LWG Leather Working Group Certification

I. LWG's Positioning and Core Objectives

II. Major Upgrade of the 2025 Certification Standard

1. Mandatory Carbon Footprint Accounting
   : Enterprises must submit Scope 1-3 greenhouse gas reports and set emission reduction targets (e.g., a 30% reduction in carbon emission intensity by 2030 compared to the 2020 baseline). Those failing to meet targets cannot obtain Silver or higher certification. This is directly linked to the EU Green Deal's compliance requirements for the environmental footprint of leather products.

2. Chemical Management Upgraded to ZDHC Level 3
   : Adds restrictions on over 50 hazardous substances (such as perfluorinated compounds/PFCs and phthalates) and requires chemical inventories to be submitted through the ZDHC Gateway. SMEs may face rising raw material substitution costs.

3. Water Risk Assessment Becomes Mandatory
   : Enterprises must assess water scarcity and wastewater pollution risks in production areas and set water recycling rate targets (≥30% by 2025, ≥50% by 2030). Factories in water-scarce regions must invest in reclaimed water reuse systems.

III. Certification Process and Grading System

(A) Certification Steps (Full Process Takes 6-12 Months)

1. Self-Assessment and Pre-Audit
   : The enterprise completes a self-assessment against the Environmental and Social Responsibility Audit Checklist, focusing on modules such as wastewater treatment and chemical compliance. Some brands require a pre-assessment report for early risk identification.

2. On-Site Audit (Core Phase)
   : Auditors are randomly assigned by LWG Assurance Services (LWG AS) (designated auditor selection eliminated from June 2025). The audit includes:

• Data Authenticity: Verification of water consumption and energy consumption ledgers and monitoring reports;

• On-Site Operations: Inspection of ZDHC compliance and wastewater treatment facility operational status;

• Traceability: Random sampling of leather batches to trace raw hide sources and processing techniques.

3. Corrective Actions and Follow-Up Review
   : Non-conformities must be corrected within 45 days (e.g., installing exhaust gas purification equipment); certification is granted after evidence submission and sampling review.

4. Annual Surveillance and Re-Certification
   : Factory certificates are valid for 2 years, trader certificates for 1 year, with annual online/offline surveillance audits required.

(B) Certification Grades and Scoring Criteria

• Gold (≥85 points): Industry benchmark; priority entry into international brand core supplier lists (e.g., 7 enterprises in Xinji City secured connections with Prada and Gucci after obtaining Gold);

• Silver (≥75 points): Mainstream market entry threshold (Nike requires suppliers to achieve Silver or above from 2024);

• Bronze (≥65 points): Baseline threshold, applicable to regional markets.

IV. Commercial Value and Market Impact of Certification

1. International Supply Chain Passport
   : Over 200 brands including Nike, Adidas, and IKEA have made LWG certification a mandatory condition for collaboration; uncertified enterprises risk losing orders. For example, IKEA has explicitly stated that “uncertified suppliers will be phased out,” and Amazon provides traffic preference for certified products.

2. Regulatory Compliance Moat
   : The EU's new Battery Regulation requires environmental footprint disclosure for leather products, making LWG data a core compliance reference; the US Inflation Reduction Act offers tax incentives for low-carbon leather.

3. Brand Premium and Technology Upgrades
   : Certified enterprises can obtain a “green product” label, with premium pricing power increasing by 10-15%. Additionally, LWG provides technical training and continuous improvement guidelines to help enterprises optimize production processes (e.g., one factory reduced water consumption by 25% after certification).

V. Chinese Enterprises: Practices and Challenges

1. Regional Cases
   : Organizations such as Shenzhen Keruijia provide certification guidance for local enterprises; 7 tanneries in Xinji City saw a 40% increase in export value after achieving Gold certification. Li Auto, as the first Chinese automaker to join LWG, is driving the sustainable upgrade of automotive interior leather.

2. Localization Challenges

• Increased Audit Difficulty: After June 2025, auditors (including foreign auditors) will be randomly assigned; language and cultural differences may affect audit efficiency;

• Cost Pressure: SMEs need to invest RMB 200,000-500,000 to upgrade equipment (e.g., reclaimed water reuse systems), and some traditional chemical raw materials face elimination.

VI. Future Trends and Industry Innovation

1. Technology-Empowered Transparency
   : LWG plans to launch a blockchain technology pilot in 2025 to achieve full-chain traceability from raw hide to finished product, addressing the “greenwashing” problem in the supply chain.

2. Deep ESG Integration
   : Adds requirements such as supply chain anti-discrimination and low-carbon transition, aligning with international standards such as TCFD (Task Force on Climate-Related Financial Disclosures) and ISO 14064, driving the industry toward comprehensive ESG management.

3. Emerging Market Expansion
   : Prioritizes supporting the upgrade of the leather industry in Southeast Asia and Africa, reducing global supply chain environmental risks through cooperative projects with organizations such as UNIDO (e.g., 6 tanneries in Ethiopia obtained certification)。

VII. Key Recommendations for Certification Applications

1. Advance Planning
   : Develop a 3-year improvement plan aligned with the 2025 new regulations, prioritizing investment in modules such as reclaimed water reuse and renewable energy.

2. Leverage Professional Organizations
   : Select LWG-recognized third-party advisory services (such as SGS and Intertek) to shorten the certification timeline to 3-6 months.

3. Integrate into Industry Networks
   : Joining LWG as a member provides access to technical resources and brand collaboration opportunities, such as participating in brand-initiated sustainable leather innovation projects。