This article was originally published in The Interline’s second Sustainability Report. To read other opinion pieces, exclusive editorials, and detailed profiles and interviews with key vendors, download the full Sustainability Report 2024 completely free of charge and ungated.
Crises, compliance, and the need for critical and creative thinking
Fashion and textiles legislation has generally come to be viewed as one of the major solutions to the industry’s environmental and ethical crises. There are two primary reasons for this: a sheer volume of new laws (particularly from the EU,) and the fact that many regulations across the EU, UK, and US impose stringent requirements aimed at reducing waste, preventing exploitation, and pushing fashion businesses to rethink their entire approach to product creation, sales, and disposal.
Regulations are pushing the sector to adapt, innovate, learn, and unlearn in a global market that is experiencing unparalleled challenges when it comes to the climate, consumer behaviour, and technological advances. For brands and retailers, manufacturers, government bodies, activists, and consumers alike, the stakes have never been higher.
It’s worth pointing out that the EU in particular has accelerated their activity when it comes to sustainability. This is largely because, until recently, this sector was largely unaccounted for and uncaptured by existing legislation – being left to self-regulate.
In 2014 – a quick reminder that that was already a decade ago! – leaders recognised that the EU needed to go further to transform Europe into the highly energy-efficient, low-carbon economy the future demands. The EU and its member states rolled out a series of initiatives aimed at addressing key environmental issues: from reducing carbon emissions and tackling water pollution, to managing chemical toxicity and waste. These efforts often singled out specific industries, providing frameworks for compliance.
But the first significant piece of EU legislation specifically targeting the fashion and textiles industry was the Strategy for Sustainable and Circular Textiles, which was launched in March 2022. And many of the new measures (contained across almost 20 new laws) are set to affect fashion’s operations without offering clear guidance on how to comply.
Nonetheless, the following pieces of legislation are critical for fashion professionals to have on their radar – to learn, to understand, and to think critically about and engage with.
EU Regulations
Corporate Sustainability Due Diligence Directive (CSDDD)
Status: In force since the 25th of July 2024
This Directive’s aim is to create sustainable and responsible corporate behaviour in companies’ operations and across their global value chains. The new rules will ensure that companies in scope identify and address adverse human rights and environmental impacts of their actions inside and outside Europe.
The companies in scope are “large EU limited liability companies and partnerships” with more than 1000 employees and €450 million turnover (net) worldwide. Also in scope are large non–EU companies with €450 million turnover (net) in the EU.
Member States have to transpose the Directive into national law and communicate the relevant texts to the Commission by 26 July 2026. One year later, the rules will start to apply to the first group of companies, following a staggered approach (with full application on 26 July 2029).
Corporate Sustainability Reporting Directive (CSRD)
Status: In force since the 5th of January 2023
The CSRD modernises and strengthens the rules concerning the social and environmental information that companies have to report. A broader set of large companies, as well as listed SMEs, will now be required to report on sustainability. Some non-EU companies will also have to report if they generate over €150 million on the EU market.
The new rules ensure that investors and other stakeholders have access to the information they need to assess the impact of companies on people and the environment, and for investors to assess financial risks and opportunities arising from climate change and other sustainability issues.
The first companies will have to apply the new rules for the first time in the 2024 financial year, for reports published in 2025.
Ecodesign for Sustainable Products Regulation (ESPR)
Status: In force since the 18th of July 2024
The ESPR aims to improve the circularity, energy performance, and other environmental sustainability aspects of products placed on the EU market, and is part of a package of measures that are central to achieving the objectives of the 2020 Circular Economy Action Plan (CEAP). For more context, the CEAP is one of the main building blocks of the European Green Deal that aims to set the EU on the path to a green transition, with the ultimate goal of reaching climate neutrality by 2050.
The EU now requires products to have a Digital Product Passport (DPP), a so-called “data carrier” that can take the form of a QR code, RFID tag, or other form of scannable technology. It will allow custom authorities to perform automatic checks on the existence and authenticity of the DPPs of imported products. This information can include: a product’s technical performance, materials and their origins, repair activities, recycling capabilities, and lifecycle environmental impacts.
The ESPR also has new rules to address destruction of unsold consumer products: banning the destruction of unsold textiles and footwear, and opening the way for similar bans in other sectors, if evidence shows they are needed. It will require large and eventually medium-sized companies across all product sectors to disclose annual information on their website, such as the number and weight of products they discard, as well as their reasons for doing so.
EU Textile Labelling Regulation Revision
Status: In progress
As part of the Circular Economy Action Plan (CEAP), the European Commission is in the planning stages for a revision to the existing EU Textile Labelling Regulation. The revisions are anticipated to require inclusion of sustainability and circularity disclosures, and to align the requirements of the existing Regulation with the recently adopted Ecodesign for Sustainable Products Regulation (ESPR).
The existing Textile Labelling Regulation has already long required importers and manufacturers of textile products on the EU market to specify the fibre composition of the products using a defined list of standardised names, and to disclose whether the product includes non-textile parts of animal origin. As member states have added overlapping labelling requirements on other issues in recent years, and as product labelling further expands under the ESRP, the Textile Labelling Regulation must be amended to conform and simplify matters for retailers.
Green Claims Directive
Status: In progress
With this proposed new Green Claims Directive seeks to: (i) increase environmental protection and accelerate the green transition; (ii) protect consumers and companies from greenwashing; (iii) improve the legal certainty as regards environmental claims; and (iv) boost the competitiveness of economic operators that make genuine efforts to go green.
Under this Directive, companies of all kinds will need to adhere to specific guidelines and standardised criteria when making green claims for greater clarity and trustworthiness.. These claims will require independent verification and must be supported by scientific evidence – generic statements like “eco-friendly” won’t suffice anymore. Currently, the EU has over 200 sustainability labels, many with overlapping or contradictory standards. Some rely on self-certification, making them unreliable and confusing.
Waste Framework Directive Revision
Status: In progress
Following a thorough analysis including stakeholder consultations, the EU Commission has proposed a targeted amendment of the Waste Framework Directive, with a focus on textiles waste. The proposal aims to bring about a more circular and sustainable management of textile waste, in line with the vision of the EU Strategy for Sustainable and Circular Textiles (that implements the commitments of the European Green Deal, the Circular Economy Action Plan and the European industrial strategy.)
Under current EU rules on waste, Member States are required to set up separate collections of textiles by 1 January 2025. For this to happen, separate collection, sorting, re-use, and recycling capacities within the EU have to be strengthened. This requires significant investments to build infrastructure, and to develop new technological solutions.
In particular, the Commission is proposing to introduce mandatory and harmonised Extended Producer Responsibility (EPR) schemes for textiles in all EU Member States. EPR schemes require producers to take responsibility for the entire lifecycle of their products, in particular at the end of the product’s life. Under the proposal, the level of the financial contributions of the producers will be based on the circularity and environmental performance of textile products (referred to as “eco-modulation”).
To reduce illegal waste shipments to non-EU countries, often disguised as intended for reuse, the Commission’s proposal further clarifies the definitions of waste and reusable textiles. This will complement the proposed Regulation on waste shipments, which ensures that textile waste is only exported when there are guarantees that the waste is managed in an environmentally sound manner.
US Regulations
California SB 707- Responsible Textile Recovery Act of 2024
Status: In progress
The bill establishes an extended producer responsibility (EPR) program that will require producers to implement and fund a program to facilitate the reuse, repair, and recycling of clothing and textile fibres. SB 707, together with the EPR program it establishes, seeks to expand upcycling and recycling markets for clothing and fibres, which have been largely underdeveloped. It also reinforces ongoing state initiatives to promote the repair and reuse of textiles. The bill is anticipated to accelerate the shift towards a sustainable, circular textile economy that aligns with market needs. This will open new opportunities for production and consumption that benefit the environment, while keeping costs low for the state, businesses, and consumers in California.
Status: In progress
Officially introduced as Senate Bill A. 4333-A, the Act requires “fashion sellers” doing business in New York to be accountable to standardised environmental and social due diligence policies, as well as establish a fashion remediation fund. The proposed law would cover any apparel or footwear company doing business in New York with an annual global revenue of $100 million.
Fashion sellers are mandated to conduct thorough due diligence for all aspects of their business related to wearing apparel, footwear, and fashion bags. This includes mapping their supply chains across all tiers of production, from suppliers to subcontractors, and disclosing pertinent information such as worker demographics and wages. Fashion sellers must also align with international guidelines for responsible business conduct and risk assessment, as outlined by the Organization for Economic Co-operation and Development (OECD).
Fashion Workers Act
Status: In progress
The Fashion Workers Act provides for the registration and duties of model management companies, as well as complaint procedures and penalties for violations. The legislation aims to close the legal loophole by which management companies escape accountability, and create basic labour protections for models and other fashion professionals working in New York’s fashion industry.
Fashioning Accountability and Building Real Institutional Change Act – the “FABRIC Act”
Status: In progress
The FABRIC Act proposes major new workplace protections and manufacturing incentives to cement the US as the global leader in responsible apparel production.
This worker-led bill also amends the Fair Labor Standards Act of 1938 to include: the establishment of a nationwide garment industry registry through the Department of Labor to promote transparency, hold bad actors accountable, and level the playing field; new requirements which hold fashion brands and retailers alongside manufacturing partners jointly accountable for workplace wage violations to incentivise responsible production; and setting hourly pay in the garment industry and eliminating piece rate pay until the minimum wage is met to ensure jobs with dignity.
House Bill 2068 – Washington Act Relating to Environmental Impacts of Fashion
Status: In progress
The Washington legislature is set to introduce a policy modelled after the New York Fashion Act, requiring large fashion companies operating in the state to address their environmental impact. This bill mandates public disclosure of environmental due diligence policies, processes, and outcomes.
Key provisions of the bill include a requirement for companies to map at least 50% of their suppliers throughout the entire production process, from raw materials to final products. They must identify and disclose suppliers linked to prioritised risks. Affected companies are also required to implement measures to identify, prevent, and mitigate negative environmental impacts, ensuring their due diligence aligns with international standards. Additionally, starting July 1, 2025, these companies must publish an environmental sustainability report on their websites, detailing the results of their supply chain mapping and due diligence efforts.
Status: In force since the 28th of May 2024
The SEC’s final rules reflect the Commission’s efforts to improve and standardise climate-related disclosures by public companies and in public offerings. They also reflect the Commission’s efforts to respond to investors’ demand for more consistent, comparable, and reliable information about the financial effects of climate-related risks on a registrant’s operations and how it manages those risks while balancing concerns about mitigating the associated costs of the rules.
Before adopting the final rules, the Commission considered more than 24,000 comment letters, including more than 4,500 unique letters, submitted in response to the rules’ proposing release issued in March 2022.
UK Regulations
Streamlined Energy and Carbon Reporting framework SECR
Status: In force since the 1st of April 2019
Under the SECR, relevant companies are required to report certain GHG emission and energy consumption information with their annual financial statements. The SECR framework applies to all UK incorporated, quoted companies and large UK private organisations and LLPs, regardless of their sector. A company is defined as “large” if it meets at least two of the following criteria in a financial year: turnover of £36 million or more; balance sheet total of £18 million or more; and/or 250 employees or more.
Reporting obligations include Scope 1 and Scope 2 emissions as well as total energy consumption and at least one emissions intensity ratio. To note, reporting of Scope 3 emissions remains voluntary. There are also numerous distinctions and points of exclusion; for example, if an entity can demonstrate that its energy consumption is less than 40 MWh during the reporting period, no emissions information requires disclosure.
Modern Slavery Act (MSA)
Status: In force since 29th of October 2015
The MSA sets out a range of measures on how modern slavery and human trafficking should be dealt with in the UK. It requires fashion brands and retailers operating in the UK to report annually on their efforts to eradicate modern slavery throughout their supply chains. Of particular significance for businesses are the requirements of section 54 (“Transparency in supply chains”) that require commercial organisations in scope to prepare a slavery and human trafficking statement each financial year.
The requirement to submit an annual slavery and human trafficking statement applies to all “commercial organisations” with a total turnover, including group turnover from subsidiaries, of at least £36 million. This requirement affects organisations that provide goods or services and operate, in whole or in part, within the UK. A “commercial organisation” is defined as any company, regardless of where it is incorporated, or any partnership formed that conducts business in the UK. The 2015 Act clarifies that “business” encompasses any trade or profession.
Status: In force since 6 April 2022
The UK Government’s mandatory climate change reporting requirements for large UK private companies and limited liability partners (LLPs) has the purpose of climate risk disclosure is to identify risks and opportunities of both the physical and transitional impacts, risks, and opportunities of climate change. The CFD aims to integrate climate risk and opportunities in the business governance, strategy, risk management, and key performance indices. Carrying out CFD can improve how investors view and assist the organisation in complying with new regulation.
Companies in scope will include public interest entities (traded companies, banking companies, insurance companies) and AIM-listed companies with more than 500 employees, as well as private companies with more than 500 employees and turnover of more than £500 million.
Paper to practise: the ambitious act of turning policy into action
The sheer volume and complexity shouldn’t discourage or stall efforts from fashion businesses. A productive first step is thorough research and staying well-informed – concentrating first on ensuring proper compliance with the regulations currently in effect. For thetjeje forthcoming laws, it’s advisable, at this stage, to become acquainted with their requirements and begin preparations for future implementation.
Also to hear in mind is that while legislation is certainly part of the bigger picture of solutions, the reality is that progress has been frustratingly slow in an urgent timeframe. As detailed above, many important laws are still in the process of being finalised, and some are only coming into force in the next few years.
But that preparation (and as much positive, practical change) must start now for a guarantee that the next decade will see the implementation of the ambitious sustainability policies, and radical transformation of the industry will take place. Taking the written commitments off the page and into action will require active participation and genuine investment of every one of fashion’s stakeholders, today. Yesterday, actually.
