New York wants to enact a unique new law: all major fashion companies that sell clothing there must expose their supply chains and show the efforts they are making to improve their environmental and social impact.
For all major fashion multinationals
In New York, a bill is on the table to reduce the negative environmental and social impact of the fashion industry. The Fashion Sustainability and Social Accountability Act aims to require all major fashion companies operating in New York State to disclose at least 50% of their supply chain. They also need to map out all of its impacts, including greenhouse gas emissions, water consumption, employee wages and what chemicals they use.
The law applies to all fashion players who generate more than $100 million in worldwide sales annually. All multinationals of LVMH until Shein are therefore reviewed. The law has been in the works for a year and will be finalized in late spring 2022. “We want to link all the big issues together and create industry-wide standards that drive real change in practice,” said Senator Alessandra Biaggi, who initiated the proposal.
The Fashion Act doesn’t specify which half of the supply chain companies should disclose, but it does urge brands to focus on areas of greatest social and environmental risk. The fashion brands are also required to disclose a number of general figures, such as the total production volume and the median wages for workers.
Own commitment required
It’s not just about transparency. New York itself does not impose any standards, but does demand that fashion companies set themselves scientifically substantiated goals. Every company should present concrete targets to reduce CO2 emissions and demonstrate annually what it is doing to achieve them. The bill also expects to see concrete measures to embed corporate social responsibility in policy and management.
The New York State Attorney General must enforce the law, but consumers can also sue violators. Fines, which can be as much as 2% of annual revenue, are collected in a community fund for environmental projects. However, companies in violation will first have three months to rectify their mistakes. If the law were passed, the fashion multinationals would have 12 months to openly publish all the requested information on their websites.