"Before selling a single bra in the EU, the Italian lingerie maker Yamamay will soon have to provide a wealth of data on what it will be made of, who will make it and what it will cost the planet.
Production of the company's popular underwear ranges used to start with a sketch to get the aesthetics right before finding the fabric. "Nowadays it's the opposite," says Barbara Cimmino, Yamamay's head of corporate social responsibility. "We have had to totally change the way we work."
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This is partly driven by Yamamay's own sustainability agenda - but it will soon be mandatory in order to comply with a new regulation governing the sustainable design of products, agreed by Brussels this year and due to be fully implemented in the late 2020s.
"It is very, very difficult," Cimmino says.
The driver of this increased paperwork is the EU's sprawling Green Deal climate law of which the ecodesign regulation is a part. Announced in 2019, the Green Deal aims to drive the EU to net zero emissions by 2050 and rewire the bloc's economy from one that is driven by consumption to one based on recycling, reuse and longevity.
But it has also turned out to be a bureaucratic machine that has spawned reams of legislation that businesses across the EU are struggling to implement, or even understand.
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The incoming legislation has implications for sectors across the EU, but they are particularly acute for the 197,000 companies that make up the bloc's textile industry.
With 1.3mn employees, the industry is the world's second-biggest exporter of clothes and textiles by value after China. Before 2019, the sector was not heavily regulated but will soon be subject to 16 new pieces of primary legislation under the Green Deal, governing everything from microplastics to financial reporting.
Businesses, particularly large companies, will be expected to gather and report data on water use, energy consumption, labour conditions, waste, chemical use and emissions throughout much of their supply chain.
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The sustainability agenda means "a good 5 to 7 per cent extra cost," Crespi says, "which at the moment we are never able to turn to the market".
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In a study, the consultancy SB+CO found that many large companies were willing to risk fines rather than comply during the uncertain early years of the regulations, in order to avoid incurring "expensive advisory fees" and sucking time out of the business.
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The challenge is even harder for the 89 per cent of businesses in the textile industry that are microenterprises, with scant resources to hire consultants, make significant changes or even gather data.
"An entrepreneur can spend nine to 16 hours processing administrative requests from local authorities... That is taking a lot of productive time away from their schedule," says Véronique Willems, secretary-general of the trade group SMEunited.
Although SMEs are largely exempt from many of the regulations, they are affected "de facto because they are part of value chains", Willems adds. Cimmino says Yamamay "for sure" has had to drop suppliers that cannot meet the requirements.
Many of Euratex's member companies are "concerned that producing in Europe is still uncompetitive", Scalia says. One executive puts it more bluntly: "People are panicking like crazy." [Moi ici: Já ouviram os empresários têxteis portugueses falarem sobre isto? Talvez na véspera da entrada das obrigações em vigor]
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"Over-regulation places significant additional costs on businesses, proving unsustainable for SMEs and inadvertently favouring non-European companies that are not bound by the same stringent rules," his report, published in April, said.
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In the meantime, Euratex's Scalia warns, textile companies will seek cost efficiencies, which portends a possible wave of consolidation in the industry. For companies managing day to day, "it's difficult to process all this information ... it's overwhelming, he says. "The commission has put a lot of meat on the grill, more than anyone could possibly eat.""
Recordar:
E se recuarmos a 2007 neste
blogue e àslições de Maliranta com base na experiênca finlandesa:
"As creative destruction is shown to be an important element of economic growth, there is definitely a case for public policy to support this process, or at least avoid disturbing it without good reason. Competition in product markets is important. Subsidies, on the other hand, may insulate low productivity plants and firms from healthy market selection, and curb incentives for improving their productivity performance. Business failures, plant shutdowns and layoffs are the unavoidable byproducts of economic development."
O meu lado cínico imagina logo a indústria dos “can I go to the bank” a engendrar estas coisas, quando era mais certeiro deixar morrer e remover obstáculos. Assim, uns iluminados pretenderão substituir-se ao mercado e vai simplesmente deixar dívida que terá de ser paga.
No FT de 09.09.2024 em "Europe's red tape problem".
