The Fashion Act Bill Revised...what's new??

On November 18, 2022, an amendment and recommitment were entered into Consumer Protection for the Fashion Sustainability and Social Accountability Act ("The Fashion Act"). Previous actions included the bill being referred to Rules (Oct. 08, 2021) and to Consumer Protection (Jan. 05, 2022). The Supporters (including local industry leaders, union leaders, labor and justice organizations, academic institutions, advocacy organizations, and leading apparel industry brands and designers) of the Fashion Act have come together to strengthen the bill and offer even more clarity, which would ultimately increase the odds of the bill passing. Their overall goal is to comprehensively address social and environmental impacts, as well as achieve emission reductions and other supply chain improvements.

Several sections of the Fashion Act were revised. Specifications for water protection and chemical management were updated. Chemical mismanagement in the fashion industry's production is significant. Therefore, efforts to curb wastewater pollution from sites where textile mills are located are being implemented. Other updates will improve biodiversity and expand enforcement provisions. There is currently no binding and effective global accountability mechanism nor international law that holds corporations accountable for their involvement in human and environmental abuses.

Lastly, the updates to the Bill will offer more mandatory due diligence criteria and include brand liability for garment workers’ rights. Joint and several liabilities between fashion sellers and garment workers will be provided. The amendment will add labor protections, allowing garment workers to bring legal claims directly to brands for lost wages. The State of New York and the Attorney General will be tasked with developing regulations for companies to comply with. Companies found to be in noncompliance will have three months to remedy matters or face the possibility of being fined up to 2% of their annual revenue. The funds will be used to benefit the workers and the fashion community.

These provisions will provide further frameworks for the global fashion industry as well as place NYC at the forefront of corporate accountability. Although we have seen several brands and designers step up to the plate to do the right thing, brand self-regulation is not enough. Many businesses have found themselves at a competitive disadvantage, which has caused their costs to rise relatively.  Thus, the absence of legislation is wreaking havoc on the planet and enlarging the enormous environmental and social footprint of the $2.5 trillion apparel industry.

Because many companies are prioritizing their bottom line, wide-reaching legislation is necessary, and lawmakers are needed to prevent loopholes and misinterpretations. Hopefully, with this Bill and others that will follow, they will present stable expectations that will guide investment decisions, as well as offer ongoing incentives to industry players for cooperation and allowing companies to make long-term strategic plans.

Policy - Prevents Greenwashing and Meet Goals

A few entries back, I wrote about “greenwashing”.  We talked about What exactly greenwashing was?, Who does it?, and How it affects us as consumers?  We even talked about ways to avoid it or easily spot it in a business’s campaign or ads. However, in this post I want to touch on the importance of policy and the leverage it has with preventing greenwashing all together.  Policy helps to guide the actions and set guidelines, rules, and regulations for organizations.  It provides company leaders with a predetermined course of actions for managing issues, as well as articulating an organization’s values, philosophies, cultures and strategic goals and objectives. 

In terms of global climate impact, policy helps ensure social and environmental sustainability in the fashion and textile industry through reporting and traceability.  Policy aids in separating legitimate climate commitments from public relations campaigns, and present standards that are necessary to weed out “low quality” climate pledges.

Despite lagging Europe, US regulators are making small strides to tackle greenwashing with policy.  The policies are set in place to determine what governing entities will actually do or not do regarding particular issues or problems. 

• Here we’ve mentioned The New York Fashion Sustainability and Social Accountability Act aka the Fashion Act, and if passed, it would require disclosure of environmental and social policies, processes, and outcomes of US Fashion brands.  This piece of legislation would ensure compliance with global principles and guidelines set by the UN, ILO, and OECD.    

• In 2021, upon entering the White House, President Joe Biden promptly signed for the United States’ reentry into the Paris Agreement.  This would frame the beginning of public consultations that would begin the changes in reporting practices in environmental policies and initiatives.  Ultimately preventing the way companies and brands “embellish” their activities to disguise them as environmentally positive.

• Many states, and even the federal government, require sustainable solutions from marketers of consumer-packaged goods.  The Securities and Exchange Commission (SEC) specifically target ads; as well as scrutinize investment fund advisors who misinform “green” investors and shareholders with misleading data and product labeling regarding sustainability.  Recently, the agency proposed two rule changes that would prevent misleading and deceptive claims by US funds on environmental, social and corporate governance (ESG) qualifications and increase disclosure requirement.  These changes are introduced to require publicly traded companies to disclose how their climate change risks affect their business.  The call for transparency and disclosure by the SEC will encourage companies to provide honest and useful information on ESG matters and help tackle greenwashing.

In Europe, concrete rules and legislative measures are in place to address greenwashing.

• Agencies such as the Sustainability Accountability Standards Board, the Global Reporting Initiative, and the Task Force on Climate-related Financial Disclosures all require organizations to present data from financial and non-financial sources that show they are meeting standards. The gained information must be readily available to all shareholders.

  • The Sustainability Accounting Standards Board (SASB) provides a clear set of standards for reporting sustainability information across a wide range of issues, from labor practices to data privacy to business ethics. More specifically, international companies use the standardized discovery for reporting on sustainability in annual reports, financial filings, and company websites. 

• At UKCOP 26 in Glasgow, shareholders discussed initiatives that would set an international, unequivocal, and unified standard for reporting environmental targets, rather than relying on voluntarism. This would ensure consistent, reliable, and comparable labeling across companies globally. Thus, eliminating unsubstantiated assertions and confusing terms when reporting.

In conclusion, with the global adoption and integration of policies in the fashion and textile industries, this sector and its shareholders will be able to reach sustainability and net positive climate targets.  Policy isn’t necessarily policing, and it is indeed instrumental in achieving effective environmental communication from corporations to consumers.  This adds true value an makes significant impact to the planet.

COP 27: UN Climate Change Conference - Shifting to ACTION

Started by the United Nations, the COP, or Conference of the Parties, is currently conducting its 27th installment in Sharm el-Sheik, Egypt. COP 27 is a conference that brings together government leaders, mayors, ministers, CEOS, organizers, activists, negotiators, and civil society representatives. The purpose of this 2-week conference is to operationalize cooperative approaches for confronting the climate crisis.  Heads of state and other industry stakeholders discuss collaborative efforts to accelerate developments that confront the negative effects of climate change.  Governments in attendance understand that there are expectations to deliver on past promises and respond to the needs of the communities suffering the most from implementation with ambition, equity, and access. 

Science has proven that global warming is happening more rapidly than expected, so therefore, countries are coming together to discuss the implementation of actionable plans and ensure climate goals are being hit according to the Paris Agreement and the Convention.  Originally, the Paris Agreement called for countries to take concerted climate action to reduce greenhouse gas emissions by hitting a 1.5˚C goal by 2030.  Unfortunately, they rose.  Ecosystems and global communities are being pushed to their limits.  However, according to the World Meteorological Organization, the odds of reaching the threshold in the next 5 years are 50/50. 

The session that I made sure to tune in to was "Toward a net positive textile industry by 2050 - Setting ambitious targets and inspiring leaders,"  which was hosted by Federica Marchionni of the Global Fashion Agenda and Elisa Tonda, chief of Resources and Markets Branch for UNEP.  The presenters welcomed industry stakeholders to share insight and discuss effective ways of transitioning to circularity by the scheduled goals because, as we’ve discussed, on the current route the fashion and textile industry travel, they will miss decarbonization targets significantly.

A brand-new initiative was formally launched during the event.  The Fashion Industry Target Consultation is a project that aims to accentuate specific industry-aligned targets such as: Respectful & Secure Work Environments, Better Wage Systems, Resource Stewardship, Smart Material Choices and Circular Systems. Purchasing practices and circular designs are other matters for which the consultation seeks to formulate new targets.  Furthermore, The Fashion Industry Target Consultation aims to converge existing industry efforts and targets with clarity for arriving at 1.5˚C pathway and a net-positive fashion industry. Using the initiative as a guide, the industry will be able to monitor and track progress, as well as drive accountability through measurable metrics.  

Through cooperative approaches and the collective progress of all industry stakeholders on mitigation, adaptation, finance, capacity building, and technology development and transfer ideas will be operationalized and guaranteed interoperable.  Additional solutions that should be considered are ESG based management solutions.   With engagement and financial investments, sustainability can be embedded into the entity’s value creation process.

Lastly, GFA and UNEP are inviting industry stakeholders from across fashion and textiles' global value chains to offer input and insights on the performance indicators, as well as formulate new targets in underserved areas.

Sources:

1. The Global Agenda (2022). The Fashion Industry Target Consultation. https://globalfashionagenda.org/resource/fashion-industry-target-consultation/

2. EU COP 27 Conference Side Events

3. UN (2022). Delivering for people and the planet. Communicating on Climate Change. UN COP 27. https://www.un.org/en/climatechange/cop27