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Wednesday, June 19, 2024

EU Textile Strategy 2030, forced labor and its business impact

As EU promotes respect for human rights worldwide, including labour rights, products made through non-consensual labour will be prohibited from entering the EU27 area. EU 2030 Textile Strategy raises the bar to combat forced labour and how that will impact businesses.

The EU Textile Strategy 2030 represents a comprehensive framework designed to address forced labor within the textile industry, recognizing its significant ethical and business implications. According to the International Labour Organization (ILO), approximately 25 million people worldwide are subjected to forced labor, with the textile industry being a key sector affected by this issue. The strategy focuses on promoting supply chain transparency, with studies indicating that only 38% of companies in the apparel and footwear sector report on forced labor risks in their supply chains.

By emphasizing due diligence and responsible sourcing practices, the strategy seeks to mitigate these risks and enhance accountability throughout the supply chain. Failure to address forced labor can have severe business impacts, including reputational damage, with research showing that 88% of consumers would stop purchasing from companies perceived as unethical. Moreover, companies may face legal and regulatory risks, with governments increasingly implementing laws and regulations to combat forced labor. Financially, addressing forced labor risks can incur significant costs, with the International Labour Organization estimating that forced labor generates annual profits of approximately $150 billion globally.

Additionally, companies risk market exclusion, as stakeholders increasingly demand transparency and ethical sourcing practices. Therefore, by prioritizing supply chain transparency, collaboration, and enforcement mechanisms, the EU Textile Strategy 2030 aims to not only address forced labor but also safeguard the long-term sustainability and integrity of the textile industry.

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