Add §§399-mm & 399-mmm, Gen Bus L; add §97-ccc, St Fin L
Requires fashion sellers to be accountable to standardized environmental due diligence policies; establishes the fashion environmental accountability act compact to create an interstate fashion environmental accountability commission; establishes a fashion remediation fund.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4333B revised 5/7/2024
SPONSOR: Kelles TITLE OF BILL:
An act to amend the general business law, in relation to requiring fash-
ion sellers to be accountable to environmental standards and establish-
ing the interstate fashion environment accountability act compact; and
to amend the state finance law, in relation to establishing a fashion
remediation fund
PURPOSE OF BILL:
To establish a legal framework incentivizing fashion brands selling
(fashion sellers) in New York State (NYS) to adopt and comply with
internationally and scientifically verified standards of environmental
responsibility, sustainability, and greenhouse gas (GHG) reduction. This
act seeks to incentivize the reduction and mitigation of negative envi-
ronmental impacts of the global fashion industry and provides an inter-
state compact to allow other state's to join the legal framework
provided in this legislation.
SUMMARY OF SPECIFIC PROVISIONS:
Sec. 1 - establishes the title of this act. "Fashion environmental
accountability act"
Sec. 2 - amends the general business law by adding a new section 399-mm
to establish the Fashion Sustainability and Social Accountability Act.
This section defines terms, establishes due diligence requirements and
noncompliance, details reporting, provides regulatory authority, a proc-
ess of verification, and enforcement.
This section sets forth requirements for fashion sellers with $100
million in annual gross receipts that do business in the New York State
to map their supply chains and perform sufficient due diligence. This
includes identifying, preventing, mitigating, accounting for, and taking
remedial action to address actual and potential adverse impacts to the
environment. Covered fashion sellers must set science-based targets to
reduce their GHG emissions and work with suppliers to improve chemical
management. Provides these requirements will be enforced by the Attorney
General and violators may be fined up to 2% of annual revenues.
Sec. 3 - amends the state finance law by adding a new section 97-ccc to
establish the Fashion Remediation Fund which will distribute any funds
raised by penalties to environmental or labor remediation projects in
impacted communities.
Sec. 4 - requires the Attorney General to certify that their agency is
prepared to execute their duties under § 399-mm of the general business
law.
Sec. 5 - adds a new § 399-mmm to the general business law to establish
the Fashion Environmental Accountability Act Compact to coordinate
interstate regulations and implementation therein as developed pursuant
to this act.
Sec. 6 - provides for severability.
Sec. 7- sets the effective date.
*Changes in b-print:
-removes labor provisions -adds interstate compact
-makes other technical changes
JUSTIFICATION:
The international fashion industry largely operates in a regulatory
vacuum. Currently there are no legally binding environmental standards
placed on the apparel and footwear industries. As a result, "fast fash-
ion" retailers and manufacturers may ramp up production and operations
without taking environmental responsibility or sustainability into
account. Apparel and footwear are responsible for a massive part of the
climate crisis causing GHG emissions, between 4-8.6% of the world's
global GHG footprint. This share of GHG emissions is growing as the
fashion industry pivots further into fast fashion and "single-wear"
styles.
This legislation will shift the industry away from a race to the bottom
by requiring active due diligence and planning to mitigate risk. Under
the bill, apparel and footwear retailers with global revenue of at least
$100 million would be required to map their supply chains and suffi-
ciently engage in ongoing due diligence efforts to draw down their nega-
tive impacts.
Covered brands (fashion sellers) will be required to map and disclose
their supply chains from production to raw materials. Fashion sellers
often do not know where their production is taking place, which makes it
impossible for them to begin to take responsibility or improve the envi-
ronmental impacts where their products are made.
Once apparel companies know and disclose their supply chains, they are
then required by the bill to address their negative impacts. This is
achieved through the legally binding mandatory due diligence framework,
which requires companies to sufficiently identify, prevent, mitigate,
account for, and remediate actual and potential adverse impacts to the
environment in their own operations and in their supply chain. Within
the mandatory due diligence framework, the Fashion Act will require
companies to set and achieve climate reductions in line with the Paris
Agreement and work with their suppliers to effectively manage their
chemical use.
The Fashion Sustainability and Social Accountability Act will be the
global leader in reducing the carbon footprint of the fashion industry
by requiring companies wishing to sell to the New York market to set and
achieve science based targets. Science-based targets require that the
pace of reductions progress at the pace required to keep global warming
below 1.5C from re-industrial levels, as set out in the Paris Agreement.
The Fashion Act will also fill in a massive regulatory gap by requiring
brands to work with their textile suppliers to effectively manage their
chemical use. No more dead rivers in the name of our clothes.
Garment workers face the brunt of the industry's race to the bottom. By
requiring companies to perform mandatory due diligence, we can be confi-
dent that the people and communities affected by the emissions and chem-
ical use of the fashion industry will measurably and meaningfully
improve.
The Act will be enforced by the NYS Department of State, Attorney Gener-
al, or a designated administrator. Companies found to be out of compli-
ance and which do not remedy within three months of notice of non
compliance may be fined up to 2% of annual revenues. These funds will be
used for the benefit of workers and communities directly injured and
environmental benefit projects. This will make New York the leader in
corporate accountability and demonstrate a path forward for industry to
thrive within the bounds of the planet.
LEGISLATIVE HISTORY:
2021-22: A8352 referred to consumer affairs and protection
FISCAL IMPLICATIONS:
To be determined.
EFFECTIVE DATE:
This act shall take effect immediately, except for section 5 of 399-mm
which shall take effect one year after the attorney general certifies
that the office of the attorney general is prepared to execute the
duties assigned in section 5 of 399-mm of the general business law.
