In a world increasingly focused on sustainability and social responsibility, companies find themselves at a turning point. The demand for transparency, legal compliance, and ethical standards is rising rapidly. At the same time, companies must grapple with requirements such as the supply chain law and EU reporting obligations.

With regard to the Supply Chain Act in Germany, the minimum number of employees required to comply was reduced to 1,000, effective January 1, 2024, meaning that significantly more fashion companies are now subject to reporting requirements. Companies must identify, assess, and prioritize the risks in their supply chains. In addition to protecting human rights, the law also mandates preventive and remedial measures for environmental protection, as well as regular reporting on supply chain management. Even companies with fewer than 1,000 employees are advised to gradually implement the requirements of the law to ensure transparency and respect for human dignity.

From today’s perspective, it can be assumed that the European Union will introduce the Digital Product Passport for the fashion industry in the first half of 2027; the question of “if” is no longer relevant – only the “when” remains open. The requirements of the DPP make it clear that transparency in the supply chain must be proven for every product, and consequently, fashion companies cannot avoid implementing integrated CSR solutions. The already substantial volume of data will increase significantly – in-depth analyses suggest that the data volume will increase by a factor of 6-8: Ultimately, at least two data streams will need to be managed.

1) the information on the product for the consumer and

2) the information on the product for recycling.

The days when corporate social responsibility (CSR) was seen as a mere add-on are over. Today, the business world understands CSR as a modern business concept that promotes the integration of social, environmental, and economic aspects into value creation. CSR is no longer seen as opposed to profit – it brings real added value for companies, customers, and employees.

With the aim of increasing sustainability and efficiency in the supply chain, Corporate Social Responsibility was developed and implemented as a software solution that goes far beyond traditional systems and specifically aims to make processes and data in the supply chain transparent and to make risks assessable.

Powerful CSR software is designed to make the relationships and data across the entire supply chain visible. Partners create profile data, provide information about their capabilities, and share detailed information about production facilities and potential subcontractors. A key benefit lies in managing certifications, monitoring audit processes, and supporting and ensuring that production partners are working on improvements. Another crucial advantage is that all data, processes, and communication are handled in a single, seamless environment.

Fashion companies typically source globally, and a partnership-based collaboration in the sense of sustainability succeeds when partners can actively participate – the input of relevant information by the suppliers becomes a collaborative solution that allows companies to save valuable resources and access current data without overburdening internal working capacities.

The result: a transparent supply chain for every product and every procurement order, at every stage – from raw materials to the production partners involved. This builds trust and creates the foundation for the Digital Product Passport. Suppliers also benefit from this feature, as they

They are not only able to efficiently collect their data, but also to maintain an overview of the collected information at all times. This transparency promotes personal responsibility and enables suppliers to identify potential weaknesses early on and implement improvements independently.

Today, it is essential for fashion companies to have complete insight into sustainability and quality-related processes in their supply chain at all times – a CSR system serves as an exemplary early warning system for certificates and audits. A modern CSR system provides timely information about certificates and deadlines, enabling companies to react before problems arise. This function is crucial for ensuring compliance at all times and minimizing risks in the supply chain. The CSR system can track corrective actions until requirements are met. Through its clear overview and proactive approach, the system ensures that all necessary steps are taken.

Managing certificates significantly reduces administrative effort and drastically reduces risks.

An optimized Corporate Social Responsibility (CSR) system for digital process and workflow management enables companies to achieve their CSR goals more efficiently and transparently. The optimizations primarily focus on the automation, standardization, and traceability of CSR processes. These processes often require collaboration among multiple stakeholders both within and outside the company. Automated workflows allow for the efficient distribution of tasks, and responsibilities can be clearly defined and tracked. Digital workflows automatically capture all steps and create a complete record of CSR activities.

The rapid integration of new partners and the evaluation of existing partners are crucial for an agile supply chain. A modern CSR system enables supply chain partners to be onboarded via a digital process. A staged, client-controlled procedure keeps the onboarding process streamlined.

At the same time, a CSR system enables the evaluation and weighting of partners according to individual criteria, such as audit performance and adherence to corrective actions. The automated evaluation process ensures that clients can objectively decide who maintains a trustworthy partnership.

In a world characterized by rapid change, decision-makers need access to clear and precise data at all times. The dashboards of the CSR system provide a real-time overview of all KPI-relevant data and enable immediate responses to developments. This facilitates informed and future-proof decisions that contribute to the company’s long-term sustainability. Decision-makers should have access to all necessary information anytime, anywhere.

Sustainability is increasingly becoming a strategic advantage for companies. Customers and business partners are placing greater value on transparency and ethical conduct. CSR helps companies use resources responsibly, reduce their ecological footprint, and offer sustainable products and services. This allows companies to create a future-proof foundation and simultaneously increase their attractiveness to consumers and investors.

Furthermore, innovation is fostered, as companies are encouraged to develop sustainable solutions and alternative materials or manufacturing processes. This sustainable transformation opens up new markets and business areas based on ecological and social values. Companies that consistently and strategically integrate CSR lay the foundation for a future-proof business.

Further information can be found at the following link:

https://www.fashion-council-germany.org/reports/status-deutscher-mode-2024