How to Comply with Impending New York Fashion Laws – Sourcing Journal

If one bill proposed this spring passes, fashion brands could face the harsh reality that they could lose millions of dollars if their supply chains aren’t working well. there is.

Brands have already had to navigate significant and often confusing legislative changes with the Uyghur Forced Labor Prevention Act of 2022, but recently introduced fashion sustainability and social accountability. The terms of the law (commonly called new law) may need to be renewed. York Fashion Act.

Despite the region its informal name implies, the bill has vast global implications, said Mark Burstein, executive vice president and industry principal at supply chain software provider Logility. .

“Uyghur law is like a ripple in the ocean. New York fashion law is a tsunami and warning sirens are sounding now,” Burstein said in a recent conversation with Sourcing Journal. Corporations are moving to higher ground, while others are still on the beach, watching the tide go out and wondering, “When will the tsunami come?” Many of those companies will end up falling victim. “

The proposed bill would require apparel and footwear companies with global revenues of $100 million and operations in New York to map at least 50% of their end-to-end supply chains, but that’s just the beginning. It’s not too much.

The brand also publishes its own environmental and social sustainability report and sets binding, science-based targets to limit temperature rise to 1.5 degrees Celsius above pre-industrial levels. It is necessary to steadily reduce greenhouse gas emissions in line with the goals of the Paris Agreement.

In addition, companies should disclose their annual output of materials categorized by type, such as polyester, leather, cotton, etc., and median worker wages measured against local minimum and living wages. I have. In addition to these disclosures, brands should outline their approach to incentivizing supplier performance on labor rights through measures such as contract renewals and price premiums.

If an organization fails to comply with mapping requirements within 12 months and fails to meet sustainability-related disclosures within 18 months, it will be fined up to 2% of annual global revenue.

“Taking Nike as an example, non-compliance results in fines of $1 billion each year,” Burstein said. “They could have chosen not to sell their products in New York State, but that obviously wouldn’t happen.”

The potential for fines should set off alarm bells for those in fashion who do not fully understand the supply chain, ultimately putting them in a tight spot where they risk severe economic devastation for inaction.

Noting that most companies are reactive rather than proactive on these issues, Burstein notes, citing what Logility defines as five maturity stages of traceability, 90% of the industry stated that it remained at “Phase 0”.

“Some large global brands have actually achieved Stage 1, and about 10 or so brands have reached Stage 2 or 3,” said Burstein. “None have reached Stage 4 or 5, but some are underway.”

Click the video image above to learn more about New York Fashion Law compliance.

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