It takes two to three years for small and medium-sized enterprises (SMEs) in the garment and footwear industry that have adopted the social and labor convergence program (SLCP) initiative in ensuring compliance with evolving standards to save on audit costs, according to a paper published by the International Trade Centre (ITC).
Navigating the Regulatory Landscape: Audit fatigue in the garment and textile industry explores the extent to which the SLCP’s Converged Assessment Framework (CAF) contributes to reducing the number of duplicative audits as these firms move towards a more environmentally and socially responsible sector.
This is through using convergence to enhance buyer–supplier relationships and fostering better working conditions by unlocking resources that were originally focused on duplicative social audits.
The paper published by the ITC, a joint agency of the World Trade Organization and the United Nations, said that with the adoption of SLCP’s CAF, resources will unlock as the firm becomes more familiar with the assessment and verification processes.
“Once the facility learns more about the process and new regulatory frameworks are introduced (e.g. human rights due diligence [HRDD]), it is more likely to complete a more extensive assessment, moving from Step 1 to Step 2 or 3, which promote the creation and adoption of effective management systems,” it said.
The paper said with the evolving landscape comes the introduction of regulatory frameworks and international guidelines, such as HRDD, aimed at requiring companies to identify and assess actual and potential human rights impacts, integrate and act on the findings, track responses and communicate how impacts are addressed – not only in their own operations, but across their supply chains.
It said having the right systems in place increases the capacity of SMEs to identify and mitigate risk, monitor and track progress, and improve.
“As SMEs begin to see real savings from freed-up resources that were previously spent on duplicative and repetitive audits, those with sound management systems in place will be able to effectively allocate these savings to improve working conditions,” it added.
Audit fatigue is an obstacle to rising demand for transparency and traceability in social and labor conditions in the apparel and textiles manufacturing industry, the paper said.
It said the changing regulatory landscape and environment of increasing requirements for small businesses will likely raise pressure on sustainability standards to align and reduce system redundancies.
Demand for open, reliable and harmonized social compliance data will probably rise in response to these regulatory requirements, it added.
The paper said the ITC can play an instrumental role in leveraging its Standards Map database to support alignment efforts with multistakeholder initiatives and sustainability standards in a neutral, transparent and inclusive manner.
The Standards Map provides the world’s largest database on sustainability standards, gathering a pool of thousands of data on sustainability.
“It underpins inter alia the work of SLCP on CAF, but also helps facilitate many comparisons as well as convergence and benchmarking efforts of sustainability standards in different industries. This increases the transparency of and accessibility to sustainability standards, which enables important collaborations and technical synergies in key sustainability aspects,” it added.
