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What Fashion Needs to Know About 2023’s Legislative Landscape

For years, fashion campaigners have been banging the drum against the idea that the industry can rely on voluntary commitments alone. Self-policing, they argue, didn’t stop the Rana Plaza building from crashing down outside the Bangladeshi capital of Dhaka a decade ago, killing 1,134 garment workers and injuring thousands more. Neither have good intentions done much to rein in runaway emissions born of overproduction and prodigious pollution.

They’re not alone. A growing number of brands and retailers are waking up to the fact that legislation can be the great leveler that puts every company on equal footing. Without regulation, firms that genuinely try to do better risk losing any competitive advantage. It’s why Asos has called lawmakers to toughen Britain’s 2015 Modern Slavery Act and mandate human rights due diligence. And why Reformation threw its support behind California’s Garment Worker Protection Act, which eliminates the piece-rate system and holds buyers liable for any wage theft by their suppliers.

2022 was a banner year for cleaning up supply chains. In June, the Uyghur Forced Labor Protection Act bore down the rebuttable presumption that all goods from China’s Xinjiang Uyghur Autonomous Region are made with forced labor and therefore barred from entering the United States. A few months later, California became the country’s first state to enact enforceable limits on the intentional use of per- and polyfluoroalkyl substances, a.k.a. PFAS, with an eye on phasing out the forever chemicals from “any new, not previously owned” apparel, handbags, footwear, upholstery, curtains, towels and bedding by 2025.

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Governor Gavin Newsom also signed into law the Plastic Pollution Prevention and Packaging Producer Responsibility Act, or SB 54, which will require producers in the state to reduce single-use plastic packaging and food service products by 25 percent by 2032.

Across the Atlantic, a “summer of scrutiny” saw regulators in Norway, the Netherlands and the United Kingdom take “greenwashers” to task for misrepresenting their ecological claims, even as questions swirled around the reliability of the Higg Materials Sustainability Index. Spain in March approved an extended producer responsibility law requiring the separate collection of textile waste by Dec. 31, 2024. Throughout the year, Green Deal-championing members of the European Parliament made a flurry of plans to change the way companies make, sell and market products. On the other side of the Pacific, Japan published guidelines to help businesses set policies on human rights due diligence. It’s now part of a task force with the United States to weed out supply chain exploitation.

The new year ushered with it some new rules. Germany, getting a headstart on the rest of Europe, pulled the trigger on its mandatory due diligence law, meaning that companies of a certain size that fail to identify, prevent and remedy human rights and environmental sins in their operations now flirt with fines of up to 2 percent of their global turnover. In Massachusetts, it’s now illegal to toss clothing, mattresses and textiles—used underwear, included—in the trash. California’s statewide ban on the sale of new animal fur products is likewise in effect.

By the time 2023 comes to a close, every garment of clothing sold by a major brand in France will have to feature an eco-label detailing its climate impact. The sale of most apparel containing intentionally added PFAS was supposed to be verboten in New York State around the same time, as well, though the enforcement date has been bumped to 2025 for regular clothing and 2028 for outdoor apparel for severe wet conditions in 2028, with more specific concentration thresholds in mind.

What hangs in the balance? The European Union is expected to refine its draft proposals for its Strategy for Sustainable and Circular Textiles and Sustainable Products Initiative, which some have dubbed a “fast fashion crackdown” for the attention they pay to product durability and repairability, end-of-life management and greenwashing. Much attention is also being paid to the bloc’s push for mandatory corporate sustainability due-diligence legislation and its proposed ban on goods made with forced labor, with both fielding criticism for going too far or not far enough. For those who argue the latter, redress and compensation to victims of abuse appear to be missing elements.

The European Council will also need to formally approve a new law on deforestation-free products that will outlaw products involved in forest loss. Categories that will be covered include soy, beef, palm oil, wood, cocoa and coffee and some derived products such as leather, chocolate and furniture.

The United States is grappling with its own efforts to narrow the intention-action gap. The Federal Trade Commission voted unanimously in December to begin a regulatory review of its Green Guides, which are designed to keep marketers from overinflating their environmental claims. The Fashioning Accountability and Building Real Institutional Change Act, or FABRIC Act, which seeks to mandate hourly pay in the garment industry and revitalize American manufacturing, could potentially come to a vote in the House and Senate this year, putting fashion on the federal agenda for the first time.

The Slave-Free Business Certification Act, which Senators Kirsten Gillibrand, a Democrat from New York, and Josh Hawley, a Republican from Missouri, introduced in February, appears to have stalled, though it could still find new life this year. If passed, it would require large corporations involved in mining, manufacturing and the production of goods such as clothing to conduct regular audits aimed at peeling back forced labor in their supply chains.

What is ready for another round in the ring is New York State’s Fashion Sustainability and Social Accountability Act—better known as the Fashion Act—which has won plaudits from the likes of Patagonia and Stella McCartney. Responding to criticism from stakeholders, State Senator Alessandra Biaggi and Assemblywoman Anna R. Kelles, the legislation’s Democrat sponsors, introduced several amendments that they said will “clarify and strengthen” its goals. These include tougher chemical and climate targets, increased liability for brands and requirements for responsible purchasing practices.

Also looming in the distance is the U.S. Securities and Exchange Commission’s proposed climate-related disclosure rule, which would require businesses to provide, for the first time, detailed reporting about their climate-related emissions and risks. Under the rule, filers will have to disclose both their own direct and indirect Scope 1 and 2 greenhouse-gas emissions, as well as Scope 3 emissions generated indirectly by suppliers—a tall order for firms that haven’t mapped out their supply chain beyond the initial tiers.

So who to put in charge of staying in compliance with this rapid-fire volley of rules and legislation? Should the sourcing department be responsible? What about the sustainability one? So far, it’s “literally a lottery,” said Tim Nelson, CEO of the nonprofits Hope for Justice and Slave-Free Alliance, both based in England.

“Most companies are looking at matrix management for this because of the nature of it sitting with different departments,” Nelson said at a recent webinar with Everstream Analytics. “I think it depends on how companies assess this on the risk register. It’s whether you perceive this as a supply chain risk, or whether you see this as a regulatory risk. Bigger companies might have an in-house counsel that’s responsible.”

This scattershot approach may change, mostly because it has to, Nelson said. And companies that have dedicated teams will find that they are able to address these challenges in a more expedient manner.

“I think, probably, if we were to look 10 years from now, there will be dedicated divisions in every company that will deal with this,” he said. “But, at the moment, most companies are trying to play catch up with what they have and trying to add into areas where they see needing real help.”