Advancing Integration of CSR and Social Life Cycle Assessment in the Textile and Fashion Industry

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Bhatnagar, Anubhuti; Niinimäki, Kirsi Advancing Integration of CSR and Social Life Cycle Assessment in the Textile and Fashion Industry Published in: Corporate Social Responsibility in Textiles and Fashion DOI: 10.1007/978-3-031-61099-8_5 Published: 10/07/2024 Document Version Peer-reviewed accepted author manuscript, also known as Final accepted manuscript or Post-print Please cite the original version: Bhatnagar, A., & Niinimäki, K. (2024). Advancing Integration of CSR and Social Life Cycle Assessment in the Textile and Fashion Industry. In S. S. Muthu (Ed.), Corporate Social Responsibility in Textiles and Fashion (pp. 87-115). (Sustainable Textiles: Production, Processing, Manufacturing & Chemistry). Springer. https://doi.org/10.1007/978-3-031-61099-8_5 1 Advancing Integration of CSR and Social Life Cycle Assessment in the Textile and Fashion Industry Anubhuti Bhatnagar*1, Kirsi Niinimäki 1Department of Design, Aalto University, P.O. Box 11000 (Otakaari 1B) FI-00076 AALTO *Corresponding author: [email protected] Abstract This chapter shows how Social Life Cycle Assessment (S-LCA) could be integrated with Corporate Social Responsibility (CSR) for monitoring the challenges emerging from the textile industry's transition towards a circular economy (CE). While CSR and S-LCA share the common objective of addressing societal challenges resulting from industrial practices, they are distinct tools. CSR outlines a company's voluntary commitment to mitigate its societal, financial, and environmental impacts. S-LCA enables the identification, measurement, and evaluation of social hotspots throughout a product's life cycle. Embedding CSR with S-LCA is vital as the CE transition may alter material supply chains, which could significantly impact stakeholders such as suppliers, employees or workers, local communities, and consumers. Keywords Social Hotspots; Product Life Cycle Assessment (LCA); Circular Economy (CE); Sustainable textile strategy; Socially Responsible Practices; Stakeholders; Fast fashion 1. Sustainability and circular economy in the textile sector The textile industry includes activities like transformation of raw materials (synthetic or natural) into fibres, yarns, and fabrics, which are then turned into clothing, upholstery, industrial filters, and medical textiles. Over the past two decades the way textiles, especially clothes are produced and consumed has changed significantly. In 2015, the fast fashion industry had annual earnings of 1.8 trillion US dollars, which is likely to reach up to 2.1 trillion US dollars by 2025 (Thorisdottir & Johannsdottir, 2020). 2 The rapid growth in demand of clothes at low prices has pushed this industry to become a global enterprise. For instance, countries in Asia like China, Bangladesh, India, Pakistan, Vietnam, Malaysia, Indonesia, and Hong Kong accounted for 54% of the total global clothing exports in 2021 (World Trade Organization, 2022). Whereas countries in the European Union, Canada, United States of America, United Kingdom, Switzerland, and Australia accounted for ~62% of the clothing imported (World Trade Organization, 2022). These long textile supply chains are often accused of low levels of transparency regarding prevention of environmental damage in production or waste management, and societal harm through unethical labor practices (Bubicz et al., 2021). Further, the scale of production is also driving the industry to search for more inexpensive labor as evident from the large number of women employed in this sector (60% of 94 million total workers) who face a gender pay gap of up to 20% (International Labor Organization, 2023). However, this industry also plays a key role in the total earnings of the middleand low-income countries. Therefore, it is important that the challenges of environmental and social sustainability be addressed without eliminating these countries from the supply chain (World Trade Organization, 2022). Further, the textile industry is responsible for 3–10% of the global greenhouse gases, is one of the highest water consumers, and generates millions of tons in waste. Only 1% of the textile waste undergoes fiber-to-fiber recycling to make new textile products while the rest of it is downcycled for other applications (fillers, energy), disposed locally or transported back to lower income countries where it is landfilled without potential for resource recovery (McKinsey & Company, 2022). The circular economy (CE) transition has emerged as an economic system to minimize waste generation, optimize resource efficiency, and promote sustainable production and consumption in this sector (Niinimäki, 2018). The CE framework is based on interrupting the linear model at various stages as shown in Figure 1. The 9R-framework is most used for understanding a CE transition (Potting et al., 2017). The strategies in this framework are R0 refuse, R1 rethink, R2 reduce, R3 reuse, R4 repair, R5 refurbish, R6 remanufacture, R7 repurpose, R8 recycle, and R9 recover. In the design stage, CE framework proposes to refuse conventional production methods, rethink/ redesign the supply chain, and reduce waste. In the 3 consumption stage, users may reuse (or resell), repair, refurbish, remanufacture, and repurpose discarded products with or without technical intervention. At the end of life, the textile or garment may be recycled either completely or part of the material may be recovered to substitute virgin fiber. Figure 1. Closing the loop in the textile and clothing industry — replacing the linear supply chain (in blue) with a zero-waste circular framework (in yellow) to ensure material use efficiency. Despite the interest in a CE transition, a challenge for the textile industry to increase fiber-tofiber recycling is the low efficacy of material separation and chemical recycling technologies (McKinsey & Company, 2022). This is further exacerbated by the challenge of collecting textile waste and the absence of design guidelines enabling easy garment recycling at the end of product lifetime (Niinimäki & Karell, 2020). On the consumer side, the uptake of circularity practices such as buying clothes made from recycled fiber or engaging with second-hand clothing markets is hindered by lack of awareness regarding safety of recycled content or associations of shame (cultural acceptance) or lack of knowledge about the platforms (Mukendi et al., 2020). The CE transition is expected to reduce global waste generation including textile waste by 30%, generate local employment, and make goods accessible to new markets (Circle Economy, 2023). However, even in the CE transition, issues of social sustainability have not been resolved (Ferioli et al., 2022). Many low-income countries face challenges like lack of skilled workforce 4 and skill development opportunities, putting pressure on factory owners to manage costs effectively. Some companies seem to only focus on avoiding child labor and sweatshops, while foregoing other issues in working conditions in their suppliers’ facilities. Also, many companies hire workers from sub-contractors who do not have transparent information sharing mechanisms with clear code of conduct (Księżak, 2017). Companies also do not mandate their suppliers to abide by international standards (ISO 9001, ISO 14001, OHSAS 18001, SA8000) created to ensure ethical labor practices and neither do they audit the suppliers adequately. However, the sustainability of an enterprise should be judged based on the sustainability of its supply chain. Identifying and addressing the negative future impacts on stakeholders in the transition from a linear to a circular economy is also important since 9–12% of the global working population is employed in the apparel value chain (Suarez-Visbal et al., 2022). Further, countries like Haiti, Cambodia and Bangladesh have more to lose with changes in business practices of textile production than the markets where goods are consumed. For example, in 2021, textiles were the most exported product from Haiti, but it was only the 60th largest exporter of textiles globally (The Observatory of Economic Complexity, 2021). Here, a textile company’s corporate social responsibility (CSR) policies integrated with results generated from the social life cycle assessment (S-LCA) may assist in identifying potential benefits and hotspots of the CE transition. CSR entails companies' duty to create economic value while safeguarding society and the environment. CSR policies should surpass legal requirements, and lead to societal advantages. Social issues targeted in CSR activities may include eradicating child labor, generating jobs, providing safe living conditions for communities, access to safe drinking water for workers, and appropriate training opportunities (Kumar et al., 2020). Here, S-LCA offers a structure for identifying these social issues over the complete life cycle of textiles, spanning from the extraction of raw materials to production, usage, disposal, and re-introduction into the supply chain through CE framework. With the rapidly growing textile market, various stakeholders like workers in the industry, communities settled near manufacturing sites, and consumers face risks related to unfair 5 working conditions, toxic exposure, and lack of transparency in supply chain. Hence, in the current chapter, the authors look at the role of CSR and S-LCA in promoting social sustainability. In Section 2 we will delve into CSR development strategies, how industries evaluate sustainability, and its implementation potential. In section 3 we will discuss the methodological development of S-LCA and barriers to its application in this sector. In section 4, we will discuss the potential to integrate S-LCA with CSR so that more targeted policies can be framed, and the role that government regulations play in promoting CSR. In section 5, we present results from several cases where CSR policies could be based on social issues identified by the S-LCA, and in section 6 we discuss the future of this integration. 2. Corporate social responsibility The European Commission defined CSR in 2001 as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.” Therefore, CSR is a strategy for industries to ‘give back’ to society including people and the environment. Here, ‘people’ refers to stakeholders like workers, customers/ consumers, suppliers/retailers, and societies/ communities. The term ‘people’ also refers to shareholders, the government, investors, and competitors within the sector. Commonly, CSR policies are directed towards employees to ensure that they are provided with fair wages and decent working conditions without discrimination (Saxena, 2021). But these policies also provide a fair picture of a company’s financial position to its shareholders. CSR activities may prove to the government that an organization will ensure legality in all its operations. It also shows the customers that the organization is mindful of the product’s impact. CSR policies may assure suppliers of the ethical responsibilities such as fair competition and respecting the intellectual property rights. For overall society, a company may use its CSR policies to signal opportunities for progress through employment creation and philanthropic activities. 2.1. Development of CSR Strategies Developing CSR policies is not a systematic approach since it is a voluntary commitment of an organization that has the freedom to pick an issue, they wish to address based on various 6 drivers. The internal drivers may be a company’s size, position in the value chain, and level of internationalization (Księżak, 2017). The latter point is important because as mentioned in section 1, large supply chains often have low levels of transparency potentially leading to more social risks. The external drivers for CSR may be environmental risks, regional/ governmental push, level of circularity expected sustainability implementation challenges across the supply chain, and consumers’ attitude towards sustainable clothing (Abbate et al., 2023). In 2010, the ISO 26000 guidelines were published with an attempt to harmonize the key features of a CSR policy. Although it is not a mandatory standard, it encourages businesses to develop CSR policies that ensure transparency, respect human rights, meet stakeholder expectations, comply with laws, and promote sustainable development (Szewczyk, 2016). In 2013, Indian government mandated companies to allocate 2% of their profits to CSR activities like poverty alleviation programs, women's empowerment initiatives, education for workers’ children, and health checkups for employees (Chawla, 2019). Post the Rana Plaza collapse in 2013, the Bangladeshi ready-made garment industry’s (RMG) CSR initiatives have included a push to ensure workplace safety and compliance monitoring, social standards training for factories, sustainable use of natural resources, and improving worker benefits such as fair wages, skill development, gender equality, and better working conditions (Khattak et al., 2017). Efforts have also been made to promote collective bargaining rights for employees that has led to an increase in the reach of trade unions in the RMG industry from 138 in 2012 to around 800 in 2020. Other global CSR strategies include promoting consumer engagement by providing repair and resale options (Patagonia’s "Worn Wear" and Eileen Fisher’s "Renew" initiative), women empowerment through training opportunities for female workers (Gap Inc.’s "Personal Advancement & Career Enhancement” Program), ethical sourcing of raw materials like cotton (H&M’s "Conscious Collection" and Zara’s “Closing the Loop” campaign), spreading societal awareness about plastic pollution (Adidas’s "Parley for the Oceans" program), and promoting better labor practices in the supply chain (Puma’s "FOREVER BETTER" campaign). 2.2. Barriers to creating CSR Strategies Govindasamy & Suresh (2018) prioritized the motivations and barriers to CSR adoption (listed in Table 1) in textile industry based on their interviews with 26 textile, knitting and garment 7 industries operating in Malaysia out of which 18 were small and medium enterprises and the remaining 8 were multi-national companies. Based on the responses, they reported that the barriers to CSR adoption were costs, skills, awareness, management, size of company, and lack of national/ regional policies. Table 1. Highest to lowest priority of the motivations, barriers, and CSR initiatives based on interviews with 26 textile companies in Malaysia. Modified from Govindasamy & Suresh (2018) CSR initiatives Drivers Barriers Fair treatments all employees and job applicants Customer satisfaction (highest) Lack of training for CSR knowledge Reduce human rights abuses Employee satisfaction Insufficient financial resources Enforcing ethical relations with suppliers Sales maximization Implementation too expensive Enforcing ethical relations with shareholders Protecting brand reputation More important priorities for the company Empowering women and other groups Fulfilling government requirements Implementation too complex Support government policies Market access No significant benefits from implementation Not harming the environment Leadership in CSR Difficulty in getting information on CSR implementation Increasing community’s economic stability According to company’s ethical principles Lack of knowledge about CSR implementation Supporting community development Top management belief in CSR Lack of knowledge about CSR practices Solving social problems (problems were undefined) Correct thing to do Inadequate training from management for implementation Lack of worker level skill/education for CSR implementation Implementation too time consuming Lack of support from middle management Lack of support from top management Similar observations were made in other parts of the world regarding CSR uptake. In a discussion with Indian companies, a common response from CSR managers was that despite the mandatory CSR, companies are not always aware of which societal issues should be targeted (Saxena, 2021). Further, since CSR is mandatory, governments interfere or ‘direct’ the spending towards the specific programs they wish to promote in a region (Saxena, 2021). Therefore, CSR activities may often remain a promotional exercise without significant positive effects on society. Availability of funds is a barrier for CSR implementation in all industries. However, often smaller companies are reluctant to hire specialists since they can identify social challenges easily due to shorter supply chains and resolve the issues by better communication with their suppliers (Walker et al., 2021). Non-recurring costs of implementing CSR are related to the infrastructure needed to produce sustainably and donations for philanthropic activities. Recurring costs 8 include regular payments (or remunerations) for social activities and periodic certifications and trainings for inexperienced staff members. There are also costs related to the designations for people who will create and manage CSR activities such as directors and managers. Finally, there are expenses related to hiring responsible contractors and subcontractors, cooperating with local governments, enforcing government regulations, and investing in the mitigation of environmental damage. The CSR managers in the Netherlands and Italy suggest that worker rights’ violations should be in the ambit of the supplier country’s own laws and not the responsibility of an individual business since not all countries abide by the same international labor practices (Walker et al., 2021). For instance, in cases where overtime is accompanied with extra wages, implementing the SA8000 rule of limiting overtime to 12 hours will restrict hourly wages and the workers may find that unacceptable even though excess fatigue could reduce productivity in the longer term (Księżak, 2017). Also, the scope of altering worker conditions, brand image, and green supply chain management initiatives depends on the company’s own interests though national interests such as anti-sweatshop movements or extended producer responsibility may push the adoption of voluntary codes of conduct in the fashion industry and influence CSR policies (Thorisdottir & Johannsdottir, 2020). The introduction of CSR rules in the textile and apparel industry is also hindered by the lack of control caused by geographical distance between producers and users, which may lead to low levels of awareness in focal companies about the social hotspots in the supply chain. For instance, the Nike sweatshop scandal of the 1990s and 2000s highlighted the disconnect between the brand and the workers involved in the manufacturing of their products (Burhan Wazir, 2001). A survey of audit results shows that change in supplier behavior depends on the ease of measuring an impact category. For instance, child labor or health and safety (number of accidents) are much easier to spot in the supply chain than whether employment was freely chosen or forced (Meier, 2015). Forced labor is more difficult to identify because of inconsistencies in the collected data for wages or working hours (Shaikh et al., 2020). Inconsistencies could be incorrectly recording time of work like no entrance/ exit time being recorded, or time stamps being too early/late, or intentional falsification. Despite the push 15 While sustainability indices like GRI, DJSI, and the Higg Index consider social aspects, the integration of S-LCA principles can enhance the assessment of social impacts in the textile industry. S-LCA provides a structured and systematic approach to evaluating social dimensions, enabling companies to identify social hotspots, improve labor practices, and promote stakeholder engagement more effectively within the context of these sustainability indices. SLCA can serve as a valuable tool to fulfill the guiding principles of ISO 26000 by providing a systematic and comprehensive approach to addressing social responsibility within organizations. Among the sustainability indices mentioned, the index most significantly affected using S-LCA would be the Higg Index. S-LCA provides a systematic approach to evaluating the social impacts of products throughout their life cycle, including factors such as labor conditions, human rights, and community engagement. The Higg Index primarily focuses on environmental impacts but also incorporates social aspects through its Social & Labor Module (Higg SL). The Higg SL module, which aligns with S-LCA principles, enables companies to assess and improve their social performance by evaluating aspects such as working conditions, worker health and safety, and supply chain transparency. 3.2. Barriers to using S-LCA There are several barriers to using the S-LCA tool for textile sector. The first barrier is that of data collection. Since the textile supply chains are spread widely most assessments rely on secondary data collected through national statistics and reported in some generic databases. But the generic assessments have different scopes from those required for a particular site (Ekener-Petersen & Moberg, 2013), which makes the assessment unreliable. Another issue is of the transparency of reported information in the databases like that observed in Section 3.2. regarding audit (Meier, 2015) and survey (Shaikh et al., 2020) results. There is also the lack of agreements between all stakeholders on the prioritization of impact categories, low applicability of generic data to SMEs, poor representation of lowand middle-income countries in generic databases (Fontes et al., 2018). The quality of the stakeholder responses should be checked using a scoring system, which calculates average scores from individual stakeholders by corroborating the response with available reports (Zerbino et al., 2023). In general, the 16 global databases for secondary data collection (like PSILCA or EcoInvent) need to be expanded continuously with more localized case studies. The second barrier is inclusion of relevant stakeholders. While information related to workers can be captured through precise indicators, information related to communities, value chain actors and consumers is difficult, and the indicators are vague. S-LCA also cannot capture the product's “use phase” despite its significance in extending product lifetime through options like repairing or reusing (Suarez-Visbal et al., 2022). S-LCA practitioners had to create indicators like comfort, convenience, ease of use and social acceptance to evaluate the ‘use phase’ impact. The third barrier is that the UNEP/SETAC guidelines may be differently interpreted based on each situation (Chhipi-Shrestha et al., 2015). For example, the CE transition may alter the job skills due to changes in consumption patterns and production processes. Hence, there is likely a loss of jobs in resource extraction due to increased resource use efficiency, job substitution where some activities will be replaced by others, e.g., from landfilling and waste incineration to recycling, both of which require reskilling which is not captured in the current assessment method (Borms et al., 2023). In addition, it is still not clear how to assess the potential social impact of materials with multiple lifecycles in terms of impact attribution across the various life cycles (Papo & Corona, 2022). Standard indicators should be created based on the global consensus of socially relevant themes such as the Sustainable Development Goals (Herrera Almanza & Corona, 2020) or through collaboration with businesses regarding context-specific requirements (Walker et al., 2021). Based on Sections 3.2 and 4.2, there are several challenges in developing CSR and S-LCA. CSR activities may be focused on any number of issues from environmental, societal, to economic. A company that is setting aside funds for CSR activities wants to include activities that either directly benefit it or at least create a perception amongst stakeholders of the companies’ ethical leanings. It is used as a signal rather than a problem-solving tactic which leads to limited application of the funds for influencing society, and other stakeholders. CSR managers are also unaware of aspects concerning employees’ welfare or improving working conditions in the firm. While the biggest challenge in S-LCA is often associated with data collection, verification, and 17 standardization. However, both these tools can be improved through collaboration and engagement among different stakeholders, including suppliers, customers, industry associations, NGOs, and local communities. Expert interviews, surveys, and questionnaires are often used in this step to ensure open dialogue that promotes knowledge sharing regarding social issues effectively (Aparcana & Salhofer, 2013; Staicu & Pop, 2018). This step would be further enhanced through integrating S-LCA into CSR framework. 4. Integrating S-LCA in CSR The textile industry has focused on promoting sustainable business models through supply chain innovations, which includes promoting use of environmentally friendly materials and ensuring that suppliers follow a code of conduct that ensures workers’ safety. However, it has been discussed in previous sections that there is a need to broaden this focus and include all stakeholders across the lifecycle of textiles, which could be done through an S-LCA. An effective assessment involves defining what is to be safeguarded under regulatory requirements for a region, the boundary of the supply chain based on the function of the product under evaluation, identifying the role of all stakeholders involved in the lifecycle of the product, and collecting product and site-specific information wherever possible. The results should then be used in creating a CSR policy that ensures negative impacts are minimized and positive impacts are maximized. For instance, S-LCA can identify hotspots in the supply chain such as child labor and by leveraging CSR initiatives to direct funds towards establishing schools and opportunities for the workers’ children to be engaged safely while getting benefits of being close to their parents/ guardians. S-LCA can also guide decisions on material selection, manufacturing processes, supply chain optimization, and product design for improved social sustainability. Additionally, since CSR reporting is not always verifiable or standardized, S-LCA can help answer questions like how far the supply chain responsibility goes and where to find the solutions. For instance, when evidence emerges of unfair labor practices through S-LCA, companies can take the effort to identify better suppliers who follow the expected code of conduct and make the audit reports transparently available. Hence, S-LCA promotes transparency and accountability 18 by engaging stakeholders and considering legal and regulatory compliance to ensure all business practices align with global expectations. The remaining section will highlight factors that could help in integrate S-LCA with CSR such as regulations, managers, employees, and consumers. 4.1. What is to be safeguarded: Defining areas of protection through regulations International, national, and regional regulatory efforts play crucial roles in promoting social responsibility within the textile sector. International bodies like the United Nations, ILO, and the Organization for Economic Co-operation and Development (OECD) set global standards and guidelines for social responsibility, with ILO's Fundamental Conventions establishing core labor rights. Initiatives like the OECD Due Diligence Guidance for Responsible Supply Chains encourage transparency and responsible sourcing, guiding companies in managing social risks across complex supply chains. At a national level, many countries enact laws addressing labor rights, workplace safety, and related social issues in the textile industry (de Abreu, 2015). For instance, Pakistan’s Protection against Harassment of Women at the Workplace Act, 2010 provides a procedure to file a complaint for sexual harassment in the workplace. The Equality Act of the United Kingdom, enforced in 2010, protects employees against discrimination in the workplace at every stage of employment. The Fair Labor Standards Act of 1938 passed in the US gives a provision for minimum wage and overtime pay for work over forty hours. Additionally, regulations governing the import and export of textiles often incorporate social responsibility criteria, discouraging practices like forced or child labor. Governments also establish labor standards and conduct audits to verify compliance with international and national labor laws. Environmental regulations such as Clean Water Act (US, 1972) and National Air Quality Action Plan (China, 2014), though primarily focused on the environment, indirectly promote social responsibility by impacting worker health and community well-being. Tax incentives and other benefits may also be offered to companies demonstrating strong social responsibility practices. Further, public procurement policies in some countries favor suppliers with verifiable social responsibility records, encouraging responsible practices to access public sector markets. Examples include the Act on Public Procurement and Concession Contracts implemented in Finland in 2016 and 19 Public Procurement Act from the Netherlands implemented in 2012. Industry associations and coalitions work alongside regulatory bodies to develop and enforce social responsibility standards within textile sector. Therefore, the regulatory efforts provide a comprehensive framework for advancing social responsibility in the textile industry, establishing clear expectations, incentivizing responsible practices, and holding companies accountable for their social impacts. This contributes to a more sustainable and ethical industry overall. Advancing CSR that is integrated with S-LCA requires establishing clear standards and expectations for ethical social and environmental conduct in business practices. Several regulatory efforts have been undertaken which determine the compliance strategies that businesses have to adhere to while framing the CSR policies and these also aid in creating the PRPs for a RS-S-LCA. In this section, some of the policies are listed. 4.1.1. Human rights due diligence The UN Human Rights Council’s Guiding Principles on Business and Human Rights, published in 2011, promote Human Rights Due Diligence (HRDD), which gives clear responsibilities to governments and businesses to protect human rights. HRDD is used by companies to frame CSR policies that ensure human rights in all their global activities, relationships, and value chains. The HRDD, coupled with robust corporate endorsement of the Sustainable Development Goals, has helped companies to identify, prioritize, and address social risks within their value chains. HRDD has also played a significant role in enhancing social responsibility by helping companies demonstrate their commitment to meeting legal and ethical obligations while also to respecting and safeguarding human rights across their operations, supply chains, and interactions. HRDD encourages organizations to engage with a broader range of stakeholders, including affected communities, workers, NGOs, and local authorities, to identify and address potential human rights risks ensuring transparency and stakeholder inclusion in CSR. It strengthens risk management processes and ensures a more comprehensive approach to framing CSR initiatives. HRDD broadens the focus on the entire value chain, from suppliers to customers, in assessing human rights impacts and underscores the importance of responsible sourcing and production. HRDD also requires organizations to disclose information about their efforts to identify, prevent, and address human rights violations, which enhances accountability and 20 promotes ethical practices. Incorporating HRDD into CSR policies helps companies maintain a positive brand image and reputation by demonstrating their commitment to respecting human rights, which is of increasing importance to consumers and investors. HRDD aligns with the SDGs, particularly Goal 8 (Decent Work and Economic Growth) and Goal 16 (Peace, Justice, and Strong Institutions), fostering constructive collaboration between CSR efforts and global sustainable development priorities. 4.1.2. Circular Economy Action Plan in European Union In the European Union, Circular Economy Action Plan or CEAP was introduced in 2020. It primarily focuses on reducing environmental footprint through improved raw material consumption, promoting recycling and upcycling, minimizing waste generation throughout the product life cycle, use of eco-friendly materials, and addressing issues like chemical management, water consumption, and greenhouse gas emissions. These measures will target the health and safety of various stakeholders. However, it also includes increased transparency and traceability measures which will help address issues like unethical labor practices. CSR policies can play a crucial role in the adoption and implementation of the CEAP and EU Strategy for Sustainable and Circular Textiles by driving internal commitment towards sustainability and circularity within the textile supply chain. 4.1.3. Extended Producer Responsibility The fashion industry's transition to an effective and sustainable circular economy requires a complex mix of policy initiatives. Key to this is implementing an Extended Producer Responsibility (EPR) regime, shifting environmental impact costs from taxpayers to producers. The EPR schemes, already in place for packaging and electrical goods, are undergoing reforms, with new rules coming in 2024. The EU aims to extend EPR to fashion and textiles, seeking feedback from industry stakeholders through consultation (ongoing work in years 2022-2024). While the industry supports EPR, the cost should incentivize sustainable practices, penalizing harmful or difficult-to-recycle materials. Eco-modulation can encourage eco-friendly choices, discouraging excessive waste. Eco-labelling can inform consumers about garment durability, repairability, and recyclability. Revenue generated by EPR should be reinvested in industry support, eco-design principles, and improved recycling infrastructure. By banning textiles from 21 landfills and moreover promoting recycling and innovative practices, we can move towards a more sustainable balance in the textile and fashion sector. 4.1.4. EU Sustainable textile strategy In EU European regulators have had a strong motivation to push the industrial development towards CE and lately the focus has been on the textile sector. Especially the huge growth in environmental impacts caused by imported fast fashion has caused a discussion. The European Commission has initiated the EU Strategy for Sustainable and Circular Textiles as part of the EU Green Deal’s Circular Economy Action Plan, CEAP (Directorate-General for Environment, 2022). The EU Strategy for Sustainable and Circular Textiles promotes steps that may reduce the negative impact of textile products over their entire life cycle and support a green and digital transitions in the sector. The EU Strategy will also boost textile waste collection and recycling. It will also provide a “mandatory minimum” regarding the quantity of recycled fibers to be used in all textile products and encourage companies to make products with longer lifetime by making them easier to repair and recycle at end of life. Apart from these, the policy is targeting many environmental initiatives such as preventing the release of microplastics and destroying unsold/unused garments. It also provides tools to control ‘greenwashing’ to protect consumers, and other environmental and labor concerns across the value chain. Policy goals can increase local employment (e.g., in garment repair business, in textile collection and sorting) yet there is a risk that some of these works will move to developing countries, especially the sorting and recycling of textiles. Currently “the Global South produces fibres and textiles, and garment assembly work is located there, but the garments are produced for consumers in the Global North. The notion of economic development is rooted in Western colonial capitalist narrative and this grounding prevents improvements to the social side of sustainability” (Niinimäki, 2023). Accordingly, there is a risk that Western world transport the social impacts of CE and textile recycling to other countries and through this continues the colonial message and power play run by the Western world. The used clothing from EU is exported to Ghana, Ukraine, Pakistan, United Arab Emirates and Nigeria with the aim that these garments can be used again, yet the reality is that only 30-65% of used clothing can be re-sale and rest are dumped or burnt (EEA European Environment Agency, 2023). The targets such as improving gender equality, and 22 improving worker conditions, fall under the ambit of CSR initiatives that could be undertaken by a company. 4.1.5. Corporate Sustainability Due Diligence Directive The Corporate Sustainability Due Diligence (CSDD) Directive was introduced in 2023. It directs large companies to reduce the negative impacts on human rights and the environment occurring in their own operations and the associated supply chain. The specific initiatives under CSR could be related to labor upskilling or reskilling and training for new skills, which improves diversity in the labor. In the past decade, there has been an attempt by organizations to direct CSR towards fulfilling the sustainable development goals (Kumari & Singh, 2023). The three SDGs that may be targeted by textile companies through their CSR efforts are sustainable production and consumption (SDG12), reducing water consumption (SDG6), and ensuring decent working conditions (SDG8). 4.2. Who is to be safeguarded: Defining stakeholders The primary difference in the strategies for framing CSR policy vs an S-LCA method is the definition of stakeholders. While CSR defines stakeholders as groups or individuals that can affect or are affected by the activities of an organization (de Abreu, 2015), the UNEP/SETAC guidelines suggest that stakeholders include anyone who can influence or is influenced by the activities taking place over the entire lifecycle of a product or process (UNEP, 2020). The role of stakeholders in framing CSR policies is listed in this section. 4.2.1. Role of managers Managers often prioritize CSR policies for optimal allocation of resources. Most of the initiatives for CSR have focused on the environmental initiatives including waste management, reducing pollution, minimizing chemical discharge, organizing tree plantation drives, and other “cleanliness drives” such as for a river or beach or public parks. Other than this, there is a focus on better material procurement through organic seeds purchased for cotton cultivation. Companies are also striving to ensure no discrimination based on caste, religion, gender, and other perceived forms of identity. Several managers responded that although child labor exists, 23 it is a result of poverty rather than an intent of hiring young workers (<12 year) and is actively being reduced by companies (Chawla, 2019). 4.2.2. Role of consumers, local communities, and society Consumerism has been a key driver in the fashion industry that is often related to the “aspirations of symbolic lifestyle,” which makes it difficult to bring about change (Thorisdottir & Johannsdottir, 2020). However, a closer look at consumer attitude as a driver for the sustainable clothing shows that there is a concern about the supply chain transparency especially regarding ethics of material sourcing and social effects on the manufacturing workers and communities (Byrd & Su, 2021). In terms of age-based differences, younger generation chooses affordability before the environmental and social concerns but there is a positive attitude across all ages and nationalities towards ensuring sustainability in clothing industry (Byrd & Su, 2021). In another study, Su et al. (2019) report that millennials from the US are more aware sustainability issues in the apparel industry than their Chinese counterparts. Therefore, brands could focus on educating all consumers about their sustainability practices to ensure consumer loyalty. The regional differences were evaluated by Chawla (2019), who reported that European consumers (specifically, French, German, Slovene and Swedish) were more likely to support responsible businesses compared to their US counterparts. Indian consumers also expect a fair treatment of workers/employees but are more likely to value philanthropic activities than legal or ethical CSR activities. Consumers interested in sustainability are willing to pay a premium on the goods made from socially responsible practices. 4.2.3. Role of workers/employees Although textile industries focus on clients and consumers, they should also ensure employees and other stakeholders (shareholders and suppliers) are prioritized since CSR policies that focus on treating employees fairly with provision of funds for education, social welfare, healthcare, skill development, and women empowerment create a positive attitude in employees and in their decision to work in an organization. However, in the textile sector, farming communities have been ignored by CSR policies which has led to poverty, lack of clean drinking water, low standards of living, poverty, and unemployment (Chawla, 2019). 24 5. Case studies for S-LCA in textile industry Several cases have reported the successful application of S-LCA for identifying social hotspots in textile supply chains. The key learnings from these studies are presented in this section and Table 3, based on which companies have identified their social responsibility. In case of SMEs that are the primary employer in a region, there was a social responsibility of safeguarding its workers and communities (Lenzo et al., 2017). But there was an issue of reliable data for suppliers and consumers especially at small business level. However, the length textile supply chain means no company could prevent all the social problems at national or global scale with its secondary suppliers and business partners. When comparing handloom industries with power loom (SMEs and large industries), it was reported (Mahiat et al., 2022) that handloom was more sustainable both environmentally and socially. The handloom industries were more socially inclusive than the power loom industries, especially regarding employment opportunities. Specifically, handlooms offered more local employment, heritage conservation, and female employment, but the rate of migration associated with handlooms was higher since there were only a few of these operational in Bangladesh (at the time of publication) since power loom offered larger scale of production. Conversely, power looms offered better safety and working conditions including fixed working duration. Muñoz-Torres et al. (2023) reported that in the textile sector, typically workers’ safety is a bigger concern in the supply chain, than other issues like collective bargaining and fair income. This was also reported by Van der Velden & Vogtländer (2017). Corruption was also highlighted as a major issue in the supply chain especially in the phases taking place in low-income countries and in parts of Eastern Europe (Martin & Herlaar, 2021). Zamani et al. 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Hotspot identification in the clothing industry using social life cycle assessment—opportunities and challenges of inputoutput modelling. The International Journal of Life Cycle Assessment, 23(3), 536–546. https://doi.org/10.1007/s11367-016-1113-x 9. Acknowledgement The authors acknowledge the funding received from the European Union’s Horizon 2020 research and innovation program under grant agreement No [101060343] Textile Recycling EXcellence, T-REX project. 10. Declaration of Generative AI and AI-assisted technologies in the writing process During the preparation of this work the author(s) used ChatGPT to improve the readability of certain sections. After using this tool/service, the author(s) reviewed and edited the content as needed and take(s) full responsibility for the content of the publication.