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What role for multi-stakeholder initiatives in responsible business conduct?

Learning from the Dutch Agreement on Sustainable Garments and Textile
By Verena Bitzer, KIT Senior Advisor

Blog

The Dutch Agreement on Sustainable Garments and Textile (AGT) was a multi-stakeholder initiative aiming to make global textile supply chains more sustainable. When it came to a close at the end of 2021, KIT conducted the final evaluation to assess whether it had achieved its objectives of promoting due diligence among companies and reducing negative social, environmental, and animal welfare impacts in global textile supply chains.

While not everything that the AGT endeavoured to achieve was successful, significant progress was made, and important lessons were learned. This suggests that there is a continued role for voluntary multi-stakeholder initiatives, even as we are waiting for mandatory due diligence legislation.

The journey of Dutch responsible business conduct (RBC) policy

Over the past few years, the Netherlands has debated the way forward on RBC in line with its international commitments. After extensive deliberations, including KIT’s evaluation of 11 RBC agreements 2014-2020, the Dutch government – and many Dutch stakeholders – expressed their support for a mix of policy measures, with comprehensive legislation at the core.

The practice of building exclusively on voluntary measures will, rightly, be discontinued, as we have seen that, by themselves, these are not enough to ensure RBC in global supply chains.

Legislation is needed, but what about multi-stakeholder initiatives?

Yet, as we anticipate the next steps towards legislation at the EU level and possibly, also directly in the Netherlands, we don’t really know what role voluntary measures, such as multi-stakeholder initiatives, will play in the future.

Are the Dutch RBC agreements essentially relics of the past? Of course, quite a few RBC agreements are still ongoing, so we should not dismiss their efforts and potential impact too quickly amidst our focus on upcoming legislation. A look at the AGT – considered a frontrunner RBC agreement – holds important insights.

Findings from the final AGT evaluation

The AGT ran for five-and-a-half years and comprised the Dutch government, societal stakeholders from NGOs and unions, sector associations and, at the end of its lifespan, 58 mostly Dutch-based companies. The Social and Economic Council of the Netherlands (SER) served as Secretariat and account manager tracking companies’ progress against their due diligence commitments.

Leaving aside remarks about the number of participating companies, there are many things that the AGT did achieve, showing what multi-stakeholder initiatives are good for (and what they need to improve).

Successfully engaging companies in due diligence processes

The AGT was an important foundation on which to build trust and generate learning processes among stakeholders, as critical enablers to work in a multi-stakeholder setting dealing with complex global supply chains.

Crucially, the AGT effectively engaged companies in quality due diligence processes, leading to increased supply chain transparency and changes in company behaviour, e.g. changes in supplier relationships and purchasing practices.

Companies showed clear progress over time in all areas of due diligence, supported by training, tools, and guidance from the AGT and its Secretariat. It is safe to say that without the AGT, many, if not most, companies would not have made so much progress.

More progress is required to have impact

AGT companies also started addressing selected risks found in their supply chains, even though this part of due diligence did not come easy and took years to develop. As a result, the impact of due diligence is just starting to become visible, e.g. in a clear shift towards more sustainable materials and greater attention to safe and healthy workplaces. Further evidence of companies’ impact remains anecdotal at this stage. While it is true that observable impact takes time, it is also equally valid to say that companies need to do more to address risks and document their activities and observed changes better and more transparently.

Similarly, limited evidence of impact was found for the AGT’s collective projects, either because projects had only recently started or because they simply did not have much impact data. Going from anecdotal signs of impact to systematic empirical evidence should be the next step.

Workers’ voices should be heard

The AGT operated a collective grievance mechanism for workers or parties adversely affected by a signatory to the AGT. However, the mechanism was not successful and remained largely inaccessible to affected workers.

Collective grievance is important because individual companies tend to rely too much on their suppliers having operational grievance mechanisms in place (which is often not the case). This is something that other multi-stakeholder initiatives should do better.

Hearing workers’ voices goes beyond having a collective grievance mechanism. It also plays a role in companies’ individual due diligence (where local stakeholder engagement is something that many companies need to improve upon) and in the decision-making and governance processes of multi-stakeholder initiatives (where linkages to local stakeholders should be actively sought).

Supporting companies in responsible business conduct

The final evaluation of the AGT brought many achievements to light that can be made in the context of multi-stakeholder initiatives. Yes, the AGT also had shortcomings, but compared to many other multi-stakeholder initiatives, at the end of five-and-a-half years of collaboration, the AGT has something to show for: Participating companies now engage in in-depth due diligence processes – the quality of which was significantly enhanced through the AGT’s multi-stakeholder character, which promoted continuous learning and (critical) feedback for companies.

It is worth considering how these lessons can be incorporated in mandatory legislation or a broader ‘smart mix’ approach to ensure that responsible business conduct is more than just a paper exercise.

About the author: Verena Bitzer is an interdisciplinary social scientist and senior advisor at KIT. Her work focuses on sustainable (global) value chains, including questions of how to reduce adverse social and environmental impacts across value chains, while promoting the inclusion and strengthening the position of small-scale and vulnerable actors.