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The New York Fashion Sustainability and Social Accountability Act

Updated: Mar 25, 2023




Background


After years of global warming and environmental, social and governance (ESG) topics making headlines, New York lawmakers are taking sustainability to the runway. If passed, New York’s Fashion Sustainability and Social Accountability Act (the “Fashion Act”) announced earlier this year, would be the first of its kind in the country in attempting to impose sustainability-related obligations on the biggest brands in fashion.


The Fashion Act seeks to promote sustainability in fashion by, in effect, requiring an increased commitment to sustainability on the part of all industry participants, thereby eliminating perceived competitive disadvantages to adopting climate-friendly methods of production. The Fashion Act presents a number of challenges for companies seeking to comply with its provisions and, to the extent comparable regulations or laws are adopted in other industries, could be a harbinger for those companies as well.


Key Provisions


New York State Senator Alessandra Biaggi and Assemblywoman Anna R. Kelles introduced the Fashion Act in both chambers in October 2021. The bill’s sponsors boast the support of an alliance of nonprofits, including the New Standard Institute, the Natural Resources Defense Council and the New York City Environmental Justice Alliance, and designer Stella McCartney. The bill seeks to regulate fashion companies with $100 million or more in annual revenue that are doing business in New York. This would cover a majority of multinational fashion brands.


Supply Chain


The Act, as introduced, would require fashion companies—including fashion manufacturers and retailers, as defined in the bill—to map (i.e., list and track) a minimum of 50 percent of their supply chain. This encompasses all suppliers of raw material and materials used for finished goods. However, the bill does not specify which 50 percent of the supply chain is subject to disclosure, but urges companies to use “good faith efforts” to focus on “the suppliers and associated supply chains relevant to the prioritized risk.” The company must then disclose the names of the prioritized suppliers.

Due Diligence Disclosure


All subject companies would be obligated to publish an annual “social and environmental sustainability report” that must address environmental and social due diligence policies, processes and activities conducted to identify, prevent, mitigate and account for potential environmental and social risks, as well as the findings and outcomes for each.

Impact Disclosure


Companies would also be required to disclose actual and potential negative environmental and social impacts, which must include, among other things, greenhouse gas reporting and quantitative baseline and reduction targets on greenhouse gas emissions (in accordance with the Paris Climate Accords), and impacts on water, and chemical management; material production volumes, including itemized lists of material type; and volume of production replaced with recycled materials as compared to growth targets. All disclosures must be made publically available online. Companies must set annual targets to reduce their adverse environmental impact. Specifically, they must set and meet Science-Based Targets for their greenhouse gas emissions.

Conclusion


In short, if the Fashion sustainability and social accountability act is enacted into law, fashion retailers and manufactures will be held accountable for environmental and social impacts stemming from their supply chain and production of apparel and shoes. According to Vogue, “proponents say the bill will make history” as it could “shift how the fashion industry operates globally.” Thus, stay tuned as we will be tracking the legislation closely and will provide real time updates!




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