There are three main categories of legislation to be aware of and develop your data collection strategy around due diligence, claims & labeling and sustainability reporting. Not all regulations fit neatly into one bucket. Some, like the EU Ecodesign for Sustainable Products Regulation Proposal, will cover aspects from several categories. In this blog post, learn more about the key categories of legislation and the data needed for compliance.
Due diligence includes laws that require companies to identify and mitigate environmental and/or social risks along their supply chain. Laws on forced labor require data on a product shipment level to prove that goods have no forced labor in any part of their supply chain, requiring the collection of country-of-origin documentation. Deforestation regulations can require specific locations of individual farms.
Due diligence laws will help you achieve social impact goals, such as implementing living wages or safer working conditions. A code of conduct is not robust enough to achieve social impact goals. To achieve living wages in their supply chains, companies must have visibility of suppliers, access to information about the wages of their employees, and a collaborative relationship with factories to implement wage increases.
Claims and Labeling laws require companies to substantiate any environmental or social claims made with reliable and relevant evidence. Requirements can range from top-line data to highly granular information around the product life-cycle, such as environmental scoring, circularity, traceability, and other sustainability information.
An example is the French Anti-Waste for a Circular Economy Law (AGEC), which relates to the claims and labeling of materials on consumer-facing labels. AGEC requires companies to make weight-based declarations of recycled material content and disclose the traceability of main materials by showing countries of origin.
Sustainability Reporting laws standardize requirements for reporting, such as how to report on targets and progress towards Scope 1, 2, and 3 emissions reduction, both in absolute and relative terms, as well as for the total company and per product.
As many laws are still at the proposal stage, the exact requirements are not yet defined. Leading companies have already started collecting and analyzing granular data per shipment, so they are ready when laws come into force. Beyond what is required by compliance, companies can also use this data to get a granular understanding of their supply chain to accelerate positive social, environmental and business impact.
Gathering Data for Compliance
By now, fashion companies know they need data to comply with regulations. But identifying what data they need to gather is the most important piece in the puzzle.
In the table below, we have called out the data requirements for six major laws facing fashion businesses. Having the data to hand will be central for compliance with other laws and regulations, as many have overlapping data requirements.
This story is an excerpt from the Traceability Roadmap, TrusTrace's step-by-step guide to implementing traceability in fashion supply chains. Read the full report here.
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