(Updated January 13, 2023) New York’s proposed Fashion Sustainability and Social Accountability Act began as a disclosure law that fell short of holding brands accountable for their negative impacts. However, a November 2022 update includes significant changes that have put the bill on more promising footing to hold the fashion industry to account.
What is the fashion act and who introduced it?
The Fashion Sustainability and Social Accountability Act (S7428A), called the “Fashion Act” for short, is a bill introduced in New York State that, if adopted, would require fashion companies to set and meet Science Based Targets on carbon emissions, to perform human right due diligence on their value chains, share in the responsibility of wage and hour violations with their Tier 1 factories, and disclose more information about their supply chain’s environmental and human rights impacts, from the location of their factories and their carbon emissions to the wages they pay their garment workers. It was introduced in the New York State legislature by Senator Alessandra Biaggi and Assembly Member Anna Kelles in January 2022. It was co-developed by the nonprofit New Standard Institute.
The initial version of the bill required companies to report information about their social and environmental impacts but stopped short of requiring them to take action, drawing heavy criticism. However, a November 2022 update to the law has strengthened the bill significantly.
As of January 2023, the bill has support from a number of brands, labor unions and civil society groups, such as Patagonia, Stella McCartney, Everlane, Reformation, Workers United, RWDSU and the NRDC.
What exactly does the Fashion Act do and what does it aim to accomplish?
The Fashion Act (S7428A) requires major apparel, footwear and handbag companies operating in New York State with over $100 million in annual revenue to address a number of social and environmental impacts throughout their operations. Among the key components of the bill, companies would be required to:
- Set and meet time-bound Science Based Targets to reduce carbon emissions throughout their value chains, including Scope 1, 2 and 3.
- Sample wastewater in their dye houses and correct water pollution issues.
- Map their supply chains (75% by volume in Tier 1 and 2, and 50% by volume in Tier 3 and 4), reveal the location of their factories, and wages to workers, among other disclosures.
- Conduct human rights due diligence on their supply chain and commit to identify and assess, and mitigate and account for, any human rights harms they have caused or contributed to, or are linked to.
- They must share in the financial responsibility with their Tier 1 cut-and-sew garment suppliers for any wage and hour violations.
If passed, the law would be enforced by the New York Attorney General who would be able to pursue civil proceedings against violators as well as fine companies for violations, placing that money into a Fashion Remediation Fund, which would then be distributed to environmental and labor remediation projects in impacted communities. You can read the fine print of the bill here.
Does the bill only apply to fashion brands based in New York State?
No. the bill would apply to every large apparel, footwear and handbag company doing business in New York that has gross receipts that exceed $100 million dollars or more annually, worldwide. That’s most of the big fashion companies and retailers we’re familiar with, from Fashion Nova and H&M to Nike and Gucci. The bill also covers multi-brand retailers like Walmart, Kohl’s and Target, who sell more than $100 million dollars in apparel.
What ISSUES WERE ADDRESSED IN THE AMENDED DRAFT AND HOW HAS THE FASHION ACT IMPROVED SINCE IT WAS INTRODUCED?
The biggest shift from the first to the second draft (S7428A) of the Fashion Act is that lawmakers shifted the bill’s language from requiring companies to report and disclose information to mandating action and requiring companies to take concrete steps to reduce and address social and environmental harms. This is a big and important change. Flowing from this shift, this means that the Attorney General is able to hold companies accountable for failing to address or prevent harms they cause, like human rights violations, water pollution, carbon emissions or wage theft. Here is a brief overview of some of the more significant changes in the new draft:
- Companies are now required to conduct human rights due diligence, including addressing, avoiding and remediating any human rights harms caused in their operations, whereas the earlier draft required them only to report on any due diligence policies they may or may not have. Here is an explainer on mandatory human rights due diligence.
- Significantly, the new draft also includes joint and several liability on companies for wage and hour violations in their Tier 1 sewing factories, putting it in line with California’s Garment Worker Protection Act (SB62) and Congress’ Fashioning Accountability and Building Real Institutional Change Act (FABRIC Act).
- The remainder of the bill’s requirements, including that brands set and meet Science Based Targets to reduce carbon emissions and set water pollution reduction targets and meet them, now fall under companies’ process of conducting corporate due diligence.
- Lastly, in the enforcement section, the fines collected on brands are now distributed to “directly and verifiably benefit the workers and communities directly impacted” by companies. This, in theory, means, for example, if wage theft occurs, the money flows back to the workers owed. If pollution occurs, the money goes back to the community polluted.
What WAS WRONG WITH THE FIRST VERSION OF THE FASHION ACT?
The initial draft of the Fashion Act marked the first time a US State legislature attempted to address both the social and environmental impacts of the fashion industry in one bill. But the initial version was largely a disclosure bill that only mandated that companies disclose their impacts, policies, and targets related to social and environmental issues. But brands were not required to actually take action to correct or address their environmental and social harms, outside of concrete requirements on reducing carbon emissions. Nor were they to be held accountable for these wider impacts.
There was a lot of criticism of this approach because mandatory disclosure bills are very common globally and have generally failed to change companies’ policies or stop harmful behaviors. The Fashion Act was initially very similar to other weak disclosure laws like California’s Supply Chain Transparency Act (2012), the UK Modern Slavery Act (2015), and Australia’s Modern Slavery Act (2018). For example, Australia’s Modern Slavery Act resulted in only 27% of companies taking any sort of action to address forced labor in their supply chain. Globally, more governments are acknowledging that the disclosure approach to encouraging socially responsible corporate behavior is lacking, and the time has come to mandate action.
Regulations in Europe and California have already moved towards mandating that companies take action to protect the environment and human rights. For example, mandatory human rights due diligence laws that have passed in Germany and France (and are soon to be law across the EU) require companies to not only report on the labor and environmental problems in their supply chain, but also mandates that companies correct and prevent them from happening, introduces liability on brands when harms continue, and includes remediation, meaning they provide a path to justice for victims when they do happen. Likewise, the Garment Worker Protection Act (SB62) in California holds brands and retailers jointly liable when garment workers go underpaid in their factories. SB62 is the first legislation in the world to establish clear liability on brands and retailers for factory worker pay, even when the brand does not own the factory.
Under the original draft of the Fashion Act, companies could report that they’ve set living wage targets for their apparel factories, market that fact to consumers, never meet those goals, and remain in compliance with the law. Companies could also say they’ve set a goal to recycle all of their clothing by 2030, market that fact to consumers, never meet it, and be in compliance. Sounds a lot like how the fashion industry already operates, no?
The original bill included steep fines on brands and allowed citizens to bring a civil suit against them for failures to disclose information. But these steep fines and civil suits should protect the people and communities harmed by the fashion industry, which they did not.
ISN’T TRANSPARENCY AN IMPORTANT FIRST STEP IN CHANGING FASHION?
No, transparency should only be pursued in tandem with industry accountability, not as end in itself. That’s because transparency alone does not have a proven track record of changing fashion brands’ behavior or making them more ethical or sustainable, even when the government mandates it. This has been thoroughly demonstrated in scholarly research, nonprofit reports, articles in the business press, and via numerous failed policies around the world that fall short of driving impact. For years, major apparel brands have voluntarily disclosed substantial amounts of information about their supply chains (we know because we have to dig through these annual reports to create the Remake Fashion Accountability Report), with virtually no benefit to the environment and workers who make their clothes. Year after year, brands reveal information, make promises to do better, and progress doesn’t happen.
While more consistent and streamlined data on the fashion industry’s impacts will be useful for civil society, brands, shareholders and consumers, the point of gathering any data about harmful behavior should be to end it. To end it, we must mandate that companies change their behavior and attach liability to the continuation to do harm.
WHAT GROUPS WORKED TO AMEND THE FASHION ACT?
Many groups and individuals worked to craft and amend the Fashion Act. On the worker rights side, a coalition of 20 human and environmental organizations and advocates, including Remake and the PayUp Fashion coalition, wrote to lawmakers in January of 2022 to convey that the first draft of the Fashion Act failed to hold corporations accountable and to drive real change in fashion. You can read the suggested amendments to improve the bill here. Lawmakers met with our coalition and eventually took on many of our suggested changes, which we applaud.
How DOES the Fashion Act COMPARE TO other regulations?
The Fashion Act marks the first time a US State legislature has attempted to address both the social and environmental impacts of the fashion industry in one bill. The current draft is heavily modeled after European human rights due diligence bills with the novel addition of stringent language on carbon emission reductions as well as joint and several liability on companies for wage violations. You can read more about the due diligence approach here.
What loopholes remain in the new draft?
There are several areas where we are urging lawmakers to further strengthen and clarifying the language in the bill to ensure it has maximum impact. These changes include:
- Restoring the private right of action for citizens and victims to bring proceedings directly against brands. This right was part of the original version of the Fashion Act and was removed in the new draft, weakening enforcement.
- Requiring full supply chain traceability. Currently the bill requires companies to map 75% of their Tier 1 and Tier 2 factories (these are garment factories and fabric mills) by volume. Companies should fully map their supply chains all the way to Tier 4.
- Clarification of the enforcement of joint and several liability on brands for wages.
- Mandate ethical purchasing practices. The language added in on ethical pricing and responsible edits reads as voluntary or discretionary and should be mandatory.
- Clarify that independent bodies without ties to fashion can oversee reporting and claims.
WHAT’S NEXT FOR THE FASHION ACT? SHOULD WE SUPPORT THE UPDATED AND AMENDED BILL?
A list of current endorsers of the Fashion Act are here as well as resources on how to get involved. The bill will be pushed forward again in the 2023 legislature in hopes of bringing it to a vote. We applaud lawmakers for listening to labor and strengthening the bill and look forward to the remaining loopholes in the language being closed.