Sustainability and ESG-related regulations are coming

Business leaders and brands must plan to get ahead as legislation continues to roll out.

To meet future legislation, industries must address a multitude of social and environmental challenges, from product waste and repair to land preservation, CO2 emissions and worker rights.

What you need to know

• ESG regulations initiated by the EU and North America will affect producer countries in APAC, South America and Africa – regions that are currently incentivised rather than legislated on.

Whilst often requiring sacrifices in near-term benefits, legislation increasingly plays a role in driving product innovation. In a world gripped by an environmental crisis, it is the brands that embrace sustainability, not as a response to legislation, but as a strategic advantage, that will propel them ahead of the competition

Millie Diamond, Strategist, WGSN Food & Drink

Initiatives and frameworks already in progress

• Fashion brands will need to get ahead of the EU’s Waste Framework Directive for textile waste and meet social and environmental rules to meet the New York Fashion Act. The EU's ‘right to repair', law will require sellers to offer customers repair (unless repair is more costly than replacement)

• Industry groups are actively approving regulations. The CFDA (Council of Fashion Designers of America) and other bodies lobbied for support of a Californian state legislation bid to force businesses to publish CO2 emissions
• Brazil’s state-owned Petrobras Podium Gasoline firm has launched CO2-neutral gas, compensating emissions from the fuel’s lifecycle with actions that preserve or restore the Amazon forest. Each of the 175 thousand carbon credits purchased will offset one tonne of CO2 emissions
• Alongside ESG investment in Asia, government initiatives designed to reduce emissions through cap and trade include China’s Emissions Trading Scheme and Singapore’s Carbon Pricing Act tax

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