Across Asian manufacturing hubs, textiles contribute roughly 2% of global greenhouse gas emissions while employing over 90 million people. The majority of whom are women. As delegates gathered, the opening discussions framed four foundational questions for the day: why proven green innovations struggle to scale? How to distinguish real operational risks from simple unfamiliarity? How can catalytic funding de-risk commercial investment? And how to shift from isolated facility pilots to industry-wide transformation?

Shahi’s Decarbonization Journey

Priydarshini Gouthi from the ESG and Innovation team opened the presentations by introducing the challenge of driving decarbonization across the value chain. Using Shahi Exports as a case study, she touched on the various efforts undertaken to mitigate emissions. These include building over 143 megawatts (MW) of captive renewable energy capacity, transitioning thermal boilers to biomass, implementing energy-efficient measures, and reducing water intensity.

Underpinning the climate transition efforts is a focus on driving innovation through the ‘scout- to-scale’ process. Shahi applies a structured five-stage pathway to identify, evaluate, test, and eventually scale the best solutions.

Decarbonization, Financing, and the Just Transition

Aravindan Srinivasan from AVPN moderated a discussion with Anant Ahuja (Shahi Exports), Christiane Dolva (H&M Foundation), Karan Kumar (Laudes Foundation), and Eshika Gombar (Good Business Lab).

The conversation opened with a shared call to demystify climate action, ensuring conversations stay accessible and grounded in shop-floor realities. Anant emphasized that while regulatory frameworks such as India’s Carbon Credit Trading Scheme and brands’ net-zero targets create urgency, the operational and financial burden of piloting new technologies falls heavily on manufacturers. Christiane Dolva and Karan Kumar highlighted that philanthropic foundations must deploy catalytic risk capital to absorb early piloting uncertainties, prove commercial viability, and overcome the bottleneck between pilot innovations and market-wide adoption.

The panelists stressed the importance of long-term co-creation between brands, innovators, and suppliers. Anant pointed to Shahi’s partnership with innovators, which required more than two years of iterative on-site trials before it could confidently set specific targets. Eshika shared evidence showing that environmental upgrades directly support worker well-being: replacing older lighting with energy-efficient light-emitting diode (LED) fixtures across 26 factories reduced electricity demand and lowered ambient heat on the shop floor. Similarly, operational adaptations such as structured hydration and rest breaks during extreme heat protect health and reduce on-site medical clinic visits without lowering production output. 

Her insights came in the backdrop of GBL’s work with  MSMEs to adopt energy-efficient technologies that cut both costs and emissions. Hence, supporting decarbonization across the textile sector without compromising worker health. The session concluded with a call for stable state policies to help small and medium enterprises adopt clean technologies.

Factory Floor Immersion

After stepping out of the conference room, delegates walked the shop floor to observe apparel manufacturing firsthand. The guided tour followed a garment’s journey through: pre-production, sampling, fabric cutting and waste segregation, assembly, sewing lines, quality, finishing, packaging, washing, boilers, and the on-site Effluent Treatment Plant (ETP). 

Walking through the production lines gave delegates a tangible view of industrial scale and operational complexity. Attendees observed how material flow, thermal steam distribution, water recycling systems, and line balancing work together in real time. The tour highlighted how physical safety measures, and resource-efficient machinery operate alongside welfare facilities to create a safe, supportive, and dignified workplace.

The Ultimate Game of  Waste Management with Thumbi Labs

In the afternoon, Thumbi Labs led an interactive simulation that placed participants in the roles of enterprise decision-makers managing the post-consumer textile lifecycle.

Delegates experienced the direct friction between financial viability and environmental sustainability. The task: balance collection costs, logistics, and debt repayment against the risk of textile waste ending up in landfills. Managing capital constraints such as choosing between formal bank loans at 11% interest and informal credit at 36% interest revealed how access to finance dictates an enterprise’s ability to scale. The simulation made it clear that enterprises working in isolation quickly faced insolvency. Whereas, businesses that formed regional alliances, shared processing infrastructure, and coordinated collection networks successfully built viable, low-waste circular models.

The Road Ahead

The workshop closed with actionable takeaways on what the textile ecosystem must prioritize to move from ambition to implementation:

• Start: Involving manufacturers from the beginning to co-design transition roadmaps, realistic timelines, and procurement criteria.
• Stop: Re-diagnosing known industry challenges; move away from repetitive high-level reports and focus on financing execution.
• Continue: Building candid platforms for multi-stakeholder dialogue; expanding blended finance mechanisms that absorb initial risks; and supporting innovators on the ground.

Grounding climate conversations in the daily realities of manufacturing proves that true sustainability requires shared accountability. Shahi looks forward to working with more partners to build a low-carbon, resilient, and inclusive future for apparel manufacturing.

Watch the event glimpse here: https://player.vimeo.com/video/1225879618?badge=0&autopause=0&player_id=0&app_id=58479

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Read: Fashion for Good And Altmat To Accelerate Adoption of Next-gen Fibres Through Altag® Fibre Club.

The Altag® Fibre Club aims to overcome systemic barriers that hinder the widespread integration of sustainable materials. Challenges include limited production capacity, premium pricing, and fragmented supply chains. The collaborative consortium facilitates seamless integration and provides brands with early access to AltMat’s groundbreaking Altag® fibres. This helps secure supply terms and streamlines processes.

The Altag® Fibre Club partners include: Adalberto, Alok, Arvind, Bhaskar Denim, Jindal Textiles, Maharaja Shree Umaid Mills, Ltd, Positive Materials, Sambandam Spinning Mills Limited, Shahi Exports, Sutlej Textiles, Sweaters India and Industries Limited, and Vrijesh Natural Fibre & Fabrics (India) Pvt. Ltd.

Driving long-term partnerships for change

This initiative marks a significant step forward in our 4-year partnership with AltMat. As a value chain partner, Shahi gains priority access to Altag® yarns. We also play a crucial role in co-developing fabrics with their global network of innovative customers. This collaboration furthers our commitment to fast-track material innovation, enabling it to offer cutting-edge sustainable solutions to brands seeking to reduce their environmental footprint.

The consortium is dedicated to collectively overcoming key adoption barriers, particularly in scalability and cost competitiveness for next-gen materials. The club provides access to sustainable material libraries and aims to distribute costs through shared investment. It, therefore, reduces upfront financial burdens for its members.

We’re excited to leverage our vertically integrated setup to collaborate with brand partners and integrate Altag®’s innovative agri-waste Fibres into scalable textile production. 

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Responsible sourcing has been the cornerstone of our operations at Shahi. Our Knits Processing Division (KPD) has been a pioneer in this field, achieving several firsts. In 2023, we became the first Indian mill to undergo the Yarn Ethically & Sustainably Sourced (YESS) Assessment, managed by Responsible Sourcing Network (RSN). This year, the Knits Processing Division is the first Indian mill to meet the foundational level requirements of the YESS Program, which includes the posting of its first publicly available Due Diligence Report. The Knits Processing Division has set a new standard for sustainable practices. 

We’ve made substantial progress in the past year, especially refining our supply chain risk assessment systems. The learnings from our pilot informed our approach to emerging legislation around the world, from the Uyghur Forced Labor Prevention Act (UFLPA) to the Corporate Sustainability Due Diligence Directive (CSDDD) and other new regulations from the European Union.

Role of Manufacturers in Due Diligence

Sourcing raw materials like cotton presents unique challenges due to the complex global supply chain used by the Fashion Industry. Understanding the underlying processes is essential for supply chain members to ensure transparency, improve policies, and implement effective solutions. With guidance from the YESS team, the Knits Processing Division has made significant strides in achieving these goals. 

Our progress in mitigating risks

In the one year since you last heard from us, we have:

• Refreshed our KYC (Know Your Supplier) requirements, which have been a strong support for getting first-hand information about our vendors. 
• Built our Responsible Sourcing Policy to align with OECD guidelines and responsible ethics in procuring our raw materials (or cotton inputs).
• Implemented a thorough supplier vetting approach, ensuring that our suppliers uphold the same values and moral standards that we follow. 
• Strengthened our two-way communication tools with our supply chain members to foster better communication and understanding.
• Formalized and trained all our sourcing and due diligence teams to align as closely as possible with global standards. 
• Redefined our responsible sourcing methodology by introducing cross-functional teams from sustainability, compliance, procurement, and production. 

These actions have mitigated our exposure to several risks and enabled us to have a stronger partnership with our suppliers.

Improving our Due Diligence

Michael Baldino-Kelly, Director of Program Development who leads the YESS initiative, stated,

“I really want to commend the team at Shahi for all the hard work and effort they’ve put in to meet the YESS requirements to reach the Foundational Level of conformance. It shows Shahi’s foresight in getting into a new initiative as it grows, as well as demonstrated leadership in the due diligence space to be one of the first two mills globally to achieve this status.”  

As we enter the next year of this journey, we aim to expand these initiatives. We’re dedicated to exceeding expectations. We follow not only UFLPA requirements but also the broader European Union regulations on sustainability, ethical sourcing, and due diligence.

In the years ahead, we’ll continue to improve our grievance redressal mechanisms, make our reporting more transparent, track cotton from field to finished product, and work more closely with our suppliers. Our goal is to ensure ethical sourcing practices throughout our entire process and address any potential risks.

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At a wider scale, these questions turn into larger humanitarian conversations where there is a standard or a means that society aspires to achieve— Human Rights, a common understanding of the basics of human existence. But let’s roll back a little from an existential crisis to a real one that manifests itself in countries, economies, businesses, and the very same communities— forced labor. 

Understanding Forced Labor

Forced Labor has deep historical, geopolitical, and socio-economic roots from ancient civilizations using enslaved people to medieval serfdom. Colonial powers exploited indigenous populations and harsh working conditions during the Industrial Revolution. The 20th century witnessed forced labor camps in totalitarian regimes. Forced labor, also known as involuntary labor or slavery, is a form of exploitation in which individuals are compelled to work against their will, often under threat of violence or other forms of coercion– a gross violation of human rights and considered a form of modern-day slavery.

The United Nations Forced Labour Protocol (UNFLP) is a pivotal instrument that underscores the urgency of combatting forced labor practices within various industries, most notably the textile sector. The UNFLP, introduced as an amendment to the broader International Labour Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work, has propelled the issue of ending forced labor in the textile supply chain to the forefront.  

The Current Discourse

The eradication of forced labor within the textile supply chain has emerged as a fervent and pressing global concern, capturing widespread attention due to a confluence of factors. At the heart of this discourse lies the “Uyghur Forced Labor Prevention Act” (UFLPA), which came into force in the US in June 2022. 

The UFLPA is a piece of legislation introduced in the United States Congress aimed at addressing and preventing forced labor and human rights abuses in the Xinjiang Uyghur Autonomous Region (XUAR) of China. The Uyghur people have faced widespread allegations of human rights violations, including forced labor, mass detentions in so-called “reeducation camps,” and other forms of repression in Xinjiang.

For Shahi, this resonated with our Responsible for People framework, which takes inspiration from our founder’s motivations for creating fulfilling and sustainable employment for women. As a vertically integrated manufacturer, we touch a large chunk of the upstream stakeholders. This makes us hyper-aware of the supply chain’s circumstances and the impending impacts that global policies, discourses, and paradigm shifts have on them. 

In 2021, we started exploring Yarn Ethically & Sustainably Sourced (YESS), an initiative spearheaded by the Responsible Sourcing Network (RSN). RSN is a non-governmental organization that champions the human rights of vulnerable communities in mining and harvesting raw materials found in products we use daily. The next year, we piloted the YESS Standards, along with 6 other global suppliers, and are now the first mill in India to take the lead in implementing robust due diligence measures.

“Due diligence will help us align with upcoming legislation and also build capacities on critical topics like forced labor.”

— Anant Ahuja, Head, ESG

The Challenge: an Indian Supplier’s Perspective

India has a comprehensive legal framework to combat forced labor and protect workers’ rights. India’s Constitution prohibits forced labor under Article 23, the Bonded Labour System (Abolition) Act, 1976; Child Labour (Prohibition and Regulation) Act, 1986; Minimum Wages Act, 1948; Immoral Traffic (Prevention) Act, 1956, Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, The Factories Act, 1948, and other labor laws. 

The apparel and textile supply chain is a sprawling web across multiple countries. The numerous stakeholders create a diverse landscape of territorial and customs laws– making it challenging to monitor and regulate labor practices effectively. Being the 5th largest sector in employment, the global nature of this industry intensifies the urgency to address forced labor.

Aligning our Knits textile division with the YESS Standards, our aim is to drive slavery out of cotton production by eliminating the trading of cotton at risk of being produced through forced labor and increasing the use of ethical cotton. The YESS program assesses management systems and inventory controls of mills to identify, assess, and mitigate the risks of forced labor based on the Organisation for Economic Co-operation and Development (OECD) due diligence framework.

“Dedicating efforts to strengthen sustainable governance systems has kept Shahi in the forerunning. With YESS, we will strengthen our due diligence and continue to provide ethically sourced and produced garments to our customers.”

— Ramalingam T, CEO, Knits Division

As a leading manufacturer, our awareness and understanding make our support of international efforts in investigating, monitoring, and mitigating forced labor crucial. Shahi serves on the Advisory Committee of YESS, which brings together different industry players, such as brands, suppliers, and NGOs, to strategize the development of YESS into a commercial and practical standard.

Leveraging Due Diligence

At Shahi, our existing processes allow us to vet, review, and select our suppliers through due diligence. The responsibility is spread across our Sourcing, Warehousing, Accounting, Auditing, and compliance teams. From vendor due diligence to ensuring product quality, we have clear transparency and record-keeping

Verifying the source: We mandatorily seek proof of upstream supply chain— yarn and cotton purchase from our suppliers to check and verify the origin of the yarn and cotton.

Adherence to Policies: We require our suppliers to adhere to our Vendor Code of Conduct, Prohibition of child labor policy, Prohibition of Bonded and Forced labor, Modern Slavery and Human Trafficking Policy, and our Cotton Sourcing policy to ensure that cotton is sourced in compliance with the YESS Standards.

Vertical integration: This has served as a tool to keep track of our yarn inputs right from spinning.

Aligning with YESS

Empowered by the YESS frameworks, we strive to only purchase cotton materials from sources verified as not involving or contributing to forced labor in cotton production. The standards have helped us achieve added qualifications in our due diligence process. 

“YESS is a more conversational assessment wherein the facility can explain its unique systems and processes around due diligence. The sourcing teams are able to solve queries and doubts, which is not possible in one-sided audits.”

— Amanullah SP, AGM, Spinning Production

Governance 

• Support and build capacities of cotton-supplying counterparties to improve performance and conform to responsible cotton-sourcing policy. 
• Exercise due diligence consistent with the Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector and encourage our suppliers to do the same. 
• Exercise due diligence in consistency with US UFLPA
• Organize formally responsible sourcing teams within our existing sourcing teams

Assessment and action

• Annual assessments through YESS auditors to verify conformance status and continually identify opportunities to improve our responsible cotton due diligence management system. 
• Preparing reports on progress and sharing with the YESS
• Where risks of forced labor in cotton production are identified, develop a risk management plan that engages internal and external actors in the supply chain who can collectively mitigate the risks of adverse impacts.

“I am impressed with Shahi’s team for not only taking a deep dive into the nuances of forced labor but then strengthening their processes and implementing a due diligence approach to identify, assess, and mitigate this abuse. I appreciate they care about contributing to solutions that have an impact.”

— Patricia Jurewicz, CEO of RSN/YESS  

What we look forward to

We look forward to strengthening our relationship with our suppliers and supporting them with our learnings from sustaining a 115,000-strong workforce and exposure to evolving standards and our position in the industry. 

With YESS, we have made an attempt to align the company with the upcoming legislation— a proactive measure that gives us the confidence to serve international clients. As we write this piece, more regulations will be adopted worldwide. In the upcoming years (Years 2 and 3), through YESS, Shahi will be able to implement the vision behind these regulations and contribute to mitigating the risk of forced labor. 

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YESS: Yarn Ethically & Sustainably Sourced is an initiative by Responsible Sourcing Network that dedicated several years to developing rigorous due diligence standards to achieve a forced labor-free cotton supply chain for the garment and textile industry. 

The YESS standards were officially presented in India on May 2, 2023 at a workshop in Bengaluru, Karnataka, attended by multiple industry members. The workshop highlighted the significance of due diligence in building an ethical supply chain for cotton sourcing and furthering the goal of preventing forced labor. 

“This joint effort represents a significant milestone in the pursuit of responsible and transparent cotton supply chains. As we expand conducting assessments in India later this year, we invite industry members to join this collective advancement and have their mills trained and assessed,” said Patricia Jurewicz, CEO of Responsible Sourcing Network.

Following the workshop, YESS conducted its initial independent assessments in India at Shahi Exports’ knitting and spinning facilities in Shivamogga. The YESS program assesses management systems and inventory controls of mills to identify, assess, and mitigate the risks of forced labor based on the Organisation for Economic Co-operation and Development (OECD) due diligence framework. In 2022, Shahi was one of the seven global suppliers that piloted the YESS Standards and has now become the first mill in India to take the lead in implementing robust due diligence measures. 

“As India’s largest apparel manufacturer and exporter, Shahi is committed to producing goods using ethical, fair, and sustainable practices. We are thrilled to embark on this journey and align ourselves with global standards of due diligence. We recognize that efforts towards traceability require industry collaboration, and we are confident that YESS will provide valuable support in achieving this goal.” stated Anant Ahuja, Head of Organizational Development at Shahi Exports. 

While already operating with firm checkpoints for cotton sourcing, the YESS assessment provided additional insights that enabled Shahi to further strengthen its management processes in response to evolving legislation and growing consumer demand on traceability against forced labor.

Spinners and textile mills play a critical role in facilitating visibility and due diligence in the complex cotton-sourcing landscape as gatekeepers. YESS recognizes the position they hold and values their partnership in connecting the industry agenda across the global supply chain.

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