Laws and Regulations

Discussing U.S. Legislation With Fashion Retail Expert Ann Cantrell.

08 August 2022

Megan Doyle

Sustainable Fashion Journalist
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    TrusTrace content editor and sustainable fashion journalist Megan Doyle sat down with Ann Cantrell, an entrepreneur and academic from the Fashion Institute of Technology in New York, to discuss incoming legislation that will impact the US this year. They discuss the current fashion landscape, what has catalysed the legislation, advice for brands looking to navigate incoming laws, and more. Below, you can read a snippet of their conversation, and stay tuned for the full webinar soon.

    MD: Today I'm speaking to Ann Cantrell, an entrepreneur and academic who also teaches full-time as an associate professor at the Fashion Business Management Department at the Fashion Institute of Technology in New York. Prior to teaching, Ann was working in the fashion industry in various roles from product development (at Coach) to planning (at Brooks Brothers) and also as a business analyst for brands like Ralph Lauren. She also has an MBA in sustainability from Green Mountain College and is an active member of the President's Council on Sustainability at FIT as well. 

    We're going to be talking about the incoming legislation in the US to understand the current legislative climate. Thanks for joining me Ann, I'm really excited to be chatting with you today and to pick your brains all about the legislation. 

    AC: Thanks so much for having me, it's nice to be speaking to you from here in New York City. As we dive into the subject, I want to lay some groundwork about what’s happening, not just in the world, but specifically in the US that led us to where we are right now. Inherent in the fashion business is the idea that we want to maximise profitability. The cost of consumer packaged goods has gone up, I’m hearing all these inflation issues and everything, and yet the cost of clothing has remained the same and even gone down. 

    So, inherently, I think businesses are trying to maximise profitability there. As consumers, we're always just looking for the cheapest price and pushing our brands to provide that for us. We also have a huge divide here in the US meaning that it's really hard to get anything pushed through Congress. So states are really taking it into their own hands. Then we have COVID coupled with that. We had huge exposure to supply chain issues through COVID and also we have one of the least regulated industries in the world — it’s very fragmented. I think that is why we've gotten to where we are today and how we're kind of segueing into what changes should be coming our way.

    MD: There are so many elements of this that are all coming to a head this year. I think it's so interesting to see now that the industry is really acknowledging that legislation is really the only way forward. What is the general consensus about the incoming laws with the business professionals and the industry leaders that you're speaking to? Are people worried about these incoming laws? Are they excited? Are they unsure about how it's going to pan out? 

    AC: All of the above. I think people really welcome some sort of regulation and figuring out what they need to do. I think inherently companies do want to do better, brands absolutely want to do better. I think a lot of this is pushed by the consumer as well. The consumer is demanding these things, but the consumer is demanding that but then also wants cheaper prices. So I think it's a tough thing to figure out, but brands have to figure out a path forward. 

    I think things like Remake’s #PayUp movement, which was launched because we had $40 billion worth of cancelled goods during COVID. That became a huge viral moment on social media and consumers really stepped up, and were able to support and see what brands were paying and weren't. We're really seeing the divide between the global wealth gap and countries that are seeing low vaccination rates and factories closing — everything happening that has so much more visibility from a consumer perspective. 

    So I think that brands want to do the right thing. And certainly, they want to make sure that their consumers are happy. So I think that regulation gives them a path forward to do that is welcomed, but they’re also thinking: how are we going to do this? They need help to figure out what that looks like. There’s a growing movement of CEOs and businesses that believe that the point of business is not about profitability, it's about our stakeholders. How do you take that and put it into practice? 

    And then meanwhile, as you say, we have the perfect storm of COVID and consumer demand for regulation and things like that. So I think we are ripe for a time when businesses want to be able to figure out what they need to do next, but how do they do that? And what does that look like? Plus, there's really not much put into place for the brands to do this. So how does this get done? The earlier the better, right, that's what we understand.

    We need to have more intent when we're in the beginning stages of the product development cycle. And that's what a lot of this newer regulation is also talking about as well, not just the end results of things but our fiber, fabric, manufacturing and all those pieces. I think it's a really pivotal time, I tell my students all the time that we’re in this huge paradigm shift in fashion. With COVID, we really saw a lot of cracks in the supply chain and we don't want it to be that way anymore. On the other hand, SHEIN just had a $100 billion valuation, so fast fashion isn't going anywhere. We need to figure out a path forward.

    "Having a path forward to show where brands could get better and how they're going to get better is a really important part of all this."

    MD: It's a moment of real value shifting for the industry. 10 years ago, the whole goal was to just maximise profits at whatever cost. And now there are a lot of executives who are changing their tune and saying “Okay, what the industry stood for 10 years ago is not what the industry stands for anymore.” Young people coming into fashion do not want to work for the industry in the state that it's in. So how do we completely shift our value system and completely shift the operating system of this industry that is so ingrained? It's tricky to untangle.  From your understanding, what are the key focus areas that the incoming legislation is covering, are they largely around sustainable supply chains and materials or do garment worker rights and the social impact ethical side of the industry come into that as well? 

    AC: We have a huge divide here in the US, so nothing really gets passed through Congress. It was promising that the U.S. Forced Labor Prevention bill passed unanimously with bipartisan support. But otherwise, we're really seeing that certain states are taking things under their own control. California has been a leader in this space for a long time. But also we are in a global world where things that pass in our legislation can't be monitored throughout the world. For example, The 2010 California Transparency in Supply Chains Act asked manufacturers and retailers to disclose business about where they were seeing efforts to eradicate slavery in their supply chain, but it was really up to the consumer to figure out where they wanted to shop and what they want to do with those next steps. 

    Last September, California passed the Garment Workers Protection Act which is protecting the garment workers from getting paid by piece piecework, so they were getting paid very little. Instead, they’re paid an hourly rate, and the onus was not just on the manufacturing system, but also on the brand itself. So there’s accountability there. 

    So I think that accountability is also really important because another big inherent part of the fashion business is that brands don't own their own factories. And so everything's always been pushed back on the manufacturing system. It's interesting to think about trying to fix different parts of the issues but again, it’s a really fragmented industry with many broken parts. 

    The New York State law, the Fashion Sustainability and Social Accountability Act, is actually really exciting because it's looking at so many different aspects of what we're saying. It's looking at the labour issues, but environmental protection is being prioritised as well. And what the New York State Act would do is show some accountability and you have to show improvement as well. By tracing 50% of your supply chain, brands would have a year to do that, as well as to show improvements. 

    Having a path forward to show where brands could get better and how they're going to get better is a really important part of all this. So I think that's what's really exciting about New York Fashion Act because it’s a proposed law that looks at all these different aspects of labor, human rights, and environmental protection.

    Stay tuned for the full webinar with Ann Cantrell, out soon! 

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