The Future of Fashion & Sustainability | 13 A Wave of Global Fashion Legislation

British fashion designer Stella McCartney isn’t afraid to ruffle some feathers. She’s become a vocal critic of the fashion industry’s harmful practices, and she used her platform at the latest UN Climate Change Conference (COP 28), along with designer Gabriela Hearst, to call for tighter regulation and policy changes targeting her industry. From Europe to the U.S., a wave of legislation is tightening the relative leeway the fashion industry enjoys, and businesses are beginning to notice. A report by management consulting firm McKinsey & Co. notes that 87% of fashion executives believe “sustainability regulations will impact their businesses in 2024.”[1] Fashion has enjoyed relatively undeterred growth, but legislation passed and on the books in Europe and the U.S. will challenge the business of the fashion industry.

Against a backdrop of increased government scrutiny of fashion supply chains and the need for transparency and traceability, meaningful legislation with enforcement powers has thus far remained minimal in the U.S. and Europe. Policy and enforcement will be pivotal in holding brands accountable to their commitments. A group of fashion companies launched the UN Fashion Charter for Climate Action at COP 24 (2018), pledging to halve emissions by 2030. However, according to an analysis of 14 signatories by group Stand.earth, nine of the brands including Nike, Levi’s, and Inditex will likely miss their targets at the current pace.[2] With climate-conscious populations and stronger political will for climate-related regulation, the fashion industry will face a reckoning in 2024. Among an assortment of areas needing policy intervention, governments have targeted the reduction of fashion waste, better supply chain management, and workers’ rights. 2024 will build on a recent uptick in fashion-related legislation globally.

Notably, France passed a comprehensive anti-waste law in 2020 and the Climate and Resilience Law in 2021 that introduced requirements regarding waste reduction, reuse, manufacturer liability, and transparent information, among other initiatives.[3] At its core, France banned the destruction of unsold non-food products, instead mandating companies donate or recycle their unsold products.[4] France offers a case study in collaborative legislation-making. The Anti-Waste law incorporated the voices of companies, policymakers, non-profits, and local government.[5] Any future legislation across Europe or in the U.S. must adopt a similar process.

2024 proves to be a pivotal year for fashion legislation across Europe and the U.S. Among the noteworthy legislative acts are two high-profile bills under consideration this upcoming legislative session in New York state: New York Fashion Act and Fashion Workers Act; U.S. Senator Kristen Gillibrand’s Fashion Accountability and Building Real Institutional Change (FABRIC) Act; and awaiting the adoption by the European Commission, the Ecodesign for Sustainable Products Regulation. These signature pieces of legislation serve to capitalize on a growing call to action across the fashion industry and an appetite for accountability.

At the U.S. state level, two pieces of legislation in New York will test lawmakers and industry leaders’ appetite for fashion regulation. The New York Fashion Act, which will be up for further review during the 2024 legislative sessions, would require fashion apparel and footwear retailers and manufacturers doing business in the state to “disclose environmental and social due diligence policies.”[6] The law targets fashion businesses with $100 million or more in global annual revenue, which covers a sizeable list of global fashion and luxury brands.

Companies must publish annual tracking and disclosure of emission reduction targets and detailed reporting of 50% of environmental impacts across the supply chain.[7] For companies not in compliance, the state would publish an annual report on non-compliant brands, while also fining brands up to 2% of annual global revenues. While the proposed law garners support from advocates of sustainable fashion, certain industry groups have called the New York Fashion Act anything from “overwhelming,” “all-encompassing,” and “incredibly imposing.”[8] While certainly a tall task for companies that have never publicly or privately monitored their supply chains and environmental impact, the New York Fashion Act has backing from a section of fashion brands such as Reformation, Patagonia, and Stella McCartney.

The Fashion Workers Act is not climate-centric legislation but remains a significant policy for protecting fashion workers, in particular models. The law provides basic labor protection for models, including requiring management agencies to provide copies of contracts, notifying models of royalties collected on their behalf, and placing responsibility on agencies to protect models from “harassment, discrimination, and unsafe working conditions.”[9] Despite industry pushback from some high-profile modeling agencies, according to the Business of Fashion, the Fashion Workers Act will get additional consideration in 2024.[10]

On the federal level, the Fashion Accountability and Building Real Institutional Change (FABRIC) Act aims to accelerate U.S. domestic apparel manufacturing and to institute workplace protections. Promising to replace the piece rate pay system, by which workers earn pennies per garment sewn, with an hourly rate and bring back apparel manufacturing to the U.S., the proposed legislation positions itself as supporting Made in USA manufacturing and stricter labor protections.[11] In referencing inadequate labor protections and violations abroad, the proposed law juxtaposes the U.S. versus states that have allowed flagrant labor violations, such as China and Bangladesh. The U.S. would set the standard for how labor rights would be protected.

Industry response to the FABRIC Act and other legislation has been contentious. U.S.-based Council of Fashion Designers of America (CFDA), American Apparel & Footwear Association (AAPL), and other industry groups have spoken out against new laws, often citing complexity and conflicting rules as roadblocks to actual change. Meanwhile, they’ve published the THREADS Protocol, which lays out industry recommendations for regulation and timelines. According to industry groups, the protocol puts forward proposals that drive “real progress,” while avoiding “consuming and conflicting rules.”[12] Critics claim the THREADS Protocol waters down regulation and oversight, as industry self-regulation has failed to hold brands accountable. Despite the battle for public perception, government leaders will need to work across the aisle and with industry voices to ensure policies are workable.

The one piece of legislation likely to make an immediate impact is the Ecodesign for Sustainable Products Regulation. The European Commission – the EU’s politically independent executive arm responsible for drawing up and implementing legislation – reached a provisional agreement in late 2023 to implement the proposals laid out in the Ecodesign for Sustainable Products Regulation. By emphasizing circularity, the new law would protect the durability, reusability, and repairability of products, incentivize recycled content, and tackle carbon footprints. The centerpiece of this legislation is the complete ban on the destruction of unsold textiles and footwear.[13] It’s aimed at directly ending fashion’s take, make, and dispose model. The law also mandates the creation of a Digital Product Passport, which will easily provide sustainability details to consumers. Upon formal adoption from the European Parliament and European Council, the regulation will be adopted by all member states of the European Union. The regulation is amongst the strongest policy initiatives countering the fashion industry’s leeway practices.

The fashion industry’s experiment with self-regulation has been unsuccessful, so governments have stepped in to fill the gaps.  While politics and public sentiment will determine the result of a series of laws in the U.S., industry groups, brands, and legislators should work to adopt sensible policies. It remains to be seen how impactful the new wave of legislation can be, but the fashion industry in the U.S. and Europe should prepare for more regulation. Consumers, brands, and ultimately the plant will feel the impact of much-needed climate legislation.

[1] https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion#/

[2] https://www.businessoffashion.com/news/sustainability/big-brands-slow-climate-progress-put-targets-out-of-reach-report-finds/

[3] https://www.dlapiper.com/en/insights/publications/law-a-la-mode/2022/law-a-la-mode-edition-33/france-introduces-new-measures-to-fight-waste-significant-impact-on-fashion-industry

[4] https://www.ellenmacarthurfoundation.org/circular-examples/frances-anti-waste-and-circular-economy-law

[5] https://www.ellenmacarthurfoundation.org/circular-examples/frances-anti-waste-and-circular-economy-law

[6] https://cfda.com/resources-tools/sustainability-resource-hub/sustainability-a-z-resources/detail/the-fashion-act-s7428-a8352

[7] https://cfda.com/resources-tools/sustainability-resource-hub/sustainability-a-z-resources/detail/the-fashion-act-s7428-a8352

[8] https://www.businessoffashion.com/articles/sustainability/bills-to-regulate-the-fashion-industry-introduced-into-the-state-legislature/

[9] https://www.businessoffashion.com/articles/sustainability/bills-to-regulate-the-fashion-industry-introduced-into-the-state-legislature/

[10] https://www.businessoffashion.com/articles/sustainability/bills-to-regulate-the-fashion-industry-introduced-into-the-state-legislature/

[11]https://static1.squarespace.com/static/6269a0251862e66ba01fc4b1/t/627e5e4946e16646c86c6984/1652448842251/FABRIC+ACT+-+FACT+SHEET.pdf https://static1.squarespace.com/static/6269a0251862e66ba01fc4b1/t/627e5e4946e16646c86c6984/1652448842251/FABRIC+ACT+-+FACT+SHEET.pdf

[12] https://www.businessoffashion.com/articles/sustainability/fashion-lobby-policy-regulation-sustainability-environment-labour/

[13] https://www.just-style.com/news/eu-ecodesign-framework-aims-to-make-green-products-the-new-norm/?cf-view