Proposed New York Fashion Sustainability Act – A Game Changer For Fashion Chains? | | Denton

The proposed New York Fashion Sustainability and Social Accountability Act (S7428/A8352, hereinafter “fashion law”) is the first law in the United States to impose social and environmental sustainability disclosure requirements on global fashion brands. However, this should not come as a surprise as several EU Member States, Australia and the UK have also started taking steps towards what is becoming a similar universal goal. Employment standards by requiring an annual statement confirming that slavery and human trafficking are free from business and supply chains.

The purpose of fashion law is two-fold.

  1. Require retailers and manufacturers to disclose their environmental and social due diligence policies.When
  2. Establishing a community benefit fund for the purpose of implementing one or more environmental benefit projects that directly and verifiably benefit the environmental justice community.

What is the current state of fashion law?

The Fashion Act was introduced to the New York Legislature by Senator Alessandra Biaggi in October 2021 and was referred to the Senate Consumer Protection Committee in January 2022. Its sponsors hope to vote in late spring.

Who should report?

The fashion law is (Me) “doing business in New York” and (ii) revenue exceeds $100 million. business in new york is now broadly defined as “actively engaging in transactions for monetary or monetary gain or profit”. In other words, businesses that do not have stores in New York may fall within the scope of the Fashion Act.

What reporting requirements do fashion laws impose?

  1. supply chain mapping: The Fashion Act requires companies to map at least 50% of their supply chain across all tiers of production. The Fashion Act does not specify which 50% of the supply chain is subject to disclosure, but encourages a “good faith” approach that focuses on supply chains related to priority risks. Additionally, companies must disclose the names of their preferred suppliers.
  2. Due Diligence Disclosure: Annually, companies are required to publish a social and environmental sustainability report. It describes the due diligence policies, processes, activities and their respective outcomes that are implemented to identify, prevent, mitigate and account for potential environmental and social risks. Such reporting must be made in accordance with the Organization for Economic Co-operation and Development Guidelines for Multinational Enterprises and Responsible Business Conduct.
  3. Impact disclosure: Companies must disclose their actual and potential adverse environmental and social impacts, including, inter alia, greenhouse gas reporting. impacts on water and chemical management; production volumes replaced by recycled materials; Monitoring and improving working conditions.
  4. Impact reduction target: Companies should set and achieve annual targets to reduce their environmental footprint, especially greenhouse gas emissions. This includes estimated timelines and quantifiable benchmarks for improvement.
  5. publicly accessible: All of the above disclosures must be published on the company website.

How soon after enactment will the requirements come into effect?

After enactment, companies subject to the law are given 12 months To comply with supply chain mapping and sustainability reporting requirements; and 18 months To comply with impact disclosure requirements.

What are the penalties for non-compliance?

Failure to comply could subject the company to fines of up to 2% of annual revenues in excess of $450 million. Money raised as a result of non-compliance will be deposited into a new Community Benefit Fund administered by the New York Department of Environmental Conservation to be used for environmental justice projects.

Each year, the New York Attorney General is required to publish a list of companies found to be out of compliance.

New York Attorney General and private person It will have the ability to enforce the law against non-compliant companies. Fashion law recognizes the right to private action:

  1. to anyone suspected of violating the law or an order by the Attorney General of New York relating to the law;
  2. Force the New York Attorney General to investigate or enforce corporate compliance.Also
  3. to the New York Attorney General for failing to perform their respective duties to enforce the law;

important point

  1. As drafted, the Fashion Act has a very far-reaching impact, requiring compliance from nearly all major fashion brands.
  2. Manufacturers and retailers should urgently begin researching and evaluating the various areas of their business where fashion legislation is concerned. Fashion brands should start by assessing whether they can accurately trace their supply chain, conduct a risk assessment where appropriate, and then make the appropriate disclosures mentioned above.
  3. Even if a fashion law is passed, sustainable laws and regulations are imminent as this trend becomes part of global initiatives to tackle climate change.

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