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                                INTERNATIONAL BUSINESS PAGES
to promote responsible business con-
duct. For example, other tools include
trade policies and trade arrangements,
export credits and direct lending, na-
tional and multinational development
finance institutions, government-
backed multi-stakeholder initiatives
and public procurement.
A growing number of governments
have introduced RBC due diligence
legislation.
Recent years have witnessed a sig-
nificant increase in RBC due diligence
legislation. From 2010 to 2019, legis-
lation has been passed in California
(USA), in the European Union, in the
United Kingdom, in France, in the Neth-
erlands and in Australia and is currently
being considered in several countries.
Current RBC due diligence legislation
can generally be categorised by dis-
closure vs. conduct requirements, is-
sue-specific vs. broadly focused on
BRC and type of enforcement.
Disclosure vs. duty of conduct
Broadly, due diligence legislation can
be categorised as follows: those re-
lated to the mandatory disclosure and
transparency of information and those
relating to mandatory due diligence and
other conduct requirements.Emerging Circular Economy Policy
While governments globally have been regulating the inputs, processes and
products to mitigate the environmental impacts of the apparel sector for
years, emerging policies are now focusing on establishing circularity in the
sector. While such policies are distinct from due diligence legislation to date,
they nonetheless touch on the lifecycle of a product and therefore may have
implications on company due diligence. Examples of emerging policies in-
clude the following:
-In December 2019 the European Commission launched its Green Deal to
drive towards a climate neutral EU by 2050. The Roadmap and Action
Plan for the Green Deal includes a “Circular Economy Action Plan, in-
cluding a sustainable products initiative and particular focus on resource
intensive sectors such as textiles, construction, electronics and plastics”to
be developed in 2020.
-In December 2019, France passed an anti-waste law that bans the de-
struction of non-food goods. This law makes the practice of discarding or
incinerating unsold clothing items illegal as of late 2021 or 2023 depend-
ing on the sector. The law was passed within the framework of France’s
Roadmap for the Circular Economy, through which France seeks to re-
duce the amount of non-hazardous waste sent to landfills by fifty-percent
by 2025.
-In 2016, the Netherlands launched a Government-wide programme for a
Circular Dutch Economy by 2050.5 The Implementation programme in-
cludes a plan to achieve “a significant closed-loop supply of textiles by
2030.” The Netherlands is also establishing a textile policy programme
and a Denim Deal alongside research into the possibilities of introducing
new business models to counter ‘fast fashion.’The main distinction being that disclo-
sure law does not include a require-
ment to take any affirmative steps in
addressing RBC impacts.
Transparency and disclosure legisla-
tion requires companies to disclose
risks they identify and whether they are
taking or have taken any action to ad-
dress those risks. To comply with this
type of legislation, companies may
have to follow certain standards and
good practice when disclosing risks,
but are not required to necessarily
change their conduct, for example by
addressing those risks. The idea be-
hind this legislation is that it allows the
market, including investors, consum-
ers and civil society, to better assess
companies.
Mandatory due diligence legislation and
other conduct requirements requirecompanies to adhere to new forms of
conduct and market practice, normally
to prevent or mitigate RBC impacts
NCM-MARCH 2020
44and also to report on them. Examples
of mandatory due diligence legislation
include the French Duty of Vigilance