Will the Fashion Act Serve as a Template for Other States?

New York isn’t the only state that wants to regulate the fashion industry. Other legislatures, including Massachusetts and Washington, are also looking into variations of the Fashion Sustainability and Social Accountability Act to call their own. But although the growing desire for a legal instrument to hold brands and retailers liable for social and environmental harms is heartening, said Anna R. Kelles, the New York assemblywoman sponsoring the OG version, a patchwork of similar but slightly different laws could confuse and even undermine efforts to improve supply chains.

That’s why she’s asked most of them to hold off until the New York Fashion Act works through the “stakeholder engagement, kinks, details” as it wends its way to the floor of the state legislature for a vote, preferably before the current session ends on June 6, Kelles said at a New York State Textile Legislation Workshop organized by the Manhattan Solid Waste Advisory Board at Kent State University’s Manhattan campus last week. But it’s also “really important,” she said, that the laws are being coordinated between states.

One thing that Kelles is looking to incorporate into the New York Fashion Act is an interstate compact that others can join instead of passing their own legislation “because, invariably, when it goes through another state’s political culture, I will not be able to guarantee [how it’s enforced],” she said. Plus, it would be impossible to make sure everything is harmonized. “I’m stressed enough about making sure this is aligned with what the EU is doing,” Kelles said. “I’d much rather they sign on to mine.”

Kelles envisions something along the lines of the Regional Greenhouse Gas Initiative, better known by its acronym RGGI, or “Reggie,” which rallies nearly a dozen Eastern states, including Connecticut, Delaware and New York, to collectively cap and curb greenhouse gas emissions from cars and trucks. Having the same ground rules for everyone would be helpful, not only for legislators but for the companies that have to comply.

But even the law of a single, influential state can lead to a ripple effect across the country, if not also the world. Take California, which successfully upheld emissions standards for cars and trucks that were stricter than the federal standards—despite multiple lawsuits and the machinations of then-President Donald Trump.

“So car manufacturers anywhere in the world had the option of saying, ‘Well, fine, we won’t sell it to California,’ or ‘We’ll sell to California and we’ll create two supply chains: one meets California’s standard and one that meets everybody else’s standards’, or ‘We’ll just make one supply chain and that’ll just be the deal.’ And the last option was the one they chose because California is one of the top 10 economies in the world. New York is the 10th largest economy in the world. Not engaging with California and New York is a tremendous loss for any major company.”

There are two versions of the New York bill: one in the Assembly and one in the Senate, though the most up-to-date variation is with the Assembly. Ultimately, they will have to merge before anything can be passed into law.

The broad strokes remain the same, even though the Fashion Act is in its third season thus far. Simply put, the legislation would require all clothing, bag and footwear purveyors that make at least $100 million in revenue and conduct business in New York to carry out risk-based supply chain mapping that includes identifying areas of risk and providing mitigation strategies. It’s the only measure in the United States that is “equivalent to what the EU is doing” in terms of corporate due diligence, Kelles said. And because of the way it’s designed, “there doesn’t need to be any other bill but the state bill,” she added.

Kelles sees the bill as a form of “due diligence 2.0” because most due diligence legislation ends up focusing on transparency, “which is a great first step but isn’t going to move the needle,” she said. “Because an entity only has to show that they made an effort; they aren’t held accountable to whether or not the effort made a difference.”

The legislation is also based on a risk-based “hybrid’ model that uses universal direct-measure standards to flag potential problems that are prioritized based on their likelihood and severity. Businesses can’t “pick around the edges” and home in on the areas of their supply chain where they will find the least amount of negative environmental or human rights activity. There’s “no greenwashing,” Kelles said.

The problems in the industry, after all, are legion. UNICEF estimates that more than 100 million children are forced to toil in the creation of garments. Fashion is also one of the top five sectors linked to slave labor, a large component of which involves stolen wages. In the United States, one of the largest consumers of clothing, textile waste climbed tenfold from 1.7 million tons in 1960 to 16 million tons in 2015. Greenhouse gas emissions, air and water pollution, and human rights violations are likewise soaring.

If today’s New York Fashion Act just passingly resembles the one that was introduced in 2022 as a way to break the industry “out of its black box,” it’s because Kelles and her team have been engaging with “brands, retailers, unions, manufacturers, people from the [Global] Fashion Agenda, people from the EU, you name it” to gather input. Responsible purchasing practices are now embedded into the rules, as are payment terms that will allow suppliers to make the changes required by the law. The fines born from non-compliance—2 percent of a company’s annual revenue, following a three-month grace period—will be deposited into a community benefit fund that will be used, in part, to make Tier 1 garment workers “whole.” The Department of State will be in charge of creating a mechanism to determine how due diligence reports are verified because “we don’t want a situation where the verifiers are paid for by the brand,” Kelles said.

The bill will continue to be a “living document” until the moment the governor’s pen is on the paper, she said. What’s less certain is when it will go through, if at all. There are 175 bills scattered on the floor of the assembly, waiting to be debated upon, and those are just the ones that have garnered consent, she said. The window gets narrower the longer discussions over the Empire State’s budget, now two weeks late, drag on. That could leave the legislature with 15 days of session to go through “about 9,000 bills,” including one on extended producer responsibility for textiles, which Kelles is also sponsoring, though she isn’t sweating that one as much because the likely passing of a broader plastics EPR bill will make it easier to push through. It’s all part of the “hurry up and wait” cadence of government, she said.

“I’d love to be able to say, well, this needs to happen. And then this happens. And then this happens,” Kelles said. “What I have found is it’s like a tipping point. And then when that one piece falls into place, everything falls into place. I can tell you [that] we’re on that tipping point. I’ve sort of earned a reputation for being phenomenally stubborn. So it will pass. It’s just a matter of when.”