The fashion industry is reacting to New York's sustainability legislation that could upend transparency practices (2023)

When then-President Barack Obama signed a new health law into law in 2010 that required restaurant chains with more than 20 restaurants to disclose the calorie intake of their offerings, Americans made those transactions knowing full well what their meal entailed from a health standpoint. (The FDA passed legislation enforcing full compliance in 2018). Along the same lines, the fashion industry may be seeing a similar trend in terms of accountability for sustainability practices.

On Friday, January 7, 2022, New York State introduced new legislation originally drafted in October 2021 that, if passed, requires transparency of at least 50 percent of goods sold, from raw materials to shipping, to their environment would require effect. Specifically, Assembly Bill A8352/S7428 - presented by MP Dr. Anna R. Kelles and New York State Senator Alessandra Biaggi, respectively, with support from influential fashion and sustainability nonprofits including designer Stella McCartney, the New Standard Institute, the Natural Resources Defense Council, and the New York City Environmental Justice Alliance – requires supply chain mapping, impact disclosure and due diligence. The intricacies ofThe draft law on fashion sustainability and social responsibility can be viewed here.

"The fashion industry is responsible for a staggering 4% to 8.6% of global greenhouse gas emissions and is allowed to operate unhindered by regulations that would curb pollution and the use of exploitation, forced and child labor," said Assembly Member Dr. Anna Kelles (D-125), main sponsor of the gathering.

At this time, the bill is in committee. If both the Senate and State Assembly pass, New York Gov. Kathy Hochul, who made a rare appearance as governor at NYFW last September, will be given to sign or veto legislation.

NSI Aids The Bill

Maxine Bédat, founder and director of the New Standard Institute, a self-proclaimed "think and do tank" that uses data and the power of citizens to transform the fashion industry into a force for good, played a key role in drafting the bill.

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Bédat was aware that deficiencies and other structural problems in the system, such as B. the “short-termism” of investors, which made the fashion industry unable to regulate itself. Thanks to a professional relationship NSI Operations Director Alejandra Pollak had with Senator Biaggi, the goal of making laws in New York was realized.

"I would call it a meeting of minds," explains Bédat, adding: "The only way to make demonstrable progress was through legislation to make setting and maintaining standards a requirement for doing business." Since the senator was also interested in this space, she supported the legislation developed by NSI.

Bédat was inspired by experts and the Golden State. “We looked at the biggest issues facing the industry and explored what sensible regulation might look like. Experts in the field - academics and other organizations working for the environment - were consulted. Quiet conversations with industry leaders," she cited California's mandatory fuel efficiency standard as an inspiration. "This state law uses its large market size to drive global change in the industry. It is the first law requiring companies to set science-based targets and to achieve,” she emphasizes.

"This legislation requires companies to conduct mandatory due diligence to identify, prevent, mitigate and address actual and potential adverse social and environmental impacts in their supply chain," Bédat said on ethical standards related to labor and environmental Sustainability while ensuring a thriving local industry."

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She believes full compliance by the companies that will be affected is imminent. “Given the level of support for sustainability, it is our expectation and hope that these companies will come on board. In 2022, we need to know which companies are truly committed to sustainability and which are just idle talk,” she continues. Penalties for non-compliance would be up to 2 percent of that company's worldwide sales.

Bédat, who was also co-founder and CEO of fashion company Zady, which Fast Company named one of the world's "most innovative companies" in retail for its work on sustainability, couldn't say whether the legislation would affect smaller brands if passed would .

CFDA and AAFA answer

The news may have come as a surprise to many in the industry. Various organizations such asCFDA led by Tom Ford and Steven Kolband the AAFA had no part in preparing the bill. They released the following joint statement.

“The apparel and footwear industry has a strong commitment to sustainability and social responsibility within its supply chains. The work of the Sustainable Apparel Coalition, the UN Global Compact, the Apparel Impact Institute, the Global Fashion Agenda, the Better Buying Initiative, the AAFA Commitment to Responsible Recruitment, and CFDA sustainability work—including the CFDA Sustainability Resource Hub and “Sustainability by Design : Rethinking New York”. Fashion Week study with Boston Consulting Group - have transformed industry supply chains from what they were decades ago.

However, more needs to be done and that is why the AAFA and CFDA are coordinating to meet the 2030 and 2050 Paris Agreement climate targets and supporting the United Nations Fashion Industry Charter for Climate Action.

As industry associations, we were not involved in the drafting of the bill, nor are we aware of any companies that were consulted. We are currently taking the time to understand the bill and look forward to speaking with its authors to provide our input and share our perspectives.”

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This is how the big players score

While the news may have sparked a collective panic in the industry, which has its fair share of small businesses, for now the bill is similar to calorie intake charts in that it only applies to companies with at least $100 million in annual sales around to include luxury giants LVMH, Kering; American mass manufacturers like PVH, fast fashion giants H&M PVH and Zara parent company Inditex and sports giant Nike VON and cougar.

According to the March 22, 2021 BoF Sustainability Index report, companies are ranked in six categories considered to be the industry's most significant violations: Transparency, Emissions, Water and Chemicals, Materials, Labor Rights and Waste. All of the above companies, with the exception of LVMH, score well over 40 in their overall score. As such, compliance with a new ruling in New York State, one of the strongest US markets, should be seamless.

Swedish model

H&M, which appears to be one of the biggest fashion offenders by face value due to the amount of inexpensive single-use clothing it produces, is among Sweden's top sustainability companies, according to Head ofStockholm fashion weekCatarina Midby. “Sweden's largest brand H&M tops Fashion Revolution's Transparency Index, which shows the level of commitment as they lead and invest in many national and global sustainability initiatives for the fashion industry,” she explains, adding: “Sustainability is a focus for the Swedish fashion industry and Stockholm Fashion Week. The upcoming Stockholm Fashion Week will examine the new (more sustainable) normal and the impact of the extreme digital development caused by the pandemic, including how processes and consumption patterns in this area can be improved. In addition, we will present brands that work with alternative, circular business models.”

Midby strongly supports legislation to enforce these practices and cites steps Swedish brands have taken. “Transparency is key to sustainable change for our industry, but it should not be a voluntary action as it is now, which is why I strongly support the Fashion Act in New York. Here in Sweden, designers and brands are increasingly investing in reporting on climate and social impacts through their value chain and taking action to improve and reduce them. That means brands need to have a committed sustainability agenda and work together. Many local brands are members of STICA (The Swedish Textile Initiative for Climate Action). In addition, they are also active in international organizations such as The Sustainable Apparel Coalition, The Fashion Pact and Global Fashion Agenda. For example, according to founder August Bard Bringéus, sustainable Swedish menswear brand ASKET shares the journey the garment has taken from concept to sale almost to the point of puking.

Transparency of any size

Closer to home, even if it won't affect them at first, the industry is considering the proposed legislation. For jewelery brand Deepa Gurnani, founded by husband and wife couple Jay Lakhani and Deepa Gurnani, who manufacture products in India, it's an enduring challenge that this small business would readily accept if legislation extended to smaller brands.

"I am 100% for this new law that New York State is trying to implement. Our industry moves at such a rapid pace that nobody can keep up. This law would help all of us to step back and think properly about implementing this change in our supply chain. In the beginning it will be difficult for any company. However, in the long term, we should go there to preserve our planet and future generations,” said Lakhani, who also serves on the Accessories Council board. President Karen Giberson, Editor-in-Chief of Accessories Council magazine, agrees, but with caution. "The spirit of the state's effort is well intentioned, but I worry about the speed with which they plan to enforce it and the difficulty in tracking transparency."

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AERA, a line of vegan and sustainable shoes, is a naturally and voluntarily sustainable small business that could lead others who want to do the same. “AERA has become more sensitive to sustainability. Mandates like the Fashion Sustainability and Social Accountability Act are finally being introduced to steer our industry in the right direction,” says co-founder Tina Bhojwani.

“Our initial approach was to do a life cycle analysis with the support of SCS Global Services (an external certification body specializing in scientific measurement and transparency) and work with organizations that provide certification. We have been awarded the Positive Luxury Butterfly Mark and most recently B Corp certification to validate our work.”

Bhojwani, also co-founder ofFigure Eight and a sustainable luxury goods pop-upin Soho, believes that government intervention is the only way forward and that businesses of all sizes should comply. “The only way to make meaningful change happen is for government to create laws and standards by which businesses should operate. The fashion industry lacks regulation and I am proud that New York City is taking the lead in such a crucial initiative, especially as it is a global fashion capital. Furthermore, thanks to science, technology and the innovative nature of the industry there is ample opportunity to operate within a system of ethics, accountability and transparency at any scale.”


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