The complexities of BHR compliance can disproportionately impact smaller companies and businesses operating in informal economies. They may lack the resources, knowledge, and capacity to implement due diligence processes, obtain certifications, and navigate complex regulatory landscapes. This can limit their access to global markets and hinder their growth potential. To reduce the disproportionate burden and create fairer, sustainable supply chains, fostering equitable partnerships rooted in mutual respect, trust, and a shared sense of responsibility is essential. These partnerships can guide collective action and collaboration across all levels of the value chain, ensuring that all actors work together in a coordinated response to regulatory expectations related to BHR requirements.
The success of Nepal’s carpet industry in accelerating progress to address child labour effectively is a good example of how equitable partnerships throughout the value chain can drive impact. Bringing together regional and global stakeholders, provincial and federal governments, local communities, and consumers backing, such partnerships can enable a more equitable distribution of benefits across the value chains.
Equitable partnerships within and across supply chains are needed to promote equitable cost-sharing for addressing sustainability challenges, offering collaborative solutions which can drive collective action throughout the value chain.
Key conclusions:
- BHR requirements and standards need to shift from top-down compliance models to inclusive, bottom-up approaches that prioritise worker voices and local suppliers’ needs, particularly in high-risk contexts within emerging markets. Engaging with local civil society organisations, trade unions, and communities would help create a shared understanding of good business practices at the supplier level.
- Buyer businesses should ensure that the financial burden of compliance, certification and risk mitigation is shared and resourced equitably across the value chain, including through conducting a true assessment of production cost.
- Buyer businesses should engage with suppliers meaningfully, through responsible sourcing dialogue and procurement practices, such as fair pricing, stable order and fair payment terms. Long-term relationships can help incentivise progress on BHR, particularly in high-risk contexts.
- Local, regional and national governments have a role to play in promoting responsible business practices and discouraging local producers in EMDEs from exiting global supply chains or seeking less regulated markets.