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14 Jan 2022

USA: New York Fashion Act to hold fashion brands legally accountable for social & environmental impacts unveiled

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In January 2021, the Fashion Sustainability and Social Accountability Act was announced.

Sponsored by State Senator Alessandra Biaggi and Assemblywoman Anna R. Kelles, the bill aims to hold fashion brands doing business in New York, with more than $100 million in revenues, accountable for their role in climate change and labour rights violations.

The Act, if passed, would require companies to map at least 50% of their supply chain, including farms where raw materials are sourced from, factories and shipping. They would also be required to disclose where in their supply chain they have the greatest social and environmental impact in regards to wages, energy, greenhouse gas emissions, water and chemical management. For this, brands would need to disclose the total volumes of materials they produce, and state how they would reduce their impacts.

It would also require companies to disclose their material production volumes to highlight, for example, how much cotton or leather they sell.

In regards to labour rights, brands would need to disclose median wages for workers and what measures were in place to implement responsible business conduct in their policies and management systems.

If brands were found to be in violation of the law, they would be fined up to 2% of their annual revenues. The fines would go towards a Community Fund used for environmental justice projects in New York. Every year, the New York attorney general would publish a list of companies found to be noncompliant.

The bill has been backed by the New Standard Institute, the Natural Resources Defense Council and the New York City Environmental Justice Alliance, as well as the designer Stella McCartney.

While the bill has been lauded as a potential 'game-changer' for holding brands legally accountable in an industry where commitments to human rights and the environment are typically voluntary, labour rights advocates suggest the bill requires stronger labour provisions.

For example, it has been questioned whether the policies on transparency will result in a significant change, or whether brands will continue to report publicly on issues that will remain unsolved. Ambiguity within the bill is also a concern, as it is argued that brands may choose to be selective over the 50% of the supply chain they choose to make public.

Concerns were further raised over the lack of 'diversity and supply chain representation' among the coalition that created the bill, in particular, the lack of garment workers and impacted communities involved.

Additionally, a statement by International Corporate Accountability Roundtable (ICAR) criticised the bill as 'falling short' of driving real accountability, arguing that while the bill has been referred to as a due diligence law, it only mandates disclosure without establishing a due diligence policy to address risks. It calls for the legislature to impose legislation that will 'have a significant impact on corporate human rights abuse, such real mHRDD laws, laws that establish prohibitions that prevent companies from engaging in abusive behaviour, or laws that create civil remedies for survivors harmed by corporate abuses.'

In a joint letter, 20 labour and sustainability organisations proposed amendments to strengthen the Act.

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