The fashion industry as a whole has always been dynamic and globally influential – from culture to technology to the formation of supply chains – and it’s currently undergoing another significant transformation. It’s being driven by increasing awareness of sustainability from both consumers and producers, as well as the impact that regulatory measures have.
These measures aren’t arbitrary though, they are designed to address environmental and social concerns while at the same time making sure the fashion and textiles industry can sustain itself and the people that make it while maintaining resources. Let’s look at how the fashion supply chain in particular is evolving for sustainability, the role of regulations, and the implications for brands and consumers…
Understanding the Modern Fashion Supply Chain
The fashion supply chain is built up of a vast interconnected network of processes and stakeholders, from raw material production to garment manufacturing, distribution, and retail. With the growing emphasis on sustainability within this supply chain, the aim is to minimise the environmental impact and promote ethical practices throughout the process (both in terms of people and the planet). Understanding the complexity and interdependence of the supply chain therefore informs how regulation changes to any part of the process affects the whole, how complicated it can be to integrate these frameworks, and how substantial these changes must be to make a difference.
Key Regulatory Bodies in the UK Fashion Industry
Specifically in the UK, there are several organisations which regulate the fashion industry to ensure compliance with sustainability and safety standards.
Department for Business, Energy & Industrial Strategy (BEIS): BEIS oversees policies related to business, energy, and industrial strategy, including aspects of sustainability and innovation in the fashion industry.
Competition and Markets Authority (CMA): The CMA ensures fair competition and protects consumers from misleading practices, including false sustainability claims.
Office for Product Safety and Standards (OPSS): OPSS regulates product safety and standards, ensuring that fashion products meet the required quality and safety benchmarks.
Health and Safety Executive (HSE): HSE focuses on workplace health and safety, which is critical in fashion manufacturing and retail environments.
Environment Agency (EA): EA regulates environmental impacts, including waste management and pollution control, relevant to the fashion industry.
HM Revenue & Customs (HMRC): HMRC oversees customs and tax regulations, impacting the import and export of fashion goods.
Local Authorities: Local authorities enforce regional regulations and ensure that local businesses comply with national standards.
Major Sustainability Regulations Affecting the Fashion Industry
There have been many regulations that have already come into play over the years and many more are set to shape the future of the fashion supply chain. In late 2023, just in the EU, there were up to 16 pieces of legislation relating to the fashion and textile industries. Most of them affect the whole value chain, from design to consumers to brands, and we’ve highlighted a few key regulations.
1. Corporate Sustainability Reporting Directive (CSRD)
The Corporate Sustainability Reporting Directive was already adopted by the European Union in 2022. It mandates comprehensive sustainability reporting for large companies that meet certain criteria, whether they are listed companies or not. Basically, it aims to bolster companies actually taking note of their impact, as well as a source of information for regulatory bodies. The regulation requires detailed reports on environmental and social activities, with the key being they must use standardised methodologies. The following are the implications of the CSRD for the fashion supply chain.
Environmental Reporting: Companies must disclose accurate information on their emissions, pollution, and biodiversity impacts, which are all crucial for an industry that uses so many different resources.
Social and Human Rights Reporting: Mandatory reporting on labour conditions, human rights, and anti-corruption measures is required, which are common issues in fashion supply chains.
Standardisation and Assurance: A key point, as the use of common reporting standards ensures consistency and comparability, while assurance requirements improve credibility.
Subsidiary Reporting: This is to include any subsidiaries of large corporate structures – they must report their sustainability activities to ensure transparency throughout the company.
2. Ecodesign for Sustainable Products Regulation (ESPR)
The Ecodesign for Sustainable Products Regulation proposes mandatory ecological design and circularity requirements, supported by digital product passports. What this means is that from the design stage, this regulation aims to create products that are climate-neutral, resource-efficient, and contribute to a circular economy by design.
Circular Design Principles: Durability, reusability, and recyclability must be incorporated into product designs from the start by fashion brands.
Digital Product Passport: A digital passport details the origin, composition, repairability, and end-of-life handling so that the data is digitally accessible.
Restricted Substances: Current regulations like REACH (the Registration, Evaluation, Authorisation and Restriction of Chemicals) need to be broadened. With this the use of hazardous chemicals is restricted, promoting safer and more sustainable materials.
3. Green Claims Code
Greenwashing is the act of making false or misleading statements about the environmental benefits of a product or practice. The Green Claims Code addresses this by introducing more stringent requirements for environmental claims made by businesses. It seeks to ensure that sustainability claims are not just truthful but backed by sturdy evidence.
Substantiation Requirements: Companies must provide clear, robust evidence to support their green claims, such as eco-friendliness, ethical sourcing and claims about the product.
Transparency: Using standardised methodologies, companies must disclose the full lifecycle environmental impacts of their products on their environmental footprint.
Restrictions on Vague Claims: Terms like “eco-friendly”, “conscious”, and “sustainable” must be specific and substantiated, otherwise they may be prohibited or regulated further.
Use of Certifications and Labels: Outlines guidelines for marketing and how eco-labels and certifications can be used to ensure legitimacy.
Penalties for Greenwashing: Adding penalties like fines to deter misleading claims that violate the code, including mechanisms to enforce them.
Complexity of materials used: The Circular Fibres Initiative (created by the Ellen MacArthur Foundation to phase out the negative impacts of the fashion pipeline) notes that scientifically backed environmental impact data will become even more, given the complex polymers, dyes and treatments used. It means brands will need sophisticated tracking mechanisms in their materials and supply chains.
4. Waste Framework Directive
The Waste Framework Directive is a European Union legislation which sets the principles of waste management, including the “polluter pays” principle and “extended producer responsibility” (EPR), so that brands don’t offload or ignore their responsibility. The proposed amendments call for the implementation of EPR for textile waste in the UK, meaning fashion brands and retailers will be required to finance the collection, sorting, and recycling of textile waste they generate.
Financial Responsibility: As mentioned, fashion companies must finance the collection, sorting, and recycling of textile and product waste. It could impact their profit margins, as they need to absorb the cost or pass it on to the consumers in the form of higher prices.
Sustainable Product Design: Brands are incentivised to design durable, repairable, and recyclable products that can add to the circular economy.
Infrastructure Development: Companies may need to invest in or support waste management infrastructure if they don’t already, by collaborating with waste companies, and municipalities or creating their own take-back initiatives.
Transparency and Reporting: Accurate and transparent reporting on EPR activities increases accountability within the industry, disclosing amounts of materials both collected and recycled.
Other notable sustainability regulations in Europe include:
Financial Responsibility European Union Strategy for Sustainable and Circular Textiles (2022): Similar to the Corporate Sustainability Reporting Directive, it aims to ensure that by 2030, textile products sold in the EU market are long-lasting, recyclable, made of recycled fibres, and free of hazardous substances.
Financial Responsibility French Anti-Waste Law for a Circular Economy (2020): Bans the destruction of unsold non-food products, including clothing, and imposes stricter regulations on waste management and recycling.
Financial Responsibility Germany’s Supply Chain Due Diligence Act (2021): Companies must perform risk assessments, implement preventive measures, and establish grievance mechanisms at the risk of potential fines and sanctions.
Financial Responsibility UK Environment Act (2021): Aims to improve air and water quality, protect biodiversity, and reduce waste.
The Path to a Sustainable Fashion Future
As the times, responsibilities, regulations and attitudes change, so does the path for a sustainable fashion industry future. Several trends and strategies are emerging that will shape its future.
Embracing Circularity
A circular economy is the idea that the lifecycle of products is extended through reuse, repair, and recycling, creating a circular system that reduces waste. It’s been and is being integrated by many industries, but the fashion industry is particularly poised to embrace circularity. From the onset of the cycle, products must be designed for longevity and end-of-life recyclability, Innovations such as modular clothing and biodegradable materials are gaining traction, supported by regulatory frameworks like ESPR. The increase of vintage fashion, thrift stores and new technologies is therefore driven not just by trends in style but also by increased awareness by consumers and producers.
Enhancing Supply Chain Transparency
Especially in the supply chain, transparency is vital. It ensures ethical practices and eliminates brands who may want to take a chance to obfuscate their practices or data. With the introduction of digital tools like blockchain and digital product passports, companies can trace the route of materials, providing consumers, regulatory bodies, governments, manufacturers and stakeholders with reliable information. More informed customers also make different purchasing decisions and it can improve accountability to brands.
Investing in Sustainable Materials
A cornerstone of sustainability is using and sourcing materials that eschew convenience or cost-reduction in favour of longevity – both of the products, brands, and the planet. Materials, such as organic cotton, recycled polyester, and innovative fabrics like mushroom leather and algae-based textiles are on the rise. They have a lower environmental footprint and support circular economy principles – for example, being able to biodegrade without adding to landfills. Regulations also help in restricting the use of hazardous substances (for both people and the environment) and promoting eco-design encourages the adoption of sustainable materials.
Collaborating for Change
The fashion industry cannot function without collaboration, and achieving sustainability goals is no different. The whole system cannot move forward in a meaningful way if there is no buy-in and commitment from suppliers, brands and regulators. Initiatives like the Circular Fibres Initiative, Sustainable Apparel Coalition and the Fashion Pact exist to foster more collaboration and drive action.
Educating Consumers
Consumers of all goods, including fashion, are already much more aware of the current situation, implications and need for a sustainable future. This has driven demand for improved practices and products, as well as the need for trust in brands that they will adhere to the needed changes. Brands also hold a responsibility to educate their consumers in responsible consumption and the social impact of their products. It also means communication needs to be transparent, bolstered by regulations like the Green Claims Code.
Conclusion
The fashion industry is no stranger to change – it’s already a fundamental aspect of fashion, whether artificially driven by marketing or organically occurring like cultural influences. Industry initiatives, societal and environmental needs, and regulatory measures are shaping the current and ongoing change in the fashion supply chain. Regulations like the Corporate Sustainability Reporting Directive, Ecodesign for Sustainable Products Regulation, Green Claims Code, and Waste Framework Directive are but a few to be put forward. As technology, knowledge and mindsets change, more will follow. It’s not a case of if companies must keep up, but how and when they will.
Brands who choose to embrace these changes will be poised to not only ensure their own longevity but also thrive in an evolving market. Fashion brands in particular can pave the way for a more sustainable and responsible future by putting these policies front and centre. They have receptive, wide-reaching and loyal customer bases who will adopt changes with them. It will also increase visibility for other industries to follow suit, especially if the positive outcomes of these changes are noticed.
In that vein, as consumers, we also have a role to play in supporting sustainable fashion and by extension the fashion industry supply chain. If we make informed choices and demand transparency from brands, we send a message to them about how important it is. Fashion is about collaboration, from brands to consumers and vice versa.
For everyone involved in the fashion industry and its supply chain, the shift towards a sustainable fashion industry supply chain is not simply a trend, it’s a necessity. From a business perspective, but also from an ethical, human one. It is vital for the wellbeing of those who make your clothes and shoes, those affected by it, and for our planet. These regulations are an indicator of what brands need to adapt to, yes, but also how our culture is shifting as a whole. Longevity and sustainability don’t just mean you get to wear that jacket for longer, it also means the future is a little bit more certain and hopeful.
The future of fashion is sustainable, and the time to act is now – let Zedonk ERP Solutions help guide you through the web of regulations so that your brand can continue to do what you do best, create great fashion.