Towards better chemistry in the fashion supply chain
Mid-Term Review of core support grant to the Zero Discharge of Hazardous Chemicals Foundation (ZDHC)
22 June 2021
ZDHC Foundation (the only industry coalition with the goal of eliminating pollution caused by chemicals) was founded in 2015 and since then has developed requisite collaborations, standards, tools and implementation guidance for industry stakeholders to reduce their harmful chemical inputs.
The key objectives of the grant cover four interconnected areas:
- demonstrating the enabling role of chemistry;
- strengthening ZDHC’s organisational capacity;
- widening geographical reach and implementation support to better serve production areas and expand the ZDHC Academy; and
- driving continuous improvement through innovation, pilots and consumer-facing communication.
Partner: ZDHC Foundation
Investment: EUR 1.75 million
Duration: 2018 to mid-2022
Geographic region: Global
While the right organisation has been funded at an opportune time for systemic impact, the interim results of the grant are mixed.
- ZDHC’s business model for sustainability has reached a new level of maturity since 2018. Supply chain stakeholders have endorsed the ZDHC Manufacturing Restricted Substance List (MRSL), with increasing use of the Gateway chemicals database to improve chemical management. Other signals of progress include a sizeable number of manufacturer and chemical supplier contributors signed on to the Leader Programme, and a case study showing rewards going to manufacturers adopting safer production technology. However, conclusive evidence on the business case for the Roadmap to Zero Programme remains to be secured.
- The ‘innovation agenda’ exceeded expectations: grant-supported pilots have yielded useful insights in the form of industry guidelines and new production technologies, reiterating the benefits of the pre-competitive multi stakeholder process.
- The organisation has made progress towards strengthening transparency in the supply chain. For example, the ZDHC Gateway tools have enabled aggregation and sharing of data across apparel and footwear supply chains and the public dissemination of information. However, accountability practices have been inadequate in driving better chemistry. A clear commitment to public disclosure is key to building confidence in the ZDHC business model. Efforts to promote consumer-facing transparency were in formation at the Mid-Term Review.
While the grant has had positive impact on the programme, there is inconsistency in the grant’s ‘core support’ designation and use of a results framework with outcome-related deliverables.
- The grant helped ZDHC set up the systems and processes needed to increase and promote environmental sustainability by minimising the adverse impacts of toxic chemicals on the environment.
- ZDHC’s structure and operational capacity have been strengthened and are now more conducive to accelerating ZDHC’s signature Programme. The grant was built on the foundation of shared interest between ZDHC and Laudes Foundation to advance sustainable chemistry in the apparel and footwear industry. However, there is a disconnect between the programmatic focus of the accountability mechanism, on the one hand, and the core support intent of the grant, on the other. This has constrained ZDHC’s ability to spend on core functions with the flexibility needed.
What did we learn?
- Core support grants require a high degree of mutual trust and mission alignment, a good measure of confidence regarding the partner’s organisational capacity and financial stewardship, and a compatible accountability mechanism.
- Core support grants allow for organisations to support core functions alongside adaptative management and well-timed exit strategies.
- When designing systems change in a supply chain context, three key variables demand careful attention: shared commitment to a desired future, a pathway to get there, and a set of incentives, rewards and assurances to keep the process dynamic.
For Partners & Others
- Access to data among supply chain actors does not automatically lead to behaviour change for the better. Rather, displaying sourcing practices relating to conformant and non-conformant chemicals creates real incentive to change.
- It is important to demonstrate standards through showcasing superior leader performance, for example, by driving actors such as brands.
- Leveraging existing policies and regulations is key when addressing systems change.