The Fashion Sustainability and Social Accountability Act, a new New York Bill (the Bill), was introduced in October and was referred to a legislative committee on January 5, 2022. The goal of the Bill, which is sponsored by State Senator Alessandra Biaggi and Assemblywoman Anna R. Kelles, various fashion and sustainability nonprofits, and designer Stella McCartney, is to effectively address the environmental and social impact of large fashion companies and make them more accountable. If passed, the Bill would require any apparel or footwear companies doing business in New York with more than $100 million in annual global revenues to map out at least 50 percent of their supply chains, demonstrate where in the supply chains the companies have the greatest social and environmental impact, and set targets to reduce those impacts. “Doing Business” is broadly defined in the bill as “actively engaging in any transaction for the purpose of financial or pecuniary gain or profit.”

Additionally, the companies would have to create sustainability reports that disclose social and environmental information on their due diligence policies and activities conducted to identify and mitigate potential adverse impacts on the environment. These reports would need to identify the adverse impacts of greenhouse gas emissions and water, plastic, and chemical use, and outline how the companies will reduce these impacts in line with the United Nations Guiding Principles on Business and Human Rights. Companies would also be required to disclose their material production volumes and include the median wages of workers and how their wages compare to local minimum and living wages.

Should the Bill be passed, companies subject to the law will have 12 months to ensure they are compliant with the mapping directive and 18 months to produce their impact disclosures and reports. If companies fail to meet the requirements set out in the legislation, companies would be fined up to 2 percent of their annual revenue, with fines going to a Community Benefit Fund established by the Department of Environmental Conservation and used for environmental justice projects and communities. The New York Attorney General, or the designated administrator, would be responsible for enforcement of the Bill and would publish a publicly available list of the non-compliant fashion retailers and manufacturers.

The Bill will now go through the New York Senate and Assembly committees, with the sponsors aiming to bring the Bill to a vote in late spring or early summer of 2022. Sponsors are hopeful that the Bill will be passed by the end of this legislative session in June 2022.

If passed, the Bill would make New York, a leading fashion hub, the first state to pass legislation that broadly mandates consumer transparency regarding the environmental and social impacts of the fashion industry. Despite being introduced in New York, the requirements would affect many major retailers and manufacturers throughout the world who will have to ensure due diligence and disclosure compliance under the law.