A particularly ambitious text, the New York Fashion Sustainability and Social Accountability Act aims to impose a duty of due digilence on both environmental and human rights issues, with required monitoring and results, as well as supply chain mapping. The Fashion Act would also all on companies to set and achieve climate impact reductions, in line with the Paris Agreement. A due diligence report must be submitted annually to the Attorney General.
Which criteria are taken into consideration?
- Social and environmental accountability, through the identification, prevention or mitigation of risks related to the brand’s operations.
- Responsible purchasing policies,implying stakeholder consultation. Suppliers must be incentivised to improve their performance in terms of labor rights and environmental impact, by developing pricing models that take into account the cost of wages, benefits and necessary investments. Responsible exit or disengagement strategies must be put in place.
- The origin of the products, with information on the manufacturing and weaving/knitting sites in years 1 and 2. In year 3, information will also be required on the spinning mill and raw materials.
- Compliance with ZDHC (Zero Discharge of Hazardous Chemicals) wastewater guidelines for all dyeing, finishing and garment washing suppliers.
- Greenhouse gas emission reduction targets and an annual inventory, in accordance with the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard, the World Resources Institute and the World Business Council for Sustainable Development.
Who does it apply to?
Any apparel, footwear or handbag brand with annual revenues of over $100 million.
When will it come into force?
The New York Fashion Act was introduced in January 2022, revised in February 2023, and if it came to the end of the vote, would be applicable immediately, with publication of the environmental and social due diligence report expected within 18 months of implementation.
What are the potential penalties?
Companies could be penalised up to 2% of their annual revenues in New York State. The amount will be contributed to a fund working for environmental or worker protection projects.
How to get ready for it?
Already encouraged by Article 13 of the AGEC law enforced in France, businesses will need to achieve the finest possible traceability of their operations, by directing this research to the products most at risk or with the highest volume. Gathering data on the origin of materials, energy mixes and modes of transport for the various stages will also make it possible to model greenhouse gas emissions.
Implementing responsible purchasing policies early will enable businesses to identify risks and effectively integrate responsibility indicators into purchasing activities on the supply chain.
The Massachusetts proposal of February 2023 targets the same companies as the New York text, and is aligned on traceability and the due diligence criteria. Only wastewater requirements and greenhouse gas reduction targets are missing from the text.