The regulatory landscape of the fashion industry is changing, and it’s changing fast. The industry now has to deal with escalating sustainability regulations and evolving consumer expectations while also keeping the pressing environmental challenges in mind. The traditional ways of operating are no longer enough to keep up. Brands must now navigate a landscape where transparency, traceability, and data-driven decision-making are critical to success. ESG expert and the Head of Communications at Delogue PLM, Anja Padget, reflects on these changes: “I’ve been in the industry for over 10 years, and in that short time, the way we work has completely shifted. When I started as a buying assistant, a collection could be built using Excel sheets and email correspondence, and orders were sometimes placed the same way”. The demands that brands face today are far greater than they were before, both internally and externally. Far greater reassources are now spent on making sure to comply with the new regulations, while keeping in mind to meet the consumers expectations on sustainability and if this wasn’t enough, brand managers also have to figure out a new and better way to manage complex supply chains. And this is why  brands are increasingly turning to technological innovations to ensure the compliance, meet the sustainability expectations of the consumers , and manage difficult and confusing supply chains.​ Nigel Salter, ESG Advisor , emphasizes this by adding to the discussion:

“The changing sustainability landscape is creating both challenges and opportunities. Brands that leverage technology to enhance transparency, efficiency, and circularity will be best positioned for the future.”​

Why fashion must adapt

Global regulations, particularly within the European Union, are compelling fashion brands to reassess their operations. Key legislative changes include: The Ecodesign for Sustainable Products Regulation (ESPR), The Digital Product Passports (DPPs), the extended Producer Responsibility (EPR) and reporting requirements such as the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD). These legislations are either hitting the companies directly or indirectly, and brands in the fashion industry are finding them extremely difficult to navigate through. 

Anne Rosenkilde from Mads Nørgaard Copenhagen underlines: 

“Handling data across internal functions and external stakeholders have never been more important. It is a big part of our job as a production team to analyze current and future legislative requirements and to ensure that our company is compliant and well prepared for what’s to come.”

The EU commission stated in regards to the ESPR: “This regulation mandates that textiles meet durability, repairability, and recyclability standards - brands must integrate sustainability into product design to comply." This highlights the need for brands not only to adapt to legislation through data and documentation, but in fact look at the entire value chain of a fashion brand, and necessitate internal changes to meet legislative requirements. From design to buying to sales - all parts of the value chain are involved and play a crucial role in the adaptation for future preparation. 

Concurrently, consumer behavior is evolving, with increased demand for resale models, sustainable materials, and transparency. Salter observes:​

“The sector has made important progress - resale business models, material innovations, and sustainability commitments are growing. But the reality is, there are still massive challenges that need solving.”​

So, what’s the problem?

Despite the clear need for change, the fashion industry faces significant obstacles in adapting to new data-driven and technology-based sustainability requirements. Unlike sectors such as finance or healthcare, where digital transformation has long been a priority, fashion has historically operated on fragmented, manual processes with next to zero transparency. This makes the shift toward compliance with new sustainability legislation particularly difficult.

One of the biggest challenges is the complexity of global supply chains. Anja Padget states: 

“Fashion production involves multiple suppliers across different countries, with little real-time visibility into sourcing, materials, and labor practices. My personal experience is that many of the brands I have worked for relied on outdated systems, often managing critical data through spreadsheets, email chains, or siloed software that does not integrate across departments.” She notes the challenge with that: “As a result, tracking sustainability metrics, carbon footprints, and compliance data is not just difficult, it is nearly impossible without significant digital investment.”

Another issue is cost and resource barriers. While major brands have the means to invest in AI, blockchain, and digital tracking systems, smaller and mid-sized companies struggle to afford the necessary infrastructure. Even for larger companies, implementing a centralized system such as Product Lifecycle Management (PLM) system requires a fundamental shift in operations, often facing internal resistance due to the high cost and disruption to established workflows. Many industry leaders view sustainability reporting as an added burden rather than an opportunity to future-proof their businesses.

​In the McKinsey report "The State of Fashion 2025," the critical need for fashion brands to adapt swiftly to the industry's evolving challenges, is highlighted:​

"2025 is likely to be a time of reckoning for many brands. The upshot is that there is still opportunity to be found for brands that move nimbly and are quick to adapt to upheavals in a chaotic marketplace." ​

This underscores the importance of agility and responsiveness in navigating the complex landscape of the fashion industry.

At the same time, most of the fashion industry thrives on speed and creativity, and compliance structures tend to slow down traditional workflows. Brands that are used to rapid design-to-production cycles now face increased regulatory demands that require extensive documentation and tracking, which can feel at odds with the industry’s fast-moving nature. 

And this is also the reason why these regulations need to exist in the first place. The fashion industry’s relentless speed and appetite for more - more production, more consumption, more waste - has driven us to this point. And now, we have no choice but to comply, not just because we are required to, but because we must.

The regulations that may feel like roadblocks are, in reality, safeguards - mechanisms designed to force us to slow down before it’s too late. Yes, they are complex, time-consuming, and frustrating. But they are also necessary. Because if we don’t change the way we work now, we won’t have the resources left to work with in the future. This is important to keep in mind when navigating complex regulations - it’s for a better cause. Anne Rosenkilde notes:

“It is a big responsibility to implement new ways of working with compliance related data in respect to our current structure and procedures in the company. It has become a main task for us as a team to engage colleagues and suppliers in the implementation of a new structured approach where we collect the necessary data points and streamline our processes.”

The tech-driven path to a better world

For the industry to survive and remain competitive, fashion brands are increasingly turning to technology to stay ahead and streamline their processes and data flow. From digital supply chain transparency to AI-powered sustainability initiatives, technology is playing a crucial role in reshaping the fashion industry.

One of the most pressing challenges for brands is supply chain transparency. The complexity of sourcing and manufacturing means that many brands struggle to track where their materials come from, how they are processed, and whether they comply with environmental regulations. Brands are working on solutions to try and solve the traceability issue. Many turn to supply chain mapping solutions to solve this. Anja Padget explains: “Brands are looking at different tools and tech solutions to figure out who can help them in the process of mapping our supply chains. They know they need to map further than tier 1, but they are realising that they cannot do that without a tech solution fit for this.” This kind of transparency not only helps brands comply with new regulations, such as the EU’s Digital Product Passport, but also builds consumer trust. As Nigel Salter emphasizes:

“Digital transparency is essential - not just for meeting regulations but for building consumer trust. The right tech tools can illuminate the supply chain, enabling accountability and traceability.”

Beyond transparency, brands are leveraging technology to advance circularity and waste reduction. Many brands have introduced a take-back program, encouraging customers to return unwanted clothing for reuse or recycling with the overconsumption and textile waste in mind. These initiatives align with the growing legislative push for Extended Producer Responsibility (EPR) laws, which hold brands accountable for the full life cycle of their products.

Managing carbon emissions has become a critical priority for the fashion industry, as new legislation and sustainability commitments demand greater transparency and accountability. The EU’s Corporate Sustainability Reporting Directive (CSRD) and Carbon Border Adjustment Mechanism (CBAM), for instance, require brands to track and report their carbon footprint across the entire supply chain. However, fashion's highly fragmented production processes - spanning multiple suppliers, regions, and materials - make accurate emissions tracking incredibly challenging. This is where data becomes indispensable.

Without reliable, real-time emissions data, brands risk non-compliance, greenwashing accusations, and financial penalties. AI-powered carbon accounting platforms and blockchain-based tracking tools are now enabling brands to collect precise emissions data from raw material sourcing to end-of-life disposal. Data-driven insights allow companies to identify the biggest sources of emissions, make informed decisions on materials and suppliers, and set science-based reduction targets.

Ultimately, without robust data management, carbon reduction goals remain theoretical. Precise tracking is the foundation for credible climate action, helping brands move beyond vague sustainability claims toward measurable, impactful change.

These advancements could be instrumental in addressing one of fashion’s biggest sustainability challenges - carbon emissions. As Salter explains:

“Climate and GHG emissions are major industry challenges, but we’re seeing tech-enabled breakthroughs - carbon as a source of new materials could be a game-changer.”

As fashion’s regulatory landscape tightens, brands must embrace technology to ensure compliance, drive sustainability, and remain competitive. Those that fail to innovate risk falling behind in an industry that is rapidly transforming.

The key to survival is the data-driven transformation

The traditional fast-fashion model is being challenged as sustainability-driven business practices push brands toward more responsible production and consumption models. Companies are shifting to on-demand manufacturing to reduce waste and excess inventory, integrating rental and resale models to extend product lifecycles, and exploring subscription-based services that focus on experience rather than volume. These changes are essential in a de-growth economy, where overproduction is no longer viable. As Nigel Salter puts it:

“In a de-growth world, brands that leverage tech to optimize resources and embrace circularity will emerge as leaders.”

However, none of this is possible without accurate, real-time data, and that data begins in the Product Lifecycle Management (PLM) system. A centralized PLM is the foundation for managing materials, tracking carbon emissions, and ensuring compliance with increasingly stringent regulations like the EU Digital Product Passport (DPP) and Ecodesign for Sustainable Products Regulation (ESPR). Without structured data from the design and production stages, sustainability reporting becomes fragmented, making AI-driven compliance, blockchain transparency, and emission tracking nearly impossible.

The McKinsey “State of Fashion 2025” report reinforces this urgency, noting that 75% of fashion executives are investing in AI-powered sustainability tools to improve efficiency, while digital transformation remains a top priority amid rising regulatory and consumer pressures. With only 20% of industry leaders expecting market improvements in 2025, brands must proactively innovate to remain competitive.

For the fashion industry to survive, it must undergo both a cultural and technological shift. The era of siloed operations and outdated processes is coming to an end. Transparency, data integration, and digital transformation are no longer optional - they are essential for not only survival of the industry but for the survival of the earth. Brands that embrace this evolution will not only survive but thrive in an increasingly regulated and sustainability-conscious world.

As Nigel Salter concludes:

“The biggest challenges still need solving - but for those who embrace technology, the opportunities are enormous.”