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The Relevance of Due Diligence in the Textile Industry

It requires companies to commit to social and environmental sustainability.

More and more responsibility is being demanded from companies, due to the challenges of sustainability, production methods and overproduction.

The fashion industry creates more than 65 million jobs worldwide. Increasingly, companies are being held accountable due to the challenges presented by sustainability, production practices and overproduction. 


According to the European Commission, due diligence refers to: “Processes by which companies identify, prevent, mitigate and explain how they address their actual and potential negative impacts. Supply chain due diligence is an ongoing, proactive and reactive process by which companies monitor and manage their purchases and sales.” 


The OECD Due Diligence Guidance for the textile and footwear sector states that fashion companies should: 


  • Detect potential risks in both their activities and those of their supply chain.  
  • Prevent, contain, or mitigate risks to both their activities and their supply chain.
  • Monitor and verify the progress and effectiveness of due diligence in both its activities and its supply chain.
  • Communicate publicly and to stakeholders the company’s due diligence systems. 

Importance of due diligence


Lack of due diligence can have a human cost. It entails overlooking the conditions of workers who produce the garments and the footprint that these production processes involve. The opacity of the industry has caused different tragedies that could have been avoided. The most commonly known took place in 2013 in Bangladesh. 1,134 people died due to the collapse of the Rana Plaza building, which had not undergone the necessary safety inspections and contained five workshops for European and U.S. brands. Since the accident was exposed, conditions for workers in Bangladeshi textile factories have improved, as it prompted the creation of the Bangladesh Accord (on building and fire safety), the first legal agreement that obliges brands in the textile industry to help their suppliers eliminate structural and fire hazards. 


In conclusion, there is no accountability without due diligence. It is essential to have a clear understanding of how a company works and the goals it has set to improve its practices. Due diligence requires companies to commit to social and environmental sustainability. It also exposes environmental and human rights abuses, putting them in the spotlight and providing an incentive to demand change. 


During April 2020, the European Commission announced the introduction of a new legislative measure that will introduce mandatory due diligence for companies. It is expected to include requirements for companies to display, document and communicate their purchasing practices and processes, and to safeguard universal human rights. This will positively impact the quality of employment, wages and working conditions, eliminating child labor in the value chain and increasing respect for human rights.


Thank you for your interest in this post. At Dcycle we strongly believe that due diligence is critical for textile companies to act sustainably. That way they can operate without generating a negative social and environmental impact. We trace their value chain so that they can learn more about their production processes and can make decisions based on scientific data.