New York’s Fashion Act Has Potential Global Supply Chain Impact

March 31, 2022
Harris Allgeier

Earlier this year, lawmakers in New York State unveiled the Fashion Sustainability and Social Accountability Act, which would require clothing companies with more than $100 million in annual revenue to meet environmental, sustainability and human rights standards in fashion supply chain.

Known simply as the Fashion Act, this proposed legislation aims to hold fashion companies that do business in New York accountable for their role in climate change and human rights abuses.

Most notably, the act would require these firms to map at least 50 percent of their supply chains to disclose impacts such as greenhouse gas emissions and chemical and water usage. Brands would also need to disclose median wages for workers while taking more responsibility for safe working conditions.

The bill is currently under discussion in state legislative committees. It is expected to be put to a vote later this spring.

How the Fashion Act Expands Beyond New York [H2]

While the bill exists in New York, it could have a global impact on the fashion supply chain. All major brands who do business in the state would need to meet the standards or discontinue operations in a massive global market. There is also the possibility that other states or countries could create copycat legislation that requires the same or more stringent standards.

The Faction Act goes beyond the standards set in California’s Garment Work Protection Act, which was first introduced in 2020 and signed into law in September of 2021. Under that law, businesses with more than 25 employees must pay garment workers a minimum wage of $14 per hour instead of piece-rate compensation.

The European Union is currently doing due diligence on mandatory human rights legislation. At the same time, countries including France, Germany, Australia and the United Kingdom have already created laws related to human rights and modern slavery in manufacturing.

The Fashion Supply Chain Faces ESG Challenges [H2]

According to the World Economic Forum, the fashion industry produces 10% of all humanity’s carbon emissions and is the second-largest consumer of the world’s water supply.

As the fashion supply chain’s economic and humanitarian issues have gained more attention in recent years, consumers largely want to purchase from ethical brands. Many fashion manufacturers will need to adopt new strategies if the Fashion Act goes into law, as some have purposely hidden or are unaware of the downstream issues in their manufacturing supply chain.

At Interos, our platform helps organizations understand the full risks of their supply chain regardless of the industry. Using artificial intelligence and machine learning, Interos leverages more than 80,000 data feeds to help companies map, monitor and model their supplier network. As consumers push for more ESG transparency, manufacturers will need this enhanced supply chain visibility to ensure all suppliers meet organizational goals. To learn more, visit interos.ai.

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