At Nybo Workwear, we work systematically to identify, assess and prioritise risks to people, the environment and responsible business conduct in our textile supply chains.

The purpose of the risk assessment is not to assess financial or reputational risks for Nybo. Instead, the focus is on where our activities, products, supply chains and purchasing practices may be linked to adverse impacts on people and the environment.

The risk assessment covers our textile supply chain from garment manufacturing and wet processing to textile production, yarn and raw materials. It is updated at least once a year and additionally when significant changes occur, for example new sourcing countries, new materials or major changes in the risk landscape.

How we identify risks

Our risk assessment is based on the significant risks identified for the textile and garment sector in the OECD guidance.

We assess, among other things, the risk of:

• child labour
• discrimination, sexual harassment and gender-based violence
• forced labour
• excessive working hours and overtime
• occupational health and safety
• restrictions on freedom of association and collective bargaining
• non-compliance with minimum wage requirements
• inadequate living wages
• hazardous chemicals
• high water consumption
• water pollution
• greenhouse gas emissions
• bribery and corruption

For each area, we assess how the risk is influenced by the specific country, product, materials, production process and the conditions we know from our own supply chain.

We also analyse our own business and purchasing model, because practices such as forecasting, price negotiations, lead times and order changes can affect working conditions at supplier level.

Our risk assessment therefore combines external country risks, product and process risks, supplier data and risks related to our own purchasing practices.

What information do we use?

We use both external and internal sources of information.

External sources include information and analyses from:

• OECD
• ILO
• UNICEF
• national authorities and labour authorities
• the World Bank
• Transparency International
• international human rights and civil society organisations
• country-specific reports on working conditions, forced labour, child labour, the environment and integrity

Sources are reviewed continuously with focus on their relevance and how up to date they are for the specific country and part of the supply chain.

We combine this information with data from our own suppliers. This includes, among other things:

• audits and certifications
• information on occupational injuries
• working hours and overtime
• wages
• worker representation
• grievance mechanisms and the number of grievances received
• policies on labour and human rights
• climate and energy data
• water consumption and wastewater
• chemicals management
• information about subcontractors and production countries

These data are collected and updated continuously through our supplier management process.

How we assess and prioritise risks

Once we have identified a risk, we first assess the likelihood that it may occur in our supply chain.

We take into account, among other things:

• the general risk in the country
• materials and production processes
• information from the specific supply chain
• existing preventive and mitigating measures
• known incidents, audit findings and grievances
• our own business and purchasing practices
• any gaps in the information available to us

Missing information is not automatically assessed as low risk. If we lack important documentation, we treat this as an information gap that requires follow-up.

We then assess the severity of the risk based on, among other things:

• how severe the potential harm could be
• how many people or how large an environmental area could be affected
• how difficult it would be to restore or remedy the harm

The final prioritisation is based on the combination of likelihood and severity. This allows us to focus our efforts where the risk to people and the environment is greatest.

Affected and vulnerable groups

An important part of the risk assessment is understanding which people may be particularly exposed.

Depending on the country and production stage, this may include:

• women and young women
• migrant workers
• young workers
• temporary and seasonal workers
• homeworkers
• workers with limited literacy
• minorities
• worker representatives
• local communities around production sites with significant environmental impacts

We use, among other things, information from amfori BSCI, OEKO-TEX STeP and SA8000 audits to understand working conditions and the situation of affected groups.

We also receive information on the number of grievances at our suppliers and use Nybo Workwear’s own whistleblower system as an additional channel through which workers and other affected parties can raise concerns.

This information is included in our risk assessment and in the continuous improvement of our due diligence processes.

Internal perspectives

The risk assessment is not carried out by the ESG function alone.

Input from relevant functions within Nybo is included in the assessment, including:

• ESG
• purchasing and supply chain
• design and product development
• sales
• management

This is important because several of the risks we see in the supply chain may be influenced by decisions and working processes within Nybo.

Our most significant risks

Our risk assessment shows that our most significant risks are not the same in all countries or production stages.

Across our supply chain, we pay particular attention to the following areas:

Living wages

The risk that workers do not receive wages sufficient to cover a basic and decent standard of living is significant in parts of our supply chain.

Compliance with the legal minimum wage is therefore not in itself sufficient to conclude that a living wage is being paid.

We work with wage data and living wage calculations to better understand wage gaps and develop concrete improvements.

Working hours and overtime

Excessive working weeks and inappropriate overtime can be a significant risk in textile production.

The risk may be caused by local conditions, but it can also be influenced by buyer practices. We therefore look both at suppliers’ working-hour data and our own processes relating to forecasting, lead times and order changes.

Occupational health and safety

Textile production involves risks related to, among other things, machinery, ergonomics, heat, dust, chemicals and fire safety.

Our supplier data show that occupational injuries still occur, and health and safety therefore remains an important focus area in our risk assessment and supplier follow-up.

Freedom of association and worker representation

The ability to organise freely and be heard through worker representatives varies significantly between our sourcing countries.

We therefore look not only at whether a policy or formal system exists, but also at the information available to us about worker representation and grievance channels.

Forced labour and vulnerable workers

In certain sourcing countries and deeper parts of the supply chain, forced labour is a significant risk.

The risk is particularly relevant where there are migrant workers, recruitment agents, informal work, homework or limited supply chain transparency.

Environmental impacts from wet processing

Wet processes such as dyeing, washing and finishing have a particular risk profile.

Here, we focus among other things on:

• chemicals management
• water consumption
• wastewater
• waste
• energy and greenhouse gas emissions

These risks are assessed based on the country, production process and the supplier’s own systems and data.

Countries with elevated risk exposure

Our analysis shows that risk levels vary significantly between the countries we source from.

Among the countries where we have identified several significant risks are:

China

In China, we see elevated risks relating among other things to:

• forced labour and traceability in the deeper supply chain
• working hours
• freedom of association
• living wages
• chemicals
• water consumption and water pollution
• greenhouse gas emissions

However, the level of risk depends significantly on the specific supplier and production process.

India

In India, there are significant risks relating among other things to:

• child labour in parts of the deeper textile supply chain
• discrimination and gender-based violence
• forced labour
• working hours
• occupational health and safety
• living wages
• chemicals and wet processing
• water consumption and water pollution

Our own supplier data also show that occupational injuries continue to require close follow-up.

Laos

In Laos, there are elevated risks relating among other things to:

• child labour
• forced labour
• discrimination
• working hours
• occupational health and safety
• living wages
• freedom of association
• corruption

At the same time, our supplier data and audits show that concrete control systems can reduce some of these risks at factory level.

How we use the results

The risk assessment is not a stand-alone documentation exercise. It is used to guide our next actions.

The results influence, among other things:

• which suppliers we follow more closely
• which topics we address in supplier dialogue
• which data we request
• which improvement projects we prioritise
• our work on living wages
• the development of our purchasing practices
• our requirements for audits and certifications
• our work on grievance mechanisms
• our cooperation with external organisations

Where the analysis identifies information gaps, these are included in our further action planning so that we can gradually improve both transparency and the quality of our risk assessments.

A continuous process

Risks in global textile supply chains change over time.

Political conditions may change, new suppliers and materials may be added, and new information from audits, grievances or supplier dialogue may change our assessment.

We therefore update our risk assessment at least once a year and additionally when significant changes make this necessary.

The aim is not to create a static list of risks, but to continuously improve our understanding of where the risks to people and the environment are greatest and use that knowledge to prioritise our efforts.