Navigating Increasing Reporting Requirements: How CleanChain Supports Suppliers in the Face of New Legislation
Article
As suppliers face increasing reporting requirements and data requests due to legislation like CSDD, the EU Forced Labor Act, and ESPR, CleanChain stands ready to provide critical support.
According to the 2024 edition of the Apparel Suppliers Guide on Key Sustainability Legislation in the EU, US, and UK, suppliers are encountering a rapidly evolving landscape characterized by heightened reporting requirements and increased data requests. This shift is primarily driven by the adoption of significant legislation, including the Corporate Sustainability Due Diligence Directive (CSDD), the EU Forced Labor Act, and the Ecodesign for Sustainable Products Regulation (ESPR). These new regulations pose significant challenges to suppliers, compelling them to adopt a more comprehensive and proactive approach to supply chain management.
The Dual Role of Suppliers in a Changing Regulatory Environment
One of the key trends highlighted in the guide is the need for suppliers to achieve greater visibility into their upstream supply chain partners’ practices while ensuring full supply chain traceability. Suppliers are now expected to perform a dual role: looking downstream to address the needs of their clients and upstream to manage relationships with their fabric, yarn, and accessory suppliers. This dual responsibility demands a heightened level of coordination and transparency across the entire supply chain.
Moreover, the impact of these regulations extends to brands, which may alter their raw material purchasing behaviour. Brands are increasingly becoming involved in textile processing steps to enhance their performance or to meet sustainability-related criteria mandated by regulations like the ESPR. This trend puts additional pressure on suppliers to align with these evolving demands and to build the capabilities required to thrive in this new regulatory environment.
CleanChain’s Role in Supporting Suppliers
In response to these growing challenges, CleanChain offers a suite of solutions designed to assist suppliers in meeting the rigorous demands of modern legislation. These solutions focus on four key areas:
- Supply Chain Visibility and Traceability
CleanChain enables suppliers to achieve comprehensive visibility into their upstream supply chain partners’ practices. By leveraging CleanChain’s technology, suppliers can map their entire supply chain, ensuring that every link is documented according to regulatory requirements such as those outlined in the UFLPA and EU Forced Labor Act. This level of transparency not only helps suppliers meet legal obligations but also positions them to respond swiftly to brand requests and customs inquiries.
- Compliance and Due Diligence
Compliance is no longer a box-ticking exercise; it has evolved into a proactive approach known as due diligence. CleanChain helps suppliers foster a culture of due diligence by educating and engaging various departments—legal, HR, sourcing, and operational teams—to share the responsibility with sustainability or ESG teams. This collaborative approach ensures that suppliers are well-prepared to navigate the complex legislative landscapes of Global North markets.
- Data Gathering and Management
Effective data management is at the heart of compliance with modern legislation. CleanChain supports suppliers in developing robust data gathering and management capabilities, enabling them to capture and measure life cycle assessment (LCA) relevant data, including energy and water consumption, chemical inputs, and environmental impacts. By digitizing these processes, CleanChain reduces administrative burdens and enhances the accuracy of reporting, making it easier for suppliers to comply with regulatory requirements.
- Technology Integration
CleanChain’s technology integration services empower suppliers to digitize their compliance and sustainability efforts. By utilizing CleanChain’s platforms, suppliers can streamline data collection, analysis, and reporting processes, ensuring they are always audit-ready and capable of meeting the expectations of both regulators and brand partners.
Conclusion
As suppliers face increasing reporting requirements and data requests due to legislation like CSDD, the EU Forced Labor Act, and ESPR, CleanChain stands ready to provide critical support. By focusing on supply chain transparency, compliance, data management, and technology integration, CleanChain helps suppliers navigate the complexities of modern legislation, ensuring they remain compliant while meeting the evolving demands of the industry.
Contact us: cleanchaininfo@adec-innovations.com
