UKFT Associate Member Fox Williams recently held an event to discuss upcoming legislation changes around sustainability, covering the future of UK and EU sustainability legislation.

Hannah McCullagh, associate at Fox Williams, offered an update on the UK Green Claims Code, the EU Corporate Sustainability Due Diligence Directive and the Digital Product Passport Regime.

UK Green Claims Code

Currently, under the UK’s Green Claims Code Green washing is classed as making untrue or misleading statements about the environmental benefits of a product or practice.

Under UK law claims must:

• Be truthful and accurate.
• Clear and unambiguous.
• Not omit or hide important information.
• Only make fair and meaningful comparisons.
• Consider the full life cycle of the product.
• Be substantiated.

At the moment, McCullagh suggested that the Competition & Markets Authority (CMA) has relatively limited enforcement powers but some of the consequences of non-compliance with the Green Claims Code include legal proceedings, fines and reputational damage.

The UK Digital Markets, Competition and Consumer Bill, however, will bring about a radical overhaul of consumer protection laws. The CMA will have direct enforcement powers and will be able to hand out fines of up to £300k or 10% of global annual turnover depending on which is higher. This Bill is expected to come into force in mid to late 2024.

Fox Williams’ advice to ensure that fashion businesses do not fall foul of this new legislation is to ensure that there is a sustainability strategy in place within the company and an accompanying communications strategy to avoid any mishaps.

UKFT is releasing the second edition of its new Sustainability 101 series on the Green Claims Code in early 2024. Members can contact info@ukft.org to access a copy.

EU Corporate Sustainability Due Diligence Directive and Digital Product Passport Regime

The EU Corporate sustainability due diligence directive will require increased reporting requirements for businesses. Businesses impacted by this directive in the UK include those with a net turnover of more than EUR 150 million in the EU, net turnover of EUR 40 million in the EU and 50% of net turnover generated in relevant sectors and perhaps most crucially for UK businesses, any company which operates in a supply chain with other businesses which must comply with the Directive.

Consequences of non-compliance include a breach of director’s duties, civil liability, fines and a breach of contractual obligations for those operating in the supply chain. This directive is expected to be in force by 2025. Upon enforcement member states will then have two years to implement the Directive into their national legislation.

NB: Similar legislation is already in place in France and Germany

The EU Digital Product Passport Regime is being brought in to identify, monitor and communicate significant amounts of data and maximise transparency enabling consumers to make informed decisions. There will also be enhanced product labelling requirements in the form of QR codes.

This regime will apply to businesses who manufacture or sell products into the EU or who form part of a supply chain for products sold into the EU (for example, suppliers or components or raw materials). This regulation is expected to come into force by 2026 or 2027. Businesses operating in the supply chain of the first product groups (batteries and manufacturers of textiles) are expected to be required to comply first.

Key takeaways for UK fashion businesses from Fox Williams:

• Familiarise yourself with the requirements of the Directive and the Regulation.
• Discuss the upcoming changes with your customers and suppliers.
• Investment in technology may be necessary.
• Transparency and preparation are key!

UKFT Associate Member Fox Williams also discussed tenancy agreements, protecting your IP and issues surrounding mergers and acquisitions (M&A) on 29 November 2023.

Fox Williams works with a wide range of fashion businesses, covering:

• Commercial: agency, distributor, supply or franchise agreements; terms and conditions of sale and purchase; data protection and privacy; digital commerce
• Dispute resolution: IP, trading, shareholder and joint venture arrangements
• Employment: service contracts; restrictive covenants; share incentives and option schemes; dismissals and redundancies
• IP: brand protection, management and enforcement; UK, EU trade mark and international trade mark filings; UK and EU registered design filings; brand clearance; search and seizure orders; data protection and privacy; advertising, marketing and sponsorship;
• Real estate: acqusiitions and dispposals for retail, offie, earehouse and distribiution space; negotiating heads of terms for new leases; rent reviews; service charges; renewals of leases and more
• Corporate: early stage capital, private equity transactions, mergers and acquisitions and joint ventures, to ultimate sale or flotation

For a UKFT member introduction to Fox Williams, please contact info@ukft.org

You may also be interested in…Extended Producer Responsibility

UKFT has updated its guide for members which covers international Extended Producer Responsibility (EPR) legislation and other legislative requirements for textiles, products, packaging and plastic tax. To access your copy email info@ukft.org.