A garment travels a long way before it ends up in the store. All parties that a garment passes through are collectively called the supply chain. This is often a complex chain of companies with all kinds of risks. To map out these risks, we do our ‘due diligence’. But what is due diligence, how does it work in practice and how does it work at Kuyichi?

What is due diligence?

Due diligence is a process that identifies the risks regarding labour rights, human rights and the environment of both the country and the region as well as in the company itself and the partners in the chain. The aspects considered are:

Social risks:

“Risks such as child labour, discrimination or poor working conditions.”

Environmental risks:

“Risks such as water consumption, CO2 emissions and animal welfare.”

Governance risks:

“Risks such as corruption, bribery and national legislation.”

Cultural and current risks in both the country and at the chain partner are checked in various subcategories. In addition, you also look at your own business model, products and actions towards chain partners. The ultimate goal of due diligence is to trace risks in the chain and then stop, prevent and limit the negative effects.

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How does due diligence work in practice?

The due diligence process consists of six processes that have been drawn up as guidelines by the OECD. The OECD is an international organisation that is committed to international trade and economic developments. As can be seen in the image, the processes are shown in a circle. This indicates that due diligence is an ongoing process. There are always changes that influence the chain, such as audit results, legislation, crises, etc. In addition, there are always factors that can be improved.

How does Kuyichi do his due diligence?

Kuyichi is a member of the Fair Wear Foundation. Fair Wear provides guidelines on how we should do our due diligence. This is in line with the OECD guidelines. This started with checking our own policy documents. These have been adjusted so that both our responsibilities and those of our supply chain partners are recorded. For a number of years now, we have had a risk analysis at country, chain partner and business model level. In 2024, we will have looked at whether we sufficiently include gender in this. For example, the risk for women is often higher to come into contact with violence and intimidation. Based on the risk analysis, you will prioritise. For example, we have prioritised two themes for social risks that we work on preventively: gender-based violence and intimidation & fair wages.

"No supply chain is perfect, but by continuously improving we ensure a positive impact in the chain."

Due Diligence: a cycle of improvement

Due diligence is not just about risk analysis; it is mainly focused on a continuous process of improvement. For example, we work with our chain partners to check and improve the overall working conditions through, for example, audits and visiting the factories ourselves. We also try to gather additional information through questionnaires to improve the risk analysis. Or we work on increasing knowledge through training for managers and employees. We are proud to collaborate with partners who work with us continuously to further improve. Both socially and environmentally. No supply chain is perfect, but by continuously improving, we ensure a positive impact across the chain.