Getting ready for sustainable fashion regulations: 10-step guide

June 10, 2024 . 6 read
  • Introduction

    As consumers become more conscious of the environmental and social impacts of their purchases, governments worldwide are responding with stringent regulations to ensure the fashion sector operates more sustainably and ethically. For businesses, this means adapting quickly to new legislative requirements to avoid penalties and remain competitive not just on the sustainable fashion scene, but in the industry at large.  

    The challenge, however, lies in navigating this complex and evolving regulatory landscape. Whether it’s mandatory disclosures on environmental impact, stricter guidelines on supply chain transparency, or new rules on product data management, fashion brands will need to be proactive in their approach to sustainability compliance.  

    In this 10-step guide, we’ll walk you through the essential steps you should take—from understanding specific regulations to engaging suppliers and continuously improving your practices, making sure that you’re ready to handle the sustainability challenges of today and tomorrow. 

  • What Are the Top Sustainability Regulations for Fashion?

    Before diving into preparation, you need to have at least a broad-level idea of the legislative landscape in your relevant region. Generally, these regulations aim to reduce environmental impact, enhance transparency, and promote circularity in the fashion industry.  

    To get you started, here are 15 such sustainability regulations for fashion:  

    1. EU Circular Economy Action Plan: Focuses on waste reduction, sustainable product design, and promoting circular economy practices. 

    2. U.S. SEC Proposed Climate Disclosure Rules: Requires companies to disclose climate-related risks and greenhouse gas emissions.

    3. French Anti-Waste Law (AGEC): Imposes strict regulations on product end-of-life management, including recycling and reuse. 

    4. UK Modern Slavery Act: Mandates transparency in supply chains to combat forced labor and human trafficking. 

    5. California Transparency in Supply Chains Act: Requires businesses to disclose their efforts to eliminate slavery and human trafficking from their supply chains. 

    6. Germany’s Supply Chain Due Diligence Act: Imposes human rights and environmental due diligence obligations on companies. 

    7. Japan’s Law on Promoting Green Procurement: Encourages the purchase of environmentally friendly products. 

    8. Australia’s Modern Slavery Act: Requires entities to report on the risks of modern slavery in their operations and supply chains. 

    9. Canada’s Environmental Protection Act: Regulates pollution prevention and the management of toxic substances. 

    10. South Korea’s Framework Act on Resource Circulation: Focuses on waste management and recycling. 

    11. New York Fashion Act: Proposes mandatory disclosures on social and environmental policies, processes, and impacts. 

    12. India’s Plastic Waste Management Rules: Enforces the management of plastic waste to reduce environmental impact. 

    13. China’s Green Development Guidelines: Encourages sustainable practices and environmental protection in production and operations. 

    14. Norway’s Ethical Trade Initiative: Promotes ethical trade practices and responsible supply chain management. 

    15. Sweden’s Textile Waste Regulations: Imposes strict requirements on the collection, sorting, and recycling of textile waste.

  • How To Prepare Your Business for Mandatory Disclosures & Compliance

    Step 1: Understand the Regulatory Requirements 

    Start by gaining a thorough understanding of the applicable sustainability regulations and standards. This includes recognizing cross-jurisdictional and extraterritorial implications for your apparel supply chain. Keep track of important timelines to ensure timely compliance. Consulting with legal and sustainability experts will help you interpret how these regulations apply to your specific business and products. 

    For example, the EU’s Circular Economy Action Plan requires fashion brands to design products with longer lifespans and give them a ‘right to repair’. Understand the specific sustainability requirements for fashion businesses in Europe through our free EU Regulations Guide. Start planning your sustainability strategy effectively today.  

    Step 2: Assess Your Current Practices 

    Conduct a comprehensive assessment of your current practices across all stages of the product lifecycle. Identify areas where your practices align with the new regulations and areas needing improvement. Transitioning from static spreadsheets and reducing data silos is essential. Everyone needs to move their data onto a centralized, end-to-end integrated system.  

    For example, the implementation of WFX’s Apparel ERP software is helping multinational businesses like World Textile Sourcing enhance visibility and efficiency, crucial for meeting sustainability goals.  

    Step 3: Developing a Strategic Compliance Plan 

    Based on your assessment, create a personalized plan addressing both immediate and long-term compliance goals. This plan should cover changes in material selection, sourcing, design, production, end-of-life considerations, and most importantly, data management. Additionally, develop a communication strategy to keep all stakeholders informed about sustainability efforts and compliance status. 

    Integrate risk management into your compliance strategy to mitigate potential challenges and ensure smoother compliance. For example, Nike’s Move to Zero initiative outlines a clear roadmap towards zero carbon and zero waste, demonstrating how strategic planning can drive sustainability.  

    Step 4: Invest in Training and Education 

    Educate your team on the importance of sustainability, the specifics of each relevant regulation, and your company’s sustainability plan. Training should be provided not just to the design and production teams, but also to marketing, sales, and retail staff to ensure a holistic understanding and approach. An informed team can better implement sustainable practices and communicate them effectively to customers. 

    You may want to organize your own trainings programs for your staff or encourage your team to take up online courses such as Future Learn’s Fashion and Sustainability course (created by London College of Fashion and Kering) or Coursera’s free Sustainable Fashion course (led by Copenhagen Business School). This will ensure everyone understands your sustainability goals and knows how to apply them.  

    Step 5: Supplier Engagement and Code of Conduct 

    Establish a supplier code of conduct that reflects your sustainability values and maps your end-to-end supply chain. This step is critical in ensuring that your suppliers align with the upcoming sustainability mandates and your company’s environmental ethos. Support them in understanding the regulations and improving their practices.  

    This collaborative approach has successfully been adopted by brands who work closely with their suppliers to ensure compliance with their quality and environmental standards. You may look examples from leading businesses like LVMH, Global Fashion Group or SPELL.  

    Step 6: Create a Comprehensive Data Inventory 

    Develop a detailed inventory of all properties and accounts relevant to your sustainability program. Automate data collection wherever possible to ensure accurate and complete information supporting your sustainability initiatives. Use technology to streamline this process, reducing the risk of human error and increasing efficiency. This is also essential for making sure that product data is ready for upcoming Digital Product Passport mandates in the EU.  

    For example, many WFX customers like the PPJ group in Vietnam or Vermont Teddy Bear in the US are using advanced data management and reporting systems to automatically track and manage sustainability metrics across their global supply chain, by communicating directly with international suppliers or buyers from their ERP or PLM systems.  

    Step 7: Leverage Technology for Tracking and Reporting 

    Utilize technology for efficient tracking of sustainability metrics and streamlined reporting. Software and tools that can track material sourcing, supply chain practices, and environmental impact will be invaluable for accurate and transparent disclosures. When ready, incorporate real-time data to reveal additional opportunities for optimization, both in terms of cost and emissions reduction. 

    Tech companies like Amazon and TraceX are all working towards building blockchain technologies for traceability and transparency in the supply chain.  

    Step 8: Seamless Access and Utilization of Data 

    Ensure that sustainability data is not just collected but also shared across teams. This approach transforms sustainability from a reporting obligation to an integral part of your business strategy. Use the data for basic carbon accounting to understand your status and to plan your journey towards desired sustainability goals. 

    This data-driven approach is already exemplified by brands like ELK and Adidas (among many others), who publishes detailed sustainability reports accessible to all stakeholders. 

    Step 9: Navigating the Reporting Ecosystem 

    As you become more adept at managing your sustainability data, begin exploring the ecosystem of voluntary, quasi-mandated, and soon-to-be-mandated reporting. Acquiring limited assurance and progressing towards reasonable assurance will become crucial, especially as it’s expected to be mandated in the coming years for SEC and CSRD reporting, covering both US and Europe. Keeping abreast of global reporting standards will position your company as a leader in transparency and accountability. 

    Brands like Stella McCartney have been leading the way for many years by voluntarily adhering to stringent sustainability reporting standards, setting an example for others in the industry.  

    Step 10: Continuous Improvement and Adaptation 

    Establish a culture of continuous improvement and adaptation within your organization. As sustainability regulations evolve and consumer expectations rise, staying adaptable and proactive is key. Regularly review and update your sustainability strategies and practices to align with the latest standards and best practices.  

    Encourage innovation within your team to find new, more sustainable ways of working. Keep engaging with stakeholders – from customers to suppliers – to share insights and learn from each other. This approach ensures that your business not only complies with the current regulations but is also well-prepared for future changes and challenges in the sustainability landscape. 

    IKEA’s commitment to continuous improvement in sustainability, such as their shift towards using 100% renewable and recycled materials by 2030, highlights the importance of ongoing adaptation and innovation.  

  • Master Supply Chain Tracing with WFX

    Want to understand how your fashion brand should approach supply chain traceability from an expert? Evelyn Gibson, Partnerships Lead for WFX in New Zealand + Australia, and the Head of Operations at SPELL (an Australian sustainable fashion brand), will be leading a 60-minute seminar on this topic on 14 June 2024 at the upcoming Global Sourcing Expo in Sydney. Register for the seminar now!  

  • Summary

    The Global Fashion Agenda predicts that the fashion industry’s GHG emissions will increase by 50% by 2030 if no significant actions are taken. Furthermore, a McKinsey report reveals that 66% of global consumers now consider sustainability when making a purchase, indicating a significant market shift towards eco-friendly products. Amidst this scenario, preparing your business for the global sustainability push is crucial.  

    Our 10-step plan is designed to help fashion businesses navigate this complex compliance landscape. Key steps include understanding regulations around climate disclosure rules that matter to your business, conducting periodic assessments, developing strategic plans to map your entire supply chain, engaging suppliers from the start, leveraging technology, and committing to continuous improvement.  

    Embrace sustainability as a core business strategy to stay ahead of regulatory demands and consumer expectations. Are you ready to transform your fashion business for a sustainable future?  

Vishakha Somaniauthor linkedin
Assistant Manager

Vishakha Somani is a Fashion Tech Analyst and Communications expert at WFX - World Fashion Exchange. She is a Fashion graduate from Polimi Italy, and has been actively reporting on the fashion industry since 2016. She's an expert in analyzing trends, market shifts and new technologies. Her work spans forecasting and research on the global luxury and retail supply chain, emerging markets, and the circular economy.

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