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In anticipation of New York Fashion Week, lawmakers remind us that this season’s haute couture is not the only thing heating up right now. After years of global warming and environmental, social and governance (ESG) topics making headlines, New York lawmakers are taking sustainability to the runway, intent on greening the fashion industry. If passed, New York’s Fashion Sustainability and Social Accountability Act (“Fashion Act”),1 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.2
The Fashion Act would apply to global apparel and footwear companies with more than $100 million in revenue doing business in New York, reaching luxury fashion brands, like Prada, as well as fast-fashion brands, like Shein. The industry has long been a target of environmental activists. The World Economic Forum estimates that the fashion industry contributes up to 10% of worldwide carbon emissions and ranks second in global water consumption.3 Many facilities once operating as textile dyeing and finishing plants have landed on the Superfund National Priorities List over the years.4 Yet, the industry remains “stunningly unregulated.”5
Some companies have forged ahead in addressing climate change despite the absence of regulation, including by providing enhanced sustainability disclosure.6 Kering, the parent company of luxury houses Gucci, Bottega Veneta, Yves Saint Laurent, Balenciaga, Alexander McQueen, and others, has emphasized sustainable luxury fashion for several years.7 In 2017, Kering announced the three pillars of its 2025 Sustainability Strategy: care, collaborate, and create.8 And, in 2020, it shared its first Sustainability Progress Report as part of its 2025 sustainability strategy.9 Other companies, like Patagonia and Reformation, have made sustainability a core part of their business model. These companies not only have committed to producing sustainable fashion, they also have pushed for more expansive climate change policies and invested in initiatives like renewable energy and water conservation projects.10
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. Maxine Bédat, the founder of the New Standard Institute—a supporter of the New York bill—has stated that the bill is “inherently pro-business,” because “[r]ight now, companies are uncompetitive if they do the right thing,” and this bill will create a regulatory floor that requires every company doing business to “do the right thing.”11 Nevertheless, 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.
New York State Senator Alessandra Biaggi and Assemblywoman Anna R. Kelles introduced the Fashion Act in both chambers in October 2021. It has since been referred to the Consumer Protection committee of the New York Assembly, where it remains pending. 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. As mentioned, 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.
To their credit, the bill’s sponsors recognize that while it is “the most robust and aggressive bill possible that can get passed,” it is only a step; not the silver bullet.19 Some question whether the Fashion Act has enough teeth—in other words, will the transparency it requires result in demonstrated change, or will it merely require companies to report on problems that continue to go unsolved? Bédat has reassured the public that “[i]t’s not just about the reporting. It’s about the setting and meeting of these targets[.]” However, she has acknowledged that the “language [is] crystal clear within the Science Based Targets component,” but may need “amendments to further clarify that [elsewhere in the bill].”20 Regardless, the Fashion Act serves as a reminder that companies in virtually every industry should be prepared to address issues surrounding ESG issues.
2 Vanessa Friedman, New York Could Make History With a Fashion Sustainability Act, N.Y. Times (Jan. 7, 2022), https://www.nytimes.com/2022/01/07/style/new-york-fashion-sustainability-act.html.
3 Morgan McFall-Johnson, These facts show how unsustainable the fashion industry is, World Econ. Forum (Jan. 30, 2020), https://www.weforum.org/agenda/2020/01/fashion-industry-carbon-unsustainable-environment-pollution/.
4 See, e.g., EPA, Clearwater Finishing, https://cumulis.epa.gov/supercpad/cursites/csitinfo.cfm?id=0403391.
5 Emily Farra, A New Piece of Legislation Could Make New York a Leader in Sustainable Fashion, Vogue (Jan. 7, 2022), https://www.vogue.com/article/new-york-fashion-bill-sustainability-social-justice.
7 Sustainability, Kering, https://www.kering.com/en/sustainability/crafting-tomorrow-s-luxury/historic-commitment/?page=6 (last visited Feb. 10, 2022).
8 Id. The care pillar stands for Kering’s commitment to reducing its environmental footprint and preserving the planet by adopting and putting into practice sustainable targets and standards; the collaborate pillar stands for Kering’s collaboration with stakeholders to “ensure higher economic, environmental, ethical and social performance,” and the create pillar stands for the group’s commitment to “creating innovative alternatives, driving change to influence the entire industry and sharing its knowledge using an open source approach.” Sustainability 2017-2025 Roadmap, Kering, https://www.kering.com/en/sustainability/crafting-tomorrow-s-luxury/2017-2025-roadmap/ (last visited Feb. 10, 2022).
10 Sustainable Practices, Reformation, https://www.thereformation.com/sustainability/sustainable-practices.html (last visited Feb. 10, 2022); Activism, Patagonia, https://www.patagonia.com/stories/activism/ (last visited Feb. 10, 2022).
11 Emily Farra, A New Piece of Legislation Could Make New York a Leader in Sustainable Fashion, Vogue (Jan. 7, 2022), https://www.vogue.com/article/new-york-fashion-bill-sustainability-social-justice.
12 The bill also proposes measures to monitor and improve labor conditions.
13 The Science Based Targets initiative (SBTi) is a tool for reducing carbon emissions created by the CDP (a nonprofit that sets standards for environmental reporting), the United Nations Global Compact, World Resources Institute and the World Wide Fund for Nature. How it works, Science Based Targets, https://sciencebasedtargets.org/how-it-works (last visited Feb. 8, 2022).
14 See Jason Halper et al., Investors and Regulators Turning up the Heat on Climate-Change Disclosures: Attempting to Make Sense of the State of Play in the US, EU, and UK, Cadwalader, Wickersham & Taft LLP (Sept. 14, 2021), https://www.cadwalader.com/resources/clients-friends-memos/investors-and-regulators-turning-up-the-heat-on-climate-change-disclosures--attempting-to-make-sense-of-the-state-of-play-in-the-us-eu-and-uk#; Jason Halper et al., “Sustainable” Companies Face Increased Pressure to Justify the Sustainability Label Amid Investor Challenges and Demands for Greater Risk Assessment and Disclosure, Cadwalader, Wickersham & Taft LLP (DEC. 1, 2021), https://www.cadwalader.com/resources/clients-friends-memos/sustainable-companies-face-increased-pressure-to-justify-the-sustainability-label-amid-investor-challenges-and-demands-for-greater-risk-assessment-and-disclosure.
15 SHEIN BASICS Solid Slim Tee, SHEIN, https://us.shein.com/SHEIN-BASICS-Solid-Slim-Tee-p-1995306-cat-1738.html (last visited Feb. 10, 2022).
16 35 Ethical And Sustainable Clothing Brands Betting Against Fast Fashion, The Good Trade, https://www.thegoodtrade.com/features/fair-trade-clothing (last visited Feb. 10, 2022).
17 Softspun Crew Neck Tee, PACT, https://wearpact.com/women/apparel/tops%20&%20shirts/softspun%20crew%20neck%20tee/wa1-wmc-wht (last visited Feb. 8, 2022).
18 See Jason Halper et al., Investors and Regulators Turning up the Heat on Climate-Change Disclosures: Attempting to Make Sense of the State of Play in the US, EU, and UK, Cadwalader, Wickersham & Taft LLP (Sept. 14, 2021), https://www.cadwalader.com/resources/clients-friends-memos/investors-and-regulators-turning-up-the-heat-on-climate-change-disclosures--attempting-to-make-sense-of-the-state-of-play-in-the-us-eu-and-uk#, Jason Halper et al., “Sustainable” Companies Face Increased Pressure to Justify the Sustainability Label Amid Investor Challenges and Demands for Greater Risk Assessment and Disclosure, Cadwalader, Wickersham & Taft LLP (DEC. 1, 2021), https://www.cadwalader.com/resources/clients-friends-memos/sustainable-companies-face-increased-pressure-to-justify-the-sustainability-label-amid-investor-challenges-and-demands-for-greater-risk-assessment-and-disclosure.
19 Rachel Cernansky, Deconstructing New York’s Fashion Act, Vogue Bus. (Jan. 13, 2022), https://www.voguebusiness.com/sustainability/deconstructing-new-yorks-fashion-act.