Introduction

This section should be completed by companies that are responsible for product creation, which includes design & development, manufacture, and distribution of their own/private label brands.

Licensees:
Companies that are licensees (holder of a license to use a trademark) and are responsible for product creation as per the previous paragraph should complete this section to evaluate their own sustainability practices and performance.

Licensors:
Companies that make product creation decisions for licensees to execute should include those licensee business streams in their own Brand section reporting.
Companies that request their licensees to complete their own Higg BRMs should exclude those licensee businesses from their own Brand section reporting to avoid double counting..

Steps in the OECD due diligence process that are addressed in the Brand – Environment section
Step 1. Embed Responsible Business Conduct into policies & management systems
Step 2. Identify & Assess Adverse Impacts in Operations, Supply Chains and Business Relationships.
Step 3. Cease, prevent or mitigate adverse impacts
Step 4. Track Implementation and Results
Step 6. Provide for or cooperate in remediation when appropriate

Brand (Environment)

Product

1.1 Which of the following primary material categories are used in your products?

  • Cellulosic Textiles (man-made)
  • Cotton Textiles
  • Foam
  • Fur
  • Insulation Materials (natural or synthetic)
  • Leather
  • Plastics (synthetic or bio-based)
  • Metals
  • Rubbers/Elastomers
  • Synthetic Leather
  • Synthetic Textiles
  • Wood-Based Materials (e.g., cardboard, cork, wood)
  • Wool
  • Other textiles

Intent of the question

This question intends to assess whether your company has a way of accurately accounting for and tracking of the primary materials used in the products you sell. This information supports the company’s understanding of the environmental risks and impacts associated with their material use.

Technical Guidance

Scope of this question

  • Materials provided are aligned with the Higg Materials Sustainability Index (MSI). For a list of definition of materials please login to Higg.org to access the Higg MSI, Example Materials.
    • Definition of Foam: A solid “open cell” or “closed cell” foam material commonly used in packaging and footwear. Includes EVA, PE, and PU foam. More information can be found through Higg MSI on Higg.org platform
  • Product categories: The key users are companies that sell apparel, footwear, textile products and hard goods. However, with the exception of the questions around specific materials, the tool enables companies regardless of product category to evaluate their sustainability performance and provides recommendations on integrating sustainability into organizational practices.
  • Primary materials are defined as the key materials used to make the final product. Primary materials are all the materials that, when totalled, represent at least 80% of the total material usage.
  • The primary materials used in the production of your products, excluding packaging and trims, within the last calendar year, January 1 through December 31.
  • Includes nominated and non-nominated (chosen by your supplier) materials that are used in your final product.

Definitions

Materials inventory: Information that has been documented on the material types and volumes used by the company. This information can be consolidated from purchase orders, contracts, sourcing specifications, credible data collected from Cut Make Trim suppliers/sourcing agents/nominated fabric mills, or by using information from product legal declarations/care labels.

If the material is sourced from improved (sustainable) sources, such as organic cotton or recycled polyester, this should be noted in the inventory (so long as these claims are verifiable and credible).

Nominated vs non-nominated suppliers:

Nominated suppliers are those suppliers with a direct or agreed business arrangement – for example, if a brand has agreed with a fabric mill to purchase a specific amount of fabric that can be used by Cut Make Trim (CMT) suppliers. Alternatively, a brand can have an agreed list of ‘allowed’ producers that a supplier may source from – for example, for trim, packaging, dyestuffs, fabric, etc., there may be a list of ‘endorsed’ suppliers that a direct supplier is allowed to negotiate with or buy from.

Non-nominated supplier will be any supplier below the CMT suppliers without a direct business relationship to, or agreement with, your company, and who is not specifically identified as a recommended/required supplier.

Primary materials are defined as the key materials used to make the final product. Primary materials are all the materials that, when totalled, represent at least 80% of the total material usage.

Packaging: Materials used to protect or wrap goods.

Trims: Trims and components are the other components (other than fabric) that make up the rest of the garment. This can include but is not limited to buttons, threads and zippers (apparel examples) or eyelet, buckle, cord and EVA padding (footwear examples).

How to calculate primary materials

There are several ways that companies can create an inventory of the types and volumes of materials. Three examples are listed below. The level of accuracy increases from #1 to #3.

  1. By reviewing material projections provided to the Tier 2 material manufacturer, either from the brand or on their behalf by Tier 1.
  2. By reviewing Purchase Orders from Tier 1 for Cut, Make, Trim, or brand in some cases, to the Tier 2 material manufacturer.
  3. By reviewing production, shipping, and receipt documents to corroborate the actual quantities.

Answer options

  • To answer ‘yes’ to this question, >75% of your total volume of primary materials has been recorded in an inventory.
  • To answer ‘partial yes’ to this question, 25% to 75% of your total volume of primary materials has been recorded in an inventory.
  • To answer ‘no’ to this question, <25% of your total volume of primary materials has been recorded in an inventory.

Helpful Resources

  • Companies that do not have a materials inventory yet, can start by using the data collection sheet (material use tab) to record their types and volumes of materials used in their products.
  • Some tools to utilize when assessing the environmental impacts of your materials could include: a Life Cycle Assessment, the Materials Sustainability Index (MSI), http://msi.higg.org/page/msi-home or other credible environmental impact assessment.
  • Textile Exchange offers a standardized approach to converting product, fabric, and yarn used back into fiber for a consistent baseline measurement within and across companies. For more information:

UNIDO/UNEP RECP Programme’s Enterprise level indicators for Resource Productivity and Pollution Intensity: 6 steps in order to calculate materials use.

How this will be verified

Documentation required

If you answered ‘yes’ to this question, your company should provide the following: 

  • A documented inventory of the types and volumes of materials used in your products. 
  • An explanation of how the calculation was made, including an explanation of the methodology. 
  • Companies that use Higg MSI can show the customs materials library.
  • If available, companies that are reporting to Textile Exchange’s Corporate Fiber & Materials Benchmark may use the same methodology to calculate the bulk fiber and upload the corresponding documents to this question.

Interview questions to ask:

  • Please describe the process used to create the material inventory.

Please describe the internal employees and suppliers involved in the process of creating the material inventory.    

  • Yes (>75% of trim/component materials)
  • Partial Yes (25-75% of trim/component materials)
  • No (<25% of trim/component materials)
  • Unknown

Intent of the question

This question is intended to assess whether your company has a way of tracking the trim materials (by volume) used in your company’s products. This information is needed in order to build an understanding of the potential environmental impacts and risks associated with these materials.

Technical Guidance

Please refer to the definitions as stated in previous question.

How to calculate

  • Assess overall volume or number of trim materials by weight or by product/unit. This
  • can be done through: a company’s own records, supplier information, or by credible calculation of estimated volume/number.
  • Calculate volume of trim in inventory using real data from direct records or by the same calculation used to create an overall volume assessment.

Answer options

  • To answer ‘yes’ to this question, >75% of your total volume of trim materials has been recorded in an inventory.
  • To answer ‘partial yes’ to this question, 25% to 75% of your total volume of trim materials has been recorded in an inventory.
  • To answer ‘no’ to this question, less than 25% of your total volume of trim materials has been recorded in an inventory

Helpful Resources

  • Some tools to utilize when assessing the environmental impacts of your materials include: a Life Cycle Assessment, the Materials Sustainability Index (MSI), or other credible environmental impact assessment.

How this will be verified

Documentation required

  • A documented inventory of the types and volumes of materials used in your products. 
  • An explanation of how the calculation was made, including an explanation of the methodology. 
  • Companies that use Higg Design & Development Module (DDM) can use the trims library if was used to assess their trims. Note: The Higg DDM will be sunsetting and the Trims Library will be part of the new Higg MSI to be released later in 2020.

Interview questions to ask:

  • Please describe the process used to create the trim inventory. 

Please describe the internal employees and suppliers involved in the process of creating the trim inventory.

3.1 Please describe your assessment methods or provide supporting documentation text

Intent of the question

This question is intended to confirm your company’s understanding of the environmental impacts associated with the primary materials used in the products sold by your company. It is important to have a thorough understanding of these impacts before developing an effective materials sustainability strategy.

Technical Guidance

There are 4 steps for companies to begin assessing environmental impacts relative to risks in the raw materials supply chain:

Step 1: Identify & track materials by volume.

Identify all your raw materials by volume, country of origin and use the data collection sheet (material use tab) if helpful.

Companies may choose to prioritize the primary materials with the largest volume and gradually include the other (remaining) materials.

Step 2: Assess the impact associated with the materials.

Use the Higg Materials Sustainability Index (Higg MSI) to assess and calculate the environmental impacts of your materials. The Higg MSI has identified the following impacts:

  • Climate Change/Global Warming
  • Eutrophication
  • Water Scarcity
  • Abiotic resource/fossil fuel depletion
  • Chemistry

Step 3: Identify the salient sector risks associated with the materials.

  • OECD has identified the following common risks for the garment and footwear sector:
    • Hazardous chemicals
    • Water consumption
    • Water pollution
    • Greenhouse gas emissions
  • Apparel and Footwear specific resource: Textile Exchange has created this helpful resource which includes the identified risk(s) for the material types: cotton, down, wool, man-made cellulosic fibers, polyester, nylon (please go the table of contents and click on the header “risk management” for each of the aforementioned materials).
  • The Sustainable Apparel Coalition has created an overview of environmental risks for companies to consult which describes the environmental risks identified in the Higg BRM assessment.

Step 4: Evaluate each material on the basis of where your material is manufactured.

  • Measure the environmental impacts of the production processes through the Higg Facility Environmental Module (Higg FEM) to understand the specific impacts against the risks.
  • The volume your company uses (how important or strategic is this material).
  • The sourcing country and the associated social impact (what geographical and commodity risk is involved).
  • The leverage your company has to reduce the risk (does it require an industry approach or can an individual company make the change).

Step 5: Develop an action plan and set targets to track progress

  • Engage internal and/or external stakeholders to identify how your company can mitigate and/or reduce the adverse environmental impacts on the material and supplier level through a sustainable materials strategy. Key internal stakeholders are for example senior management, product designers and developers, Research & Development and staff responsible for sourcing / procurement.
  • Based on the discussions, develop an action plan and SMART targets that specifies how the company and respective staff will source more sustainable materials (in order to reduce or mitigate their adverse impacts) in the next 1-3 years.

Important Note: All companies, regardless of their company size or degree of leverage with their suppliers, have a responsibility to know the environmental impacts of its materials use. However, the specific steps that a company would take may vary based on their leverage. For example, a company could collaborate with other companies through a multi-stakeholder initiative to increase their leverage with suppliers.

Helpful Resources

  • Higg Materials Sustainability Index (Higg MSI) – Open source tool that provides access to a large amount of relevant information about the impacts of material production used in the apparel, footwear, and home textile industries. Companies can leverage this information in different ways to get a clear understanding of what is causing different types of material impacts, and to explore different production processes that can be used to reduce those impacts. Higg MSI: Sustainable Apparel Coalition
  • Textile Exchange – Free download of the 2020 Market Report outlining the preferred fibers and materials used by the textile industry.
  • 2020 PREFERRED FIBER & MATERIALS MARKET REPORT

How this will be verified

Documentation required

  • Documentation related to the environmental impact assessment of the materials.
  • An explanation of how the assessment was made, including an explanation of the methodology.
  • Above documentation can relate to the tools/programs: Higg Materials Sustainability Index (Higg MSI), Life Cycle Assessment, Textile Exchange Corporate Fiber & Materials Benchmark, or other credible environmental impact assessment.

Interview questions to ask

  • Please describe the process used for the environmental impact assessment of these materials that are used to create your company’s products.  
  • Please describe the internal employees and suppliers involved in the process of evaluating the environmental impact of these materials that are used to create your company’s products.

4.1 Please select the applicable environmental attribute for your materials

This question will populate a list of environmentally preferred materials based on your selections in question 1. Please select one or more of the options that are populated for you.

  • Cellulosic Textiles (man-made)
  • Cotton Textiles
  • Foam
  • Fur
  • Insulation Materials (natural or synthetic)
  • Leather
  • Plastics (synthetic or bio-based)
  • Metals
  • Rubbers/Elastomers
  • Synthetic Leather
  • Synthetic Textiles
  • Wood-Based Materials (e.g., cardboard, cork, wood)
  • Wool
  • Other textiles

Intent of the question

This question is intended to assess whether your company sources materials that have reduced environmental impacts compared to their conventional counterparts. The majority of product-related environmental impacts result from: raw material extraction, growing, and harvesting; as well as from processing, dyeing, and finishing of the materials. Source: Quantis’ 2018 Environmental Impact of the Global Apparel and Footwear Industries study

Technical Guidance

Definitions

Preferred: The Higg BRM definition of “preferred” aligns with Textile Exchange, which defines a preferred fiber or material as: one which results in improved environmental and/or social sustainability outcomes and impacts in comparison to conventional production.

Attributes: Refers to material types that have a verifiable and credible claim that improve environmental sustainability.

Two resources available to explore preferred materials options with reduced environmental impacts are:

Textile Exchange’s Preferred Materials Portfolio

Companies can significantly decrease the environmental impacts of their materials use through the following actions:

  • For the material you are currently using, consider switching to a material type with a lower impact. Examples include using: recycled content, organically grown or chemically optimized fibers, and no- or low- water processes. When you are switching between materials please ensure through analysis and research that you are not transferring impacts to another life cycle stage.
  • Once you have selected the material that will be used, you can explore lower impact processing options of that particular material. The Higg MSI and Textile Exchange’s Preferred Materials List can be used to review process options that will reduce your environmental impact.

Answer options

  • To answer ‘yes’ to this question, >75% of your total volume of materials are either environmentally preferred or have an environmental attribute.
  • To answer ‘partial yes’ to this question, 25% to 75% of your total volume of materials are either environmentally preferred or have an environmental attribute.
  • To answer ‘no’ to this question, you should have documented less than 25% of your total volume of materials are either environmentally preferred or have an environmental attribute.

Helpful Resources

How this will be verified

Documentation required

If you answered ‘yes’ to this question, your company should provide the following: 

  • A documented inventory of the environmentally preferred materials, or inventory of materials with environmentally preferred attributes.
  • Basis or source information that was used to determine that these materials or material attributes have reduced impacts. Examples include materials from the Higg MSI and Textile Exchange’s preferred materials list.
  • Companies that use Higg MSI can show the customs materials library.

Interview questions to ask:

Please describe the process used to determine or verify that the materials or material attributes have reduced environmental impacts.

5.1 If you answered yes, please select the applicable environmental attribute for your materials:

Intent of the question

This question intends to ensure that companies are confirming and tracking the materials used which have environmentally preferred attributes/certifications. Developing a progressive sustainable materials strategy will only be possible if a company understands and has visibility of their entire materials portfolio and knows whether environmentally preferred attributes or certifications have been used.

Technical Guidance

This question focuses on your individual materials, not on your products.

For each environmentally preferred material selected in the previous question, you will be asked to specify which environmentally preferred attribute or certification has been used within the table format.

On the next page you will find a brief explanation on the terms used within the table.

Type of certification / attribute

Certifications such as but not limited to:

Environmentally preferred attributes (not certifications) that can be considered, such as Better Cotton Initiative or bio-based polyester, are shared on page 16 of this Textile Exchange Guide.

Companies can also use the Higg MSI dyeing and coloration information to choose lower impact dyeing process e.g. solution (dope) dyeing.

Baseline %

In order to demonstrate improvements or reductions, it’s important to know what your starting point is.

A “baseline %” is a starting point of the initial reporting percentage.

This percentage will enable your company to track over time whether you are on track to make progress against your set target(s).

Baseline yearThe initial reporting year, which you are measuring targets against, is also known as the baseline year (which the above “baseline %” is based on).
Target %

A target is a particular goal to be delivered by a company for a specific period. The Target % is an indicator of where you want to be from the baseline %.

Target types that are most commonly used are either absolute or normalized.

Absolute target addresses the total amount/quantity per year or per month. In the materials context this could be total amount of water used by materials supplier in a year or total amount of kg of recycled polyester use.

Normalized target is a comparison of totals or usage against a predefined variable. An example is the amount of water used to produce 100 yards of fabric at a material supplier. In the materials context this could be the quantity per meter of fabric, quantity per unit, quantity per dollar of revenue. Or percent of total polyester usage that is recycled content.

It is recommended to use normalized targets when setting materials targets.

Target yearThe year in which the “target %” has to be achieved.
Last calendar year %The percentage of products which carry end-of-use certifications and/or attributes in the last calendar year.
Additional commentsAny notes or comments to provide clarity to the information you have submitted.
  • Attributes: Refers to material types with verifiable and credible claims that improve environmental sustainability. For example, organic cotton and recycled polyester are attributes.
  • Certification: A third party certification program confirm the integrity of the environmentally preferred attributes within the material. Third-party certification programs support a systemic approach to integrate environmental performance in the raw materials. Examples of certification programs include but is not limited to: GOTS, Textile Exchange and Forest Stewardship Council.

Answer options

  • To answer ‘yes’ to this question, your company has tracked more than 75% of your entire materials portfolio for environmental attributes or certifications.
  • To answer ‘partial yes’ to this question, your company has tracked 25-75% of your entire materials portfolio for environmental attributes or certifications.
  • When answering “no” to this question, your company has tracked less than 25% of your entire materials portfolio for environmental attributes or certifications.

Helpful Resources

How this will be verified

Documentation required

If you answered ‘yes’ or ‘partial yes’ to this question, your company should provide the following:

  • Completed the information as requested within the table.
  • A documented inventory of the environmentally preferred materials used in the previous calendar year.
  • When certifications have been used, please share the related scope and transaction certificates of the material suppliers.

Interview questions to ask:

  • Please describe the process used to determine or verify that the materials have environmentally preferred attributes or certification.
  • Please describe the process used to collect certificates along the value chain of the sourced materials.

6.1 Please describe your assessment methods or provide supporting documentation

Intent of the question

This question is intended to ensure companies have a robust understanding of the environmental impacts associated with the use of their products so that they can set strategies and targets accordingly to improve on these identified impacts. This question also intends to support your internal process to identify and prioritize the key environmental risks and impacts holistically across your product portfolio.

Technical Guidance

To answer ‘yes’ to this question, your company must have carried out a product life cycle assessment, life cycle inventory, or analysis / study in the last five years that includes one or more of the following:

  • Analysis of environmental risks and impacts based on the manufacturing through to use phase of key product categories.
  • Description of the percentage of production or sales the above analysis covers.
  • Documentation of materials until processes, which can be collected through bill of materials and production records. Documentation related to the materials used and the finished goods production processes — which can be collected through bill of materials and production records.
  • Analysis of specific opportunities within the stages of product design & development and consumer use phase to address environmental risks or impacts.

Note: Any analysis, assessment, or study should be backed up by credible data or verified by an accredited third party.

Helpful Resources

  • SAC has released the first edition of the Higg Product Module in September 2020. This tool will enable companies to assess environmental impacts from materials to products and will help companies develop more sustainable products consistently across the industry. The second edition of the Higg Product Module, which covers the use and end-of-use phase, will be released in 2021.
  • European Clothing Action Plan – Mapping Clothing Impacts

How this will be verified

Documentation required

  • Copy of the analysis, assessment, or report (carried out in the last five years) that identifies the key environmental risks, impacts, and opportunities associated with the products you sell. 
  • Analysis through Product Life Cycle Assessment or other credible tools.

Intent of the question

This question intends to ensure companies are confirming and tracking the percentage of products that have environmentally preferred attributes/certifications. Developing a progressive sustainable products strategy will only be possible if a company understands and has visibility of its entire product portfolio and knows whether environmentally preferred attributes or certifications have been used by their finished goods/products suppliers.

Technical Guidance

  • If you have answered “yes” to this question, your company has tracked the environmental attributes of more than 75% of your entire product portfolio.
  • If you have answered “partial yes” to this question, your company has tracked the environmental attributes for 25-75% of your entire product portfolio.
  • If you have answered “no” to this question, your company has tracked the environmental attributes for less than 25% of your entire product portfolio.

Guidance related to the table format

Please refer to the guidance as part of question 5.

How this will be verified

Documentation required

If you answered ‘yes’ to this question, your company should provide the following: 

  • A documented inventory of the products that have environmentally preferred attributes/certifications that your company has used in the previous calendar year. 
  • When certifications have been used please share the related scope and transaction certificates of the finished goods/products (tier 1) suppliers.

8.1 What does your QA program include for enhancing product duration of service (lifetime)?

  • Durability criteria for products and materials to ensure longevity in the products’ intended use.
  • Lab and/or field-testing program to ensure products and materials meet durability criteria.
  • An active feedback system to assess the condition of products throughout their duration of service (including returns) and to upgrade durability criteria accordingly.
  • Educate consumers about the intended life cycle/duration of use of product(s).
  • Formal inclusion of QA data into the product design process.

Intent of the question

This question is intended to a) encourage companies to make more durable products and b) to assess whether your company has a quality assurance program aimed at enhancing the durability of your products. Product durability is an important determinant of a product’s duration of service, a key contributor to the product’s impact over its life.

The longer a product’s duration of service, the longer the period of time over which the product’s environmental impacts are amortized. If a product’s user buys fewer new products due to using a more durable product, this also reduces the environmental impact associated with the manufacture of the new products.

Technical Guidance

Answer options

  • To answer ‘yes’ to this question, your company must have a formal quality assurance program in place aimed at understanding and enhancing the durability and longevity of your company’s products.
  • To answer ‘partial yes’ to this question, your company does not have a formal quality assurance program but has taken actions to enhance the product lifetime (duration of service).

Components to consider as part of your quality assurance program are:

  • An active system of feedback to continuously assess worn products (including
  • returns) and upgrade durability criteria accordingly. For example, this may include documenting and reporting product return rates with reason codes that reference “failure due to materials, assembly, etc.”
  • Formal inclusion of quality assurance data into the product design process.
  • Lab and/or field-testing program to ensure products and materials meet durability criteria.
  • Product- and material-level durability criteria to ensure longevity in the product’s intended use.
  • Communication to consumers about the intended life cycle/duration of use of product(s).
  • A clear definition and technical guidance on what is meant by ‘durability’ within fabric and garment processes. For example, is it defined by: the overall length of time a garment or fabric can function? Or by ensuring the product remains serviceable for the expected lifetime of the garment? These definitions should include testing protocols and quality standards to support this definition.
  • Documentation of ASTM testing results on materials from a validated testing laboratory (i.e., tear strength, abrasion resistance, etc.) and relevant field trial experiments.

Helpful Resources

How this will be verified

Documentation required

  • Documented quality assurance program shared with internal and external partners.
  • In order to select any of the answer options, you should ensure that there are a)
    explicit and formal policies available to all relevant team members and b) clear processes in place to ensure alignment with those policies, including embedding criteria or decision points/priorities into protocols and internal systems.
  • Verification of lab and/or field-testing program
  • Documentation of ASTM, ISO, AATCC, or JIS testing results on materials from a validated testing laboratory (i.e., appearance after washing; physical test such as tear strength, abrasion resistance, snagging, etc.)
  • Relevant reports of field trial experiments which may include information related to the contracted testing person or team, time requirement for field testing (i.e., hours or days, etc.)

Relevant information about the intended life cycle/duration of use of product(s) is shared with consumers (e.g. through company’s corporate website, hangtags, or in-store information).

9.1 Please list these efforts and provide relevant URLs that describe them in detail.

Intent of the question

This question is intended to assess whether and how your company engages with other stakeholders and accelerates the adoption and development of sustainable materials or products. In particular, Small and Medium- sized Enterprises (SME) are encouraged to take part in multi-stakeholder initiatives that drive collective impact to bring programs to scale, but are not expected to create a new initiative if their resources are not sufficient.

Technical Guidance

To answer ‘yes’ to this question, your company must be able to demonstrate that you have contributed to one or more of the following initiatives:

  • Contributing financial resources to research, or to innovation funds, or partnering with innovation institutions or organizations to address key industry-wide emerging issues such as land use & deforestation, animal welfare, or microfiber pollution; or to address known challenges in new and innovative ways. For example, funding a report exploring opportunities to address microfiber shedding through collaboration between companies, washing machine manufacturers, research institutions, and municipal waste or water treatment facilities; or analyzing how companies can play a role in scaling up sustainable cellulosics.
  • Active engagement and collaboration with producers, technical organizations, communities, NGOs and/or governments to develop, test and share information, knowledge and best practices that accelerate the adoption and development of more sustainable materials.
  • For example, directly working with organizations such as IDH, Solidaridad, Textile Exchange or WWF on addressing on-the-ground impact with cotton farmers, local agricultural departments, and ginners to support better cultivation practices for cotton in key production regions; or collaborating with companies, technical organizations, NGOs and beef producers to create deforestation-free and high-welfare leather stocks and to gradually make better practices the norm in the cattle supply chain.
  • Supporting credible programs to improve on-the-ground practices in materials production, accelerate the improvement of regional and national production methods, or scale up global systems for more sustainable materials.
  • For example, supporting the expansion of a more sustainable material certification scheme to new countries or strengthening the certification standards.
  • Active engagement with relevant regional/national/international government organizations to encourage uptake and preferential policy for better practices.
  • For example, working with other stakeholders to advocate for embedding better practices in national agricultural or forestry standards in key production regions; engaging with regional organizations like the EU to support increased sustainability requirements for materials imports; working with the UNFCCC to support measurable carbon credits for sustainable materials.
  • Engagement with policy and governance should always be done in an appropriate manner to avoid undue influence or company policy capture – it is recommended to work with a coalition of other companies and stakeholders, or with a credible and neutral 3rd party broker, when doing any policy engagement in a context where a company holds significant trade or other forms of power/influence, or where counterparts are potentially under-resourced such as in a developing country context with challenges around governance resources.
  • Supporting the creation (or seeding) of financial or trade solutions to systemic materials challenges.

For example, working with financial organizations, development organizations, or governments to create systematic and supportive financial mechanisms that will give materials producers access to a) technical investments and upgrades, b) technical capacity and skills, c) certification or verification resources, or d) preferential sales price or trade finance mechanisms.

Helpful Resources

The above is not an exhaustive list of initiatives that companies can reach out to.

The SAC intends to update the Brand & Retail Module – How to Higg Guide on a regular basis with user feedback.

How this will be verified

Documentation required

  • Relevant links/URLs to these multi-stakeholder initiatives/platforms.
  • A signed partnership or collaboration agreement with the relevant stakeholder(s).
  • Evidence of participation and engagement in shared platforms, including multi-
    stakeholder events.
  • Evidence of direct engagement with community groups.

Describe the results achieved through these multi-stakeholder initiatives/platforms.

Supply Chain: Product & Textiles

Intent of the question

Knowing the specific address where production processes occur is the first step in understanding the environmental risks and impacts of your materials and products.

It is important to know the specific location of each facility that produces or processes materials and products, and the locations where the raw material inputs originate, as this is where some of the largest impacts occur.

In addition, knowing the geographical location would help you understand the sensitivity to harm or adverse environmental impacts that is linked to the sourcing region so that you can create action plans to mitigate these key impacts. For example, knowing what energy sources (coal, wind, solar or nuclear power) that are available in the region, whether the region has water risk or scarcity or if any important protected areas (such as ancient forests or areas of rich biodiversity) are part of your supply chain are all important regional information in order to determine the risk level.

Technical Guidance

Why does it matter?

The further down your supply chain, the more challenging it can be to obtain the exact locations of production facilities or areas where raw materials are grown or extracted. Typical reasons for these challenges include:

  • Lack of direct contractual relationships with these entities.
  • Many raw materials such as cotton, wool, and metals are commodities that are sold through brokers or traders on the open market.
  • The supplier subcontracts work to other suppliers.

Understanding these relationships will help you know your supply chain, and will enable you to uncover risks and inefficiencies as well as opportunities. As an example, subcontractors used by your suppliers may operate in a manner that does not meet your standards and exposes your company to higher risks.

Keep in mind that the address or location you have for a supplier often does not identify the location of the facility producing the material or product. The address may be the location of the company’s headquarters or sales office, or an agent’s address. The supplier often produces the same product or material at various locations.

Getting started

The process of obtaining the addresses in the supply chain starts with listing all the suppliers that produce products and materials for your company. Work with your sourcing managers, sourcing agents, facilities managers, field staff, and buyers to build this list. Continue to work with these same people to reach out to the suppliers to obtain the addresses of all their production facilities that produce products or materials for you. Continue to work with the first layer of suppliers to identify their list of suppliers and so on.

Continue this work until you are able to identify the location of the supplier that produces the raw materials, such as the farm or mining operation.

Start the process by focusing on the suppliers that produce your high-volume products and materials. For each product, trace the flow of materials through the supply chain. Keep cascading along the chain until you reach the end: your raw material suppliers.

It is important to identify the address(es) of the actual facility(ies) that produces the product and material, and each of the suppliers down the supply chain, as this is the first step in determining the specific impacts of the materials and products you purchase. By knowing these locations you will then investigate the various impacts such as:

  • Types, sources, and amounts of power used.
  • Sources and amounts of water used.
  • Wastewater treatment systems on site.
  • Types and amounts of contaminants in the wastewater discharged.
  • Types and amounts of air emissions.
  • Environmentally sensitive areas near the facilities.
  • Impacts to local communities.
  • Local and county regulations that apply, etc.

The above information for each facility location can be obtained by using the Higg Facility Environmental Module (Higg FEM)

The descriptions of supplier tiers:

  • Tier 1 Final product manufacturing and assembly (or finished goods production)
  • Tier 2 Material manufacturing (or finished materials production)
  • Tier 3 Raw material processing
  • Tier 4 Agriculture and extraction
  • Other tiers: E.g. wholesale/third party brands, chemical supplier

To better understand the supply chain tiers please review Supplier Network Diagram version 6.1  

This work is licensed under a Creative Commons Attribution-Share Alike 4.0 International License.

Definitions:

  • Finished Component Manufacturing: This refers to manufacturers that supply trims/accessories comprising the finishing components of an apparel, footwear and hard goods products. Examples are zippers, buckles, snaps, buttons, etc.
  • Material Converter: An organization that coordinates between Tier 2, 3, 4 suppliers to develop finished materials to be used in the final products.

Guidance for Small and Medium sized Enterprise (SME)

From the perspective of conducting due diligence, all companies irrespective of size must know their supply chain in order to identify risks that prevent them from having full visibility and being able to assure customers of their responsible business conduct.

Due to their relatively small order quantities and minimal leverage in the supply chain, SMEs may oftentimes rely on business partners (sourcing agents) for the management of their supply chain. This kind of indirect sourcing is an information gap that poses significant risk (because most impacts occur in the manufacturing of products) and must be addressed. At the same time, the strength of SMEs also lies in their size. These companies tend to be more nimble/agile and can quickly react to any changes compared to larger corporations.

At the start of this journey of mapping your supply chain you will uncover many questions and uncertainties. You will also find that cascading down your raw material supply chain will take considerable time and effort. This is normal and to be expected. Having supply chain transparency is a long-term goal which requires support of key- stakeholders involved. To this point we encourage SMEs to engage in industry/sector initiatives such as the Sustainable Apparel Coalition to help implement collaborative solutions to this complex topic that one company alone cannot solve.

The following SMEs have publicly shared their insights on supply chain mapping and providing transparency:

Answer options

  • To answer ‘yes’ for each supplier segment, your company must know the production locations for >75% of suppliers in the relevant tier.
  • To answer ‘partial yes’ for each supplier segment, your company must know the production locations for 25 – 75% of suppliers in the relevant tier.
  • When answering “no” for each supplier segment, this would mean that your company knows the production locations for less than 25% of suppliers in the relevant supplier tier.

Helpful Resources

How this will be verified

Documentation required

For each segment of the supply chain that was selected, your company should provide: 

  • A documented list of the addresses for each supplier segment that you have selected. 
  • If applicable, a link to your corporate website where your supplier list/supply chain has been publicly disclosed. 

Interview questions to ask:

  • What aspects of the supply chain were included? What was excluded? 
  • Please describe the process for obtaining the addresses for the supply chain.
  • Who was involved in the process?

11.1 For which supply chain segment(s) does your company disclose supplier lists?

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: please specify segment type e.g., dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

11.2 Where can this information be found? Please list the URL.

11.3 How often does your company update these lists?

  • Quarterly
  • Every six months
  • Every year
  • Less frequent than once a year

11.4 When disclosing supplier lists, do you also link to each supplier’s environmental performance data? Answer options: Yes/No

Intent of the question

This question intends to encourage companies to publicly disclose their supplier list for the purpose of increased supply chain transparency. When companies publicly communicate about their supply chain, it ensures transparency and accountability to meet with key-stakeholders’ expectations, and gives consumers the option to access information on where the product is made, to help them make an informed purchasing choice.

Transparency also holds companies accountable to ensure that human rights are respected, and that working conditions and the environment are safeguarded.

Technical Guidance

In 2019, the SAC and global research consultancy GlobeScan released the Empowering Consumers Through Transparency report. The report is designed to contribute to thinking and debate within the industry and to stimulate greater collaboration among brands, retailers, and manufacturers to engage consumers globally. More information here.

In 2016, nine labor and human rights organizations formed a coalition to advocate for transparency in apparel supply chains. They developed the Transparency Pledge, and are campaigning for all brands and companies to adopt this. The pledge criteria, to be included within supplier lists, are as follows:

  • The full name of all authorized production units and processing facilities (Processing factories include printing, embroidery, laundry, and so on)
  • The site addresses
  • The parent company of the business at the site
  • Type of products made (apparel, footwear, home textile, accessories)
  • Worker numbers at each site (by category: less than 1000, 1001 to 5000, 5001 to 10000, more than 10000)

Since the founding of the Sustainable Apparel Coalition, a core part of our vision has been to provide trusted and relevant information to all decision-makers, including consumers, so that they can decide how best to manage their impacts through what they purchase. SAC encourages companies to commit to the fashion transparency pledge.

To answer this question:

  • Review the Supplier Network Diagram version 6.1 to better understand the supply chain tiers. SAC aligns with the definitions
  • Please select the supplier segments/tiers that you have publicly disclosed and share the link to where the information can be found. In addition, you are requested to share how often you update the supplier lists and whether a link to the supplier’s environmental performance data has been shared (in addition to their location).
  • In this current version it is not possible to choose between Agents, Trading Company or Licensees. When this supplier segment has been selected you may provide additional explanation of your answer through; the aforementioned public link to where the information can be found or share supporting documentation during verification.

Answer options

  • To answer ‘yes’ for each supplier segment, your company must have publicly disclosed >75% of the suppliers in the relevant tier.
  • To answer ‘partial yes’ for each supplier segment, your company must have publicly disclosed 25 – 75% of the suppliers in the relevant tier.
  • When answering “no” for each supplier segment, this would mean that your company has publicly disclosed less than 25% of your suppliers in the relevant tier.

Helpful Resources

How this will be verified

Documentation required

  • Provide information on how this data is managed and updated. 
  • Provide relevant links/URLs of the supplier list(s) and indicate what segments and tiers are included in the supplier lists that your company has publicly disclosed. 
  • If applicable, share the link to each supplier’s environmental performance data that you have shared as part of your supplier list.
  • Supporting Documents: A brief report or process document, capturing the metric used to calculate the % (e.g. number of sites, volume of specified product, etc.) and the means by which supplier data is gathered and managed per tier.

12.1 Which supply chain segment(s) does this program address?

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: please specify segment type e.g., dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

12.2 What is included in your program?

  • A corporate policy, approved by your company’s executive team and/or Board that underpins the commitment to the success of this program.
  • Compliance with all applicable regulation or international norms (whichever is higher).
  • Specific minimum requirements and best practices that go above and beyond applicable regulations.
  • Requirements in manufacturer contracts that require their suppliers and subcontractors to meet the goals of the program.
  • Public disclosure, including: a description of your impact, effectiveness of managing impacts, and details pertaining to your program.
  • Other

12.3 How does your company implement the program?

  • Action plans are designed to address the differences in manufacturers’ priorities based on local context.
  • Personalized and custom training or workshops.
  • Company facilitates/provides support to manufacturers by providing trained/qualified specialists.
  • Collaborative projects which match manufacturers’ environmental roadmap and priorities.
  • Company provides support to manufacturers to develop internal environmental performance competencies.
  • Company provides support to manufacturers to engage with stakeholders around environmental performance issues.
  • Supporting innovation.
  • Other (If other, please describe)

Intent of this question

This question builds on the questions 1-3 in the Management System section by evaluating how your company is addressing the environmental risks that were identified as part of your risk assessment process.

While it is possible to make progress in advancing sustainability without a formal program in place, establishing such a program enables a company to coordinate its efforts more effectively and to realize continuous improvement over an extended period of time.

Technical Guidance

Supply Chain segments: The definition of tiers has been explained in the guidance of the previous question.

Environmental Performance Program – Includes formal policies, strategies, manufacturer contracts, or action plans to improve the environmental performance of the company’s supply chain.

Answer options

  • To answer ‘yes’ to this question, >75% of your suppliers are enrolled in your company’s environmental program.
  • To answer ‘partial yes’ to this question, 25% to 75% of your suppliers are enrolled in your company’s environmental program.
  • To answer ‘no’ to this question, less than 25% of your suppliers are enrolled in your company’s environmental program.

Helpful Resources

  • To better understand the supply chain tiers please review Supplier Network Diagram version 6.1 This work is licensed under a Creative Commons Attribution-Share Alike 4.0 International License.

Programs that support improvements in environmental performance

How this will be verified

Documentation required

  • In order to consider a supply chain segment included in the program, your company must have documentation in place wherein the supplier segment is specifically addressed and you have described how it is being supported as part of your environmental performance program.
  • Internal or external materials related to the environmental performance program, laying out the approach to improving the environmental performance of supply chain partners, including at least the following information:
  • The description of the policies, goals, and targets that have been approved by your company’s executive team and/or board that commits resources to the environmental program. 
  • The environmental resources (Energy, Water, Waste, Chemistry, etc.) that were identified as priorities for the company as part of the risk assessment process, and which supply chain segments will be engaged or included. 
  • How the program will be implemented, including the staff resources and financial investment needed. 
  • Supplier requirements that are captured in business contracts in which is described how suppliers and subcontractors can meet the goals of the program. 
  • Roles and responsibilities of responsible staff/team/department
  • Internal or external (third party) best practices, tools, or expertise that will be leveraged to help implement this program.  

Public disclosure — including a description of your impact, effectiveness of managing impacts, and details pertaining to your program.

13.1 In which supply chain segments can you confirm that environmental compliance regulations are met?

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: E.g. dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

Intent of this question

This question is designed to determine if the company has monitoring systems to verify suppliers involved in the production of goods are operating in compliance with local law.

This does not refer to the product or materials outputs themselves, but to the facilities, equipment, and processes which make them.

Technical Guidance

Value Chain definition: All activities involved in the creation, sale, and servicing of products to the end customer. This includes product development, manufacturing, logistics (inbound and outbound), company operations, distribution and customer support services (example repair programs).

Verifying compliance with your standards and local law at all tier levels within your supply chain requires a company to know all suppliers at each tier level and have established monitoring processes. It also requires your company to understand and manage the different legal requirements by geography within your supply chain.

Thus, this question may be favorably answered “yes” by multiple means, including a company’s oversight of a supplier’s internal means to manage such information, a company managing the information themselves or the use of third-party services.

Examples of different approaches that can be used:

  • Companies can monitor their suppliers means to manage this activity by reviewing the facility responses to the following questions in the Higg Facility Environmental Module – Site Info & Permits section:
    • Does your facility have a valid operating license, if required by law?
    • Did your facility receive any government-issued environmental violation records for this reporting year?
    • Please complete the following questions to provide details on your facility’s environmental permits requirements and compliance status.
  • Verified Higg FEM scores should be more valuable than non-verified ones for this compliance aspect.
  • Alternatively, companies may elect to use third-party organizations that understand and ensure supply chain legal compliance in addition to a deeper view into Environmental Health & Safety in tier 2 & 3.
  • For managing the process for suppliers of finished products (tier 1), companies could utilize a qualified Environmental Health & Safety third party, provided that the supplier does not have chemical intensive processes such as laundry, garment dyeing, printing, etc. where a specialized third party (with Chemical specialty) should be used.

Note: Depending on the risk level and resources a company may have, third-party experts or organizations can offer on-the-ground support when evaluating supplier’s data. Having said that, enlisting the support of a third party should not be substituting a brand’s own efforts to continuously support the performance improvement of supply chain partners.

Answer options

  • To answer ‘yes’ for each supplier segment, your company has confirmed the compliance for >75% of your suppliers in the relevant tier.
  • To answer ‘partial yes’ for each supplier segment, your company has confirmed the compliance for 25 – 75% of suppliers in the relevant tier.
  • When answering “no” for each supplier segment, this would mean that your company has confirmed the compliance for less than 25% of suppliers in the relevant tier.

Helpful Resource

How this will be verified

Documentation required

A company’s total answer to this question may contain strategies that are exclusively contained within, or are combinations of, the following aspects. 

  • If a company monitors this responsibility on their own: records showing the applicable regulations as mapped against the complete view of their supply chain, including the process to update such records and showing latest version of said records. 
  • If the appropriate questions of the Higg FEM are utilized: review of the company’s records for Higg FEM coverage (verified) against their supply chain. 

If a third party is utilized: documentation that shows the chosen third-party participation and extent of the supply chain covered by the services.

14.1 Please select all that apply

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: E.g. dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

14.2 How were they engaged?

  • Feedback survey
  • Interviews
  • Direct engagement as part of business performance meetings
  • Their priorities and action plans were direct inputs into the development of these programs.
  • Feedback included in representative engagement (e.g., through industry associations or other collaborations they are participating in).
  • Other

14.3 How often do you request feedback?

  • Annually
  • When programs are updated
  • Other

14.4 Please provide specific examples of how feedback was incorporated.

14.5 How frequently do you update your program(s) utilizing this feedback?

  • Annually (or more frequently)
  • Every 2 years
  • >2 years

Intent of the question

When designing supply chain strategies, a collaborative and inclusive relationship should be established between brands/retailers and their manufacturers. Engaged manufacturers will be more likely to be active participants within your supply chain initiatives and are also more likely to showcase enhanced performance. Such communication is also essential to allow for problems and grievances to be raised, discussed, and resolved as early as possible in the decision-making and target-setting process.

Technical Guidance

There are multiple ways to engage manufacturers as part of your

company’s strategy development; whether through formal methods like business performance and/or stakeholder engagement meetings, or via supplier summits or supplier surveys.

Helpful Resources

How this will be verified

Documentation required

If you answered ‘yes’, you should have one or more of the following: 

  • Provide interviews, feedback surveys, documents, or other evidence of supplier consultation and engagement, that are included in the program development process, showing at least 3 of the following: 
  • How suppliers were selected/identified for consultation. (e.g., identify how many of the suppliers that were engaged have long term business relationship with the company).
  • Which types and tiers of suppliers were included.
  • How suppliers were consulted and for which environmental risk/impact. 
  • How many suppliers were consulted.
  • How often suppliers were consulted.
  • How feedback was captured and shared internally within the decision-making teams. 
  • How the feedback was included in the decision-making processes of the company and any changes that were made to strategies or plans due to supply chain feedback. 
  • Evidence that supplier(s) roadmaps were used as direct input into the development of your company’s formal approach or strategy.

Interview questions to ask 

  • Please describe the process of how suppliers were engaged and consulted. 
  • Please share the outcome of the supplier engagement/consultation that has been proven to create impact on-the-ground for supply chain partners.

15.1 Please describe or upload the action plan

15.2 In which supply chain segments is action being taken?

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: E.g. dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

Intent of the question

Brands and retailers are expected to take action on prioritized environmental risks identified during the risk assessment. Part of these activities should include building the capacity of suppliers within their supply chain to improve their environmental performance.

Technical Guidance

A variety of actions can be taken to improve the environmental performance of its supply chain. Our recommendations are as follows:

  • As a company develops its plan, it should consider the number of its suppliers and related tiers related to the risks identified (e.g. geographic-specific, isolated to a specific production tier). This will help the company determine how to target specific suppliers to help build their capacity to improve their performance.
  • It is strongly encouraged to partner with their suppliers and other subject matter experts to develop action plans and/or related capacity building efforts prior to implementation to avoid unintended negative impacts, as well as get supplier buy-in for greater supplier engagement. We highly recommend companies have, at minimum, collaborative projects which match the manufacturer’s environmental roadmap and priorities (rather than taking a top-down approach).
  • A company’s leverage with its suppliers is important when identifying and improving on environmental performance. There are many reasons why an individual company may lack leverage (small order volume, lack of resources to support supplier) but where a single company may lack leverage, a group of companies collaborating together may achieve greater leverage, for example by aligning on the activities, timelines and follow-up measures included in a supplier’s action plan or within the supplier region.

Joining industry initiatives or organizations such as the Sustainable Apparel Coalition has proven to be an effective measure for companies (including SMEs) to pool resources, avoid duplication of efforts and jointly collaborate in activities such as capacity building or implementation of solutions.

Answer Options

  • In order to answer “yes” to this question, the company has uploaded the action plan to this question and can demonstrate the actions that were taken to build capacity amongst its supply chain partners.
  • In order to answer “partial yes” to this question, the company does not have an action plan but can demonstrate that actions were taken to build capacity amongst its supply chain partners.

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence: 

  • The action plan to support suppliers in improving their environmental performance. 
  • Documentation of processes/internal guidelines/interviews, demonstrating how action plans are set with suppliers taking contextual issues into account; OR, how support and guidance is given to suppliers through existing industry initiatives or by collaborating with other companies. 
  • Demonstrations of training materials/tools or documentation/minutes of training given to suppliers – either online, through workshops, or 1 to 1.
  • Evidence of financial or technical support given to suppliers, contracts with 3rd parties, or documentation of outcomes/site visits/investments made by suppliers with the support of the brand and its collaboration partners

In this question we will focus on the practices your company has implemented, to reduce or improve Energy and Water resource consumption that are affecting your supply chain partners.

Energy

  • Have practices been implemented to reduce energy use and Greenhouse gas (GHG) emissions in your company’s supply chain?
    • In which supply chain segments is action being taken? Specify percentage of each supply chain segment included.
    • What is included in your energy and GHG reduction program for your suppliers?

Renewable Energy

  • Has your company established programs to promote the use, installation, or purchase of renewable energy (wind or solar) by your suppliers?
    • In which supply chain segments does this program apply? Specify percentage of each supply chain segment included.
    • Select all that apply

Water

  • Have practices been implemented to reduce water consumption in your company’s supply chain? Answer options: Yes/Partial Yes/No
    • In which supply chain segments is action being taken? Specify percentage of each supply chain segment included.
    • What is included in your water reduction program for your suppliers? Please specify all that apply
    • Has your company established programs to promote the installation of new equipment or processes to reuse or recycle water by your suppliers? Answer options: Yes/Partial Yes/No
      • In which supply chain segments is action being taken? Specify percentage of each supply chain segment included.
      • Please specify all that apply

Other impacts

  • Have practices been implemented to reduce or improve other impacts in your company’s supply chain?
    • Please describe these practices (open text)

Intent of this question

This question intends to confirm the practices or actions your company has taken to reduce resource consumption within your supply chain. For this question the Sustainable Apparel Coalition has identified key impact areas to be: Energy, Renewable Energy, and Water. There is an opportunity for companies to expand from this and explain other impact areas they have prioritized.

Technical Guidance

Companies should start by reviewing the Addressing Supply Chain Impacts guide which we have created to address each of the above key impacts, the document will outline the processes and options that are generally useful for brands and retailers to implement in partnership with their suppliers.

  • In order to answer ‘yes’ to this question, the company can demonstrate actions have been taken to reduce resource consumption in all 3 key impact areas: renewable energy, energy and water.
  • In order to answer ‘partial yes’ to this question, the company can demonstrate that actions have been taken to reduce resource consumption in one of the key areas of renewable energy, energy or water.

Helpful resources

Energy and Greenhouse Gas Emissions related to the supply chain

Supply chain related Greenhouse Gas emissions are categorized by the World Resource Institute (WRI) in their Greenhouse Gas Protocol as Scope 3 emissions

Renewable Energy

Water

Other resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Copy of the action plan or program related to resource efficiency and/or reduction (related to Energy, Renewable Energy, and/or Water) where the following elements are included:
  • Explanation of which supplier segments were prioritized, engaged and why.
  • The description of the practices or actions the program includes.
  • Details on the implementation approach, with the help of internal and/or external issue experts.
  • Description of the outcomes/achievements, and the impact that the program has had on the supply chain.

Note: In this question we will focus on the practices your company has implemented to mitigate chemicals and wastewater risks that are affecting your supply chain partners.

Note 2: Content highlighted in blue represents sub-question(s).

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

By having any affirmative response with chemical integrity (as in all the chemical questions below), should allow a company to–at a minimum–to answer Partial Yes to this question. The difference between a “Yes” and “Partial Yes”, for this specific question is somewhat subjective because it can’t simply be reduced to a number. Any reasonable response should include magnitude and quality as well as quantity. However, as a guide, if 50% or more of the core questions (level 1 & Level 2) are answered “Yes”, then a “Yes” on this question may be warranted. Otherwise, other than no action at all, only a “Partial Yes” is legitimate.

Chemicals Supply Chain

17.1 Have practices been implemented to reduce or mitigate chemical risk in its supply chain? Answer Options: Yes/Partial/No

What is the intent of the question?

This is a broad qualifying question to determine if the company being assessed follows any chemical integrity action whatsoever. Most all brands/retailers should be able to respond, at a minimum, a Partial Yes to this question. If they can’t, it is really time for them to get to work.

Technical Guidance

Chemical Risk is present all through the supply chain as well as in the final, finished product. The two major classes are risk to Human Health as well as Environmental risk.

In Human Health, a risk assessment is calculated by a combination of Hazard Identification, Dose-Response Assessment, Exposure Assessment, and a Risk Characterization. Health hazards are classified by the Global Harmonized Standard (GHS) into 13 specific ‘building block’ endpoints of human toxicity.

In Environmental, hazards are classified by the Global Harmonized Standard (GHS) into specific building blocks such as acute and chronic aquatic toxicity, degradation, bio- accumulation, terrestrial toxicity, soil adsorption, and hazard to ozone layer.

Because the risks exist throughout the supply network, actions taken by brands and retailers to reduce risk can span the entire spectrum of the product lifecycle–from the creation, through use, and disposal of products and materials. The actions taken furthest upstream, closest to the source of the problems tend to be the most effective.

By having any affirmative response with chemical integrity (as in all the chemical questions below), should allow a company to–at a minimum–to answer Partial Yes to this question. The difference between a “Yes” and “Partial Yes”, for this specific question is somewhat subjective because it can’t simply be reduced to a number. Any reasonable response should include magnitude and quality as well as quantity. However, as a guide, if 50% or more of the core questions (level 1 & Level 2) are answered “Yes”, then a “Yes” on this question may be warranted.

Otherwise, other than no action at all, only a “Partial Yes” is legitimate.

Improvement Opportunities

Focus on the primary, basic actions which build a foundation of chemical action. These include knowing your supply chain, knowing (all) of your materials, knowing the substances which present the most risk for your specific business (a function of materials, processes, supplier integrity, geographic regions, etc.).

Helpful Resources

17.1.1 Have your company’s chemicals management expectations been communicated to your manufacturers/suppliers in the last calendar year? Answer options: Yes/No/Unknown

What is the intent of the question?

A chemical management program is a comprehensive system that includes many elements and expectations of internal and external partners. This question is designed to determine if the program is appropriately designed, robust and regularly communicated to supply network partners. Good communications provide the expectations of the brand/retailer regarding how their suppliers address the challenges of chemical management.

Technical Guidance

To answer ‘yes’ to this question, the formal chemicals management program should encompass the following:

  • Documented policies that are communicated to impacted stakeholders and shared publicly
  • A means to stay up to date with legal requirements concerning chemical use
  • A system to ensure RSL and regulatory compliance for your products and across your supply chain
  • A record (inventory) of all chemicals (including dyestuffs, auxiliaries, and other agents) used in the production
  • Documentation of Material Safety Data Sheets (MSDS) for every chemical inventory
  • A training program for employees on chemical handling and storage
  • A program to implement the use of an input stream
  • An updated and assessed positive list of chemical products when sourcing for chemicals
  • A system for sourcing materials that ensures appropriate chemicals management practices are in place
  • Proactive steps to innovate and use “positive” chemistries, and synchronizing them with product performance needs (this a more advanced step)
  • Examples of free resources for brands and retailers to begin the process of establishing a chemicals management program include:
  • Higg Index Facility Environmental Module (FEM) – Section #8 – Chemical Management – This may be one of the best readily available collection of elements which make up a chemical management system. A company could simply base their expectations on what is provided in this resource: https://howtohigg.org/fem-landing/chemical-management-2020/
  • Outdoor Industry Association’s (OIA) Getting Started Guide for Chemicals Management: https://outdoorindustry.org/sustainable-business/chemicals- management/
  • Zero Discharge of Hazardous Chemicals (ZDHC) Chemicals Management System: (CMS) Guidance Manual
  • Higg Index Facility Environmental Module (FEM) – Section #8 – Chemical Management – This may be one of the best readily available collection of elements which make up a chemical management system. A company could simply base their expectations on what is provided in this resource: https://howtohigg.org/fem-landing/chemical-management-2020/
  • Outdoor Industry Association’s (OIA) Getting Started Guide for Chemicals Management

Improvement opportunity

Formally incorporating the FEM (section #8) into the company’s chemicals management expectations would provide a solid, comprehensive, and industry consistent background for the company’s chemical management program.

17.1.1.1 In which supply chain segment(s) has your company communicated chemicals management expectations with suppliers?

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: E.g. dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

Intent of the question

This is to provide clarity on the where (in the supply chain) this specific action of your chemical management program is being directed. Some brands remain focused only at the closest layer (T1) of their supply network, however some have a much deeper engagement in their supply chain on these topics. This sub-question is meant to determine exactly where the brand is engaged on this particular issue.

Technical Guidance

The desired outcome of this question is to better understand and document the degree of coverage for your supply network. However, before that can be stated, it must be determined how engaged the brand is in actually knowing and interacting with its supply network.

In most cases (but not all) the predominant relationships exist between a brand and their Tier 1 (finished goods manufacturing) which should be relatively straight forward–however, things get quickly complicated from there. In some cases, a trading company or agent, or licensee may exist between the brand and the Tier 1 manufacturer which presents additional challenges in knowledge and transparency in a brand’s supply chain.

With respect to material producers–often found at Tier 2 (T2), your brand/company may or may not have a direct relationship with these suppliers. With some brands, the T1 manufacturer specifies a considerable amount (if not most all) the actual materials from their own network of T2 suppliers. Even for brands that choose (called ‘nominate’) materials for their products directly from a T2 material producer, many T2 suppliers outsource some of their processes.

Further, in some examples, the T2 supplier is not a manufacturer per se, but a converter. A converter is someone who develops materials on your behalf but really doesn’t own/manage the material facilities.

Improvement Opportunities

Learn your supply chain! Most brands are sub-optimal on this point. This includes not only the primary manufacturer of materials and product, but also who they subcontract work to. Many of the most chemically intense processes happen at subcontractors.

Knowing as many of your supply chain partners–by specific role in the network–is a core competency for any brand. Making an extra effort for supply chain information management is a practice of the best performing brands. Additionally, having a clear scorecard of suppliers’ performance, including an indication of agreed receipt and compliance with brand requirements is an important practice.

17.1.1.2 Which of the following supplier requirements are communicated to your company’s suppliers?

  • Suppliers track and adhere to a reliable way of ensuring local regulations regarding chemicals in use at manufacturing facilities
  • Suppliers have a process to verify compliance with regulatory requirements regarding all emissions (air, water, waste)
  • Suppliers have a record and inventory of all chemicals used in manufacturing processes (including chemicals in production, spot cleaners, and effluent treatment plant chemicals where applicable)
  • Suppliers have a record and inventory of all chemicals used in tooling/equipment, and to operate and maintain the facility
  • None of the above

Intent of the question

To provide a short list of options for which clear expectations should be explicitly communicated to the suppliers.

Technical Guidance

There are a number of potential points which could be communicated to suppliers, these four are actually two important (foundational) expectations split into two parts each. The first one addresses the requirement that the supplier has a way to understand and comply with all applicable local chemical regulations:

  • Suppliers track and adhere to a reliable way of ensuring local regulations regarding chemicals in use at manufacturing facilities
  • Suppliers have a process to verify compliance with regulatory requirements regarding all emissions (air, water, waste)
  • The second one addresses the basic requirement of knowing all chemistry stored and used at the facility:
  • Suppliers have a record and inventory of all chemicals used in manufacturing processes (including chemicals in production, spot cleaners, and effluent treatment plant chemicals where applicable)
  • Suppliers have a record and inventory of all chemicals used in tooling/equipment, and to operate and maintain the facility

Helpful Resources

The Higg Index Facility Environmental Module (FEM) – Section #8 – Chemical Management – may be one of the best readily available collection of elements which make up a chemical management system. It includes these basic ones as well as others.

17.1.2 Has your company established a program aimed at improving chemicals management in the supply chain? Answer Options: Yes/Partial/Unknown

17.1.2.1 Which supply chain segment(s) does this program address?

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: E.g. dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

Intent of the question

To establish a clear indication of purpose and mission for the brand regarding chemical integrity. This question is an internal facing check on the robustness of the brand’s chemical management program (by a measure of what is or is not present), combined with a few key external expectations regarding supplier contractual expectations.

Technical Guidance

This question provides the foundation of the company’s commitment to a chemical integrity program. Its critical elements are:

  • A corporate policy, approved by your company’s executive team and/or Board that underpins the commitment to the success of this program.
  • Compliance with all applicable regulations or international norms (whichever is higher).
  • Specific minimum requirements and best practices that go above and beyond applicable regulations.
  • Requirements in manufacturer contracts that requires their suppliers and subcontractors to meet the goals of the program.
  • Public disclosure including a description of your impact, effectiveness of managing impacts, and details pertaining to your program.

Much like the question “Have practices been implemented to reduce or mitigate chemical risk in its supply chain?”, this question cannot be measured simply in quantity, without considering quality and magnitude. A “Yes” response would be representative of ALL the critical elements in the Technical Guidance of this question–done adequately. Anything less would elicit at best a “Partial Yes” response. A “No” is essentially none of these, or none done well.

Specifically, the response should be assessed by:

17.1.2.2 What features does your program include?

  • A corporate policy, approved by your company’s executive team and/or Board that underpins the commitment to the success of this program.
  • Compliance with all applicable regulations or international norms (whichever is higher).
  • Specific minimum requirements and best practices that go above and beyond applicable regulations.
  • Requirements in manufacturer contracts that requires their suppliers and subcontractors to meet the goals of the program.
  • Public disclosure including a description of your impact, effectiveness of managing impacts, and details pertaining to your program.
  • Other (If other, please describe)
  • None of the above

Intent of the question

It is easy to say yes, that the company has a broad and robust program, however the proof is in the details. These options are some of the most important elements–although still high level–which make up a total chemical integrity strategy in a brand.

Technical Guidance

Some of the most important elements of a program should include:

  • A corporate policy, approved by your company’s executive team and/or Board that underpins the commitment to the success of this program.
  • Compliance with all applicable regulations or international norms (whichever is higher).
  • Specific minimum requirements and best practices that go above and beyond applicable regulations.
  • Requirements in manufacturer contracts that requires their suppliers and subcontractors to meet the goals of the program.
  • Public disclosure including a description of your impact, effectiveness of managing impacts, and details pertaining to your program.

A visual check of the features of the program (including program documentation itself) should be used as the guide on whether the requirements have been met. All elements of the Technical Guidance above should serve as evidence that the program is robust and deserving of a “yes” response. However–although these are key elements–the definition of a strong program need not be limited to this list.

Helpful Resources

17.1.2.3 How does your company implement the program?

  • Action plans are designed to address the differences in manufacturers priorities based on local context
  • Personalized and custom training or workshops
  • Company facilitates/provides support to manufacturers by providing trained/qualified specialists
  • Collaborative projects which match manufacturers’ environmental roadmap and priorities
  • Company provides support to manufacturers to develop internal environmental performance competencies
  • Company provides support to manufacturers to engage with stakeholders around environmental performance issues
  • Supporting innovation
  • Other (If other, please describe)

Intent of the question

To provide a set of mechanisms of engagement with suppliers on important chemical integrity action that promotes strong partnerships with the organizations who are a critical link in the chain of getting product concepts into materials and ultimately market ready products.

Technical Guidance

The bulleted list of high value touchpoints and actions from brand to suppliers, and further guidance provided in (paragraphs). A strong brand program will contain many of these options:

  • Action plans are designed to address the differences in manufacturers priorities based on local context (an attempt to engage and understand the nuances–business, geographic and/or market–that suppliers face in their efforts to attain and maintain high chemical integrity)
  • Personalized and custom training or workshops (Direct engagement, where possible, to provide personalized or smaller group settings to enable two way communication on the important subjects)
  • Company facilitates/provides support to manufacturers by providing trained/qualified specialists (People with direct experience in addressing the subject and serve as consultants and coaches for improvement)
  • Collaborative projects which match manufacturers’ environmental roadmap and priorities (An opportunity for all–supplier and supplied–to learn first hand what works and what needs refinements)
  • Company provides support to manufacturers to develop internal environmental performance competencies (Capacity building on specific and relevant topics)
  • Company provides support to manufacturers to engage with stakeholders around environmental performance issues (to serve as a convener of multiple stakeholders who may not necessarily collaborate on their own, however can each contribute important perspective on creating and implementing improvements)
  • Supporting innovation (Innovation requires a willingness to exist in a less than clear and structured environment–with even possibility of failures. A brand holds the key to creating an atmosphere where this can thrive, or die)
  • Other (Something relevant not mentioned here)

17.1.3 Were your manufacturers consulted when creating the chemicals management program? Answer options: Yes/No/Unknown

17.1.3.1 Which tiers were consulted? Please select all that apply

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: E.g. dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

17.1.3.2 How were they engaged?

  • Feedback survey
  • Interviews
  • Direct engagement as part of business performance meetings
  • Their roadmaps were direct inputs into the development of these programs
  • Feedback included in representative engagement (e.g. through industry associations or other collaborations that they are participating in)
  • Other

17.1.3.3 How often do you request feedback?

  • Annually
  • When programs are updated
  • Other

17.1.3.4 Please provide specific examples of how feedback was incorporated

17.1.3.5 How frequently do you use this feedback to update your program(s)?

  • Annually (or more frequently)
  • Every 2 years
  • >2 years

Intent of the question

Since a brand’s manufacturing suppliers are a key stakeholder because of duties assigned by a brand’s chemical management program, it makes great sense that they should be given an opportunity to review and comment on your program as it is being developed and implemented. They often will have very relevant and valuable perspective on the execution, management and improvement of the program.

Technical Guidance

Important considerations when planning for feedback are captured in the sub-questions:

  • Which Tiers were consulted? (There are reasons why many levels of your supply chain may have a unique and valuable perspective… from T1 to T2 to Material Converters, to Trading Companies. The more diverse the feedback as well as closest to the place where chemistry is applied–generally the more accurate the results)
  • How were they engaged (some of the more logical and appropriate ways to gather feedback are listed. There is no one ‘best’ way, however methods that provide an opportunity for clear, honest and without fear of retaliation or ‘uncomfortable’ situations–tend to be the best.)
  • How often do you request feedback? (Does it simply reflect the wishes of an individual, or has it become a part of the formal chemicals development? These are important considerations because programs change. In a robust brand organization, the level of outreach reflects natural events such as a planned program update.)
  • How frequently do you use this feedback to update your program(s)? (Good feedback should be incorporated each and every time)

If a company cannot accurately and completely answer the four sub-questions, in particular the first two, then it is unlikely that a rigorous feedback process for gathering feedback from the supply chain, was conducted.

17.1.4 Does your company have a means to confirm that suppliers at each tier of its value chain identify, manage and meet compliance with all applicable chemical use and chemical environmental regulations in their country/region? Answer options: Yes/Partial/Unknown

17.1.4.1 In which supply chain segments can you confirm that chemical compliance regulations are met?

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: E.g. dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

Intent of the question

This question is designed to determine if the company has the system in place to maintain continual oversight on the appropriate local, regional and national regulations which are applicable to the facilities who manufacture their materials and finished products. This does not refer to the regulatory compliance of product or materials outputs themselves–often geographically distant from the place of manufacture. This requirement is focused on the facilities, equipment, and processes which make the materials and products.

Technical Guidance

Understanding and managing the legal requirements of your suppliers is understandably a big ask of any company because identifying and tracking local laws in countries/regions where their supply chain exists can be a time consuming, difficult process. To be realistic, this question may be appropriately answered “yes” by multiple means. This includes having a direct oversight of their supplier’s internal SOPs to manage such information, the use of third-party services to provide the check, or a company (brand) managing the regulatory information themselves and using this as a basis for checking compliance.

Most importantly, companies can monitor their supplier’s means to manage this action by utilizing—where available and verified—responses to the following questions in the Higg Facility Environmental Module: (Facility demonstrates possession of:)

  • Permits, Question 3 (table): Are permits required for specific chemical use and management? If yes, upload.
  • EMS, Question 4: Does your site have a program or system in place to review and monitor environmental permit status and renewal (where appropriate) and ensure compliance?
  • EMS, Question 5: Does your facility maintain a documented system to identify, monitor and periodically verify all laws, regulations, standards, codes, and other legislative and regulatory requirements for your significant environmental impacts?

Alternatively, companies may elect to use third-party organizations to satisfy this requirement. These service companies will most likely document and ensure supply chain legal compliance as an added benefit to the primary service of managing a broad set of EHS requirements for tier 2 & 3 facilities. Examples such as the bluesign system and OEKO-TEX STeP certification, or a highly qualified EHS audit firm with experience and expertise in materials manufacturing processes and the primary issues, are suggested options.

Brands should educate themselves on the scope and magnitude of the methodology for each 3rd party they are considering to determine the robustness of the option(s).

Depending upon how a company accomplishes the task, the answer may include strategies that have combinations of the following aspects. In all examples, the ability for a company to understand and manage this process is predicated on a high level of achievement in knowing their supply chain (see question #10 in Brand/Environment section on knowing supply chain):

  • If a company monitors the required regulations on their own, records showing the applicable regulations as mapped against the complete view of their supply chain including the process to update such records and showing latest version of said records.
  • If the appropriate questions of the FEM are utilized, review of the companies records for FEM coverage (verified) against their supply chain.
  • If a third party is utilized, documentation that shows the chosen third-party participation and extent of the supply chain covered by the services would suffice.

Answer Options

All the above, at all Tier 1 facilities AND Tier 2 facilities would earn the ability to answer “Yes”, anything less than this (e.g., only T1 and sporadic T2), but greater than None of this, would qualify as “Partial Yes”.

17.1.5 Does your company have an action plan to improve the performance of its supply chain? Answer options: Yes/Partial/Unknown.

17.1.5.1 If answered yes, please describe or upload a copy of the action plan

17.1.5.2 In which supply chain segments is action being taken?

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: E.g. dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

Intent of the question

Only after a supplier has assessed (likely by a third party) the state of their facility’s chemicals management program can they pinpoint opportunities for suppliers to improve. Leading brands in this space embark on actions and interactions with suppliers that are beyond simply issuing demands for compliance along with purchase orders (POs), but they operate as collaborative partners to help suppliers to overcome obstacles in replacing chemistry.

This question is intended to assess how proactive and collaborative the brand is in relationship to its suppliers and how it specifically supports suppliers’ chemicals management programs.

Technical Guidance

How brands/retailers choose to support their suppliers will differ from company to company based on strategy, resources, and relationships. Companies may assess if the business model in place provides incentives for know-how exchange and resource efficiency, or rather stimulates resource overconsumption and chemicals’ misuse.

Some brands may choose to implement innovative business models while others provide organizational support to ensure the supplier has proper systems in place.

Answer Options

To answer “Yes” to this question, the company must be able to provide documentation of this support, including initial proposal, plan documents and any applicable SOPs, Who was consulted/included with the drafting of the Action Plan, and what measurements are to be tracked and reported upon to gauge the effectiveness of the program. Anything less than this (e.g., a plan without clear evidence of intent to measure year over year improvements), but greater than None of this, shall be considered “Partial Yes”.

Helpful Resources

Examples of resources to companies that aim at supporting suppliers’ chemicals management improvement programs include:

17.1.6 Does your company measure the effectiveness of its chemicals management programs? Answer options: Yes/Partial/Unknown

17.1.6.1 How does your company measure the effectiveness of its chemicals management systems?

17.1.7 Does your company have an escalation process for working with manufacturers that do not meet its programmatic goals? Answer options: Yes/No/Unknown

17.1.7.1 Select all that apply:

  • Engage senior management within the brand and manufacturer to confirm there is mutual commitment to improvement, a necessary requirement of continued business
  • Create a performance improvement plan
  • Monitor performance in sufficient increments of time for required performance improvement (timelines will vary according to severity)
  • Plan for sourcing alternatives
  • Give a warning/ create follow up plan for performance improvement and required timeline when immediate improvement is not achieved
  • Consider brand/ retailer tolerance for lack of improvement
  • Engage other brands/retailers that are also sourcing from the factory
  • Consider exiting the sourcing relationship if the above criteria does not yield required improvements
  • If improvement is not made, evaluate the cost to business, supplier, and rights-holders of leaving the sourcing relationship
  • If decision is made to cease business with the supplier, ensure workers are given adequate notice and payment

Intent of the question

This question is intended to determine the amount which the brand captures data and turns it into information which illustrates the current state and effectiveness of its chemicals management program–as it is executed across its supply network. Having a program with clear actions and accountability is important, however measuring the effectiveness of the program is what will facilitate continuous improvement.

17.1.6.1 How does your company measure the effectiveness of its chemicals management systems?

This question is intended to determine the amount which the brand captures data and turns it into information which illustrates the current state and effectiveness of its chemicals management program–as it is executed across its supply network. Having a program with clear actions and accountability is important, however measuring the effectiveness of the program is what will facilitate continuous improvement.

In order to determine the overall effectiveness of the program, clear, measurable, repeatable metrics should be developed, and a reliable means to capture them–at consistent intervals–should be established. As by means of example, some of the items which could be a part of your program could include degrees to which your supply network, by tier, successfully:

  • keeps a complete inventory of chemicals on site at their facility
  • manages the process of keeping SDS complete, available and current
  • trains all applicable employees on appropriate chemical hazards, risks and proper handling and spill management
  • records all chemical spills and accidents and the trend at the facility
  • selects chemicals based upon their documented hazards and manages their inventory towards verified safer chemistry
  • selects and uses chemistry that meets your brand RSL (for materials), and/or MRSL (for formulations)
  • manages the overall EHS and OHS program as it relates to chemicals management
  • manages all the subcontracting (if applicable) with respect to how THEY perform chemicals management

These, and more, may make up your KPIs which are then recorded, analyzed and improved upon.

17.1.7: Does your company have an escalation process for working with manufacturers that do not meet its programmatic goals

To ensure that the company makes–and keeps–lower performing suppliers accountable for progress in meeting its chemical management objectives and goals.

Technical Guidance

An escalation process is dependent upon having clear expectations which are adequately communicated to your supply network and mechanisms in place to measure progress (the basis for this and the previous two questions). Escalation is employed when suppliers miss expectations and fail to fulfill their obligations as indicated in your program documents and communications.

An adequate escalation process details out consequences based upon specific sub-par performance. It should stress encouragement and incentives for ‘getting on track’ as well as clear consequences for continual missed expectations.

Escalation processes have been utilized in all sorts of buyer-seller relationships–not just in environmental sustainability performance. There are examples in social responsibility, quality and compliance and other logistics and sourcing categories.

In a well-designed escalation strategy there is enough granularity to address varying degrees of severity for program deficiencies.

Answer Options

To answer “Yes” to this question, all of the key elements mentioned in Technical Guidance should be present and demonstrable for at least Tier 1 and Tier 2 suppliers. Further clear KPIs which definitively measure progress are to be established and regularly reported upon–at a minimum on an annual basis. Anything less than this (e.g., not all the elements, and/or not for both T1 & T2), but greater than None of this, would earn a “Partial Yes”.

Helpful Resources

The Higg FEM, Chemical Section, has a very robust set of requirements for facilities and should be referenced to determine which of these are applicable to the chemicals management expectations you have of your supply network. In addition, these tools may also provide guidance:

17.1.8 If people are harmed by your company’s actions or decisions relating to its chemical management processes, is there a system in place for addressing the problem or complaint?

Answer options: Yes/No/Unknown

17.1.8.1 Please describe how these impacts are addressed

Intent of the question

To ensure that there is an expedient and effective remediation capability within the organization if problems are discovered and/or reported.

Technical Guidance

Realistically, although the premise is based on human harm, this question can apply to not only people but also environmental degradation due to a chemical management failure–on a brand’s behalf. Further, the human harm problem can be one of consumer harm (found in final product) or that of worker harm (process chemistry used to make products). The reality is that although consumer safety is most visible to the brand’s reputation, the latter may be the most relevant and hold the greatest risk of human harm.

A robust product safety process includes a thorough and adequate investigation of the matter–ensuring the proper staff are included in the investigation, a root-cause analysis, and recommended course of action.

Truthfully, although organizations should be prepared to be able to adapt and deal with failure, the bulk of the company’s energy should be dedicated to preventative measures.

If answered yes, this simply should be able to be demonstrated by process management documents, and some variant of a log for discovery, discussion, decision and remediation.

It is quite possible that the process has not been deployed, or deployed infrequently–if strong preventative measures are in place. If a company has an adequate process, but no relevant incidents, this is an indicator of proactivity–not deficiency.

Improvement Opportunities

There are numerous models for establishing a “product safety” process and culture within an organization. Some of the key steps would/may include:

  • Obtain full support from the company’s top management.
  • Centralize authority and responsibility for product safety.
  • Involve all company units in product safety.
  • Develop an extensive safety database.
  • Construct a company-wide safety policy.
  • Develop a product safety committee.
  • Make operating units responsible for safety performance.
  • Develop a capacity to measure and monitor safety performance.

The following questions relate to your company’s Product Restricted Substance List (RSL)

17.1.9 Has your company adopted and implemented a Product Restricted Substance List (Product RSL) or other lists of restricted chemicals for its products and the materials contained within them? Answer options: Yes/No/Unknown

Intent of the question

Establishing a Product RSL (This is often referred to simply as an RSL) is a very foundational action that establishes a set of restrictions or outright bans on substances which should not be found in finished materials or finished products. An RSL by itself does not constitute a chemical management program, however is an important step every company should take as part of their chemical integrity strategy.

This question establishes an initial platform from which a total RSL program may be further defined. The process of “adopting” an RSL is a first step. A complete RSL program a brand must go further than simply establishing a common document. A robust RSL program includes: a communication plan, a risk matrix to determine where such substances might be found in their range of products, a testing program, a remediation program (when problems are found), and other aspects in order to make the entire program more effective.

Technical Guidance

A company may adopt an established universal, global industry standard RSL, adopt one developed by another company, or develop their own version. It is highly recommended and a best practice to use an industry standard RSL to improve the tool’s completeness, relevance and drive overall supply chain efficiency. Examples of existing, widely-adopted, and industry-relevant RSLs include:

If answered yes or partial yes

  • A copy of the current RSL shall be provided (if an industry standard one is utilized, simply a reference can be provided which indicates where the RSL can be found and acknowledgement that the company has in fact adopted it)
  • For percent product coverage, the company should demonstrate the relevance of the RSL to the products and materials which are part of the company’s range. A reference to the Product Development questions 3 and 4, whereby the company must be able to indicate a YES or at least a PARTIAL YES to indicate that they understand all the materials and therefore which products are covered by the RSL.
  • For percent of suppliers who are covered by RSL (9.1.2) a company must be able to first demonstrate that they have a view of their suppliers for each tier (Yes or Partial Yes to question 2 in this section for each of the respective tiers)
  • Then the company should be able to demonstrate that the supplier has been informed of the RSL requirement, has acknowledged receipt, and agrees to comply with the requirement.

Note: In the case that the company is not in direct contact with a number of its tier 2+ and the tier 1 operates on behalf of the company for purposes of RSL compliance, a clear record of the communication to the tier 1 communicating the expectation should be provided to indicate any compliance above tier 1.

Improvement opportunities

  • Best practice is to use an industry standard RSL where upkeep, maintenance, and communication is centrally managed instead of the brand/company taking on this responsibility itself.
  • Best practice is to manage the chemistry on the input to the manufacturing facility (MRSL) instead of the output (RSL).

17.1.9.1 Which of the following statements apply to your Product RSL?

  • Company’s Product RSL is maintained/updated on at least an annual basis.
  • Company’s Product RSL specifies the most stringent regulatory limits for restricted substances as found in applicable global regulations
  • Company’s Product RSL goes beyond applicable regulatory requirements in order toproactively address potential chemicals risks that are relevant to your company’s products
  • Company includes Product RSL compliance in supplier contracts and specifies that suppliers must in turn require their suppliers and subcontractors to have a means of ensuring compliance with the Product RSL
  • Company’s Product RSL is aligned to a widely-adopted Product RSL administered by acredible third-party organization (include this list in guidance: AAFA RSL (American
  • Apparel & Footwear Association, AFIRM RSL, bluesign RSL, OEKO-TEX Standard 100 RSL)
  • None of the above

Intent of the question

The development of and RSL is only the first step in a multi-step process. This question is intended to provide the respondent the ability to indicate which key aspects and attributes of a company’s RSL are true. The list contains actions/attributes which improve its utility, accuracy, and relevance. All of these choices are elements of a strong RSL.

Technical Guidance

Because chemical regulations and general hazard knowledge/understanding changes regularly across the world, in order to remain relevant, it must be managed/updated regularly — at a minimum, annually. Since meeting the consumer regulations wherever your product is to be sold is a fundamental requirement of all brands, the RSL must, at minimum, cover the most stringent legal requirements on your products. Better RSLs go beyond the most stringent regulations to include chemistry which is restricted for precautionary reasons. ‘Precautionary reasons’ are where there is mounting evidence that the substance is of enough hazard to warrant a precautionary restriction or outright ban.

In order to give your RSL strength, it is important to specify that compliance with these requirements has purchase order backing. If compliance is written into contracts, then it elevates the consequences of and hopefully lessens the potential for non-compliance. Lastly, for overall organization and supply chain efficiency sake, the proliferation of individual company lists should be avoided. It is a best practice to, instead of specifying a unique brand RSL, adopt an industry accepted one.

Some of the most prevalent ones are:

  • The AAFA RSL which is maintained annually and reflects the lowest regulatory limits, yet it is NOT a precautionary list.
  • The AFIRM RSL which is maintained annually, reflects the lowest regulatory limits and IS a precautionary list.
  • The bluesign RSL which is maintained annually, reflects the lowest regulatory limits and IS a strongly precautionary list
  • The bluesign BSSL which is maintained annually, reflects the lowest regulatory limits and IS a strongly precautionary list (900+ substances)
  • The Oeko-Tex 100 RSL which is maintained annually, reflects the lowest regulatory limits and IS a precautionary list
  • Individual Company’s RSLs may or may not be updated annually, may or may not reflect lowest regulatory limits, and may or may not be precautionary – Must show evidence that these aspects are true

Improvement Opportunities

17.1.9.2 Does your company have a documented program to ensure compliance with its Product RSL? The program should include monitoring, verification (testing), tracking and corrective actions when nonconformities are found. Answer options: Yes/No/Unknown

Intent of the question

This question is intended to convey that alongside establishing, maintaining, and communicating your Product RSL to your supply chain, the critical work of documenting and ensuring compliance to the RSL is also accomplished.

Additionally, because differing risks are present in various processes, which may be found spread across many tiers of the supply chain, demonstrating the degree to which the RSL verification is applied at each applicable tier will indicate the overall program effectiveness.

Technical Guidance

Companies may establish and manage a Product RSL compliance program within their own organization or through the use of a specialized third-party organization to perform these duties on their behalf.

In either case, to answer ‘yes’ to this question the brand must be able to confirm their program addresses these specific aspects:

  • Includes staff with appropriate educational background, experience, certifications and/or training
  • Contains clearly outlined policies that identify monitoring procedures
  • Identified verification/testing procedures executed by brand or specified third-party organization
  • Contains a detailed corrective action plan process for when supplier/material noncompliance has been detected
  • Has an annual review process which assesses program effectiveness, use cases, & new strategies
  • Best practices utilized, recognized, and credibly-verified “positive” chemistry list as indicators of compliance.

17.1.9.3 In which supply chain segments is action being taken?

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: E.g. dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

17.1.9.4 Can your company provide evidence of corrective action(s) taken as a result of finding products or materials that are out of compliance with its Product RSL? Answer options: Yes/No

17.1.9.4.1 Please describe or upload supporting materials

Intent of the question

This question is a follow-up on ensuring the process of compliance by confirming that a company can produce records which indicate evidence of compliance performance. Any company that claims to have verification of compliance should be able to produce records that show a history of their testing, including cases of non- compliance and how the findings were taken to an appropriate resolution.

Technical Guidance

To answer “yes” to this question, a company should be able to demonstrate their means of tracking Product RSL compliance and be able to provide compliance records over the history of their Product RSL program that include:

  • Percentages of total materials which are certified by credible chemical integrity scheme.
  • Testing records showing test plan (risk analysis and methodology), materials tested, substance tested for, results, corrective actions, etc.
  • Records of audit/examination of supplier test strategies and plans (for better suppliers who are trusted to test for themselves)
  • Corrective actions when nonconformities/RSL failures are found

17.1.9.4 Is your company’s Product RSL publicly available? Answer Options: Yes/No

What is the intent of the question?

The current minimum standard of transparency for a company is that it shares with the general public the substances that it restricts or bans (per its RSL) meaning that this RSL is publicly available. It is intended so that any interested stakeholder is aware of what substances should not be found in the company’s products.

Technical Guidance

To answer ‘yes’ to this question, a company should publish its RSL to a public location, such as its own website, and include such things as revision number and revision date.

In the case the company uses a universal, already publicly available RSL and does not have a unique one of its own (a best practice), the company may indicate on its own website the facts about its use and a direct link to the common RSL in its shared space.

How this will be verified

This is simply verified by checking online for the presence of the RSL (or link) in the location specified by the company.

17.1.9.6 Does your chemicals management program ensure RSL compliance by managing the chemical inputs to all material and production processes throughout its supply chain? Answer options: Yes/No

17.1.9.6.1 Please specify the name of your company’s chemical management program text

17.1.9.6.2 What percentage of your company’s value chain partners have been enrolled in this program and been deemed compliant?

17.1.9.6.3 This question refers to materials that are certifiably produced using ONLY chemistry that adheres to strict input assessment protocols and that ALSO are used and disposed of by the manufacturer using processes that are reviewed and deemed compliant with strict EHS guidelines (with materials measured by volume, area or mass of materials). What percentage of your materials meet these criteria?

Intent of the question

This question is designed to incentivize and reward companies towards employing a proactive strategy of preventing chemical issues at an early point of material creation, instead of finding them late in production–or even after final product assembly. This question improves on the RSL concept by rewarding companies for moving away from employing a ‘quality control’ (testing) strategy, and towards a ‘quality assurance’ (input management, process control, etc.) approach.

Technical Guidance

An “input stream” approach for managing chemical integrity is progressive and effective, however, it is critical that a company who makes such claims is also clear on how much of the materials found in its product range is covered by such a scheme, to be able to quantify its total effectiveness.

Unless 100% of a company’s suppliers and materials are covered by such a program, and this is verified, exposure and risk from materials that do not fall under such a proactive program will remain. Therefore, it is critical for a company to be clear about how much of its products and materials are covered by such programs.

In order to answer yes to this question:

  • At the supplier level (question 10), a company must be able to demonstrate that they are aware of who their material suppliers (Tier 2) are and have correlated what percent of this list meets the criteria of the specified input scheme.
  • At the material level (question 1), a company must be able to demonstrate that it is tracking and aware of all the materials chosen for their products (nominated and factory supplied) and what number is certified, and therefore calculated as a percentage of total. This may be recorded as an appropriate unit of volume (area of material, number of units).

Improvement Opportunities

  • Know your supply chain, as deep as possible. At a minimum down to tier 2 (material manufacturer)
  • Know the capabilities (including chemical management strategies and certifications) for each and every one of your suppliers

The following questions relate to your company’s Manufacturing Restricted Substance List (MRSL)

17.1.10 Has your company adopted and implemented a Manufacturing Restricted Substance List (MRSL) for its suppliers? Answer options: Yes/Partial/Unknown

Intent of the question

This question is intended to first determine if an MRSL has been established for the company, then assess the scope in which the company’s MRSL has been formally applied to the company’s supply network.

Unlike a Product RSL, which is targeted at chemistry contained within or on a finished material or product, an MRSL is intended to restrict or ban specific substances before they enter places of materials or finished product manufacturing. The theory is that if the restricted or banned substance never enters a facility, or the input of substances is managed down to acceptable levels, it will never leave the facility on, or in a material, or by way of an emission such as water, air, or waste.

Technical Guidance

To answer ‘yes’ to this question, the company must have documentation of their MRSL, the MRSL process and requirements across their supply chain, explicitly identifying the specific levels of the supply chain (tiers) covered by the protocol.

A company should be prepared to demonstrate coverage by showing documentation of formal outreach and sharing of expectations. This documentation could be included in a clearly defined management system protocol (likely a chemical management program), a Vendor Guide, individual product and/or policies, or all of the above. Records for statements of compliance (from suppliers) returned, including percentages of supply network who have responded, shall be reviewed.

Further, it should be recognized that some 3rd party certification schemes that screen chemical inputs to the manufacturing facilities who use chemistry, may also be considered as satisfying the requirements of a brand requiring MRSL. The specific certification body’s banned or restricted substances requirements for formulations, and the method of screening, should be closely reviewed to determine if they align with the company’s chosen MRSL (most frequently the ZDHC MRSL).

If all the above is in place and clearly applied to the Tier 1 & Tier 2 suppliers, then a company may answer “Yes” to this question. Anything less than this, and short of None of this, qualifies as a “Partial Yes”.

17.1.10.1 Please select all statements that are true of your MRSL?

  • It is maintained/updated at least on an annual basis
  • It meets all applicable local chemical use regulations in the respective country of production
  • It goes beyond applicable regulatory requirements in order to proactively address potential chemicals risks that are relevant to your company’s products and the processes involved
  • Compliance is specified in in supplier contracts and purchasing requirements
  • It is required of all sub-suppliers & sub-contractors
  • It is a widely-adopted, public MRSL, administered and maintained by a credible third-party organization

17.1.10.2 Which supply chain segment(s) have been informed about and formally agree to comply with your company’s MRSL?

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: E.g. dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

(The guidance for this sub-question is the same as question 17.1.1 on “Have your company’s chemicals management expectations been communicated to your manufacturers/suppliers in the last calendar year?”)

Intent of the question

The development of and MRSL is only the first step in a multi-step process. This question is intended to provide the respondent the ability to indicate which key aspects and attributes of a company’s MRSL are true. The list contains actions/attributes which improve its utility, accuracy, and relevance. All of these choices are elements of a strong MRSL.

Technical Guidance

Because chemical regulations and general hazard knowledge/understanding changes regularly across the world, in order to remain relevant, it must be managed/updated regularly — at a minimum, annually. Since meeting the local regulations wherever your product or materials are made, the MRSL must, at minimum, cover the most stringent legal requirements for your suppliers use of chemistry. Better MRSLs go beyond the most stringent regulations to include chemistry which is restricted for precautionary reasons. ‘Precautionary reasons’ are where there is mounting evidence that the substance is of enough hazard to warrant a precautionary restriction or outright ban.

In order to give your MRSL strength, it is important to specify that compliance with these requirements has purchase order backing. If compliance is written into contracts, then it elevates the consequences of and hopefully lessens the potential for non-compliance.

Lastly, for overall organization and supply chain efficiency sake, the proliferation of individual company lists should be avoided. It is a best practice to, instead of specifying a unique brand MRSL, adopt an industry accepted one. The most widely accepted and used MRSL is the regularly maintained ZDHC MRSL.

In answer to answer yes: all of the attributes of this question should be readily and easily verified through company documentation indicating the presence and type of MRSL (is it aligned to a shared industry standard), the update schedule (including last update/revision), examples of verbiage in supplier contracts (if applicable)

Improvement Opportunities

If your organization has/is using an MRSL, using an industry standard such as the ZDHC MRSL is a best practice.

Helpful Resource

17.1.10.3 How does your company define compliance to its MRSL?

  • Specified in suppliers contracts
  • Documented in chemical purchasing requirements
  • Required of all sub-suppliers & sub-contractors
  • Use of company-nominated chemical products (where applicable)
  • None of the above

Intent of the question

The question is intended to demonstrate the commitment of the company by putting contractual “muscle” behind their stated requirements for MRSL compliance. Further, it provides incentive for the company’s direct suppliers to extend the requirements of the company deeper into the supply chain (suppliers-suppliers and subcontractors).

Technical Guidance

To answer ‘yes’ to this question, the company must be able to provide evidence that requirements are clearly spelled out in any legal contractual document(s) such as supplier contracts, vendor letters (signed) confirmation of compliance, purchase orders (POs), or any combination of the above.

17.1.10.4 Does your company have a means to accurately evaluate MRSL compliance for the chemicals associated with its products and materials? Answer options: Yes/Partial/Unknown

17.1.10.4.1 What percentage of your company’s suppliers at each tier of the value chain have been informed about, and formally agree to comply with, the MRSL?

17.1.10.4.2: Chemicals come from chemical suppliers who have self-declared that their chemistry is MRSL compliant (ZDHC Conformance Level 0)

17.1.10.4.3: Items in previous Checkbox + Chemicals come from positive lists created via third-party testing and/or recipe review of provided formulation (ZDHC Conformance Level 1)”

17.1.10.4.4: Items in previous Checkbox + The product stewardship of chemical suppliers has been reviewed by a competent expert and deemed satisfactory (ZDHC Conformance Level 2)

17.1.10.4.5: Items in previous Checkbox + The chemical supplier has been visited and audited for all relevant EHS issues and product stewardship (by a competent expert) and deemed satisfactory (ZDHC Conformance Level 3)

17.1.10.4.6: Items in previous Checkbox + Chemical supplier provides full disclosure of recipes and known impurities to a trusted third party.

Intent of the question

A MRSL is a powerful and important specification of a company or brand. The acknowledgement of receipt and agreement for compliance to the MRSL by suppliers are important procedural steps to ensure your company’s expectations have been communicated. However, without a means to verify HOW your suppliers are verifying their compliance, the process would have little validity. This question outlines the methods by which the brand develops confidence that the requirements of the MRSL have been met.

Technical Guidance

There are acknowledged and significant variances in confidence for the various methods for MRSL compliance verification. Some of the methods are little more than a self-declaration by chemical companies (low to no confidence of compliance) all the way up to comprehensive 3rd party verification of every aspect of the chemical company’s operations and products (high confidence of compliance). The ZDHC guidance provides a range from very basic (Level 0), to high confidence (Level 3) and this question attempts to establish what level(s) from which the brand’s chemistry is derived.

Further, it is highly likely that chemistry may be found at all ranges from unclassified to level 3, the question also attempts to tabulate the distribution across these ranges.

This question is understandably very hard for brands who are not deeply engaged with their supply chain, suppliers who make materials and the chemistry that they use, however when a brand uses tools that manage “input streams” that guarantee level 3 chemistry and materials are certified to these schemes, it is generally much easier and reliable to know more about the integrity of the chemicals used in products.

If answered yes to this question:

In order to answer this question with a high degree of confidence, a company must be able to respond affirmatively, or at least partial yes, to the questions which determine how well the brand knows/manages their supply chain as well as the materials used in their products.

With this knowledge in place, then the company must be able to show through their records that their materials/product suppliers are choosing chemistry based upon any/all of these levels. Further they must demonstrate through clear and repeatable methods that they specifically and regularly account for the chemistry across all of their suppliers.

A “Yes” response means that the brand has all the documentation which supports knowledge of the chemical inventories at its suppliers, and the conformance levels. This applies to–at a minimum Tier 1 and Tier 2. Anything short of that (i.e., tier levels, chemical inventories, etc.) then at best a “Partial Yes” may be awarded.

Companies that do not have the ability to answer any of the level questions are demonstrating that they do not confirm MRSL compliance and no points shall be awarded.

Lastly, companies that use 3rd parties for their chemical management who manage the input stream of chemistry at suppliers–resulting in chemicals used in and on their products from legitimate ‘positive lists’, may use these as surrogates for knowing specific chemical inventories. The conformance level(s) (ie., 1 – 3) may be properly assumed and assigned based upon the materials provided and the accredited capabilities of the 3rd party (i.e., Level 1, Level 2 and/or Level 3 conformance).

Helpful Resource

Standard chemicals management sequence questions

17.1.11 Does your company have a means of tracking identified critical chemical substances found in its products and manufacturing processes associated with its products? Answer options: Yes/Partial/No

  • Please describe your means of tracking

Intent of the question

Progressive organizations move from simply restricting substances to actively seeking alternatives that are better. This process is called Alternatives Assessment. This activity starts with a reliable way of identifying which chemicals should be targeted for study. The intent of this question is to determine how robust the first step in Alternatives Assessment is within your company.

Technical Guidance

In order to be effective, in addition to having clear procedures and documentation to find and record substances of concern, a company must be able to at least answer ‘yes’ or a strong ‘partial yes’ to questions about knowing its materials and supply chain. Without this key knowledge trying to discover chemicals of concern is a very imprecise and ineffective activity–at best.

Further, the company should have a means by which to correlate substances of concern with the materials where they are likely found. Lastly, a process should be in place to reach out to suppliers and investigate substances actually present in finish and process chemistry, thereby improving the overall effectiveness of the study.

Lastly one should familiarize themselves with general practices of Alternatives Assessment, a multi-step process which starts with risk identification.

In order to answer yes:

To determine plausibility, If a company cannot reliably answer at least a partial yes to knowing >50% of its materials OR a partial yes to knowing > 50% of its suppliers at a Tier 2 level , then it is unlikely that it can accomplish this basic task of knowing the substances of greatest concern.

Therefore, a “Yes” answer to this question is more complex than simply having a process to understand substances in a generic way. Proficiency in knowing suppliers and materials is a pre-requisite. If this base supplier/material requirement is met, then further, a “Yes” requires that a clear process to connect substances to the company’s portfolio of products should be evident.

Acceptable outputs may include a clear list (for example, top 10, chemical risks and where they are found) including date of inclusion, and other indicators of the data being up-to-date should be shareable.

Anything less than all the above is–at best–to be considered a “Partial Yes”.

Improvement Opportunities

Because of the nature of this activity is investigative, can be uncertain, and outside the realm of normal product and materials development interactions, successfully implementing such a process will require strong collaboration with your suppliers. As such, being prepared for being able to articulate your intent, goals, guidelines, etc. with your supplier(s) should be expected. Further, patience should be exercised as it may take time to build the appropriate level of trust and cooperation.

Helpful Resource

Outdoor Industry Association’s Getting Started Guide for Brands: Chemicals Management

17.1.12 Does your company work with its value chain partners to replace substances with social/environmental health risks with preferred alternatives, starting by identifying the risks?

Answer options: Yes/Partial/Unknown

17.1.12.1 Do you collaborate with upstream suppliers? Yes/No

17.1.12.2 Do you collaborate with downstream customers? Yes/No

17.1.12.2.1 Describe how you collaborate, being sure to include all collaborations with upstream partners to identify, investigate and conduct a thorough Alternatives Assessment

Intent of the question

Value Chain definition : All activities involved in the creation, sale, and servicing of products to the end customer. This includes product development, manufacturing, logistics (inbound and outbound), company operations, distribution and customer support services (example repair programs).

This question advances the company beyond the activity of identifying chemicals of concern, bringing action towards finding viable options to replace the unwanted chemistry. This is the process named “Alternatives Assessment” (AA) where alternatives are considered using multi-variable analysis to determine not just reduced risk from toxicants but maintaining the best performance, cost, availability/viability, and a number of other relevant measures of success.

Technical Guidance

Results of successful action to this question would be evidence of targeted substances which are not already identified to be of concern—for example: those which are proposed for or awaiting regulation are already identified and not what this question rewards. The intent is to identify substances which warrant deeper analysis.

Further, and as indicated in the sub-questions; it is imperative that the brand collaborate with both upstream (away from end consumer) suppliers as well as downstream (toward end consumer) customers. These are straightforward sub questions that should be interpreted as indicated.

To answer a full “Yes” this question, your company must be able to provide specific examples of formal, documented Alternatives Assessments (AA), which demonstrate a program of collaboration and research towards identifying chemical hazards and risks, performance requirements, and market conditions.

Company should show evidence of where products, materials or specific substances have been addressed; who was involved in the analysis (supply chain partners); and the outcomes of the research (e.g., substance added to the “of concern list, eliminated from materials or processes, impact realized, etc). Where AAs have been conducted, these will serve as examples of a fully functional program.

All the above must be in place, including documentation to support it, to effectively answer “Yes”. Short of that, if parts of the process exist, then at best it can be answered as “Partial Yes”.

Helpful Resource

The AA aspect of this question should be answered in relation to standard industry protocols. OECD lists several industry frameworks for alternative assessments here.

17.1.13 Does your company have demonstrated evidence of substances which have been targeted, reduced and eliminated from its products as a result of alternatives assessment? Answer options: Yes/Partial/Unknown

17.1.13.1 Please list as many examples as possible (at least one)

Intent of the question

This is step three of the Chemical Alternatives Assessment (AA) process. Once substances have been identified, assessed and prioritized, the objective of this question is to determine how robust the company’s AA process is at solving problems and actually reducing impact. If a company has effectively assessed their product and supply chain for chemical risk, they will be able to identify opportunities for action including chemicals to phase out and preferred alternatives to adopt. As a result, the company should be able to provide documentation of measurable targets and achieved reductions of substances which were identified for priority reduction or phase-out.

Technical Guidance

To answer ‘yes’ to this question, a company should be able to provide specific documentation of a completed Chemical Alternatives Assessment. Further, specific reduction goals of targeted substances and demonstrated results against the goals (or at least a planned reduction if still early in the transition) should be available. At a minimum, companies should be able to provide the following:

  • Name of chemical identified
  • Description of formal Alternatives Assessment process
  • Outcome of the Alternatives Assessment
  • Description of appropriate metrics:
  • Baseline date
  • Time interval (annual, season, etc.)
  • Baseline use (volume)
  • Baseline methodology and verification
  • Target date
  • Target (absolute or normalized)
  • Target metric achieved

At least one relevant example should be provided to answer “Yes” to this question, absent of that–even if the AA process to study and innovate to remove substances exists within the company, but no specific examples may be provided–a company may only claim “Partial Yes”.

Helpful Resources

Alternative Assessments are an emerging discipline. There are a number of frameworks which can be used as a guide. To see a comprehensive list, go to:

17.1.14 Does your company incentivize supply chain partners who have demonstrated improvement in chemicals management? Answer options: Yes/No/Unknown

17.1.14.1 What kind of incentives does this include?

  • Increased order volume
  • Multi-year order contracts
  • Premium pricing
  • A more favorable mix of products
  • Consistent month-to-month volume
  • Option to set a higer minimum order level
  • Other business incentives (please describe)
  • None of the above

17.1.14.2 Is supplier performance and progress towards receiving incentives regularly reviewed and discussed with manufacturers? Yes/No

Intent of the question

As a brand there is only so much that you can do alone to improve the chemical management programs of your suppliers by way of demands and compliance. Ultimately some of the most impactful changes will come about from more of a “carrot”, than a “stick” approach to improvement.

This question is meant to determine how you incentivize and reward your supply chain partners to make improvements in their chemicals management in a positive, win-win fashion.

Technical Guidance

Manufacturers can be particularly averse to making significant changes in their operations, processes and inputs when they have already painstakingly optimized a particular line or whole facility for efficiency, efficacy, speed, quality and/or cost. Asking for, or requiring change (e.g., for chemical substitutions) can be quite disruptive to an operation that has already been highly optimized. It is for this reason that a company (brand) should consider options that are more incentive based rather than purely compliance.

The most obvious incentives are increased business, however others may include limited cost sharing when significant investments need to be made, time based price concessions on materials that use advanced sustainable practice that need time to bring to scale, to simple but clear recognition for best suppliers in a public setting (sometimes this is the biggest incentive/reward).

The concept of incentives can be applied to all aspects of improving chemical management and not just in the use of undesireable chemicals. For example, how they manage chemical inventories–and possibly share it with their brand partners, how they train, protect and guard against human health issues in their own operations, how they interact with their chemical suppliers making sure that they are extending the expectations that their suppliers are of high chemical integrity as well, how they ensure that the chemicals that they purchase and use are of the best appropriate quality–covering both performance and hazard elimination, etc.

In order to answer yes to this question, please evaluate the answers to these subquestions:

  • What kind of incentives does this include?
  • Has it, and if so, how has it made positive change?
  • Is supplier performance and progress towards receiving incentives regularly reviewed and discussed with manufacturers?

Improvement Opportunities

  • The AFIRM Supplier Toolkit provides a number of ideas in better chemical management. As a brand, how you incentivize rather than simply mandate, is the consideration.
  • The OIA Chemical Guide also has useful information to consider.

17.1.15 Does your company have business goals and processes, with documented actions and results, that demonstrate its commitment to advancing sustainable chemical innovation? Answer options: Yes/Partial/No

17.1.15.1 Give one or more examples of advancing sustainable chemical innovation

Intent of the question

The intent of this question is to assess if the company has formal mechanisms in place to go beyond compliance and drive sustainable or “green” chemistry through their business practices.

Technical Guidance

To answer ‘yes’ to this question, the company’s documented business goals, processes, actions and results must adhere to the 12 Principles of Green Chemistry:

Examples include:

  • Working with supply chain (chemical companies and materials manufacturers) to develop and implement material options using less or less harmful solvents.
  • Incentivizing choices of better quality chemistry that is inherently more efficient at its task, but also in the use of other resources such as water and energy.
  • Collaboration with suppliers (chemical companies and materials manufacturers) in the use of renewable chemical feedstocks that have a demonstrably lower overall environmental footprint.

In order to answer yes:

The company needs to be able to clearly demonstrate, through programs and goals that it looks at the chemistry in products and supply chain with a holistic approach to sustainability and not just hazard reduction.

It must be able to demonstrate action and results from specific actions towards improving chemistry and all the processes that it supports. The company shall demonstrate that they have been able to make tangible progress by selecting and implementing chemistry in their product and/or supply chain which satisfies at least one, or more, of the other 11 principles (aside from principle #4 “designing safer chemicals”).

All other responses that are based upon reducing toxics in chemistry only–whereas an important goal–it still is only a “Partial Yes” as green chemistry goes much beyond this single objective. Any efforts that don’t even address the reduction of toxics does not even qualify as a partial yes.

Improvement Opportunities

Improvement in this space will be extremely challenging because no one company can likely move the meter all by themselves. It will take collaboration on a grand scale—both up and down the supply chain to and including chemical companies; but also horizontally with other direct competitors in order to gain the leverage needed to commercialize new chemistry at scale.

Helpful Resources

17.1.16 Does your company collaborate with retailers and suppliers to regularly select product(s) for detailed data collection and analysis of chemical substances? Answer options: Yes/Partial/No

17.1.16.1 Give one or more examples of this collaboration

Intent of the question

In the context of sustainable chemistry, to determine the degree to which a company engages with up and down stream stakeholders to better understand where their biggest opportunities lie.

Technical Guidance

A designer/creator of product — as part of a brand — has a somewhat limited view of what chemical substances might present the biggest chemical risk, or the biggest chemical opportunity for improvement through sustainable chemistry. Therefore, this question is designed to encourage and reward engagement with both suppliers (upstream) as well as customers (downstream) to collaborate on identifying biggest opportunities for improvement.

Some of the biggest opportunity improvements in chemistry are found where it is applied (e.g., to make a textile), however there may also be very impactful aspects of chemistry where the chemical molecules are actually being created. All this, however, does matter when considering ‘green chemistry’

It is important to note that–although the reduction of toxic hazards is a critical action–a comprehensive approach to sustainable chemistry includes other dimensions of lessened impact in the creation and use of the chemistry. This can include things such as better chemistry that: produces less waste, synthesizes much more efficiently, improves resource efficiency where it is applied, reduces the need for solvents (especially very toxic ones) in the chemical creation and use phases, etc.

Understandably, these points are often very far from a designer, materials developer, sourcing manager’s, etc. view because these individuals are very far removed from where molecules are actually created. This is why this question is aspirational. In order to make progress, it absolutely necessitates engagement with the supply network, and others with different expertise, to ensure the investigation is complete and accurate.

In order to answer yes:

The connection with upstream/downstream supply chain colleagues is not necessarily the hard part–what is hard is to investigate the chemical options and determine which ones present significant improvement opportunities.

What would be positive evidence leading to a “Yes” answer would be a clear process that defines when/how the company reaches up and/or downstream in order to find the significant opportunities–and how the company evaluates the options for their potential for impact reduction. If the company can clearly demonstrate how it systematically has performed an investigation of impact–including impacts associated with the creation of the chemistry itself (as opposed to just the use of the chemistry), and can demonstrate that this has led to specific substances which have been elevated to a higher risk or opportunity status, then a “Yes” is warranted.

Otherwise, all other actions can at best be considered only “Partial Yes”. For example, having a process to find materials/substances of higher risk–but no substances yet identified–illustrates good intent, but not yet progressive behavior.

Helpful Resources

17.1.17 Does your company actively engage with communities of practice to share information, knowledge, and best practices that accelerate the adoption of sustainable or green chemistry? Answer option: Yes/No

Give one or more examples of this engagement

Intent of the question

The advancement of better chemistry and truly sustainable, or “green chemistry” is an aspirational endeavor that rarely happens in a vacuum. To accelerate the ideation, creation, testing, implementation and scaling of green chemistry requires collaboration all the way through the supply network.

This question attempts to determine how active, engaged and collaborative the company is in participating in broader communities of practice that advance the creation and use of green chemistry.

Technical Guidance

The goal of this question is not simply one of participation in groups, it seeks to determine how and where the brand is engaged and participating in collaborative efforts that produce real results. Because much of what happens in innovation requires tremendous trial and error and sometimes tangible progress and results can be incremental and/or far between, what is most important is that a company invest time and resources wisely.

Further, it necessitates that a company step outside its own direct supply network and work with groups that advance broader solutions. Or, develop solutions in a tighter group–but quickly and appropriately share innovation with a wider set of stakeholders to accelerate scale. For some organizations who are hyper competitive this may not come naturally–or not at all.

Even still, because chemistry is most likely used in processes that can vary tremendously, the need for collaboration by a diverse set of stakeholders is more critical than almost any other impact. From organizations that make chemistry, to those who make materials, to those who specify it–all are critical in the success of such collaboration.

There is not yet one best way to move towards greener chemistry because the science is still comparatively new– however where companies can demonstrate leadership for the good of the larger industry is what this question seeks to ask and promote.

In order to answer yes:

This is a highly subjective question, but has been included because what it is trying to incentivize is radical transparency, collaboration and cooperation for the better of the industry and planet. It is not easy to achieve, nor should it be.

In order to say “Yes” to this question, a company should be able to demonstrate through whatever documentation that is available and appropriate, that it has been exceptionally engaged with a wide and diverse set of stakeholders to advance the creation and use of green/sustainable chemistry.

Improvement Opportunity

Improvement in this space will be extremely challenging because no one company can likely move the meter all by themselves. It will take collaboration on a grand scale—both up and down the supply chain to and including chemical companies; but also horizontally with other direct competitors in order to gain the leverage needed to commercialize new chemistry at scale.

Helpful Resources

Wastewater

17.2 Have practices been implemented to reduce or mitigate wastewater in your company’s supply chain? Answer options: Yes/Partial Yes/No

Answer options

  • In order to answer ‘yes’ to this question, the company can demonstrate that practices have been implemented to reduce or mitigate wastewater in the company’s supply chain tier 2 segment.
  • In order to answer ‘partial yes’ to this question, the company can demonstrate that practices have been implemented to reduce or mitigate wastewater in the company’s supply chain tier 1 segment.
  • When answered ‘no’ to this question, no practices have been implemented yet.

17.2.1 In which supply chain segments does this program apply? Specify percentage of each supply chain segment included.

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: E.g. dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

17.2.2 Please indicate whether the expectations communicated to suppliers include the following supplier requirements.

  • A reliable way of ensuring regulations regarding wastewater discharge are tracked and adhered to
  • Wastewater testing requirements
  • Which of the following statements applies to your Wastewater Program?

17.2.3.1 Select all that apply

  • Company’s Wastewater Program is maintained/updated on at least an annual basis
  • Company’s Wastewater Program specifies the lowest regulatory limits for wastewater
  • discharge that reflect the lowest limits found in applicable global regulations (note: lowest limits= most stringent legal limits)
  • Company’s Wastewater Program goes beyond applicable regulatory requirements in order to proactively address potential risks that are relevant to your company
  • Company includes Wastewater Program compliance in supplier contracts and specifies that suppliers must in turn require their suppliers and subcontractors to have a means of ensuring compliance with the Wastewater Program
  • Company’s Wastewater Program is aligned to a widely-adopted Wastewater Program administered by a credible third-party organization.

17.2.4 Does your company have a documented program to ensure compliance with your Wastewater Program? The program should include monitoring, verification (testing), tracking, and corrective actions when nonconformities are found. Answer Options: Yes/Partial Yes/No

Technical Guidance

These programs that could be considered are ZDHC, Bluesign, OEKO-TEX SteP or other equivalent programs.

Answer options

  • In order to answer ‘yes’ to this question, the company is using one of the programs listed above.
  • In order to answer ‘partial yes’ to this question, the company has implemented some parts of a program (as listed in the question) but not all.
  • When answered ‘no’ to this question, no program has been implemented yet.

17.2.4.1 In which supply chain segments does this program apply? Specify percentage of each supply chain segment included.

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: E.g. dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

17.2.4.2 Can your company provide evidence of corrective action(s) taken as a result of wastewater discharge being found to be out of compliance with your Wastewater Program? Answer options: Yes/Partial/No

Answer options

  • In order to answer ‘yes’ to this question, the company can demonstrate that you are working with your supply chain partners on the corrective action(s).
  • In order to answer ‘partial yes’ to this question, the company has hired a third party to implement the corrective action(s) with your supply chain partner(s).
  • When answered ‘no’ to this question, no corrective actions have been taken or no non-compliance has been found.

17.2.5 Is your company’s Wastewater Program publicly available? Answer options: Yes/Partial/No

Answer options

  • In order to answer ‘yes’ to this question, your company can provide the relevant link/URL to the publicly available wastewater program.
  • In order to answer ‘partial yes’ to this question, your company has the program available on your intranet and can be provided upon request.
  • When answered ‘no’ to this question, your company does not have a wastewater program or it is not publicly available.

17.2.6 Does your company have a means to confirm that suppliers at each tier of your supply chain identify, manage, and meet compliance with all applicable wastewater discharge regulations in their country/region through appropriate documentation? Answer options: Yes/Partial/No

Answer options

  • In order to answer ‘yes’ to this question, your company has implemented a monitoring system to ensure supplier compliance with local law.
  • In order to answer ‘partial yes’ to this question, your company has hired a third party to implement monitoring audits to ensure supplier compliance with local law.
  • When answered ‘no’ to this question, your company does not have a monitoring system to ensure supplier compliance with local law.

17.2.6.1 In which supply chain segments does this program apply? Specify percentage of each supply chain segment included.

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: E.g. dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

17.2.7 Does your company have documented business goals and processes, along with recorded specific actions and results, which demonstrate its commitment to advancing innovations in reducing wastewater and improving wastewater treatment? Answer options: Yes/Partial Yes/No

17.2.7.1 If answered yes, please describe

Answer options

  • In order to answer ‘yes’ to this question, your company has a formal commitment (which includes business goals, metrics/targets and processes) to advancing innovations in reducing wastewater and improving wastewater treatment.
  • In order to answer ‘partial yes’ to this question, your company does not have a formal commitment, but actions have been taken / resources have been invested to advancing innovations in reducing wastewater and improving wastewater treatment
  • When answered ‘no’ to this question, your company does not have a formal commitment and/or taken actions to advance in the reduction of wastewater or wastewater treatment.

17.2.7.8 Does your company support its suppliers in reducing wastewater and improving wastewater treatment?

  • Providing access to – or funding suppliers’ involvement in – training or capacity building programs
  • Supporting suppliers – via funding or organizations support – in developing internal targets and performance teams that include worker representatives
  • Initiating or joining collaborative improvement projects with other companies
  • Ensuring suppliers’ voices are included in industry-wide capacity building efforts to spread best practices related to management systems or to address industry-wide wastewater management issues
  • Making long-term commitments (for a term greater than 1 year) to suppliers that make investments to improve wastewater management practices
  • Providing financial support or pricing incentives for suppliers to improve wastewater management practices (e.g. grants, loans, cost-sharing structures, etc.
  • None

Answer options

  • In order to answer ‘yes’ to this question, the company has taken part in 2 or more of the supporting activities listed in the question.
  • In order to answer ‘partial yes’ to this question, the company has taken part in one of the supporting activities listed in the question.
  • When answered ‘no’ to this question, no support has been provided to suppliers.

17.2.7.8.1 Select all that apply:

  • Providing access to – or funding suppliers’ involvement in – training or capacity building programs
  • Supporting suppliers – via funding or organizational support – in developing internal targets and performance teams that include worker representatives
  • Initiating or joining collaborative improvement projects with other companies
  • Ensuring suppliers’ voices are included in industry-wide capacity building efforts to spread best practices related to management systems or to address industry-wide wastewater management issues.
  • Making long-term commitments (for a term greater than 1 year) to suppliers that make investments to improve wastewater management practices
  • Providing financial support or pricing incentives for suppliers to improve wastewater management practices (e.g. grants, loans, cost-sharing structures, etc.
  • None

17.2.9 Does your company actively engage with communities of practice to share information, knowledge, and best practices that accelerate the adoption of best in class wastewater reduction and treatment processes, practices, and equipment? Answer options: Yes/Partial/No

17.2.9.1 If yes, please describe:

Answer Options

  • In order to answer ‘yes’ to this question, your company is part of a multi-stakeholder initiative that addresses wastewater reduction as an industry.
  • In order to answer ‘partial yes’ to this question, your company is part of a trade/industry association to address environmental challenges as an industry.
  • When answered ‘no’ to this question, your company does not participate or engage in industry initiatives.

Other risk(s)

17.3 Have practices been implemented to reduce or mitigate other risks in its supply chain? Answer options: Yes/Partial Yes/No

  • Please describe (open text)

Intent of this question

This question intends to confirm the practices or actions your company has taken to mitigate the risks associated with Chemicals Use and Wastewater Discharge within your supply chain. There is an opportunity for companies to expand from this and explain the actions implemented to mitigate other risks.

Technical Guidance

Companies should start by reviewing the Addressing Supply Chain Impacts guide which we have created to the above key impacts, the document will outline the processes and options that are generally useful for brands and retailers to implement in partnership with their suppliers.

In order to answer yes to this question, the company can demonstrate reduction or mitigation of both chemical and wastewater risks has been achieved.

In order to answer ‘partial yes’ to this question, the company can demonstrate that actions have been taken to reduce or mitigate chemical and/or wastewater risks.

18.1 Select all that apply:

  • Internal audit or reviews
  • Audits or review implemented by third parties
  • Collaborative assessments through the Higg Facilities Environmental Module (FEM) or equivalent, which evaluates supplier performance
  • Engagement with directly affected stakeholders (e.g., workers)
  • Improved environmental benefits
  • Improved business performance for factories and for brand/retailer

Intent of the question

This question intends to confirm that companies understand the impact their measures have on their supply chain partners’ environmental performance.

Technical Guidance

In order to make lasting impact, during the program’s implementation phase companies must be able to

make changes or revisions to the program, strategy, and tactics when they have determined that their efforts to address risks in the supply chain are not effective.

During the implementation phase, companies and suppliers should measure and evaluate the effectiveness of the measures and the program through regular evaluation & monitoring meetings.

Questions that a company should consider when evaluating supplier engagement:

  • Have suppliers shared concerns or complaints related to the environmental program or measures resulting from it?
  • Do suppliers feel able and empowered to raise concerns or complaints to the company?
  • What is the process for integrating supplier feedback to adjust the implementation approach (program, strategy, and tactics)?

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Demonstrated evidence of adverse impacts that were eliminated, or risks mitigated, as a result of your environmental program. Together with a description of the solutions that the company has provided.
  • Relevant documentation that describes the trends and patterns that have been identified — through joint conversations with the supplier(s) — and what lessons the company has drawn from this to improve the effectiveness and efficiency of its environmental program.

19.1 Select all that apply:

  • Engage senior management within the brand and manufacturer to confirm there is mutual commitment to improvement, as a necessary requirement of continued business.
  • Create a performance improvement plan.
  • Monitor performance in sufficient increments of time for required performance improvement (timelines will vary according to severity).
  • Plan for sourcing alternatives.
  • Give a warning/create follow up plan for performance improvement and required timeline when immediate improvement is not achieved.
  • Consider brand/retailer tolerance for lack of improvement.
  • Engage other brands/retailers who are also sourcing from the factory.
  • Consider exiting the sourcing relationship if the above criteria do not yield required improvements.
  • If improvement is not made, evaluate the cost (to business, supplier, and rights-holders) of leaving the sourcing relationship.
  • If decision is made to cease business with the supplier, ensure workers are given adequate notice and payment.

Intent of the question

Companies should have defined escalation processes to review and address concerns of potential manufacturer non- compliances and address and remediate confirmed supplier policy violations.

Technical Guidance

An escalation process defines how a company will monitor and manage potential and confirmed policy non- compliances within its supply chain. Communicating a defined process helps supply chain manufacturers understand customer expectations and requirements as a condition of business.

If companies are not able to resolve a non-compliance identified through the escalation process, can be an important tool to assist all stakeholders in resolving the dispute. The OECD Due Diligence Guidelines define the role of the mediator as an active but neutral role in helping the parties identify and evaluate options for resolution and settlement. Mediation may be triggered on an ad-hoc basis, for example when both parties request mediation, or it may act as a form of escalation when parties cannot reach an agreement or where complainants are not satisfied with the resolution of their grievances. Mediation should be mutually acceptable by both parties, legitimate, independent and confidential. It is important that the members of the bodies entrusted with such functions are impartial and are seen as impartial.

All governments adhering to the OECD Guidelines have established a National Contact Point (NCP) that are tasked with contributing to the resolution of issues that arise from the alleged non-observance of the Guidelines in specific instances. These national contact points can be engaged to support in mediation. Click here for more information

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Documentation of the escalation processes (including responsible exit strategy) that the company has put in place for supply chain manufacturers.
  • Description of how, and at what stage, this was shared and communicated to supply chain manufacturers.

Interview questions to ask

  • Examples, if any, in the last calendar year where the escalation process was used and the outcome of this.
  • Identify if there are any instances where the business relationship had to be ended as a result of the escalation process. Share how the actions related to the responsible exit strategy were implemented and the outcome.

20.1 If you answered yes/partial yes, select all criteria that are included:

  • Regulatory Compliance
  • Animal Welfare
  • Biodiversity/Land Use/Habitat Loss
  • Deforestation
  • Energy/Fuel Use (or Fossil Fuel Depletion)
  • Greenhouse Gas (GHG) Emissions
  • Air Emissions / Air Pollution (non GHG)
  • Solid Waste
  • Hazardous Waste
  • Chemical / Hazard / Management
  • Water Use / Water Scarcity
  • Wastewater / Water Pollution / Eutrophication
  • Other (If other, please describe)

Intent of the question

The intent of this question is to assess whether your company includes environmental criteria in the traditional sourcing decision criteria of price, delivery, performance, and quality.

This question is designed to identify whether your company has an internal process for assessing and making decisions which includes environmental criteria and performance.

Technical Guidance

Developing and using integrated scorecards, also referred to as balanced scorecards, ensures that environmental criteria are a factor in the decision-making process for evaluating new and existing suppliers, products, materials, and packaging. An integrated scorecard enables decision makers to consider sustainability attributes in business decisions. Integrated scorecards that compare the environmental performance of materials, products, packaging, and suppliers are effective at motivating people to act as the scorecard creates competition and motivation to improve.

The integrated scorecard should meet the following requirements:

  • Put your company’s commitments into action by making environmental criteria part of the decision- making process.
  • Include relevant environmental criteria and be used in regular departmental meetings, for sourcing decisions and supplier selection, and in products, materials, and packaging decisions.
  • Include environmental criteria as well as the traditional purchasing criteria of price, performance, delivery, and quality. The environmental criteria should be given similar weighting to the traditional criteria when making business decisions.
  • Included in internal discussions and used when choosing new suppliers and evaluating existing suppliers. The integrated scorecards for suppliers should be updated regularly and included in internal discussions and decision-making. It should also be included in check-ins and meetings with suppliers in order to ensure progress is being made over time.

When developing the scorecard, it is important to consider the following:

  • The criteria and elements are included within the scorecard.
  • The use of the scorecard in meetings and business decisions.
  • The weighting, if any, for each criteria.
  • How tradeoffs are addressed and whether there are any minimum thresholds applied to criteria.
  • The departments and people responsible and accountable.

An example of how to use a scorecard is in choosing new suppliers and evaluating existing suppliers.

Examples of relevant environmental criteria for a supplier integrated scorecard are in the list below. These would appear along with traditional supplier evaluation criteria such as price, performance, and quality.

  • Higg Facility Environmental Module (FEM) scores
  • Third-party environmental certifications
  • Low or no-water processes
  • On-site water recycling
  • Wastewater treatment facility meeting industry standards such as Zero Discharge of Hazardous Chemicals
  • Percent of energy from solar or wind
  • Availability of environmentally preferred materials

Answer options

  • To answer ‘yes’ to this question, over 75% of your company’s purchasing orders have factored environmental criteria into purchasing decisions.
  • To answer ‘partial yes’ to this question, 25% to 75% of your company’s purchasing orders have factored environmental criteria into purchasing decisions.
  • To answer ‘no’ to this question, less than 25% of your company’s purchasing orders have factored environmental criteria into its purchasing decisions.

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Internal communication/policies/procedures on the integrated scorecard (this includes both business and sustainability criteria).
  • Sample score cards.
  • Supporting documents that demonstrate that both business and sustainability criteria are included in purchasing decisions.
  • Business agreements with suppliers that include the integrated scorecard as criteria for doing/maintaining business.
  • Percent of your supply chain included within the scope of your company’s scorecard.
  • Demonstrating that goals related to responsible sourcing practices are incorporated into annual performance targets for individuals with sourcing/purchasing responsibilities, and are also incorporated into sourcing/purchasing staff individual goals.

Interview questions to ask

  • Which criteria and elements were included within the scorecard? What was excluded?
  • What weighting, if any, is given to each criteria?
  • Are any minimum thresholds applied to criteria?
  • Who is responsible and accountable for various criteria in the scorecard?
  • How is the scorecard used in business decisions?
  • Are there examples of suppliers being selected or rewarded on the basis of the sustainability criteria?

21.1 Select all that apply

  • Providing access to – or funding suppliers’ involvement in training or capacity building programs.
  • Supporting suppliers, via funding or organizational support, in developing internal targets and performance teams that include worker representatives,
  • Initiating or joining collaborative improvement projects with other companies (customers within the facility).
  • Ensuring suppliers’ voices are included in industry-wide capacity building efforts to spread best practices related to management systems or to address industry-wide environmental management issues.
  • Making long-term commitments (for a term greater than 1 year) to suppliers who make investments to improve environmental management practices.
  • Providing financial support or pricing incentives for suppliers to improve environmental management practices (e.g., grants, loans, cost-sharing structures, etc.).

21.2 Which tiers are supported? Please select all that apply:

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: E.g. dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

Intent of the question

This question is designed to encourage companies to support their manufacturers in the implementation of environmental action plans, as this makes a big difference in the outcomes of those plans and in the responsiveness of suppliers to continued requests for improved performance. Furthermore, building capacity with your manufacturing partner can encourage innovation and collaboration which drives further value in the supply chain.

Technical Guidance

In the Higg BRM the term “suppliers” are used interchangeably with manufacturers.

In order to answer ‘yes’ to this question, the company should be able to respond to at least one of the activities listed in the question.

Helpful Resources

Examples of multi stakeholder initiatives are:

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Documentation of processes/internal guidelines/interviews, demonstrating how action plans are set with suppliers (taking contextual issues into account) OR, how support and guidance is given to suppliers in collaboration with other companies.
  • Demonstrations of training materials/tools or documentation/minutes of training given to suppliers – either online, through workshops or 1 to 1; and in collaboration with other organizations if applicable.
  • Demonstration of how suppliers’ voices are included in industry-wide capacity building efforts.
  • Evidence of financial support given to suppliers such as loans, grants, cost-sharing structure, etc.
  • Evidence of technical support given to suppliers through contracts with 3rd parties or documentation of investments made through site visits and the outcomes thereof.
  • Evidence of long-term commitments made to reward suppliers for improving on their environmental management.

22.1 What does this include?

  • Increased order volume
  • Multi-year order contracts
  • Premium pricing
  • A more favorable mix of products
  • Consistent month-to-month volume
  • Option to set a higher minimum order level
  • Other business incentives (If other business incentives, please describe)

Is supplier performance and progress towards receiving incentives regularly reviewed and discussed with manufacturers? Answer options: Yes/No

Intent of the question

By creating incentives for manufacturer performance, companies can provide an important business case for action at supplier level, as well as building strong long-term relationships with supply chain partners that have demonstrated an improvement on their environmental performance.

Technical Guidance

Manufacturer recognition programs are used by companies to incentivize and reward positive environmental performance. Rewards and incentives may include increased order volume, longer contracts, etc.

In order to answer ‘yes’ to this question companies should have at least 1 of the following:

  • A clear process by which to track supplier performance beyond compliance, with criteria that capture more ambitious supplier activities or standards – with official recognition for those suppliers achieving a high level of performance. This recognition can include specific status or categorization within the supplier management systems of the brand.
  • Non-commercial recognition of leadership performance by suppliers, such as in-house or public articles or case studies explaining how best practices were carried out, as well as prizes/awards with no monetary value.
  • Semi-commercial rewards for suppliers with strong sustainability performance, such as membership in a specific level of supplier status (e.g., preferred supplier, gold supplier, strategic supplier, etc.) which includes sustainability performance alongside other business criteria (this type of status usually comes with higher order volumes, or likely more frequent orders, without a specific underlying agreement) OR, access to specific useful resources such as improvement programs, technical expertise.
  • Commercial rewards for suppliers with strong sustainability performance, such as: explicit commitments of higher orders, signing longer-term sourcing agreements, facilitating or making investments at supplier sites.

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence, such as :

  • Links to external materials highlighting your activities (e.g., corporate social responsibility reports, press releases or information posted on your website or another website).
  • Program materials and/or communication developed for your suppliers to explain the program (e.g., supplier performance criteria, data collection, verification, and evaluation processes).
  • Share terms and conditions related to supplier incentives or any other related documentation outlining the specific contexts in which suppliers are given incentives, and explain how these incentives align with the broader business and sustainability goals of your company.
  • List of manufacturers enrolled in the program.
  • Outcome of these manufacturer recognition programs.
  • Connection with the supplier scorecard system.

Intent of the question

Participation and investment in collaboration with other stakeholders is critical for addressing shared, systemic challenges, and working on the root cause of those challenges to drive real change. In particular, building collaborations with locally relevant actors can be crucial for building up long term solutions to challenges in your sourcing regions.

Technical Guidance

Example of initiatives:

  • Organizing joint training and capacity building sessions on the Higg Facility Modules for supply chain manufacturers in collaboration with other SAC members.
  • Join international capacity building initiatives for supply chain manufacturers through collaboration with the German Partnership for Sustainable Textiles or Agreement on Sustainable Textiles & Garments.
  • Leverage the industry expertise and resources provided by the Apparel Impact Institute.

To answer “yes” to this question, you must demonstrate that you can:

  • Identify and describe what stakeholder activities your company is participating in and the purpose of the activities.
  • Identify which stakeholders are associated with the activities and in which targeted geographic regions these activities are occurring.
  • Share the outcome of the participation and how it has helped improve the social/human rights performance of participating manufacturers.

To answer “partial yes” to this question, you must demonstrate that you can:

  • Identify and describe what stakeholder activities your company is participating in and the purpose of the activities.
  • Identify which stakeholders are associated with the activities and in which targeted geographic regions these activities are occurring.

Helpful Resources

How this will be verified

Documentation required

To answer this question with “yes” or “partial yes”, please ensure you have the following evidence, such as :

  • Proof of participation, such as: links to external materials highlighting your activities, outcome of these activities, meeting agendas, invitations, etc. 
  • Description of the outcome and results from the company’s participation that has improved the environmental performance of participating manufacturers. 
  • External materials may include: corporate social responsibility reports, press releases, or information posted on your website or another website. 

Intent of the question

This question is intended to encourage collaboration amongst companies, to join forces and tackle the most challenging environmental issues together, by funding environmental improvement projects for manufacturers.

Technical Guidance

Contributions to shared solutions by brands and retailers collectively can add credibility and influence to processes; provide resources to allow for action; and directly contribute to the knowledge and best practices available in that location.

Companies are encouraged to:

  • Engage within relevant local supplier contexts, as it is crucial to drive change and address contextual (local) risks and challenges.
  • Make joint investments in innovation and in innovative models that create value for manufacturers and drive systemic change.

Answer options

  • To answer “yes” to this question, your company can demonstrate that more than 75% of your suppliers has received funding to access one of the environmental improvement projects.
  • To answer “partial yes” to this question, your company can demonstrate that 25-75% of your suppliers has received funding to access one of the environmental improvement projects.

Helpful Resources

How this will be verified

Documentation required

To answer this question with “yes” or “partial yes”, please ensure you have the following evidence, such as:

  • Links to external materials highlighting your activities, such as: corporate social responsibility reports, press releases, or information posted on your website or another website 
  • Sample resources and materials developed and shared externally (i.e., with suppliers, stakeholders). 
  • Documentation of coordinated processes where stakeholders have identified and share new operational processes that reduce resource consumption for manufacturers and protect natural resources.
  • Documentation of events, best practices, training materials, or datasets provided by your organization, with information on who they were provided to and the outcomes of that provision including which manufacturers have access to them. E.g. agendas and invitations from events, workshops, training events, webinars, etc.

Evidence of funding, research, or other supported activities for the benefit of manufacturers that are carried out in collaboration with other stakeholders. 

Packaging

25.1 Which of the following primary material categories are used in your consumer packaging? (Multi-select possible)

  • Foam
  • Insulation Materials (natural or synthetic)
  • Leather
  • Metals
  • Plastics (synthetic or bio-based)
  • Synthetic Leather
  • Textiles (natural, synthetic, man-made cellulosic)
  • Wood-Based Materials (e.g. cardboard, cork, wood)

Intent of the question

This question is intended to assess whether your company has a way of tracking at least the primary materials (by volume) used in its consumer packaging. This information is needed to build an understanding of the potential environmental risks and impacts associated with these materials. This question is also intended to ensure that your company has an accurate accounting of the packaging materials of the products you sell.

Technical Guidance

Definitions

  • Primary materials are defined as the key materials used to make the final product. Primary materials are all the materials that, when totalled, represent at least 80% of the total material usage.
  • Consumer packaging is defined as on-product packaging, labels, and retail packaging.
  • On-product packaging: everything that is on a product and taken off before a consumer wears it (hangtags, fasteners).
  • In-store Packaging: packaging for use in-store (e.g., including shopping bags, hangers, alarms, etc.) This excludes hangtags since that is part of the on-product packaging.
  • Retail/e-Commerce Packaging: packaging that is designed specifically for e-commerce (poly bags, boxes, etc.)
  • Definition of Foam: A solid “open cell” or “closed cell” foam material commonly used in packaging and footwear. Includes EVA, PE, and PU foam. More information can be found through Higg MSI on Higg.org platform

Answer options

  • To answer ‘yes’ to this question, >75% of your total volume of primary materials (used in its consumer packaging) has been recorded in an inventory.
  • To answer ‘partial yes’ to this question, 25-75% of your total volume of primary materials (used in its consumer packaging) has been recorded in an inventory.
  • To answer ‘no’ to this question, less than 25% of your total volume of primary materials (used in its consumer packaging) has been recorded in the inventory.

Helpful Resource

  • A template has been created to support your company in tracking these materials. Please download the data collection sheet (packaging tab) from here.

How this will be verified

Documentation required

To answer this question with “yes” or “partial yes”, please ensure you have the following evidence:

  • A documented inventory of the types and volumes of materials used in its consumer packaging. Records from the accounting system may be used.
  • An explanation of how this calculation was made, including an explanation of the methodology. 

26.1 Which of the following primary material categories are used in your consumer packaging? (Multi-select possible)

  • Foam
  • Insulation Materials (natural or synthetic)
  • Leather
  • Metals
  • Plastics (synthetic or bio-based)
  • Synthetic Leather
  • Textiles (natural, synthetic, man-made cellulosic)
  • Wood-Based Materials (e.g. cardboard, cork, wood)

Intent of the question

Similar to the previous question. This question intends to assess whether your company has a way of tracking at least the primary materials (by volume) used in its transport packaging as well as to ensure that there is an accurate accounting of the packaging materials associated with the transport packaging.

Technical Guidance

Transport packaging refers to all packaging items used to transport products (e.g., corrugated boxes, poly bags, pallets, shrink wrap, adhesive labels, etc.)

Answer options

  • To answer ‘yes’ to this question, more than 75% of your total volume of primary materials (used in its transport packaging) has been recorded in an inventory.
  • To answer ‘partial yes’ to this question, 25%-75% of your total volume of primary materials (used in its transport packaging) has been recorded in an inventory.
  • To answer ‘no’ to this question, less than 25% of your total volume of primary materials (used in its transport packaging) has been recorded in the inventory.

Helpful Resource

A template has been created to support your company in tracking the packaging materials. Please download the data collection sheet (packaging tab) from here.

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence: 

  • A documented inventory of the types and volumes of materials used in its transport packaging. 

Records from the accounting system may be used.

  • An explanation of how this calculation was made, including an explanation of the methodology. 

Interview questions to ask:

  • Please describe the process for creating the material inventory.
  • Please describe the internal employees and suppliers involved in the process of creating the  material inventory.

27.1 Select all that apply:

  • Eliminating packaging
  • Lightweighting materials
  • Reducing size or volume of packaging
  • Packaging Redesign
  • Eliminating labels, foils, inks, colorants, fasteners, seals, liners, laminates, waxes, coatings, etc.
  • Other

Intent of the question

This question is intended to understand whether your company has eliminated or reducing packaging materials in any of your channels or for any of your consumer packaging in the last calendar year.

Technical Guidance

Lightweighting is a concept about using materials that are less heavy as a way to achieve better efficiency and handling.

Answer options

  • To answer ‘yes’ to this question, your company can demonstrate that the company’s reduction program has helped eliminate or reduce consumer packaging materials.
  • To answer ‘partial yes’ to this question, your company has included requirements for the elimination or reduction of consumer packaging materials in procurement contracts.

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence: 

  • Related documentation or supporting materials that demonstrate your company has eliminated or reduced packaging materials for its consumer packaging. 
  • The aforementioned documentation/materials should also provide information on how the new packaging has a lower environmental impact than the one it replaced.
  • An explanation of how this calculation (eliminating or reducing packaging materials) was made. 
  • If answered ‘partial yes’, a copy of the procurement contract can be provided.

28.1 Select all that apply:

  • Eliminating packaging
  • Lightweighting materials
  • Reducing size or volume of packaging
  • Packaging Redesign (e.g. using bags instead of boxes for e-commerce shipments)
  • Reusing packaging
  • Increasing packaging efficiencies
  • Changing process to eliminate repacking at the distribution center (e.g. cross docking, pre-packs at the factory, etc.)
  • Eliminating labels, foils, inks, colorants, fasteners, seals, liners, laminates, waxes, coatings, etc.
  • Other

Intent of the question

This question is intended to understand whether your company has eliminated or reduced packaging materials in any of your channels or for any of your consumer packaging in the last calendar year.

Technical Guidance

Lightweighting is a concept about using materials that are less heavy as a way to achieve better efficiency and handling.

Cross-docking is a practice in logistics where products from a supplier or manufacturing plant are distributed directly to a customer or retail chain with marginal to no handling or storage time in between.

Answer options

  • To answer ‘yes’ to this question, your company can demonstrate that the company’s reduction program has helped eliminate or reduce transport packaging materials.
  • To answer ‘partial yes’ to this question, your company has included requirements for the elimination or reduction of transport packaging materials in procurement contracts.

Helpful Resources

E-commerce specific resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence: 

  • Related documentation or supporting materials that demonstrate your company has eliminated or reduced packaging materials for its transport packaging. 
  • The aforementioned documentation/materials should also provide information on how the new packaging has a lower environmental impact than the one it replaced.
  • An explanation of how this calculation (eliminating or reducing packaging materials) was made. 
  • If answered ‘partial yes’, a copy of the procurement contract can be provided.

Intent of the question

This question is intended to encourage companies to increase the percentage of packaging materials which have environmental attributes or certification program(s).

Technical Guidance

Definitions

  • Consumer packaging has been defined in the guidance of the question 25 of this section.
  • Sustainable packaging is defined as packaging that delivers products in the condition expected by consumers, and does so with minimum economic, environmental, and social costs. Source: American Institute for Packaging and the Environment
  • The sustainable packaging definition according to the Sustainable Packaging Coalition:
  • Is beneficial, safe & healthy for individuals and communities throughout its life cycle.
  • Meets market criteria for performance and cost.
  • Is sourced, manufactured, transported, and recycled using renewable energy.
  • Optimizes the use of renewable or recycled source materials.
  • Is manufactured using clean production technologies and best practices.
  • Is made from materials healthy throughout the life cycle.
  • Is physically designed to optimize materials and energy.
  • Is effectively recovered and utilized in biological and/or industrial closed loop cycle.

The below illustration by The Consumer Goods Forum presents the optimum between protection of the product (to minimize losses due to damaging) and reducing the amount of material used (weight and volume) to reduce environmental impact.

Besides switching from conventional to more environmentally preferred materials it is important for companies to first consider how to reduce or reuse its current consumer packaging materials.

Answer options

  • To answer ‘yes’ to this question, your company has tracked over 75% of your entire packaging materials portfolio for environmental attributes or certifications.
  • To answer ‘partial yes’ to this question, your company has tracked 25-75% of your entire packaging materials portfolio for environmental attributes or certifications.
  • When answering “no” to this question, your company has tracked less than 25% of your entire packaging materials portfolio for environmental attributes or certifications.

It is the expectation that when you answer ‘yes’ or ‘partial yes’ to this question that you will also complete information requested within the table.

On the next page you will find a brief explanation on the terms used:

Type of certification / attribute

Certifications such as but not limited to:

Attributes: Reduction of material waste, water efficiency, energy efficiency, and CO2 emissions reductions, amongst others.

Baseline %

In order to demonstrate improvements or reductions, it’s important to know what your starting point is.

A “baseline %” is a starting point of the initial reporting percentage.

This percentage will enable your company to track over time whether you are on track to make progress against your set target(s).

Baseline yearThe initial reporting year, which you are measuring targets against, is also known as the baseline year (which the above “baseline %” is based on).
Target %

A target is a particular goal to be delivered by a company for a specific period. The Target % is an indicator of where you want to be from the baseline %.

Targets could be related to:

Percentage of total packaging used: Percentage is calculated by what percent the specific material type represents of the total packaging materials used in the previous calendar year.

Percentage of material coming from a more sustainable source: This percentage is calculated on the basis of the weight that the sustainable packaging materials represent within the total packaging weight.

Companies are encouraged to set targets that grow the percentage of consumer packaging materials with environmental attributes and/or certification.

Target yearThe year in which the “target %” has to be achieved.
Last calendar year %The percentage of products which carry end-of-use certifications and/or attributes in the last calendar year.
Additional commentsAny notes or comments to provide clarity to the information you have submitted.

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Description of how the packaging certifications/attributes and metrics (baseline and target) were determined.
  • Documentation that shows the baseline matches purchasing/sales records for the year the baseline was set.
  • Completed the information as requested within the table.

Interview question to ask:

  • Discussion with the team responsible for managing the metrics.
  • The team must clearly explain and demonstrate:
  • How baseline data was validated (e.g., use of verified data, used internal validation process, external audit, etc.)
  • How targets were set (following the SMART criteria) and met/progressed.

Technical Guidance

The guidance for this question is exactly the same as previous question, with the exception that the scope of this question focuses specifically on transport packaging materials.

Transport Packaging includes all industrial packaging (e.g. outer boxes) and the shipping containers for consumer products.

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Description of how the packaging certifications/attributes and metrics (baseline and target) were determined. 
  • Documentation that shows the baseline matches purchasing/sales records for the year the baseline was set.
  • Completed the information as requested within the table. 

Interview question to ask: 

  • Discussion with the team responsible for managing the metrics. 
  • The team must clearly explain and demonstrate:
  • How baseline data was validated (e.g., use of verified data, used internal validation process, external audit, etc.) 
  • How targets were set (following the SMART criteria) and met/progressed.

Intent of the question

This question is intended to encourage companies to adopt circular approaches and strategies to packaging material sourcing. Circular approaches integrate elements that are restorative and regenerative by design, while minimizing impacts. Formally incorporating circularity in your company’s design and selections process for materials can be an effective way to ensure that the use of raw materials can be seamlessly integrated into a sustainable circular economy.

Technical Guidance

Circular design considerations can include:

  • Selecting materials that are produced from pre- or post- consumer waste, or from by-products from other processes.
  • Selecting materials based on their ability to become part of a circular process.
  • Creating or encouraging circular processes.

Companies will need to consider possible trade-offs in order to understand whether circular options are also more sustainable. For example, analysis may be required to understand the relative impacts of:

  • Chemical use, energy, and transportation impacts created through product recycling approaches.
  • Trade-offs between using a mixed fiber with better longevity vs. using a non-mixed fiber that can be more easily recycled.

Answer options

  • To answer ‘yes’ to this question, your company has tracked over 75% of your entire materials portfolio for environmental attributes or certifications.
  • To answer ‘partial yes’ to this question, your company has tracked 25-75% of your entire materials portfolio for environmental attributes or certifications.
  • When answering “no” to this question, your company has tracked less than 25% of your entire materials portfolio for environmental attributes or certifications.

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence::

  • A copy of the packaging materials development and selection process.
  • A clear definition of what is in scope for their ‘circular design’ considerations, and formal procedures for including that circular design into the selection process as well as into decision making.
  • A process to integrate the circularity strategy, in order to identify whether specific circular solutions are lower impact. Where they are not, the company should be clear about how this can be resolved, or how additional solutions can be identified. This will also help provide an evidence base, to ensure that accurate communications of the sustainability credentials of proposed new solutions are made — thereby reducing the likelihood of misinformation, or ‘greenwashing.’ 

32.1 Please attach relevant document.

Intent of the question

This question is intended to first determine if a Packaging Restricted Substance List (PRSL) has been established for the company, and then to assess the extent to which the company’s PRSL has been formally applied within the company’s supply network. Unlike a Product RSL which is targeted at chemistry contained within or on a product, a Packaging RSL is intended to restrict or ban specific substances before they enter a materials or finished packaging manufacturing facility. The theory is that if the restricted or banned substance never enters a facility, or the input of substances is managed down to acceptable levels, it will never leave the facility on, or in, a material, or by way of an emission such as water, air, or waste.

Technical Guidance

To answer ‘yes’ to this question, the company must have documentation of their PRSL and the PRSL process and requirements across their supply chain, explicitly identifying the specific levels of the supply chain (tiers) covered by the protocol. A company should be prepared to demonstrate coverage by showing documentation that shows formal outreach and sharing of expectations. This documentation could be included in a clearly defined management system protocol (likely a chemical management program), a Vendor Guide, individual product and/or policies, or all of the above.

The AFIRM group has published a harmonized Packaging Restricted Substance List in May 2018.

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence::

  • Review of documentation supporting the process, including the PRSL itself, how the PRSL is implemented, expectation of suppliers, and all other supporting materials.
  • Review of records for statements of compliance returned by suppliers, including percentages of supply network who have responded.

33.1 If answered yes, please attach relevant document

Intent of the question

Companies are encouraged to develop and implement a preferred and restricted packaging materials list similar to the sustainable materials used in your finished good/end-products.

Communicating these clear expectations and requirements to internal stakeholders and suppliers will support everyone in meeting and achieving the organization’s sustainable packaging goals.

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • A copy of the preferred and restricted packaging materials list.
  • Description of the process of selecting the preferred and restricted packaging materials. 
  • Any claims should be backed up by credible data or verified by an accredited third party.
  • Explanation of how this list will be integrated by the responsible person for the sourcing of packaging (materials) and communicated to packaging suppliers.

34.1 Describe 1-3 ways you have done this.

Intent of the question

This question is intended to ensure the company is communicating and educating their customers on their environmentally preferred packaging materials, as well as on how to recycle packaging material to reduce the environmental impact associated with the use of their product(s).

Technical Guidance

To answer ‘Yes’ to this question, your company must have guidance for customers on how to recycle the packaging, thereby reducing the environmental footprint of your products.

One option of how to communicate to customers could be through on-product communication such as the How2Recycle labelling system. For more information please refer to http://www.how2recycle.info

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Public URL or link to documentation where customers can learn about your company’s use of environmentally preferred packaging materials. 
  • Related documentation/instructions to customers on how to recycle the packaging material associated with your consumer packaging. 
  • Calculation of the percentage of total consumer packaging used that is accompanied with “How to Recycle” guidance. 

35.1 Please list these efforts and provide relevant URLs that describe them in detail

Intent of the question

Participation and investment in collaboration with other stakeholders is critical for addressing shared, systemic challenges and working on the root cause of those challenges to drive real change. In particular, building collaborations with locally relevant actors can be crucial for building up long-term solutions to challenges.

Technical Guidance

Examples of these initiatives could be:

The above is not an exhaustive list of initiatives that companies can reach out to. The SAC intends to update this Brand & Retail Module – How to Higg Guide on an annual basis with member and user feedback.

Helpful Resources

Refer to the above example of initiatives described under the Technical Guidance.

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • A signed partnership or collaboration agreement with the relevant stakeholder(s). 
  • Evidence of active participation and engagement in shared platforms, including multi-stakeholder events. 
  • Evidence of direct engagement with community groups – for example, consultation through a credible third party or direct dialogue with community groups in response to their request 
  • Outcome of the collaboration with other stakeholders to improve the environmental performance of your packaging (materials).
  • Provide relevant URL or links to your participation in, or contribution to, these initiatives

Use & End of Use

Introduction

Use phase: The use of products by consumers split in 4 processes; washing (excluding detergent use), detergent use during washing (including emissions to water), tumble drying, and ironing.

In Europe: Consumer behaviour during the use phase accounts for at least a third of the carbon impacts of clothing in the EU, mainly from laundry impacts. As a comparison production of clothing also accounts for nearly a third of CO2e emissions. Laundry methods and clothing care affect the carbon footprint of clothing. High frequencies of machine drying and higher wash temperatures both increase the energy consumption from laundry and impact on the carbon footprint of clothing in the use phase.[1]

In the United States: in 2018, residents were estimated to have purchased over 22 billion garments and over two billion shoes, while discarding over 12 million tons of apparel. Clothing and footwear accounted for around 4% of consumer spending and over 4% of the total municipal solid waste stream.[2] Clothing that is not discarded is often over-washed or otherwise cared for improperly, leading to further environmental impacts and the shortening of garments’ useful lives. The average US household will use around 12,300 gallons of water annually for laundry alone; clothes dryers account for around 6% of every American household’s annual electricity expenditure.

End of use phase: When a consumer decides that they no longer want to keep the product, it will likely go through one of two paths: either the product is donated to an organization to be further reused or recycled, or it is disposed of by landfilling or incineration. According to the Ellen MacArthur Foundation, every second, the equivalent of one garbage truck of textiles is landfilled or burned. An estimated USD 500 billion value is lost every year due to clothing that’s barely worn and rarely recycled. Circle Economy estimates that 20 million tonnes of textiles are being landfilled or incinerated annually in the EU and US alone and an estimated 95% of all these textiles, could be re-worn or recycled.

[1] http://www.ecap.eu.com/wp-content/uploads/2018/07/Mapping-clothing-impacts-in-Europe.pdf

[2] Sources: AAFA industry stats: AAFA industry stats, US EPA MSW data and https://www.nps.gov/articles/laundry.htm

36.1 Please describe or provide supporting documentation:

Intent of the question

This question is intended to ensure that companies have a robust understanding of the environmental impacts associated with the use and end-of-use phase of their products so they can set strategies and targets accordingly to improve on these identified impacts. Furthermore, this question supports your internal process to identify and prioritize the key impacts based on your current product portfolio.

Technical Guidance

Examples of common environmental impact categories (which are also included in the Higg Materials Sustainability Index) are:

  • Global Warming
  • Eutrophication
  • Abiotic resource depletion (fossil fuel)
  • Water resource depletion/scarcity
  • Chemistry

Answer options

  • In order to answer ‘yes’ to this question, more than 75% of the company’s products should be covered by such analysis, assessment or study.
  • In order to answer ‘partial yes’ to this question, 25-75% of the company’s products should be covered by such analysis, assessment or study.
  • When answered ‘no’ to this question, less than 25% of the company’s products should be covered by such analysis, assessment or study.

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Copy of analysis, assessment, or study (carried out in the last five years) that identifies the key environmental risk and impacts associated with the use and end-of-use of your products.
  • Description of the percentage of production or sales the above analysis covers.  
  • Description of the environmental risks and impacts based on key product types, respective care instructions and end-of-use destinations. 
  • Documentation of known assumptions including product longevity, length of customer use phase, average customer wear & tear, garment care appliances, etc. 
  • Documentation of actual consumer behavior in relation to garment care, use, and end-of-use across key product types.
  • Clarification if products that are recycled or re-sold are excluded from the end-of-use impact analysis.
  • Any analysis, assessment, or report should be backed up by credible data or verified by an accredited third party. 
Intent of the question This question intends to ensure that your company is confirming and tracking whether the risk of adverse environmental impacts (as identified in the previous question) is being reduced through the products you sell. Having visibility of the entire product portfolio and how environmental sustainability are being advanced (through certifications and attributes) helps companies measure progress against set targets and enables them to achieve the goals outlined in their company’s strategy. Technical Guidance Answer options
  • To answer ‘yes’ to this question, more than 75% of your company’s sourced products have an environmental certification or attribute(s)
  • To answer ‘partial yes’ to this question, 25- 75% of your company’s sourced products have an environmental certification or attribute(s)
  • When answering “no” to this question, less than 25% of your company’s sourced products have an environmental certification or attribute(s)
  • If answered ‘yes’ or ‘partial yes’ to this question, the company can complete the table and list out the products that have been tracked with end of use attributes or certifications.
Type of certification / attribute End-of-use certifications that can be considered are, for example: Textile Exchange’s Recycled Claim Standard, Global Recycled Standard. End-of-use attributes that can be considered are products that have been reused, repurposed/upcycled, or recycled.
  • Reuse: donate, swap or sell products with the intention of reuse in the same form.
  • Repurpose: (refurbishing, upcycling, downcycling) Donate, swap or sell products with the intention of repurpose for use in a new form, where the original value/properties of a material are maintained
  1. Refurbishing: taking an old product and transforming it into like-new condition for resale.
  2. Upcycling: taking something that would otherwise be thrown out or recycled, and turning it into something more valuable (e.g. remanufacturing used clothing into new collections).
  3. Downcycling: taking something that would otherwise be thrown out or recycled and converting it to a secondary use where the value/properties of a material is degraded (e.g. wiper rags or insulation).
  • Recycling (closed loop or open loop).
  • Closed Loop Recycling: is a strategy where the recycled materials keep their original material properties, providing the same material performance through many recycling loops, ideally endlessly, as part of a circular economy process.
  • Open Loop Recycling: is a strategy to extend material utilization for more than one product lifecycle, where the recycled material properties degrade with every recycling loop to finally end up as waste. Typically, an open loop recycled material must be blended with other materials for full performance, or used in products where demands on material properties are lower for each recycling loop. Open loop recycling can include both physical and chemical recycling processes. Open loop recycling can be considered as a linear process.
Baseline % In order to demonstrate improvements or reductions, it’s important to know what your starting point is. A “baseline %” is a starting point of the initial reporting percentage. This percentage will enable your company to track over time whether you are on track to make progress against your set target(s).
Baseline year The initial reporting year, which you are measuring targets against, is also known as the baseline year (which the above “baseline %” is based on).
Target %
  • A target is a particular goal to be delivered by a company for a specific period. The Target % is an indicator of where you want to be from the baseline %.
  • Absolute target addresses the total amount/quantity per year or per month. In this context this could be total number of returned products that were repaired in a year.
  • Normalized target is a comparison of totals or usage against a predefined variable. An example here could also be the percent of total products sold with recycled content.
Target year The year in which the “target %” has to be achieved.
Last calendar year % The percentage of products which have end-of-use certifications and/or attributes in the last calendar year.
Additional comments Any notes or comments to provide clarity to the information you have submitted.
Helpful Resources
  • Learn more about setting baselines and targets through this resource.
  • Cradle 2 Cradle – Safe, circular material choices.
  • Fashion for Good – C2C Certified How to Guide
  • Global Fashion Agenda 2020 Circular Fashion System Commitment. On this website you will find helpful guidance and resources on 4 action points that can accelerate the industry’s transition to a circular fashion system. In particular, please look at the target matrix which includes brands’ commitments and targets (including textile recycling).
  • It all starts from the design phase. Learn more about the methods to achieve circular design by reading this guide.
  • This helpful guide from the Ellen MacArthur Foundation provides further insights into how your company can identify additional circular value from your products and materials, and mitigate risks from material price volatility and material supply.
  • WRAP – Sustainable Clothing Guide – This useful resource shares best practices on how to design, produce and sell sustainable clothing that lasts longer and that can be easily re-used and recycled.
How this will be verified Documentation required To answer this question, please ensure you have the following evidence:
  • Description for how the end-of-use certifications/attributes and metrics (baseline and target) as reported in the table were determined.
  • Documentation that shows the baseline matches production/sales records for the year the baseline was set.
  • Explanation of whether an adequate recycling infrastructure is provided in the country/countries where the products are being sold.
  • Yes: 50 Percent or more of faulty damaged products or unsold inventory
  • Yes: 1-49 Percent of faulty damaged products or unsold inventory
  • No

38.1 If you answered yes, please describe this program

Intent of the question

This question is intended to understand whether the company has set up a solution or system to responsibly deal with faulty, damaged, unsellable or returned products and unsold inventory.

Technical Guidance

Companies are encouraged to put in place a reverse logistics system or systematic decision-making process to deal with faulty, damaged, unsellable or returned products and unsold inventory.

Companies should identify methods with the least environmental impact by avoiding the increase of waste to landfills, and air pollution caused by incineration.

Inventory should be distinguished between:

  • Unsold or returned but in good condition.
  • Inventory that is faulty or damaged but safe to reuse/recycle.
  • Inventory that is unsellable, damaged, or contaminated in a way that makes it unfit for sale or recycling (for example, if chemical levels are non-compliant with company quality controls or legal limits, or contaminated with specific molds that make it unsafe to reuse or recycle).

The most preferred options, as long as they are environmentally responsible, are for companies to:

  • Reuse/repurpose undamaged but unsold or returned inventory and materials.
  • Non-contaminated but damaged stock should be repurposed or recycled wherever possible.
  • Faulty or damaged goods that are not safe for reuse or recycling should be decontaminated wherever possible to facilitate recycling, or disposed of responsibly if necessary.

By prioritizing solutions for unsold and damaged inventory, and aiming for maximum reuse or recycling, this approach supports the transition to a circular economy and moves away from the linear approach of make, use, and dispose.

Helpful resources

Examples of third-party service providers

Deadstock materials, findings, trim, or unusable scraps

Unsold inventory/good-quality returns

  • Responsible excess inventory resale – charity model: TRAID (UK only)
  • Responsible excess inventory resale – upcycling model: Looptworks
  • Custom reverse logistics and excess inventory separation/placement: Parker Lane Group
  • Returns optimization and excess inventory AI: Optoro

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Calculation of the percentage of products that were faulty/damaged or unsold. 
  • Description of the program to manage faulty/damaged products and unsold inventory
  • Analysis, assessment, or study that the company has carried out to define their solution and/or system to deal responsibly with faulty, damaged, unsellable or returned products and unsold inventory and materials.
  • Explanation of solution and/or system and how it contributes to the most environmentally responsible method. 

39.1 If you answered yes, what does this guidance include? (multi-select possible)

  • Best practices for storing product in a manner that extends product life.
  • Cleaning or washing products only as frequently as is necessary.
  • Guidance on re-treating or re-finishing products to enhance and prolong applicable performance or aesthetic characteristics that are likely to extend product life.
  • Low-impact dry cleaning or no dry cleaning.
  • Low-impact product care guidance (e.g., where appropriate — washing garments at a lower temperature, line-drying or hang drying, using non-toxic detergents, avoiding bleach, etc.).
  • Other

Intent of the question

This question is intended to assess whether your company provides guidance to customers on how they can care for products in a responsible manner. Customers may not be aware of the environmental impacts associated with caring for their products, so offering information can be an effective way of encouraging them to reduce any associated impacts. Providing this guidance can also help customers derive the maximum value from products by extending the life of the product. In some instances, responsible product care requires that customers have access to specific resources, such as cleaning kits, laundry bags, product treatments/finishes, etc.

Technical Guidance

To answer “yes” to this question, product care guidance must be made publicly available and easily accessible for consumers (e.g., through website, phone customer service, in-store printed materials, on-product labeling and/or trained staff).

Companies are encouraged to have an on-product care label for washing at lower temperatures where it makes the most sense and has the greatest environmental impact (example: environmental impact is higher for jeans than for undergarments).

Non-toxic detergents: such as those free of phosphate, Linear Alkyl Benzene Sulphonic Acid (LABSA) and Sodium Lauryl Sulphate (SLS).

Helpful resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Calculation of the percentage of products that were faulty/damaged or unsold. 
  • Description of the program to manage faulty/damaged products and unsold inventory
  • Analysis, assessment, or study that the company has carried out to define their solution and/or system to deal responsibly with faulty, damaged, unsellable or returned products and unsold inventory and materials. 
  • Explanation of solution and/or system and how it contributes to the most environmentally responsible method. 

Intent of the question

This question is intended to assess whether your company provides information to your customers about how they can ensure their products reach the outcome at the end of their useful life that derives maximum value from the products and minimizes environmental impact. In many instances, customers are not aware of their end-of-use options, resulting in products that still have life/value being prematurely sent to landfills.

Technical Guidance

To answer ‘yes’ to this question, product end-of-use guidance must be made publicly available and easily accessible for consumers (e.g., through website, phone customer service, in-store printed materials, and/or trained staff).

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

Relevant links / URLs to product end-of-use guidance that are made publicly available and easily accessible for consumers (e.g., through website, phone customer service, in-store printed materials, and/or trained staff).

41.1 If you answered yes, what does this service include:

  • An in-house repair offering operated by your company.
  • A third-party repair offering operated by a third-party organization.
  • Product that includes repair kit offerings so product owner can make repair themselves.
  • Other

Intent of the question

This question is intended to assess whether your company provides customers with options that enable them to repair the products sold by your company. This can be an effective way of supporting your customers in repairing their products or ensuring the products are repaired by a provider who can conduct a quality repair.

Technical Guidance

To answer “yes” to this question, your company must provide customers with access to a product repair offering. This offering can be operated directly by your company or offered to your customers via a partnership with a third- party repair provider.

Helpful resources

In-house repair offerings

Third-party repair service providers

  • The Renewal Workshop (U.S. only).
  • Nudie Jeans : Repair shops, repair partners, mobile repair stations
  • The Outdoor Industry Association has created a list of repair facilities for the outdoor industry: https://outdoorindustry.org/sustainable-business/circular-economy (U.S. only).
  • At the time of writing the guidance, a similar list of repair facilities for other countries outside of the U.S. could not be found. We advise to perform a Google search to find local third-party repair service providers near you.

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Proof of the product repair offering by your company or by a third-party organization. 

Records related to tracking the annual portion of the products sold that were covered by in-house repair offering or third-party repair offering.

If you answered yes,

42.1 Do you actively promote the resale, donation, and/or recycling of garments (through your organization or an accredited third party)?

42.2 Does your company have visibility to the fate and relative impact of the products and/or materials that are collected via the take-back program to ensure they support positive environmental outcomes?

42.3 Is collected product ultimately diverted toward positive environmental outcomes and away from landfill, incineration, or energy recovery?

Intent of the question

This question is intended to assess whether your company provides your customers with product take-back options that enable them to have their products reused, donated, and/or recycled at the end of their useful life.

Technical Guidance

To answer “yes” to this question, your company must have:

  • A program in place that allows customers to return products to your company or to a third-party organization to be reused, donated, and/or recycled. This program can be offered to your customers directly by your company (in-store) or via a partnership with a third-party organization.
  • Companies should raise awareness/educate their customers on their take-back options and the benefits of extending the life of their products and/or utilizing them for an extended period of time.
  • Companies should seek visibility to the destination of the products collected via the take-back program to ensure they support positive environmental outcomes. This article highlights negative outcome from donation of clothes to the African market.

End-of-use streams companies can consider:

1) Reuse: donate or sell products with the intention of reuse in the same form.

Options for product take-back program/offering:

  • Company develops partnerships with recognized, credible, and licensed charities or private reuse companies.
  • Company supports public collection and/or processing infrastructure.
  • Company creates second-hand market for used products or actively supports similar initiatives.

2) Repurpose: Donate, swap or sell products with the intention of repurpose for use in a new form, where the value of a product may be maintained, improved, or degraded but the original properties of a material are maintained.

Refurbishing used products involves returning them to a condition where they can be sold to another consumer, it can be an effective way of extending the life of products that may have been exhausted by one user, but which can provide additional value to another user after being refurbished. Examples of refurbishing include cleaning, mending, altering, restuffing, and overdying.

Upcycling encompasses methods that adapt the form of the original product to increase its value, such as by using it to create a new version of a comparable item (e.g. remaking used clothing into new clothing collections) or by creating a new type of item (e.g. converting used clothing into home textile items). In the 2002 book Cradle to Cradle: Remaking the Way We Make Things (William McDonough and Michael Braungart) the authors state that the goal of upcycling is to prevent wasting potentially useful materials by making use of existing ones. This reduces the consumption of new raw materials when creating new products. Reducing the use of new raw materials can result in a reduction of energy usage, pollution, greenhouse gas emissions, etc.

Downcycling is taking something that would otherwise be thrown out or recycled and converting it to a secondary use where the value/properties of a material are degraded (e.g. wiper rags or insulation).

Options for product take-back program/offering:

  • Company develops partnerships with recognized, credible, and licensed second-hand businesses with the intention of repurpose for use in new form.
  • Company partners with, or subscribes to, third-party organizations for product take-back service.
  • Company supports public collection and/or processing infrastructure.

3) Recycling (closed loop and open loop)

Closed Loop Recycling: is a strategy where the recycled materials keep their original material properties, providing the same material performance through many recycling loops, ideally endlessly, as part of a circular economy process.

Open Loop Recycling: is a strategy to extend material utilization for more than one product lifecycle, where the recycled material properties degrade with every recycling loop to finally end up as waste. Typically, an open loop recycled material must be blended with other materials for full performance, or used in products where demands on material properties are lower for each recycling loop. Open loop recycling can be considered as a linear process. Open loop recycling can include both physical and chemical recycling processes. Open loop recycling can be considered as a linear process.

Options for product take-back program/offering:

  • Company develops partnerships with recognized, credible, and licensed charities or private recycling companies.
  • Company partners with, or subscribes to, third-party organizations for product take-back service (closed/open loop recycling).
  • Company supports development of technologies that enable material recycling.

Helpful resources

Examples of take back programs:

Examples of third-party service providers such as:

Example of a company based on resale/circular business model

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Documentation provided to customers related to the take-back program 
  • Documentation of the take-back program’s logistics from the point of collection (in-store, by mail, or through third-party service providers), through processing, to end of process; must provide visibility into how collected items are diverted from landfill/incineration and incorporated into a secondary stream. If possible, provide documentation of the secondary stream geography/market.
  • Documentation of the types and volumes of products collected via the take-back program

43.1 If you answered yes, please indicate how you handled damages or defectiveproducts that were returned during the last calendar year:

  • Products were repaired for that customer.
  • Products were not repaired and were replaced with a new product.
  • Products were replaced with a new product, but the original was collected for repair and recirculation.
  • For products that could not be repaired, our company offered an alternative option (reusing, refurbishing, donating, or recycling).
  • Other

Intent of the question

This question is intended to assess whether your company prioritizes product repair before offering product replacement when servicing customers who have a performance or quality issue.

Repairing a product is typically an environmentally preferable option as compared to replacing the product with a new one, since the manufacture of a new product requires the use of additional resources and materials.

Technical Guidance

To answer “yes” to this question, your company must have a policy or standard operating procedure (SOP) that prioritizes product repair over replacement when servicing customers who have a performance or quality issue with a product and want to repair or replace it.

Helpful resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Policy and/or Standard Operating Procedure (SOP) that prioritizes product repair over replacement when customers return products due to a performance or quality issue. 
  • Records of tracking returned products offered through in-house and/or third-party repair offering. 
  • Relevant links/URLs of your company offering alternative options (such as reusing, refurbishing, donating, or recycling) to customers for products that could not be repaired. 

Intent of the question

This question is intended to encourage companies to investigate opportunities to rethink the linear business model (make, use, and dispose) by participating or investing in technical R&D and innovation focused on extending the life of their products. Business model innovation occurs when a company implements systematic changes and adapts the way a business earns profits in order to remain relevant and competitive.

Technical Guidance

To answer “yes” to this question, your company must have a program in place that enables your company to participate or invest in technical research and development and innovation to extend the life of your products.

Helpful resources

Harvard Business Review

Innovation: Programs, Awards, Incubators encouraging R&D

Innovation: Company-specific R&D

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Provide relevant links/URLs of your participation and/or investments in R&D for extending the life of your products.
  • Supporting document(s) to showcase the results achieved through your company’s participation and/or investment.
  • Yes, 50 percent or more of products
  • Yes, 1-49 percent of products
  • No

45.1 What kind of recycling collection and infrastructure can customers use? Please describe.

Intent of the question

This question is intended to encourage your company to increasingly provide products made of materials that can be recycled by a majority of users and communities, so as to reduce the product’s environmental impact.

Technical Guidance

To answer “yes” to this question, your company should be able to substantiate its recyclable claims by demonstrating that recycling facilities are made available to at least 60 percent of consumers or communities where a recyclable product is sold. The calculation should be based on the percentage of products that in the 2019 calendar year were made exclusively with materials that can be recycled.

The US Federal Trade Commission provides the following guidance:

  • 16 CFR 260.12 – Recyclable Claims

Recyclable includes the reuse, reconditioning, and remanufacturing of products or parts in another product.

  1. It is deceptive to misrepresent, directly or by implication, that a product or package is recyclable. A product or package should not be marketed as recyclable unless it can be collected, separated, or otherwise recovered from the waste stream through an established recycling program for reuse or use in manufacturing or assembling another item.
  2. Marketers should clearly and prominently qualify recyclable claims to the extent necessary to avoid deception about the availability of recycling programs and collection sites to consumers.

When recycling facilities are available to a substantial majority of consumers or communities where the item is sold, marketers can make unqualified recyclable claims. The term “substantial majority” as used in this context, means at least 60 percent. When recycling facilities are not available to at least 60 percent of the consumers or communities where a product is sold, qualified recyclable claims must be included. Marketers may always qualify recyclable claims by stating the percentage of consumers or communities that have access to facilities that recycle the item.

When Using Environmental Marketing Claims

Examples of recycling collection and infrastructure:

  • Return to the store
  • Collection through a third-party organization
  • Donation or collection through a charity
  • Collection through municipal waste or recycling programs

Helpful resources

Legislation

Examples of recycling communications to consumers:

Other resource

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Supporting documents that can substantiate how recycling facilities and/or collection are available to at least 60 percent of the consumers or communities where the recyclable products are being sold.
  • Documentation of your communications to consumers regarding recycling/collection infrastructure in their area.

46.1 Please describe and upload a copy of the action plan

Intent of the question

This question intends to confirm that your company has a plan in place to accelerate the transition to a circular economy.

Technical Guidance

This entire section intention is to encourage companies to rethink their existing business model by transitioning from a linear (take-make-dispose) to a circular (make-use-return) economy.

Circular economy is defined as an industrial system that is restorative or regenerative by intention and design. It replaces the end-of-life concept with restoration, shifts towards the use of renewable energy, eliminates the use of toxic chemicals, which impair reuse and return to the biosphere, and aims for the elimination of waste through the superior design of materials, products, systems, and business models.

The below infographic created by the Ellen MacArthur Foundation illustrates the concept of a circular economy very well.

Source: https://www.ellenmacarthurfoundation.org/circular-economy/concept/infographic

Answer Options

  • In order to answer ‘yes’ to this question, your company can upload a copy of the action plan.
  • In order to answer ‘partial yes’ to this question, your company does not have a formal action plan but can demonstrate actions have been taken to reduce environmental impacts of its products during customer use and end-of-use phase.
  • When answered ‘no’ to this question, your company has not started

Helpful resources

  • Higg FEM implementation plan template which may also function as an action plan.
  • The Policy Hub’s Although the Hub’s purpose is to inform policymakers, it is an excellent resource for companies that are starting to look into circular economy.
  • Think outside the box through Fashion for Good’s report on the viability of circular business models.
  • Global Fashion Agenda 2020 Circular Fashion System Commitment. On this site you will find helpful guidance and resources on 4 actions points that can accelerate the industry’s transition to a circular fashion system. In particular be sure to look at the target matrix that includes brands’ commitments and targets (including textile recycling).

Harvard Business Review

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • A copy of the action plan which details the necessary actions, the responsible persons, and the timeline for implementation.
  • Description of the process that has informed the company on which actions to prioritize in order to reduce (negative) environmental impact. 
  • Explanation of the responsible staff tasked with implementing the action plan and the resources to support their efforts. 
  • If answered ‘partial yes’: please provide a description/explanation of the actions taken that have resulted in reduction of environmental impacts of its products during customer use and end-of-use phase. 

Interview question to ask 

  • Responsible staff will be asked to explain the process behind: 
    • Implementing the actions;
    • Developing the action plan and the results in the past calendar year.

 

  • Yes, 50 percent or more of products
  • Yes, 1-49 percent of products
  • No

Intent of the question

This question is intended to understand whether your company provides your customers with options for accessing the products sold by your company beyond the traditional model of selling new products to customers. Examples of alternate product access models include product rentals, used product sales, product sharing, product leasing, etc.

Transferring products from consumer to consumer can be a highly effective way to extend product life and ensure maximum value is derived from the product. Another benefit is the reduction of environmental impact (transportation emissions) by avoiding products to be returned to distribution centers.

Technical Guidance

To answer “yes” to this question, your company must provide your customers with product lease or rental access options. This program can be offered to your customers directly by your company or via a partnership with a third- party organization.

Helpful resources

Examples of brands creating their own rental programs

Example of third-party service providers allowing brands to create rental programs

Examples of brands contracting with a third-party multi-brand rental provider

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Supporting documents that show your company is providing and tracking the product lease or rental.
  • Calculation of the percentage of products being offered as part of product lease or rental.
  • Process to identify whether specific lease or rental of product access options are in fact lower impact, in particular by using life cycle assessment or a similar credible approach to model the environmental impacts.

48.1 If answered yes, what stakeholders do you engage with?

  • Local communities
  • Governments
  • NGOs
  • Multi-stakeholder initiatives
  • Other

48.2 Please describe these initiatives

Intent of the question

This question is intended to encourage companies to collaborate with other stakeholders to jointly address industry-wide systemic challenges such as extending the longevity of products and enabling them to be reused and recycled. In particular, Small and Medium-sized Enterprises (SME) are encouraged to work collaboratively to jointly address issues in order to overcome resource and scaling constraints.

Technical Guidance

In order to answer “yes” to this question, your company has participated in one or more of the following initiatives to extend longevity or enable reuse and recycling of your products:

Participating and sharing resources on extending product longevity

Participating in initiatives to enable reuse or recycling of products

  • Scaling up innovations in the sorting and recycling of textiles.
  • Supporting research and development into systemic challenges and potential trade-offs around recycling solutions.
  • Engaging with systems issues such as municipal recycling infrastructure.
  • Participating through a collective platform/research with other stakeholders to address systems challenges.
  • Supporting uptake of new technologies and enabling improved financial/legal frameworks and capacity.
  • Collaborating with governments to advocate for incentives and policies that support end-of-use programs (e.g., reducing tariffs on recycled content, removing legal barriers for second-hand markets, etc.)

Helpful resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • A signed partnership or collaboration agreement with the relevant stakeholder(s). 
  • Evidence of participation and engagement in shared platforms, including multi-stakeholder events. 
  • Evidence of direct engagement with community groups – for example consultation through a credible 3rd party or in direct response to a request by community groups. 
  • Provide relevant URLs or links to your participation or contribution to these initiatives.
  • Records of outcome and feedback from stakeholder consultation/engagement.

Brand (Social & Labor)

This section should be completed by companies that are responsible for product creation, which includes design & development, manufacture, and distribution of their own/private label brands.

Licensees:
Companies that are licensees (holder of a license to use a trademark) and are responsible for product creation as per the previous paragraph should complete this section to evaluate their own sustainability practices and performance.

Licensors:
Companies that make product creation decisions for licensees to execute should include those licensee business streams in their own Brand section reporting.
Companies that request their licensees to complete their own Higg BRMs should exclude those licensee businesses from their own Brand section reporting to avoid double counting.

Steps in the OECD due diligence process that are addressed in the Brand – Social & Labor section
Step 1. Embed Responsible Business Conduct into policies & management systems
Step 2. Identify & Assess Adverse Impacts in Operations, Supply Chains and Business Relationships.
Step 3. Cease, prevent or mitigate adverse impacts
Step 4. Track Implementation and Results
Step 6. Provide for or cooperate in remediation when appropriate

Product

1.1 Please describe or provide documentation of this assessment

Social/human rights assessment tools or methodologies (e.g. Social Life Cycle Assessment, geographical or commodity risk analysis, analysis through stakeholder consultation) could support your company’s efforts to identify and assess these impacts. Please note that this question focuses on your individual raw materials, not on your products.

Intent of the question

This question intends to ensure that the company has a robust understanding of the salient social/human rights impacts that are associated with the raw materials supply chain.

Technical Guidance

This question builds on the Management System section wherein you have identified your salient social risk(s) related to materials manufacturing (please review the risk(s) you have identified in Management System section question 2 and 3).

For companies at the start of the journey, there are 4 steps they can take to begin assessing social/human rights impacts in the raw materials supply chain.

For companies that are further along in the assessment of human rights impacts in the raw materials supply chain, they may prefer to update parts of their assessment (outlined as part of the 4 steps) if/when new information is brought to their attention that would change their evaluation of impacts and risks.

Step 1: Identify & track materials by volume.

Identify all your raw materials by volume, country of origin and use this tracking sheet if helpful.

Step 2: Identify the salient risks of adverse human rights impacts associated with the materials.

The result of step 1 is a list of raw materials by volume and country of origin.

This list will serve as a basis for the second step activity on identifying the salient risk(s) of adverse human rights impacts associated with your raw materials use.

Companies do not need to start from scratch, when identifying the salient human rights risks, and can rely on publicly available information such as:

  • OECD has identified the following common risks for the garment and footwear sector:
  • Child Labor
  • Discrimination
  • Sexual Harassment and sexual and gender-based violence
  • Forced Labor
  • Non-compliance with minimum wage laws
  • Occupational health and safety (e.g., work-related injury and ill health)
  • Violations of the rights of workers to establish or join a trade union and to bargain collectively
  • Wages do not meet basic needs of workers and their families

  • Apparel and Footwear specific resource: Textile Exchange has created this helpful resource which includes the identified risk(s) for the material types: cotton, down, wool, man-made cellulosic fibers, polyester, nylon (please go the table of contents and click on the header “risk management” for each of the aforementioned materials).

  • We have created a guide companies can consult which describes the social risks identified in the Higg BRM assessment and where they may occur.

  • As a reminder, you can review the guidance on how to determine salient risks (as explained in the management system section) from here.

Step 3: Evaluate the human rights risk for each material on the basis of where your material is manufactured.

Now that you have identified the salient human rights risks for your company to focus its efforts on, it is time to evaluate these risks in the context of the materials you have used.

Companies can evaluate the risk on the basis of:

  • Material type: How much risk to adverse social/human rights impact could be reduced through your material procurement.
  • Manufacturer/Supply Chain: Understand and measure the social/labor conditions of your manufacturer (specific impacts against the risks) by using the Higg Facility Social & Labor Module (FSLM)
  • Sourcing country/location – The geographical and commodity risk that are involved where the material is grown/produced and manufactured.
  • The leverage your company has to reduce the risk (does it require an industry approach or can an individual company make the change).

Step 4: Develop an action plan and set targets to track progress

  • Engage internal and/or external stakeholders to identify how your company can mitigate and/or reduce the adverse social/human rights impacts on the material and supplier level through a sustainable materials strategy. Key internal stakeholders are for example senior management, product designers and developers, Research & Development and staff responsible for sourcing / procurement.
  • Based on the discussions, develop an action plan and SMART targets that specifies how the company and respective staff will source more sustainable materials (in order to reduce or mitigate their adverse impacts) in the next 1-3 years.

Important Note: All companies, regardless of their company size or degree of leverage with their suppliers, have a responsibility to know the environmental impacts of its materials use. However, the specific steps that a company would take may vary based on their leverage. For example, a company could collaborate with other companies through a multi-stakeholder initiative to increase their leverage with suppliers.

Helpful resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • A list of any standards, industry tools, resources, or documents used by company to guide the identification of risks, impacts, and opportunities. 
  • Copies of documents produced in determination of salient risks, impacts, and opportunities. Any documentation should use credible data sources, or data that has been verified by an accredited third party.
    • Examples of documents: Social Life Cycle Analysis (S-LCA) data; geographical or commodity risk analysis using credible third-party tools or datasets; analysis, benchmarks or recommendations from expert organizations. 
  • Stakeholder consultation (including external expert participants) to map out the likely risks and impacts for your material types. 

Interview question to ask:

  • Please describe the process or methodology that led to an appropriate understanding of the salient risks, impacts, and opportunities for the raw materials supply chain.
  • Suggested document upload for this question: Documentation of the social/human rights impacts assessment of materials (e.g. Social Life Cycle Assessment, geographical or commodity risk analysis, analysis through stakeholder consultation)

Intent of the question

This question is intended to assess whether your company sources raw materials that advance ethical standards and practices in your supply chain.

Technical Guidance

Ethical sourcing is the process of ensuring the products being sourced are obtained in a responsible way, that the workers involved in making them are safe and treated fairly, and that social impacts are taken into consideration during the sourcing process.

Companies implementing ethical sourcing must ensure social/human rights are protected across its full supply chain, regardless of whether they have direct or indirect relationships with the material suppliers.

Assurance can be provided on whether you are sourcing from responsible material producers/suppliers through third party certification.

  • Certification: A third party certification program that ensures the protection of human rights and/or improvement of the well-being and livelihood of raw material producers and manufacturers. Examples of certification programs include, but are not limited to: Fairtrade International, SA8000. A complete overview of sustainability standards can be found through the International Trade Centre’s Sustainability Map
  • Credible third party: Companies that are accredited and qualified to certify materials and/or companies.

Answer options

  • To answer ‘yes’ to this question, your company has social/human rights certification for over 75% of your materials.
  • To answer ‘partial yes’ to this question, your company has social/human rights certification for 25-75% of your materials.
  • When answering “no” to this question, your company has social/human rights certification for less than 25% of your materials.

Helpful Resources

  • A complete overview of sustainability standards can be found through the International Trade Centre’s Sustainability Map

How this will be verified

Documentation required

To answer “yes” or “partial yes” to this question, please ensure you have the following evidence:

  • A documented inventory of the materials with social/human rights certifications and/or ethical attributes sourced in the 2019 calendar year. 
  • Basis or source information that was used to determine that these certifications and/or attributes have advanced ethical practices or led to improvements in the well-being and livelihood of raw material producers and manufacturers.

Interview questions to ask:

  •  Please describe the process your company used to determine or verify that the social/human rights certifications are driving improvements of social/human rights.  

Intent of the question

This question intends to ensure that companies are confirming and tracking whether they are reducing the risk of adverse social/human rights impact (or rather contributing to positive social impact) through their raw material sourcing activities.

Having visibility of the entire materials portfolio and how social/human rights are being advanced (through certifications and attributes) helps companies measure progress against set targets, and enables them to achieve the goals outlined in the company’s strategy.

Technical Guidance

  • Attributes: Refers to material types and/or products that have a verifiable and credible claim of contributing to positive social/human rights impact(s) or ethical practices.
  • Certification: A third party certification program confirms the integrity of the ethical attributes within the material. Third-party certification programs support a systemic approach to integrate environmental performance in the raw materials.
  • Example: Paying fair prices to producers is an attribute whilst Fair Trade Certification could be the corresponding certification.

As part of this question, you will be asked to complete a table to share details related to the certification and/or attribute. Below you will find a brief explanation on the terms used within the table.

Type of certification / attribute

Certifications that can be considered are: Fairtrade International or SA8000.

A full overview of social/human rights standards can be reviewed here

Baseline %

In order to demonstrate improvements or reductions, it’s important to know what your starting point is.

A “baseline %” is a starting point of the initial reporting percentage. This percentage will enable your company to track over time whether you are on track to make progress against your set target(s).

Baseline yearThe initial reporting year, which you are measuring targets against, is also known as the baseline year (which the above “baseline %” is based on).
Target %
  • A target is a particular goal to be delivered by a company for a specific period. The Target % is an indicator of where you want to be from the baseline %.
  • Target types that are most commonly used are either absolute or normalized.
  • Absolute target addresses the total amount/quantity per year or per month. In the materials context this could be total amount in kilograms of Fair Trade cotton in a year.
  • Normalized target is a comparison of totals or usage against a predefined variable. An example here could also be the percent of total cotton usage with Fair Trade Certification.
Target yearThe year in which the “target %” has to be achieved.
Last calendar year %The percentage of products that have social/human rights attributes or certifications in the last calendar year.
Additional commentsAny notes or comments to provide clarity to the information you have submitted.

Answer options

  • To answer ‘yes’ to this question, your company has tracked the social/human rights attributes for over 75% of your total volume of materials.
  • To answer ‘partial yes’ to this question, your company has tracked the social/human rights attributes for 25 – 75% of your total volume of materials.
  • When answering “no” to this question, your company has tracked the social/human rights attributes for less than 25% of your total volume of materials.

Helpful resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

If you answered ‘yes’ to this question, your company should provide the following:

  • A documented inventory of the materials with social/human rights attributes.
  • When certifications have been used: share related copies of certificates of the material suppliers/producers.

Interview questions to ask:

  • Please describe the process your company used to determine or verify that the materials have advanced ethical practices or improved the well-being and livelihood of suppliers.
  • Please describe the process your company used to collect certificates along the value chain of the sourced materials.

4.1 Please describe or provide documentation of this assessment

Intent of the question

This question is intended to ensure companies have a robust understanding of the social/human rights impacts associated with the manufacturing and use of their products, so they can set strategies and targets accordingly, to improve on these identified impacts. This question also intends to support your internal process to identify and prioritize the salient social/human rights risks and impacts holistically across your product portfolio.

Technical Guidance

Social/human rights assessment tools or methodologies (e.g. Social Life Cycle Assessment, geographical or commodity risk analysis, analysis through stakeholder consultation) could support your company’s efforts to identify and assess these impacts.

Please review your answer to question 1 in this section and include the finished goods manufacturing as well as the use phase of the products within the scope.

To answer ‘yes’ to this question, your company must have an analysis, assessment, or study (carried out in the last five years) over a single product, that includes one or more of the following:

  • Social/human rights risks and impacts based on the manufacturing and the use phase of key product categories. Any analysis, assessment or study should be backed up by credible data or verified by an accredited third party.
  • Documentation of materials and finished goods production processes collected through production records.
  • Specific opportunities to address social risks or impacts within the stages of product design and development.

Helpful resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Copy of analysis, assessment, or report (carried out in the last three years) that identifies the salient social/human rights risks, impacts, and opportunities associated with the manufacturing and use of one single product. The analysis can be done through Social Life Cycle Assessment or other credible tools. 

Interview questions to ask:

  • Describe the process of conducting the analysis, assessment, or study as well as the selection of the product. 
  • What were the outcomes of that process, and how has this informed or adjusted your strategy on improving social/human rights impacts? 

Intent of the question

This question intends to ensure that companies are confirming the total products that they source with social/human rights certifications.

Technical Guidance

The previous questions were focused on the materials stage, whilst this question covers the manufacturing — from materials through to the product.

Developing a progressive sustainable products strategy will only be possible if a company understands and has visibility of the entire product portfolio; this includes knowledge of whether attributes or certifications have been used by their finished goods/products suppliers.

Answer options

  • To answer ‘yes’ to this question, more than 75% of your company’s sourced products have a social/human rights certification.
  • To answer ‘partial yes’ to this question, 25 – 75% of your company’s sourced products have a social/human rights certification.
  • When answering “no” to this question, less than 25% of your company’s sourced products have a social/human rights certification.

How this will be verified

Documentation required

To answer “yes” or “partial yes” this question, please ensure you have the following evidence:

  • A documented inventory of the materials with social/human rights certifications and/or ethical attributes sourced in the 2019 calendar year. 
  • Basis or source information that was used to determine that these certifications and/or attributes have advanced ethical practices or led to improvements in the well-being and livelihood of raw material producers and manufacturers

Interview questions to ask:

Please describe the process your company used to determine or verify that the social/human rights certifications are driving improvements of social/human rights.  

Intent of the question

This question intends to ensure that companies are confirming and tracking the social/human rights attributes through to the finished goods manufacturing of their products.

Technical Guidance

Attributes: Refers to material types and/or products that have a verifiable and credible claim of contributing to positive social/human rights impact(s) or ethical practices.

Answer options

  • To answer ‘yes’ to this question, your company has tracked more than 75% of your entire product portfolio.
  • To answer ‘partial yes’ to this question, your company has tracked 25-75% of your entire product portfolio.
  • When answering “no” to this question, your company has tracked less than 25% of your entire product portfolio.

When “yes” and “partial yes” has been selected a table will appear.

It is the expectation that you can complete the table by listing the information of products that you have tracked with social/human rights attributes. Please refer to the guidance as part of question 3 on how to interpret this table.

Helpful Resources

For companies that are new to tracking percentages of products for social/human rights attributes:

  • Please download the template that companies can use to track percentages of products with social/human rights attributes.

How this will be verified

Documentation required

To answer “yes” or “partial yes” this question, please ensure you have the following evidence:

  • Completed the information that is known to you as requested within the table.
  • A documented inventory of the products that have been tracked with social/human rights attributes/certifications for the 2019 calendar year. 
  • Basis or source information that was used to determine that these attributes/certifications have advanced ethical practices or have led to improvements in the well-being and livelihood of raw material producers and manufacturers.

Interview question to ask:

 Please describe the process your company used to determine or verify that the social/human rights attributes or certifications are driving improvements of social/human rights.

7.1 If you answered yes, please list these efforts and provide relevant URLs that describe them in detail.

Intent of the question

This question is intended to assess whether and how your company collaborates with other stakeholders and contributes to knowledge-sharing and the development of solutions with the intent to improve the social responsibility/human rights of materials or products.

Industry collaboration is an important means of bringing new, more socially responsible/ethical materials to market and contributing to a larger shift in the industry.

In particular, Small and Medium-sized Enterprises (SMEs) are encouraged to take part in multi-stakeholder initiatives that drive collective impact to bring programs to scale.

Technical Guidance

Scope of this question is limited to how your company engages and collaborates with stakeholders to share information, knowledge, and best practices and other innovative solutions to accelerate the adoption and development of ethical materials and/or ethical production methods.

Examples of some social issues that prohibit raw materials and/or products from being ethically produced are: interfering with democracy, preventing prosperity, financing criminal activity or violating human rights. In human rights, numerous circumstances are included, e.g., low salaries, harmful conditions, forced labor or child labor.

Below are some examples of initiatives that companies can participate in:

  • Investing in pilots that bring more ethical production of raw materials and products to market.
  • Assigning internal innovation teams that bring more ethical production of raw materials and products to market.
  • Example: JOYN Bags operates in marginalized communities and offers a variety of programs to help improve the lives of its workers and the community it operates in as part of its production processes.
  • Contributing financial resources to research, innovation funds, or partnering with innovation institutions or organizations to address key industry-wide issues such as forced labor, child labor, or pesticide or chemical exposure to workers and local communities.
  • Example: The Life and Building Safety initiative is a multi-stakeholder initiative to address systemic issues in key countries around building and fire safety.
  • Building case studies of driving ethical standards in raw material supply chains.
  • Example: Fair Labor Association’s Fair Cotton Project addresses three challenges presently facing the producers of cotton goods. It published a case study based on its learnings.
  • Actively engaging and collaborating with producers, technical organizations, communities, NGOs and/or governments to develop, test and share information, knowledge and best practices that accelerate the adoption and development of ethical production of raw materials and products.
  • Example: Better Cotton Initiative, Fairtrade for producers
  • Supporting credible programs to improve on-ground practices in raw materials production, accelerating the improvement of regional and national production methods to protect worker health and safety, or scaling up global systems for ethical production of raw materials.
  • Example: Fair Labor Association’s Fair Cotton project
  • Actively engaging with relevant regional/national/international government organizations to encourage uptake and preferential policy for better, ethical practices (e.g., embedding ethical practices in national agricultural standards, mandating third-party certification at national level or international level to advance social responsibility in production factories).

Note: The above is not an exhaustive list of initiatives that companies can reach out to. The SAC intends to update this Brand & Retail Module – How to Higg Guide on a regular basis with user feedback. Various initiatives can be joined through contacting your national industry trade associations and industry specific associations such as the European Outdoor Group or Outdoor Industry Association.

Helpful resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • In your description, please summarize your activities and indicate whether your company conducts these activities in-house, via an external organization, or both. 
  • Provide relevant links/URLs to these multi-stakeholder initiatives/platforms. 
  • A signed partnership or collaboration agreement with the relevant stakeholder(s). 
  • Evidence of participation and engagement in shared platforms, including multi-stakeholder events. 
  • Evidence of direct engagement with community groups. 

Describe the results achieved through these multi-stakeholder initiatives/platforms that accelerate the adoption and development of materials or products that promote social responsibility/human rights.

Supply Chain: Product & Textiles

8.1 Which segments of your supply chain have received your social/human rights policies?

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: please specify segment type e.g., dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

Intent of the question

It is essential for companies to share their social/human rights policies before entering into a business relationship with any manufacturer. By doing so, a manufacturer will have a clear understanding of the expectations and requirements of doing business with you. This also fosters a collaborative business relationship built on transparency and trust from the beginning.

Technical Guidance

Please refer to this resource which explains the steps to define and embed social/human rights policies within your company.

A policy is a written commitment that outlines the expectations and requirements your company has on a certain topic. A policy standardizes the step-by-step approach in the company’s ways of working and of its staff.

Companies often have policies in place for topics such as product quality, payment.

A policy statement should:

  • Provide clarity to staff and external stakeholders about what the company expects regarding human rights.
  • Be tailored to the company’s business model, industry and human rights risks.
  • Be developed in consultation with relevant experts and stakeholders.
  • Be approved at the most senior level of the business.
  • Be communicated to internal and external stakeholders.
  • Be made publicly available.
  • Policy statements once finalized should be embedded within the organization to ensure internal processes and procedures align with the policy. Companies should take the following actions to embed commitments throughout ways of working:
  • Define roles and responsibility for the policy within the company

  • Develop procedures to support implementation of the policies, including revising existing procedures if necessary
  • Create accountability throughout all senior levels of the company and functions
  • Conduct training within the company to help everyone understand expectations
  • Conduct specialized training with key roles responsible for implementing the policy
  • Integrate into the company’s rewards and incentives programs to prevent the company from incentivizing the wrong behavior

Communication between brand and manufacturing partner(s)

The company’s social/human rights policies should be shared with suppliers prior to entering into a business relationship and should be re-communicated to them at minimum once a year.

When new information about emerging social/human rights risks are brought to the company’s attention, this should prompt the company to consider how this will impact its understanding of risks, as well as how it will impact policies and strategies going forward — e.g. increases in migrant labor, changes in labor laws, entering new sourcing markets and countries.

Communication to suppliers may take a number of forms: through in-person supplier meetings/summits, corporate website, email. However, in all cases, information should be maintained and communicated in a way that is relevant, accurate, current, clear, and user-friendly and that enables intended users to access more information.

Not only should companies share the policy with their manufacturers, but they should also publicly communicate this to any stakeholders who would like to know more.

Helpful resources

Examples

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • A copy of the social/human rights policies for manufacturing partners. 
  • Explanation of how this policy was developed and which rights were ensured.
  • A description of the process of how this policy was shared with manufacturing partners, the coverage of supply chain segments and how the company ensures the understanding on these requirements. 
  • What is the process for adjusting/revising these policies based on new information or changing conditions? 

Interview questions to ask: 

Are relevant staff able to explain the process and ensure the manufacturer’s understanding of the company’s policies? 

9.1 In which supply chain segments does this program apply?

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: e.g., dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

9.2 What is included in your program?

  • A corporate policy, approved by your company’s executive team and/or Board that underpins the commitment to the success of this program.
  • Compliance with all applicable regulations or international norms (whichever is higher).
  • Specific minimum requirements and best practices that go above and beyond applicable regulations.
  • Requirements in manufacturer contracts that requires their suppliers and subcontractors to meet the goals of the program.
  • Public disclosure including a description of your impact, effectiveness of managing impacts, and details pertaining to your program.
  • Other

9.3 How does your company implement the program?

  • Action plans are designed to address the differences in manufacturers priorities based on local context
  • Personalized and custom training or workshops
  • Company facilitates/provides support to manufacturers by providing trained/qualified specialists
  • Collaborative projects which match manufacturers’ rights and labor roadmap and priorities
  • Company provides support to manufacturers to develop internal social/human rights performance competencies
  • Company provides support to manufacturers to engage with stakeholders around social/human rights performance issues
  • Supporting innovation
  • Other

Intent of the question

This question builds on the questions in the Management System section by evaluating how your company is addressing the social/human rights risks that were identified as part of your due diligence process.

While it is possible to make progress in advancing sustainability without a formal program in place, establishing such a program enables a company to coordinate its efforts more effectively and to realize continuous improvement over an extended period of time.

Technical Guidance

As a first step, many companies establish a policy defining its social/labor expectations for suppliers and a process to monitor and remediate identified non-compliances. The scope of your supply chain program may be limited to Tier 1 suppliers but ideally extend to your full supply chain depending on your company’s leverage, number of suppliers and supply chain visibility.

In addition, your company may have identified risk areas where additional action is needed to prevent or mitigate potential impacts as part of your human rights due diligence risk assessment. Companies are expected to act on identified risks and track efforts to assess the effectiveness and measure improvements.

Answer options

  • To answer ‘yes’ to this question, over 75% of all your suppliers are in-scope of your company’s social/human rights program.
  • To answer ‘partial yes’ to this question, 25-75% of all your suppliers are in-scope of your company’s social/human rights program.
  • To answer ‘no’ to this question, less than 25% of all your suppliers are enrolled in your company’s social/human rights program.

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Documentation defining the supplier scope of your responsible sourcing program and requirements for all applicable supplier segments. If this is part of a public statement, such as a Modern Slavery Act statement or a sustainability report, please share that documentation as relevant for any of the verification criteria defined.
  • A description of how your program is reviewed and updated to address identified social/human rights risks.
  • Internal or external materials related to the social/human rights performance program, laying out the approach to implement the program and improving the performance of supply chain partners, including at minimum, the following information below.
    • The description of the policies, plans, goals, and targets that have been approved by your company’s executive team and/or board that commits resources to the program. 
    • Policies should specify minimum requirements and best practices that go above and beyond applicable regulations. 
    • Targets should be linked to social impacts.
    • The social issues that were identified as priorities for the company, and which supply chain segments will be engaged or included. 
    • How the program will be implemented, including the staff resources and financial investment needed. 
    • Supplier requirements that are captured in business contracts, in which it is described how suppliers and subcontractors can meet the goals of the program. 
    • Team/department responsibilities. 
    • Internal or external (third party) best practices, tools, or expertise that will be leveraged to help implement these approaches.  

Interview questions to ask: 

  • Are relevant staff able to explain the process for implementing the program to improve social/human rights performance in its supply chain and which segment it covers. 

If applicable, how were violations to social/human rights policies resolved and remediated?

10.1 Which tiers were consulted. Please select all that apply:

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: e.g., dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

10.2 How were they engaged?

10.3 How often do you request feedback? Please select all that apply:

  • Annually
  • When programs are updated
  • Other

10.4 Please provide specific examples of how feedback was incorporated

10.5 How frequently do you update your programs utilizing this feedback?

  • Annually (or more frequently)
  • Every 2 years
  • >2 years

Intent of the question

When designing supply chain strategies, a collaborative and inclusive relationship should be established between brands/retailers and their manufacturing partners. These partners will then be more likely to be active participants within your supply chain initiatives and will be more likely to demonstrate enhanced performance through that.

Such collaborative and inclusive communication is also essential to allow for problems and grievances to be raised, discussed, and resolved as early as possible in the decision making and target setting process.

Technical Guidance

There are multiple ways to engage suppliers and/or manufacturers as part of your company’s strategy development, whether through formal approaches like business performance and/or stakeholder engagement meetings or supplier summits, or through methods such as supplier surveys.

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have one or more of the following evidence:

  • Provide interviews, feedback surveys, documents, or other evidence of supplier consultation and engagement, that are included in the program development process, showing at least 3 of the following: 
    • How suppliers were selected/identified for consultation (e.g. identify how many of the suppliers who were engaged have a long term business relationship with the company).
    • Which types and tiers of suppliers were included.
    • How suppliers were consulted and for which social risk/impact. 
    • How many suppliers were consulted?
    • How often were suppliers consulted? 
    • How often feedback is requested? 
    • How was feedback captured and shared internally within the decision-making teams? 
    • How was the feedback included in the decision-making processes of the company and how often, if any, were changes made to strategies or plans due to supply chain feedback?
    • Evidence that supplier(s) roadmaps were used as direct input into the development of your company’s formal approach or strategy.

Interview questions to ask: 

  • Please describe the process of how suppliers were engaged and consulted.
  • Please share the outcome of the supplier engagement/consultation and how it has created impact on-the-ground for supply chain partners.

11.1 In which supply chain segments can you confirm that social/human rights compliance regulations are met?

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: e.g., dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

Intent of this question

This question is designed to determine if the company has monitoring systems to verify suppliers involved in the production of goods are operating in compliance with local law. This does not refer to the product or materials outputs themselves, but to the facilities, equipment, and processes which make them.

Technical Guidance

Value Chain definition : All activities involved in the creation, sale, and servicing of products to the end customer. This includes product development, manufacturing, logistics (inbound and outbound), company operations, distribution and customer support services (example repair programs).

Verifying compliance with your standards and local law at all tier levels within your supply chain requires a company to know all suppliers at each tier level and have established monitoring processes. It also requires your company to understand and manage the different legal requirements by geography within your supply chain.

Thus, this question may be favorably answered “yes” by multiple means, including a company’s oversight of a supplier’s internal means to manage such information, a company managing the information themselves or the use of third-party services.

Examples of different approaches that can be used:

  • Using the Higg Facility Social & Labor Module (FSLM) to internally review what management systems the facility has in place to maintain compliance with local law. These are defined in the Facility Profile section in the Operating License question.
  • Using verified Higg FSLM data.
  • Using third-party organizations to review supplier’s compliance with local regulations and/or international norms.

Note: Depending on the risk level and resources a company may have, third-party experts or organizations can offer on-the-ground support when evaluating supplier’s data. Having said that, enlisting the support of a third party should not be substituting a brand’s own efforts to continuously support the performance improvement of supply chain partners.

Answer options

  • To answer ‘yes’ for each supplier segment, your company has confirmed the compliance for over 75% of your suppliers in the relevant tier.
  • To answer ‘partial yes’ for each supplier segment, your company has confirmed the compliance for 25 – 75% of suppliers in the relevant tier.
  • When answering “no” for each supplier segment, this would mean that your company has confirmed the compliance for less than 25% of suppliers in the relevant tier.

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • A company’s total answer to this question may contain strategies that are exclusively contained within, or are combinations of, the following aspects. 
  • If a company monitors this responsibility on their own: records showing the applicable regulations as mapped against the complete view of their supply chain, including the process to update such records and showing the latest version of said records. 
  • If the appropriate questions of the Higg FSLM are utilized: review of the company’s records for Higg FSLM coverage (verified) against their supply chain.
  • If a third party is utilized: documentation that shows the chosen third-party qualification, participation and extent of the supply chain covered by the services.

12.1 Please describe or upload the action plan

12.2 In which supply chain segments is action being taken?

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: e.g., dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

Intent of the question

Brands and retailers are expected to take action on prioritized human rights risks identified during risk assessment. Part of these activities should include building the capacity of suppliers within their supply chain to improve their social/ human rights performance.

Technical Guidance

Companies can take a variety of actions to mitigate harm and improve the social/human rights performance of its supply chain. As a company develops its plan, it should consider the number of its suppliers and related tiers related to the risks identified (e.g. geographic-specific, isolated to a specific production tier). This will help the company determine how to target specific suppliers to help build their capacity to improve their performance. Companies are strongly encouraged to partner with their suppliers and other subject matter experts to develop action plans and/or related capacity building efforts prior to implementation to avoid unintended negative impacts, as well as get supplier buy-in for greater supplier engagement. We highly recommend companies have, at minimum, collaborative projects which match the manufacturer’s social/human rights roadmap and priorities (rather than taking a top-down approach).

Answer options

  • In order to answer “yes” to this question, the company has uploaded the action plan to this question and can demonstrate the actions that were taken to build capacity amongst its supply chain partners.
  • In order to answer “partial yes” to this question, the company does not have an action plan but can demonstrate that actions were taken to build capacity amongst its supply chain partners.

Helpful resources

How this will be verified

Documentation required

To answer this question, please ensure you have one or more of the following evidence:

  • The action plan to support suppliers in improving their social/human rights performance and/or relevant capacity building plan.
  • Documentation of processes/internal guidelines/interviews that demonstrate how action plans are defined with suppliers and take contextual issues into account, OR how support and guidance is given to suppliers. 
  • Demonstrations of training materials/tools or documentation/minutes of training given to suppliers through eLearning modules, in-person workshops or one-to-one engagements. 
  • Evidence of financial or technical support given to suppliers, such as transfers, internal budgets/accounting systems, contracts with third-parties or documentation of outcomes/site visits/investments made by suppliers. 
  • The results/outcome of the company’s actions or action plan and how it has supported the supply chain partners in improving their social/human rights performance and/or build capacity.

13.1 Select all that apply:

  • Internal audit or reviews
  • Audits or review implemented by third parties
  • Collaborative assessments through the Social Labor Convergence Program (Higg FSLM or equivalent, which evaluates supplier performance)
  • Engagement with directly affected stakeholders and affected workers
  • Review of grievances raised, resolved, and/or remedy provided
  • Improved factory compliance /reduced frequency of compliance violations
  • Increased use of worker grievance mechanisms
  • Improved social/ labor benefits for workers
  • Improved business performance for factories and for brand/retailer

Intent of the question

This question intends to confirm that companies identify and understand the impact/effectiveness their social/human right program activities have on their supply chain partners’ social/human rights performance.

Technical Guidance

Companies are expected to evaluate their efforts to mitigate and prevent social/human rights risks. This allows them to evaluate the effectiveness of efforts and identify if activities need to be updated to better address the risks. Companies can assess if their plan is helping reduce risks through monitoring, verification and validation.

  • Monitoring: Developing and tracking indicators to measure how far the plan is from its intended goal.
    • Quantitative indicators are numerical values used to measure if the activities and actions are happening as defined in the plan.
    • Qualitative indicators measure if the desired behavior change occurred as intended and are typically expressed as a percentage.
  • Verification: Confirming all actions are completed as committed.
  • Validation: Evaluating if actions taken have adequately stopped or reduced the risk and/or impact as intended. The insights gained during verification and monitoring should be used to evaluate the effectiveness of actions taken.

Learnings from these three steps should identify if additional activities are needed to more effectively address risks.

Brands and retailers should also consider engaging suppliers to get their feedback and incorporate it into evaluating the effectiveness of their plan. Questions that a company should consider asking suppliers as part of their evaluation activities include:

  • Have suppliers shared concerns or complaints related to the social/human rights program or measures resulting from it?
  • Do suppliers feel able and empowered to raise concerns or complaints to the company?
  • What is the process for integrating the supplier feedback to adjust the implementation approach (program, strategy and tactics)?

Helpful Resources

  • Higg BRM Guidance: Track & Communicate Progress: This document explains what best practice is for tracking and communicating progress based on the UN Guiding Principles and OECD Due Diligence guidance.
  • Higg BRM Guidance: Setting Targets: This document explains how to define targets and track social performance commitments as part of your management systems.
  • Higg BRM Guidance: Setting Baselines: This document explains how to establish a baseline to measure progress against your targets as part of tracking on social commitments.

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Demonstrated evidence of adverse impacts that were eliminated, or risks mitigated as a result of your social/human rights program. If so, please share a description of the solutions that the company has provided. 
  • Relevant documentation that describes the trends and patterns that have been identified through joint conversations with the supplier(s), and what lessons could the company draw from this to improve the effectiveness and efficiency of its social/human rights program.

Interview questions to ask:

  • Did the company provide or enable remedy for any impacts related to a salient issue and, if so, what are typical or significant examples?
  • How has the supplier feedback influenced/adjusted the implementation of the program?

14.1 If answered yes, select all that apply:

  • Engage senior management within the brand and manufacturer to confirm there is mutual commitment to improvement, a necessary requirement of continued business
  • Create a corrective action and/or remediation plan
  • Monitor performance in sufficient increments of time for required remediation (timelines will vary according to severity)
  • Plan for sourcing alternatives
  • Give a warning/create follow up plan for remediation and required timeline when immediate improvement is not achieved
  • Consider brand/retailer tolerance for lack of improvement
  • Engage other brands/retailers that are also sourcing from the factory
  • Consider exiting the sourcing relationship if the above criteria does not yield required improvements
  • If improvement is not made, evaluate the cost to business, supplier, and rights-holders of ending the sourcing relationship
  • If decision is made to cease business with the supplier, ensure workers are given adequate notice and payment

Intent of the question

Companies should have defined escalation processes to review and address concerns of potential supplier non- compliances and address and remediate confirmed supplier policy violations.

Technical Guidance

An escalation process defines how a company will monitor and manage potential and confirmed policy non- compliances within its supply chain. Communicating a defined process helps supply chain manufacturers understand customer expectations and requirements as a condition of business.

If companies are not able to resolve a non-compliance identified through the escalation process, can be an important tool to assist all stakeholders in resolving the dispute. The OECD Due Diligence Guidelines define the role of the mediator as an active but neutral role in helping the parties identify and evaluate options for resolution and settlement. Mediation may be triggered on an ad-hoc basis, for example when both parties request mediation, or it may act as a form of escalation when parties cannot reach an agreement or where complainants are not satisfied with the resolution of their grievances. Mediation should be mutually acceptable by both parties, legitimate, independent and confidential. It is important that the members of the bodies entrusted with such functions are impartial and are seen as impartial.

All governments adhering to the OECD Guidelines have established a National Contact Point (NCP) that are tasked with contributing to the resolution of issues that arise from the alleged non-observance of the Guidelines in specific instances. These national contact points can be engaged to support in mediation. Click here for more information

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Documentation of the escalation processes (including responsible exit strategy) that the company has put in place for supply chain manufacturers.
  • Description of how, and at what stage, this was shared and communicated to supply chain manufacturers. 

Interview questions to ask:

  • Examples, if any, in the last calendar year where the escalation process was used and the outcome of this.
  • Identify if there are any instances where the business relationship had to be ended as a result of the escalation process. Share how the actions related to the responsible exit strategy were implemented and the outcome.

15.1     Does your company assess the effectiveness of its system and its outcomes? Answer options: Yes/No

15.2     Please list the social/humans rights impacts you have addressed in the last calendar year, describing the action you took to redress/resolve the complaint.

15.3     Please share a brief description.

15.4     In the last calendar year, were you able to improve the rate of resolution of complaints? Answer options: Yes/No

Intent of the question

This question intends to confirm that the company has a system or complaint mechanism in place where any affected stakeholder could raise their questions and concerns directly to the organization.

Technical Guidance

The OECD Due Diligence Guidance encourages companies to “commit to hearing and addressing complaints that are raised through legitimate processes regarding activities in their supply chain.” There is a wide range of legitimate processes that companies may choose to participate in, for example, companies may:

  • Establish a grievance mechanism by which trade unions, civil society, and impacted parties can raise a complaint with the company itself regarding its actions in its supply chain.
  • Engage in multi-stakeholder initiatives (MSIs) that provide supply chain grievance mechanisms (e.g., as a member) or agree to enter into mediation with any MSI that raises a legitimate complaint against the company.
  • Enter into agreements with trade unions, for example through global framework agreements, to establish a process by which trade unions can raise complaints to the company that its practices have caused or contributed to harm in its supply chain, for the purpose of providing remedy.
  • Agree to enter into mediation with the OECD National Contact Points (NCPs) when the NCP has determined that the issue is bona fide under the procedures of the OECD Guidelines, see below for more information. Refer to page 101 of the guidance.

Answer options

  • If answered “yes” to this question, your company has implemented a formal complaint system or grievance mechanism where any affected stakeholder could raise their questions and concerns directly to the organization.
  • If answered “partial yes” to this question, your company is engaged in a multi-stakeholder initiative or through a trade union agreement that will raise supply chain grievance directly to the company.

Helpful resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Copies of relevant documents pertaining to the company’s complaint system or grievance mechanism either organized themselves or through multi-stakeholder initiative or trade union.
  • Description of the company’s process, wherein the effectiveness of its system/mechanism is assessed as well as its outcomes
  • Description of how key performance indicators or measures of effectiveness were identified and selected to determine the effectiveness. 
  • A list of the social/humans rights impacts you have addressed in the last calendar year, describing the complaint/grievance and the action you took to redress/resolve the complaint.
  • Any documentation that can substantiate how your company, in the last calendar year, was able to improve the rate of resolution of complaints.

16.1     If answered yes or partial yes, which supply chain segment(s) have credible grievance mechanisms in place?

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: e.g., dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

16.2     How is monitoring of social/human rights grievances monitored?

  • Complaints received
  • Complaints received broken down by supplier
  • Type of complaint received
  • Rate of resolution of complaints
  • Categorization of complaints by type and severity, broken down by supplier
  • Other (If other, please describe)
  • None of the above

Intent of the question

This question is intended to increase your company’s visibility and awareness of the effectiveness of your suppliers’ grievance mechanisms. This information can be a valuable input to your company’s due diligence process and assist in understanding the living and working conditions for workers at their factory sites.

Technical Guidance

A credible and effective grievance procedure operated by any type of entity should ensure that any worker, acting individually or with other workers, can submit a grievance without suffering prejudice or retaliation of any kind.

To validate whether a supply chain partner has a credible and effective grievance mechanism implemented, the mechanism has to meet the 8 effectiveness criteria as outlined by the UN Guiding Principles.

The mechanism should be legitimate, accessible, predictable, equitable, transparent, rights- compatible, a source of continuous learning, and based on engagement and dialogue.

More information can be found within the Higg BRM : Conducting Human Rights Due Diligence.

In the context of this question, companies should prioritize and segment their supply chain partners based on high actual/potential risk and business volume.

Answer options:

  • To answer ‘yes’ to this question, your company has verified that >75% of your suppliers have implemented a credible grievance mechanism.
  • To answer ‘partial yes’ to this question, your company has verified that 25-75% of your suppliers have implemented a credible grievance mechanism.
  • To answer ‘no’ to this question, your company has verified that less than 25% your suppliers have implemented a credible grievance mechanism.

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Your company must have documentation for each supplier segment describing the percentage of supply chain coverage. 
  • Explanation of how the UNGP effectiveness criteria and implementation approach has been used to evaluate the credibility of grievance mechanisms.
  • Identify any guidance or support provided to suppliers to help them improve the credibility of their grievance mechanisms and internal processes.  
  • Description of any type of monitoring or audit activities required to verify grievance mechanisms are in place. 
  • Explanation of how supplier segmentation has been used to prioritize supply chain partners based on risk, which may include any additional grievance mechanisms and/or programs that you and/or your suppliers have established to address high risk issues within your supply chain. 
  • Documentation/communication from supply chain partners explaining their grievance mechanisms.

17.1 If answered yes/partial yes, select all criteria that are included:

  • Forced Labor or Human Trafficking
  • Child Labor
  • Wages and Benefits
  • Working Hours
  • Freedom of Association and Collective Bargaining
  • Health and Safety
  • Access to Water and Sanitation
  • Decent Work
  • Discrimination, Harassment and Abuse
  • Sexual Harassment and Gender-Based Violence
  • Bribery and Corruption
  • Right to Health
  • Right to Privacy
  • Right to Security of the Person
  • Minorities’ and Communities’ Rights
  • Land Rights

Intent of the question

The intent of this question is to assess whether your company incorporates social/human rights criteria into the traditional sourcing decision criteria of price, delivery, performance, and quality. In addition, this question intends to determine whether your company has an internal process for assessing and making decisions that includes social/human rights criteria and performance.

Technical Guidance

Developing and using integrated scorecards, also referred to as balanced scorecards, ensures that social/human rights criteria are a factor in the decision-making process for evaluating new and existing suppliers, products, materials, and packaging. An integrated scorecard enables decision makers to consider social/human rights attributes in business decisions. Integrated scorecards that include the social/human rights performance of suppliers incentivize social/human rights performance improvement because it directly links performance with purchasing decisions.

The integrated scorecard should:

  • Reflect your company’s commitments by making social/human rights criteria part of the decision-making process.
  • Include relevant social/human rights criteria, as well as the traditional purchasing criteria (e.g. price, performance, delivery, and quality). The social/human rights criteria should be given similar weighting to the traditional criteria when making business decisions.
  • Be updated regularly and reviewed as part of regular departmental meetings to manage the health of the entire supply chain.
  • Be used to evaluate new and existing suppliers. This includes reviewing score cards with suppliers to ensure progress is being made to improve performance.
  • Be used to make sourcing decisions and supplier selection (e.g. products, materials, and packaging).

When developing the scorecard it is important to consider the following:

  • The criteria and elements are included within the scorecard.
  • The use of the scorecard in meetings and business decisions.
  • The weighting, if any, for each criteria.
  • How tradeoffs are addressed and whether there are any minimum thresholds applied to criteria.
  • The departments and people responsible and accountable.

An example of how to use a scorecard in choosing new suppliers and evaluating

existing suppliers is to include relevant social/human rights criteria for a supplier in the list below.

These would appear along with traditional supplier evaluation criteria such as price, performance, and quality in the integrated scorecard.

  • Higg Facility Social & Module (FSLM) results
  • Third-party social/human rights certifications
  • % of non-compliances identified in third-party audits
  • Number of overtime hours worked based on previous audits
  • % of workers who are paid a living wage
  • % of workers who have a collective bargaining agreement

Answer options:

  • To answer ‘yes’ to this question, over 75% of your company’s purchasing orders have factored social/human rights criteria into purchasing decisions.
  • To answer ‘partial yes’ to this question, 25% – 75% of your company’s purchasing orders have factored social/human rights criteria into purchasing decisions.
  • To answer ‘no’ to this question, less than 25% of your company’s purchasing orders have factored social/human rights criteria into its purchasing decisions.

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Internal communication/policies/procedures on the integrated scorecard (this includes both business and social/human rights criteria) or another approach if used to include social/human rights as part of purchasing decisions. 
  • Sample score cards. 
  • Supporting documents that demonstrate that both business and sustainability criteria are included in purchasing decisions. 
  • Business agreements with suppliers that include the integrated scorecard as criteria for doing/maintaining business. 
  • Percent of your supply chain included within the scope of your company’s scorecard. 
  • Demonstrating that goals related to responsible sourcing practices are incorporated into annual performance targets for individuals with sourcing/purchasing responsibilities

Interview questions to ask:

  • Are there examples of suppliers being selected or rewarded on the basis of the social/human rights criteria?
  • Which criteria and elements were included within the scorecard? What was excluded?
  • What weighting, if any, is given to each criteria? 
  • Are any minimum thresholds applied to criteria?
  • Who is responsible and accountable for various criteria in the scorecard?
  • How is the scorecard used in business decisions? 
  • Are there examples of suppliers being selected or rewarded on the basis of the social/human rights criteria?

18.1 If answered yes, select all that apply:

  • Providing access to – or funding suppliers’ involvement in training or capacity building programs
  • Supporting suppliers – via funding or organizational support – in developing internal targets and performance teams that include worker representatives
  • Initiating or joining collaborative improvement projects with other companies (customers within the facility)
  • Ensuring suppliers’ voices are included in industry-wide capacity building efforts to spread best practices related to management systems or to address industry-wide social/human rights management issues.
  • Making long-term commitments (for a term greater than 1 year) to suppliers that make investments to improve environmental management practices
  • Providing financial support or pricing incentives for suppliers to improve social/human rights management practices (e.g. grants, loans, cost-sharing structures, etc.)

18.2 Which tiers are supported? Please select all that apply:

  • Agents/Trading Company/Licensees
  • Tier 1: Final product manufacturing and assembly (or Finished Goods Production).
  • Material Converters
  • Tier 2: Material or Finished Component Manufacturing
  • Tier 3: Raw material processing
  • Tier 4: Agriculture and extraction
  • Chemical suppliers
  • Other tiers: e.g., dyeing auxiliaries, centralized/public wastewater treatment plants, hazardous waste treatment facilities

Intent of the question

This question is designed to encourage companies to support their manufacturers in the implementation of action plans to improve on social/human rights performance; this kind of support makes a big difference in the outcomes of those plans and the responsiveness of suppliers to continued requests for improved performance. Furthermore, building capacity with your manufacturing partner can encourage innovation and collaboration which drives further value in the supply chain.

Technical Guidance

In order to answer “yes” to this question, the company should be able to respond to at least one of the activities listed within the question.

Helpful Resources

Examples of multi stakeholder initiatives are:

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

Please ensure you have the following evidence, if applicable, to the answer(s) you have selected: 

  • Documentation of processes/internal guidelines/interviews, demonstrating how action plans are set with suppliers, taking contextual issues into account, OR, how support and guidance is given to suppliers in collaboration with other companies.
  • Demonstrations of training materials/tools or documentation/minutes of training given to suppliers – online, through workshops or 1 to 1, and in collaboration with other organizations, if applicable.
  • Demonstration of how suppliers’ voices are included in industry-wide capacity building efforts.
  • Evidence of financial support given to suppliers such as loans, grants, cost-sharing structure, etc. 
  • Evidence of technical support given to suppliers through contracts with 3rd parties or documentation of investments made through site visits, and the outcomes thereof.
  • Evidence of long-term commitments made to reward suppliers for improving on their social/human rights

19.1 What does this include?

  • Increased order volume
  • Multi-year order contracts
  • Premium pricing
  • A more favorable mix of products
  • Consistent month-to-month volume
  • Option to set a higher minimum order level
  • Other business incentives
  • If other business incentives, please describe
  • None of the above

19.2 Is supplier performance and progress towards receiving incentives regularly reviewed and discussed with manufacturers? Answer options: Yes/No (brslscincentivizereview)

Intent of the question

By creating incentives for manufacturer performance, companies can provide an important business case for social/human rights performance action at the supplier-level; it also deepens long-term relationships with supply chain partners who have a strong social/human rights performance and, therefore, a lower risk business model.

Technical Guidance

Manufacturer recognition programs are used by companies to incentivize and reward positive social/human rights performance. Rewards and incentives could include increased order volume, longer contracts, etc.

In order to answer ‘yes’ to this question companies should have at least 2 or more of the following:

  • A clear process to track supplier performance beyond compliance with criteria that captures more ambitious supplier activities or standards with official recognition for those suppliers achieving a higher level of performance. This recognition can include specific status or categorization within the supplier management systems of the brand.
  • Non-commercial recognition of leadership performance by suppliers, such as in-house or public articles or case studies explaining how best practices were carried out, as well as prizes/awards with no monetary value.
  • Semi-commercial rewards for suppliers with strong social/human rights performance, such as membership in a specific level of supplier status (e.g., preferred supplier, gold supplier, strategic suppliers, etc.) which includes social/human rights performance alongside other business criteria (this type of status usually comes with higher order, or likely more frequent orders, but there is no specific agreement to do so) OR, access to specific useful resources such as improvement programs or technical expertise.
  • Commercial rewards for suppliers with strong sustainability performance, such as explicit commitments of higher orders, signing longer-term sourcing agreements, facilitating or making investments at supplier sites.

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Links to external materials highlighting your activities (e.g., corporate social responsibility reports, press releases, or information posted on your website or another website) .
  • Program materials and/or communication developed for your suppliers to explain the program (e.g., supplier performance criteria, data collection, verification, and evaluation processes). 
  • Share terms and conditions related to supplier incentives or any other related documentation (outlining the specific contexts in which suppliers are given incentives, and how these incentives align with the broader business and sustainability goals of your company). 
  • List of manufacturers enrolled in the program.
  • Outcome of these manufacturer recognition programs.
  • Connection with the supplier scorecard system.
  • If your company’s purchasing practices (supplier incentives for compliant production) have been reviewed by the Better BuyingTM Initiative, a copy of the analysis can be provided as proof. 

What is the intent of the question?

The intent of this question is to identify what stakeholder activities and programs your company is contributing to or participating in, as part of your efforts to improve social/human rights conditions within your supply chain.

Technical Guidance

Industry and multi-brand initiatives can be examples of collaborative stakeholder activities to jointly address system challenges to improving social/human rights conditions within high-risk sourcing regions.

To answer “yes” to this question, you must demonstrate that you can:

  • Identify and describe what stakeholder activities your company is participating in and the purpose of the activities.
  • Identify which stakeholders are associated with the activities and in which targeted geographic regions these activities are occurring.
  • Share the outcome of the participation and how it has helped improve the social/human rights performance of participating manufacturers.

To answer “partial yes” to this question, you must demonstrate that you can:

  • Identify and describe what stakeholder activities your company is participating in and the purpose of the activities.
  • Identify which stakeholders are associated with the activities and in which targeted geographic regions these activities are occurring.

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Providing proof of participation, such as: links to external materials highlighting your activities, outcome of these activities, meeting agendas, invitations, etc. 
  • Description of the outcome and results from the company’s participation that has improved the social/human rights performance of participating manufacturers. 
  • External materials may include: corporate social responsibility reports, press releases, or information posted on your website or another website. 

What is the intent of the question?

The intent of this question is to identify what type of industry contribution your company is providing to improve social/human rights conditions within your supply chain through innovative and/or collaborative solutions.

Technical Guidance:

Companies could participate in the following activities:

  • We host and share training programs, resources & learnings for suppliers in collaboration with other companies.

  • Examples: Shared supply chain roll-out, supply chain overlap analysis with the intent to reduce assessment burden for suppliers, joining in the Sustainable Apparel Coalition or the Social & Labor Convergence Program.

  • We work within a group of stakeholders, including NGOs, government, academia and communities, to understand and take action to address local social issues together.

  • Examples: Joint social dialogue program, community service, conservation efforts or educational outreach to improve sustainability curriculum.

  • We initiate and pro-actively contribute in a group of external stakeholders to collaboratively address key emerging issues to improve social conditions in the industry.

  • Examples: AMCO, Better BuyingTM Initiative, UNHRC+Oxfam, Living good standard – USAID, Better than Cash Alliance.
    • We engage and contribute knowledge to address relevant social regulations, standards & issues with local, national, and regional governance bodies.

Examples: ACT initiative on living wages, Agreement on Sustainable Garment and Textile, German Textiles Partnership, OECD Due Diligence Guidance, Better Work, ETI-FLA Turkey Refugee, Global Deal.

  • If none of the activities above accurately reflect how your company is engaging with other companies, to improve social/human rights performance, please share a description.

Answer options

  • To answer “yes” to this question, your company can demonstrate that more than 75% of your suppliers has received funding to access one of the social/human rights improvement projects.
  • To answer “partial yes” to this question, your company can demonstrate that 25-75% of your suppliers has received funding to access one of the social/human rights improvement projects.
  • To answer “no” to this question, your company has less than 25% of your suppliers that has received funding to access one of the social/human rights improvement projects

Helpful Resources

Note: The above is not an exhaustive list of initiatives that companies can reach out to. The SAC intends to update this Brand & Retail Module – How to Higg Guide on a regular basis with user feedback. Various initiatives can be joined through contacting your national industry trade associations and industry specific associations such as the European Outdoor Group or Outdoor Industry Association.

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Links to external materials highlighting your activities, such as: corporate social responsibility reports, press releases, or information posted on your website or another website 
  • Sample resources and materials developed and shared externally (i.e., with suppliers, stakeholders). 
  • Documentation of coordinated processes where stakeholders have identified and share new operational processes that has improved the social/human rights performance of manufacturers.
  • Documentation of events, best practices, training materials, or datasets provided by your organization, with information on who they were provided to and the outcomes of that provision including which manufacturers have access to them. E.g. agendas and invitations from events, workshops, training events, webinars, etc.
  • Evidence of funding, research, or other supported activities for the benefit of manufacturers that are carried out in collaboration with other stakeholders. 

Purchasing Practices

This subsection is designed to encourage and urge companies to integrate responsible purchasing practices into their business relations and agreements with their supply chain partners, so that these partners will not experience a negative effect from the buyer’s behavior on their production process and the working conditions of their workers.

Conventional purchasing practices such as last-minute changes to orders, cancelled orders, and short lead times can contribute to excessive overtime, increased use of casual labor, and unauthorized subcontracting. Additional pressure from brands and retailers to reduce prices can make it difficult for suppliers to pay their workers a living wage.

As part of the social/human rights impact assessment, companies are expected to have considered the potential impact of their purchasing decisions on suppliers’ ability to comply with labor rights standards by contributing to adverse human rights impact. Through the integration of responsible purchasing practices, companies/buyers can help protect workers from poor working conditions, labor abuses, and low pay.

This infographic (taken from the Ethical Trading Initiative’s Guide to Buying Responsibly)

illustrates the impact conventional purchasing practices have on the manufacturer and its workers.

Purchasing Practices – Flow chart

Source: Solidaridad & Ethical Trading Initiative Norway

When sourcing indirectly

Companies that are sourcing indirectly (through intermediaries such as agents and importers) should implement control measures to evaluate the capability of their sourcing partners in implementing responsible purchasing practices by providing visibility in the pre-qualification process of suppliers.

For more information please review the OECD Due Diligence Guidance for Garment & Footwear on pages 76 and 77.

Before you continue on to complete answers to the below questions, please learn more about Responsible Purchasing Practices through the helpful resources listed below:

Helpful Resources

  • Yes: 0-30 days
  • Yes: 31-60 days
  • Yes: 61 days or greater
  • No
  • Unknown

Intent of the question

This question intends to confirm the company’s standard payment term for manufacturing partners.

Technical Guidance

Payment terms should be mutually agreed between manufacturer and customer and indicate when payments should be made and how. These terms are included in the purchasing agreements/contracts, invoices.

Helpful Resources

  • Better BuyingTM Company Reports provides industry benchmark on payment terms. (Links have been shared above as part of the introduction to this sub-section)

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Information related to the company’s payment policy/process. Companies can also provide Better BuyingTM Company Reports if available. 
  • The standard payment term included within purchasing agreements/contracts and invoices between company and manufacturer. 
  • A description of how the standard payment term was agreed upon between company and manufacturer.

Intent of the question

This question intends to confirm that the company made payment in line with the contract.

Technical Guidance

Answer options:

  • To answer ‘yes’ to this question, more than 75% of your supplier invoices have been paid on time according to their contract.
  • To answer ‘partial yes’ to this question, 25% to 75% of the suppliers have been paid on time according to their contract.
  • To answer ‘no’ to this question, less than 25% of the have been paid on time according to their contract.

Late payments and extended terms (outside of the contractual agreement) will cause adverse impact on the livelihoods of workers and their families. To prevent and mitigate this risk from occurring, organizations should establish the following measures:

  • Establish a company policy or commitment to ensure that standard payment terms are always honored, and that suppliers and manufacturers are reimbursed and paid in a timely manner to help them remain financially secure.
  • Requirements in the company policy or commitment have been incorporated into the standard operating procedure or work process for relevant employees.
  • Employees that are responsible for purchasing from, and making payments to, supplier should ensure that it is known who is responsible for making the payment, and keeps oversight on that all payments will be made on time.
  • Include this policy or commitment within your business contracts with your suppliers.
  • Establish internal processes and monitoring mechanisms to track: terms of payment, on-time payments, as well as penalties issued and their root causes.

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • The Higg BRM will be aligning with the below fair terms of payment requirements of ACT. Companies that are part of the initiative can provide information related to the Purchasing Practices Self-Assessment (PPSA) as part of the verification: 

  • A commitment / policy from the brand, where the brand commits to fair terms of payments. 
  • Provide related internal/external materials that can prove the following measures were implemented, and answer to the measurement of progress/compliance listed below: 
    • Payment to suppliers is in line with agreed upon timeframe. 
      • % of orders with on-time payment to suppliers.
      • % of orders where the amount paid is in line with agreed payment terms.
    • Retrospective changes may only be made where it is mutually agreed and is not to the detriment of the supplier
      • % of retrospective changes of payment terms which were not mutually agreed.
      • % of retrospective changes of payment terms which were mutually agreed and to the detriment of the supplier.
    • Implement an internal monitoring mechanism to track: terms of payment, on-time payments, as well as penalties issued and their root causes.
      • Internal monitoring mechanism to track: terms of payment, on-time payments, as well as penalties issued and their root causes.
    • If available, companies can also provide the Better BuyingTM Initiative report on Payment and Terms to validate the above points. 

Interview questions to ask 

  • Relevant and responsible staff (purchasing, finance/accounts) are able to explain the process to meet the requirements in the payment terms. 

Intent of the question

The purpose of this question is to understand the process your company has in place to reduce and eliminate any financial pressures placed on the manufacturer as a result of your purchasing practices.

Technical Guidance

Examples of favorable financial terms are e.g., up-front payment of sampling costs, deposits on volume orders, letter of credit, pre-finance inputs, advance payment in full before/on shipment.

Answer Options

  • To answer ‘yes’ to this question, more than 75% of the manufacturers have received favorable financial terms.
  • To answer ‘partial yes’ to this question, 25% to 75% of the manufacturers have received favorable financial terms.
  • To answer ‘no’ to this question, less than 25% of the manufacturers have received favorable financial terms.

Helpful Resources:

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Identification and description of processes and controls your company utilizes to minimize any negative impact associated with its purchasing practices. 
  • Training and communication materials to educate buyers about responsible purchasing practices. 
  • Description of internal alignment of buyer staff on corporate social compliance goals and the buyer’s contribution to improving purchasing practices. 
  • Evaluation and monitoring processes your company follows to assess, and address impacts caused by its purchasing practices. 
  • If your company nominates fabric supplier(s), does the payment terms of the nominated supplier match the cut and sew supplier? 
  • Purchase order terms that are deemed favorable for suppliers. 
  • If the Better BuyingTM Initiative has reviewed your company’s purchasing practices through the Payment & Terms and Management of the Purchasing Process section, a copy of that analysis can be provided as proof. 

Intent of the question

Companies are encouraged to provide training to their buyers in order to raise awareness of potential problems in costing that could interfere with compliant production. The goal of raising awareness of responsible staff is to ensure the price paid to suppliers allows for the payment of wages and all other labor costs.

Technical Guidance

Negotiation strategies may put suppliers under financial pressure to offer prices that reduce or eliminate their financial margins and at times do not cover the direct costs of production.

Companies should develop costing/pricing models that account for full production costs which may include; upfront material purchases if the upstream suppliers are nominated by the company, the true labor costs which are adjusted for inflation, as necessary. The aforementioned considerations should be reflected in freight on board (FOB) prices used by companies to establish overall pricing. There are several other practices outside of costing that impacts prices paid to supplier.

Before negotiating a price, buyers should ask suppliers to provide the ”real” cost of addressing these labor issues and factor these costs into their calculations. Buyers can refer to the buyer’s checklist of labor-related costs (the green checklist on the right), which was developed by the joint ethical trading initiatives as part of the Guide to Buying Responsibly.

In addition, please review the info brief (refer to page 4 as shared by ACT on Living Wages, on how to include labor costing in purchasing prices)

Helpful resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Description of the process on the following topics:  
    • Which methodology for calculating the cost of production models was used. Did this include wages and other labor costs, including wage increases? 
    • How buyers were trained on the cost production models. 
    • How many buyers have been trained to date and what the training process looks like 
    • Were any internal/external issue experts consulted, and/or who provided the training e.g., through ACT on Living Wages, Better Buying Initiative, Fairwear Foundation or Solidaridad.
  • Sharing of the relevant training or communication materials. 
  • Better BuyingTM Initiative Company Report (Cost & Cost Negotiation section) – as evidence that the training has been successful.

Intent of the question

This question is intended to understand whether sourcing/purchasing staff know the minute values of products, so they can estimate if the cost negotiated is enough to cover the direct and indirect labor costs.

Technical Guidance

Definition Standard Allowed Minutes or SAMs or Standard Minute Values (SMVs): is a universal method for factories to determine the cost required to make a product as well as the factory efficiency.

Answer Options

  • To answer ‘yes’ to this question, your company has the minute values for more than 75% of the percent of products ordered
  • To answer ‘partial yes’ to this question, your company has the minute values for 25-75% of the percent of products ordered
  • To answer ‘no’ to this question, your company has the minute values for less than 25% of the percent of products ordered

There are two initiatives that we would like to reference here as part of this guidance to understand why knowing about minutes values is important.

Action Collaboration Transformation on Living Wages

On page 4 of their info brief, ACT has explained how to calculate labor cost component and labor minute value.

Fair Wear Foundation

The Fair Wear Foundation has created the methodology “Labour Minutes Costing” (refer to pages 7-12) which clearly explains how minute values can be used to calculate labor minutes cost, which can be included in the purchasing price.

Furthermore, Fair Wear Foundation has created a calculator for specific sourcing countries to help companies determine the cost of one minute of labor in a factory (taking into account factory-specific variables such as workforce composition, bonuses and insurance, and actual overtime hours).

Helpful Resources

Resources are listed within the technical guidance.

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Documentation in relation to the minute values from manufacturers. 
  • The percent of products ordered the aforementioned covers. 
  • Training and communication materials, you have used for educating sourcing/purchasing staff about evaluating production capacity and for establishing better order forecasting.
  • Explanation or description of how the company has used this information. E.g. the actions the company has taken to adjust prices paid to suppliers accordingly. 

Intent of the question

The intent of this question is to understand what your company has done to keep your manufacturer updated in a timely (at a minimum on a monthly or more frequent as necessary basis) manner on possible changes to upcoming orders.

Regular information updates on changes to seasonal ordering forecast are important for manufacturers, so they can build this into their production planning and prevent negative impact on manufacturers and their workers.

Technical Guidance

Buyers who provide visibility on order planning and forecasting enable manufacturers to anticipate and make adjustments in their production planning including releasing capacity reserved for other customers, and/or finding other customers to fill capacity that will be unused. This also provides a measure of accuracy to evaluate the buyer’s planned production, as compared with the orders they actually place.

When orders are changed or cancelled at the last minute or are significantly greater than the forecast and thereby exceed the factory’s reserved or planned capacity, this creates additional pressure for factories to successfully deliver. This pressure can lead to overtime and other non-compliances with social and labor requirements.

The OECD Due Diligence Guidance (page 74) defines additional control measures companies may implement to ensure responsible purchasing practices are shared internally and with their manufacturers.

  • Set final order placement dates with the manufacturer
  • Communicate the deadlines to everyone in the purchasing teams
  • Share the purchasing plan with manufacturers and communicate updates in a timely manner.
  • Ensure manufacturers confirms whether changes or updates to orders can still be incorporated within the production planning.
  • Improve forecasting alignment, which involves coordination across geographies, categories, and product designs to get the right information and ensure decisions are made at the right time
  • Optimize the sourcing base to handle fluctuations in capacity and to adopt and implement the technologies needed to respond to the demand for emerging styles and products
  • Companies should develop internal procedures for purchasing teams to follow, for instances in which practices could contribute to harm. For example, in instances in which orders are changed after order placement or orders are placed late, the company may mitigate risks by:
  • paying for rushed order delivery
  • changing the delivery date
  • providing a list of prequalified subcontractors to fill a portion of the order

Answer Options

  • To answer ‘yes’ to this question, changes to forecasts were updated and communicated to manufacturers on a regular basis, at a minimum monthly.
  • To answer ‘no’ to this question, changes to forecasts were not updated and communicated to manufacturers on a regular basis, at a minimum monthly.

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • The processes and controls your company regularly follow to communicate forecast changes to your suppliers.
  • Description of how training and communication materials were created with the help of internal/external issue experts. 
  • If the Better BuyingTM Initiative has reviewed your company’s purchasing practices (in particular whether the factory capacity is reserved and the accuracy of the forecasting against that), a copy of the analysis can be provided as proof.

Intent of the question

The intent of this question is to understand the process your company has in place to ensure the manufacturer has the capacity to produce an order without adverse impacts.

Technical Guidance

Reviewing order forecasts against a factory’s available production capacity is an important component in improving forecast accuracy, and also in helping suppliers reduce potential impacts on social and labor requirements to fulfil orders. Unless the buyer is the only customer of the factory, the buyer’s planned forecast is used to reserve a percentage of the factory’s total production capacity. Some companies include capacity verification as part of their quality assurance audits to prevent order volumes from exceeding a facility’s capacity.

Answer Options

  • To answer ‘yes’ to this question, more than 75% of your order forecasts have been reviewed against available factory capacity
  • To answer ‘partial yes’ to this question, for 25% to 75% of your order forecasts have been reviewed against available factory capacity
  • To answer ‘no’ to this question, for less than 25% of the order forecasts have been reviewed against available factory capacity

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Identification and description of processes and controls your company follows to identify a facility’s production capacity and to ensure order volumes do not exceed it. 
  • Training and communication materials, your company has used to educate the appropriate staff on evaluating production capacity. 
  • Forecasting and production capacity verification procedures and practices. 

In addition to the above, the Higg BRM will be aligning with the below better planning and forecasting requirements of ACT. Companies that are part of the initiative can provide information related to the Purchasing Practices Self-Assessment (PPSA) as part of the verification: 

  • Identification and description of processes in relation to order planning and forecasting, which includes:
  • dates and frequency for adjustments are mutually determined and agreed upon.
  • excess capacity is released in a timely, mutually agreed upon manner.
  • % of suppliers who report that forecast updates are in line with the agreed upon timeline.
  • capacity booking (covering at least your key manufacturers in terms of production volume) 
  • Share internal/external materials with regards to the following measures of progress: 
    • % of volume covered by order planning and forecasting systems, including capacity booking
    • % deviation (measured in pieces) from forecast, on-average, on supplier level. 
    • % increase of overall volume covered by forecasting. 
    • % of suppliers who report positively on communication regarding mutually agreed upon critical path deadlines.
    • % of suppliers your company is engaged with in critical path communication. 
    • % of suppliers who report positively on communication regarding management of peaks and troughs.

Intent of the question

This question intends to confirm that lead times are agreed between brand and manufacturer prior to order placement.

Technical Guidance

Lead time is the time between a confirmed order and its scheduled pick up or delivery date that was agreed between a brand and their manufacturer.

  • Sufficient lead-times enable suppliers to accurately plan and manage their production capacity.
  • Insufficient lead-times, due to last minute changes to orders without changing the delivery date, could force a manufacturer into using excessive overtime or unauthorized sub-contractors who may not meet the brand’s social and environmental standards.

It is important that both brands and manufacturers clearly communicate and agree about the critical path deadlines, as well as its consequences, when these are not met. A critical path is a production plan that contains a list of all of the necessary activities that are required to be done within a particular time frame. This ensures that production orders are shipped successfully within the agreed time of delivery.

Answer options

  • To answer ‘yes’ to this question, the brand and the manufacturer discussed and agreed upon lead times in advance for more than 75% of orders.
  • To answer ‘partial yes’ to this question, the brand and the manufacturer discussed and agreed upon lead times in advance for 25-75% of orders.
  • When answered ‘no’ to this question, the brand and the manufacturer discussed and agreed upon lead times in advance for less than 25% of orders.

How this will be verified

Documentation required

To answer “yes” or “partial yes” to this question, please ensure you have the following evidence:

  • Communication materials between brand and supplier on critical path deadlines
  • Proof of measures your company has taken to ensure accuracy of order placement and meeting critical path deadlines.
  • Suppliers feedback on order placements being in line with the agreed timeline or if the time and action calendar provided 
  • If the Better BuyingTM Initiative has reviewed your company’s purchasing practices in the Management of the Purchasing Process section, a copy of the analysis can be provided as proof. 

Interview questions to ask:

  • How does the brand ensure that the time and action calendar provided enough time for the manufacturer to complete all processes?
  • If the brand missed key milestones what were the steps taken / process to ensure manufacturers are not negatively impacted? 

Intent of the question

The intent of this question is to understand the process your company has in place to reduce, and/or eliminate, order volume variability which would have adverse impacts on a factory level.

Technical Guidance

Monthly order variability impacts a factory’s ability to proactively plan capacity needs. As a result, factories may operate above their capacity to fulfil unplanned orders, which then creates additional pressure to deliver, at the expense of social and labor requirements.

  • To answer ‘yes’ to this question, more than 75% of your manufacturers receive consistent monthly orders.
  • To answer ‘partial yes’ to this question, 25% to 75% of your manufacturers receive consistent monthly orders.
  • To answer ‘no’ to this question, less than 25% of your manufacturers receive consistent monthly orders.

Helpful Resources

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Proof of measures your company has taken to reduce order volume variability throughout the year.
  • If the Better BuyingTM Initiative has reviewed your company’s purchasing practices in the Sourcing & Order Placement section, a copy of the analysis can be provided as proof. 

Intent of the question

The intent of this question is to understand the process your company utilizes to accurately plan capacity with your manufacturers.

Technical Guidance

Tracking the ratio of capacity-booked to capacity-utilized provides valuable insights into trends with respect to hours planned versus hours actually needed. This information can inform or adjust existing order planning and forecasting systems, to plan manufacturer capacity more accurately.

Answer options

  • To answer ‘yes’ to this question, more than 75% of manufacturers’ orders are within 20% of capacity booked
  • To answer ‘partial yes’ to this question, for 25-75% of manufacturers’ orders are within 20% of capacity booked
  • To answer ‘no’ to this question, less than 25% of manufacturers’ orders are within 20% of capacity booked

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Identification and description of processes in relation to track the ratio of capacity-booked to capacity-utilized, which includes:
    • % of volume covered by order planning and forecasting systems, including capacity utilization.
    • % deviation (measured in pieces) from forecast, on-average, on supplier level. 
    • excess capacity that is released in a timely, mutually agreed upon manner.
    • % of suppliers who report that shipping deadlines have been extended against mutually agreed upon timeline.
  • If the Better BuyingTM Initiative has reviewed and tracked your company’s ratio of capacity booked to capacity utilized, a copy of the analysis can be provided as proof.

Intent of the question

This question is intended to encourage companies to extend shipping deadlines when changing orders, so that suppliers can meet social and labor requirements and do not have to resort to overtime, casual labor, or outsourcing of production in order to meet deadlines.

Technical Guidance

Answer Options

  • To answer ‘yes’ to this question, more than 75% of orders involving changes, potential extensions to lead times and shipping deadlines have been discussed with suppliers
  • To answer ‘partial yes’ to this question, for 25-75% of orders involving changes, potential extensions to lead times and shipping deadlines have been discussed with suppliers
  • To answer ‘no’ to this question, less than 25% of orders involving changes, potential extensions to lead times and shipping deadlines have been discussed with suppliers

Helpful Resources

  • Better Buying Deep Dive Report (Design, Development, and Calendar Management

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Identification and description of processes in relation to adjusting the lead-times/shipping deadlines when orders are changed (covering at least your key manufacturers in terms of production volume). 
  • Identification and description of processes in relation to order planning and forecasting, which includes:
  • Dates and frequency for adjustments are mutually determined and agreed upon.
  • % of suppliers that report the buyer is accountable for delays, extending as needed. The Management of the Purchasing Process section of Better BuyingTM Company Reports can be used to verify this point.  
  • Share internal/external materials when changes to orders have been made, which includes the following measures of progress: 
  • Number of days between the last change and shipment.
  • % of suppliers reporting the buyer was flexible/accountable for adjusting shipping deadlines, if needed. The Better BuyingTM Company Report can be used to verify this point. 
  • % of suppliers your company is engaged with in critical path communication. 

Intent of the question

This question intends to confirm that the company has a process in place to track and monitor any changes and cancellations made by the company after order placement. By having this data in hand companies can establish a process, and/or action plan, to prevent or reduce the occurrence of these situations in the future.

Technical Guidance

  • To answer ‘yes’ to this question, your company has monitored changes and cancellations after order placement
  • To answer ‘no’ to this question, your company has not monitored changes and cancellations after order placement

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Description of the system the company has in place to monitor and track order changes and cancellations after order placement. 
  • Analysis of the results gathered from the system. 

Intent of the question

The purpose of this question is to understand which practices or process your company has in place to reduce chase orders.

Technical Guidance

Chase orders definition: A chase order refers to an unexpected addition to an original purchase order, generally made as a result of high consumer sales not accounted for in a product’s original forecast.

Chase orders often surpass a factory’s production capacity, significantly cut production lead times, and can result in social and labor violations including excessive overtime. Some companies have procedures in place to ensure buyers use accurate forecasts to book within a factory’s capacity; so they do not exceed reserved capacity, and to prevent chase orders.

Chase orders may also occur if a company is using the Open-to-Buy ordering practice. This is the practice of waiting until the last minute to submit an order that was not forecast, because the company is trying to evaluate which product may sell best.

Answer Options

  • To answer ‘yes’ to this question, more than 75% of the chase orders have been discussed with manufacturers and mutually agreed upon
  • To answer ‘partial yes’ to this question, for 25-75% of the chase orders have been discussed with manufacturers and mutually agreed upon
  • To answer ‘no’ to this question, less than 25% of the chase orders have been discussed with manufacturers and mutually agreed upon

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Identification and description of processes and controls your company follows to minimize any negative impact associated with your company’s chase orders.  
  • The absence of chase orders can be demonstrated by 
    • Analyze number of days in advance a forecast was provided for an order. 
    • Provide other internal review metrics your company uses to monitor the accuracy of forecast orders to control chase orders 
  • If the Better BuyingTM Initiative has reviewed your company on; the number of days in advance of production a forecast was provided and whether capacity for repeat orders was agreed upon, a copy of the analysis of the Better BuyingTM  Company Report on Planning & Forecasting section can be provided as proof. 

Intent of the question

Companies are encouraged to engage with their suppliers to understand if and how the brand’s purchasing practices may contribute to adverse impacts to the factory and their workers.

Technical Guidance

Provided by OECD Due Diligence Guidance for Garment & Footwear :

Recognizing that suppliers may be reluctant to provide such feedback candidly, the company may seek to collect information from its suppliers anonymously (e.g., annual survey) or by partnering with a third party that aggregates the data and presents findings.

SAC edit: For example, through Better BuyingTM Initiative.

The company should track relevant indicators of actions that may have lead to harm.

Examples include but not limited to: percentage of orders placed late, percentage of orders changed after order is placed, number of days between the last change and shipment. Systems should be established to track such information on an on-going basis.

If the company has identified, through its tracking of the supplier, feedback that above practices (e.g., changes in orders) are common, it should seek to determine why. Team members responsible for the placement of orders should be included in the analysis and be part of the resolution/change to improve on this.

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Description of role and responsibilities of the buyer(s) / buying team to achieve the company’s social compliance goals. 
  • Description of to what extent buyers know how they are responsible for achieving the company’s goals through integrating responsible purchasing practices.  
  • Clear description of the main point of contact for supplier(s). 
  • Documentation related to supplier feedback and the key-insights generated, which should include:
    • Description of the processes used to gather supplier feedback – whether it was anonymous, whether a third party was involved % of suppliers who report positively about the company’s purchasing practices
    • % of suppliers who experienced positive impact (e.g., were incentivized) based on the company’s purchasing practices 
    • % of suppliers who report positively on communication by your company 
    • If applicable, share examples of cases where suppliers have reported negatively on company’s purchasing practices. 
  • Description of the subsequent processes and actions that were taken to provide, or cooperate in, remediation.
  • If the Better BuyingTM Initiative has reviewed your company’s purchasing practices a copy of the company report can be provided as proof

Intent of the question

The purpose of this question is to understand the process your company has in place to analyze the positive social/human rights impacts that have arisen as a result of your purchasing practices.

Technical Guidance

  • To answer ‘yes’ to this question, your company can demonstrate there is a system in place to analyze the social/human rights impact of your purchasing practice improvements.
  • To answer ‘partial yes’ to this question, your company can demonstrate an analysis has been carried out but not on a systematic/consistent basis
  • To answer ‘no’ to this question, no systems are in place to do this.

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Description of processes and controls your company has implemented to collect the information in support of your analysis. 
  • Supplier survey where suppliers have reported their feedback on the impacts of the company’s purchasing practices. This may also be demonstrated through the Better BuyingTM Company Reports. 
  • Purchasing practices analysis through initiatives such as the Purchasing Practices Self-Assessment of ACT and the Better BuyingTM Company Reports. 
  • Any insights and analysis extracted by your company to demonstrate positive social/human rights impact in the supply chain that has arisen as a result of the company’s purchasing practices.

Intent of this question

Is to confirm that your company has established business incentives for supply chain partners who have demonstrated strong social/human rights performance, and/or to reward their progress thereof.

Technical Guidance

Business incentives that could be provided include:

  • Non-commercial recognition of leadership performance by suppliers, such as in-house or public articles, or case studies explaining how best practices were carried out, as well as prizes/awards with no monetary value.
  • Semi-commercial rewards for supply chain partners with strong social/human rights performance, such as membership in a specific level of supplier status (e.g., preferred supplier, gold supplier, etc.) that includes sustainability performance alongside other business criteria (this type of status usually comes with higher order volumes, or more frequent orders, without a specific underlying agreement) OR access to specific useful resources such as improvement programs and/or technical expertise.
  • Commercial rewards for suppliers with strong social/human rights performance, such as explicit commitments to: increase the number of orders, sign longer-term sourcing agreements, facilitate or make investments at supplier sites.

How this will be verified

Documentation required

To answer this question, please ensure you have the following evidence:

  • Relevant materials that explain the incentives that are being provided. 
  • Explanation of the process to track supplier performance. 
  • Communication materials provided to supply chain partners introducing the incentives that are available to them for improved performance. 
  • If the Better BuyingTM  Initiative has reviewed your company’s incentives a copy of the company report can be provided as proof
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