Risk mitigation in the supply chain 

At Nybo Workwear, we highly value that all textile workers and parties involved in the textile industry have decent living conditions. Therefore, we perform a thorough risk assessment at least yearly, and we proactively support our suppliers and stakeholders in mitigating risks of violations in the supply chain.

On this page, we will report our most severe risks and grievance information. 

Riskprocedure 

At least yearly, Nybo Workwear conducts a thorough risk analysis. In creating the analysis, our tier 1 and tier 2 suppliers participate with knowledge and concrete information. 

The risk analysis is conducted in four sections: 

• A national risk assessment based on desk research. 

• An individual risk assessment of each of our tier 1 suppliers and their supply chains. 

• A risk assessment of the processes needed to create our products. 

• A risk assessment of our sourcing and procurement procedures. 

Proces of risk mitigation 

The analysis was conducted in September 2024. In this revision, Tunisia was added to the analysis as we have opened manufacturing activities in the country. 

In non-prioritized order, the main risks found were:

Risk 1: Compensation packages for lowest-paid textile workers are insufficient for a dignified living 

All suppliers paid above the minimum wage published by their local governments. At some suppliers, the risk of some employees receiving payment slightly below the living wage was found. It is likely that this risk can be falsified and eliminated when calculations for the local areas are completed. The process of creating calculations has been started. If the risk is proven, we will initiate a process to eliminate the risk together with our suppliers. 

Risk 2: Chinese tier 2 suppliers aren’t being certified on social working conditions

At Nybo Workwear, we have a policy that all our suppliers are certified on social and working conditions. During the risk assessment, it was concluded that some Chinese suppliers didn’t hold a certificate from a social audit body. We have initiated the process of supporting our suppliers to acquire the necessary certifications. 

Risk 3: Grievance mechanisms at certain factories aren’t fully anonymous 

During the risk analysis, it was found that some suppliers didn’t have fully anonymous grievance mechanisms in place for all employees. This decreases employees' ability to report violations. We are currently supporting these suppliers in creating and implementing grievance mechanisms that are both trusted and anonymous. 

Risk 4: Risk of working hours exceeding local law 

During the risk analysis, it was identified that a supplier was at risk of violating the local law defining the maximum number of working hours allowed on a monthly basis. We are currently investigating and initiating processes to avoid this risk in the future. 

Risk 5: Consequences of greenhouse gas emissions 

In our manufacturing countries, Laos, China, and India, they experience floods and increased heat waves due to the consequences of years of increased greenhouse gas emissions. At Nybo Workwear, for the last three years, we have calculated and decreased our CO2e levels both at our trade office and our manufacturing facilities in Latvia. Therefore, we have offered our experience and knowledge to help our suppliers do the same.

Learnings from OECD Risk Analysis

Through the risk analysis, we have gained critical learnings regarding supply chain risks. Learnings that togehter with the five identified risks will guide our future work on supply chain risk mitigation.

1. Priority Risk Countries:
Among the analyzed countries, we have identified China, India, Pakistan, Turkey, and Tunisia as our priority risk countries. These countries pose the highest risks due to factors such as excessive overtime, discrimination, greenhouse gas emissions, living wage compliance, and occupational health and safety concerns.
 

2. Wage Compliance and Living Wage Gap:
A significant finding is the ongoing gap between paid wages and living wages. Despite efforts by our suppliers, wages often fall short of meeting the basic needs of workers, which continues to be a critical challenge that needs focused attention and collaboration.
 

3. Grievance Mechanisms:
While our suppliers have grievance mechanisms in place, there is a noticeable absence of backup or alternative systems. This could limit the effectiveness of existing solutions and hinder workers from seeking resolutions in cases where the primary mechanism is inadequate.
 

4. Occupational Health and Safety:
Although health and safety procedures are formally established across many of our suppliers, safety remains a substantial concern. We have identified risks such as inadequate implementation and enforcement of safety standards, which expose workers to potential hazards.
 

5. Excessive Overtime in the Global Textile Industry:
Excessive overtime continues to be a widespread issue in the global textile industry, and our analysis confirms this remains a major risk. Workers in many regions, particularly in our priority countries, often face extended working hours due to production demands, leading to health risks and compromised work-life balance. This issue requires continuous attention to ensure fair and safe working conditions for all workers.
 

6. Environmental Impact and Greenhouse Gas Emissions:
One of the critical gaps we discovered is the lack of concrete plans and initiatives to address greenhouse gas emissions. Many of our suppliers have yet to integrate sustainability measures or develop strategies to reduce their carbon footprint, which is a growing concern as we push towards sustainable production practices.
 

These learnings guide our ongoing efforts to work collaboratively with suppliers to close these gaps and strengthen our due diligence processes, ensuring that risks are mitigated and that progress towards ethical and sustainable supply chains continues.