Risk in the Supply Chain: Proposed Laws Seek Unprecedented Transparency

In January 2022, two members of the New York State government, backed by a coalition of fashion and sustainability nonprofits, unveiled the Fashion Sustainability and Social Accountability Act (or Fashion Act). If passed, this law would make New York the first state to “effectively hold the biggest brands in fashion to account for their role in climate change.” The Fashion Act does not only pertain to climate impacts, it also seeks to address ethical sourcing and due diligence in supply chains. Similar legislation with broader implications has been proposed in Europe. A year prior to the announcement of the Fashion Act, the European Parliament made an announcement of its own, coming out in support of legislation to mandate that companies address human rights and environmental standards within their value chains; in March of this year, the EU unveiled its long-awaited proposal for a directive on Corporate Sustainability Due Diligence (CSDD). In this article, CRA’s Elaine Wood and Emily Butler along with Paul Weiss’ Dave Curran and Madhuri Pavamani discuss how both the Fashion Act and the CSDD are emblematic of growing public and regulatory interest, and it would be wise for companies, regardless of their size and industry, to begin to take steps to understand the impacts associated with their supply chain, as we can be sure these pieces of legislation represent the beginning of a movement towards transparency and informed choices.