Regulating Fast Fashion Industries as the New Norm?

Legislators all around the world are looking at fast fashion industries with greater scrutiny. In March 2022, the European Union published the Ecodesign for Sustainable Products Regulation (ESPR) to improve product circularity and identify substances that may prevent products from being recycled. 

ESPR specifically set single-fiber, or monofiber, clothes as the new standard, which makes clothes easier to recycle. Across the Atlantic in America,  the Fashioning Accountability and Building Real Institutional Change Act—known as the FABRIC Act—is the first federal fashion bill which aims to improve the labor rights of garment workers and encourage reshoring of the American garment manufacturing industry. More regulations on the fast fashion industry are also appearing at the state level. California recently passed a bill that requires hourly wages for garment workers. Under this new bill, workers would no longer be paid per garment, and manufacturers and brands would be penalized for illegal pay practices. 

Growing government regulations may be a response to the inability of fashion industries to self-regulate, despite their stated intentions. While in recent years, many fashion brands began sustainability marketing, much of the efforts remain acts of greenwashing that yield little concrete benefits to the environment or garment workers. The Netherlands’ Authority for Consumer Markets notably investigated H&M and Decathlon for greenwashing and misleading marketing claims. This is just one example, out of many, that led to the introduction of these new fast fashion regulations across America and the Western Europe which have begun to hold fashion brands legally accountable for their production and marketing not only domestically but also abroad in their offshoring factories. This series of new rules shifts the burden away from the so-called responsible and socially aware consumers and has begun to tackle fashion corporations.

In addition to its impact on fast fashion brands, new regulations will also affect the international supply chain of fast fashion. Specifically, as ESPR covers all clothes sold in the bloc which imports nearly three-quarters of its textiles, any fashion multinationals export to the EU would be impacted. We should expect the trickle-down effect of EU and American policies to hit fast fashion suppliers in developing nations. With the new regulations, one may envision a mutually beneficial scenario. Fast fashion brands may reshuffle their supply chains and possibly identify and transform local providers in Southeast Asia to comply with the EU standards. Economically resourceful fashion brands may in turn proactively provide infrastructure, training, and protection for offshore garment workers. 

Nonetheless, this possibly auspicious situation gives rise to many more concerns, among which who would bear the cost of more expensive products. It is predictable that sourcing sustainable and recyclable materials and ensuring workers’ rights would increase the cost of production. This rise in cost is at least a short-term problem before sufficient innovation can ensure cheaper and widely available recycling methods, thus creating a more efficient and closed ecosystem for clothing production. We are indeed hopeful that more and more startups have come up with solutions for effectively recycling clothes. France-based Carbios SA developed technology to recycle the polyester in clothes blended with synthetic and organic materials. It signed an agreement with sportswear brands earlier this year, including Puma SE and Patagonia. 

Holding fast fashion brands legally responsible for their impact on the environment and workers’ rights may also reshape the landscape of the fashion industry and induce interesting consumer behavior. The heightened labor and recycling standard in the new EU regulation would increase the retail prices of fast fashion items, at least in the short term. The single-fiber requirement would also pose challenges to many fast fashion designs, which rely heavily on mixed fiber fabrics. The major appeal of fast fashion—cheap pricing—would be mitigated. Consumers may gradually decide to purchase less or prioritize second-hand clothes shopping. It may also be likely that fast fashioning pricing would begin to approximate that of local and small business. As a result, consumers would place greater emphasis on the design, quality, or convenience of their purchases. Granted, fast fashion brands may have the upper hand in marketing and advertising. However, with lessened price competition, small and local businesses may finally have the ability to compete with fast fashion brands through the creation of a loyal consumer base.