INTERNATIONAL BUSINESS PAGES
footwear and textiles industry that pro-
duces no unnecessary environmental
harm and has a positive impact on the
people and communities associated
with its activities.” SAC membership
comprises of over 200 brands, retail-
ers, manufacturers, academic institu-
tions, governments and non-govern-
mental organisations. SAC corporate
members represent over $500 billion
annual revenues combined in the ap-
parel and footwear sector.
The Higg BRM is a self-assessment
tool that seeks to assess the environ-
mental and social performance of SAC
brand and retail members. The tool is
divided into eight sections: General,
Product Development, Supply Chain,
Packaging, Transportation, Distribution
Centres, Retail Stores, and Product
Use & End of Use. Each section in-
cludes an environmental and social
sub-section with the exception of pack-
aging.
Across the eight sections, companies
complete over 200 questions, which are
categorised into three levels of im-
provement: Level 1 - Awareness and
understanding of risk, impacts and
opportunities; Level 2 - Setting targets
and tracking progress; and Level 3 -
Leading practices.
The Higg BRM intends “to standardize
how brands and retailers measure and
evaluate their environmental and so-
cial performance, year over year.” It
does not provide a pass or fail assess-
ment, but rather gives an indication of
a company’s performance vis-à-vis its
peers.
The OECD Garment Guidance calls on
companies to carry out due diligence
on their own operations as well as on
their supply chains. In practice, this
means that brands and retailers should
identify and address risks and impacts
linked to their retail, procurement, em-
ployment, warehouses, the transpor-
tation of their products, and the use
and end of life of their products in ad-
dition to risks and impacts that may
be linked to the production of their
products.Common scenarios in the apparel sector which
may pose challenges to monitoring
The following scenarios present challenging circumstances for evaluating
whether the actions that a company is taking are effective. These circum-
stances could be better considered in the Higg BRM to ensure that compa-
nies seeking to collaborate to address systemic risks or to engage to ad-
dress risks linked to upstream production are not unduly penalised.
Scenario A: Companies are collaborating (with each other and/or with other
stakeholders) to engage government to address a systemic challenge. For
example, companies may be collaborating to lobby for stronger enforcement
of existing labour laws or entering into collective bargaining to address wag-
es. In these cases, changes may not be seen in the first two years, but the
impact over time may be more substantial. In this context, qualitative indica-
tors that can reflect meaningful engagement with governments on this topic,
for example, may be appropriate.
Scenario B: A company is seeking to address a risk but it does not yet have
sufficient information to understand the scale or scope of that risk (i.e. the
company does not have baseline data). This is a common scenario as com-
panies seek to address human rights, labour and environmental risks be-
yond tier one. In its current form, the tracking table is built on the foundation
of baseline data. Companies should not be discouraged or penalised from
taking measures to address known risks at tier 2, even without comprehen-
sive baseline data.
Scenario C: Companies have identified key risks linked to upstream pro-
duction (e.g. Tier 4) in their supply chain. As a first step, the table should
include reference to the tier that the company is seeking to address as well
as the country (optional). In the case of risks at tier 3 or 4, companies may
rely on multi-stakeholder initiatives (e.g. Better Cotton Initiative, BCI). Mon-
itoring progress, therefore, may be a combination of monitoring progress of
those multi-stakeholder initiatives as well as monitoring the company’s par-
ticipation in that initiative (e.g. monitoring the uptake of BCI cotton).
Recommendations
The following recommendations are
based on the evaluation by the OECD
of the SAC Brand & Retail Module
against the OECD Due Diligence Guid-
ance for Responsible Supply Chains
in the Garment and Footwear Sector.
The OECD recognises that the SAC
may not seek to evaluate every as-
pect of a company’s responsibility un-
der the OECD Garment Guidance for
Responsible Supply Chains in the Gar-
ment and Footwear Sector. However,
during interviews with SAC member
companies, it was confirmed that com-
panies are relying on the Higg BRM to
evaluate their own performance in re-
lation to environmental, labour and
human rights due diligence. Within this
context, the SAC should clearly state
NCM-MARCH 2020
47in its communication on the Higg BRM
if aspects of a company’s responsibil-
ity are not within scope of the Higg
BRM but are nonetheless the respon-
sibility of the company.
Overarching recommendations
-The Higg BRM should clearly state
if aspects of a company’s respon-
sibility in relation to labour, human
rights and environmental due dili-
gence are not within the scope of
the Higg BRM.
-The Higg BRM should define the
term ‘social’ to include labour and
human rights as defined in interna-
tional instruments.
-The SAC should consider restruc-
turing the Higg BRM to facilitate and
encourage a risk-based approach