The fashion industry is rife with ethical and environmental abuses in its supply chains and attempts to address the issues have continuously fallen short. Fueled by social media and consumers’ insatiable demand for new, cheap, and disposable clothing, fast fashion shows no sign of abating. Now, an EU Directive aiming to improve social, environmental and human rights issues in supply chains, has been derailed. The directive, which would require large companies to determine if their supply chains used forced labour or caused environmental damage, has lost support from the EU’s largest member state, Germany, with the country’s pro-business FDP claiming it would burden businesses with excessive bureaucracy. Italy, Bulgaria and Austria have also indicated that they are not in favour of the EU Corporate Sustainability Due Diligence Directive.

The proposed law would apply to EU companies with more than 500 employees and a net worldwide turnover of $150 million and for non-EU firms whose turnover is more than $150 million.  The due diligence standard adopts a risk-based approach and companies would be required to identify the risks most applicable to them and mitigate accordingly based on severity and likelihood. Critics claim that it is burdensome and excessive and that it will duplicate requirements under the ESG disclosures which will also come into force this year.

The fashion industry is responsible for 10 percent of human-caused greenhouse gas emissions and uses more energy than the aviation and shipping sectors combined.  Further, its abuse of labour law violations is well documented, and it has been estimated that of the 75 million factory workers around the world, less than three percent earn a living wage.  In Bangladesh, where 4.4 million people, mostly women, work in the garment industry, violence and threats are a common occurrence for those who speak out about unfair labour conditions. It’s almost eleven years since the Rana Plaza factory collapse in Dhaka killed 1134 people and injured over 2000 others. The factory was producing clothes for Primark, Bonmarché and other fast fashion giants across the globe. The promises for reform and the introduction of fair pay and safe working conditions were never realised. When the media coverage died down, the public outrage waned, and it was business as usual for many factories in Bangladesh. In November 2023, negotiations over a new minimum wage for garment workers sparked mass demonstrations on streets across Dhaka. Four protestors were shot dead and multiple others were beaten severely.

The defeat of the directive will come as a disappointment to sustainability campaigners across the EU and, indeed, to the workers across the globe who are ultimately reliant on these Western companies for whom they manufacture clothing.