For the past two years, LVMH has been preparing to provide consumers with unprecedented levels of information about where and how their clothes and shoes are made.
Across all its brands, from Louis Vuitton and Dior to Celine and Loewe, the French luxury titan is pushing to unravel complex supply chains, trace the origins of its products, and pin down the granular data needed to comply with a next wave of regulations aimed at to address fashion issues. environmental impact. It’s a huge task tracing information between houses and products, and it’s still a work in progress.
“We have a space in every maison,” said LVMH environmental deputy director Alexandre Capelli.
The company is racing to align with the new laws; On January 1, France quietly mandated that the biggest fashion companies provide buyers with detailed information about environmental characteristics, such as the proportion of recycled material in a product, as well as where garments are sewn and materials are woven.
The law is an early salvo in a broad regulatory push taking shape in Europe and the US that will end years of lax controls over the fashion industry’s environmental footprint and links to labor abuses.
Compliance is complicated and will require companies to have much greater control of their supply chains than most today. And while some of the proposed new rules are likely to take years to go through the legislative process (and even longer to enter into force), others, like France’s new law, will require companies to act now.
Fashion is not ready.
A test case
France’s new requirements fall under the country’s Anti-Waste for a Circular Economy, or AGEC, law, which aims to push companies towards more circular production and buyers towards more responsible consumption habits. It requires brands to give consumers much more transparency about the countries they come from and the environmental impact of the materials used.
For example, if a brand says a t-shirt is made from recycled material, it will need to disclose the proportion that is recycled. If more than 50 percent of a garment is made of synthetic fibers, it must carry a warning that it will shed microfibers in the wash. There are strict guidelines that govern whether a company can claim an item is recyclable, and brands must publish the country where a product is made, as well as where the core material it contains is processed and manufactured.
“This is the first time a regulation has required such industry-wide disclosure,” said Baptiste Carriere-Pradal, speaking in his capacity as co-founder and director of public affairs consultancy 2B Policy. He also chairs Policy Hub, an EU advocacy group that represents the interests of fashion trade groups. “The industry is not ready at all.”
Although the introduction of the law is phased in to give smaller brands more time to prepare, it went into effect for larger brands this month. Just finding out if a business is covered can be tricky. This year, the law applies to companies that sell more than 25,000 items a year in France and generate revenue of more than 50 million euros ($54 million) in the country. Does not cover leather goods.
“It’s really complicated,” said Sophie Bonnier, director of environmental excellence and circularity at French luxury conglomerate Kering. “We have to define for each brand who it concerns, when, and then we have to find the information that is going to be published.” In Kering’s case, the conditions mean that Gucci and Balenciaga are covered this year, but other major brands such as Bottega Veneta and Saint Laurent are not.
Brands wait for a grace period while they work to collect the information necessary to comply. The law was passed in 2020, but details of the new requirements were only released in April, providing little time to process the huge volumes of data required, they say.
A quick analysis of the French websites of many of the major players shows mixed acceptance so far and highlights some of the complexity involved. A pair of leggings for sale at Nike are touted as mostly recycled, but there’s no percentage breakdown of recycled content. On the other hand, a black polyester “skort” for sale at Zara now offers details of manufacturing locations and warns shoppers about the risk of the microfiber coming off during washing. A Louis Vuitton synthetic jersey dress does not carry a similar warning because the garment is dry-clean only, LVMH said.
Adding to the challenge for many brands, the information on what to expect is largely in French and exactly how some of the data should be calculated and presented has yet to be defined. The rapid turnover of many styles, inherent in the trend-driven nature of fashion, also makes things difficult.
LVMH is expanding a partnership with traceability and data management platform Fairly Made to collect and track the information you need to comply. This year, the luxury giant’s priority is to nail down the details of the products that are worn from season to season, Capelli said. Inditex, which owns Zara, and Kering said they are working to ensure they fully comply. Nike did not respond to a request for comment.
Across the industry, meeting the conditions of the law is a large and complicated task that requires fashion brands to make years-long commitments to improve the traceability of their supply chain, a task that ultimately requires time and money to complete. develop capabilities and processes around the world. the business.
“It requires a change in the way you operate,” Carriere-Pradal said. “At the same time, it is telling that much of this information was not available.”
A regulatory crisis
For brands, being caught red-handed is becoming more risky as regulation that is likely to require big changes to business operations advances globally, bringing with it the threat of financial penalties and legal action.
Undoubtedly, the penalties associated with AGEC are not large (€15,000 maximum); the biggest risk is reputational and legal, as NGOs, consumer protection agencies and buyers themselves are highly focused on what brands say, said Joanna Peltzman, lead partner in the Paris environmental practice at the law firm Osborne Clarke.
Around the world, several brands are already facing litigation for making allegedly misleading environmental claims. Other laws under consideration globally could result in higher fines measured as a percentage of brands’ global revenue, and the scope of what is covered will increase significantly.
The European Union is working through a set of policies aimed at reshaping the way fashion operates by the end of the decade. The planned regulations include new design requirements to make products more durable and reduce their environmental footprint and to provide more transparency to consumers about the impact of items on the climate.
Countries like France and Germany have already tightened due diligence requirements, making brands more accountable for misbehavior in their supply chains; regulation that the European Union is also considering.
Over the past 12 months, New York and California have passed bans on “forever” toxic chemicals commonly used in waterproof outerwear. The proposed New York Fashion Law, which combines strict due diligence and transparency requirements, could expose companies to fines of up to 2 percent of global revenue if passed.
The best positioned brands will make strategic investments that will prepare them to comply with the likely new rules now. Many large companies have already increased spending on traceability tools in anticipation of demands for more data and disclosure, similar to LVMH’s efforts with Fairly Made. And companies are putting design-to-sourcing teams on training on sustainability requirements, while also hiring subject matter experts and public affairs specialists in senior-level positions to help keep abreast of the changing landscape.
“The management of sustainability issues is clearly moving from a matter of ‘best practice’ or ‘guidance’ to hard law,” said Susanne Bullock, a partner at the law firm Gibson Dunn & Crutcher. “Brands are advised to closely monitor these developments.”
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Editor’s Note: This article was revised on January 13, 2023 to correct Joanna Peltzman’s name and environmental details available on Zara’s French website, which include information on eliminating microplastics.
Source: news.google.com