Major Policy Updates: EU Textile Strategy & Due Diligence Votes

The 1st of June 2023 was a big day for sustainability in the EU, with two major policies being voted on by the European Parliament, the EU Strategy for Sustainable and Circular Textiles and the EU Due Diligence Proposal.

Respectively, these comprehensive pieces are aimed at reshaping the way one of the highly polluting industries operates and enhancing corporate accountability across the board regarding social and environmental matters. Since both policies are considered by lawmakers and environmental experts to be cornerstones of the EU Green Deal, the outcomes of these votes could significantly impact the block’s ability to realise its sustainability ambitions.

In this article, we will discuss the results of the parliamentary votes on these policies, shedding light on their expected consequences for European organisations and explaining how they could also have implications for companies operating far beyond the European Union’s borders.

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The EU Due Diligence Legislation Vote

Making businesses more accountable for the social and environmental impacts of their operations is one of the EU’s main strategies to accelerate corporate commitments to the Union’s sustainability goals. This stance has been stressed in several legislative pieces, such as EU Deforestation Regulation and the Forced Labour Ban Proposal, but it was even more prominent with the publishing of the Due Diligence Legislation Proposal in February of last year.

Voting Results and the Implications for EU Businesses

The European Parliament voted in favour of strict and mandatory corporate due diligence requirements for companies doing business within the EU. The vote represents only one of the necessary steps for the adoption of a EU due diligence law, which has yet to go through all the necessary legislative steps. Changes could hence still be introduced, yet this vote gives us a clear indication of the aspiration of Members of the European Parliament.

The voting session, which saw 366 votes in favour, 225 against and 38 abstentions, has moved forward the ambition of making EU businesses responsible for preventing, identifying, mitigating and ending any socially or environmentally harmful practices found across their entire value chain, regardless of location. Organisations will also have to monitor how their transport, distribution, storage, sales and waste management partners handle such matters.

Compared to the initial proposal, the European Parliament wants to delete an article that sought to make corporate directors responsible for putting in place and overseeing the due diligence policies and actions of companies. That represented a win for the centre-right European People’s Party (EPP), which sees such progressive sustainability laws as too taxing for European businesses. Nonetheless, the proposal’s rapporteur Lara Wolters, from the Socialists & Democrats Group, was pleased with the results. She took to social media to say that the outcome was a victory for workers, the environment, companies that take sustainability seriously, and the European Parliament as a whole.

Impacts of Non-Compliance and the Next Steps for the Legislation

The consequences for non-compliant EU-based companies go from “naming and shaming” to fines based on the companies’ net worldwide turnover (could amount to even 5%). Another proposed sanction is banishment from public procurement within the block’s borders.

But sanctions are not the only way to provide effective enforcement of the due diligence rules. Companies can also be held civilly liable for the damages to people and the environment that they cause or contribute to if they fail to comply with the EU due diligence rules.

The next step for this game-changing legislative piece will be the negotiations between the EU Parliament and the EU Member States. Companies can expect the new rules to come into effect within three to four years, although the timeline will vary depending on the company’s size.

The size of the organisation will be determined based on a combination of the number of employees and global turnover, with smaller companies possibly being completely excluded from the scope of the legislation.

Vote on the EU Strategy for Sustainable and Circular Textiles

During the 1st of June parliamentary vote, the Members of the European Parliament took the opportunity to express their opinion on the Textile Strategy presented by the European Commission last year. In a nutshell, the EU Strategy for Sustainable and Circular Textiles is a statement of what the European Commission expects the textile sector to look like by 2030. Thus, the European Parliament adopted a resolution that is non-binding, but that could still influence the political agenda of the coming years.

With an overwhelming majority of 600 Members, Members of the European Parliament voted in favour of a ban on the practice of destroying returned or unsold textile goods, emphasised the need to eliminate “fast fashion”, increase the circularity of textile goods and improve sustainability standards at every stage of a product’s life cycle. Similarly to what we have seen in the Due Diligence proposal, the text also includes recommendations for textile production to respect human, social and labour rights and animal welfare throughout the value chain.

Relevant EU Legislation for the Textile Industry: What’s Next?

Since the document voted on this occasion is a non-binding resolution that the Parliament adopts to express the Members’ opinions and wishes on the topic, the call for a ban on the destruction of unsold and returned textile products should be realised during the planned adoption of the Ecodesign for Sustainable Products Regulation in Q1 2024 at the latest. The same legislation will also set the framework to adopt mandatory design requirements for textile products as well as the creation of a Digital Product Passport that needs to be present on products.

Based on MEPs’ increasing focus on textiles, the sector can also expect to be impacted by a number of other legislative updates, starting with the Green Claims Directive, which creates strict rules to target commercial greenwashing.

The upcoming revision of the Waste Framework Directive could also include industry-specific targets to deal with the pressing problem created by the end-of-life stage of textiles.

Want someone with deep experience and connections in the EU to help guide your sustainability strategy? Get in touch!

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