In the absence of a common definition recognized by all the scholars and dictionaries as well, we want to start from the definition of geopolitics given by the Oxford Languages as “politics, especially international relations, as influenced by geographical factors”.

Accordingly, the concept of geopolitics started as a study on how the geographical position and the geographical peculiarities of a state (such as the presence of borders secured by mountains or rivers) could lead the political actions of that state in respect of other states, where the first aim is protecting its own sovereignty and boosting and increasing its power on other states.

As times passed, observes noted that other peculiarities may influence the geopolitical relation, other than the pure geographical characteristics. Social behaviour, different scales of values and believes may influence indeed the actions of a state in relation to others.

In this sense it is worth noting, by way of example, that, in fact, many Western countries condition their support for developing countries on strengthening the protection of human rights. Furthermore, environmental protection is increasingly becoming a factor that may influence relations among nations.

Likewise, sustainability and its implementation in many rules related to the fashion industry are reshaping relations between different countries, opening or limiting access to richest markets. 

The new corpus of rules governing fashion and sustainability in some jurisdictions (namely USA and UE) are indeed influencing the affected industries beyond the borders of the territories to which it applies. 

Indeed, fashion can be viewed through the lens of geopolitics. 

In today’s globalised world, power is expressed through subtle and complex systems of interdependence, namely economic dependence,  the traits of which are clearly visible within the intricate and endless tiers of the textile supply chain. 

The industry’s economic reach – and its impact on job creation, international trade, and economic growth – makes fashion a true soft power that exerts influence beyond national borders. 

The new perspective means that the new fashion rules do not relate to the garments per se (as for rules related to the safety of dyes used for textiles) but to the way in which they are produced and the impact of production on human rights and environment. In this regard,– in terms of sourcing transparency, relevant precedents are the US Clean Diamond Trade Act of the 2003 and the Canadian Kimberley Process for the trade of rough diamonds.

This article aims to provide an example on how a highly globalized industry must deal with rules and requirements decided by those states that drive the most relevant markets and the transition towards a greener and perhaps more human-centred world.

New rules to ensure sustainability

Relegating fashion to a gilded cage of catwalks and glossy social campaigns is rather anachronistic, as the marriage of sustainability legislation and fashion transcends superficial glamour and serves as a nuanced reflection of global geopolitics and evolving regulatory trends. 

In a bid to achieve climate neutrality by 2050, the old continent stands at the forefront of the green transition, propelling a transformative and ambitious agenda.

The initiatives launched have adopted a global approach, ranging from product design – with the flagship Ecodesign for Sustainable Products Regulation – to the fight against greenwashing – with the Green Claims Directive – to waste management – with the revision of the Waste Framework Directive – to reporting.

On the latter, the tension is due to the attractiveness of ESG parameters for investors as synonymous with resilience and long-term growth.

EU institutions have enacted the Corporate Sustainability Reporting Directive for large companies and are currently drafting the Corporate Sustainability Due Diligence Directive, two complementary pieces of legislation that prioritise transparency and accountability as key drivers in compelling companies to wisely manage their social and environmental impacts.

Both directives emphasise the importance of disclosing sustainability information, while considering the impacts and risks of internal sustainability targets and across the supply chain. The desired outcome is a structural synergy between sustainability strategies and business models to understand, first, how sustainability efforts affect the company’s growth and performance, both structurally and financially, and second, to make it easier for potential investors to  evaluate the associated risks.

To this end, the CSRD elevates ESG reporting by fully equating it with traditional financial statements while improving comparability and interoperability through single reporting standards for the benefit of investors. The CSDDD – as sustainability goes beyond just climate – will impose environmental and human rights due diligence across all the tiers of the value chain, supported by directors’ duty of care and civil liability. 

The position of the British lawmaker is not dissimilar. In the UK, sustainability is being driven by a series of wide-ranging measures such as the Green Claims Code, the Plastic Packaging Tax, and, above all, the Sustainability Disclosure Standards which are due to be implemented by July 2024 and will set out corporate disclosures on the sustainability-related risks and opportunities, with an eye to global comparability.

Across the Atlantic, the United States are strategically using sustainability initiatives as weapons to differentiate the American manufacturing sector from that of China in their ongoing trade war.

At the federal level, the Fabric Act and the Americas Trade and Investment Act aim to boost local manufacturing through tax incentives and targeted circular strategies, and offer US companies an alternative to produce domestically, by providing better infrastructure and access to low-cost capital for circular textile businesses. The ultimate goal is to incentivise the reshoring and nearshoring of manufacturing from China to the US, thus putting an end to the constant search for cheap workforce in countries with poor labour policies. 

Another recent initiative is the US SEC’s long-awaited Climate Disclosure Rule, which will require both domestic and most foreign private issuers to identify and disclose material climate risks and impacts on their business strategy, operations and financial condition.

Similarly, key American jurisdictions have mirrored the same trend.

Emblematic is the New York Fashion Sustainability and Social Accountability Act – as well as its twin initiative, the Washington State’s House Bill 2028 – which mandates supply chain transparency, ESG disclosure and due diligence for apparel companies operating in New York with annual global sales of $100 million.

The state of California also experienced a major regulatory shift. Its key measures are three: California SB 253 and SB 261 which, albeit at different annual revenue thresholds, require companies operating in the state respectively to report on direct and indirect emissions and to disclose climate-related financial risk reports biannually; and the Textile Recovery Act of 2023, introduced to facilitate the collection, repair and recycling of used textiles.

As the West advances sustainability agendas, Asian powerhouses – on which global textile production has depended so far – are implicitly called to reshape their legal scenario on sustainability and labour practices.

Thus, India has recently refined the ESG disclosure scheme by introducing the Business Responsibility and Sustainability Core framework which covers, with a comprehensive approach, the risk areas related to environmental protection and human rights within the supply chain and requires top listed companies to identify and address those potential risks. 

Meanwhile, in China, the days when ESG compliance was simply the result of the codes of conduct imposed by Western companies seem to be over. As Europe’s quest for environmental protection comes to a standstill, in a landmark move, the Beijing, Shanghai and Shenzhen stock exchanges have just introduced their first mandatory guidelines on ESG disclosure for major listed companies, borrowing the principle of double materiality already endorsed by the EU CSRD.

While this is undoubtedly a watershed moment, with increasing scrutiny of human rights and environmental practices, Beijing will soon be required to provide greater protection for its workers. And that future is not so distant, given the expected approval of the EU Forced Labour Regulation and the US Uyghur Forced Labor Prevention Act, both aimed at preventing goods contaminated by human rights abuses from entering or being exported to the EU and US markets. 

Sustainability: a chess game where players win or lose together

Amid these legislative developments, the geopolitical implications of sustainability policies are becoming increasingly clear. Beyond the cases where the violation of environmental rules and human rights can hinder the access to the most prosperous markets, the race for sustainability is not just a domestic issue. It is rather a chess game that reflects broader international dynamics, tied together by massive regulatory reporting efforts, given the reputational value of ESG credentials as a key asset for attracting capital by providing investors with consistent, comparable, and decision-useful information.

About Authors:

Mario Di Giulio: Visiting Lecturer (Fashion and Ethics) and Member of the Scientific Committee of the Master in Fashion Law (LUISS University in Rome)

Giulia Tuccio: LLM in Fashion Law (LUISS University in Rome)

]]> https://fashionlawjournal.com/fashion-law-sustainability-and-geopolitics-a-non-obvious-but-concrete-nexus/feed/ 0 https://fashionlawjournal.com/ethics-and-fashion-industry-the-need-of-a-new-legal-approach/ Thu, 23 Mar 2023 06:32:48 +0000 http://fashionlawjournal.com/?p=6643 Sustainability: One of the Facets of Ethics

As many other industries, the fashion industry faces ethical issues in a continuous manner: issues related to the environment, but also the labor conditions and employments, as well as exploitation of animals and endangered species. That is not so different from other sectors, but fashion (that includes also luxury) emphasizes these issues because it often satisfies superfluous and unnecessary desires.

After all, an Italian saying goes: “this is a luxury” to mean something that is needless.

Considering the increasing sensibility that people worldwide are paying to sustainability and the achievements of the Sustainable Development Goals set out for the 2030 Agenda, it becomes clear the progressive willingness by the consumers to buy, as well as from the producers to make, fashion sustainable and first of all ethical.

Just for the sake of clarity, the word sustainable should involve actions and decisions aimed at satisfying the need of the current generations through actions and decisions that do not compromise the possibility of the future generations to satisfy their own; while ethics involve more concepts like morality and behavior that affect lives of human beings and animals. 

It is clear, however, that sustainability per se includes ethical choices, since it is pursued to ensure equal chances between generations that do not exist contemporarily.

Why a new approach?

Ethics is a value that may be influenced by many factors: personal belief, religion, but also state of need: a Latin saying goes primum vivere, i.e. the first priority is to stay alive. Having this in mind, it is clear that, except for certain values like the protection of the human life, ethics may involve values which may differ a lot from country to country, from region to region, from people to people.

It is sufficient to think of the use of animals for the leather. Many fashion designers are defining themselves sustainable just because they do not use leather made by animals and just because they recycle plastic bottles or crop wastes. However, is that sufficient? How good is the message given by the use of plastic bottles if it could be understood as “you may use how many plastic bottles you want, since they could be recycled”, when it is clear that the recycled plastic bottles are just a minimum number of those that are produced? Moreover, what about the possibility to recycle the shoes made by recycled plastic when they are not usable any longer? In addition, what about the dispersion of micro-plastics when the shoes are used? Who is able to know how much oil derivatives are used to transform crops waste into the so-called eco-leather?

On the other hand, animal leather is for the biggest part made from animals that are killed for nutrition purposes and not only for their skin (as it happens, instead, for most of the cases when they are killed for the fur). Thus, for those persons who are vegan, it could be understandable that they do not accept animal leathers.  It might seem a little odd if, instead, they are carnivorous, but they still complain about animal leather. However, also in this case, the reality is more complex: because tannery may have a relevant impact on environment and many issues may be considered with reference to intensive farming, the relevant effects on global warming, the cruelties imposed to animals, and, last but not least, how and whether animal leather may be efficiently disposed.

It is therefore evident that, as it happens in many circumstances of life, when theory comes to practice many are the issues at stake, while the way to address them may be difficult and unclear. 

Grey areas leave space to green washing and unwanted consequences

As for many human activities, it is clear that also the fashion industry has grey areas that leave space to wrong messages, intentionally or not. It is not only a  matter of greenwashing where the information given is untrue or misleading, in many cases the issue raises from the fact that the consumers are not allowed to have a clear picture of what their loved brand makes.

Another example may be of help. With regard to diversity and inclusion, is it sufficient for being inclusive to represent diversities in the advertising? Or should the brand also produce its garments for those who are overweight or have disabilities of whatever nature? Is it sufficient to produce these garments if then the relevant distribution is limited or very restricted? Moreover, how much is a brand inclusive when it does not ensure fair wages to the models or engage models only if they are underweight?

These considerations could be applied in many fields and one-way perspectives many times influence them. Is fast fashion so much unethical if it creates job opportunities for poor people? And may we consider ‘green’ a brand that wastes a lot of energy in advertising, covering the facades of buildings in the very center of the cities, often hiding the artistic beauty of those buildings?

It is obvious that every choice has different consequences and may be evaluated with different scales of values, where, in many circumstances, nobody is in the position to claim that the relevant decisions are better than those taken by others.

A proposal to address the issues from a legal perspective

As mentioned above, the factors that could affect ethical choices can be many and not easy to be dealt with in a clear manner. The existing legislation in many countries is addressing the issues related to untrue or misleading messages, sanctioning greenwashing and misleading advertising. These rules, however, address only a part of the problem because of the criticalities that have been exposed above.  

Many of the same issues may also refer to sustainability. 

The creation of taxonomy regulations may be of help, but – also in this case – the regulations are the result of choices that could be opined because they are the results of lobby actions and compromises and often disagreed based on the personal belief of every consumer. 

In this regard, a principle that has to be ensured is the right of consumers to exercise conscious choices.  

So, one of the criteria that should be used as the main guideline should be transparency rules that oblige the brands to explain why their action should be considered ethical or sustainable every time that ethics and sustainability become a driver for their promotions. 

The simple list a of greenhouse gas emissions or the potential recyclability of a product does mean that this product is better than another one that causes  major carbon print but offers more job opportunities or ensures its full recyclability? it is a matter of choices that the consumers should be able to evaluate with their own assessment. 

Moreover, brands should give sufficient information to explain why they declare themselves inclusive, for example making available data in terms of employment, advertising and productions.

If a brand claims sustainability just because of plastic recycled, it should explain how and when the recycled plastic may be recycled again, explain as well what is the impact of recycling in terms of dioxide emissions for a small production compared to other materials or the same plastic when it is new.  It should also be explained how much plastic is actually recycled.

If the brand uses eco-leather, it should explain how much oil derivatives have been used to make it and what is the relevant impact on the environment. While if a brand uses animal leather, it should explain whether the leather comes from intensive farming, in compliance with no cruel practices, as well as how the items could be disposed when wasted.

In this regard, many steps have been taken or are in the process to be taken at a global level, such as: 

1. the European Union Commission proposed the Eco Design for Sustainable Products regulation  , which is aimed at improving transparency, among others, on products  for their capability of being recycled, use of sustainable raw material, carbon and environmental footprints;
2. the European Union Commission also proposed the Corporate Sustainability Due Diligence Directive, which requires companies with 500 employees or 150 million euro turnover worldwide, to ensure protection of humans and the environment during all the supply chain passages, including those that take place outside of Europe; 
3. The State of New York is considering the issue of the Fashion Sustainability and Social Accountability Act that would require transparency regarding environmental and social impacts of fashion labels. This Act, if passed, shall require fashion brands to disclose greenhouse gas emissions, as well as usage of energy, water, material and plastic through traceable processes. 

However, we must face the fact that sometimes choices may be in contrast among themselves: just for the sake of clarity, Western countries are asking developing countries not to use coal because of the gas emissions, not considering that in those countries coal is still necessary to ensure better life conditions. Is that ethical considering that Western countries use life standards that are one of the biggest causes of global warming? 

Considering the above, there should be a simple rule, if a brand claims to be sustainable or ethical: 

1. first of all, it should give sufficient information to explain why and to which extent it believes it is so; and
2. secondly, it should be obliged to reply to the requests of information that come from consumers in this regard.

The second aspect is fundamental. 

Transparency should also mean that if a brand claims to be ethical or sustainable, it is obliged to address and reply to the questions posed by the consumers in public forms. In fact, it is clear that certifications by third independent parties may not be sufficient, since these auditors make assessments applying agreed procedures that could address just part of the issues, while the consumers should know what is beyond the procedures, what has been considered and what has not. Last but not least, the independency of third parties’ judgement has all to be proven when it comes from those firms that have always been involved as consultants by the same brands in the past.

How these matters may be regulated and how the exercise of consumers’ request have to be dealt with is a matter pertaining to the lawmakers and, in this field, lawyers could help to figure out possible solutions.

What is clear is that greenwashing is only a part of the global issue and maybe it is only the peak of an iceberg, where the real matters are under the water. 

Written By: Mario Di Giulio

A member of the Scientific Committee and visiting lecturer (Ethics and Fashion Law)  at the Fashion Law Master held by LUISS University in Rome. He is adjunct professor of Law of Developing Countries at Campus Bio-Medico University. Partner at Pavia e Ansaldo Law Firm, he is co-founder and Vice President of The Thinking Watermill Society, a non profit organization focused on technological innovation and sustainability matters.