Green regulations watch
Exploring changes to environmental legislation that will affect many companies within the footwear industry.
As governments and organisations around the world take action to stop climate change, it is inevitable that alongside the commitments made to reduce greenhouse gas emissions and become carbon neutral, legislation will also follow. This article introduces the UK’s ‘Green Claims Code’, the proposed New York State’s ‘Fashion Sustainability and Social Accountability Act’ and the UK’s ‘Extended Producer Responsibility scheme for packaging’, and outlines how these are likely to affect the global footwear supply chain.
Evaluating green claims
Consumers are increasingly demanding sustainable products and considering sustainability as part of their purchasing decisions. Talking about the sustainable credentials of a product can therefore give businesses a point of differentiation in a crowded market place. However, while there are many credible claims being made, there is also considerable ‘greenwash’ – the making of misleading claims about a product or an organisation’s environmental credentials.
To help businesses ensure that any claims would stand up to legal scrutiny and also to enable consumers to make educated decisions, the Competition & Markets Authority in the UK has launched the Green Claims Code, which covers six key principles based on existing consumer law. These state that claims should be truthful and accurate, be clear and ambiguous, not omit or hide important relevant information, consider the full lifecycle of the product or service, and be substantiated. In addition, comparisons must be fair and meaningful. The fashion industry is expected to be among the first to come under scrutiny by the CMA in relation to the code.
Sustainability and accountability
If passed, the proposed Fashion Sustainability and Social Accountability Act for New York State would require fashion retailers and manufacturers with a global revenue greater than USD 100 million (GBP 73.8 million) and which operate in the state to map a minimum of 50 per cent of their supply chains from raw material to final production. These companies will also be required to disclose the environmental and social impact of their activities and set targets to reduce those impacts.
This would cover areas such as greenhouse gas emissions, water and chemical management and the provision of fair wages. Information would also have to be provided on the volumes of the different materials used, such as leather and cotton. Fines levied against companies for non-compliance (up to 2 per cent of annual revenue) would be invested in a community fund which would be used to invest in projects for the benefit of the environment.
Responsibility for packaging
From 2023, the Extended Producer Responsibility scheme for packaging will require – with varying degrees of obligation – any organisation putting packaging into the UK market (including brand owners, importers, distributors, online stores and retailers) to cover the full net recovery cost of the collection, recycling and disposal of packaging. This will even include costs associated with such activities as litter-picking. The intention of this policy is to encourage investment in more sustainable materials and recycling infrastructure. It is anticipated that the costs will be significantly higher than the existing ‘Packaging Waste: Producer Responsibilities’ scheme, with much more detailed data being required.
While the legislation detailed above is specific to the UK and the USA, similar legislation already exists in a number of other countries. It is easy to see how the impact will be felt throughout the footwear supply chain, as brand owners and retailers are obliged to gain a deeper understanding of their impacts and to validate that any ‘green’ claims being made are credible. This will potentially be through signing up to voluntary standards and certification schemes. It is also likely that there will be a renewed drive to reduce the amount of packaging used and to transition to the selection of more sustainable materials.
How can we help?
Members seeking guidance on validating their sustainability claims are invited to email us at email@example.com
This article was originally published on page 4 of the March 2022 issue of SATRA Bulletin.