Regulation & Public Policy Supply Chain

2 New Resources Aim to Put Apparel Companies, ESG Regulators on the Same Page

Amid a spate of new ESG-related legislation, an interactive white paper demystifies this regulatory rigmarole for apparel and textile companies; and a handbook outlines the industry’s unique challenges for the EU as it develops due diligence guidelines.

Published 1 week ago | About a 5 minute read

Image: Hartono Subagio

Despite a vacillating domestic landscape, the global business world is confronting an unprecedented spate of new ESG-related policies and legislation — primarily, from two key markets: California and the European Union — which are forcing multinational companies to adopt consistent ESG reporting frameworks and transparency requirements, substantiate sustainability claims, phase out environmental pollutants and increase transparency of supply chains, among other things.

Both California and the EU’s Corporate Sustainability Reporting Directive (CSRD) now require companies to disclose their climate risks; the EU’s new supply chain due diligence laws make companies ensure any products sold in the EU aren’t linked to deforestation or human rights abuses (CSDDD); and the EU’s Ecodesign for Sustainable Products Regulation (ESPR) and California’s Responsible Textile Recovery Act prompt companies to ensure their products are easier to repair, recycle and reuse.

While companies must adapt their operations to meet these new criteria for doing business in these major markets, the shift also presents remarkable opportunities to appeal to the growing number of consumers factoring ESG considerations into their purchasing decisions. And two new resources set about demystifying this regulatory rigmarole for apparel and textile companies.

Policy to Profit: How New Rules Create Commercial Wins for Fashion

Image credit: Carmen Laezza

Today, grounded — a B Corp-certified boutique marketing firm that helps brands align profit with purpose and turn ESG commitments into competitive advantages — launched Policy to Profit: How New Rules Create Commercial Wins for Fashion, a comprehensive resource designed to equip fashion industry leaders with an actionable roadmap for navigating complex ESG regulations and transforming compliance challenges into revenue opportunities. The AI-enhanced white paper combines expert insights and real-world case studies to provide practical frameworks for commercializing sustainability.

“Instead of scaling up investments in sustainability practices, fashion industry leaders appear to be retreating — choosing short-term profits over longer-term, purpose-driven commercial innovation,” says grounded co-founder and Chief Strategy Officer Phil White. “Our new white paper helps flip this paradigm by equipping leaders to view the growing range of legislative and regulatory challenges as critical opportunities to commercialize sustainability — driving greater profitability and business success over the long term.”

grounded’s proprietary AI assistant, "Gaia," adds an interactive element to Policy to Profit — readers can engage directly with Gaia to explore how the insights apply to their specific organization, receive strategic recommendations; and get real-time analysis of their unique challenges based on the latest industry data, policies and legislation. This level of personalization helps readers translate the paper's frameworks and findings into actionable strategies for their business.

"A sustainable business recognizes opportunities to deliver products and services while protecting the interests of people, planet and profit,” White adds. “Our white paper helps navigate these complex considerations, making them actionable for business leaders."

CSDDD Handbook highlights textile sector challenges for European Commission

Image credit: huyvinhnhon

Meanwhile, four European organizations have banded together to develop a comprehensive Handbook for Due Diligence Implementation in the Textile Sector — intended to support the European Commission in formulating informed, practical guidelines for the textile sector and beyond, as required by the CSDDD.

Created by three nonprofits dedicated to ethical textile supply chains — Fair Wear Foundation, Policy Hub and the Social and Labor Convergence Program (SLCP) — and amfori, a leading business association for sustainable trade, the Handbook provides an overview of the textile industry’s existing tools, instruments, formats and guidance; and identifies gaps where further clarification is needed.

“The textile industry faces a number of unique challenges that need to be on the radar of the European Commission as they develop the CSDDD guidelines — [including] duplication of social and labor audits in factories, wasting time and resources that could be better spent on improving working conditions,” says SLCP CEO Janet Mensink. “The CSDDD Handbook stands as an excellent source of information to guide policymakers towards practical, effective and comprehensive guidelines. We look forward to continuing to highlight the needs of manufacturers through data-driven insights, to ensure CSDDD implementation is not only efficient but also effective for the industry."

The Handbook also:

maps key learnings from ongoing implementation efforts
assesses the realities of the textile sector and issues to be considered for a practical and effective implementation of due diligence
supports the exercise of developing the general CSDDD guidelines and accompanying measures.

By collaborating on this initiative, the four organizations reaffirm their commitment to a robust human rights and environmental due diligence framework — and to working alongside the European Commission to ensure that the forthcoming guidelines are fit for purpose for the textile industry, based on existing efforts and gaps.

“The Handbook demonstrates the importance of collaboration and dialogue among sector stakeholders to foster a holistic understanding of the textile value chain and the diverse perspectives that must be considered when implementing a framework like the CSDDD,” says Marina Prados Espinola, Co-Director of Policy Hub. “We are proud of the work accomplished and its contribution as a valuable resource for the practical implementation of obligations, grounded in the technical realities and expertise of various stakeholders.

“Due diligence relies on meaningful conversations that reflect the multiplicity of realities — a principle that underpins the development of this handbook. The dialogue must continue in order to further advance the representation and deepening of all the realities of the global textile value chain.”