How YESS Helps Brands Meet Evolving Regulatory Requirements to Implement Due Diligence in Their Cotton Value Chains
New regulations in the EU and other regions require companies to adopt a due diligence approach across their own operations and value chains, putting increased pressure on textile brands to ensure that their complex, multi-tiered suppliers are ethical, transparent, and compliant. This can be fairly difficult because brands frequently lack direct relationships with their fabric or yarn manufacturers. The recent passed EU Corporate Sustainability Due Diligence Directive (CSDD) requires companies to address human rights and other risks throughout their entire value chain, all the way to the dirt.
As brands look to strengthen their responsible sourcing strategies and meet regulatory requirements, RSN’s due diligence initiative, YESS: Yarn Ethically & Sustainably Sourced, offers essential tools and guidance for mid-tier suppliers--their mills--to identify and address forced labor in cotton production (at farm level). Once the mills have completed the e-learning training and prepared adequately, they will undergo a third-party in-person assessment to demonstrate they meet the requirements of the YESS Standards.
The YESS Standards are based on the OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector, which is a sector guidance framework for the CSDDD. By joining YESS as members, and enrolling mills in their value chains into the program, brands can meet their cascading due diligence requirements, address farm-level risks, and contribute to ethical sourcing for the raw materials in their products.
Understanding the CSDDD Regulatory Landscape and YESS Alignment
The CSDDD sets rigorous criteria for companies to conduct due diligence across their entire value chains. Businesses must actively manage human rights and environmental risks, including forced labor. The following key requirements under the CSDDD are directly addressed by YESS, ensuring due diligence conformance and responsible sourcing in the middle tiers of the value chain:
1. Identifying and Prioritizing Risks: Companies must evaluate human rights and environmental risk throughout their value chains, focusing on forced labor, child labor, and environmental damage, including within indirect supplier relationships.
YESS Alignment: YESS cascades due diligence through the middle-tiers of retailers’ and brands’ value chains. YESS emphasizes comprehensive risk identification by fabric mills (Tier 2) and spinning mills (Tier 3) with their own sourcing of cotton inputs, especially from regions known to have higher risks of forced labor. Tools like the YESS Standards, checklists, e-learning, and YESS Assessment Workbook enable mills to evaluate risks of their suppliers and materials, and implement proactive management systems to address identified risks.
2. Embedding Due Diligence Policies: Businesses (just large companies, for now) must establish a publicly accessible policy on due diligence that aligns with internal management systems to ensure consistent application across operations.
YESS Alignment: YESS requires mills to integrate responsible business practices into their sourcing operations and to publicly publish their responsible cotton sourcing policy. Examples of Cotton Sourcing Policies in English and Urdu are available on Nishat Mills’ website. Companies working with mills in the YESS program will meet due diligence requirements because the mills in their value chains are creating, implementing, and publicly sharing their own responsible sourcing policies.
3. Implementing Preventative and Mitigative Measures: After identifying risks, companies must take preventative and corrective actions, such as training suppliers, revising procurement practices, or implementing additional oversight in higher-risk areas.
YESS Alignment: YESS offers capability-building resources, such as e-learning modules and in-person training, as well as guidance to train the mills’ suppliers. This equips mills with the knowledge and support to meet global due diligence requirements. To be in full conformance with the YESS Standards, mills need to work with local stakeholders to develop and implement their own risk mitigation plans. As a result, mills are prepared for and working in collaboration with others to prevent and mitigate risks effectively.
4. Continuous Monitoring and Tracking: Companies must regularly monitor and assess their due diligence systems through assessments and supplier evaluations to ensure ongoing compliance with commitments.
YESS Alignment: To stay conformant, YESS mills must undergo an annual third-party assessment. The YESS Assessment includes a walkthrough of the facility, and a review of the mills’ management systems, risk mitigation plans, and transaction documents for a sample of all cotton inputs procured by the mill over the past year. The YESS Assessment ensures continuous improvement, builds trust with stakeholders, and aligns with regulatory expectations for due diligence implementation. A list of mills that have undergone YESS Assessments appears on RSN’s public list of YESS Participating Mills.
5. Detailed Reporting Obligations: Public disclosure of due diligence activities and their impact is mandated, ensuring transparency for stakeholders, consumers, and regulatory bodies.
YESS Alignment: YESS mandates that conformant mills publicly report on their due diligence activities and update their reports annually. An example of a publicly-available Due Diligence Report is on Shahi Exports’ website. Having publicly available reports allow mills to demonstrate to brands and other stakeholders how they are meeting the CSDDD disclosure requirements and shows their commitments to ethical sourcing practices.
6. Access to Remediation: Companies are responsible for addressing grievances related to human rights violations, either directly or through supplier engagement and collaboration, and may need to implement compensation mechanisms for those impacted.
YESS Alignment: When actual harm linked to the mill is identified, the mill must cooperate in providing remediation. Since the harm that is being remediated with YESS is forced labor on a cotton farm, the spinning or fabric mills likely would be cooperating with their suppliers, local civil society organizations (CSOs), and local government officials, as well as the mills’ customers including garment manufacturers, brands, and retailers. YESS provides for and encourages collaboration among all stakeholders to implement remediation. By joining YESS, brands will be able to demonstrate their contributions to remediation and their commitments to resolving issues effectively.
Building Resilience with YESS as Regulatory Requirements Evolve
YESS offers brands a scalable, globally recognized due diligence framework that aligns with evolving regulatory standards. As mills socialize a risk-based due diligence approach internally, together we will expand YESS to address additional risks like environmental harm, and expand the application to other materials like polyester.
By joining YESS as members, and bringing their mills into the YESS program, brands can meet legal requirements, minimize risks, and contribute to ethical sourcing. As the regulatory landscape continues to evolve, YESS’s framework ensures that brands remain proactive, resilient, and positioned for success in an increasingly compliance-driven market.
For more information on joining as a member of YESS to enhance your due diligence strategy, visit Responsible Sourcing Network.