*The views expressed in this article do not represent the views of Santa Clara University.
Credit: Ashim D. Silva | Unsplash
A new bill called “The Fashion Act” was drafted on October 8, 2021 in New York State and is currently in committee for study. The Fashion Act strives to ameliorate the environmental impact of the fashion industry and, if passed into law, would require global fashion companies to employ transparency by mapping their supply chains, disclosing the environmental and social impact of their activities, and setting targets to improve those impacts. It would apply “to any company that makes significant sales in New York — one of the fashion capitals of the world — regardless of where the company is headquartered.” This bill comes at a time when the fashion industry is currently “responsible for more annual carbon emissions than all international flights and maritime shipping combined.”
If no changes are made, the fashion industry is on track to potentially increase its greenhouse gas emissions by fifty percent within a decade. While some companies, including “Gucci, Bottega Veneta, Yves Saint Laurent, Balenciaga, [and] Alexander McQueen,” have begun to voluntarily address climate change despite the absence of regulation, they are put at a disadvantage when competing with other fashion brands that have not implemented such policies. If passed, The Fashion Act would ideally result in a demonstrated change in the industry participants as a whole. Further, it will focus on “the setting and meeting” of targets, so there is no perceived disadvantage to implementing sustainability policies.
While this legislation would constitute a step in the right direction, it potentially runs afoul of antitrust laws. In order to implement policies to advance sustainability goals, fashion designers and retailers would be required to produce less, essentially banding together to limit production.
These pledges “risk violating antitrust rules that bar competitors from collaborating to fix prices and reduce production.” One possible solution is to follow the example set by the Netherlands, in which it has begun to update its antitrust rules in the interest of achieving net-zero carbon emissions. For example, “authorities endorsed rules to encourage sustainable agriculture, which would involve greater collaboration among farmers, wholesalers and supermarkets.” Reassessing the current antitrust non-competition policies, and carving out exceptions for sustainability objectives, is a small step to insure a sustainable future for generations to come.
Still, others, like Maxine Bédat, the founder of the New Standard Institute, maintain that the “bill is ‘inherently pro-business,’ because ‘[r]ight now, companies are uncompetitive if they do the right thing,’ and this bill will create a regulatory floor that requires every company doing business to ‘do the right thing.’” The Fashion Act, by requiring brands to increase their commitment to sustainability, would place brands on an even playing field and eliminate the competitive disadvantages to running a sustainable business.
Ultimately, this bill highlights how imperative it is for artists and creators to be mindful of their impact and to play their part in the fight against climate change, regardless of the potential changes they may be required to adhere to. This bill is just the beginning and businesses in other industries may soon be subject to bills that aim for improved sustainability practices as well.
However, there is still a long way to go, because “without uniform data standards and ESG ratings systems, each company must adopt a method to calculate and track its environmental impact and associated risks.” Consequently, there will likely be inconsistent reporting within industries and an inability to effectively compare companies. Accordingly, “until the SEC or other regulators or states adopt sustainability standards, any regulation requiring environmental risk and impact disclosure may prove ineffective or result in inconsistent or inadvertently misleading disclosure.”
New York State’s Legislative session ended in June 2022, and this bill has some time to be refined before the next session where they will begin the process of enactment. Until legislation like this is more widely implemented, the role of environmental and health conscious consumers will continue to have an impact. We all play an important role in taking actionable steps in the pursuit of sustainability.