Background
What does it mean?
This bill is intended to effectively hold the biggest fashion brands accountable for their social and environmental impact. It will require companies to map their supply chain, identify their most impactful suppliers and implement accurate actions to reduce their impact. Fashion companies will be required to share all of this info on their websites.
Who is concerned?
This bill applies to any company with over $100M revenue, selling goods in the State of New York.
Requirements
Retailers or manufacturers concerned will have to respect, at minimum, the following requirements:
Supply chain mapping:
The retailers or manufacturers shall map at least 50% of their suppliers by volume across all tiers of production using good faith efforts to identify the prioritized risk suppliers. Any intent to withhold information about prioritized risk suppliers in this exercise will be considered against this article.
Critical suppliers’ analysis:
The manufacturer or retailer shall disclose the following information on their website:
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Its suppliers of significant environmental and social risks.
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An assessment of the adverse impacts of these suppliers.
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The median wage of workers for suppliers of significant risk.
Policies and actions:
The retailer or manufacturer shall implement and publish on its website:
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Due Diligence Policies regarding environmental and social responsibility
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Actions to mitigate the risks and reduce the environmental and social impacts in the supply chain.
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Tracking of the implementation of the policies.
Targets and outcomes:
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Companies shall set and disclose annual quantitative reduction targets on greenhouse gas emissions (greenhouse gas reporting conform with the greenhouse gas protocol corporate value chain scope three standard), water pollution and chemical use.
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They shall disclose a yearly progress report on the application of the policies.
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Retailers/Manufacturers will have to disclose their material production volumes, breakdown by material type, as well as the % of their raw materials replaced by recycled material.
Consequences
Fashion retailers and manufacturers failing to comply with this act may be fined up to 2% of their annual revenues. Such fines shall be deposited in a Community Benefit Fund for the purpose of implementing environmental benefit projects. The Attorney General shall annually publish a report listing the fashion companies that are out of compliance.
Risk Mitigation
To ensure your business is ready for the eventuality of enforcement of the bill above, firms should start to design and implement an effective compliance system and get an understanding of their supply chain in order to discover any human rights or environmental violations. Sounds complicated? Not with the right platform! TrusTrace provides actionable transparency of your entire supply chain and makes it easier to manage compliance, supply chain risk and communicate product origin easily and credibly. Contact us for more information on how we can help your company.
