American Fashion Wants More Say Over Sustainability Regulation

Next week, New York State’s legislative session comes to a close — and with it this year’s chance to pass the most consequential piece of fashion-focused sustainability legislation currently on the table in the US.

The New York Fashion Act would place an unprecedented level of scrutiny on fashion’s supply chains, making large brands and retailers accountable for environmental damage associated with their operations and requiring them to actually meet high-profile, but largely voluntary climate commitments. It’s secured backing from brands like Patagonia and Reformation and endorsements from celebrities including Leonardo DiCaprio and Jane Fonda.

Big Fashion, however, is pushing back.

The proposed regulation goes too far, too fast, creating additional reporting complexity and requiring companies to go beyond current accepted best practice on unrealistic timelines, according to the American Apparel and Footwear Association, one of the industry’s most influential and powerful trade bodies.

Though the landmark bill was first introduced three years ago, the industry has not laid out a public indication of its position until now.

Even if the Fashion Act falls short again this session (passage is still a possibility, though slim and dwindling) its backers intend to reintroduce it in 2025. Other states are considering similar measures. But the AAFA has a laundry list of changes it believes would make the legislation more “effective,” part of a broader strategy to play a more active role in influencing policy, its senior vice president for policy Nate Herman said during an interview at an industry event last week.

“[We want to be] setting the table, where we’re proposing the good legislation,” Herman said.

Big Fashion’s Big Lobby

The Fashion Act’s backers fear the industry is looking for ways to stall or dilute tougher oversight as regulatory efforts in the US gain momentum.

Though DC is mired in partisan gridlock — and is expected to remain so following elections in November — individual states are becoming more active. Some have already passed industry-changing regulation, like bans on toxic “forever chemicals” historically used to waterproof top performance wear. California is likely to move forward with a bill that would make large fashion companies responsible for clothing waste this summer. Other states are also considering their own versions of New York’s Fashion Act.

Trade groups are starting to take things seriously because “shit’s getting real,” said Michelle Gabriel, adjunct professor of sustainable fashion strategy at Glasgow Caledonian New York College.

Though many big companies have signed onto voluntary initiatives that commit them to curbing their environmental impact, for most, new and proposed regulations will require expensive and costly changes to the way they conduct business. The New York Fashion Act, which would apply to any brand or retailer operating in the state with more than $100 million in annual sales, would implicate virtually all global and many mid-sized fashion businesses. Failure to comply could result in fines worth up to 2 percent of annual global revenue.

“There’s no denying it will incur a cost in order to comply — that’s why none of the trade organisations are supporting it,” said Gary Wassner, CEO of Hilldun, a firm that helps American fashion brands finance their wholesale orders.

Industry organisations like the AAFA (which represent businesses ranging from sustainability leaders such as Patagonia and Eileen Fisher to ultra-fast-fashion giant Shein) say they are supportive of new rules to help the sector operate more responsibly; but they must be “practical, effective and workable.”

The sector has been ratcheting up its lobbying efforts to that end, sometimes taking a comparatively progressive stance on legislative efforts to enforce more climate action. For instance, American fashion’s biggest trade groups backed a push by Californian state legislators to make businesses publish their planet-warming emissions last year. Though similar reporting requirements will come into force for Europe’s biggest companies from 2025, the issue has proved highly contentious in the US.

Fast Fashion, Slow Progress

One big reason the industry said it ultimately got behind the Californian bill was that legislators included a provision that would allow companies to report in the same way to meet both the European and American requirements.

The Fashion Act, on the other hand, would raise the bar on the regulatory expectations currently facing the sector. It would require companies to not only map, monitor, manage and disclose environmental impact across their supply chains, but also put companies at risk of penalties if they fail to meet strict impact targets.

The AAFA’s objections to the New York bill range from technical to structural. Some elements of the proposed legislation need to be more clearly defined or adjusted to better align with existing standards and regulatory frameworks; others are simply not realistic, it says.

For instance, expectations that companies collect primary emissions data from suppliers deep in their value chain within a few years of the bill coming into effect are “virtually impossible in the timeline suggested,” the trade group said in emailed notes detailing its position. Similarly, it argues that binding targets on absolute emissions reductions — a tentpole feature of the bill — would stifle growth, put demands on companies to deliver results largely dictated by forces outside their control and exceed what’s currently required by the Science Based Targets initiative, the biggest and most respected verifier of corporate climate commitments.

The organisation would however support a requirement that companies must set science-based emissions targets, it said. Though a growing number of fashion companies already have SBTi-approved emissions goals, many don’t. Often these pitch ambitions to curb value-chain emissions (where most big brands’ impact takes place) relative to production or sales, meaning if companies grow, their emissions can too. The Council of Fashion Designers of America, another powerful industry group, said it was aligned with the AAFA’s view. The National Retail Federation did not comment.

Patagonia, which sits on the AAFA’s Fashion Act Working Group, said it shares some of the organisation’s concerns around issues like binding absolute emissions reduction targets, though it continues to support the bill.

Other backers of the proposed policy argue that pushing the industry farther, faster than it would go alone is exactly why regulation is needed. The sector’s track record based on voluntary efforts is dismal, they point out, adding that the value of commitments companies are only willing to set if they’re not obliged to keep them is questionable.

“The general message from industry is that this is too hard,” said Gabriel. “From my vantage point they not only don’t support the Fashion Act, but they’re not in support of any form of legislation that could change the status quo.”