An update on the proposed Washington State Fashion Sustainability Accountability Act

Fashion retailers and manufacturers need to monitor industry-focused corporate responsibility bills on both sides of the United States. 

In prior posts, we have written on New York’s proposed Fashion Act (see our prior posts here and here). Similar to the New York act, Washington State’s proposed Fashion Sustainability Accountability Act would create environmental due diligence, reporting and performance target requirements for subject companies. In this post, we provide an overview of the recently amended proposed Washington Act.

The Act was initially introduced in the Washington State Senate in January 2023. As originally proposed, the Act would have addressed social matters and environmental sustainability.

Last month, the Act was amended to focus solely on environmental sustainability. Separate legislation was proposed in Washington State last month – an Act Relating to Transparency in Supply Chains (SB 5541) – that would require retail sellers and manufacturers doing business in the state with annual worldwide gross receipts of at least $100 million to annually report on their efforts to address human trafficking and forced labor in their supply chain. 

Subject companies  

The Act would apply to fashion retail sellers and manufacturers doing business in Washington State that have more than $100 million in annual worldwide gross income. 

• A “fashion retail seller” would be defined as a business entity that lists retail trade as its principal business activity on its Washington State business and occupation tax returns and sells articles of wearing apparel or footwear.
• A “fashion manufacturer” would be defined as a business entity that lists manufacturing as its principal business activity on its Washington State business and occupation tax returns and manufactures wearing apparel or footwear.

Due diligence requirements

If passed, the Act would require subject fashion retail sellers and fashion manufacturers to conduct environmental due diligence on their operations, supply chain and other business relationships. Specifically, due diligence would at a minimum be required to include:

• Supply chain mapping: Taking a risk-based approach, subject companies would be required to use good faith efforts to map suppliers across all tiers of production, from raw material to final production. In any event, they would be required to map at least 50% of suppliers by volume across all tiers of production. The Act would also require subject companies to use good faith efforts to map suppliers and supply chains associated with prioritized risks and disclose the names of the suppliers.
• Impact due diligence: Subject companies would be required to implement processes to identify, prevent, mitigate and account for how they address actual and potential adverse environmental impacts in their own operations, their supply chain and other business relationships. Due diligence would be required to align with the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, OECD Due Diligence Guidance for Responsible Business Conduct and United Nations Guiding Principles on Business and Human Rights.

Reporting requirements 

Subject fashion retail sellers and fashion manufacturers would be required to publish an environmental sustainability report that includes the results from their supply chain mapping as well as externally relevant information on their due diligence policies, processes and activities, including the findings and outcomes of those activities. The impact due diligence efforts that would need to be disclosed in the environmental sustainability report would include:

• A website link to the fashion retail seller’s or fashion manufacturer's relevant policies on responsible business conduct;
• Information on the measures taken to embed responsible business conduct into policies and management systems;
• The fashion retail seller’s or fashion manufacturer's identified areas of significant risk in its own activities and business relationships, such as supply chains;
• The significant adverse impacts on risks identified, prioritized and assessed in the context of its own activities and business relationships, such as supply chains;
• The prioritization criteria used;
• The actions taken to prevent or mitigate risks, such as corrective action plans, including estimated timelines, targets and benchmarks for improvement and their outcomes;
• Measures to track implementation and results; and
• The fashion retail seller’s or fashion manufacturer's provision of or cooperation in remediation.

Subject companies would need to post the report on their website with a clear and easily understood link by July 1, 2025. 

Performance targets 

The Act also would require subject fashion retail sellers and fashion manufacturers to establish, track and disclose progress towards numerous environmental performance targets, beginning on January 1, 2027. This would include: 

• A quantitative baseline and reduction targets on energy and greenhouse gas emissions, water and chemical management; greenhouse gas emissions reporting would need to be independently verified, include absolute figures and conform to the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard and the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Standard;
• The annual volume of material produced, including breakdown by material type, which would be required to be independently verified;
• How much production was displaced with recycled materials as compared to growth targets, which would be required to be independently verified; and
• The targets the fashion retail seller or fashion manufacturer has set for impact reductions, and for tracking due diligence implementation and results, including where possible estimated timelines and benchmarks for improvement; the targets would be required to include absolute targets for greenhouse gas emissions reduction that align with the Apparel and Footwear Sector Science-Based Targets Guidance and include all scopes of production.

The Act would require fashion retail sellers and fashion manufacturers to meet the targets they establish. Beginning on April 1, 2028, and by each April 1 thereafter, subject fashion retail sellers and fashion manufacturers would need to submit an annual report to the Washington State Department of Ecology that allows the Department to determine whether the fashion retail seller or fashion manufacturer achieved its established performance targets. 

Penalties and civil actions

A subject fashion retail seller or fashion manufacturer that violates a disclosure or reporting requirement of fails to achieve a performance target would be subject to a civil penalty of up to $5,000 for each violation in the case of a first offense. Repeat violators would be subject to a civil penalty of up to $10,000 for each repeat offense. 

The Washington State Department of Ecology would be required to annually publish and make publicly available a report regarding compliance with the Act, listing the fashion retail sellers and fashion manufacturers who are known to be out of compliance.

The Act also would allow for any person to bring a civil action (1) against a subject fashion retail seller or fashion manufacturer alleged to have violated the Act or an order by the Department of Ecology, (2) to compel the Department to investigate a subject entity's compliance, to enforce compliance with the Act or to apply the prohibitions under the Act or (3) where there is an alleged failure of the Department to perform any act or duty under the Act.   

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