PFI Newsletter June 2021

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Dear PFI community,

The COVID-19 pandemic has fundamentally changed the world. It has interrupted the market and altered societal norms. New habits formed are likely to become the new norm in a post-pandemic world, permanently changing what we value, how we live, and work.

People are living differently, buying differently, and thinking differently in many ways. Consumers have been more mindful than ever before of what is happening in supply chains. They also look at products and brands through a new lens:

  • Increasing focus on health and personal wellness
  • Conscious consumption, especially the Generation Z
  • Growing love for local and pro-social consumption

On the other hand, the German government has planned a new supply chain due diligence law, the final decision will be made in the German federal parliament in the 23rd calendar week and in the federal council on June 25, 2021. The law will then come into force in 2023. Germany is now one more country across the globe with a due diligence law. The European Union will follow this summer with a regulation for the entire European Union – not only being a political and economic union of 27 member states but also as building up a uniform quality system.

PFI Fareast and cads co-hosted a virtual International Lieferkettengesetz Conference: Guide to Lieferkettengesetz – Building Responsible Global Supply Chains, which took place last month, to shed light on this new law for supply chain stakeholders. As one of the moderators of the conference, I would like to take this opportunity to thank everyone who participated in the online event.

PFI provides leading sustainable supply chain solutions with 65 years of experience in the footwear, garment, leather, and consumer goods industries. At PFI, I am already experiencing the adeptness with which a company can modify business as usual to adopt new ways of working during a crisis. I appreciate the marvellous teamwork at PFI Fareast to the fullest.

PFI Group must outmanoeuvre uncertainty with constant course-corrections in response to changing circumstances. This requires the PFI Group to reassess assumptions, re-evaluate scenarios and strengthen the Group’s ability to awareness and response. I am confident that our team will master future challenges and that we will move together towards a prosperous future. I am proud to be a part of the Global PFI Family.

Ingo Bade
Managing Director of PFI Fareast

Event highlight — International Lieferkettengesetz Conference 2021

The virtual International Lieferkettengesetz Conference 2021, “Guide to Lieferkettengesetz – Building Responsible Global Supply Chains” was successfully held on Thursday 20th May to reduce the complexity of the new supply chain law and to offer assistance on how to prepare for it.

Ingo Bade joins PFI Fareast’s leadership team

PFI Fareast is excited to welcome Ingo Bade to our growing team as PFI Fareast’s new Managing Director.

The role of quality assurance in the fashion industry
Closing the gap between quality and sustainability in the fashion industry

Sustainability is driving changes in the textile industry. The requirements for good shoes and textiles need to be adapted in this context. Our Sustainability Project Manager, Melanie Fuerch has offered us some insights into the new definition of quality in the newly issued article.

Global Supply Chain News

German government agree on final version of the German Supply Chain Law

The previous draft was initially rejected by the German parliament as some open discussion points needed to be clarified. Above all, the question of civil liability caused disagreement. After several committees sat down together, they agreed on a final version to pass the law. The final resolution is set to be passed in the parliament in the 23rd calendar week and in the council by the end of June.

Key clarifications now include:

1. No civil liability

It was decided that in the event of a breach of the obligations under this Act there will be no civil liability. The reason behind this is that “civil liability is already established under the current legal situation, irrespective of the newly created due diligence obligations, this should, however, continue unchanged and, in particularly serious cases, be facilitated in its implementation.”

2. Scope of the law

The criteria for determining whether a company is affected by the law or not has been defined more precisely: only workers employed in Germany are taken into account in the final sum. On the other hand, foreign companies with a branch office in Germany with more than 3000 (starting in 2023) or 1000 (starting in 2024) employees will now also be obliged to comply with the law.

3. Additional environmental aspect

Besides the negative impacts of organic pollutants and quicksilver, a third environmental aspect was added in the law: the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal. An environmental risk or a violation of an environmental obligation is now also present if one of the shipment facts of certain hazardous and other wastes is fulfilled.

4. Responsibility for indirect suppliers

The term “substantiated knowledge” was defined more specifically. When a company now has factual indications that make a human rights violation or a violation of an environmental obligation at indirect suppliers appear possible, they need to act according to the regulations of the law. Compared to the government draft, the characteristic of “factual indications” has been added to point out the need for action.

 

Source:
https://www.arbrb.de/blog/2021/05/31/erweiterung-der-beteiligungsrechte-des-wirtschaftsausschusses-durch-das-lieferkettensorgfaltspflichtengesetz-lksg/

The Dutch Agreement on Sustainable Garments and Textile updates and clarifies its assessment framework

The Dutch Agreement on Sustainable Garments and Textile (AGT), an alliance of businesses and organisation on international responsible business conduct in garment and textile industries, recently announced an expanded assessment framework. The new framework makes the assessment processes of companies, as well as the ramifications of failing to fulfil requirements more transparent.

Regarding the article “Dutch AGT breaks down assessment criterion”, the AGT “expects that with approaching legislation at the EU level regarding due diligence, the document will be useful for companies (both SMEs and large companies) outside the AGT and for other sectors.” While the international responsible business conduct’s standards integrated in the AGT assessment framework, and its execution is in line with the Organisation for Economic Co-operation and Development (OECD) guidelines according to AGT.

PFI is a global leader in sustainable supply chain solutions with over 65 years of experience in the footwear, garment, leather, and consumer goods industries, your leading experts in the world of fashion. We assist fashion companies to verify, improve and optimise the social performance of their supply chains according to PFI standards or designated code of conducts. 

Check out the PFI’s social audit services now and see how we can help you.

Generation Z, the second-largest generation are conscious consumers

Generation Z concerns about the impacts that we are making to our planet. They want to practice sustainable living by start making small steps in their daily lives. The Gen Zers have voiced out their opinions on the practices in the fashion industry that they do not support fashion businesses who engage in environmentally harmful activities.

In the article, “Gen Z Cares About Sustainability — Brands Should Too”, First Insight, a data driven market research and predictive analysis platform discuss the results of their 2021 survey: “The State of Consumer Spending: Gen Z Shoppers Demand Sustainable Retail”. They discovered “a whopping 62% of Generation Z prefer to buy from sustainable brands…and 73% (are) more willing to pay 10% or more for their sustainable goods.” The tech-savvy Gen Z are well-informed about the world and learn how to discover and eliminate from their purchasing remit; businesses with unethical practices and those who are greenwashing.

These young conscious consumers will soon become the second-largest generation on the planet. They not only care about the buying decisions they make but expect brands to enact environmental and social due diligence.

PFI Fareast’s highly experienced experts in the fields of sustainability and social auditing can help brands to enhance the quality of your products and the performance of your supply chain and show your commitment to high-quality standards.

Talk to our experts now to learn more about our expertise.

Reports

Material Change Insights Report 2020, Textile Exchange. This report offers different index trends, materials-related business risks, insights, advice on actions to be taken to the readers. The report also “provides one of the most comprehensive data-backed analyses of how the industry is progressing in its shift to preferred materials, as well as alignment with global efforts like the Sustainable Development Goals (SDGs) and the transition to a circular economy.” https://mci.textileexchange.org/insights/

The Plastic Waste Makers Index: Revealing the source of the single-use plastics crisis, Minderoo Foundation. This report identifies for the first time which companies are producing fossil fuels from the five key polymers “that generate the vast majority of single-use plastic waste globally (“virgin single-use plastic polymer producers”) – and which investors and banks are funding them.” https://www.circularonline.co.uk/wp-content/uploads/2021/05/Plastic-Waste-Makers-Index-Minderoo-FINAL-compressed-1.pdf

Who’s Minding the Store? 5th annual report card on retailer actions to eliminate toxic chemicals, Retailer Report Card. This report shows “the largest retailers in the United States and Canada continue to make substantial progress towards reducing and eliminating toxic chemicals and offering safer, more sustainable products and packaging. These retail sustainability actions are preventing toxic pollution of communities, workers, homes, water, food, people, and wildlife. Fifty major retailers were evaluated this year, up from 43 in 2019. Together, these retailers have more than 200,000 stores across the United States and Canada.” https://retailerreportcard.com/

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