7 tips on how to become more socially responsible in the home decoration and home textiles sector

European buyers of home decoration and home textiles (HDHT) have become increasingly aware of the importance of conducting their business in a socially responsible manner. They also expect this from their suppliers. Consumers, businesses and governments increasingly demand ethical practices throughout the value chain. To stay competitive in this market, you need to do what you can to become more socially responsible.

1. Sustainability is becoming a must - be ready

Sustainability is quickly becoming part of core consumer needs, including in the HDHT sector. A majority (>65%) of consumers in Europe’s leading HDHT markets believe that a sustainable lifestyle is important, because their actions have an impact. Especially younger generations care about sustainability, and they express this by buying products that contribute to a better world. To appeal to the European market, now and in the future, you need to be sustainable.

Being socially responsible plays an important role in this, although true sustainability is a combination of:

• People: social aspects;
• Planet: environmental aspects;
• Profit: aspects like affordability, marketability, productivity and up-scalability of your sustainable offer.

Figure 1: CBI webinar on sustainability in the European market for HDHT

Source: CBI @ YouTube

Social responsibility has been on the agenda for a long time, but attention has increased significantly in the last decade. Disasters in other sectors, like the Rana Plaza garment factory collapse in Bangladesh in 2013, have highlighted the need for responsible production. Buyers and consumers are more aware than ever of the importance of buying products that are made under ethical circumstances.

Figure 2: The Basket Room – the sustainable message at the core of this ethical business

Source: The Basket Room @ YouTube

European legislation is also moving towards increased sustainability, making it a must rather than an option. You need to be ready for this. With the European Green Deal, the European Union (EU) is rolling out new and updated legislation that makes sustainability a requirement.

This means that as a producer, you must ensure socially responsible production in your company. Social responsibility can be applied in each of the 5 stages of a typical product lifecycle. As a producer, you have the most control over social practices in stages 1-3: material, production and distribution.

Figure 3: 5 stages of a circular product lifecycle

Source: CBI sustainable design training material

For example:

1. Materials: fair deals with suppliers, empowerment of local communities that produce your natural materials;
2. Production: fair wages, equal representation/diversity, proper health and safety standards;
3. Distribution: fair deals with distributors and transparency about your value chain.

In HDHT, social issues like a safe working environment and equal opportunities for women are particularly important. Key tools to address these issues include self-assessments, clear guidelines and training on topics ranging from safe production and skills to entrepreneurship and financial literacy.

2. Ensure a safe working environment

To export to Europe, you need to provide a safe working environment for your staff, both for their benefit and yours. Better health and safety conditions lead to higher productivity and product quality, fewer work accidents and less sick leave. Many countries have labour laws that include health and safety in the workplace. You should compare your country’s laws to international standards, like the International Labour Standards of the International Labour Organisation (ILO). This helps you organise your production to comply with local laws and to become eligible for internationally recognised certification.

In the HDHT sector, there are generally 2 types of production:

• Centralised – in factories or workshops;
• Decentralised – community-based, often from home.

It is easier to control the production environment in a factory than it is in the individual homes of artisans. In both settings, hazardous situations must be avoided, and the safe and proper use of tools and simple machinery must be explained through dedicated training. Where in factories supervising is relatively easy and you can communicate important rules using posters, home-based production requires a different approach. Here, quality control staff in the field can play an important role in communication, checking and supervision.

Lack of awareness is another issue. You must train employees and artisans in the dos and don’ts of production. Especially the proper use of protective clothing such as masks and gloves needs to be explained, as well as the reasons why. Otherwise, people may not see the point of using protective clothing.

Different types of materials and production processes in the HDHT sector come with different risks and preventive measures. For example, an important risk factor in ceramics production is Respirable Crystalline Silica (RCS), which can cause lung cancer through inhalation. The ceramics industry mostly uses crystalline silica in the form of quartz and cristobalite. Preventive measures can range from using a wet process instead of a dry process, to providing workers with breathing-protection equipment.

3. Provide equal opportunities for women

Diversity and social inclusion are important topics in today’s society. According to the World Bank, women across the world hold fewer formal jobs, are paid less and are more likely to experience worse job conditions than men are. Most women who do work in the formal sector have medium and low-skilled jobs, especially in low-income countries. Trade has the potential to expand women’s role in the economy, increase equality (equal rights, responsibilities and opportunities for people of all genders), and expand women’s access to skills and education. In developing countries, women make up 33% of the workforce of exporting firms, compared to 24% for non-exporting firms.

To work towards gender equality, companies need to offer women more opportunities in formal employment, with better conditions and benefits. HDHT exporters like you play an important role in this.

Unlike many other economic sectors, HDHT is very women-friendly. The work in this sector is often community-based and allows women to combine their work with family life. In factories, companies can offer on-site daycare and nursing spaces. In addition, the hours in the HDHT sector are more flexible, and the work is not as heavy as in agriculture or the production of commodities.

You can further strengthen these benefits and empower women through training, for example on skills, leadership and entrepreneurship. Training and workshops can also cover topics that are not directly work-related but could help to improve your employees’ overall standard of living in terms of finances, adult literacy, health and welfare. Training your employees should start with increasing awareness. Therefore, you should also try to include the rest of the family in the training, not only the women themselves. This helps to create more sustainable effects both immediately and in the long run, since the next generation will also benefit.

When it comes to wages, equal pay for men and women for the same kind of work is essential. Helping your employees save money (financial planning, setting up a savings account) for future expenses and plan for a pension or retirement fund is also a way to ensure their financial well-being in the long run.

4. Map out your supply chain

In the HDHT sector, it can be hard to map out the entire supply chain and ensure compliance on an international level. Especially when working with recycled materials, it is often difficult to determine the source and verify how they were originally produced. Buyers expect you to map out your supply chain and manage it as well as possible. They would also like to know how you intend to improve your performance, and they expect you to encourage your vendors and suppliers to improve their own.

Mapping out your supply chain begins with having your suppliers fill out the same self-assessment tools you use. Key topics include providing safe working environments, equal opportunities, fair wages and decent working hours, and preventing forced and child labour. This will give you a clearer picture of the positive and negative aspects of their part in the chain. You can also help them with their self-assessment and suggest improvements where relevant.

Some producers try to manage the entire supply chain in their own country to ensure compliance throughout. This is not possible for all companies, especially if you use a wide variety of raw materials and semi-finished products. Suppliers of raw materials that are certified according to international standards will make it easier for you (and your buyers) to communicate social responsibility in your supply chain.

5. Prepare for new and updated human rights due diligence legislation

Sustainability is becoming a must in the European market. This is not only because buyers and consumers are asking for it, but also because of new legal requirements. The European Green Deal includes both environmental and social requirements. In this context, many European laws are being revised, and new laws are being developed. Many of these laws apply to European companies’ entire value chains. This means that for your buyer to comply, you must meet the requirements of this legislation too.

Corporate Sustainability Due Diligence Directive

The Green Deal’s new Corporate Sustainability Due Diligence Directive (CSDDD – EU 2024/1760) aims to foster sustainable and responsible corporate behaviour and to anchor human rights and environmental considerations in companies’ operations. It requires larger companies to identify and – where necessary – prevent, end or reduce negative impacts of their activities on human rights and the environment. Both in the company’s own operations and in its value chains.

As a small or medium-sized enterprise (SME) from a developing country, your company is not within the scope of the CSDDD. However, your European buyers may be. This means that even if the new rules do not apply to you directly, they may apply indirectly via your buyers. Larger buyers will have to perform the required due diligence on their direct business partners, which may include you, as a supplier. The European Commission plans to publish guidelines to help companies conduct due diligence.

The CSDDD entered into force on 25 July 2024. The rules are set to apply according to a staggered approach, with the first group of companies starting on 26 July 2028 and full application being on 26 July 2029. The European Commission has proposed an Omnibus package to simplify the due diligence requirements for sustainability. The proposal aims to protect SMEs by formulating a new voluntary standard for SMEs (VSME), which will limit the number of requests for general sustainability information from larger companies.

Forced Labour Regulation

The new Forced Labour Regulation (FLR – EU 2024/3015) bans all products made with forced labour (including child labour) from the EU market. The FLR is linked to the CSDDD. If a company has complied with the forced labour requirements of the CSDDD, this will be considered in the assessment of its FLR compliance. The Commission will issue guidance on due diligence for forced labour, as well as information on risk indicators. The FLR entered into force on 13 December 2024 and will apply as of 14 December 2027.

Due diligence legislation at a national level

Ahead of the EU-wide rollout of the CSDDD and FLR, some countries have introduced national due diligence legislation – including:

• Germany - the Act on Corporate Due Diligence Obligations in Supply Chains;
• France - the law on corporate Duty of Vigilance;
• The United Kingdom - the Modern Slavery Act;
• Norway - the Transparency Act.

This type of national legislation has also been proposed in other countries, including Belgium and the Netherlands.

6. Use voluntary standards and certifications to verify your social performance

A growing number of European buyers would like you to comply with voluntary sustainability initiatives. Documenting your performance like this 'proves' your sustainability, and it may also help you to facilitate your buyers’ due diligence processes.

Popular (social) sustainability initiatives among European buyers include:

• Business Social Compliance Initiative (BSCI): an initiative of European retailers to improve social conditions in sourcing countries. They expect their suppliers to follow the BSCI Code of Conduct;
• Ethical Trading Initiative (ETI): an alliance of companies, trade unions and voluntary organisations. ETI aims to improve working conditions in global supply chains via their ETI Base Code, founded on the ILO conventions;
• Sedex: a membership organisation striving to improve working conditions in global sourcing chains. The platform lets you share your sustainability performance, based on a self-assessment. Sedex’s SMETA audit can help you understand standards of labour, health and safety, ethics, and environmental performance within your operations.

These initiatives help you systematically document your social sustainability performance. Many Codes of Conduct and auditing frameworks (including SMETA) are based on BSCI and/or ETI. This means that complying with these initiatives can make it easier for you to meet European buyers’ requirements. In turn, compliance makes it easier for buyers to do business with you.

Taking it a step further, another option is for you to become certified. For example, the Social Accountability International (SAI) SA8000 standard focuses on the fair treatment of workers. The ISO 45001 standard specifies requirements for an occupational health and safety (OH&S) management system. Such a system can help companies reduce their environmental impact and comply with regulations. If you meet ISO 45001 requirements, you can apply for certification.

Fair-trade labels like the World Fair Trade Organisation (WFTO) Guaranteed System and Fair For Life certification can also give you a competitive advantage, especially if the production of your items is labour-intensive. But even if you are not fair-trade certified, you can document your compliance with the WFTO’s 10 Principles of Fair Trade to show your commitment.

Figure 4: WFTO’s 10 Principles of Fair Trade

Source: WFTO

These social standards and initiatives often contain environmental components as well. In turn, environmental standards tend to include social requirements too. This illustrates the importance of a holistic approach to sustainability, including both social and green efforts.

7. Create a Code of Conduct that reflects your social commitment

European companies often work with Codes of Conduct to address social aspects within their supply chains. A Code of Conduct is a set of values and principles that a company and its employees must adhere to. It clearly communicates these rules to both your internal and external stakeholders. It typically includes key elements like human rights, compliance with local laws, and the prohibition of unethical practices. A good Code of Conduct both inspires the people inside your organisation and makes external partners want to engage with you more.

Codes of Conduct are a process. They make corporate promises to the world. Stakeholders will base their belief in your promises on how they have experienced your company’s behaviour and how it matches the Code of Conduct. So, you should start your strategic process with a mission statement and a few years of living this statement, to establish trust. Then, you can develop a Code of Conduct.

A well-rounded Code of Conduct contains both social and green practices. If your concept is built on a particular social principle, like women's empowerment, you start with detailed and ambitious social promises. This is how your stakeholders know you and appreciate you. If you are mainly environmentally oriented, then it makes sense to start there.

You should be authentic and use your tone of voice in your Code of Conduct. Do not use complicated words if they are not yours. Make sure your stakeholders can understand and ‘believe’ you. Copy-paste documents will not convince them. You can, however, use internationally known and accepted codes like the ETI Base Code as a starting point.

Figure 7: The 9 principles of the ETI Base Code

Source: ETI Base Code/Globally Cool

Codes of Conduct, like the ETI Base Code, are quite generic because they apply to different types of companies in different sectors. Your company’s code should be more specific and tailored to your values and practices. Table 1 lists the 9 principles of the ETI Base Code and the type of information you should include in your own code to customise it.

Table 1: How to tailor the ETI Base Code principles to your Code of Conduct

Source: ETI Base Code/Globally Cool

Globally Cool carried out this study in partnership with Remco Kemper and GO! GoodOpportunity on behalf of CBI.

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