United States: New York lawmakers introduce sustainability requirements for the fashion industry

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Last week, New York lawmakers announced a bill to impose sustainability reporting requirements on the fashion industry. If passed, the Fashion Sustainability and Social Responsibility Act would generally require major fashion retailers to map their supply chains, make various disclosures on their websites, and pledge to reduce their environmental impact. .

The law would broadly apply to fashion retailers and manufacturers with more than $100 million in gross revenue doing business in New York. These companies should make good faith efforts to map at least 50% of their suppliers by volume at all levels of production, from raw material to final production. Based on this exercise, companies would be required to disclose certain information on their websites, including:

  • Supply chain mapping and disclosure, with company supplier information.
  • An impact and due diligence disclosure, including a social and environmental sustainability report, with information on the policies and due diligence activities carried out to identify, prevent and mitigate potential adverse impacts, including findings and results of these activities.
  • An impact disclosure on priority negative environmental and social impacts within 18 months of the adoption of these policies, including information on greenhouse gas emissions, volume of materials produced, recycling efforts, the median salaries of priority supplier workers and the company’s approach to encouraging supplier performance on worker rights.
  • A disclosure of the company’s goals for impact reduction and monitoring the implementation and results of due diligence, including estimated timelines and criteria for improvement.

If signed into law, the law would be enforced by the New York Attorney General and includes a private right of action, allowing New York citizens to bring civil lawsuits to enforce compliance with the law. Companies that fail to comply can be fined up to 2% of annual revenues of $450 million or more. Money generated from the penalties would fund projects to benefit New York’s environmental justice communities.

Although activists (and even some members of the fashion industry) have expressed support for the bill, there is no doubt that companies will be required to spend a lot of time, money and effort to compliance, and that they will be required to disclose information (such as supplier lists) that they might otherwise consider confidential.

We are monitoring the evolution of this legislation and will publish major developments here.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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