Hunton Retail Law Resource

Fashion Industry

On February 4, 2024, California legislators introduced a bill, the Fashion Environmental Accountability Act (AB 405), which would require fashion brands to disclose their environmental impact, carbon emissions, water use, and waste. The proposed regulation would apply to brands with total annual revenue over $1 billion and that do business in California. The law would not apply to retailers that sell used fashion goods and does not include multibrand retailers, unless the total annual gross receipts of all of the private labels under the retailer exceeds $100 million.

Starting in 2026, fashion brands would be required to publicly disclose, and annually thereafter, their scope 1 and scope 2 greenhouse gas emissions, and their scope 3 greenhouse gas emissions in 2027.

Additionally, the proposed bill would require fashion brands to carry out effective environmental due diligence that complies with certain environmental guidelines. These guidelines, at a minimum, require fashion brands to embed responsible business conduct into their policies and management systems, identify areas of significant risk for societal and ecological harm, and assess and mitigate the adverse impacts of those risks. Beginning July 1, 2027, the bill would also require brands to submit an Environmental Due Diligence Report to the department and state board, outlining their environmental diligence efforts and certain information related to their greenhouse gas emissions. By January 1, 2028, fashion sellers will also be required to ensure significant tier 2 dyeing, finishing, printing, and garment washing suppliers annually report wastewater chemical concentrations and water usage in the due diligence report.

AB 405 now awaits referral to its first policy committee. This proposed legislation appears to be part of a broader effort to address the environmental impacts of the fashion industry, as California has already passed and signed into law the Responsible Textile Recovery Act (SB 707) on September 22, 2024.