California’s newly introduced Fashion Environmental Accountability Act aims to enforce significant environmental standards in the fashion sector, setting a precedent for similar initiatives across the U.S.
On February 4, 2025, the California State Assembly introduced the Fashion Environmental Accountability Act of 2025, also known as AB 405, marking a significant legislative effort to enhance environmental accountability within the fashion industry. This proposed law is notable as it could become the first of its kind in the United States, mandating that retailers engage in substantial environmental due diligence concerning their products and supply chains.
The Fashion Act specifically targets “fashion sellers,” which the legislation defines as businesses selling apparel and footwear within California that generate annual gross receipts exceeding $100 million from private label items. The legislation expressly exempts retailers dealing in second-hand fashion goods.
If enacted, the Fashion Act will require these fashion sellers to undertake detailed environmental due diligence. This process involves identifying, ceasing, preventing, mitigating, accounting for, and remediating any actual and potential adverse environmental impacts resulting from their operations and supply chains. The Act stipulates several key obligations for these retailers:
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Disclosure and Reduction of Greenhouse Emissions: Fashion sellers must publicly disclose their supply chain greenhouse gas emissions and take steps to reduce them in accordance with targets established by the Paris Agreement.
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Compliance with International Standards: Retailers must adhere to the OECD Guidelines for Multinational Enterprises and integrate responsible actions into their corporate policies to identify and prioritize mitigating environmental damage.
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Annual Environmental Due Diligence Reports: Fashion sellers are required to develop and submit an Environmental Due Diligence Report to the California Department of Toxic Substances Control, outlining their environmental accountability efforts. This report must be made publicly accessible on an annual basis.
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Management of Chemical Use: The legislation mandates that sellers work collaboratively with their suppliers to manage chemical usage and conduct annual wastewater tests to monitor chemical concentrations and water consumption, including these findings in their Environmental Due Diligence Reports.
To ensure compliance, the California Department of Toxic Substances Control will have the authority to publicly list noncompliant fashion sellers and impose civil penalties of up to 2% of annual revenues for businesses that do not rectify compliance issues following a three-month cure period. As an example, a retailer generating $100 million could face penalties amounting to $2 million for non-compliance.
This legislative push in California follows the enactment of the Responsible Textile Recovery Act (SB 707) on September 28, 2024, which requires clothing producers to join a Producer Responsibility Organization and implement waste reduction initiatives by 2026. SB 707 allows the state’s recycling agency, CalRecycle, to impose day-to-day civil penalties for violations, with maximum fines reaching $50,000 for intentional infractions.
Other states, including Washington, Massachusetts, and New York, are observing California’s initiatives closely. Washington state legislators have proposed a bill requiring producers to disclose information regarding harmful chemicals in their products, marketing terms related to sustainability, and measures taken to reduce environmental impacts. In Massachusetts and New York, similar environmental due diligence bills that aimed to establish accountability and sustainability in the fashion sector have encountered challenges, with previous attempts failing in 2024 and 2023 respectively.
Additional federal legislation has also been introduced to encourage fashion producers to voluntarily disclose greenhouse gas emissions data and provide support to American retailers focused on domestic apparel manufacturing.
The evolving landscape of environmental legislation in the fashion industry brings opportunities and challenges for retailers, many of whom will need to adapt to comply with these rigorous new standards. The focus on sustainability will likely continue to shape the future dialogue around fashion and its environmental impact.
Source: Noah Wire Services
