How Regulations Affect Sustainable Fashion

Here is a truth that is also a self-interested justification. When asked to assure that their #supplychain pays workers fairly, does not compel overtime, does not employ children and keeps fire exits unobstructed and clearly marked, many #fashion brands lament the impossibility of the challenge. After all, they note: (1) their supply chain is global, complex, multi tiered and unstable (as order volumes shift continuously); (2) suppliers often use subcontractors without seeking approval; (3) audits are temporal; and (4) records can be fudged….among other things. Thus, assurance is impossible. Even so, the EU was set to make these challenges the responsibility of brands via the CSDDD (Corporate Sustainability Due Diligence Directive). According to the prior version of the CSDDD, brands would be responsible for due diligence to identify, assess and address negative impacts on human rights and environmental across their entire supply chain with the goal of preventing or mitigating adverse impacts. No more. The Omnibus restricts the responsibility for brands to only Tier 1 suppliers….which typically includes 10% to 20% of their total suppliers (while also spacing out the intervals of periodic risk assessments, removing mandatory rules for civil liability, and delaying implementation..) The inevitable result. Less disclosure and more human rights and environmental damage. What gets missed in this discussion is that the structure of fashion supply chains is a choice.  Brands choose to outsource to a complex, global, multi tiered supply chain to 1️⃣ lower asset intensity 2️⃣ drive down costs (of labor) 3️⃣ maintain flexibility (to move to lower wage countries) 4️⃣ skirt responsibility for human rights and environmental externalities and damage Decades ago, many apparel and footwear brands were also manufacturers with tight relationship with local suppliers. No more. Now, with production separated from consumption, and “making” outsourced to the Global South, with the cooperation of EU regulators, brands can continue to mostly wash their hands of their damage while continuing to earn outsized margins. Shivam Gusain Lutz Walter Oliver Scutt Auret Van Heerden Peter Ford Saqib Sohail Dr. Vidhura Ralapanawe Sanjana Pimoli Marie-Claire Daveu Kathleen Egan Kathleen Talbot Sarah Krasley Maxine Bédat Neeraj Narayan Liz Hershfield Leslie Johnston, M.Sc. Transformers Foundation Kim van der Weerd Philip Blake Andreas Rasche Alice Korngold Alice Marmion

SYSTEMIC CHANGE -- Apparel and footwear are significant contributors to our climate crisis. The industry is responsible for between 4 and 8.6% of the world’s global greenhouse gas footprint –– 6x more than New York, and more than France, Germany and the United Kingdom combined. Left unchecked, the industry will be responsible for more than a quarter of the world’s global carbon budget by 2050. And perhaps most important of all -- there are currently no legally binding environmental standards for the industry. h/t Alec Leach for capturing this moment, and this critical systems level opportunity most eloquently: • The Fashion Act is an ambitious piece of legislation that’s being proposed in the New York State Assembly. The bill would regulate fashion so that sustainability, transparency and fair working conditions are a requirement for any major brand wanting to sell in the state of New York (aka all of them). • The Act would apply to any apparel and footwear brand with more than $100m in global revenue, and it would be enforced by the state’s Attorney General. • The bill was conceived by Maxine Bédat, one of the smartest and most driven people in the industry — she’s written a book about sustainability and appeared in the BOF 500, and she’s got a background in law. • The Act is thorough, wide-ranging and ambitious. Brands would be required to trace their entire supply chains, all the way back to the raw material. They’d have to reduce their greenhouse gas emissions in line with the Paris agreement, but in absolute terms — so no “emissions intensity” bullshit, no dodgy offsetting schemes and no ignoring Scope 3 emissions. Chemicals would be managed in line with the ZDHC’s most up-to-date Wastewater Guidelines. • Companies would be responsible for human rights abuses in the supply chain, and workers would have a legal mechanism for recovering any lost or stolen wages. "This is a really, really big deal. Any major player wanting to access the highly lucrative New York market would be required by law to be responsible for their supply chains, and anyone on the wrong side of the regulations would find themselves facing the state’s top lawyer — the Attorney General could fine a company up to 2% of their global revenue. This is what systemic change looks like!"

California isn’t waiting for fashion brands to self-regulate. Hot on the heels of SB 707, CA just introduced AB 405, the Fashion Environmental Accountability Act of 2025, setting a new bar for holding brands accountable for their environmental impact. This bill mirrors New York’s Fashion Act, creating a coast-to-coast push to regulate emissions and chemical use in fashion supply chains. If passed, brands making $100M+ in revenue and selling in California will need to: ✅ Set science-based emissions reduction targets ✅ Manage toxic chemicals across their supply chain ✅ Prove compliance—or face penalties of up to 2% of global revenue With SB 707 already signed into law, California is making one thing clear: they mean business. What this means for brands: ✔️ You can’t just report impact; you need to reduce it. ✔️ Sustainability regulations aren’t coming—they’re here. ✔️ With CA and NY leading the charge, expect this to become the industry standard. The smartest brands aren’t waiting to react—they’re investing in circularity, branded resale, and smarter supply chain strategies now.

This is a story about the power of regulation and how to take a more innovative approach to it to fight extremely unsustainable practices. In this case, the French lower assembly passed legislation aiming to combat ultra-fast fashion, applying both carrots and sticks by rewarding "more durable, sustainable apparel items and taxing carbon-heavy ones with a lack of transparency." Here's the part I found most interesting: "According to the bill, brands with over a thousand new items added to their site per day will face modulated financial contributions. Additionally, it imposes a €5 penalty per product for those exceeding the thousand-model daily threshold, with an aim to curb the environmental impact." For companies like SHEIN and Temu, which adds thousands of new items every day to their website (in the case of #Shein, up to 10,000 according to this report - https://lnkd.in/gWQYYzMs), such legislation could be a very challenging obstacle to their current business model, requiring them to redesign it, hopefully in a far more sustainable way. Beyond the smart use of new items per day as a key anchor of this legislation, it also offers a lesson in 'riding the populist wave' (in this case, the context is the rise in French and European protectionism) to drive legislation that guards us against the destructive practices of ultra-fast fashion and its counterparts. I wrote more about the need to apply #populism to drive #sustainability here: : https://lnkd.in/dF2r94wD #france #fastfashion #temo #fashion #eu #climatechange #climateaction https://lnkd.in/gdnxnbdM

France's new approach to penalise fast-fashion companies showcases how regulation and taxes can influence consumer behaviour. Targeting cheap, mass-produced clothing, the country is pioneering efforts to reduce fast fashion's environmental harm. This strategy includes bans on advertising for low-cost textiles and an environmental levy to push the industry towards sustainability. It's an intriguing method showing policy's role in changing consumer habits and industry norms for a sustainable future.