As regulations loom and the demand for recycled material content in products increases, the Ethical Supply Chain Progamme (ESCP) and a number of its members noted that the existing material vetting and management system for material use in toys, is not suitable for recycled material use, given all the additional variables and safety concerns. Therefore, the ESCP and four of its members, LEGO, Crayola, Mattel, and Target, collaborated together on a solution.

Carmel Giblin, president and CEO at the Ethical Supply Chain Programme (ESCP), detailed this project at the 2024 POC Conference.

The Ethical Supply Chain Programme, also known as the ICTI Care Foundation, has been operating for 20 years.

“We changed our name because the work we were doing was getting better awareness and the toy industry was diversifying into other sectors, such as footwear, electronics, apparel and being called the toy programme was a little bit of a barrier,” explained Carmel.

“Regardless of the industry you are in, we are designed to meet members’ needs; we are a not-for-profit organisation focused on engaging with our diverse community, from working in factories, logistics, NGOs, licensors, retailers and the brands themselves,” she added.

The ESCP works on behalf of that diverse community and is principally a labour standards organisation for the safe respectful treatment of workers and their human rights in global supply chains.

“Never forget the people – the S in ESG,” said Carmel, “Companies can be distracted focusing on the environment and the urgency with dealing with that but the people are just as important.”

It works to raise standards in the supply chain, through transparency, the promotion of fair trade practices, and by providing support for its members to improve capability.

Mounting demands

Carmel explained that amid increasing regulations such as ESPR and the EU Toy Safety Regulation, more supoprt is needed for companies to comply. What’s more, the opportunity to collaborate is really important and allows companies to operate on a level playing field.

With the ESPR comes digital product passports (DPPs), which is of increasing interest for companies, especially SMEs, so the ESPR has been helping its members navigate through that.

The EU Toy Safety Directive is closer on the horizon, however, which we see will become regulation moving forward, said Carmel.

As a result, the ESCP has created the Recycled Materials Chemical Safety Assessment (RSCA).

“The reason it has been created is the use of raw materials in toys is managed by existing chemical management software, however the use of recycled materials produces more variables, so existing chemical management systems are not suitable – collaboration to find a solution was essential,” Carmel explained.

As there is increasing interest in having more recycled product available, especially in the toy category, existing ways of working are no longer suitable. So it was necessary to find a new solution to enable greater use and availability of recycled materials, particularly in the toy category.

So the RSCA is in development in direct response to existing and upcoming regulation, with an aim is to provide a standardised set of requirements through collaboration, and reduce duplication for suppliers.

“Our programmes have been focused on removing duplication and allowing more companies to work in the same way,” said Carmel. By doing that, they can improve labour standards or make products more available.

The RSCA also seeks to achieve scaling of data, which is important for accessibility to a wider range of company sizes and to reduce cost and improve resource efficiencies.

“Four companies came to us initially,” said Carmel, “LEGO, Crayola, Mattel and Target, which were already existing ESCP members which work with us on their labour standards activities.”

They wanted to find a standardised process. They already have existing processes but they recognise the benefit of collaboration,such as reducing costs, complexity and duplication, but also creating greater accessibility to the product in question, in this instance recycled materials, to be used at greater volumes in products.

How it will work

New or existing material supplier upload all the information required which will cover the approval of the supplier and the products.

“It has been a good indication of how coming together in pre-competitive ways to collaborate for a common purpose has really accelerated the development of this system.

“We only started working on it with this group towards the middle of 2023 and quickly we will be into the first round of user interface testing, so it is moving very quickly.

“Partly because it is founded by us, at the request of members, but each of those members are active in a working group.

“We do some of the heavy lifting of that but we are not experts in the content so it has been fantastic to have these companies commit to developing something that they don’t see as competitive but as a reason to collaborate and overall will increase the availability of recycled products in the toy and entertainment sector,” noted Carmel.

ESPR may mandate a percentage of recycled material in toys, so the need for recycled material will increase. Collaboration increases the availabilities of such materials to all sizes of companies.

There is a regulation database included in this programme which means the system, the RSCA, will keep pace with changing legislation.

“The companies involved may be doing the heavy lifting now,” said Carmel, “but they are helping smaller companies in the future to comply with the regulations who don’t necessarily have the same resources and expertise that the larger companies do.”

There are various working groups in the ESCP, focusing on requirements set for suppliers and what they need to meet and upload, the assessment process, the validation process, and the regulatory database.

“They would welcome many other participants to work on the development of this, or once it is developed to participate and use it as a system for all,” commented Carmel.

It has been designed in a collaborative way, therefore the cost of using this system is minimal for brands, but it does require scale and participation to make it successful.

“So reach out to our colleagues to answer any further questions on how the process will work,” Carmel requested.

Benefits of RCSA and collaboration

The RSCA is expected to go live in 2025, when there will be more opportunities to get more voices in. It started with buyers of recycled materials, then suppliers of recycled materials are now in the working group as well, but that can always be expanded and more participation is welcome, said Carmel.

As it moves forward, the platform will continue to be overseen by this multi stakeholder group which enables all voices to be heard, shares the burden of keeping the technology and methodology up to date, and keeps cost low.

“The regulatory database – on the product side is a lot more complex than the social side – but having a group that is responsible for keeping it up to date and reflecting needs is a real value added for it,” concluded Carmel, “ The hope is that it will be a single system of compliance that will increase the availability of recycled materials for the toy industry and beyond.”