Purchasing Practices: Pre-COVID-19 self-assessment provides valuable insights

9 June 2020

Purchasing Practices: Pre-COVID-19 self-assessment provides valuable insights

Joint report of AGT and PST based on tool developed by ACT underlines importance of responsible purchasing practices in times of crisis.

Through their collaboration with the ACT initiative (Action, Collaboration, Transformation) the Dutch Agreement on Sustainable Garments and Textile (AGT) and the German Partnership for Sustainable Textiles (PST) aim to jointly establish the conditions for responsible purchasing practices within the industry. The joint report released today shows the aggregate results of the Purchasing Practices Self-Assessment (PPSA) of 42 AGT and PST companies. This assessment took place prior to the COVID-19 pandemic.

The results provide a mixed picture: Whereas some responsible purchasing practices (such as ‘Changes to Orders’ and ‘Terms of Payment’) are already in place and effective, some areas (such as ‘Price Quotation’ and 'Incentives and Compliance Scoring') demand considerable improvement across the majority of companies. Likewise, some results indicate that companies’ handling of purchasing practices differs strongly.

These insights are very valuable, both at the individual as well as the collective level. Recognising that this was first and foremost an internal assessment, companies should now ask their suppliers for feedback on their own purchasing practices to get a more complete picture. At the same time, concrete action beyond this analysis is needed. Companies should use their leverage, continue dialogue with their suppliers and set ambitious goals to improve their purchasing practices. Read the full report.

Importance of purchasing practices

This report reflects the results of self-assessments of companies just before the corona crisis turned the world upside down. The crisis also had major effects on the garment and textile sector. Moreover, the crisis put the purchasing practices of AGT and PST companies to an extreme test.

Two interviewees respond to this new situation as follows: 'The crisis has drawn attention to the shortcomings of the industry’s purchasing practices. We therefore believe that this will remain a key topic for years to come. The PPSA can play a vital role in providing a basis for discussions and reflecting on improvement measures taken,' says Kathrin Raabe, Senior Manager Corporate Responsibility International, ALDI SÜD (represented by HOFER KG).

Daphne Zita van Esveld, Sustainability Coordinator of America Today adds: 'In order to maintain and advance good working conditions it is important to address our purchasing practices. Due to the Corona virus, vulnerabilities and risks on both sides of the supply chain have grown. This makes it even more important to have insights in your own purchasing practices. The PPSA tool helps to obtain these insights.'

About the tool

In summer 2019, PST launched an online tool for its member companies to assess their purchasing practices, based on the content of the Purchasing Practices Self-Assessment developed by ACT. Utilising this tool, a significant number of forward thinking AGT and PST companies have started to analyse their own purchasing practices, compare themselves with other companies, raise awareness internally, and discuss next steps in adapting purchasing practices by making them more sustainable and enabling progress.

Next steps

Industry-wide sustainable purchasing practices are necessary to enable suppliers to make progress towards decent working conditions and paying a living wage. AGT and PST will keep on supporting their signatories/members on this path: both initiatives will further intensify their already existing guidance and trainings, both at the company as well as the supplier level. Likewise, PST, AGT and ACT aim to continue their cooperation concerning tools and trainings on purchasing practices. AGT and PST also signed the joint statement on responding responsibly to the corona crisis, including protecting worker income and health.

Other paths to progress will also be continued. In 2019, PST and AGT started to collaborate with the Fair Wear Foundation to host trainings on living wages linked to purchasing practices. Trainings will be continued in various production countries across Asia and Eastern Europe.