“Sustainable Fashion” - Hot Button Issue in 2022
With the global COVID-19 pandemic still disrupting our lives and dominating the headlines, it is understandable that important news about sustainability can sometimes slip through the cracks. The G&A team is pleased to continue to bring you our Highlights newsletter with a round-up of the latest breaking news and trends in sustainability affecting businesses and investors.
Certain trends in ‘sustainable fashion’ have emerged as hot button issues in 2022, with renewed focus by governments and consumers on various social and environmental impacts of the global fashion industry on society.
According to Fashion United, the global fashion industry generates over US$3 billion dollars of annual revenue, accounting for 2% of the world’s Gross Domestic Product (SDP). Over 430 million people globally are estimated to work in fashion and textile production, or roughly one in eight workers.
Clothing brands came under increased scrutiny for harsh and unsafe working conditions following the 2013 Rana Plaza factory collapse in Dhaka, Bangladesh -- which killed over 1,100 people producing clothing for over 29 major (and well-recognized) fashion brands.
In the aftermath of this disaster, Bangladesh passed stricter safety regulations and some major fashion brands formed groups to implement new inspection training and protocols. However, conditions for clothing workers in many countries continue to be unsafe and numerous non-governmental organizations -- including Fairtrade International -- continue to advocate for living wages and reasonable working hours.
While the social impact of the fashion industry was in the spotlight, less attention was paid to the environmental impact of the industry, but that is beginning to change.
The rapid rise of ‘fast fashion’ brands has led to a huge increase in production, with over 100 billion new garments made in 2019 compared to 50 billion in 2000. The global fashion industry’s carbon footprint is now larger than that of international flights and maritime shipping combined, accounting for 10% of all worldwide greenhouse gas emissions (GHGs).
The industry is also responsible for 20% of global wastewater and in the U.S. alone, over 10 million metric tonnes of textiles ended up in landfills with another 2.9 million tonnes incinerated in 2017.
Lawmakers in New York State recently took a major step forward to regulating the fashion industry with the introduction of a proposed bill that if passed would make New York the first state to hold fashion brands accountable for their role in climate change.
The Fashion Sustainability and Social Accountability Act (Fashion Act) bill is being reviewed by State Senate and Assembly committees with plans to bring it to a vote in late spring. The Fashion Act would apply to all global apparel and footwear companies with more than $100 million in revenues that do business in New York.
Details of the proposed bill, which are reviewed in our Top Story below, include requiring companies to map at least 50% of their supply chain and disclose their greatest impact in GHG emissions, energy and water usage, and chemical management.
The bill would also require disclosure of median wages for workers and policies to ensure responsible business conduct. Violations of the regulation would result in fines of up to 2% of the violator’s annual revenues, along with negative publicity that could hurt sales to consumers who are increasing interested in sustainability.
The G&A team will continue to monitor this proposed regulation and we are available to answer questions and advise fashion companies on how to meet the bill’s potential disclosure and reporting requirements.
This is just the introduction of G&A's Sustainability Highlights newsletter this week. Click here to view the full issue.