Daniela Rakowski

Associate Editor

Loyola University Chicago School of Law, JD 2023

“Sustainable,” “eco-friendly,” “ethical,” “recycled” — all buzzwords you might see the next time you’re shopping for a new outfit, designed to make you as a consumer feel like you’re making better choices to help reduce your carbon footprint. But what do those buzzwords really mean — is there any traceable impact the company has made to reduce its carbon footprint? In many cases, unfortunately not. The fashion industry has a major impact on climate change. It is estimated to contribute between 4 and 8.6 percent of the world’s greenhouse gases, and for the most part is largely unregulated. Any efforts to increase sustainability, such as by reducing pollution or eliminating labor abuses, are predominately voluntary commitments with little to no repercussions for failing to uphold those commitments.

Greenwashing in the fashion industry

Oxford English Dictionary defines greenwashing as “mislead[ing] (the public) or counter[ing] (public or media concerns) by falsely representing a person, company, product, etc., as being environmentally responsible,” or “misrepresent[ing] (a company, its operations, etc.) as environmentally responsible.”  Greenwashing can sometime go undetected, but Swedish fashion giant H&M came under scrutiny in 2019 for greenwashing in its newly revealed “Conscious Collection,” which, ironically, claimed to be more sustainable than its ordinary clothing lines. Following an investigation into the Conscious Collection, the Norwegian Consumer Authority criticized the collection for utilizing potentially “misleading” marketing ploys, indicating that H&M did not provide sufficient information about the sustainability of the collection. The Conscious Collection was also poorly received in the UK, where industry research on the actual sustainability of certain brands compared to their advertised sustainability revealed that H&M’s Conscious Collection actually contained a higher share of damaging synthetic materials (seventy-two percent) than its ordinary lines (sixty-one percent). Young climate activists took a stand against the collection in the UK, resulting in one H&M location taking down the Conscious Collection window display following a protest by 21-year-old climate activist Tolmeia Gregory and her friends.

Who is pushing for change?

In the U.S., Gen Z and Millennials are calling for change and demanding accountability, but there aren’t any measures in place to actually hold brands accountable. The EU, on the other hand, is taking some steps to demand more accountability from large corporations in the form of new reporting and corporate governance directives in furtherance of the Sustainable Corporate Governance initiative. Some of these changes would require directors and executives of brands operating within the EU to monitor long-term outcomes and measures including the environment, human rights, and social impacts along their supply chains. These revisions also include liability for organizations and directors for noncompliance with the directive.

France recently passed a law requiring a “carbon label” to be included on garments and textiles, aimed at informing consumers about the impact of their purchases. This new law follows an “anti-waste” law passed in 2020 prohibiting the destruction of excess inventory and samples.

Germany has similarly taken further steps to demand more accountability for environmental responsibility in the textile industry, passing the “green button” label law in June of 2021. This new legislation requires companies to meet a minimum of twenty-six social and environmental standards, including supply chain reporting and responsibility points, in order to use the label.

The U.S. has not taken any steps on a federal level to address these issues, but certain states, such as California and New York, have passed or proposed legislation on the topic. In California, the California Garment Worker’s Act was signed into law in September 2021, eliminating the piece-rate wage system that had been heavily criticized as providing easy means for wage theft within the apparel manufacturing industry. On the opposite coast, New York has introduced a bill that, if passed, would present some of the most sweeping measures for regulation the industry has seen.

The New York bill

In January 2022, the New Standard Institute, sponsored by New York State Senator Alessandra Biaggi and Assemblywoman Anna R. Kelles, introduced the Fashion Sustainability and Social Accountability Act (Fashion Act), which would apply to global apparel and footwear companies with more than $100 million in revenues doing business in New York. The Fashion Act would require transparency of at least fifty percent of goods sold from raw materials to shipping regarding their environmental impact. Specifically, it would require companies meeting the criteria (revenues of more than $100 million and doing business in New York) to set and achieve Science Based Targets, as well as to provide clear, transparent reporting on their energy, greenhouse gas emissions, water, plastic, and chemical management, and to perform mandatory due diligence to avoid labor abuses. Significantly, failure to meet these requirements would result in a fine of two percent of a brand’s annual revenue.

Despite the fact that the Fashion Act is being introduced in New York, the state’s market share will have far-reaching implications and will effectively require brands around the world to comply. One of the core issues in addressing the push for transparency currently is the diverse requirements throughout a brand’s supply chain. Due to the disparities in guidance provided by regulators in different countries, fashion lawyers are typically advising their clients to “adopt a favoured nation mentality and abide by the most rigorous standards,” but this still poses issues as one country may be at the highest standard in one area of fashion but not another. The Fashion Act could help to alleviate these concerns, as New York’s market share effectively means that any goods sold in the U.S. would have to comply with the requirements of the Fashion Act — providing practitioners with a more cohesive set of guidelines to provide to their clients.

Although the Fashion Act was just introduced in January, Maxine Bédat, founder of the New Standard Institute, is hopeful it will be passed by the end of the 2022 legislative session in June.