What are the next steps to compliance?
Global supply chain compliance has become increasingly complex, and it can be a challenge to navigate all applicable regulations and reporting requirements in addition to managing customer and investor expectations.
Planning for compliance with the New York Fashion Act and similar policies should be part of a company’s ESG program. Due diligence regulations are constantly emerging, changing, and becoming more stringent – proven by the recent release of the Uyghur Forced Labor Prevention and the German Supply Chain Act, both of which require some level of supply chain mapping. Luckily, many emerging due diligence requirements at least partially align with one another.
It is important for organizations to mature their ESG programs to be able to respond proactively to new requirements rather than reactively to state, federal, or global legislation and requirements as they become law. Though some aspects of environmental and human rights due diligence reporting are currently voluntary, the importance of a comprehensive ESG strategy that encompasses reporting and other ESG issues is growing more prescient.
Combining voluntary due diligence with a company’s existing product and supply chain compliance programs – such as chemical compliance, California Proposition 65, conflict minerals, anti-human trafficking, and sustainability reporting – creates a robust responsible sourcing program that helps companies prepare for mandatory compliance.
Though the New York Fashion Act and similar upcoming bills are not yet law, it is vital for companies to expand on existing responsible sourcing efforts and implement new efforts as needed to avoid falling into noncompliance.