Fashion Industry Reacts To New York Sustainability Legislation That Could Upend Transparency Practices

In 2010, when then-President Barack Obama signed a new Health Law requiring restaurant chains of more than 20 restaurants to disclose caloric intake of their offerings, Americans entered these transactions knowing fully what their meal entailed from a health impact stance. (The FDA passed a law to enforce full compliance in 2018). Now in the same vein, the fashion industry may be seeing a similar trend regarding being accountable to sustainability practices.

On Friday, January 7, 2022, a new bill in New York state was presented, initially drafted in October 2021, that if passed into law, would require transparency of at least 50 percent of the goods sold from raw materials to shipping regarding their environmental impact. Specifically, Assembly Bill A8352/S7428—introduced by Assemblywoman Dr. Anna R. Kelles and New York State Senator Alessandra Biaggi, respectively, with support from influential fashion and sustainability nonprofits including designer Stella McCartney, the New Standard Institute, the Natural Resources Defense Council, and the New York City Environmental Justice Alliance—requires supply chain mapping and impact and due diligence disclosure. The finer points of the Fashion Sustainability and Social Accountability bill can be viewed here. 

“The fashion industry is responsible for a staggering 4 – 8.6% of global greenhouse gas emissions and has been permitted to operate unchecked by regulations that would curb pollution and the use of exploited, forced, and child labor,” said Assemblymember Dr. Anna Kelles (D-125), Prime Assembly Sponsor of the bill.

As of this posting, the bill is in committee. If passed in both the Senate and State Assembly, New York governor Kathy Hochul, who made a rare appearance as governor at NYFW last September, will receive to sign into law or veto.

NSI Aids The Bill

Maxine Bédat, founder and director of the New Standard Institute, a self-described ‘think and do tank using data and the power of citizens to turn the fashion industry into a force for good,’ played an instrumental role in the bill’s making.

Bédat was aware that shortcomings and other structural issues in the system, such as investor ‘short-termism’, rendered the fashion industry unable to self-regulate. Thanks to a professional relationship NSI Director of Operations Alejandra Pollak had with Senator Biaggi, the goal to create legislation in New York was realized. 

“I would characterize it as a meeting of the minds,” Bédat explains, adding, “The only way demonstrable progress was going to be achieved was through legislation, to make setting and meeting standards the requirement for doing business.” As the Senator was also interested in this space, she supported the legislation NSI developed. 

Bédat looked to experts and the Golden State for inspiration. “We looked at the biggest issues facing the industry and explored what common sense regulation would look like. Experts in the space – academics and other organizations taking the environmental side – were consulted. Quiet conversations with industry leaders also took place” She cited California’s mandatory fuel efficiency standard as inspiration. “This state law uses its large market size to drive global industry change. It’s the first law that would require companies to set and achieve science-based targets,” she points out.

“This legislation will require companies to perform mandatory due diligence to identify, prevent, mitigate and account for actual and potential adverse social and environmental impacts in their supply chain,” said Bédat. “New Yorkers have a powerful role to play in ensuring industries are practicing ethical standards in labor and environmental sustainability while at the same time ensuring a thriving local industry.”

Full compliance from the companies this will affect, she feels imminent. “Given the volume of support for sustainability, it is our expectation and hope that these companies get on board. In 2022 we need to know which companies are truly committed to sustainability and which are just empty talk,” she continues. Penalties for non-compliance would be up to 2 percent of that company’s global revenue.

Bédat, who also co-founded was CEO of the fashion company Zady which was named one of the world’s “Most Innovative Companies” in retail by Fast Company for its work in sustainability, couldn’t say that if the legislation would affect smaller brands if passed.

CFDA And AAFA Respond

The news may have come as a surprise to many in the industry. Various organizations such as the CFDA led by Tom Ford and Steven Kolb and the AAFA were not involved in making the bill. They released the following joint statement. 

“The apparel and footwear industry has a strong commitment to sustainability and social responsibility within its supply chains. The work of the Sustainable Apparel Coalition, UN Global Compact, Apparel Impact Institute, Global Fashion Agenda, Better Buying Initiative, AAFA’s Commitment to Responsible Recruitment, and CFDA’s sustainability work — including the CFDA Sustainability Resource Hub and ‘Sustainability by Design: Rethinking New York Fashion Week’ study with Boston Consulting Group — have transformed the industry’s supply chains from what they were decades ago.

That said, more needs to be done, and that is why AAFA and CFDA are aligned in meeting the 2030 and 2050 climate targets of the Paris Agreement and why we support the United Nations Fashion Industry Charter for Climate Action.

As industry organizations, we were not involved in the drafting of the bill, nor are we aware of any companies who were consulted. We are currently taking time to understand the bill and look forward to speaking with its authors to provide our input and share our perspectives.”

How The Big Players Score

While the news may have sent a collective panic across the industry, which boasts its fair share of small businesses, right now, the bill is similar to the calorie-intake charts in that it only applies to companies with at least $100 million in sales annually to include luxury giants LVMH, Kering; American mass producers like PVH, fast-fashion behemoths H&M PVH and Zara parent company Inditex and sports giants Nike NKE and Puma. 

According to the BoF Sustainability Index report dated March 22, 2021, companies are graded across six categories deemed the industry’s most significant transgressions: Transparency, Emissions, Water & Chemicals, Materials, Worker’s Rights, and Waste. All the companies mentioned above, except for LVMH, score well above 40 for their overall rating. Thus, conceivably compliance to a new ruling in New York state, one of the strongest US markets, should be seamless. 

Swedish Model

H&M, which from face value would seem to be one of fashion’s biggest offenders due to the volume of low-cost slash disposable clothing they produce, is among Sweden’s sustainability leaders, according to Head of Stockholm Fashion Week Catarina Midby. “Sweden’s biggest brand H&M is at the top of Fashion Revolution’s Transparency Index, which indicates the level of engagement as they lead and invest in many in sustainability initiatives for the fashion industry nationally and globally.,” she explains adding “Sustainability is a focus for the Swedish fashion industry and Stockholm Fashion Week. The upcoming Stockholm Fashion Week will explore the New (more sustainable) Normal and the impact of the extreme digital development caused by the pandemic, including how to improve processes and consumption patterns within this space. In addition, we will present brands that work with alternative, circular business models.”

Midby strongly supports laws to enforce these practices, citing steps Swedish brands have taken. “Transparency is key to sustainable change for our industry, but it shouldn’t be a voluntary action as it is now, which is why I strongly support the Fashion Act in New York. Here in Sweden, designers and brands have increasingly prioritized investing in reporting on climate and social impact through their value chain and actions to improve and reduce it. This means brands need to have a committed sustainability agenda, and they also need to work together. Many local brands are members of STICA (The Swedish Textile Initiative for Climate Action). In addition, they are also active in international organizations like The Sustainable Apparel Coalition, The Fashion Pact, and Global Fashion Agenda. For example, sustainable Swedish menswear brand ASKET shares the path the garment took from concept to purchase, almost ad nauseum, according to founder August Bard Bringéus.

Transparency At Any Size

Closer to home, even if it won’t initially affect them, the industry reflects on the proposed legislation. For jewelry brand Deepa Gurnani, founded by husband and wife duo Jay Lakhani and Deepa Gurnani, which produces products in India, it’s a sustainable challenge this small business would willingly accept should the legislation extend to smaller brands.

“I am 100% for this new act that the state of New York is trying to implement. Our industry is moving at such a rapid pace where no one can keep up. This act would help us all take a step back and think about properly implementing this change in our supply chain. It will be hard at the beginning for any business. Still, in the long run, this is where we should be heading to preserve our planet and future generations to come,” said Lakhani, who also serves on the Accessories Council Board. President Karen Giberson, the Editor-in-Chief of Accessories Council magazine, concurs but with caution. “The spirit of the State’s efforts is well-intended, but I worry about the speed that they want to enforce it and the difficulty in tracking the transparency.”

AERA, a line of vegan and sustainable shoes, is a naturally and voluntarily sustainable small business that could lead others looking to do the same. “AERA has become more sensitive to sustainability. Mandates like the Fashion Sustainability and Social Accountability Act are finally being introduced to lead our industry in the right direction,” says co-founder Tina Bhojwani.

“Our initial approach was to conduct a lifecycle assessment with the support of SCS Global Services(a third-party certification agency specializing in scientific measurements and transparency) and to partner with organizations that offered certifications. We were awarded The Butterfly Mark by Positive Luxury, and most recently B Corp certification to validate our work.” 

Bhojwani, also co-founder of Figure Eight and a sustainable luxury goods pop-up in Soho, believes government intervention is the only path forward, and businesses of all sizes should adhere. “The only way to achieve meaningful change is for the government to create legislation and standards by which businesses should operate. The fashion industry lacks regulation, and I am proud that New York City is taking the lead on such a critical initiative, especially as it is a global fashion capital. Furthermore, thanks to science, technology, and the innovative nature of the industry, there is ample opportunity to operate within a system of ethics, accountability, and transparency at any scale.”