The U.S. fashion industry has been abuzz about the Fashion Act, ever since New York unveiled the proposed new piece of legislation early this month. It would require fashion brands that do business in New York to make vast improvements to the sustainability of their processes, as well as openly report factors like production volume and emissions.
While the industry has made sustainability a marketing buzzword in recent years, actual concrete regulations — especially those with penalties – are rare in the industry. There are few rules about what you can label as “organic” or “sustainable,” for example, beyond bare minimum false advertising laws.
Companies like Allbirds have supported legislation in the past. Hana Kajimura, head of sustainability at Allbirds, told Glossy in August that it’s the only way to see actual change in the industry.
“The choice should not be on the consumer to make compromises and do all the research to determine what’s good for the environment,” she said. “It should be on the companies making this stuff to make it better.”
Here’s a look at three upcoming pieces of legislation that will impact the fashion industry this year.
The Fashion Act is one of the broadest regulation proposals the industry has seen. It would require companies with more than $100 million in annual revenue and operations in New York to disclose their emissions and production volumes, as well as map out the sources of all the materials they use.
Those grappling most with the consequences of the legislation are large companies. The law would specifically target large companies, which are typically slowest at carrying out new processes, considering their supply chains often span the globe. The bill, as written, does not offer a grace period to get its required programs in place, though that may change if it passes.
“The fashion community is very focused on sustainability, in general,” said Sarah Flint, founder of her eponymous footwear brand. Flint said she supports the bill, especially since her business is already almost entirely compliant. “But for big brands, it takes a while to make these big changes. It’s very difficult to re-engineer a company when you get to a certain scale and size.”
Sustainable Corporate Governance Initiative
The EU proposed the Sustainable Corporate Governance Initiative in 2021. The new directive would require companies to focus on long-term sustainability over short-term financial growth. They’d also be required to incorporate sustainability goals into high-level decision-making, and track emissions and other data around how their actions affect the environment.
The exact details of this initiative are not as clear as those of New York’s Fashion Act, but the two proposals are similar at their core. Specific metrics and goals around emissions and environmental impact are still being worked out and will likely be revealed later this year by the European Commission. As of February 2021, the EU had consulted 855 entities throughout the industry, including fashion companies and non-profits, on what the details should be.
Europe, in general, is more regulated than the U.S., according to Rania Sedhom, managing partner of Sedhom Law Group, who has experience with fashion law.
“European brands are used to regulation,” Sedhom said. “The big fashion houses in Europe will probably be a lot easier to convince on regulation than American brands, since they already have some of the measures in place.”
Green Claims Code
Announced by the U.K.’s Competition and Markets Authority in October 2021, the Green Claims Code will likely go into effect within the next month. The ruling requires brands to substantiate any claims of a product being “sustainable.” They must provide clear information on a product’s emissions, materials and sourcing throughout its entire lifecycle, not only for when it’s manufactured or sold.
That means a product that’s made in a sustainable way, but is non-recyclable, doesn’t biodegrade in a short time or isn’t designed to last, would not meet the standards. The brand, therefore, could be penalized.
Greenwashing is a big issue in fashion and, until now, there has been little regulation on the various terms brands use to advertise their product as sustainable. Like other legislations listed here, the main requirement for brands under the Green Claims Code would be disclosures.
“There are rules about nomenclature in all sorts of things,” Sedhom said. “Wines can only be called certain types if they’re from certain regions, for example. But fashion has never had anything like that, and it’s led to terms like ‘sustainability’ having no meaning at all. They’re completely overused.”