New FUSH˚ Certificates and Social Responsibility Audit Report Results

1. Become Global Recycled Standard (GRS)-certified
2. Become Global Organic Textile Standard (GOTS)-certified
3. Get a Sedex membership and pass the SMETA 4-pillar social responsibility audit

What does this mean for our clients and what does it mean for us?

With FUSH becoming GOTS and GRS-certified, our clients can get their collections adorned with either GOTS or GRS hang tags. This will prove to their customers that their collections are from genuinely recycled materials or real organic cotton.

Also, working with certified companies like ours is slowly becoming a legal obligation for some European companies. Here’s why.

German Due Diligence in the Supply Chain Act

According to this act, companies with 1000 employees or more, that are based in Germany will become subject to stricter human rights due diligence requirements. This includes the supply chain, which means our 170 employees would count in the total of 1000+ people employed by a German company if we become its clothing supplier.

The easiest way for these companies to prove that their supply chain operates in a socially responsible manner is for their manufacturers to become Sedex members and pass the 4-pillar SMETA social responsibility audit.

Get more information on this topic in the Ropes Gray article. However, this doesn’t stop with Germany. By 2028, the rest of the EU will be hit with the Corporate Sustainability Due Diligence Directive (CSDDD).

The Corporate Sustainability Due Diligence Directive

This directive, known also as CSDDD or CS3D, approved by the European Council, is designed to address human rights and environmental abuses committed by EU-based companies and non-EU companies that generate revenue in any Member State, their subsidiaries, and supply chains.

When in place, it would end, prevent, mitigate, and account for adverse human rights and environmental actions by these companies.

There will also be a system in place for victims of these actions to give them access to compensation using civil liability, where companies will be held accountable through proven intent or negligence.

However, it won’t affect all companies doing business in the EU. Criteria according to size and annual turnover would have to be met.

Criteria for application of CSDDD

Companies – large EU LLCs

Group 1: Companies with 500+ employees and net EUR 150 million+ turnover worldwide.

Group 2: Companies in high-impact sectors of 250+ employees and net EUR 40+ million turnover worldwide (textiles, agriculture, extraction of minerals).

The same rule applies to non-EU companies as long as they meet the turnover threshold generated in the EU.

Enforceability

EU Member States will enforce this act through administrative supervision and civil liability (as mentioned already).

The European Network of Supervisory Authorities will carry out administrative supervision.

Following the CSDDD principles, it can impose appropriate penalties, such as fines, if a company doesn’t comply. The Network can also order companies to take corrective actions.

Keep in mind that this extends to the supply chain. So when it comes to the supply chain, the lowest risk for companies affected by the CSDDD lies in choosing a supplier with a valid social responsibility audit like the 4-pillar SMETA. You know, the one, we passed in early 2024. But there’s more to a clothing manufacturer than social responsibility, there’s also the ecological aspect.

Sustainability credit from GRS and GOTS certificates

As you already learned, when your manufacturer has these certificates, you can sell products that are officially of recycled or organic origin. Getting to a final product adorned with these certificates’ hang tags isn’t easy. And that’s why they will make your brand a sustainable one in an instant. Let’s learn how.

The roadmap of a certified final product

Let’s say you want to sell your running t-shirts with the GRS hang tag. Every process involved in making your t-shirt will have to be done by a GRS-certified company. This starts with yarn manufacturers, continues with fabric dyeing companies, and finally ends with clothing manufacturers like FUSH. If there’s a trading company between you and the manufacturers, then it too will have to be GRS-certified.

The same situation is with the GOTS certificate and it starts with organic cotton farms.

When you decide to take on this road of selling certified products, make sure to communicate it well on your website, both in product descriptions, blog posts, and social media. Your customers should know that they get a much higher-value product from you this way.

Summary

With FUSH having these valuable certificates and social responsibility audit results, you as our client are on the right path when it comes to selling higher-value products, hitting CSR goals and being prepared for legislative changes that do and will require more and more ecological and social awareness from businesses.