“We waited a really long time for the industry to regulate itself,” exclaims Maeve Galvin, the global policy director at Fashion Revolution. With an impending climate crisis, the fashion industry is in need of a serious makeover. It’s time to dive into the colourful world of new laws that are set to take the anxiety out of your shopping experience!

The Call for Urgency

Amidst the glamour and spectacle of the Fashion, it is imperative not only to celebrate the cutting-edge designs gracing the runway but also to scrutinize the worldwide environmental and labour implications of the fashion industry. Startlingly, the fashion sector contributes up to 8.6% of the total global greenhouse gas emissions, operating without the necessary regulations to rein in both environmental pollution and the prevalence of exploited, forced, and child labour. To address these pressing concerns, fashion is on the brink of significant legislative changes, putting an end to the industry’s extensive history of self-regulation and self-reporting, particularly concerning its environmental footprint. Some of these upcoming laws are poised to impact various brands as early as spring, with different regions experiencing distinct effects.

In essence, brands are gearing up to intensify their efforts in reducing emissions, safeguarding garment worker rights, embracing supply chain responsibility, and promoting product circularity. The prominence of environmental, social, and governance (ESG) issues is growing across all sectors, prompting consumers to prioritize products with minimal social and environmental impact.

The Evolution of Sustainable Legislation

Across the years, workers in the garment industry globally have persistently championed for equitable pay and secure working conditions, striving to establish improved regulations that bridge existing gaps enabling exploitation. However, the escalating intricacy of supply chains in recent decades has resulted in a complex web of laws and responsibilities, offering a loophole for brands to sidestep accountability, leaving workers without effective means of seeking remedy when issues arise.

The McKinsey 2022 State of Fashion report highlights a consumer shift in preferences, signalling a desire to unravel the origins of materials, the production process, and the fair treatment of individuals involved in the production of clothes. Consumers are now seeking connections with brands that not only showcase quality products and services but also prioritize ethical supply chains, integrating social, human rights, and environmental considerations into their global business practices. Responding to this trend, an increasing number of companies are diversifying their product offerings to include more sustainable options, actively working towards enhancing the sustainability and transparency of their supply chains.

Furthermore, the European Union (E.U.) and the United Kingdom (U.K.) are heightening their legislative efforts to address the well-known environmental impact of the fashion industry. The primary focus revolves around compelling brands to rectify inefficient and wasteful supply chain practices. A significant milestone in this endeavour was the approval of the E.U. Green Deal in 2020, presenting a comprehensive set of proposals aligned with targets for reducing greenhouse gas emissions.

Global Efforts for Environmental Accountability

1. Garment Worker Protection Act (California, U.S.)

In California, USA, a groundbreaking development took place in October 2022 with the signing of the Garment Worker Protection Act by Governor Gavin Newsom. This landmark legislation positions California as the pioneer among states by mandating hourly wages for garment workers, explicitly prohibiting garment manufacturers and contractors from compensating workers based on a piece or unit basis. The rationale behind this change stems from the recognition that the time invested in creating a garment piece often leads to hourly pay falling below California’s minimum wage.

Beyond the shift in payment structure, the Garment Worker Protection Act introduces additional layers of support for workers. Notably, it grants workers the right to pursue compensatory damages against manufacturers, providing a crucial avenue for ensuring fair compensation for completed work. To enhance accountability, the legislation mandates that manufacturers maintain detailed records of worker hours and payments for a period of three years. This not only serves as a record-keeping requirement but establishes a structured mechanism for individuals to file claims and secure payment for any outstanding wages.

Importantly, the Garment Worker Protection Act imposes liability on employers utilizing a piece-rate payment system and the manufacturers engaging with them. In cases of non-compliance, both employers and manufacturers face the prospect of compensatory damages amounting to $200 per employee for each pay period. This multifaceted legislation not only addresses the immediate concerns of hourly pay and compensation but also introduces robust measures to safeguard the rights and financial interests of garment workers in California

2. FABRIC Act (U.S.)

The FABRIC Act, officially known as the Fashioning Accountability and Building Real Institutional Change Act, stands as a proposed federal bill (not enacted yet) designed to be a game-changer in safeguarding American garment workers and breathing new life into the domestic garment industry. Its mission is multi-faceted, aiming to enhance working conditions, reform the piece-rate pay structure, and stimulate domestic apparel production. Not stopping there, the Act also carries the ambitious goal of reshoring garment manufacturing, redirecting it from countries lacking proper working conditions to support domestic manufacturers.

To inject transparency and accountability into the garment industry, the Act mandates that all garment manufacturers register with the Department of Labor. This not only promotes transparency but serves as a mechanism to hold any unscrupulous actors accountable for their actions. Further, the legislation places joint responsibility on fashion brands and retailers alongside their manufacturing partners and contractors, especially in cases of wage violations.

Should the FABRIC Act pass into law, it is anticipated to extend protection to nearly 100,000 American garment workers. Beyond protection, it seeks to breathe fresh life into the domestic garment industry by elevating working conditions, overhauling the piece-rate pay structure, and infusing investment into local apparel production.

Drawing parallels with the California Garment Worker Protection Act, the FABRIC Act resonates in its call for garment workers to be compensated on an hourly basis instead of the piece rate. Additionally, it sets out to ensure that workers are justly remunerated for work already completed, offering a direct response to the pervasive issue of wage theft across the United States. In essence, the FABRIC Act emerges as a comprehensive legislative proposal geared towards transforming the landscape for American garment workers and the industry at large.

3. Fashion Sustainability and Social Accountability Act or Fashion Act (New York, U.S.)

The proposed state bill (not enacted yet) is poised to position New York as the inaugural state in the nation to enforce accountability upon fashion brands for their environmental and social impacts. This legislation is designed to compel brands to adhere to a spectrum of requirements regarding their supply chains, encompassing elements such as carbon emissions, water footprints, chemical usage, worker wages, and collective bargaining, among others. The mandate doesn’t stop at awareness; brands will be obligated to curtail their impact and rectify substandard practices, aligning with legislator-established standards.

For those who choose to dance to a different beat, there are substantial consequences outlined in the proposed Act. Companies identified as non-compliant by the New York Attorney General are granted a three-month window to rectify their deviations. Should compliance remain elusive beyond this period, a fine equivalent to 2% of their annual revenue may come knocking.

Adding a philanthropic twist to the repercussions, all fines imposed by the Act will be earmarked for the newly established Fashion Remediation Fund. This fund is not just a punitive measure; it’s a transformative initiative poised to channel funds into environmental and labour remediation projects within the borders of New York.

Here’s a spotlight on the potential impact: the bill takes centre stage for fashion companies operating in the state, specifically those with annual revenues surpassing $100 million. From Shein and Mango to luxury giants like LVMH, these major players are in the crosshairs, ensuring that responsibility for environmental and social impacts is a non-negotiable part of their high-stakes fashion game in the Empire State.

4. Corporate Sustainability Reporting Directive (EU)

Commencing in 2023, the European Union’s freshly introduced Corporate Sustainability Reporting Directive (CSRD) mandates extensive disclosure from major European companies regarding their approaches to addressing social and environmental challenges. Simultaneously, as part of the ongoing commitment to curbing global carbon emissions, the EU is deliberating the implementation of a Carbon Border Adjustment Mechanism, commonly referred to as a ‘carbon border tax.’ This innovative mechanism operates as an import duty, calculated in proportion to the quantity of carbon emissions released during the production process.

5. Good Clothes, Fair Pay (EU)

Initiated under the banner of the Good Clothes, Fair Pay campaign, a call to action has been sounded for the implementation of living wage legislation within the European Union, specifically aimed at safeguarding the rights of global garment workers. This proposed legislation carries a comprehensive mandate, compelling brands to unveil crucial information publicly. This includes specifics like the addresses of production sites, the workforce count at each location, and the weekly earnings of the employees.

As a protective measure, brands would be expressly prohibited from engaging in detrimental practices such as delaying payments to suppliers beyond 60 days after delivery, abrupt order cancellations without notice, and would be obligated to furnish details about suppliers upon request. Enforcing adherence to these regulations is not just a formality; brands found in violation could face severe consequences, including exclusion from state aid and loans. Moreover, their commodities could be subject to confiscation as a consequence of failing to abide by the stipulated rules.

In Support of Legislation & Reducing Emissions

For more than 32 years, Nazma Akter, the visionary founder of the Awaj Foundation, has tirelessly championed the cause of enhancing workers’ rights within the garment sector. Her immersion into this realm commenced at the age of 11 when she began her journey as a child worker. Expressing a fundamental truth, she asserts, “If there is no legislation, there is no legally binding agreement, then there is no protection, and there are no rights.” She even went further asserting that, “You don’t have accountability, and you don’t have the responsibility as a company,” she says. “They can do whatever they want”. According to her perspective, without regulatory frameworks, companies can operate without constraints, potentially compromising the well-being and rights of workers.

The risks are not confined to a local scale; global companies like Mango, with a presence spanning over 115 markets, face the looming prospect of being subject to an array of regulations at various levels—international, national, and local. Illustrating this point, Fernandez highlights the evolving scenario in Europe, particularly where Mango, a fashion brand, holds a significant presence. The European Union is actively formulating a new regulatory framework, encompassing initiatives such as the Green Deal and SPI. This comprehensive framework aims to realize sustainable and circular textiles by 2030, promote for extended producer responsibility (EPR), curtail hazardous chemicals, and foster circularity through innovative measures like digital product passports. Thus, she emphasizes the breadth of these objectives, underscoring the complexity of the regulatory landscape that global entities like Mango must navigate.

A Global Supply Chain Responsibility

Illustratively, there are two pivotal proposals—namely, “Good Clothes, Fair Pay” in the EU and the “Fashion Act” in the state of New York—each designed to encompass the complete supply chain of companies functioning within their respective markets. To elaborate, if a brand engages in sales in Spain, the enactment of Good Clothes, Fair Pay would extend its protective umbrella to include garment workers in far-reaching locations such as Vietnam and Bangladesh. Maeve Galvin emphasizes that “Brands can no longer turn a blind eye to the global implications of their supply chain practices. It’s about time bigger companies take responsibility for what’s happening beyond their backyard”.

So, fashion enthusiasts, as the winds of change sweep through the industry, get ready for a shopping experience that’s not just stylish but socially and environmentally conscious. The fashion revolution is here, and it looks fabulous on everyone!