Suppliers are expected to respect human rights and promote gender equality but are set up to fail by buying companies

The vast majority of apparel companies express high expectations of gender and human rights compliance from their suppliers. Notably, 85%* of companies factor in suppliers’ human rights performance in their contracting, and 87% include at least one requirement related to gender equality in their contractual agreements with suppliers. While this demonstrates an acknowledgement of the human rights and gender-related risks in their supply chains, these cannot be mitigated through strict requirements only. For these standards to be met, buying companies must own up to their part of the bargain and foster an environment where suppliers are enabled to uphold human rights and gender equality standards. However, only 27%* of apparel companies disclose evidence of enabling their suppliers to meet their human rights and gender equality expectations through responsible purchasing.

Purchasing practices play a determining role in the degree to which buying companies’ expectations can be upheld in supply chains. Practices such as last-minute changes to orders and short lead times intensify pressure on suppliers and can contribute to excessive overtime, increased use of casual labour and unauthorised sub-contracting. Additionally, late payments or pressure to reduce prices can make it more difficult for suppliers to provide a safe working environment and timely wages for workers. Despite their substantial impact, only 27%* of companies demonstrate responsible purchasing by committing to timely and accurate payments to suppliers and providing production needs in advance. The disparity between high expectations and the lack of a conducive environment to meet them creates a scenario where suppliers struggle to meet both human rights and gender equality standards and commercial demands.

Apart from creating an enabling environment through purchasing practices, companies can enhance supplier performance through targeted support programmes. Nearly half of apparel companies provide targeted support for at least one gender equality theme (45%) or human rights issue (47%*). While these support programmes can contribute to improved supplier capacity and performance, there is a risk of fragmented or opportunistic implementation that is not based on height of need or risk. Furthermore, these programmes frequently replace rather than complement responsible purchasing practices that create an environment conducive to suppliers upholding human rights and gender equality standards. Among apparel companies with targeted support programmes for suppliers on gender equality and human rights, only 19% and 26%*  implement responsible purchasing practices, respectively. This disconnect highlights that most companies do not adopt a systematic approach to supporting their suppliers by combining responsible procurement and targeted support, even though the first is essential for the effectiveness of the latter. *Key finding five on responsible purchasing practices is based on data from both the 2023 Gender Benchmark and the 2023 Corporate Human Rights Benchmark. Data from the 2023 CHRB is marked with an * symbol.

In recent years, companies have responded to forthcoming legislation such as the Corporate Sustainability Due Diligence Directive (CSDDD) in the European Union by raising their supply chain standards. While presented as an effective way of addressing issues in the supply chain, this often places increased pressure on suppliers without simultaneously enabling them to meet both human rights standards and commercial demands. To ensure that these legislative changes truly benefit workers downstream in the supply chain, companies must be urged to support their suppliers in achieving success and discouraged from cutting ties when non-compliance is found. The final CSDDD legislation must clearly state that there is no legal obligation for companies to abruptly discontinue supplier relationships, and that instead the company’s legal obligation is to engage and support their supplier in addressing human rights risks. Striking a balance between their commercial requirements and business models while implementing purchasing practices that do not undermine human rights efforts is essential for companies.