With increasing public support for enhanced sustainability and accountability legislation, both the federal and state governments are developing new measures to address the environmental impact of business practices.
While most of these bills are currently tied up in Congress or in state legislatures, it’s important for fashion and apparel brands to be aware of the conversation and the regulations that may be introduced soon.
In our knowledge hub for global textile regulations and our previous article, we delved into EU and EU membership state policies relevant to the fashion industry, however, if your company is located in the United States or conducts business there, here is a list of the key regulations that should be on your radar in the coming months:
The FABRIC Act
Introduced in the US Senate in May 2022, the Fashion Accountability and Building Real Institutional Change (FABRIC) Act addresses both the environmental and social impact of outsourcing garment production. It will encourage transparency in the fashion supply chain, ethical production standards, and a 30% tax credit for clothing producers willing to relocate their manufacturing to the US. In terms of implementation, the FABRIC Act still needs to pass the Senate and then the House of Representatives.
New York Fashion Act
If passed, the New York Fashion Act would require fashion brands to provide detailed reporting on the environmental and social impact of their products. This includes identifying, preventing, and taking remedial measures to address the negative impacts of their corporate actions and that of their supply chain.
The act also requires apparel brands to implement enhanced due diligence procedures into their operations. It would apply to any fashion business with annual global revenue of more than $100M. As of August 2023, the act is still in deliberation. In order to become law, it will need to pass both the New York State Assembly and the New York State Senate.
California’s Climate Corporate Data Accountability Act (SB 253)
The Climate Corporate Data Accountability Act (SB 253) is a new state law that requires large fashion companies doing business in California to report their greenhouse gas (GHG) emissions each year. The law applies to companies in the fashion industry with more than $1 billion in annual revenue and requires them to report their Scope 1, 2, and 3 emissions.
The Climate Corporate Data Accountability Act is the first law in the United States to require textile and apparel companies to report their Scope 3 emissions, which often account for the majority of a fashion brand’s carbon footprint. The law will take effect on January 1, 2026, and the first reports will be due in 2027.
The Climate Corporate Data Accountability Act is a significant step forward in climate transparency. It will provide investors and consumers with the information they need to make informed decisions about the fashion brands they buy from. It will also help to hold apparel and textile companies accountable for their climate impacts.
California’s Greenhouse Gases: Climate-Related Financial Risk Bill (SB 261)
Taking it one step further, the SB261 bill examines a corporation’s financial risk caused by climate change. More than 10,000 companies with revenues over $500M will need to comply.
These risks can be divided into two categories: physical risks and transition risks.
- Physical risks are the risks caused by the physical effects of climate change (extreme weather, rising sea levels, changes in temperature) that can damage or destroy property, disrupt operations, and increase costs.
- Transition risks are the risks caused by the transition to a low-carbon economy. These risks can include changes in government regulations, technological innovation, and consumer preferences, which can lead to stranded assets, lost market share, and increased competition.
Uyghur Forced Labor Prevention Act
The Uyghur Forced Labor Prevention Act addresses forced labor practices among ethnic minorities in the Xinjiang Uyghur Autonomous Region of China. This act was signed into law in December 2021. As of June 2022, any American fashion company importing products from the Xinjiang region needs to prove there was no forced labor used in the manufacturing process.
How to prepare for the upcoming regulations in the US
As we look ahead to the upcoming sustainability regulations in the US, fashion and apparel brands will need to gain a greater understanding of their environmental impact, and have the necessary tools in place to report on their carbon footprint.
That’s where Carbonfact comes in. Carbonfact is the only fashion-specific Carbon Accounting and Product-LCA platform that helps brands and manufacturers discover the exact sources of their environmental impact and take actionable steps to reduce their footprint.
Carbonfact provides precise carbon accounting for all emissions (Scope 1, 2, and 3), and enables brands to use their footprint data to generate sustainability reports for the increasing number of regulations.
Want to discover how Carbonfact can help you stay compliant? Book a demo today and take a tour of the Carbonfact platform.
Martin Daniel