The pièce de résistance of all fashion legislations : New York Fashion Act

Waiting to be passed, the New York Fashion legislation with teeth, could change how fashion entrepreneurs with global ambitions operate, as it aims at the industry’s environmental and social impact

“Sustainable fashion is not a trend, it’s a responsibility.” – Livia Firth

Background

New York City’s fashion industry is a multi-storied network of material, meaning, some of the world’s most known designers and couturiers and globally influential fashion movements. A roaring fashion capital, it houses both niche local and prominent international designers with effortless ease. Alarming reports by the International Labor Organisation and the Ellen MacArthur Foundation, in 2021 stated that if the fashion industry does not correct its course, it will be responsible for over 26% of the world’s global carbon budget by 2050. McKinsey The industry is responsible for between 4 and 8.6% of the world’s global greenhouse gas footprint – 6x more than New York, and more than France, Germany and the United Kingdom combined.

Unsurprisingly, in line with the United Nations Sustainable Development Goals’ targets, NY is at the helm of spearheading efforts to combat the disturbing statistics regarding the fashion industry’s excessive carbon emissions. Former New York State Senator Alessandra Biaggi and Assemblymember Dr. Anna R. Kelles first presented the New York Fashion Sustainability and Social Accountability Act (commonly monikered as the “Fashion Act”) (A8352/S7428), in January 2022. Late last year the coalition behind it brought in amendments to “clarify and strengthen” the bill. It is still pending before the New York State Senate Consumer Protection Committee, waiting to be passed.

The Mandate

The Fashion Act in its current form, when passed shall be applicable to all fashion retail sellers and manufacturers, earning $100 million in growth earnings worldwide, doing business in the state of New York making it the global leader in thoughtful accountability for the fashion industry. This essentially means that luxury fashion brands such as Gucci and Chanel, sportswear giants such as Nike and Puma, and fast fashion brands such as H&M and Forever 21, will be brought under one umbrella legislation and will be required to abide by the exact same industry wide standards.

As a law student Senator Biaggi went to the Fashion Law Institute where she came across The California Transparency in Supply Chains Act which was prima facie a good law but “lacked teeth”. This lack of a sound enforcement mechanism became the foundation of the Fashion Act, as the endeavour was to take several systemic problems plaguing the fashion industry as a whole to come up with a set of well researched industry wide standards to bring about an affirmative change globally. Barring some concerns, experts have deemed this Act to be the most comprehensive legislation that touches upon all essential aspects than any other legislation has done in the history of the global fashion industry, to measure and bring affirmative changes in tandem with the UN objectives.

The Act proposes a mechanism of achieving this change in New York state by mandating companies to begin setting science based targets and bring about environmental accountability through various mandatory disclosure regarding supply chains, water footprint, greenhouse gas emissions and use of chemicals. Additionally, it aims to mitigate social risks arising from common problems that plague the industry such as working conditions of contract workers, low wages and unauthorised subcontracting of manufacturing by suppliers. After an assessment of these parameters, companies found to be out of compliance and which do not remedy within three months of notice of non compliance may be fined up to 2% of annual revenues. These funds will be used for the benefit of workers and communities directly injured and environmental benefit projects. Fashion companies will also be held jointly and severally liable for lost wages of the garment workers in their supply chains. Together, these provisions will make New York the leader in corporate accountability and provide the basic framework for the industry to thrive today and in the future. (NY Fashion Act - Fact Sheet)

Implications for the Global South : And the India story

India currently has a share of 5% of the global trade in textiles and apparel. With mounting concerns of climate change and the fast approaching deadline of Net Zero Emissions by 2050, the current unregulated path becomes a dangerous one for the fashion industry to tread. Without digressing into a debate about the correctness of a sleuth of criticisms against the Global South’s neo-colonial disposition to follow the Global North’s footsteps, a legislation such as the NY Fashion Act might be the right yardstick to draw inspiration from in this regard.

• First, the need of the hour is to begin by developing an all encompassing definition to this over-defined or under-defined or ill-defined concept of sustainability in general. While the UN Sustainable Development Goal 12 alludes to sustainable production and consumption patterns by recycling, reusing, and repairing the garments and fabrics - it still does not give a universally applicable definition.
• Second, one of India’s main concerns is the lack of social sustainability in the authorised as well as unauthorised supply chains operating all over the country. It is interesting to note that until recently, social sustainability was a relatively neglected dimension of studies relating to sustainability or sustainable development. While sustainability as a concept has achieved prominence in many fields, social sustainability is the least developed of the oft-cited three dimensions or three pillars of sustainability namely - environmental, economic, and social.This pillar finds its roots in the Brundtland Report titled Our Common Future published in 1987 by the World Commission on Environment and Development (WCED) which stated that critical global environmental problems were primarily the result of the enormous poverty of the South and the non-sustainable patterns of consumption and production in the North. It called for a strategy that united development and the environment – described by the now-common term sustainable development, which was defined as the development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Gauging the negative impact of fashion, it is safe to say that the fashion industry is well past its self-regulating phase. In this scenario, fast developing economies like India, must take a leaf from the NY Fashion Act and lobby for regulations?that levels the playing field for their workforce. After all, ensuring social security of the workforce, abiding with international norms of human rights law and establishing a ‘code of conduct’ of social compliance is not a responsibility that the industry should be reluctant to take on.
• Third, the overall industry must take this as a sign of the times to come. The pandemic has proved that ease of doing business is the biggest concern for any entering the global markets and sustaining themselves in it. From a purely practical perspective, for Indian companies to function outside of India or to attract foreign investors and vice versa, it will get increasingly difficult in the times to come to function without legislation for the industry. Operating in the EU already requires abiding by a huge amount of disclosure mandates and making an educated guess one can foresee that once the Fashion Act is adopted as binding law, companies will have to face the challenge of abiding by a very diversified global regulatory framework. In the context of the Fashion Act, companies intending to do business in the state of NY or entrepreneurs with an established presence in the city such as Anita Dongre and Sabyasachi Mukherjee, must maintain the gold standard in being “sustainable” at all times. Here, the most pragmatic solution especially for the doyens of luxury fashion in India to ensure the ease of doing business globally would be to adopt the requirements that are being adopted globally. Upon a reading of these diversified country wise regulations one would arrive at the common denominator among all of them - a requirement of accountability through disclosures. As daunting as this task might seem right now, India is actually positioned in the perfect seat to bring about this change. Delhi-NCR and Mumbai, headquarter dozens of fashion and couture workshops, factories as well as export units of all kinds, fashion, leather, accessories, other allied goods. As epicentres of the industry in the subcontinent, theses cities have a strategic of the global fashion industry as it sprawls out in the West with retail and serpentines in the East with its murky supply chains.To leverage this pivotal viewpoint, the Indian fashion industry from Good Earth, Manish Malhotra to the smallest fashion retailer operating on social media, must collectively lobby for an extensive umbrella legislation that contains industry wide norms to redress the concerns of accountability that come in handy on an international level as well. It’s noteworthy that while cross-industry agreements such as The Fashion Pact are?great to draw inspiration from, they were partly brought into picture to pre-empt potentially challenging government regulation. In the absence of any legislation on the domestic front, the Indian companies will be held liable for mass violations when an act like the Fashion Act is implemented, sending them on a downward spiral that will be hard to climb up from in the highly competitive international markets.

Lobby for regulation

The $2.5 trillion apparel industry has an enormous environmental and social footprint as a leading : greenhouse gas emitter, user and abuser of industrial chemicals, and exploiter of global labor, particularly women.

If we as consumers aka one of the pivotal stakeholders of this equation - forget all else - we must remember that lobbying for legislation in any country is bringing another stakeholder into the equation to shoulder responsibility - the government.

The NY Fashion Act is a pièce de résistance in the true sense as its pioneering approach serves as a valuable model for other countries seeking to implement similar sustainability legislations and push the fashion industry towards a more sustainable future. The government, as a stakeholder with a vested interest in a healthy environment and responsible practices, can play a crucial role in driving sustainability in the fashion industry through mandating disclosures. By implementing legislation that requires brands to publicly disclose information about their environmental and social impact, the government can achieve two key objectives.

First, disclosures increase transparency and accountability. Consumers gain access to vital information about the production processes, materials used, labor practices, and waste generation of fashion brands. This empowers them to make informed choices, directing their purchasing power towards sustainable brands and exerting pressure on others to improve their practices.

Second, disclosures incentivise sustainable practices within the industry. By making sustainability a measurable and publicly reported aspect of their operations, brands are motivated to improve their environmental and social performance. This can lead to innovation in eco-friendly materials, reduction in water and energy use, ethical sourcing, and improved working conditions throughout the supply chain. This collective effort paves the way for a more sustainable future for the fashion industry.

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We encourage you, as vital stakeholders to stay informed and engaged as the fashion industry navigates its path towards a more sustainable future. It is our endeavour to work together, as consumers and stakeholders, to support this crucial shift.