Shifting the Standards: How New Social Governance Legislation Is Reshaping the Fashion and Toy Industries

Change is sweeping through the brand and licensing industry—with fashion and toys in the spotlight as two of the sector’s most dynamic and influential categories. But this shift goes far beyond trends: it’s being driven by increasing consumer demand for transparency, a rising focus on impact, and a powerful wave of new legislation aimed at raising the bar for environmental and social governance.

Governments and regulators are now expecting brands to not just talk the talk, but walk the walk – embedding responsible practices across their supply chains, operations, and product storytelling.

So, what’s actually changing?

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Fashion: From Fast to Fair

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The fashion industry has long faced scrutiny over its environmental footprint and labour practices. But now, new laws are turning ethical intentions into legal obligations.

In the U.S., California’s Fashion Environmental Accountability Act—introduced in early 2024—would require fashion brands with annual revenues over $1 billion to publicly report their environmental impact, from carbon emissions to water usage. It’s about accountability and transparency at scale.

At the federal level, the proposed FABRIC Act (Fashioning Accountability and Building Real Institutional Change) is working its way through the Senate. The bill aims to bolster labour protections and incentivize reshoring apparel manufacturing, with $40 million in funding and tax credits to support ethical production in the U.S.

Meanwhile in Europe, the EU is rolling out an ambitious package of regulations to elevate sustainability and social governance in fashion. These include:
1. EU Strategy for Sustainable and Circular Textiles
2. Ecodesign for Sustainable Products Regulation (ESPR)
3. Corporate Sustainability Due Diligence Directive
4. Extended Producer Responsibility (EPR) Regulation
5. EU Forced Labour Regulation
6. Green Claims and Empowering Consumers Directives

These policies are pushing brands to design for circularity, eliminate forced labour, substantiate environmental claims, and take responsibility for a product’s full lifecycle.

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Toys: More Than Child’s Play

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Momentum isn’t limited to fashion. Many of the new EU regulations apply across all product categories, with specific requirements for toys. The toy industry, though playful in nature, is one of the most heavily regulated. In fact, a toy pram is subject to stricter safety regulations than a real baby pram!

However, regulation is evolving beyond safety alone. The EU’s proposed Toy Safety Regulation aims to tighten chemical requirements and introduce Digital Product Passports (DPPs)—providing a transparent, traceable record of a toy’s origin, materials, and environmental impact.

These passports won’t be limited to toys either. By 2030, DPPs will be required for all products imported and exported in and out of the EU, making supply chain transparency a legal necessity, not just a nice-to-have.

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The Bigger Picture: Global Shifts in Governance

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All these updates are part of a global trend: doing good is no longer optional – it’s the baseline.

The Corporate Sustainability Due Diligence Directive (CSDDD) is one of the most impactful tools in the EU’s legislative toolbox. It requires companies to identify, prevent, and mitigate human rights and environmental risks throughout their operations and supply chains. It’s a blueprint for how modern business must operate—with integrity, transparency, and accountability.

For brands and manufacturers across categories, this means getting serious about impact data, responsible sourcing, and building trust not just with regulators—but with consumers.

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Supporting the Transition: Products of Change in Action

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As this new era unfolds, Products of Change is actively supporting the brand and licensing industry through the transition. Our mission is to empower businesses—large and small—to reduce their environmental and social impact, while still achieving commercial success.

We work directly with industry stakeholders, providing the tools, insights, and connections needed to navigate change confidently and creatively.

One of the ways we’re helping to accelerate this shift is through our partnership with the Ethical Supply Chain Program. Together, we’re bringing greater visibility to the social side of sustainability—highlighting issues like fair labour, ethical sourcing, and worker wellbeing. Because it’s not just about carbon anymore; it’s about people, too.

Through collaboration, education, and the right partnerships, we’re helping to future-proof the industry—not just for regulatory compliance, but to build brands that consumers believe in and want to support.

In short? The rules are changing—and for the better.

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And thanks to shared action across industry, policy, and communities like Products of Change, the brand and licensing world is evolving with purpose—proving that sustainability and business growth go hand in hand.

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Products of Change is a not-for-profit organisation, supporting industry in reducing its environmental impact.