New York Fashion Act to Test Brand Taste for Sustainability Regulation

The willingness of major fashion brands to support sustainability regulations will be tested in one of the industry’s largest markets.

On Friday a coalition of nonprofits, companies and activists announced the Fashion Act, an ambitious piece of legislation that could put New York at the forefront of efforts to hold fashion accountable for its environmental impact and labor abuses in its supply chain. The bill has been sponsored by New York State Senator Alessandra Biaggi and Assemblyman Anna Kelles, who have introduced it for consideration by the State Assembly.

Stella McCartney, who has positioned herself as a champion of better regulation for the fashion industry, has lent her support behind the motion. The launch was planned for SoHo brand stores in New York, but the rapid spread of Omicron’s Covid-19 variant pushed it online.

There needs to be policies in place to oversee our industry, McCartney told the BoF last summer, a week after delivering the same message to a group of the world’s most powerful leaders at the G7 summit in Cornwall, England. Of course the industry has failed to leave its own set, he said.

Companies that want to do the right thing are currently at a disadvantage.

The Fashion Act aims to bring much greater accountability to the sector. If approved, the current proposal would tighten supply chain due diligence and environmental disclosure requirements for any brand doing business in New York with more than $100 million in global revenue. Proponents say the law will create a more equal playing field for brands that have invested in operating more responsibly.

Companies that want to do the right thing are currently at a disadvantage, said Maxine Bdat, director of the nonprofit New Standard Institute, which spearheaded The Fashion Act. We hope and expect the industry to be behind this… it will make it clear who is speaking and who is ready to act.

The regulatory push builds on efforts already underway in Europe and the US, signaling increased scrutiny on an industry that has resisted scrutiny for decades. While high-profile labor scandals and growing consumer interest in sustainable products have pushed major brands to confront their negative impacts in recent years, the response has been largely limited to high-profile, but non-binding commitments to do better.

The result has been slow progress, despite growing urgency to address fashion’s contribution to climate change (studies peg industrial emissions at between two and 10 percent of the global total) and clean up opaque supply chains that allow unethical business practices. Increasingly, environmental and labor advocates in the industry have pointed to tougher regulatory requirements as an important lever to drive change.

What’s in the Fashion Act?

The proposed bill would bring much greater accountability to brands with more than $100 million in global revenues operating in New York. It calls for:

• Clear, public and transparent reporting on energy, greenhouse gas emissions, water, plastic use, and chemical management.
• Mandatory science-based targets for reducing greenhouse gas emissions are in line with efforts to keep global warming below 2 degrees Celsius above pre-industrial levels.
• Mandatory supply chain due diligence to prevent and remedy abuse of labor at the factory level.
• The potential penalty is as much as two percent of annual revenue for non-compliance.