Regarded as the ‘‘Fashion Capital of the United States,” New York City secures the highest concentrations of fashion sales, talent, and largest breeding ground for aspiring models, designers, and brands. As a global fashion capital, in 2022 alone, New York City generated $96 billion in fashion, jewelry, and footwear sales—accrewing $51 billion in direct and $45 billion in indirect sales. The industry accounted for over $20.4 billion in gross city product (GCP), while employing over 130,000 individuals. While the fashion industry is critical to New York’s economic health and global stature, sustainability has become an increasingly dominant standard in the business world. On October 8th, 2021, State Senator Alessandra Biaggi and Assemblywoman Anna R. Kellens proposed Bill S4746B, encompassing the Fashion Sustainability and Social Accountability Act—requiring fashion retail sellers and manufacturers to disclose environmental and social due diligence policies, map supply chains, protect workers rights, and set targets to improve their overall impact on the environment.
The Bill S4746B, the Fashion Act, applies to apparel and footwear companies operating and selling products in New York that exceed one hundred million dollars in annual gross sales, excluding second-hand goods and multi-brand retailers. The Fashion Act would require these companies to conduct environmental due diligence aligned with the Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises (OECD) Guidelines for Responsible Supply Chains, mapped across the 4 Tiers: Final product manufacturers, material processors, raw material processors, and raw material producers. The act pushes a disclosure timeline, outlining each tear as following Tier 1 suppliers: Within 1 year (75% of suppliers by volume). Tier 2: Within 2 years, tier 3: Within 3 years (50% by volume or value), and tier 4: Within 4 years (50% by volume or value).
If passed by legislation, this act would make New York the first city in the world to impose supply chain climate impact regulations on fashion companies. Abiding by the Fashion Act, companies (fashion sellers) would be required to align with the OECD Guidelines on responsible conduct and due diligence, specifically in the garment sector. Such responsibilities would include identifying potential risks in supply chain operations, promoting long-term contracts, price premiums and financial support to mitigate risks to human rights and to meet environmental standards . Human rights in the fashion industry relate to the protection and ethical treatment of workers. The Fashion Act emphasizes the remediation and compensation for workers impacted by human rights violations, thus creating compensation funds that restore the affected individuals to their pre-violation conditions through financial compensation. This is on top of the living wage paid to all workers for a standard workweek, a wage that covers the essential needs and provisions for unexpected events of a working individual.
The Fashion Act obligates fashion companies to uphold environmental standards through mandatory reporting. Brands are required to implement greenhouse gas (GHG) reduction targets covering Scopes 1 and 2 (by 2026) and 3 (by 2027). These fashion companies are also asked to align their reporting with Science-Based Target Initiatives, using primary data to measure the emissions and reduction targets bi-annualy. To ensure compliance with the reporting mandates, the Fashion Act uses annual due diligence reports that fashion companies will publicly display on their websites concerning material volumes, supply chain mapping categorized by the four tiers, and financial expenditures. The requirements imposed on fashion sellers by this section of the fashion act are monitored by the attorney general and supported by the Department of Environmental Conservation. Fashion sellers that fail to comply with the due diligence expectations of the Fashion Act—either failing to file a due diligence report or their reportings are inaccurate or falsified—will be notified by the Department of State. After three months, if the sellers fail to file a complete report, then that company will be publicly listed as ‘non-compliant’ on the department’s website, as well as face civil fines up to $15,000 per violation per day that will be directed to a Fashion Remediation Fund—funding projects benefiting affected workers and communities . With stringent requirements at play, one of the biggest goals of the Fashion Act is to broaden the transparency within companies in the fashion industry, mandating open data requirements making disclosure on supply chain information and GHG emission data freely accessible, reusable, as well as significantly more available to the public. Maxine-Bédat, the founder of the New Standard Institute proclaimed, “Fashion is one of the least regulated industries,” a claim supported by the ambiguous origins of supply chains from multiple countries and continents. And while the Fashion Act hopes to achieve just that, the legislation has yet to show its effectiveness, considering it has been in the New York State legislative agenda for over two years.
Although the bill is backed by notable non-profit organizations including the New Standard Institute, the New York City Environmental Justice Alliance, the Natural Resources Defense Council, and over 100 brands, critics claim that the bill falls short in providing a means to hold fashion companies accountable for its supply chain and waste. For example, the legislation of Bill S4746B only requires the disclosure information on the sellers supply chains, and has no implication to improve the seller's sustainability. And although the bill requires sellers to use science-based targets to reduce their GHG, the monitoring process behind this feat is both unexplored, and dismayed considering that the Fashion Act does not obligate the sellers to act on its targets or even attempt to achieve them. Thuss, this Bill proves to be focused on how a fashion company communicates its targets and operations instead of the pathway to achieving remedial goals.
Additionally, in the Fashion Act’s requirements for fashion companies to disclose a minimum of 50 percent of their supply chain among the four tiers, the legislation does not specify the distinct parts of the chain that must be recorded, allowing for brands to be selective in the information that they share, artificially aligning their company with the greatest sustainability values. Although the New York Fashion Act is doing what no other legislation globally has done—governing the greater social and environmental actions of the fashion industry and mandating that change, it is still estimated that by 2050, 26% of the global carbon budget will come from the fashion industry. The New York State Senate Bill S4746B demonstrates a significant awareness of equity and environmental considerations by integrating worker protections, environmental justice, and supply chain disclosure into its framework, However, the effectiveness of the policy depends largely on rigorous enforcement and efficient monitoring mechanisms that in themselves require time, money, and dedication. Even with these challenges amended, the Fashion Act cannot solve the global epistemic problem of overconsumption. Its regulations can slow down the pace of garment production through its GHG reduction targets which could reduce the amount of trending items circulating thus decreasing the pressure to purchase new trending clothing. In order to fully shift as a society to embrace the integrity behind the New York Fashion Act, consumers will need to align their values with their shopping habits, making sustainable fashion a part of our culture—not just a value proposition.
Bibliography
The Fashion Act. “The Fashion Act.” Accessed October 22, 2024. https://www.thefashionact.org.