Due diligence is far more than the widespread, audit-based approach and puts a focus on the following aspects:
- Anchoring due diligence as a management process for continuous improvements
- Analysing and prioritising social, ecological, and compliance risks as the basis for planning measures
- Taking into account the whole supply chain
- Emphasising the significance of purchasing practices of brands and retailers
- Including stakeholders in production countries
- Implementation of remediation and grievance mechanisms
- Taking the requirements and expectations of enterprises into account and considering their specific situation, e.g. size or sourcing model
- Asking for sector-specific cooperation and collaboration with all stakeholders
The Textiles Partnership has developed information and support materials for the six elements of the due diligence process:
By committing to abide by and implement basic social, environmental, and compliance standards, your organisation communicates goals and expectations not only to its employees but also to business partners and producers. At the same time, your organisation undertakes measures to implement specific targets aimed at improving sustainability in its operations and the supply chain.
Knowing what risks and negative impacts your business activities pose for humans and the environment is the first step and crucial for meeting your due diligence obligations.
To effectively manage potential and actual harm, risk analysis results should be integrated into all businesses processes. This includes, for example, clearly defining responsibilities and monitoring purchasing practices while considering social and ecological aspects within product development. The risk analysis may uncover the need for employee training on social, ecological, and corruption risks or supporting suppliers in realising requirements. The measures taken should be evaluated regularly and adapted if necessary.
An effective monitoring system helps companies implement social and environmental objectives in their supply chain and communicate progress to external stakeholders. It includes a wide range of subjects, such as internal prerequisites, progress measurement indicators, various monitoring instruments, and ways to handle agreement violations.
International standards unanimously demand that companies offer effective grievance mechanisms for persons potentially affected by social and environmental impacts. They also require companies to provid solutions if such a case arises. These standards also apply to supply chain workers.
Organisations should regularly and publicly report on the integration of due diligence processes and risk management procedures in their supply chains as well as grievance management and the corresponding solutions. By communicating their responsibility externally, businesses strengthen and deepen the internal cooperation and the communication between different departments as well as the relationship with their stakeholders. Furthermore, they create a competitive advantage regarding investors, suppliers, and consumers.