OVERVIEW OF (UPCOMING) LEGISLATION
The coming years there will an increasing of legislation regarding transparency and traceability of fashion and footwear products. This document gives you a brief overview. Generally, the legislation can be divided in two large groups. Those that concern:
1. general supply chains: not at granular level (per individual item), aimed at general due diligence
2. individual items at granular level: digital product passport, aimed at making circular business models and closed circuits possible.
1. LEGISLATION REGARDING DUE DILIGENCE IN SUPPLY CHAINS
Due diligence in the fashion supply chain aims to achieve several key goals, primarily centered around ensuring ethical, sustainable, and responsible practices throughout the entire production process.
1.1 EU: Corporate Sustainability Due Diligence Directive (CSDDD)
· What?
The CSDDD requires companies to
o identify and prevent,
o bring to an end or mitigate the actual and potential impacts of their activities on the environment and on human rights abuses.
o conduct due diligence not just on their own operations, but also on the activities of their subsidiaries and other entities in their value chains with which they have direct and indirect established business relationships.
o develop and implement ‘prevention action plans’, obtain contractual assurances from their direct business partners that they will comply with the plans, and subsequently verify compliance.
· When?
CSDDD was approved in the EU parliament on 1 June 2023. Negotiations on the CSDDD between the European Parliament, the European Council and the European Commission can commence. Once the CSDDD has been formally adopted – not expected before 2024 – Member States will have two years to implement the CSDDD into national legislation (before 2026).
· Who? (Scope):
o EU based companies with net turnover > €40M and > 250 employees
o EU based parent companies with net turnover > €150M and > 500 employees
o Non-EU companies: net turnover > €150M generated in EU
o Non-EU parent companies: net turnover > €150M of which > €40M is generated in EU
o SMEs could be affected in their capacity as contractors or subcontractors to any of the above companies!
Why might it concern you?
Even though your company is not in-scope, you might be affected if you’re in the supply chain of a company that has to comply!
1.2 D: Lieferkettengesetz (LkSG)
Germany did not “wait” for the CSDDD but on 16 July 2021 it introduced the “Gesetz über die unternemerischen Sorgfaltspflichten in Lieferketten”. (aka “Lieferkettengesetz”)
What?
Short summary: Companies are obliged to
· Respect human rights by implementing pre-definied due diligence requisites
· Set up a risk management system to
o Identify, prevent and mitigate risks to violations of human rights / harm to the environment
o To set preventive and mitigating measures, complaint procedures and reporting.
· Companies have due diligence and liability all along the supply chain. Even abroad!
Who?
Since 2023 for all companies with >3,000 employees in Germany. As of 2024 > 1,000 employees).
Why might it concern you already?
If your company has a customer brand in Germany with more that 1,000 employees, you might be affected because your customer will require you to comply!!
More information: csr-in-deutschland.de
1.3 BE: Proposition of law
Since 2 April 2021 there is a “Wetsvoorstel houdende de instelling van een zorg- en verantwoordingsplicht voor de ondernemingen over hun hele waardeketen heen”.
For the moment, this law has not been put to vote, while the CDDD procedure is not finished. This is expected to happen shortly.
Take-aways regarding due diligence
· Even if your company is not yet or will never be directly required to due diligence, you might (already) be affected if you’re in the supply chain of a company in-scope!
· When? This could be now (if you’re in the supply chain of a German company) or by the latest by 2026, so it is good to start mapping your own supply chain now!
2. LEGISLATION REGARDING DIGITAL PRODUCTS PASSPORTS (DPP) AND RECYCLING
2.1. EU : Ecodesign for Sustainable Products Regulation (ESPR)
What?
The Digital Product Passport for textiles is part of the Ecodesign for Sustainable Products Regulation (ESPR), published on 30 March 2022, is the cornerstone of the Commission’s approach to more environmentally sustainable and circular products.
The DPP which will provide information about products’ environmental sustainability. It aims to improve traceability and transparency along the entire value chain of a product. This information will be easily accessible by scanning a data carrier and it will include attributes such as the durability, repairability and recyclability.
It should help consumers and businesses make informed choices when purchasing products, facilitate repairs and recycling and improve transparency about products’ life cycle impacts on the environment. The product passport should also help public authorities to better perform checks and controls.
When?
DPP will come into for textiles in 2026/7, which doesn’t leave long for businesses to prepare.
2.2 FR: Loi AGEC
What?
Loi AGEC stands for “Loi anti-gaspillage pour une économie circulaire”. On 29 April 2002 a decree was published regarding art. 13, to bring “transparency to the fashion industry, specifically regarding dangerous substances and recycled materials”.
The consumers must be informed of:
· Recyclability of the items (either not recyclable, predominantly recyclable, fully recyclable or in closed-loop)
· Hazardousness of products
· Traceability of textile products: Indication of the country where each of the following operations is mostly carried out:
o Weaving
o Dyeing and printing
o Confection
· Pollution from plastic microfibres (>50% synthetic labels must be labelled “releases plastic microfibres into the environment during washing”)
How?
· in a dematerialised format (QR codes / NFC tags)
· accessible free of charge at the point of purchase and reusable
· on a dedicated website or page with a sheet entitled "Product Environmental Characteristics".
· available for 2 years
Who and When? The scope: all producers and importers
· 2023: with a turnover over €50M distributing over 25,000 units per year.
· 2024: with a turnover over €20M and distributing over 10,000 units per year.
· 2025: with a turnover over €20M and distributing over 10,000 units per year.
2.3 NL : Uitgebreide Producenten Verantwoordelijkheid (UPV)
What?
The UPV makes it mandatory to collect and recycle textile products, such as clothes, bed-, bath- and kitchen linens.
Who?
Everyone /every company that brings textile to the Dutch market in a professional way, whether it was paid for or not.
There is no minimum turn-over and it also includes foreign companies, who will have to appoint a representative.
When?
Starting in 2025, every year the weight percentage of textiles that must collected, re-used and recycled (fibre-to-fibre!) will gradually increase until 2030:
· Collection: from 50% of the weight (2025) to 75% (2030)
· Re-use: from 20% (2025) to 25% (2030), of which 10% - 15% inside NL
· Fibre-to-fibre recycling: from 25% (2025) to 33% (2030).
How?
Obviously complying with UPV is a logistical challenge. While producers can organize their own collection, re-use, re-distribution and recycling, they can also call upon “Stichting UPV” and outsource it.
2.4 BE: Uitgebreide Producenten Verantwoordelijkheid 2.0 (UPV 2.0)
Belgium has no legislation regarding recycling yet, but several brands are developing a voluntary UPV 2.0 system (Circletex)
What?
UPV 2.0 is similar to the Dutch UPV, but is goes further:
· Buyers of textiles are also included, not just producers
· Renting is included as well, not just selling
· Wider scope : also workwear, interior fabrics, outdoor textiles etc.
· More details: not just fabric, but also buttons, zipper etc. must be collected and recycled.
When?
Not before 2025. The wider scope and higher recycling will require detailed monitoring of sales and rentals and of collection, re-use and recycling. This will require the use of DPP’s.
Take-aways regarding DPP’s and recycling
· The French Law AGEC gives us brief preview of the DPP to come, but the information on the EU DPP will be much wider and more in depth.
· If you’re supplying to a French brand or selling in France, you will probably have to comply by 2024/5. The EU DPP will take longer, probably by 2026/7.
· Nevertheless, it is good to start preparing now, because each item will need a unique passport and QR code, the challenges are great, both from a logistical (creating and applying unique QR codes) and information point-of-view (acquiring and aggregating all required information).
· If your brand sells in NL (regardless of your revenue), you will have to organize collection, re-use and recycling of your textile, or outsource it to Stichting UPV.
· The Dutch UPV is a good preparation of the stricter Belgian UPV, which will require DPP’s to be feasible. This is where it all comes together.
In all these matters, Quifactum can supply both tools and consulting. Contacts us at info@quifactum.com