Learnings and recommendations in joint report of AGT and PST on purchasing practices
The Dutch Agreement on Sustainable Garments and Textile and the German Partnership for Sustainable Textiles have jointly released a report with insights from buyer and supplier feedback. In Spring 2021 feedback was collected through purchasing practices surveys by 48 participating companies, receiving insights from 954 brand employees and 445 suppliers. The report sums up key takeaways, learnings and recommendations from this huge dataset.
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In a summary report, the Agreement on Sustainable Garments and Textile (AGT) and the German Partnership for Sustainable Textiles (PST) identify areas of opportunity from the aggregated results and their work as multi-stakeholder initiatives. Among others there is a huge opportunity for improvement when it comes to how to responsibly end a relationship with a supplier, how the cost price is build up (with respect for direct and indirect labour costs) and on training and awareness, both among brand employees and suppliers. In general there is a huge opportunity and urgency to train and further align internal teams on responsible purchasing practices policies.
Again, the findings show that purchasing practices are crucial to guaranteeing decent working conditions and living wages. Giving valuable insights into both positive and challenging topics, the results – combining both brands’ and suppliers’ perspectives – have made it clear: the foundation has been laid, the insights are there but there is a lot of work still to be done.
Better working conditions
Purchasing practices can have a negative effect on working conditions but can also be an enabler for better working conditions. Purchasing practices are crucial to guarantee decent working conditions and living wages. The COVID-19 pandemic has underscored how international brands and retailers’ purchasing practices may contribute to harmful impacts in the supply chain. Practices such as aggressive price negotiation, inaccurate forecasting, late orders, short lead times, last minute changes and late order payments, put suppliers under intense pressure and are amongst the most important factors that lead to poor working conditions and low pay for workers.
On the other hand, responsible purchasing practices can increase stability leading to productivity gains, sustainable growth and building strong relationships. It can also improve suppliers’ ability to meet the brands’ sustainability and ethical requirements and help create an environment that enables improvement in working conditions and wages. Responsible purchasing practices can contribute to better wages. For example, they ensure that workers can get paid on time, have stable employment and reduce the need for excessive overtime.
Collaboration for leverage
The AGT has strategically been cooperating with the PST since its beginning and have made this official in 2018. Both initiatives have joined forces to increase leverage to change the industry. Purchasing practices has been one key focus area as well as to promote the payment of living wages along the garments and textile supply chain. In order to enable better purchasing practices within the industry, the AGT and the PST started a cooperation with the ACT initiative and their purchasing practices work in 2019. Based on a tool developed by ACT, the AGT and PST member brands/signatories performed self-assessments (PPSA) and asked their factories to assess them and share their perspective on the topic (PPA). The report gives insights in the gathered data through these purchasing practices assessments.