3COMPLIANCE. REGULATION AND SELF-REGULATION IN THE FASHION INDUSTRY Flashcards
What does ESG stand for?
Environmental, Social, and Governance.
What are the key components of good governance in ESG?
Ethics, compliance, accountability, and transparency.
What are the main environmental concerns in ESG?
Eco-efficiency, climate action, biodiversity, and circular economy.
What social aspects are considered in ESG?
Human and labor rights of employees, suppliers, community investing, and diversity.
What does compliance mean in the context of ESG?
Adhering to a set of corporate policies, processes, and procedures to ensure adherence with industry or jurisdictional norms.
What is the difference between hard law and soft law in ESG?
Hard law is legally binding and judicially controlled norms, while soft law refers to quasi-legal norms with weak enforcement, like self-regulations and guidelines.
Why is ESG compliance important for fashion companies?
Due to regulatory obligations, risk prevention, and opportunities to improve brand reputation.
What are climate risks in the context of legal obligations for ESG?
Physical risks (extreme weather), existential risks (obsolescence in a decarbonized world), transition risks (towards a low-carbon economy), regulatory risks, and reputational risk.
How can companies be criminally liable under ESG regulations?
Companies can be directly responsible for crimes committed by their employees or subsidiaries, and the board of directors can be liable for employees’ offenses.
What are examples of directly non-compliant behaviors in ESG?
Sanctions for polluting, discriminating against employees, or lacking integrity in corporate dealings.
What are the opportunities for companies being compliant with ESG norms?
Increased social legitimacy, improved stakeholder relationships, and enhanced corporate reputation.
What is a regulatory tsunami in the context of ESG?
A significant increase in the intensity and volume of regulations related to ESG performance, particularly in the EU.
What does the transition from soft law to hard law in ESG entail?
Moving from voluntary responsibility guided by self-regulation to mandatory compliance enforced by national laws and EU directives.
What is greenwashing and how is it regulated?
Greenwashing is making misleading claims about environmental benefits. The EU has new laws forbidding it as an unfair commercial practice.
What is the impact of the 2013 & 2018 Bangladesh Accord on ESG compliance?
It is a legally-binding agreement aimed at ensuring safety in the garment and textile industry in Bangladesh, signed after the Rana Plaza building collapse.
