Mandatory due diligence across the fashion and footwear supply chain is incoming, however there are concerns that as the world shifts to the right politically there will be more voices claiming sustainability and competitiveness cannot work together.

During the first session of this year’s OECD Garment and Footwear Due Diligence Forum in Paris, the head of the OECD’s Centre for Responsible Business Conduct, Allan Jorgensen describes mandatory due diligence as a “moving target”.

He asserts that mandatory due diligence is a global discussion and states: “We know what ‘good’ looks like – we just need to have more of it.” 

Plus, he adds: “We need to consider that having the intended impact will require us to move from the few to the many and from the margins to the mainstream.” 

Next month (March) the OECD will be launching an inclusive platform on due diligence policy cooperation, which Jorgensen says will gather all interested countries to exchange policy developments in different regions and countries.

It will discuss how to ensure interoperability between different measures and how to avoid fragmentation. Plus, Jorgensen says it will explore the support measures companies working across the supply chain need to take advantage of new sustainability opportunities. 

Concerns growing conservatism will jeopardise mandatory fashion due diligence 

This is a positive step, however Clean Clothes Campaign’s lobby and advocacy coordinator Muriel Treibich argues a major concern is the amount of conservative voices emerging that suggest sustainability and competitiveness cannot work together.

She says: “I obviously have the Omnibus Proposal at the EU in mind.”

Treibich is referring to EU officials meeting with corporate lobbyists in February to discuss rolling back EU sustainability laws in a bid to protect corporate interests over and above workers and the environment. 

“We worked really hard to get the EU public sustainability due diligence directive passed last June. And even though it was not perfect, it was still an excellent basis to work from and to work with workers and companies and improve business practices,” she states.

The Clean Clothes Campaign, which is a garment industry alliance of labour unions and non-governmental organisations, is “very concerned” to see what’s happening with Treibich telling attendees: “This is my moment to make a plea to all of you. During the legislative process of the CSDDD [Corporate Sustainability Due Diligence Directive] there were many voices that came out in support of the mandatory judicial legislation.”

She continues: “We saw your public statements, read your interviews, listened to you tell us about how you were already preparing yourself for CSDDD recommendations and implementation, but today we’re not hearing you. We really need you to speak up.”

She urges fashion brands and retailers to show that they will be ready for mandatory due diligence and understand that business competitiveness without it is not sustainable. 

“Yes, the critical discourse has changed, but the reality of the supply chain remains the same.”

In other words, garment workers still face issues around wages and labour rights and the climate and the environment are still under threat irrespective of who is in power.

Treibich reminds the audience that binding and enforceable are the key words when it comes to due diligence in practice, which is why she believes “voluntary commitments just do not have the same type of impact”.

She does not mince her words when she refers to fashion brand CEOs and their knowledge of the supply chain, declaring: “You have some of the richest men on earth that are CEOs and claim they cannot control what happens in their supply chain. Yet, they can still determine the cost per minute ratio of garment production by their suppliers.” 

Mandatory fashion due diligence must extend beyond Europe to succeed 

The EU is currently leading the way on mandatory due diligence but Jorgensen points out that for a level playing field to truly exist there needs to be an uptake globally. 

Secretary at the ministry of foreign affairs in Bangladesh, ambassador M Riaz Hamidullah agrees, but tells the forum shared responsibility between fashion brands and manufacturers is key for environmental and social due diligence and should also include shared prosperity. 

He adds that we need to collaborate on sustainability, circularity and decarbonisation all the way through the supply chain and value chain. 

The chief researcher at the office of social responsibility for the China National Textile and Apparel Council, Xiaohui Liang, reveals that due diligence is becoming compulsory in China.

He says there has been some very interesting developments with regulators coming to the front line. Last year (2024) the three major stock exchange markets in China (Shanghai, Shenzhen and Beijing) all introduced mandatory system reporting guidelines, which means publicly listed companies have to disclose ESG information starting in 2026 for the fiscal year of 2025. 

He notes these new rules align with global trends like the EU’s Corporate Sustainability Reporting Directive (CSRD) and International Sustainability Standards Board (ISSB) standards. 

Plus, he says the rules will cover the biggest firms in China, which represent half of China’s market value. 

Africa is not as advanced as the EU in terms of its legislation around responsible business conduct, but there are some new opportunities especially for garment trade unions that are being identified and pursued. 

Etienne Vlok, national industrial policy officer at the Southern African Clothing & Textile Workers’ Union (SACTWU) explains African nations recently formed an African trade agreement called the African Continental Free Trade Agreement, or ACFTA. 

The objective is to ensure the continent trades more with itself and it’s also provided an opportunity to create responsible business conduct across the continent. 

Vlok explains: “As trade unions we’re trying to ensure that part of the agreement includes a social clause, and that social clause would then be linked to higher standards and would allow companies to only benefit from the trade preferences in the agreement when they comply with these standards. 

“This is a difficult ask on a continent where responsible business conduct is not yet as entrenched as in Europe, but this is something we’re pushing hard for, and we see this as an opportunity in terms of policy.” 

Vlok agrees with Clean Clothes Campaign’s Treibich and states: “It’s clear from the past 30 years voluntary standards don’t work. Voluntary codes of conduct don’t deliver results for garment workers in the factories and it’s not what investors want in terms of their returns and the sustainability of the investments. Nor is it what what governments want.”

He has seen significant changes in companies being forced to publish the pay gap between CEOs and workers, adding that responsible business conduct is the next step: “This is where we’re going now. This is the ultimate step from moving from shareholder capitalism to a stakeholder model of capitalism. 

“For us, this is a significant move. We are now looking to more of these kinds of agreements. And we think the recent evidence, in terms of the Accords in Bangladesh and Pakistan, as well as the recent agreement in Cambodia shows mandatory due diligence binding agreements can provide benefits to workers, but also can achieve both government and investor objectives.”