Latest news on COVID-19
‘Now is the time for solidarity.
We will either beat COVID-19
together or not at all.’
- Federal Ministry for Economic Cooperation and Development
Our world has been turned upside down.
COVID-19 poses a global threat to human health.
Social, cultural and economic life has ground to a halt, which no one would have thought possible until recently. The COVID-19 crisis is affecting each and every one of us, with the weakest in society being the hardest hit, in Germany, but particularly in developing countries. The sales slump in industrialised nations is leading to the cancellation of orders in countries such as Bangladesh. Payments are no longer being made for goods already manufactured. This is all leading to mass redundancies. It is now becoming especially clear that exploitative working conditions and low wages pose a direct threat to the livelihood of textile workers in the event of a crisis. Their wages barely cover living costs, let alone allow them to set aside savings for times of hardship. This is why we need minimum wages and protection against unfair dismissal, two of the social criteria of the Green Button.
We have a responsibility for those at the beginning of the supply chain and all the more so in times of crisis. The German Federal Ministry for Economic Cooperation and Development (BMZ) has been working for several years through the Green Button and the Textile Partnership to promote greater sustainability in the textile industry. It will not allow a virus to end this commitment. Rather, the pandemic illustrates just how important this work is. BMZ is currently preparing to introduce measures aimed at alleviating its worst effects.
Below you will find an overview of the impact of the COVID-19 crisis on people in the supply chain and on the global textile industry.
Impact in the production countries
The pandemic is illustrating in dramatic fashion just how dependent we are on one another in the global economy. Bottlenecks in the supply of raw materials from China, the collapse in demand for clothing on the part of Europe, China and the United States, and lockdown restrictions in the production countries themselves have forced the closure of tens of thousands of textile businesses. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) estimates that some EUR 3 billion worth of orders have been cancelled in Bangladesh alone, affecting over two million workers (as at 20 April 2020). According to the Garment Manufacturers Association in Cambodia (GMAC), 80 per cent of clothing companies had suspended or cancelled orders from Cambodian suppliers. These dramatic events in textile supply chains are not limited to individual countries, but rather are affecting all major production countries in Asia, Central America and Eastern Europe.
The livelihoods of millions of workers are hanging in the balance as a result of redundancies and wage cuts. Clothing suppliers from Sri Lanka report that they are having to lay off 30 per cent of their workers. It is forecast that between 30 and 50 per cent of the industry’s 2.8 million workers in Viet Nam will be laid off. Employees in the textile industry do not generally have access to social security or health insurance. Textile sector workers are also exposed to a higher risk of infection due to poor ventilation systems and a lack of hygiene equipment in factories, and no recourse to continued wage payments in the event of falling ill.
Impact on textile businesses
All textile dealers and brands throughout Germany had to close their brick-and-mortar stores to help contain the pandemic. Some 80,000 retail outlets of 33,000 businesses in the German textile, footwear and leather industry have been affected by the lockdown, representing a total revenue of almost EUR 50 billion and a total workforce of 440,000 individuals. This is presenting enormous challenges to the textile industry. Online revenues have also slumped. This is leading to dramatic sales losses and leaving ten million items of clothing unsold each day in Germany alone. The figures show the disproportionately severe impact the COVID-19 is having on the textile industry compared with other sectors: According to a study by McKinsey, consumers in Europe and the United States are cutting spending on clothing by over 65 per cent while only reducing their overall spending by 40 per cent. Online revenues have also fallen by between 5 and 20 percent in Europe, 30 and 40 per cent in the United States, and 15 and 25 per cent in China. Consumer behaviour is dominated by panic buying, with clothing being low on the list of priorities. Many textile business, especially small and medium-sized enterprises, are fighting for survival.
The role of consumers
Showing solidarity at the moment means keeping your distance while still demonstrating closeness and responsibility.
Buying sustainably produced textiles not only supports seamstresses and tailors in countries such as Bangladesh, but also those companies that are striving to achieve socially and environmentally sustainable manufacturing processes. The government-run textile label Green Button makes sustainably produced clothing easily recognisable. It is attached directly to the product, making it easy to spot when you are shopping – in a reliable and consumer-friendly way.
Even if you are not browsing textile shops looking for sustainable brands for the time being, you can still continue to support these businesses. Buying vouchers for sustainable shops in your local area would be one way of doing so, as would making prudent and sustainable online purchases. Do you want to know where you can buy textiles certified with the Green Button label? You can find an overview on our consumer page of all brands that already offer certified products.
COVID-19 and the Green Button
What support is being offered to companies already offering certified textiles? What impact is the COVID-19 crisis having on companies currently undergoing the Green Button certification process? Is COVID-19 a topic for company audits? Find answers here:
Even in the midst of the COVID-19 pandemic, companies are still required to carry out due diligence in the textile supply chain. The main focus at present is on ensuring that companies’ existing management systems are capable of adequately tracking the risks of COVID-19 to humans and the environment in the supply chain and that companies manage these risks appropriately. This also includes reflecting on purchasing decisions already made. The lessons learnt from the crisis should be used to directly inform improvement processes and this should be set out in the audit.
Many companies in Germany switched to producing masks and personal protective equipment to assist in the fight against COVID-19. Several firms now produce masks that have been certified with the Green Button label.
Auditing the companies
The Green Button audits take place as part of a full audit. This requires that the applicable distancing rules and travel restrictions can be observed and that the company and the certification body agree to an on-site audit.
In light of the restrictions imposed as a result of the COVID-19 pandemic, BMZ agreed back in late April as the certifying body to also provide the option of carrying out initial certification in two steps. The first step provides for the use of a remote audit in preparation for certification, for example, in the form of an online video conference. In order to continue to comply with all applicable ISO standards, the second step must still involve an on-site audit in this case as well. A number of remote audits have already been conducted successfully.
Regular monitoring of businesses: BMZ covers costs
The COVID-19 crisis is hitting the textile industry especially hard. Consequently, BMZ will cover the costs of conducting regular checks of the Green Button criteria, known as monitoring audits, until 30 June 2021.