Moving Fashion Businesses Beyond the "Waiting Position" on Sustainability and New EU Legislations

This morning I was in a meeting, where we discussed how many fashion businesses are in a constant “waiting position” when it comes to tackling sustainability issues or new EU legislations. It is a position that allows companies to wait and see who will take that initial step. One could argue that waiting can be seen as a good business decision but I wonder whether it really is. The clock is not going to stop ticking. Therefore businesses remaining in a "waiting position," hesitant to take decisive action, need to understand that waiting should not be optional if they want their business to thrive.

So following this conversation I decided to explore strategies that could help fashion companies move forward proactively, aligning with new EU regulations and embedding sustainability into their core operations.

Understanding the New EU Legislation

A few months ago I read a Vogue Business article published on March 14, 2024, written by Rachel Cernansky where she wrote; "The fashion industry is woefully unprepared for the wave of legislation coming out of the EU, according to experts." It was a statement that, for me, encapsulated a significant challenge the fashion industry faces as it grapples with new EU regulations to foster sustainability and transparency.

For example, the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) are designed to hold businesses accountable for their environmental and social impacts, but many in the industry have yet to grasp the implications fully.

Also, the EU's Green Deal, which is associated legislation emphasise supply chain transparency, sustainability, and ethical practices, for fashion businesses, this could mean integrating sustainable practices into every facet of their operations—from sourcing raw materials to production, distribution, and end-of-life management. The first step is for businesses to thoroughly understand these legislations and assess how they apply to their operations.

Shifting the Mindset: From Compliance to Opportunity

Having spoken to some fashion businesses, some have admitted that they view these regulations as a burden rather than an opportunity. It was a honest opinion that made me realise that the industry’s mindset needs to change. Compliance should be seen as the bare minimum—an entry point into a broader strategy of innovation and leadership in sustainability.

In an article published by The Business of Fashion on June 17, 2024, Achim Berg noted that "suppliers, start-ups, and activists increasingly fear the current unclear economic climate could lead to a 'hibernation of efforts,' where budgets are frozen, and projects continue but do not accelerate. The industry is on track to throw over its values to secure more immediate returns." This sentiment underscores the urgency of shifting the industry's mindset from viewing sustainability as a cost centre to recognising it as a critical driver of long-term success.

Opportunities in Compliance

It is one thing talking about opportunities but it is quite another presenting opportunities. So here goes:

Innovation: Embracing sustainable practices can lead to the development of new products, materials, and processes that set a brand apart in the market.

Consumer Trust: With growing consumer awareness, brands that lead in sustainability can build more robust, more loyal customer bases.

Investment Appeal: Sustainability is increasingly linked to long-term financial performance. Brands that excel in this area are more likely to attract investment.

Building a Proactive Sustainability Strategy

In my opinion, to move out of the waiting position, fashion businesses must develop a proactive sustainability strategy beyond mere compliance. This strategy should be integrated into the company's core mission and vision, influencing every decision and action.

Megan Doyle, in her article "Legislation is coming for fashion's supply chains. Are you ready?" for Vogue Business wrote, "This year is set to be a tipping point for fashion's supply chains, as brands and suppliers race to comply with incoming legislation and meet 2025 sustainability goals." Doyle's insight highlights the urgency for businesses to develop strategies that align with the fast-approaching deadlines.

Key Components of a Proactive Strategy:

- Holistic Sustainability Goals: Set clear, measurable sustainability goals that cover environmental, social, and governance (ESG) criteria.

- Supply Chain Transparency: Invest in technologies like blockchain and Digital Product Passports to ensure transparency and traceability throughout the supply chain.

Circular Economy Models: Adopt circular business models emphasising recycling, upcycling, and reducing waste. Encourage consumers to return products for recycling or reuse.

- Stakeholder Engagement: Engage with stakeholders, including suppliers, customers, and regulators, to ensure alignment with sustainability goals and to gain insights into evolving best practices.

Leveraging Technology for Sustainable Innovation

Yes, I am massive believer in investing in innovation, so it should come as no surprise that I think technology is a crucial enabler of sustainability in the fashion industry. I would advise businesses to explore and invest in technologies that support sustainable practices and compliance with EU regulations.

Technological Innovations to Consider:

- Digital Product Passports (DPPs): Provide detailed information on each product's sustainability credentials, from materials to production processes.

- AI and Data Analytics: Use AI to optimise supply chains, reduce waste, and predict consumer demand for sustainable products.

- Sustainable Material Innovations: Invest in research and development of new materials that are both sustainable and marketable.

Collaborating for Impact

I am sure most of you have heard this a 1000 times over, but I would like to say it again— “Collaboration is essential for driving industry-wide change”. Fashion businesses should not operate in silos but should seek partnerships with other brands, NGOs, and tech companies to advance sustainability goals.

Collaboration Examples:

-Joint Sustainability Projects: Partner with other brands to develop and promote sustainable practices and materials.

Industry Associations: Join industry groups that focus on sustainability to share best practices and influence policy.

Educating and Empowering Teams and Measuring and Communicating Progress

Internal education is crucial. Teams must understand the importance of sustainability and how it aligns with the company's goals. Training programs and workshops can empower employees to actively contribute to the sustainability agenda.

Finally, it's essential to measure and communicate Progress. Transparent reporting on sustainability efforts, aligned with EU regulations, keeps the company accountable and builds trust with consumers and investors.

Lastly, its worth mentioning that in the same article by Megan Doyle, Urska Trunk , campaign manager at Changing Markets Foundation, emphasised the importance of proactive change, stating that the incoming EU regulations "should act as a wake-up call for fashion companies that they need to embrace change proactively."

Yes it sure is.

Conclusion

The "waiting position" is no longer tenable for fashion businesses in the face of new EU legislation and growing demand for sustainability. By shifting mindset, embracing technology, fostering collaboration, and proactively integrating sustainability into their core operations, fashion brands can comply with regulations and lead the industry into a more sustainable future.

Moving forward, sustainability should be seen not as a challenge but as an opportunity to innovate, differentiate, and ultimately thrive in a rapidly changing world.