Fashion Industry Update
On February 4, 2024, a new bill called the Fashion Environmental Accountability Act, or AB 405, was introduced in California. This legislation aims to make fashion brands more transparent about their environmental impact. It requires brands with annual revenues over $1 billion to share details about their carbon emissions, water use, and waste management.
From 2026, these brands will need to publicly report their greenhouse gas emissions. Specifically, they’ll disclose scope 1 and scope 2 emissions, which relate directly to their operations, and starting in 2027, scope 3 emissions, which cover the impact from their entire supply chain.
The bill also focuses on responsible environmental practices. Fashion brands must implement effective due diligence measures. This means they need to integrate responsible practices into their business operations and identify risks that could harm society or the environment. They must assess these risks and work on minimizing their negative effects.
By July 1, 2027, brands will have to submit an Environmental Due Diligence Report. This report will outline their environmental commitment and include information about their greenhouse gas emissions. Additionally, by January 1, 2028, sellers will need to ensure that significant suppliers report their wastewater chemical concentrations and water usage every year.
This proposed legislation is part of California’s efforts to tackle the fashion industry’s environmental issues. Just recently, on September 22, 2024, the state enacted the Responsible Textile Recovery Act, known as SB 707, which further addresses sustainability in fashion.
AB 405 is a significant step towards holding fashion brands accountable for their environmental footprint. As consumers grow more aware of these issues, transparency in the fashion industry becomes increasingly important.
