Contact: Warren Koshofer
The fashion industry is a global powerhouse of creativity and commerce, but beneath the glamour lies a harsh reality—one of environmental strain and questionable labor practices. From greenhouse gas emissions and chemical waste to exploitative working conditions, fast fashion’s rapid expansion has come at a steep cost. Now, lawmakers in California and New York are pushing back with ambitious legislation designed to hold major fashion brands accountable for their environmental and social impact.
The two bills, California’s Fashion Environmental Accountability Act (CFEAA) and New York’s Fashion Sustainability and Social Accountability Act (NYFSSA), share a common goal—forcing transparency and responsibility in an industry long criticized for its opaque supply chains and inconsistent sustainability efforts. However, they take fundamentally different approaches in their enforcement mechanisms and priorities. If either (or both) become law, the impact on global fashion companies will be profound.
California’s Approach: Environmental Due Diligence and Transparency
California has long positioned itself as a global leader in climate policy, and the proposed CFEAA follows this tradition by focusing squarely on environmental accountability. Introduced in February 2025, the bill targets large fashion businesses that conduct operations in California. Specifically, it applies to brands with total annual revenues exceeding $1 billion and multi-brand retailers with annual gross receipts over $100 million. The CFEAA, as currently drafted, mandates rigorous environmental due diligence including disclosure of environmental impact, carbon emissions, waste use, and waste, to ensure that major players in the industry are actively working to reduce their ecological footprint.
Key Provisions of the CFEAA
Under the proposed CFEAA, fashion companies operating in California would be required to comply with strict environmental disclosure and compliance requirements. Beginning in 2026, they would be required to publicly disclose Scope 1 and Scope 2 emissions, which include greenhouse gas emissions from their direct operations and energy consumption. By 2027, the mandate would extend to Scope 3 greenhouse gas emissions, ensuring transparency on the full environmental impact of production, including supply chain emissions. In addition to disclosure, the law would require companies to align their climate goals with the Paris Agreement, setting clear targets for emissions reduction.
Beyond carbon emissions, the CFEAA also seeks to tackle chemical and wastewater management. By 2028, businesses engaged in dyeing, washing, printing, and garment finishing would have to conduct annual wastewater testing to monitor and report chemical discharges, aimed at curbing pollution and mitigating harm to water sources. To further strengthen corporate accountability, the bill calls for annual environmental due diligence reports starting in 2027, requiring companies to assess and disclose risks associated with their operations and supply chains while detailing mitigation strategies.
Failure to comply with the CFEAA regulations would carry significant financial penalties. Companies that do not meet the law’s requirements would face fines of up to 2% of their annual revenue, a considerable deterrent for industry leaders. These penalties would be allocated to the Fashion Environmental Remediation Fund, a state-managed initiative designed to support environmental restoration projects in communities disproportionately affected by fashion industry pollution.
Through this ambitious legislation, California is joining New York in signaling commitment to reshaping the fashion industry, prioritizing sustainability, and enforcing corporate responsibility at an unprecedented scale. However, critics argue that while the CFEAA places strict environmental demands on companies, it does little to address labor conditions and workers’ rights in global supply chains—a notable gap given the ongoing criticism of the industry’s labor related practices.
New York’s Approach: Comprehensive Corporate Responsibility
The proposed NYFSSA takes a far broader approach than California’s bill. The NYFSSA focuses on more than emissions and environmental disclosures. Instead, the proposed bill also directly targets corporate responsibility across the entire supply chain, including labor practices, wages, and human rights violations.
Originally introduced in 2022, the NYFSSA was reintroduced in 2025 as Senate Bill S4558, and it has gained renewed political momentum. The law would apply to fashion companies with at least $100 million in global revenues that manufacture or sell products in New York—effectively ensuring that nearly every major global fashion brand would be subject to its requirements.
Key Provisions of the NYFSSA
Under the proposed NYFSSA, fashion companies must map out their entire supply chain and identify, cease, prevent, mitigate and account for actual and potential adverse impacts to human rights and the environment in both their own operations and their supply chain. Unlike the CFEAA, which focuses primarily on environmental disclosures, the NYFSSA additionally requires public disclosure of labor practices, wages, and sourcing policies, ensuring that brands cannot hide unethical business operations behind vague sustainability pledges.
The proposed New York legislation demands robust environmental and social due diligence. Fashion industry companies would be required to set clear climate targets and report on their progress toward emissions reductions, water conservation, and toxic chemical elimination. To prevent greenwashing—the practice of misleading consumers about sustainability efforts—the bill calls for third-party verification of corporate sustainability reports, ensuring that commitments translate into real-world action rather than empty promises.
The NYFSSA calls for fashion companies to adhere to fair wage laws across all levels of production, from textile mills to garment factories, preventing exploitation within their supply chains. Independent audits would be conducted to evaluate working conditions, wages, and hiring practices, ensuring that companies are not engaged in child labor, wage theft, or other undesirable employment practices.
Like its California counterpart, failure to comply with the NYFSSA would come with steep financial consequences. Companies that violate its provisions could face fines of up to 2% of their annual revenues. These funds would be directed to the Fashion Remediation Fund, which would in turn provide worker relief and finance environmental restoration projects in communities disproportionately affected by unethical and unsustainable industry practices.
Through this sweeping legislation, New York is taking an aggressive stance on corporate responsibility. Indeed, New York’s aim seems to be reshaping the fashion industry to foster a more sustainable, ethical and socially responsible fashion ecosystem.
What’s Next?
Both bills have their challenges. Critics argue that the CFEAA, while groundbreaking in environmental accountability, does not go far enough in addressing supply chain labor issues. Meanwhile, some claim that the NYFSSA is overly ambitious, placing burdensome supply chain requirements on companies that could be difficult to enforce, especially in countries with weak labor laws.
At the same time, major fashion brands and industry groups are pushing back against both laws, arguing that they impose heavy regulatory burdens and would likely increase costs for companies and consumers alike. Not coincidentally, the fast-fashion industry, with its reliance on cheap production models and just-in-time manufacturing, would be hardest hit by the proposed legislation.
Is This a Turning Point for Fashion?
Despite opposition, both bills reflect a growing trend: lawmakers are no longer allowing fashion brands to self-regulate when it comes to environmental and labor standards. Whether these bills pass in their current form or get watered down, the era of unchecked fashion industry practices, opaque supply chains, and questioned labor practices is coming under scrutiny.
With fast-fashion giants like Shein, Zara, and H&M capturing an increasing share of the $2.5 trillion fashion industry market, the question is not whether regulations will come—but how soon and how strict they ultimately will be. If California and New York succeed, the fashion industry as we know it may never be the same again.
This blog post is not offered, and should not be relied on, as legal advice. You should consult an attorney for advice in specific situations.
