Ethical Trading Initiative

The entities are in favour of mandatory due diligence on human rights.

The entities state: 'In favour of mandatory due diligence on human rights. As Fair Wear and the Ethial Trading Initiative (ETI), we envision a global garment industry that contributes to an equal and just society by respecting human rights in the world of work'.

The entity welcomes the EU initiative and supports its Aaim to create more legal certainty and a level playing field.

The entity states that 'ETI welcomes the EU taking a leading role in promoting human rights due diligence within the wider sustainability directive .... We would like to see best practice set the bar for legislation, incentivising all companies to embed human rights due diligence into the core of their business practices. ETI supports the Directive's aims to create more legal certainty and a level playing field for companies, whilst also providing added transparency for consumers and investors alike'.

ETI makes a clear and public defense of the adoption of the CSDDD as mandatory legislation. The text states that the vote is decisive and that a setback would represent a regression for responsible businesses and workers in global supply chains

The statement includes “ETI reiterates call to support the CSDDD.... The CSDDD offers a historic and, at present, the only chance for an EU-wide level playing field.... This will be a real setback for responsible business... if the vote is undermined at this late stage"

The entity strongly opposes the Omnibus proposal, the stop-the-clock vote and the re-opening of the legislative process of the CSDDD

"ETI urges policymakers to pause and reflect on the wide negative consequences that may follow if the Omnibus proposal is adopted in its entirety. … These delays risk creating an environment of confusion and uncertainty for all stakeholders involved, disincentivising early implementation of these directives by responsible business. Furthermore, they risk a global depriortisation of human rights and environmental due diligence by companies and waste an opportunity to create a ‘level playing field’, unfairly impacting those responsible companies already implementing these requirements. "

The entity strongly opposes the Omnibus proposal, the stop-the-clock vote and the re-opening of the legislative process of the CSDDD

"ETI urges European legislators to uphold the core principles of the Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD). … ' Executive Director Giles Bolton is cited: “The proposed Omnibus risks undermining years of progress by policymakers, civil society, trade unions, and responsible business. These groundbreaking EU sustainability laws should be protected, ensuring legal protections for workers and rightsholders, establishing a level playing field for responsible business and driving sustainable development for people and planet, not storing up more problems for the future”.'""Of particular concern is that the proposal suggests that in-scope businesses would be required to assess the adequacy and effectiveness of due diligence measures every five years, instead of every year as per the original text of CSDDD. The reality is that human rights risks and abuses can develop in much shorter timeframes." "Lastly, the Commission proposes to delay application for the first companies due to report from mid-2027 to mid-2028; a delay that is unnecessary given this requirement has been flagged for several years now, and mid-2027 is plenty of notice."

The entity is in favour of mandatory due diligence and agrees with the definition of due diligence duty given by the consultation.

The entity considers that a legal framework is needed. It states that: 'we support the introduction of EU legislation, as part of a wider regulatory framework, to mandate that businesses conduct meaningful human rights ... due diligence that contributes to respect for human rights .... Most of the current guidelines and frameworks for business are essentially voluntary and do not have the force of law'. It agrees with the DDD definition of the consultation, adding, among other things, that any definition should align with the definitions set out in the UNGPs and the OECD DD for Responisble Business Conduct.

Based on the document "EU Business Statement – February 2022," in which this entity is listed as a signatory, it states: “We... urge the European Commission to adopt a legislative proposal without further delay.” “We firmly believe that strong and ambitious EU legislation would make a tangible contribution to improving human rights and environmental conditions along global value chains...” “Our view has always been that the due diligence expectations set out in the UNGPs and in the OECD Guidelines should form the core requirements on business in HREDD legislation.”

By endorsing this joint statement, the entity demonstrates unequivocal support for the establishment of mandatory due diligence legislation on human rights and environmental issues. The letter reinforces the urgency of adopting the legal text and the central role that regulation must play. The entity publicly supports the mandatory nature of the legislation and its alignment with international standards (UNGPs, OECD), which directly corresponds to the scope of indicator Q1.1. The language used reflects a proactive and affirmative stance.

Based on the joint letter “Support for EU framework on mandatory human rights and environmental due diligence,” signed by this entity: “We... welcome the announcement by the European Commissioner for Justice... that the European Commission will launch a legislative initiative on mandatory human rights and environmental due diligence.” “Mandatory human rights and environmental due diligence is key to ensure that efforts by companies that respect people and the planet... are not undercut by the lack of a uniform standard...” “Legislation introducing an obligation to conduct due diligence as defined by the UNGPs... is critical to bring all companies to the same standard...”

The statement, demonstrates clear and direct support for the creation of mandatory legislation on human rights and environmental due diligence, recognizing the importance of standardizing business conduct. The statement actively supports the creation of a binding directive on due diligence, advocating for it as essential to establishing a uniform and competitive standard.

The joint statement shows support for the legal framework on due diligence irrespective of diverging views on certain aspects.

The joint statement indicates that: 'While we hold diverging views on certain aspects of the law, we are aligned in recognising the necessity of a common EU wide legal framework, as part of a smart and coherent mix of policy and legislative measures. We therefore urge the co-legislators to reach a political agreement in view of adopting the final version of the law ... We commend the co-legislators’ efforts in current negotiations toensure that the CS3D follows a risk-based approach and builds on existing globally recognised due diligence standards, such as the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises ... Key elements of this risk-based approach include the recognition of different modes of involvement with adverse impacts and allowing companies to prioritise the most severe and likely ones.'

Signatories call the EU to not reopen the Directive for renegotiation.

‘The undersigned companies and industry associations continue to support the goals of the European Union’s sustainability due diligence … We write now to urge at this critical juncture that you focus on delivering the much-needed practical implementation of these rules. Investment and competitiveness are founded on policy certainty and legal predictability. The announcement that the European Commission will bring forward an “omnibus” initiative that could include revisiting existing legislation risks undermining both of these. … Therefore, we urge the European Commission to publicly clarify that this “omnibus approach,” if embarked upon, will not allow already agreed and adopted legal texts to be reopened for renegotiation. We are particularly concerned about the potential reopening of the Corporate Sustainability Due Diligence Directive (CSDDD), especially as the CSDDD does not introduce any overlapping reporting requirements’

The undersigned entities call for a pragmatic implementation of the CSDDD and for the Commission to not weaken the sustainability legislation through the Omnibus initiative

"We remain certain that the adopted directive on Corporate Sustainability Due Diligence (CSDDD) will bring scale to current due diligence efforts and support the practical implementation of international standards (such as the OECD Guidelines, the UNGPs, and ILO Conventions). we reiterate our full support for pragmatic implementation of the EU sustainability due diligence framework which will level the playing field across global supply chains. Legal certainty is essential, not only for businesses to operate effectively within the EU market but also for our global trading partners to engage with EU businesses. We therefore call on the Commission to ensure that its “bolder, simpler, faster” mission does not result in weakening the CSRD and CSDDD text regarding sustainability due diligence."

The position paper is strongly in favour of including all SMEs under the due diligence directive.

It states that 'we take the view that all SMEs should fall under a practicable, proportionate, and effective corporate due diligence directive'. It adds that 'at least 90% of all companies in the EU garment and textile industry are Small Sized Enterprises with less than 50 employees and a share of 60% in the sector's total annual turnover ... Without the inclusion of SMEs, a significant system change of the garment and textile sector cannot be achieved.

The entity recommends expanding the scope of company inclusion to include SMEs.

The entity recommends: 'expand the scope of company inclusion to include small and medium organisations, based on the principles of proportionality, in line with the European Parliament's own initiative report.'

The entity considers that micro-enterprises should be excluded and SMEs subject to lighter requirements.

The entity states that: 'Micro-enterprises (less than 10 people employed) should be excluded'. Also: 'SMEs should have lighter requirements'. It advocates for reducing burden through capacity building, funding, toolbox/national helpdesk, etc. It adds that: 'SMEs have less capacity and fewer resources with which to undertake comprehensive due diligence. The additional burden they face should be recognised and a collaborative approach to due diligence should be encouraged. Businesses should work with their suppliers and with their peers to identify, prevent and mitigate risk. In the case of large businesses with smaller suppliers, the large business should support its supplier to comply with its due diligence requirements. In the case of small businesses with larger suppliers, the small business should seek opportunities to collaborate with other businesses that share the same supplier'.

Based on the document "EU Business Statement – February 2022," in which this entity is listed as a signatory, it states: “All businesses established in the EU and/or active on the internal market, including financial actors, and regardless of size, should be covered by mHREDD legislation.” “Many European SMEs... acknowledge that responsibility... is not a matter of company size...”

The document advocates for the legislation to apply to all companies, regardless of size or sector, expressly including SMEs and financial actors. This position represents clear support for the universal scope of the regulation. The statement explicitly supports the universal application of the legislation, recognizing the importance of a level regulatory playing field, including for SMEs.

Based on the joint letter “Support for EU framework on mandatory human rights and environmental due diligence,” signed by this entity: “...legislation introducing an obligation to conduct due diligence as defined by the UNGPs and covering all business actors is critical to bring all companies to the same standard…”“EU-wide cross-sectoral legislation... should harmonise these expectations…”

The letter explicitly advocates that all companies, regardless of sector or size, should be subject to the legislation, reinforcing the idea of a "level playing field." The statement supports the universal application of the regulation, without sectoral or business-size exceptions, fully meeting the indicator.

Recommends including sufficient enforcement mechanisms and establish systems that enable access to remedy

The paper recommends: 'Include sufficient enforcement mechanisms and establish clear, transparent systems that enable workers to access effective remedy. The UNGPs set out that states and businesses should both work to provide remedy when rights are violated. For this to happen,workers need to be safe and able to raise grievance without fear of prejudice'.

The entity advocates for supervision by competent national authorities, based on complaints about non compliance in implementing due diligence measures with effective sanctions, supported by judicial mechanism.

The entity advocates for supervision by competent national authorities, based on complaints about non compliance in implementing due diligence measures with effective sanctions. It clarifies that: 'it is important to distinguish between enforcement of DD requirements and liability/compensation in case of harm caused by not fulfilling DD obligations. A competent national authoritiy can be well placed to do so as long as it is adequately resourced and can impose suitable sanctions ... However, a supporting judicial mechanism is also necessary if the enforcement of the law is to be robust'. The company discusses the issue of liability.

Based on the document "EU Business Statement – February 2022," in which this entity is listed as a signatory, it states: “The requirement needs to be accompanied by legal consequences – encompassing administrative penalties and provisions for civil liability – that will be strong enough to ensure that businesses... carry out HREDD to a high standard...”

The statement advocates for the existence of legal accountability mechanisms, including administrative sanctions and civil liability, as a means to ensure the effectiveness of the legislation. There is clear support for the implementation of robust enforcement mechanisms, covering both administrative penalties and civil liability, fully aligning with the scope of the indicator.

Based on the joint letter “Support for EU framework on mandatory human rights and environmental due diligence,” signed by this entity: "Mandatory legislation can... clarify legal consequences for when responsibilities are not met...”

The statement advocates that the legislation should establish clear legal consequences for non-compliance with due diligence obligations. Implicit support for enforcement mechanisms. Although it lacks detailed specifications (such as civil or administrative sanctions), the acknowledgment of the importance of legal consequences justifies a positive score

The joint statement shows support for both administrative enforcement and civil liability

The joint statement indicates that: 'This common standard should be effectively enforced, recognising the need for a balanced combination of administrative enforcement and civil liability, as well as access to justice measures.'

Although this is not directly asked, the entity does not have a position on whether there should be a specific legal duty on individual company directors to set up procedures to ensure that risks and impacts on stakeholders are identified, prevented and addressed.

The entity indicates that: 'all businesses should be required by law to set up adequate procedures and, where relevant, measurable targets to ensure that possible risks to, and adverse impacts on, stakeholders are identified, prevented or mitigated. This ill be most effective if the relevant actions are led by staff at director-level. ... ETI does not have a position on whether there should be a specific legal duty on individual company directors."

Based on the document "EU Business Statement – February 2022," in which this entity is listed as a signatory, it states:“HREDD should also be embedded in appropriate governance and accountability structures, including at board level.”

The letter argues that governance structures, including boards of directors, should integrate due diligence, implying an active role for directors in risk prevention and mitigation. Although the text does not explicitly propose a formal legal obligation for directors, it advocates for their incorporation into governance, justifying a positive score.

The recommendations advocate for establishing 'clear, transparenty systems that enable workers to access effective remedy'.

The entity recommends: 'Include sufficient enforcement mechanisms and establish clear, transparent systems that enable workers to access effective remedy ... For this to happen, workers need to be safe and able to raise grievance without fear of prejudice. Pathways to remedy need to be accessible within the financial, educational, and general means of those harmed, and compensation needs to be appropriate and worth the effort and upheaval of accessing it.'

Although the entity is in favour of Supervision by competent national authorities as an enforcement mechanism for DDD, it is not clear on its position in relation to remedy or compensation for harm caused or contributed to by its activities.

The entity indicates that: 'The question of liability/ compensation in case of harm caused by not fulfilling the due diligence obligations is more complex. There are a range of views, including within ETI’s membership. The inclusion of liability would certainly increase the direct accountability of companies. However, it would likely meet opposition from businesses on the grounds that in many cases they would argue that they have limited control of their suppliers (due to sourcing only a limited proportion of a given supplier’s production). A further question is the extent to which compliance with the due diligence requirement would be a defence or mitigation against a liability charge'.

Based on the document "EU Business Statement – February 2022," in which this entity is listed as a signatory, the company states: "To level and harmonise the playing field in practice, the requirement needs to be accompanied by legal consequences – encompassing administrative penalties and provisions for civil liability – that will be strong enough to ensure that businesses falling within the personal scope of the legislation carry out HREDD to a high standard and that those that are harmed have access to remedy."

The text reinforces the importance of corporate accountability and the guarantee of access to remediation for victims of negative impacts, in line with the spirit of the indicator. Despite being brief, the direct mention of the need for remediation justifies a positive score, as it aligns with the principle of repairing damages caused or contributed to

Based on the document "EU Business Statement – February 2022," in which this entity is listed as a signatory, it states: "The legislation should reflect the wide spectrum of avenues, including adjustments to own purchasing practices, to effectively influence and enable business partners as well as increase leverage if needed, rather than honing in narrowly on the extent to which a company can deploy contractual or commercial leverage."

The letter explicitly advocates that companies should adopt measures to influence and support their business partners, including adjusting their own purchasing practices, which aligns with the use of leverage for remediation purposes. There is clear and active support for the use of leverage to influence business partners, as outlined in the indicator.

The recommendations letter contains a section on complaint procedures indicating their relevance the need for the directive to be more ambitious.

The paper states that: 'Operational-level grievance mechanisms (OGMs) can take many forms, but they need to be carefully designed and implemented if they are to be effective for workers'. It adds: 'Article 9 of the Directive requires companies to put in place grievance mechanisms. However, whilst Guiding Principle 31 of the UNGPs sets out a list of criteria to ensure the effectiveness of such mechanisms, such as accessibility and transparency, this is absent from the Directive. To achieve its intended purpose, Article 9 must go beyond simply demanding the existence of OGMs and specify a list of criteria that ensures they are accessible and beneficial to workers, including children and others in situations of heightened vulnerability'. No details found in relation to other stakeholders in the value chain

The entity considers that the Complaint mechanisms should be promoted at the EU level as part of due diligence, and that stakeholders should be consulted when conducting due diligence.

The entity considers that complaint mechanisms should be promoted at the EU level as part of due diligence. It states that: "it is crucial that businesses should effectively consult a wide range of stakeholders when conducting their due diligence." The entity considers 'relevant' to be all the stakeholder groups presented by the consultation.

Based on the document "EU Business Statement – February 2022," in which this entity is listed as a signatory, it states: "A key component of qualitative HREDD is meaningful engagement with affected stakeholders – those people that are at risk of negative impacts from business activity. Listening to the voices of workers, community members and others is vital to a company’s understanding of risks to people and planet and strengthens its due diligence. To ensure that the EU legislation encourages people-centric HREDD, robust engagement with affected groups, workers and other relevant stakeholders including unions and human rights and environmental defenders should inform all stages of the required due diligence process. Engagement must also be safe, so that those speaking out can do so without suffering or fearing retaliation."

The statement explicitly supports engagement with affected rights holders as a central part of the due diligence process, including during critical stages such as remediation. The document emphasizes the centrality of meaningful stakeholder engagement and their security, demonstrating full alignment with the indicator.

The entity expresses concerns regarding the proposed changes to civil liability provisions

"The proposal also limits enforcement by removing the specific EU-wide liability regime under CSDDD, leaving decisions on potential civil liability up to individual member states. Member states may also no longer be required to allow NGOs and trade unions to bring representative actions on behalf of complainants (although they may provide for this possibility). This change could lead to risks of ‘forum shopping’, with defendants pursuing jurisdictions where penalties are less strict to reduce potential exposure."

The entity didn't choose this option as one of the enforcement mechanisms.

It also states that: "The question of liability/compensation in case of harm caused by not fulfilling the due diligence obligations is more complex. There are a range of views, including within ETI’s membership. The inclusion of liability would certainly increase the direct accountability of companies. However, it would likely meet opposition from businesses on the grounds that in many cases they would argue that they have limited control of their suppliers (due to sourcing only a limited proportion of a given supplier’s production). A further question is the extent to which compliance with the due diligence requirement would be a defence or mitigation against a liability charge."

Based on the document "EU Business Statement – February 2022," in which this entity is listed as a signatory, it states: "To level and harmonise the playing field in practice, the requirement needs to be accompanied by legal consequences – encompassing administrative penalties and provisions for civil liability"

Support for civil liability as an essential component of the legislation shows direct alignment with the requirement for judicial enforcement. The statement explicitly endorses civil liability with provisions for compensation, justifying the maximum score.

The entity expresses concern regarding the proposed limiting of value chain coverage to tier-1

"The Omnibus proposal indicates primary due diligence will only focus on tier one suppliers, a major reduction from its original requirement encompassing the whole value chain. This is a major concern because the most egregious human rights abuses are often found in the lower, less visible tiers of supply chains."

The entity 'broadly agrees' with DDD definition of the consultation. However, it is not asked about the entire value chain (both upstream and downstream) and remedy, and response does not allow inference.

The entity indicates that: "ETI broadly agrees with the definition, with the following comments ... Due diligence should cover a business’s entire supply chain and should be risk-based (i.e. risk of harm to individuals or to the environment). ... Any definition should align with the definitions set out in the UN Guiding Principles on Business and Human Rights as well as in the OECD Due Diligence Guidance for Responsible Business Conduct. No reference was found to the whole chain (both up and downstream) and remedy."

Based on the document "EU Business Statement – February 2022," in which this entity is listed as a signatory, it states: “The legislation should oblige businesses to carry out ongoing due diligence proactively and across all their operations and the full value chain.” “The UNGPs set out that a company’s responsibility... extends throughout its business relationships across its full value chain...”

The statement fully supports the application of due diligence throughout the entire value chain, as reflected in UN and OECD principles. The statement proposes that the legislation require a continuous and proactive approach, covering direct operations and business relationships. There is clear and normative support for the application of due diligence across the entire chain (upstream and downstream), justifying the maximum score for this indicator.

The statement advocates for enforcing due diligence in own operations and 'value chains'.

The statements shows support for the Directive in general, and also states that 'The Directive aims to harmonise requirements for companies to carry out due diligence in their own operations, subsidiaries and value chains, thereby ensuring an EU-wide level playing field and avoiding market fragmentation. This common standard should be effectively enforced, recognising the need for a balanced combination of administrative enforcement and civil liability, as well as access to justice measures'.

The entity expresses concern regarding the removal of the duty to terminate business relationships over repeated human rights violations that cannot be resolved through leverage

"On disengagement, the proposal removes the duty to terminate business relationships in cases of actual and potential adverse impacts. Rather, once the due diligence measures have been exhausted, a company would only be required to suspend, and not terminate, the business relationship."

The entity sees limitation in the Directive's draft provisions on stakeholder engagement and advocates for a more clearly recognition of the role of stakeholders' interest in the legislation.

It states that: 'an important limitation of the provisions on human rights' due diligence in the Draft Directive relates to the limited role of stakeholder engagement which is only encouraged 'were relevant' ... In ETI's experience ... it is not possible to develop a meaningful understanding o rightsholders' experience, their expectations and therefore effective action by business, absent meaningful engagement with the rights holders themselves and their legitimate representatives.' It adds that: 'the Directive should more clearly recognise the importance of effective stakeholder engagement, throughout the due diligence cycle, including the specific role trade unions are able to play in this process. Specific consideration for people in situations of heightened vulnerability, such as women and girls, children, casual workers, homeworkers, indigenous communities, and smallholder farmers, should be incorporated, particularly given that these groups could be harder to access and consult with but may still be equally or even more affected by the negative impacts of businesses operations.'

The entity expresses concern regarding the proposed limiting the definition of stakeholders

"The definition of ‘stakeholder’ would also be reduced by limiting it to workers and their representatives, and to individuals and communities whose rights or interests are or could be ‘directly’ affected by the company, its subsidiaries and its business partners. While it is realistic that not every stakeholder can always be engaged at length, this threatens a wider understanding of human rights impacts and the previous draft gave sufficient flexibility to ensure this could be proportionate to the salience and complexity of the issues."

The entity strongly agrees that companies should be required to identify stakeholders and their intersts, and ellaborates on it.

The entity strongly agrees: "Company directors should be required by law to identify the company's stakeholders and their various interests. This is an important part of any comprehensive due diligence process. Without first mapping all relevant stakeholders, a business will be unable to properly assess the risk of any adverse impacts it may cause or contribute through its operations or supply chain."

The entity does not take a position on legal duties for individual company directors.

It states that: "ETI does not take a position on legal duties for individual company directors. However, it is crucial that businesses should effectively consult a wide range of stakeholders when conducting their due diligence."

Based on the document "EU Business Statement – February 2022," in which this entity is listed as a signatory, it states: “Listening to the voices of workers, community members and others is vital to a company’s understanding of risks to people and planet and strengthens its due diligence.”

The letter advocates that risk assessment should take place through active listening and dialogue with affected stakeholders, which aligns with the spirit of the indicator. The statement explicitly supports the use of dialogue as a risk assessment tool, justifying the maximum score.

There's a support for stakeholder engagement throuhgout due diligence.

The joint statement indicates that 'It is important that the Directive integrates stakeholder engagement as a critical component of effective due diligence, recognises the role of trade unions and worker representatives, and promotes effective collaboration between companies, including in the context of industry and multistakeholder initiatives'.

The entity agrees to some extent to the question of whether corporate directors should manage the risks for the company in relation to stakeholders and their interests, and consult with stakeholders in due diligence process although does not explicitly refer to consult with them in developing action plans.

The entity states that: 'A comprehensive due diligence process should also require businesses to manage the risks of any adverse human rights impacts on their stakeholders that they may cause or contribute to. However, this is primarily about risk to the stakeholders – not risk to the business.' It also says that: 'it is crucial that business should effectively consult a wide range of stakeholders when conducting due diligence.'

There's a support for stakeholder engagement throuhgout due diligence.

The joint statement indicates that 'It is important that the Directive integrates stakeholder engagement as a critical component of effective due diligence, recognises the role of trade unions and worker representatives, and promotes effective collaboration between companies, including in the context of industry and multistakeholder initiatives'.

Although the entity seems to agree with the requirement to managing risks in relation to stakeholders, it does not disclose a specific position on whether this should be a legal requirement for directors.

The entity agrees 'to some extent' to this question of the consultation. It adds that: 'A comprehensive due diligence process should also require companies to manage the risks of any adverse human rights impacts on their stakeholders that they may cause or contribute to. However, this is primarily about risk to the stakeholders – not risk to the company. ... Nevertheless, in doing so, the company benefits through ensuring stronger, more resilient operations and supply chains'. It does not clarify whether this should be a requirement for directors.