The Nickel Report

In 2025, four state legislatures—California, Massachusetts, New York, and Washington—proposed fashion accountability bills. These bills would require high-earning entities in the fashion industry to monitor and report activities related to their supply chains, greenhouse gas (GHG) emissions, water use, and chemical management.

The proposed bills are largely consistent on key provisions related to scope, environmental due diligence, monitoring and reporting requirements, performance targets, and enforcement mechanisms. If enacted, these bills will significantly impact due diligence and reporting requirements and have the potential to influence long-term business strategy in the fashion industry.

Scope

The bills target “fashion sellers” doing business in the relevant state. A fashion seller is broadly defined to mean any business entity that sells apparel, footwear, or fashion bags and whose annual gross receipts exceed $100 million. Notably, multi-brand retailers are included in this definition when annual gross receipts of all private labels under the retailer exceed $100 million.

Environmental Due Diligence

Each proposed bill would require fashion sellers to implement extensive environmental due diligence measures, including supply chain mapping and disclosure and risk identification and mitigation, in compliance with the Organisation for Economic Co-operation and Development (OCED) Due Diligence Guidelines. In practice, these proposed conditions would require fashion sellers to:

• Monitor their supply chains throughout a product’s life, from start to finish
• Disclose identifying information about suppliers and subcontractors over time
• Embed responsible business conduct into policies and contracting practices
• Assess and respond to environmental-related risks

All information related to a fashion seller’s due diligence activities would be recorded in a due diligence report and annually disclosed publicly, on the fashion seller’s website and to the appropriate regulator.

Reporting Requirements

As proposed, the fashion accountability bills would require fashion sellers to report their GHG emissions, water usage, and chemical management.

• GHG Emissions: Fashion sellers would have to annually report GHG emissions in accordance with certain global standards.
• Water Use and Chemical Management: Under the Massachusetts and New York bills, fashion sellers would have significant reporting duties related to Tier 2^[1] dyeing, finishing, printing, and garment washing suppliers. Specifically, fashion sellers would have to sample and report wastewater chemical concentrations and water usage, report chemical inventory, and verify the supplier’s compliance with local chemical concentrations. If appropriate, the fashion seller would also have to report chemical concentrations of wastewater treatment facilities, report the percentage of their suppliers that have chemical remediation plans in place, and disclose their internal remediation plan.

Performance Targets

The proposed bills in California, Massachusetts, and New York would require fashion sellers to establish and meet short- and long-term GHG emission reduction targets. These targets would apply to scope 1, 2, and 3 emissions and would have to align with relevant regulations and comply with certain global standards. Fashion sellers who do not meet their emission reduction targets would be out of compliance and subject to civil penalties, unless they are able to comply within the specified timeframe.

Regulated Chemicals

Under the California bills, fashion sellers would be prohibited from selling covered fashion items that contain certain chemicals above specified thresholds. The Washington bill would require reporting on products that contain priority chemicals.

Enforcement

Under the proposed bills, enforcement power is given to the state attorney general and certain state agencies (together “Regulators”). Regulators would be responsible for investigating and enforcing each bill. If the Regulators find that a fashion seller is non-compliant or otherwise violates the bill, civil fines would be imposed. Depending on the jurisdiction, these fines could be up to 2 percent of the fashion seller’s annual revenue, $15,000 per day per violation, or $10,000 per violation. Fines would then be deposited in environmental funds created by the proposed bills to fund environmental benefit or remediation projects.

Conclusion

If enacted, the proposed bills will impose significant due diligence responsibilities on the fashion industry. We will continue to monitor this issue in 2026 because the 2025 legislative sessions in California, New York, and Washington have now closed. The Massachusetts legislative session adjourns on November 19.

[1] For the purposes of delineating reporting requirements, these fashion accountability bills break up the fashion industry supply chain into four Tiers. Tier 1 is the level at which finished products are made. Tier 2 supplies Tier 1, meaning that this tier includes dyeing and printing as well as the independent manufacture of component parts like zippers and rubber shoe soles. Tier 3 supplies Tier 2 with processed raw materials (i.e., spinning and weaving). Tier 4 is the production of raw materials.