On 31 July 2024, a group of apparel suppliers published “An Apparel Supplier’s Guide: Key Legislation in the EU, US & UK”. This helpful guide highlights some challenges facing retail suppliers in light of proposed European, UK and US legislation which requires increased transparency in supply chain operations and is aimed at increasing sustainability in the fashion industry. Much of the proposed legislation imposes top-down obligations meaning that where brands make sustainability claims and promises it is likely to increasingly fall on the suppliers to fulfil them. The guide aims to help retail suppliers navigate the evolving legal landscape and identifies four main trends across 12 of the proposed legislative initiatives with some helpful suggestions summarised below:

1. A focus on responsible purchasing practises. The EU Corporate Sustainability Due Diligence Directive, for example, promotes stakeholder engagement so that each party understands and addresses each other’s concerns. Empowering suppliers to advocate for themselves would help to improve their power dynamic with suppliers.
2. Increased burden of work on suppliers as brands and markets may interpret legal requirements differently. To avoid having to comply with multiple conflicting standards, suppliers should engage with brands and retailers before finalising their methodologies. 
3. Increased reporting requirements and data requests. Suppliers must ensure strong data gathering and management capacities as well as the ability to allocate resources for due diligence to meet increased reporting demands. The EU Corporate Sustainability and Reporting Directive obliges in-scope suppliers to report on a wide range of sustainability related topics, including details about their business model and sustainability targets. 
4. Brands may impose more stringent codes of conduct and contract clauses to protect themselves in case of legal investigation and penalties. The guide encourages suppliers to hire legal advisers and push back against brands offloading their liability. 

It seems clear that suppliers are likely to have to shoulder the burden of compliance with the legislation but the question remains – at whose cost and at what point do such obligations become insurmountable for some retail suppliers? Early legal consultation can help address these main risks as follows:

1. Brands interpreting new legal requirements differently. Legal advice on the interpretation of multi-jurisdictional legal requirements can assist suppliers both to advocate their position and understand their legal responsibilities and should also help to address the power imbalance often seen between retail suppliers and brands. The cost implication of compliance may be significant.
2. Increased reporting requirements and data requests. Retail suppliers could engage legal teams to establish data request processes and at early stages in the due diligence process to help standardise the process and help retail suppliers remain compliant. 
3. Brands may impose more stringent codes of conduct and contract clauses. Legal advice here is likely to be key to provide support in negotiations, limit liability and help push back against brands offloading their liability. 

In addition to legal support, a key takeaway for retail suppliers, brands and other stakeholders is the importance of a shared responsibility model. If a brand wishes to make a sustainability commitment then this should be made in an informed way and in consultation with its suppliers, not in isolation. Failure to do so may result in legal non-compliance and bears the risk of greenwashing.