Will 2022 be the year of legislation for the fashion industry?

As fashion’s superpower brands recalibrate their retail footprints and prioritise environmental and social advancement, 2022 may be the year of legislation, forcing the industry to take responsibilities for its actions. With governments monitoring how fashion businesses operate, unsustainable practices will come with legal and financial consequences.

Digital scrutiny

New European rules will come into effect sometime in 2022, offering consumers protection for making online purchases. These rules take into account that when shopping online, consumers increasingly make purchases outside of their own countries, and that more and more products and services have digital elements. The ‘legal guarantee’ will thus also apply to products with a digital element, such as services and content.

Mandatory human rights, environmental, and good governance due diligence

Last March the EU paved the way with its directive for due diligence and corporate accountability. Penalties will be served if fashion brands are found to cause harm by insuffient due diligence in their supply chains, for example, ensuring no child labour, fair wages are paid and the environment is protected.

In May, the Netherlands Authority for Consumers and Markets (ACM) launched investigations into approximately 70 companies in the clothing sector. These companies were being investigated for making misleading marketing claims about the sustainability of their products, otherwise known as greenwashing. For those found in breach of the competition watchdog’s rules, fines up to 900,000 euros or a proportion of company revenue were ordered.

End of greenwashing

In October the UK’s Competition and Markets Authority (CMA) developed the Green Claims Code, which sets out 6 key points to check if environmental claims are genuinely green. Green claims (sometimes called ‘environmental claims’ or ‘eco-friendly claims’) are claims that show how a product, service, brand or business provides a benefit or is less harmful to the environment.

Many businesses use green claims to help market their products or services, but sometimes ‘greenwashing’ comes to the fore.

In July the French parliament passed a law to apply ‘carbon labels’ to garments. The law aims to inform consumers about the environmental impact of their purchasing decisions. France also banned companies from destroying leftover stock under an ‘anti-waste’ law last year.

In the US, the Garment Worker Protection Act (GWPA) was strengthened in October, ensuring that retailers cannot use layers of contracting to avoid liability. It also prohibits the use of paying garment workers by the “piece,” thereby eliminating a significant obstacle to workers being paid minimum wage and also protecting their health and safety.

“No industry is more rife with employment violations than the garment industry,” says the GWPA on its website. “Los Angeles has the highest concentration of garment industry workers in the country. Largely located south and east of downtown, some 2,000 manufacturers employ more than 40,000 people — mostly immigrant women — who spend 10 to 12 hours a day cutting, sewing and dyeing clothing — from designer jeans to “fast fashion” runway knockoffs.”

Consumers more conscious

New global laws are reflecting a consumer shift in conscious consumption, and a growing awareness of the impact of producing garments on the environment is shaping how business operate, communicate and retail their products.

In McKinsey’s 2022 State of Fashion report it notes consumers want to know where materials come from, how products are made, and whether the people involved are treated fairly. In response, more and more companies are expanding their sustainable assortments and working to boost the sustainability of their supply chains.

“The bottom line going into 2022 is that the fashion industry faces a complex mix of challenges and opportunities, in which there is little room for missteps. Decision makers have their work cut out to manage the demands of digital, sustainability, and the supply chain.”