3 Key Regulations EU Fashion Brands Must Look Out For to Meet 2025 Sustainability Goals
With rising consumer demand for transparency and ethics within the industry, the EU government has been pushing some strict policies and regulations for the industry to operate within.
For businesses, adapting to these new legislative requirements are beneficial in order to avoid penalties and gain a competitive edge. Though many businesses might see sustainability regulations as an added burden or threat to their current model, in reality it’s quite the contrary. Regulations present a wonderful opportunity for your brand to put sustainability at its forefront.
The challenge, however, lies in navigating the complex and ever-evolving regulatory landscape. From mandatory disclosures on environmental impact, supply chain transparency to product data management and carbon accounting — small business owners, SMEs and startups alike will need to get the hang of compliance and prepare for these key legislations. With the next reporting cycle approaching soon in 2025, fashion brands will need to be proactive in their approach to sustainability regulations.
Below, we’ll look at three major regulations set to reshape how fashion brands operate in the EU and how to adhere to them in the upcoming reporting cycle.
What are Sustainability Regulations?
Across the world, administrative bodies and policy makers have crafted a set of laws and guidelines for businesses to adhere to. These rules and regulations refer to activities and their impact on the environment and society.
The aim is to ensure that businesses or industries are reducing their negative impact on the environment while contributing to the welfare and upliftment of society.
Large industries such as fashion and textile need more direction and guidance to operate sustainably. According to the EU, the sector is responsible for 10% of global greenhouse gas emissions and 20% of wastewater pollution. They consume more energy than shipping and aviation industries combined. Moreover, the industry employs over 75 million factory workers across the world, of which only 2% earn a decent living wage.
These factors make sustainability regulations a vital tool to ensure that the industry is working towards maintaining social welfare while minimizing environmental damage.
Some of the key areas covered by sustainability regulations are as follows:
- Environmental protection
- Resource management
- Waste management and conservation
- Corporate responsibility and reporting
- Product standards and ecodesign
- Climate change mitigation
- Social equity and human rights
It is important to note that the key frameworks are created mainly by keeping these areas in mind.
In this article, we are delving into three key regulations for fashion and textile brands operating in the EU.
Ecodesign to be a key focus area of the sustainability regulations.
3 Key Sustainability Frameworks for 2025 & Beyond
In the fashion industry’s context, these 3 key frameworks will significantly impact the industry in 2025 and beyond:
The EU’s Corporate Sustainability Reporting Directive (CSRD)
The Corporate Sustainability Reporting Directive (CSRD) was set in motion to overtake and eliminate the shortcomings of the Non-Financial Reporting Directive (NFRD). Its aim is to standardize ESG reporting within the EU as part of the European Green Deal and the EU Textile Strategy.
Effective from 5 January 2023, CSRD requires regular disclosures by fashion and textile companies on environmental and social matters. It also mandates textile companies to state how their environmental, social, and governance (ESG) actions affect their business bottom line.
This helps higher bodies to administer the risks and opportunities that ESG presents for these companies. Moreover, it creates a sense of transparency among investors, consumers, and stakeholders — helping them evaluate and compare the sustainability performance of companies as part of the European Green Deal.
In the near future, every listed apparel, textile and footwear brand that sells into the EU market (except micro-enterprises) will have to comply with the CSRD. However, depending on your company size, the reporting process will take place in phases. The first batch of CSRD reports are due in January 2025, covering the 2024 financial year.
Adhering to the CSRD can be a challenging and time-consuming process.
These steps below will serve as a blueprint in one’s CSRD compliance journey:
(i) Complete the double materiality assessment as a priority
(ii) Start reviewing the exposure drafts of the CSRD’s mandatory reporting standards, specifically the European Sustainability Reporting Standards (ESRS)
(iii) Implement carbon accounting and life cycle assessment procedures in your reporting
(iv) Ensure that the data gathered from operations, suppliers, and business partners is reliable enough to be used as evidence in sustainability reports
EU’s Waste Framework Directive (WFD)
The Waste Framework Directive (WFD) was introduced as a means to safeguard the environment from hazardous substances. These substances are the most common by-products of waste processing in industries. Moreover, the WFD also focuses on reintegrating the reusable materials from these by-products in the supply chain. According to it, throughout the entire lifecycle of waste production, extensive labeling, record-keeping, monitoring, and control need to be executed in time.
The legislation also prevents the mixing of hazardous waste with other types of hazardous waste or non-hazardous waste. This classification between hazardous and non-hazardous waste is done by a system of categorization.
By 2025, fashion brands will have to adhere to the guidelines on textile waste management while focusing on waste reduction as much as possible. To prepare for compliance with the WFD, one has to get familiarized with the WFD resources.
Companies can do this by following these steps:
(i) Study the guidance documents provided by the European Commission. These documents offer detailed instructions and best practices for compliance
(ii) Analyze the reports and strategies of other Member States and how they are addressing the WFD requirements
(iii) Seek help from the European List of Waste to classify and manage waste according to EU standards
Ecodesign Criteria for Consumer Textiles
As the name suggests, Ecodesign Criteria for Consumer Textiles is a legislation designed for consumer textile goods and manufacturers. The main aim of Ecodesign criteria is to implement sustainability methods across the entire lifecycle of textile products. The legislation emphasizes on designing products that are durable, recyclable, and leave a reduced carbon footprint. The goal is to create a shift towards a circular economy whilst mitigating the environmental damage rampant in the fashion and textile industry.
Ecodesign criteria covers various aspects of consumer textiles. These aspects include the manufacturing process, product durability, and end-of-life management. If the approach of this criteria is followed correctly, it reduces environmental impacts, promotes resource efficiency, and creates products that are not only stylish but also sustainable. Therefore, it’s important to make sure that companies are aligned with the goals of this criteria.
Tips for companies to implement and follow the Ecodesign criteria:
(i) Analyse the product lines by conducting an assessment of products from manufacturing to end-of-life management. This will give a perspective on the fields where one can improvise and implement the Ecodesign criteria.
(ii) Use advanced tools to conduct a Life Cycle Assessment for the products manufactured. This will help to measure their carbon footprint efficiently.
(iii) The information collected can further be used in developing techniques and decarbonisation strategies to minimize the carbon footprint of products.
Brands will be obliged to measure their products’ carbon footprint.
Bottom line
Since the EU is tightening its sustainability regulations, it is important for brands now more than ever to adapt to a new landscape that is concerned with environmental and social responsibility.
Therefore, textile and fashion brands need to prepare for these key regulations for the upcoming 2025 reporting cycle. The goal of compliance is not just to create a sustainability report for the government. When the reporting process is done with full transparency, one not only stays compliant but also builds trust with consumers, partners, stakeholders and investors.
So, one needs to embrace and face this compliance challenge with gusto and establish their brand as a strong sustainability contender among customers.
