Is the ‘anti-look-away law’ (CSDDD) the answer to (ultra) fast fashion?

The Corporate Sustainability Due Diligence Directive (CSDDD), also known as the ‘anti-look-away law’, has been in place since July 25, 2024. These regulations have consequences for well-known (ultra) fast fashion chains such as Alibaba, Temu and Shein. In this article I explain what this directive entails and what consequences it may have for these companies.

Content guideline

Many companies, both within and outside Europe, engage in activities that could have adverse consequences for human rights and the environment. The anti-looking-away law must ensure that these companies are identified and tackled. The aim is therefore to promote sustainable and responsible behavior of companies in their global chain. Human rights such as the right to life and the ban on child labor are emphasized by the Ministry of Foreign Affairs.

Regulation of ultra fast fashion

In concrete terms, this means that fast fashion chains can be liable for abuses in their supply chain. Ultra fast fashion brands can no longer ignore problems in their production process. They must take action even if these issues arise in countries with more relaxed rules. In the field of due diligence, they are obliged to thoroughly investigate their own entire supply chain and identify risks in the field of human rights and the environment. They must then take measures to prevent or limit the risks. This should force them to adopt a more sustainable approach. If companies do not comply with these obligations, they are liable for the damage caused. Such as social and ecological damage in the form of human rights violations and environmental damage. Compliance with the obligations will also be monitored and fines will be imposed in the event of violation by a (yet unknown) national supervisor. This should ensure that (ultra) fast fashion companies pay more attention to, among other things, working conditions and more environmentally friendly production methods. According to the legislator, this arrangement could also lead to an improvement in the quality and lifespan of their products.

Implementation

The directive must be transposed into national law by the Member States by 26 July 2026. The moment at which companies must comply with the rules varies. The following applies to EU companies.
Large companies with more than 5,000 employees and a turnover of at least 1,500 million euros must comply by 2027.
Medium-sized companies (>3000 employees, minimum €900 million turnover) in 2028.
Smaller companies (>1000 employees, minimum €450 million turnover) must comply in 2029.

Non-EU companies are also subject to the anti-looking-away law. The same requirements apply to them as EU companies, but the employee quota does not apply and their turnover must have been generated in the EU.

Furthermore, franchises form a separate category. From 2029, the rules will apply to EU franchises that receive royalties of €22.5 million worldwide and generate net sales of > €80 million worldwide. This also applies to non-EU franchises if they receive €22.5 million in royalties within the EU and generate < €80 million net turnover in the EU. The introduction of the CSDDD is therefore gradual. Large companies lead the way, smaller ones follow later. This approach gives companies time to prepare.

The anti-looking-away law therefore appears to have a limited scope of application and that is true. The current version of the anti-looking away law applies to fewer than 6,000 companies. Yet the law could have a broader impact. Larger companies can impose requirements on their suppliers. This also affects smaller (ultra) fast fashion brands. Moreover, the law can set an example for the entire industry. This also puts pressure on non-regulated companies to operate more sustainably.

Conclusion

The anti-snooping law (CSDDD) aims to be an important step towards more responsibility and sustainability in the fashion industry, especially for (ultra) fast fashion. The rules require companies to examine their supply chains and implement sustainable practices, leading to greater attention to working conditions and environmental friendliness. Although the law will initially only affect a limited number of large companies, it can also indirectly affect smaller companies by setting examples. The phased introduction gives companies time to adapt, but the ultimate impact depends on effective implementation and enforcement. All in all, the anti-looking-away law offers opportunities for a more sustainable future in the clothing industry.

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