Tag: due diligence

New OECD Report: Due Diligence on Recycling Process in the Garment and Footwear Sector (February 2026)

Full report HERE

Key findings:

First, the textile recycling rate remains low in the garment and footwear sector. As the OECD report noted, the market share of recycled fibers remained at approximately 7.6% in 2024 within total textile fiber production.  Meanwhile, “of all recycled fibers, more than 90% was recycled polyester made from open-loop plastic bottles and less than 10% from actual post-consumer textiles.” For apparel sourcing, this means that using recycled input remains limited, fragmented, and often costly, challenging scalability for brands with large-volume sourcing models.

Second, the recycling supply chains are not immune to social responsibility and compliance risks. According to the OECD report, “Child laborin recycling processes is a key area of concern.” Meanwhile, a 2024 International Labor Organization (ILO) study cited in the report found that workers in waste management and recycling typically earn far less than in other sectors. Additionally,  since “textile waste collection, aggregation and sorting are often performed manually, especially in contexts where automated systems are not common,” working conditions could be an issue. Informal workers could also be hired in the recycling supply chain. For example, the ILO estimates that about 80% of jobs in the recycling sector are informal, and in Dhaka alone, around 100,000 women and children work as informal waste pickers. Overall, for fashion brands and retailers that source clothing made with recycled textile materials, this means that due diligence must go beyond traditional Tier 1 or Tier 2 suppliers to include waste and recycling networks. Additionally, recycling activities could occur in regions different from those of garment manufacturing hubs.

Third, the large-scale export of used textiles has implications for recycling outcomes. The OECD report noted that textile waste often crosses borders for sorting or recycling. However, such textile waste trade could undermine domestic recycling capacity (e.g., in the Netherlands, half of the collected textiles are sorted abroad, and the local sorting capacity is used to sort textiles from Germany) and create environmental burdens on textile waste-importing countries. The debate over managing the used clothing trade could continue (e.g., how to avoid shifting environmental burdens from apparel-consuming countries to textile-waste-importing countries, especially those in the developing world).

Fourth, regulatory shifts are reshaping global trade related to textile recycling. The OECD report highlights the EU’s Ecodesign for Sustainable Products Regulation, the revision of the Waste Framework Directive, and the expansion of Extended Producer Responsibility (EPR) schemes. These measures, either already adopted or under development, mandate the separate collection of textiles from mixed household waste, require sorting prior to export to prevent misclassification of waste as reusable goods, and shift the financial responsibility for end-of-life management to producers. For fashion brands and retailers, these changes are likely to raise compliance costs and demand greater traceability throughout supply chains, including post-consumer waste. They also create stronger incentives to redesign products for durability, recyclability, and lower environmental impact, as regulatory fees and trade restrictions become directly tied to “product characteristics.”

Additionally, due diligence for fashion brands and retailers must be adapted to the era of circularity. The OECD report recommends that fashion companies prioritize:

  • scoping new high risk actors (waste pickers, sorters, informal workers),
  • identifying “choke points” in waste flows (e.g., large sorting hubs, major aggregators, or recycling facilities that process high volumes of textile waste and therefore have leverage over upstream practices)
  • evaluating how their own purchasing practices may contribute to downstream impacts (e.g., low pricing pressure or rejection of unsold goods can push waste handling into informal and unsafe channels).
  • meaningful engagement with workers and informal sector representatives, particularly in contexts where recycling activities occur in small workshops, open-air settings, or home-based units with limited regulatory oversight.

Summarized by Sheng Lu

For FASH455 class: When writing your blog comment, you may consider addressing the following aspects. Students are strongly encouraged to read the full report before leaving their comments.

  • Does global textile trade enable circularity or export waste burdens?
  • Should countries restrict used textile imports and exports?
  • Should brands prioritize textile-to-textile recyclability even if it increases costs or limits design flexibility? How might this shift sourcing geography or supplier selection?
  • To what extent should fashion brands and retailers be financially and legally responsible for post-production and post-consumer waste? Should waste costs be integrated into retail pricing?

Recording: Due Diligence Education for Gen Z: Preparing Future Fashion Leaders for Sustainable and Socially Responsible Apparel Sourcing (2025 OECD Forum Side Session)

About the Event

As the fashion industry grapples with increasing demands for sustainability, transparency, and social responsibility, the next generation of industry professionals—Generation Z—will play a crucial role in shaping the future of apparel sourcing and social responsibility practices in the industry.

This session explores how US college fashion programs equip Gen Z with critical knowledge in due diligence, sustainable sourcing, and supply chain transparency. Including voices from educators, Gen Z students (future professionals), and industry partners, the session will share best education practices, identify educational gaps, and present valuable Gen Z’s vision for improving due diligence and social responsibility in the garment industry. Additionally, the session will emphasize the increasing importance of industry-academic partnerships in curriculum development and talent preparation, illustrating the long-term benefits of such collaboration.

This session is highly relevant to industry professionals, educators, students, international organizations, and policymakers interested in supporting the next generation of fashion leaders and fostering a more socially responsible and sustainable fashion industry.

Panelists (Bios here)

  • Matthias Knappe, Head of Fibres, Textiles and Clothing Unit, International Trade Center
  • Laurie Rando, Senior Director of Sustainable Product and Human Rights, Macy’s
  • Julia Hughes, President, United States Fashion Industry Association
  • Megan Dawson-Elli, Manager of Product Sustainability, Tapestry
  • Sheng Lu, Professor & Graduate Director, Fashion and Apparel Studies, University of Delaware
  • Emilie Delaye, Master’s Student, Fashion and Apparel Studies, University of Delaware

This event is an official side session of the 2025 OECD Forum on Due Diligence in the Garment and Footwear Sector.

New OECD Study: The Role of Sustainability Certifications In Due Diligence In The Garment And Footwear Sector (February 2025)

The study was based on a content analysis of major fashion brands and retailers’ sustainability reports and a survey of stakeholders in the garment and footwear sector from August to October 2023, including 32 brands and retailers, 37 suppliers, and a few non-business respondents.  The full report is HERE.

Key findings:

Rise in sustainability certification in the garment and footwear industry

  • Certifications like GOTS (Global Organic Textile Standard) and LWG (Leather Working Group) have seen significant growth (e.g., GOTS-certified facilities increased by 154% from 2018–2023).
  • Certified textile materials still constitute a minority of global production (e.g., 27% for cotton, 39% for leather)

Sustainability certification requirements and motivations

  • Over 80% of surveyed garment and footwear brands/retailers require certifications from suppliers, driven by risk identification (92%), product tracing (81%), and compliance with regulations (72%). In general, larger brands/retailers (91% of those with >€50M turnover) are more likely to mandate certifications than smaller ones (60% of small and medium-sized enterprises, SME).
  • In contrast to brands and retailers, most surveyed garment and footwear suppliers selected market access (84%) as a key motivation for obtaining certifications, followed by reputational reasons (83%) and risk identification (68%)

Types of sustainability certification in the garment and footwear industry

The paper divides sustainability certification in the garment and footwear industry into three major categories:

  • Due diligence certification to attest that a company (e.g. brand, manufacturer) implements the 6-step risk-based due diligence framework as outlined in the OECD Due Diligence Guidance (e.g., Green Button, Oeko-Tex Responsible Business).
  • Targeted risk certifications to verify outcomes on labor, environmental, or animal welfare risks in the supply chain (e.g., Better Cotton Initiative, Cradle to Cradle, Fairtrade Cotton, Fairtrade Textiles, FSC Forest Management, Global Recycled Standard (GRS), GoodWeave, GOTS, LWG, Oekotex SteP, SA8000, Worldwide Responsible Accredited Production)
  • Certificates of origin and chain of custody to trace raw materials (e.g., cotton, wool) to specific regions or facilities (e.g., Better Cotton Traceability, GOTS transaction certificates)

Role of sustainability certification in trade and market access

  • Certifications standardize compliance, enabling suppliers to meet buyer/regulatory demands (e.g., EU due diligence laws).
  • Brands use certifications to exclude high-risk regions (e.g., cotton from areas with forced labor) and validate ethical claims (e.g., recycled content).

Challenges related to sustainability certification in the garment and footwear sector

  • As the report noted, suppliers typically bear certification costs (e.g., audits, improvements), with limited buyer support.
  • SMEs and informal suppliers struggle with eligibility criteria and costs, risking exclusion from global supply chains.
  • The paper argues that certifications are not a “safe harbor.” Instead, apparel and footwear brands and retailers must complement certification with direct assessments, grievance mechanisms, and stakeholder engagement (e.g., worker interviews). Likewise, mandatory due diligence laws (e.g., EU CSDDD) will increase certification demand, but companies must balance compliance with holistic risk management.
  • The paper emphasizes the need for further research to understand how fashion brands and retailers use sustainability certification in practice. Policymakers should also consider new guidelines that clarify how companies should communicate publicly about the elements of due diligence for which they utilize sustainability certifications.