The global fashion industry is currently navigating a complex landscape shaped by an increasing number of sustainability regulations. This article delves into the challenges and opportunities presented by these new mandates, particularly focusing on the European Union and the United States, and examines how brands and suppliers are adapting to this evolving regulatory environment.
Unraveling the Green Tape: Fashion's Regulatory Challenge
The Onslaught of New Environmental Standards
For a considerable period, the fashion sector yearned for regulatory frameworks to guide its sustainability endeavors. Yet, the sudden proliferation of such mandates has left many businesses feeling overwhelmed. Morten Lehmann, CEO of Tailwind and former Chief Sustainability Officer at the Global Fashion Agenda, describes this wave of regulations as a "tsunami," noting the simultaneous arrival of numerous directives.
A Plethora of Acronyms: Understanding the Regulatory Jargon
The regulatory environment is rife with complex acronyms and directives. Key European initiatives include the Ecodesign for Sustainable Products Regulation (ESPR), featuring its digital product passport (DPP), the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the Green Claims Directive (GCD). In the US, efforts are more fragmented, with California leading the way through acts like the Responsible Textile Recovery Act (SB-707), the Garment Worker Protection Act (SB62), and the Climate Corporate Data Accountability Act (SB253), alongside the proposed Fashion Act.
Immediate Compliance and Evolving Demands
Many of these regulations are already taking effect, introducing new guidelines and legal requirements that companies must swiftly adopt. The ESPR, for instance, has introduced measures banning large companies from destroying unsold clothing and shoes starting July 2026. The CSRD, initially broad, has been simplified to apply to fewer, larger companies, with reporting deadlines extended to 2028, reflecting concerns about the administrative burden on European competitiveness.
Addressing Human Rights and Environmental Impact
The CSDDD focuses on establishing due diligence to prevent adverse human rights and environmental impacts within supply chains, currently targeting companies with substantial employee numbers and turnover. The GCD, aiming to combat greenwashing by verifying sustainability claims, is considered particularly vital, especially following adjustments to CSRD reporting. This directive is expected to empower brands to discern trustworthy sustainability data from suppliers and bolster consumer confidence.
The Unpredictable Nature of Regulatory Change
Lehmann notes that the sustainability regulations and their associated terminology are changing almost as rapidly as fashion trends themselves. This volatility, compounded by geopolitical factors, creates an uncertain landscape where businesses struggle to predict future legal directions. In the US, the potential rollback of federal climate change assessments under a previous administration adds another layer of unpredictability, raising concerns about the nation's commitment to climate action and its economic implications.
Supply Chain Bottlenecks: Costs and Data Discrepancies
The fluctuating regulatory environment and occasional confusion are creating significant friction within supply chains. Brands are uncertain about prioritization, while suppliers often bear the financial brunt of compliance. New business development is also slowed as partners assess regulatory alignment. Matthijs Crietee of the International Apparel Federation highlights the "difficult equation" faced by manufacturers, who confront lower prices alongside increased workloads due to tariffs and compliance costs.
The Manufacturer's Perspective: Burdens and Benefits
Ereks-Blue Matters, a circular garment manufacturer in Istanbul, exemplifies the dual impact of these regulations. While they have improved conditions by providing measurable benchmarks for environmental progress, they also demand substantial investments in time, staff, and new data management systems. Romain Narcy, Head of Strategy and Innovation, notes that onboarding clients now takes significantly longer due to comprehensive audits, with the factory absorbing most compliance costs. He emphasizes the need for greater support to maintain stable brand-supplier relationships.
The Challenge of Data Harmonization
Beyond financial costs, a critical issue is the lack of standardized data collection. Suppliers working with multiple clients face the daunting task of meeting diverse reporting requirements. Crietee underscores this as an "industry challenge," advocating for a unified approach to data requests and formats to streamline operations.
Collaborative Efforts Towards Unified Reporting
Some brands are actively working to standardize data collection. The Fashion Pact's European Accelerator initiative, involving luxury powerhouses like Chanel, Kering, Prada Group, and Zegna Group, aims to simplify reporting processes for suppliers. Additionally, organizations like Cascale, Fair Wear, and Zalando Group are developing a unified questionnaire and a platform called One Retail Hub to facilitate seamless data exchange, addressing the fragmented landscape of existing initiatives.
Reconnecting with Core Values Amidst Bureaucracy
Ultimately, current bottlenecks suggest that bureaucratic hurdles sometimes overshadow the core values of sustainability. Barbara Oswald of Bluesign urges brands to refocus on their fundamental commitments. She asserts that robust ESG requirements needn't impede industry progress; rather, companies with transparent supply chains and a clear understanding of their materials and production processes have nothing to fear, as they are already aligned with the spirit of these regulations.
