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.