New York Could Make History With a Fashion Sustainability Act

Last September, as New York Fashion Week was taking place for the first time in a year, Kathy Hochul, the new governor, sat front row at the Prabal Gurung show, marking a fresh era in the relationship of the fashion industry and the state government. “This is where all the eyes of the world are when it comes to fashion,” she later told Vogue.

Just four months later, the eyes of the world may open a little wider. On Friday, the Fashion Sustainability and Social Accountability Act (or Fashion Act) was unveiled: a bill that, if passed, would make New York the first state in the country to pass legislation that will effectively hold the biggest brands in fashion to account for their role in climate change.

Sponsored by State Senator Alessandra Biaggi and Assemblywoman Anna R. Kelles, and backed by a powerful coalition of nonprofits focused on fashion and sustainability, including the New Standard Institute, the Natural Resources Defense Council and the New York City Environmental Justice Alliance, as well as the designer Stella McCartney, the law will apply to global apparel and footwear companies, with more than $100 million in revenues, doing business in New York.

That is pretty much every large multinational fashion name, ranging from the very highest end — LVMH, Prada, Armani — to such fast-fashion giants as Shein and Boohoo.

Specifically, it would require such companies to map a minimum of 50 percent of their supply chain, starting with the farms where the raw materials originate through factories and shipping. They would then be required to disclose where in that chain they have the greatest social and environmental impact when it comes to fair wages, energy, greenhouse gas emissions, water and chemical management, and make concrete plans to reduce those numbers (when it comes to carbon emissions, specifically in accordance with the targets set by the Paris Climate Accords).

Finally, it would require companies to disclose their material production volumes to reveal, for example, how much cotton or leather or polyester they sell. All of that information would also have to be made available online.

“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,” Ms. Biaggi said in a news release, calling the law “a groundbreaking piece of legislation that will make New York the global leader” in holding the fashion industry “accountable.” She also said that the act would ensure that “labor, human rights, and environmental protections are prioritized.”

Companies would be given 12 months to comply with the mapping directive (18 months for their impact disclosures), and if they are found to be in violation of the law, they would be fined up to 2 percent of their annual revenues. Those fines would go to a new Community Fund administered by the Department of Environmental Conservation and used for environmental justice projects. The New York attorney general would also publish an annual list of companies found to be noncompliant.

While similar legislation regarding due diligence is being debated in the European Union, and while Germany, France, Britain and Australia have laws requiring due diligence when it comes to human rights and slavery, there is no general legislation in any country governing the greater social and environmental actions of the fashion industry and mandating change.

In 2010, California passed the Transparency in Supply Chains Act, which addresses modern slavery, in 2019 banned sales of new fur products, and last year passed the Garment Worker Protection Act, but the New York act focuses on the manufacturing end of the business, broadly defined.

“Fashion is one of the least regulated industries,” said Maxine Bédat, the founder of the New Standard Institute. In part that is because its sprawling supply chain can include multiple countries and continents. As a result, efforts at sustainability vary widely. Imposing government regulation would regularize the reporting and “make sure there isn’t a competitive disadvantage to doing the right thing,” Ms. Bédat said.

Though many brands have become increasingly vocal in acknowledging their own responsibility when it comes to climate change and human rights violations, efforts to rectify the situation have been left up to the companies and an assortment of nongovernmental watchdog consortiums like the Fair Labor Association, which addresses wage issues, and Higg, which addresses supply chain reporting. They can vary widely.

Ralph Lauren, Kering, LVMH and Capri Holdings, for example, are among the companies that have already committed to using the Science-Based Targets Initiative, a tool for reducing carbon emissions created by the CDP, the United Nations Global Compact, World Resources Institute and the World Wide Fund for Nature. But Shein didn’t hire its first environmental, social and governance (ESG) head until December.

“Often there is a knee-jerk reaction by businesses against the idea of regulation,” Ms. Bédat said, noting that numerous stakeholders were consulted in drafting the Fashion Act, including retail brands and manufacturers such as Ferrara, which is based in the garment district and has endorsed the bill. But, she continued, “even the auto industry, which initially rebelled against fuel efficiency standards, has now embraced them.”

The Fashion Act, Ms. Bédat said, “is an effort to meet industry where they are, recognize the good faith efforts they are already making and come up with a common standard, but do so with some teeth.”

The bill will now make its way through Senate and Assembly committees, with the sponsors aiming to bring it to a vote in late spring after state budget negotiations are complete. “Before officially introducing the bill, we built a broad coalition of support that includes leaders in the fashion industry, manufacturers, labor rights activists and environmental activists who are passionate about seeing the bill become law,” Ms. Biaggi said via email.

Though she said she expected “that some companies impacted by this legislation won’t initially support these new standards,” she added: “This diverse and active coalition makes me confident we can pass this legislation in both chambers later this legislative session.”

Then, said Ms. Kelles, New York may really “set a trend.”