New York is known as one of the fashion destinations in the world and will be making fashion history being the first state to pass legislation for sustainability regulations for the fashion industry. The state of New York has proposed the Fashion Sustainability and Social Accountability Act (or Fashion Act) through a bill that would make New York the first state to pass legislation to hold fashion companies accountable for their impact through climate change.
The Fashion Act was sponsored by Assemblywoman Anna R. Kelles and New York Senator Alessandra Biaggi with support from a coalition of nonprofits. The Fashion Act has gained the support of fashion figures with fashion and sustainability nonprofits including designer Stella McCartney, New Standard Institute, the New York Environmental Justice Alliance, the Natural Resources Defense Council.
The new legislation might be passed in New York state but will apply to global footwear and apparel companies with more than $100 million revenues who do business in New York. This legislation will impact all multinational fashion brands including high-end and fast-fashion brands.
The Fashion Act will require companies to provide a map of their supply chain with the minimal requirement of 50% disclosing the source of raw materials, factories, and shipping. Fashion companies will also be required to disclose the greatest concentration in environmental and social impact considering greenhouse gas emissions, fair wages, energy, chemical and water management, and making plans to reduce emissions.
The legislation will also be in accordance with targets set by the Paris Climate Accords with reducing carbon emissions. The Fashion Act will also require companies to disclose how much material they sell by fabric styling polyester, cotton, or leather with all the information available to customers online.
In a news release, Senator Biaggi said, “As a global fashion and business capital of the world, New York State has a moral responsibility to serve as a leader in mitigating the environmental and social impact of the fashion industry.” Senator Biaggi continues, calling the new legislation groundbreaking that will make New York a global leader in holding the fashion industry accountable while ensuring environmental protection, labor, and human rights are prioritized.
Following the passing of legislation, companies will be given 12 months to comply with the mapping directive and 18 months to provide impact disclosures. Fashion companies that refuse to follow the new legislation, will be violating the law and face being fined up to 2% of each company's annual revenue. The fines will be contributed to a new Community Fund regulated by the Department of Environmental Conservation to fund environmental justice projects.
A mere 2% of annual earnings might seem like a small figure but bigger companies can be paying a hefty fine depending on their annual earnings. For example, in 2021 the French luxury conglomerate LVMH is known for being the parent company of the brand Louis Vuitton reported annual revenue of €44.2 billion (over $50 billion) with a 2% fine costing €880 million (over $996 million).
The Fashion Act includes legislation for the New York attorney general to publish an annual list of companies that are deemed non-compliant. Though this is the first legislation of its kind, similar legislation is being debated worldwide.
The European Union is debating legislation for due diligence while Australia, Germany, France, and the U.K. have laws regarding human rights though there is no general legislation in the country governing environmental and social actions of the fashion industry. The progressive state of California has some state laws to regulate the climate impact of the fashion industry.
California passed the Transparency in Supply Chains Act in 2010 that addresses modern human rights and in 2019 banned the sales of new fur products. Last year, California also passed the Garment Worker Protection Act that holds corporations responsible while recognizing the humanity and dignity of workers.
This new legislation will bring light to the fashion industry being one of the least regulated industries and bring awareness to an industry that has the second biggest carbon footprint with fossil fuels being the first. Many brands are starting to take responsibility for their environmental impact when it comes to human rights violations and climate change making changes along with new legislation.