Complete Guide to Sustainability Regulation in Fashion
EU Regulations- Definitive guide to textile sustainability regulations
Directive vs. Regulation
Difference Between EU Directives and EU Regulations
EU Regulation
An EU regulation is a binding legislative act that is directly applicable in all EU Member States. Once adopted, it automatically becomes part of national law in all Member States without the need for further legislative action. Regulations are used when uniform application of the law is necessary across the EU to ensure consistency.
An example is the General Data Protection Regulation (Regulation (EU) 2016/679), which establishes data protection rules that apply identically in all EU countries. Source: EUR-Lex, Regulation (EU) 2016/679.
EU Directive
An EU directive is a legislative act that sets binding objectives for Member States but allows them discretion on how to achieve these objectives through national legislation. Directives are not directly applicable; they require each Member State to transpose the directive into its own legal system by a specified deadline.
Each member state must enact its own laws or regulations within two years to comply with the minimum requirements of the directive. Member states can also choose to go beyond the minimum requirements set out in the directive.
An example is the Working Time Directive (Directive 2003/88/EC), which sets minimum standards for working conditions but allows national variations in implementation. Source: EUR-Lex, Directive 2003/88/EC.
Comparison Between EU Regulation and EU Directive
| Basis of Comparison | EU Regulation | EU Directive |
|---|---|---|
| Legal Applicability | Directly applicable in all Member States without national implementation | Requires transposition into national law by Member States |
| Binding Nature | Binding in its entirety | Binding only in terms of result |
| Uniformity Across EU | Ensures uniform legal framework across all Member States | Allows variation in national implementation |
| Legislative Process | Becomes effective immediately upon adoption | Becomes effective only after national laws are passed |
| Use Cases | Used for matters needing full harmonisation | Used when national flexibility is acceptable |
| Example | General Data Protection Regulation (EU) 2016/679 | Working Time Directive 2003/88/EC |
Similarities and Differences Between EU Regulations and EU Directives
| Aspect | EU Regulation | EU Directive |
|---|---|---|
| Issued by | European Union institutions | European Union institutions |
| Legal Nature | Both are legally binding EU laws | Both are legally binding EU laws |
| Applicability Scope | Apply to all EU Member States | Apply to all EU Member States |
| Purpose | Harmonisation and legal integration | Harmonisation and legal integration |
Differences
| Basis of Comparison | EU Regulation | EU Directive |
|---|---|---|
| Mode of Application | Directly applicable in all Member States without changes | Requires Member States to adopt national laws to implement |
| National Implementation | No national legislation required | National laws must be passed by each Member State |
| Flexibility | No flexibility; identical rules across EU | Flexibility allowed in how objectives are achieved |
| Binding Nature | Binding in entirety | Binding only on the result, not the method |
| Uniformity | Ensures uniform legal framework EU-wide | Allows national variations |
| Entry into Force | Effective immediately after publication | Effective only after national transposition deadlines |
| Example | General Data Protection Regulation (Regulation (EU) 2016/679) | Working Time Directive (Directive 2003/88/EC) |
fashion brand must comply with both existing EU-wide laws and upcoming national laws. Regarding climate change, all new regulations and directives are part of the European Green Deal, which outlines the roadmap for future environmental legislation.
EU Legislative Process
Initiation of Legislation
The EU legislative process begins with the European Commission, which holds the exclusive right to propose new legislation. Once drafted, the proposal is submitted to the European Parliament and the Council of the European Union for consideration.
Review and Adoption
The European Parliament and the Council review the proposal, suggest amendments, and negotiate the final text. This process, known as the ordinary legislative procedure, can take several years. Once both institutions agree on the final version, the legislation is adopted.
Types of Legislation
There are two main types of EU legislative acts: Regulations and Directives.
- Regulations become directly applicable in all EU member states without the need for national transposition. They enter into force 20 days after publication in the Official Journal of the European Union.
- Directives set out objectives that member states must achieve but allow national governments the flexibility to implement them through their own laws. Each Directive includes a specific deadline for transposition into national legislation.
Delegated Acts
Following the adoption of a Regulation, Delegated Acts may be developed. These are secondary laws used to amend or supplement non-essential elements of the original legislation. Delegated Acts provide flexibility to adapt specific rules or technical details—such as those relevant to particular industries—without going through the full legislative process again.
Implementation Differences
While both Regulations and Directives follow the same legislative process involving the Commission, Parliament, and Council, their implementation differs. Regulations apply uniformly across all member states, Directives must be transposed into national law by each member state within a specified deadline.
Legislative Initiative Draft Phase
The European Commission initiates the legislative process by drafting a proposal. Once completed, the proposal is formally presented and published.
Dialogue Phase
After the proposal is submitted, the European Parliament and the Council review, discuss, and amend it. They work together to reach an agreement, which then transforms the proposal into EU law.
Adoption Phase and Regulation Approval
Once the Regulation is adopted, it comes into force immediately. Following this, Delegated Acts are drafted and adopted to address specific details, starting with high-priority sectors such as apparel and textiles.
The European Green Deal, Circular Economy Action Plan, and Sustainable Textile Strategy
The European Green Deal
The European Green Deal is the European Union’s main policy initiative aimed at making Europe the first climate-neutral continent by 2050. It was launched in December 2019 and sets out a roadmap of actions to make the EU’s economy sustainable. This includes reducing greenhouse gas emissions, investing in environmentally friendly technologies, and supporting industry innovation.
One of its legally binding targets, confirmed through the European Climate Law, is to reduce net greenhouse gas emissions by at least 55 percent by 2030 compared to 1990 levels. This intermediate goal supports the broader objective of achieving climate neutrality by 2050.
The European Green Deal also includes initiatives on biodiversity and ecosystem restoration. A notable commitment is to plant 3 billion additional trees in the EU by 2030 to increase carbon absorption and restore natural habitats.
Fit for 55, a legislative package under the Green Deal, was introduced in July 2021. It outlines specific measures to reach the 2030 emissions target, including reform of the EU Emissions Trading System, a Carbon Border Adjustment Mechanism, and the creation of a Social Climate Fund to support vulnerable households during the green transition.
Source: https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en
The Circular Economy Action Plan (CEAP)
The Circular Economy Action Plan was adopted in March 2020 as part of the European Green Deal. It aims to reduce the EU’s consumption footprint and double the circular material use rate in the coming decade. The plan supports the shift from a linear economic model (take-make-dispose) to a circular economy, where resources are kept in use for as long as possible and waste is minimized.
The CEAP identifies seven key sectors with high resource use and potential for circularity, including textiles, electronics, batteries, construction, packaging, plastics, and food. It proposes mandatory requirements for product durability, reusability, and reparability, along with support for sustainable product design and consumer rights.
Source: https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en
The EU Strategy for Sustainable and Circular Textiles
The EU Strategy for Sustainable and Circular Textiles was adopted on 30 March 2022. It is a key deliverable of the Circular Economy Action Plan and is intended to make textiles more sustainable, circular, and resource-efficient throughout their lifecycle.
By 2030, the strategy aims to ensure that all textile products placed on the EU market are durable, repairable, recyclable, largely made from recycled fibers, free of hazardous substances, and produced with respect for social rights and environmental standards.
The strategy outlines several measures, including the introduction of design requirements for textiles, digital product passports to improve traceability, mandatory extended producer responsibility schemes across all member states, and stronger controls on greenwashing and misleading environmental claims.
It also addresses microplastic pollution from synthetic textiles and aims to curb fast fashion by promoting reuse, repair services, and longer product lifespans.
Source: https://environment.ec.europa.eu/strategy/textiles-strategy_en
The European Green Deal, Circular Economy Action Plan, and Sustainable Textile Strategy together form a coherent framework for transforming the European economy toward climate neutrality, sustainability, and circularity. These initiatives set legal targets and sector-specific actions that reshape how industries operate, how consumers engage with products, and how environmental and social standards are enforced across the EU.
Waste Framework Directive Revision
The Waste Framework Directive (Directive 2008/98/EC) establishes the basic concepts and definitions related to waste management, such as definitions of waste, recycling, and recovery. It sets key waste management principles, including the 'polluter pays principle' and the 'waste hierarchy'. The revision aims to enhance waste management across the EU and promote the transition to a circular economy.
A central measure is the introduction of mandatory separate collection systems for textiles by 1 January 2025 to reduce textile waste going to landfill or incineration. The revision also introduces harmonized Extended Producer Responsibility (EPR) schemes for textiles, where producers will bear financial and operational responsibility for the collection, sorting, reuse, and recycling of textile waste. Fees will be modulated based on the environmental performance and circularity of products, encouraging sustainable product design and discouraging fast fashion practices.
Source: https://environment.ec.europa.eu/topics/waste-and-recycling/waste-framework-directive_en#textiles
https://ec.europa.eu/newsroom/env/items/803765/en?utm_source
Harmonized Extended Producer Responsibility (EPR) for Textiles
Under the revision of the Waste Framework Directive, a harmonized Extended Producer Responsibility (EPR) system will be established for textiles across all EU member states. Producers will take both financial and operational responsibility for the entire lifecycle of their textile products, including collection, sorting, reuse, and recycling.
Fees charged to producers will be modulated based on the environmental footprint, circularity, and sustainability of their product design—a principle known as eco modulation. This aims to provide financial incentives for the design of more sustainable textile products and to support waste prevention and reuse activities. These EPR schemes are expected to be implemented approximately 30 months after the revised Directive enters into force.
https://environment.ec.europa.eu/topics/waste-and-recycling/waste-framework-directive_en
Eco-design for Sustainable Products Regulation (ESPR)
The Ecodesign for Sustainable Products Regulation (ESPR) replaces the Ecodesign Directive 2009/125/EC. It entered into force on 18 July 2024 and expands ecodesign requirements to nearly all products placed on the EU market, including textiles, furniture, tyres, detergents, paints, lubricants, chemicals, and electronics. The regulation introduces sustainability criteria covering durability, reparability, upgradability, energy and resource efficiency, recycled content, and environmental footprints. It also bans the destruction of unsold textiles and footwear, requiring companies to report annually on unsold goods. A Digital Product Passport (DPP) will accompany regulated products to provide digital information on materials, environmental impacts, repairability, recycling, and lifecycle, thereby enhancing transparency, traceability, and compliance monitoring. Technical rules for DPP data carriers, access rights, and registry establishment are being developed, with implementation beginning progressively across priority product groups. ESPr measures will take effect between 2026 and 2028 based on the delegated acts and working plans.
Digital Product Passport (DPP)
As part of the Ecodesign for Sustainable Products Regulation (ESPR), the Digital Product Passport (DPP) is being introduced to improve product traceability and transparency across the EU market. The DPP is a digital record that stores and provides electronic access to data on a product’s material composition, environmental impact, circularity, and lifecycle. It is intended to support informed consumer decision-making, facilitate product repair and recycling, and help authorities and businesses monitor compliance with sustainability requirements. Technical implementation standards and registry rules for the DPP are currently under development, and the system will be progressively rolled out across priority product groups.
Source: https://green-business.ec.europa.eu/implementing-ecodesign-sustainable-products-regulation_en
Green Claims Directive
The Green Claims Directive is a legislative proposal by the European Commission that aims to ensure that all environmental claims made by companies about their products and services are accurate, reliable, and verifiable. It is designed to prevent misleading environmental claims or "greenwashing," which can deceive consumers and undermine trust in sustainability efforts.
The directive amends the Unfair Commercial Practices Directive (2005/29/EC) to set harmonized rules for environmental claims across the EU. These rules require that:
- Environmental claims must be clear, accurate, and supported by robust scientific evidence.
- Companies must provide transparent information and independent verification of their claims.
- Claims cover all stages of the product life cycle and include the impact on the environment.
- The directive seeks to provide a level playing field for businesses and protect consumers from false or exaggerated green claims.
The proposal is part of the EU's wider effort to promote sustainable consumption and production patterns under the European Green Deal and Circular Economy Action Plan.
Status: The proposal was adopted by the Commission in March 2023. Legislative discussions are ongoing in the European Parliament and Council to finalize the directive.
Source:
https://environment.ec.europa.eu/topics/circular-economy/green-claims_en
https://ec.europa.eu/environment/strategy/green-deal_en
Product Environmental Footprint (PEF)
The Product Environmental Footprint (PEF) is a life cycle assessment (LCA)–based methodology developed by the European Commission to quantify the environmental impacts of products (goods and services) throughout their entire lifecycle. It builds on international standards such as ISO 14040/44 and defines detailed rules for modelling material and energy flows, emissions, and waste streams associated with a product from raw material extraction to end-of-life. PEF is designed to produce reproducible, comparable, and verifiable results using Product Environmental Footprint Category Rules (PEFCRs), which establish consistent calculation methods for specific product groups.
Source: https://green-business.ec.europa.eu/environmental-footprint-methods/pef-method_en
https://knowledge4policy.ec.europa.eu/glossary-item/product-environmental-footprint-pef_en
Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS)
The CSRD replaces the earlier Non-Financial Reporting Directive and introduces more comprehensive and mandatory sustainability reporting obligations for large and listed companies. The ESRS are technical standards that specify how companies must report on environmental, social, and governance (ESG) performance, ensuring transparency and comparability across the EU.
The Corporate Sustainability Reporting Directive (CSRD) expands the scope and detail of sustainability reporting obligations for companies in the EU. It requires companies to disclose information on environmental, social, and governance (ESG) matters according to the European Sustainability Reporting Standards (ESRS). The CSRD aims to ensure that sustainability information is consistent, comparable, and reliable, supporting sustainable investment and accountability.
Non-Financial Reporting Directive (NFRD)
The Non-Financial Reporting Directive (Directive 2014/95/EU) requires certain large companies to disclose non-financial information, including environmental, social, and governance aspects. It has now been replaced by the CSRD, which introduces more comprehensive and detailed reporting requirements to better meet the needs of investors and stakeholders.
Circular Economy Action Plan
Waste Framework Directive Revision
This revision updates the existing Waste Framework Directive to improve waste management and promote sustainability.
Ecodesign for Sustainable Products Regulation (ESPR)
The ESPR replaces the previous Ecodesign Directive and sets requirements to make products more sustainable throughout their lifecycle.
Digital Product Passport (DPP)
The DPP initiative aims to provide digital information about products to enhance transparency and sustainability.
Green Claims Directive
This directive amends the Unfair Commercial Practices Directive to ensure that environmental claims made by companies are accurate and verifiable.
Product Environmental Footprint (PEF)
PEF is a methodology to assess the environmental impact of products throughout their lifecycle.
Sustainable Textile Strategy
Harmonized Extended Producer Responsibility (EPR) for Textiles
A new harmonized EPR system for textiles is introduced to hold producers accountable for the entire lifecycle of their products.
Corporate Sustainability Reporting Directive and European Sustainability Reporting Standard (ESRS)
These set updated requirements for non-financial reporting by companies to increase transparency on sustainability issues.
Non-Financial Reporting Directive
This directive mandates large companies to disclose information on environmental, social, and governance matters.
EU Circular Economy Action Plan (CEAP)
The Circular Economy Action Plan is a key component of the European Green Deal. It outlines 35 targeted actions, with particular focus on the textiles sector, identified as one of the most resource-intensive industries. The plan introduces measures to promote sustainable product design, implement circular economic models, and reduce overall waste generation.
EU Strategy for Sustainable and Circular Textiles
To support the goals of the European Green Deal and the Circular Economy Action Plan, the EU has introduced a dedicated strategy for the textile sector. This strategy aims to transform the full lifecycle of textile and footwear products—from production to consumption and disposal. It focuses on extending product longevity, increasing the use of recycled fibres, discouraging fast fashion practices, and enabling easier repair and recycling through tools such as the Digital Product Passport.
Sustainability Regulations-(EU)
Corporate Sustainability Reporting Directive (CSRD) ( Approved EU Law)
The CSRD standardizes ESG reporting across the EU by requiring companies to disclose annual information on environmental and social matters. This includes setting climate targets, presenting a detailed transition plan, and submitting audited progress reports.
The directive applies to all listed companies selling in the EU, excluding micro-enterprises. Non-EU companies are also subject to the regulation if they generate more than €150 million in net turnover within the EU and meet one of the following conditions: they have a subsidiary with over 250 employees, more than €40 million in net turnover, or a balance sheet total exceeding €20 million.
The reporting requirements under CSRD will be implemented in four distinct phases.
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32022L2464
CSRD Implementation Timeline
The reporting requirements under the Corporate Sustainability Reporting Directive (CSRD) will be introduced in four phases, depending on the size and type of the company.
| Financial Year | Reporting Year | Applicable Entities |
|---|---|---|
| FY 2024 | Reporting in 2025 | Certain large companies classified as large public-interest entities (PIEs) with more than 500 employees |
| FY 2025 | Reporting in 2026 | Other large companies (meeting two of the following: >250 employees, >€40 million turnover, >€20 million balance sheet) |
| FY 2026 | Reporting in 2027 | Listed small and medium-sized enterprises (SMEs), excluding micro-enterprises |
| FY 2027 | Reporting in 2028 | Non-EU parent companies meeting the threshold for EU presence (e.g. >€150 million in net turnover) |
| FY 2028 | Reporting in 2029 | Full compliance expected across all in-scope entities |
Notes:
- Large companies are defined by the EU as those meeting at least two of the following: more than 250 employees, more than €40 million in net turnover, or a balance sheet total of more than €20 million.
- Micro-enterprises are excluded from CSRD obligations.
- Non-EU parent companies must report if they meet the turnover threshold in the EU and have a qualifying subsidiary or branch.
- Listed SMEs will have a transitional period and simplified reporting standards.
Large Companies
More than 250 employees
More than €50 million turnover
More than €25 million in total assets
Medium Enterprises
Less than or equal to 250 employees
Less than or equal to €50 million turnover
Less than or equal to €25 million in total assets
Small Enterprises
Less than or equal to 50 employees
Less than or equal to €10 million turnover
Less than or equal to €5 million in total assets
European Sustainability Reporting Standards (ESRS) (Reporting Framework)
The European Sustainability Reporting Standards (ESRS) form the reporting framework under the Corporate Sustainability Reporting Directive (CSRD), aiming to standardize sustainability reporting across the EU. The ESRS addresses past inconsistencies in ESG disclosures by improving the comparability and reliability of data, particularly for apparel and footwear brands. The standards are structured into four categories: Cross-cutting, Environment, Social, and Governance, each requiring specific disclosures related to a company’s impacts and the financial risks from sustainability issues. Companies must begin with a double materiality assessment to identify relevant impacts, risks, and opportunities, and report only on applicable standards, except for certain topics like climate change, which are mandatory. Sector-specific standards for textiles are expected by 2026 but will not alter current reporting timelines.
Sector-Specific Cross-Cutting Standards
ESRS 1
General Principles: This standard outlines the fundamental concepts and principles that underpin all sustainability disclosures. It defines the basis for preparing and presenting information under the ESRS framework.
ESRS 2
General, Strategy, Governance and Materiality Assessment Disclosure Requirements: This standard requires entities to disclose general information about their business model, strategy, governance structures, and the results of their double materiality assessment, which determines which sustainability matters are relevant for reporting.
Issue-Specific Environmental Standards
ESRS E1 – Climate Change
Covers disclosures on greenhouse gas emissions, climate-related risks and opportunities, and transition plans aligned with EU climate objectives.
ESRS E2 – Pollution
Requires reporting on the entity’s impact related to air, water, and soil pollution, including substances of concern and their management.
ESRS E3 – Water and Marine Resources
Focuses on water consumption, discharge practices, and the impacts on freshwater and marine ecosystems.
ESRS E4 – Biodiversity and Ecosystems
Addresses the company's effects on biodiversity, including operations in or near protected areas and measures to prevent biodiversity loss.
ESRS E5 – Resource Use and Circular Economy
Includes information on material efficiency, waste generation, and circular product design strategies.
Issue-Specific Social Standards
ESRS S1 – Own Workforce
Covers employee-related data, including diversity, equal opportunity, working conditions, training, and social protection.
ESRS S2 – Workers in the Value Chain
Requires information about labor practices and human rights risks for workers not directly employed but linked through the value chain.
ESRS S3 – Affected Communities
Focuses on the company's impact on local communities, including land use, human rights, and engagement practices.
ESRS S4 – Consumers and End-Users
Addresses product safety, accessibility, privacy, and consumer engagement.
Governance Standards
ESRS G1 – Business Conduct
Covers governance policies related to ethics, anti-corruption, political engagement, and internal controls related to sustainability practices.
Ecodesign for Sustainable Products Regulation (ESPR) ( Approved EU Law)
Scope of Regulation
The ESPR is designed to reduce the environmental impact of products throughout their entire lifecycle. It establishes performance requirements for products, including durability, repairability, recyclability, and environmental footprint. It also introduces the Digital Product Passport (DPP) and enforces a ban on the destruction of unsold footwear and textiles.
Targeted Stakeholders
The regulation applies to all brands that sell into the EU market, including small and medium-sized enterprises (SMEs). SMEs will receive financial support and are initially excluded from the ban on destroying unsold products.
Implementation Timeline
Ban on destruction of unsold goods will apply from the second quarter of 2026 for large enterprises and from 2030 for medium-sized brands. Minimum product requirements are expected by 2027 or 2028. A delegated act focused on the textile sector will be published in 2026, after which brands will have 18 months to comply. The Digital Product Passport is also expected to be introduced in 2027 or 2028.
Ecodesign for Sustainable Products Regulation (ESPR)
2024 - ESPR Framework Regulation approved
2025 - First draft of Delegated Act for textiles
2026 - Delegated Act for textiles published
2026 to 2030 - Implementation period
2026 - Ban on destruction of unsold goods for large brands
2030 - Ban on destruction of unsold goods for medium brands
2027 to 2028 - Minimum product requirements
2027 to 2028 - Digital Product Passport (DPP) required
2024 - The ESPR framework regulation was officially approved, establishing the legal basis for sustainable product requirements across the EU.
2025 - The first draft of the Delegated Act specifically addressing textiles was prepared, setting out detailed rules for the sector.
2026 - The Delegated Act for textiles was published, providing tailored sustainability requirements for textile products.
2026 to 2030 - The implementation period during which brands must progressively comply with the new rules.
2026 - The ban on the destruction of unsold goods comes into effect for large brands, preventing wasteful disposal practices.
2030 - The destruction ban extends to medium-sized brands, ensuring wider compliance across the industry.
2027-2028 - Minimum product requirements such as durability, repairability, and recyclability become mandatory for all products covered.
2027-2028 - The Digital Product Passport (DPP), which provides detailed product information to enhance transparency and circularity, becomes a requirement for brands selling in the EU.
Digital Product Passport (DPP) ( Approved EU Law)
Scope of Regulation
The Digital Product Passport is an official EU legislative initiative designed to digitally record and store comprehensive information about a product throughout its entire lifecycle. This tool aims to promote greater transparency and traceability by making critical product data accessible to all stakeholders, including consumers, manufacturers, recyclers, and regulators. It supports the circular economy by enabling better product lifecycle management, encouraging reuse, repair, and recycling activities. The passport includes sixteen identified categories of information, such as the product’s origin, detailed material composition, environmental footprint, social and ethical impacts, and instructions for repair or end-of-life handling.
Targeted Stakeholders
The Digital Product Passport requirement will apply universally to all brands that place products on the European market. This includes large multinational corporations, small and medium-sized enterprises (SMEs), and brands located outside the EU that export into the EU. By encompassing this broad scope, the legislation ensures consistent transparency standards and encourages sustainable business practices across all market participants.
Implementation Timeline
The introduction and enforcement of the Digital Product Passport system are planned for the period between 2027 and 2028. This timeline allows manufacturers, distributors, and other supply chain actors sufficient time to develop the necessary digital infrastructure and adjust their operations to comply with the new regulatory requirements. The phased implementation will also provide opportunities to refine technical standards and ensure interoperability of digital product information systems across member states.
Product Description
This section provides comprehensive information about the product, including its type, size, color, and key performance characteristics. It also addresses whether the product can be resold or repaired, which is important for sustainability and circular economy goals. Detailed descriptions support consumers in making informed decisions and improve transparency throughout the product lifecycle. Accurate product information aids regulatory compliance and helps track the environmental impact of the product. This section is essential for distinguishing products and facilitating sustainability assessments.
Composition
This section details the materials used in the product, including the percentages of each material, their origin, and any treatments or dyeing processes applied. Information on fiber lengths and the use of recycled content is included to assess sustainability. Understanding the composition supports recyclability and informs consumers about product durability and environmental footprint. It also helps in verifying claims related to material sourcing and environmental compliance. Accurate composition data is critical for circular design and waste reduction initiatives.
Supply Chain
This section covers the manufacturing process of the product, including where and how it is made. It also provides details about transportation methods, distances covered, and logistics involved. Transparent supply chain information helps identify environmental and social impacts at each stage of production and distribution. It supports efforts to reduce carbon emissions and improve labor conditions throughout the value chain. Detailed supply chain data contributes to accountability and responsible sourcing practices.
Documentation
This section includes certificates, audit reports, and quality control documents related to the product. Such documentation verifies compliance with environmental, social, and safety standards. It supports traceability and provides evidence for regulatory inspections or consumer inquiries. Maintaining thorough documentation is essential for ensuring product integrity and sustainability claims. It also facilitates transparency and trust between brands, regulators, and consumers.
Environmental Impact
This section reports the product’s environmental performance, including Product Environmental Footprint (PEF) scores and greenhouse gas emissions. It assesses the impact of production, use, and disposal phases on the environment. Providing this information enables brands to identify areas for improvement and comply with environmental regulations. It also informs consumers about the ecological consequences of their purchases. Transparent environmental impact data promotes sustainability and supports policy objectives.
Social Impact
This section focuses on the social aspects related to the product’s lifecycle, including worker rights, labor conditions, and human rights compliance within the supply chain. It ensures that social responsibility is maintained from production to delivery, highlighting fair wages, safe working environments, and ethical practices. Transparent reporting in this area helps brands address social risks and build consumer trust. It also supports compliance with international labor standards and corporate social responsibility commitments. Monitoring social impact is essential for improving conditions in textile and footwear industries globally.
Impact on Animals
This section addresses the treatment of animals involved in the product’s materials, ensuring adherence to animal welfare standards. It covers the sourcing of animal-based materials like leather, wool, or down, emphasizing ethical practices. Brands must provide evidence that animal welfare regulations are respected, including the prohibition of cruelty or harmful practices. This information is important for consumers who prioritize ethical and cruelty-free products. Ensuring transparency in this area supports sustainable and responsible sourcing.
Circularity
This section highlights the product’s contribution to a circular economy through aspects like recycled content, repairability, and take-back programs. It details how the product can be reused, refurbished, or recycled at the end of its life. Circularity information encourages sustainable consumption by extending the product’s lifespan and reducing waste. Brands benefit from demonstrating commitments to reducing environmental impact and resource use. This section is critical for promoting sustainability and compliance with circular economy policies.
Health Impact
This section covers the presence of hazardous substances and compliance with regulations such as REACH (Registration, Evaluation, Authorization, and Restriction of Chemicals). It assesses risks to consumers’ health from chemicals used during manufacturing or in the product itself. Providing this data helps ensure product safety and legal compliance, while reassuring consumers about health risks. Brands must manage and disclose any hazardous substances to minimize potential harm. Transparency in health impact supports responsible product stewardship.
Information on the Brand
This section includes details about the brand’s sustainability commitments, contact information, and impact reports. It reflects the company’s broader environmental and social responsibility initiatives and transparency efforts. Providing this information builds consumer confidence and accountability. It allows consumers to make informed choices based on the brand’s values and performance. This section supports the integration of sustainability into brand identity and marketing.
Communication
This section covers the methods used to share product information with consumers and stakeholders, such as QR codes and NFC (Near Field Communication) chips. These technologies enable easy access to detailed product data via smartphones or other devices. Effective communication ensures transparency, helping consumers make informed purchasing and disposal decisions. It also supports traceability and regulatory compliance. Brands can leverage these tools to enhance engagement and trust with their audience.
Quantity
This section records the production quantities of the product, providing insight into the scale of manufacturing. Tracking quantities helps assess resource use, environmental impact, and supply chain efficiency. It also enables better planning for recycling and waste management initiatives. Accurate quantity data supports reporting requirements and sustainability goals. Understanding production volumes is important for both brands and regulators in monitoring industry trends.
Costs
This section outlines the manufacturing costs associated with the product, including materials, labor, and processing expenses. Tracking costs is important for assessing the economic feasibility of sustainable practices and innovations. It helps brands balance sustainability with profitability. Detailed cost data also supports transparent reporting and can influence pricing strategies. Understanding costs is vital for driving sustainable development within the textile and footwear industries.
Usage and Customer Feedback
This section collects information about how consumers use the product and their experiences, including reviews and ratings. Feedback helps identify potential improvements in durability, comfort, and sustainability. It also informs brands about repair needs and product lifespan. Understanding customer usage supports the development of better, more sustainable products. Incorporating consumer insights enhances brand reputation and responsiveness.
Tracking and Tracing
This section details the processes for monitoring the product’s journey through the supply chain, including after-sales activities like resale, modifications, or repairs. Tracking ensures accountability and transparency from raw materials to the end user. It supports compliance with regulations and helps prevent counterfeiting or fraud. Effective tracing enables brands to manage product recalls and sustainability reporting more efficiently. This section is key to ensuring a responsible lifecycle for textile and footwear products.
Product Environmental Footprint Method (Draft stage)
Corporate Sustainability Due Diligence Directive (CSDDD) (Approved EU Law)
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32024L1760
Scope of Regulation
The CSDDD aims to hold companies liable for human rights and environmental violations within their supply chains. It requires businesses to develop and implement due diligence policies and processes to identify and address human and environmental impacts of their activities. The directive focuses on preventing potential negative effects and ensuring that business models align with the Paris Agreement on climate change. Companies must also include CO2e reduction objectives in their business plans to contribute to global climate goals. Overall, it promotes responsible corporate conduct across global supply chains.
Targeted Stakeholders
The directive applies to large companies with more than 1,000 employees and an annual net turnover of at least €450 million worldwide. It also covers large non-EU companies generating at least €150 million turnover in the EU market and meeting employee thresholds. This scope ensures that both EU-based and international companies operating in the EU market are held responsible for sustainability impacts.
Implementation Timeline
The directive’s application will be phased: from 2024 (not 2027) for very large companies with more than 5,000 employees and €1.5 billion turnover; from 2025 for companies with more than 1,000 employees and €450 million turnover; and from 2026 for certain smaller companies. (Note: Some timelines have been updated from initial proposals; verify with the latest official EU documents.) This phased rollout allows companies of varying sizes time to adapt and comply.
Corporate Sustainability Due Diligence Directive (CSDDD) Timeline
FY 2027 - EU Company
Companies with a global turnover exceeding €1,500 million and more than 5,000 employees are required to report in January 2028.
FY 2027 - Non-EU Company
Non-EU companies with EU turnover exceeding €1,500 million must submit their report in January 2028.
FY 2028 - EU Company
Companies with a global turnover over €900 million and more than 3,000 employees must report in January 2029.
FY 2029 - Other Companies
Companies with EU or global turnover above €450 million and more than 1,000 employees (EU companies), including franchisors and licensors, are required to report.
Comparison between reporting requirements
CSRD
The Corporate Sustainability Reporting Directive (CSRD) mandates extensive sustainability reporting for companies operating within the EU. Its main goal is to improve transparency and accountability on environmental, social, and governance (ESG) issues. Companies are required to disclose detailed information about their environmental impacts, climate targets, and social responsibilities. These disclosures must be audited to ensure accuracy and reliability. The directive applies to a wide range of companies, including non-EU businesses with significant EU operations. By standardizing ESG reporting, CSRD aims to foster responsible business practices and inform stakeholders, investors, and regulators effectively.
CSDDD
The Corporate Sustainability Due Diligence Directive (CSDDD) is centered on promoting responsible business conduct through due diligence processes. Companies must identify, prevent, and mitigate human rights violations and environmental harm in their supply chains. The directive requires businesses to integrate sustainability into their governance and risk management frameworks. It also mandates that companies align their business models with the Paris Agreement’s climate goals. CSDDD applies mainly to large companies with substantial turnover and employee numbers, including non-EU firms operating in the EU. This directive holds companies liable for negative impacts and encourages transparent reporting on their sustainability efforts.
DPP
The Digital Product Passport (DPP) is an EU initiative designed to enhance product transparency and circularity. It requires companies to create and maintain a digital record containing key product information throughout the entire lifecycle. This includes data on material composition, environmental footprint, social impacts, and supply chain details. The DPP facilitates easier repair, reuse, and recycling by making product data accessible to consumers and stakeholders. It applies to all brands selling products in the EU market, including SMEs and non-EU companies. The DPP aims to support the EU’s sustainability goals by promoting product traceability and informed consumer choices.
Similarities
| Aspect | Verified Details |
|---|---|
| Shared Origin and Purpose | Both are part of the European Green Deal and aim to increase corporate sustainability, transparency, and accountability |
| Risk-based & Value-chain Focus | Both require a risk-based approach and extend across operations and supply/value chains, aligned with UN/OECD guidance |
| Double Materiality Principle | Both framework expect firms to assess inward financial risks and outward societal/environmental impacts |
| Annual Reporting Requirement | Both require annual reporting: CSRD mandates ESG disclosures, while CSDDD requires reporting on due diligence actions. One integrated report can satisfy both |
| Global Standards Alignment | Both frameworks are based on international standards like OECD Guidelines and UNGPs |
Differences Between CSRD and CSDDD
| Aspect | CSRD (Corporate Sustainability Reporting Directive) | CSDDD (Corporate Sustainability Due Diligence Directive) |
|---|---|---|
| Scope of Focus | Company‑level ESG performance and sustainability disclosures | Supply‑chain and human rights due diligence across operations |
| Legal Liability | No direct liability for violations; emphasis on transparency and reporting | Introduces legal liability for failures to prevent or remediate adverse impacts |
| Reporting Objective | Audited ESG disclosures including environmental, social, and governance data | Reports on due diligence processes, risk management, and remediation actions |
| Applicability | Applies to large and listed companies, plus non‑EU firms with significant EU presence | Applies to very large companies in a phased manner: based on workforce and turnover thresholds |
| Implementation Timeline | Phased rollout from FY 2024 to FY 2029 | Phased rollout between 2027 and 2029, depending on company size and thresholds |
| Assessment Principle | Double materiality applied for ESG reporting | Risk-based due diligence aligned with Paris Agreement and sustainability commitments |
| Target Audience | Primarily investors, regulators, and stakeholders seeking ESG performance data | Corporate boards, governance bodies, and human rights or environmental oversight authorities |
Comparison of Reporting Requirements: CSRD, CSDDD, and DPP
| Criteria | CSRD | CSDDD | DPP |
|---|---|---|---|
| Reporting/Disclosure Requirement | Yes – Requires annual corporate ESG disclosures including governance, social, and environmental data. | Yes – Requires reporting on due diligence practices and mitigation of identified risks. | Yes – Each product must be accompanied by a Digital Product Passport with lifecycle data. |
| Subject to Audit | Yes – Sustainability disclosures must undergo independent limited or reasonable assurance. | Yes – Due diligence outcomes must be verified; third-party certification may be used per Article 20(5). | Yes – DPP data must be certified/verifiable, ensuring authenticity and accuracy. |
| Environmental Impacts | Yes – Reporting must include environmental metrics such as emissions, resource use, and waste (CSRD). | Yes – Required to identify and mitigate environmental impacts across supply chains. | Yes – Includes environmental footprint information at product level (e.g. recyclability, emissions). |
| Social Impacts | Yes – Reporting covers employee conditions, human rights, labor standards, and value chain impacts. | Yes – Requires due diligence on labor practices, worker welfare and community impact in supply chains. | No – Social impact data is not currently mandatory in the DPP format under ESPR, though it may be included in the future. |
| Upstream Supply Chains | Yes – Reporting must include value chain information where material to ESG matters. | Yes – Due diligence must extend across full upstream and downstream supply/value chains. | No – DPP supports traceability of product origin and materials, not full audit of supply chain practices. |
| Introduces Double Materiality | Yes – Requires assessment of both financial risk to company and impact on society/environment. | No – Focuses on adverse impact prevention; financial materiality reporting is not required. | No – DPP focuses on product-level lifecycle transparency, not materiality-based reporting. |
| Applicable to EU & Non‑EU Companies | Yes – Applies to EU and qualifying non-EU companies based on size and turnover thresholds. | Yes – Applies to both EU and non-EU companies that meet specific thresholds. | Yes – Required for all products sold in the EU, regardless of company's location or size. |
| Digital Record via QR or URL | No – Traditional corporate reporting languages only. | No – No requirement for product-level digital recording. | Yes – DPP must be accessible via QR code, NFC or URL as per ESPR requirements. |
EU Deforestation-free Products Regulation (EUDR) (Approved EU Law)
Scope of Regulation
The EUDR aims to curb global deforestation linked to EU consumption by ensuring that key commodities entering the EU market are not associated with deforestation or forest degradation. It targets materials such as cattle leather, natural rubber, and paper-based packaging, requiring full traceability to their place of origin. Brands must verify and document that these commodities are produced on land not subject to deforestation after a specified cut-off date. A formal due diligence process must be followed, which includes risk assessment, mitigation steps, and geolocation data of production sites. Cotton and man-made cellulosic fibers like viscose are excluded from the current scope, reflecting the regulation’s commodity-specific focus. Enforcement includes strict penalties, reinforcing the EU’s commitment to halting deforestation through trade regulation.
Targeted Stakeholders
This regulation applies universally to all companies placing regulated products on the EU market, regardless of their size or origin. Both EU-based and non-EU companies are equally covered, including small and micro enterprises. This ensures a level playing field and prevents regulatory loopholes based on business size. Even smaller operators must perform due diligence and maintain records proving compliance. The regulation’s inclusive scope reflects the EU’s intent to create full supply chain accountability for deforestation-linked commodities.
Implementation Timeline
The compliance timeline is phased according to company size to allow smaller enterprises more time to prepare. Medium and large companies must meet EUDR obligations starting December 2025. This includes submitting due diligence statements and aligning their supply chains with deforestation-free requirements. Small and micro-enterprises are given a grace period, with their compliance deadline set for June 2026. This staggered approach helps ensure that administrative capacity does not hinder compliance, while still mandating universal adherence in the long term.
Packaging and Packaging Waste Regulation (PPWR) (Approved EU Law)
Scope of Regulation
The PPWR establishes comprehensive standards and targets for all types of packaging materials used within the EU. This includes everyday packaging such as protective garment bags, shoe boxes, and e-commerce shipping materials. It introduces harmonized Extended Producer Responsibility (EPR) schemes across all EU member states to ensure consistent management of packaging waste. Packaging must be clearly labeled to disclose material composition, recyclable content, and reusability. Additionally, environmental claims on packaging are only permitted if the packaging exceeds the minimum regulatory standards, ensuring truthful and verifiable communication.
Targeted Stakeholders
This regulation applies broadly to all brands operating within the EU market, including both business-to-business (B2B) and business-to-consumer (B2C) entities. It covers manufacturers, importers, and sellers of packaged products, thereby affecting a wide range of stakeholders responsible for packaging production and distribution.
Implementation Timeline
Compliance with the PPWR becomes mandatory by mid-2026, marking the initial phase of enforcement. By 2028, additional design requirements focused on enhancing the reusability and recycled content of packaging materials will come into effect. Finally, by 2030, all labeling obligations and waste reduction targets must be fully met, including requirements ensuring packaging is recyclable and contains a specified minimum percentage of recycled content. This phased timeline aims to gradually improve packaging sustainability while allowing stakeholders sufficient time to adapt.
Unfair Commercial Practices Directive (UCPD) (Approved EU Law)
Scope of Regulation
Originally established in 2005 to protect consumers from misleading commercial practices, the UCPD now specifically addresses sustainability claims to combat greenwashing. It sets out clear rules for how environmental claims must be substantiated and communicated to ensure they are accurate, transparent, and verifiable. The directive promotes honesty in advertising by requiring brands to provide evidence supporting any environmental benefits they claim.
Targeted Stakeholders
The UCPD applies broadly across all commercial activities within the EU, targeting brands that make environmental claims or engage in product labeling. It holds companies accountable for the accuracy of their sustainability statements, with particular scrutiny on sectors such as fashion where greenwashing has been identified.
Implementation Timeline
The UCPD has been legally binding since its adoption in 2005. The specific guidelines focused on sustainability claims were integrated into the directive in December 2021, strengthening its role in regulating truthful environmental marketing and ensuring continued enforcement against misleading practices.
Directive on Green Claims (Dialogue Phase)
Scope of Regulation
This directive enhances the regulation of environmental claims beyond the existing UCPD framework by setting clear and enforceable rules for how brands can communicate sustainability attributes. Independent verification of environmental claims is mandatory, ensuring that any assertions made are credible and backed by evidence. The directive also addresses environmental labeling, helping consumers make informed choices by standardizing how environmental benefits are presented. It aims to curb misleading greenwashing practices and improve overall market transparency. Non-compliance may lead to fines of at least 4% of a company's annual turnover, highlighting the directive’s strong enforcement mechanism.
Targeted Stakeholders
The directive applies broadly to all brands marketing products with environmental claims to EU consumers, except micro-enterprises. SMEs benefit from a grace period of one additional year and financial assistance to help them adjust to the new rules. This inclusive approach recognizes the varying capacities of companies while ensuring wide coverage. Importantly, non-EU companies making voluntary environmental claims targeted at EU markets are also subject to these regulations, ensuring global accountability. This helps create a level playing field between EU-based and foreign brands.
Implementation Timeline
Proposed in March 2024, the directive is currently in the EU’s legislative dialogue phase, meaning stakeholders are discussing its final shape. Adoption and formal implementation are expected around 2027 or 2028, giving companies time to prepare for compliance. Until then, the UCPD remains the operative law governing environmental claims in the EU, which already restricts misleading sustainability assertions but lacks the specificity this directive will introduce. This phased timeline supports a smooth transition and effective enforcement once in place.
Empowering Consumers for the Green Transition Directive (Approved EU Law)
Scope of Regulation
This directive introduces new consumer rights focusing on the durability and repairability of products, promoting longer product lifespans and reducing waste. It expands the existing “blacklist” by prohibiting vague or generic environmental claims such as “eco” or “green,” which can mislead consumers. Additionally, it bans claims that suggest environmental benefits for an entire product when they only apply to specific parts. These measures aim to increase transparency and ensure that consumers receive accurate, meaningful information about the sustainability of the products they purchase. The directive supports the broader EU Green Deal goals of fostering sustainable consumption and production.
Targeted Stakeholders
The directive applies to all brands selling products to EU consumers, except for micro-enterprises. Small and medium-sized enterprises (SMEs) benefit from an additional year before compliance is mandatory and are eligible for financial support to aid their transition. Non-EU companies that make voluntary environmental claims targeting EU consumers are also subject to the directive, ensuring comprehensive coverage and a level playing field. This broad applicability ensures that both EU-based and international brands adhere to stricter transparency standards.
Implementation Timeline
EU member states are required to transpose the directive into their national laws by March 2026. The rules will then become applicable across the EU starting in September 2026. Until full implementation, the Unfair Commercial Practices Directive (UCPD) remains the primary legal framework addressing environmental claims on products within the EU. This timeline allows stakeholders sufficient time to adapt to the new requirements, facilitating a smooth shift toward clearer and more reliable sustainability information for consumers.
U.S. Textile Regulations – California Climate Accountability SB 253 & SB 261 (Approved Law)
Scope of Regulation
SB 253 and SB 261 are significant pieces of legislation aimed at improving transparency around climate risks in the fashion industry. SB 253 mandates that large US-based fashion brands and those with US-based subsidiaries operating in California disclose their Scope 1, 2, and 3 greenhouse gas (GHG) emissions. Scope 1 includes emissions from company-owned or controlled sources, Scope 2 covers emissions from purchased energy, and Scope 3 involves emissions across the entire supply chain, including raw materials, transportation, and product end-of-life management. The goal is to increase accountability, as companies will be required to track and disclose their full environmental impact, with a focus on climate risks.
SB 261 takes a broader approach by requiring companies to assess and disclose how climate change could impact their business operations, focusing on financial risks. These disclosures must address physical risks, such as changes in weather patterns or regulatory changes, and transition risks, such as shifts in consumer demand or technology. By mandating these disclosures, SB 261 aligns with global standards like the EU’s CSRD, creating uniformity in climate risk reporting for international companies.
Targeted Stakeholders
SB 253 targets large US-based brands and any brand with US subsidiaries that operate in California. Specifically, it applies to companies with at least $1 billion in annual revenue. These brands, whether selling directly to consumers in California or operating through subsidiaries, will be required to track and report on their GHG emissions. This includes global companies, ensuring that even those not headquartered in the US are held accountable for their environmental impacts in the state.
SB 261 focuses on brands with annual revenues exceeding $500 million. While SB 253 addresses GHG emissions reporting, SB 261 focuses on financial climate-related risks. This allows for a wider range of companies to comply with regulations concerning the financial implications of climate change, even if they don’t necessarily meet the threshold for GHG emissions reporting under SB 253. Both regulations aim to include brands across the fashion and retail sectors, regardless of their geographic location, provided they meet the revenue thresholds.
Implementation Timeline
The implementation timeline for SB 253 and SB 261 is structured to allow companies time to prepare for compliance, ensuring they can integrate these requirements into their existing reporting frameworks.
Under SB 253, brands must begin reporting their Scope 1 and Scope 2 emissions in 2026, with data from the fiscal year 2025. Scope 3 emissions reporting will follow in 2027, requiring brands to disclose emissions from their supply chain. This timeline allows companies to establish the necessary internal processes and data collection systems to track their emissions accurately.
External verification of emissions data will be required starting in 2026, and brands will need to provide full assurance of the data by 2030. The reporting guidelines, which will provide the framework for companies to follow, are expected to be published by July 1, 2025, ensuring transparency and clarity for all affected companies.
For SB 261, the regulations require biannual reporting on climate-related financial risks starting in 2026. This reporting will focus on how climate change may impact a company’s financial standing, including both physical and transition risks. Companies will be required to post these climate-related risk assessments on their publicly available websites, ensuring stakeholders can access this critical information.
The phased implementation of these laws allows companies to gradually adapt to the new reporting requirements, ensuring they are well-prepared for full compliance by the designated deadlines.
SEC Climate Disclosure (Approved Law)
Scope of Regulation
The SEC's climate disclosure rule mandates that publicly traded fashion companies disclose their Scope 1 and Scope 2 greenhouse gas (GHG) emissions in their annual reports and registration statements. This rule is designed to ensure that investors have access to material climate-related data, which is critical for making informed investment decisions. Scope 1 refers to direct emissions from company-owned or controlled sources, while Scope 2 pertains to indirect emissions from the purchase of electricity, steam, heating, and cooling. In addition to emissions data, companies are required to assess and disclose their climate-related risks, such as the impact of extreme weather events or regulatory changes, on their operations and financial performance.
The SEC’s rule is part of a broader push to improve transparency around climate risks, aligning with global standards such as the EU’s CSRD. It also encourages companies to consider the financial implications of climate change, thereby integrating environmental factors into their financial reporting framework. By requiring climate disclosures, the SEC aims to help investors better understand the potential risks and opportunities posed by climate change to the companies they invest in, promoting more sustainable business practices across industries.
Targeted Stakeholders
The SEC climate disclosure rule applies to all companies that are SEC-registered, which includes both domestic and international companies listed on US stock exchanges. This means that publicly traded fashion brands, whether based in the US or overseas, will be required to comply with the disclosure requirements if they are registered with the SEC. The regulation is designed to ensure that companies operating in the global market are held to the same climate-related reporting standards, fostering consistency and transparency in climate risk reporting across borders.
While the regulation specifically targets publicly traded companies, private companies with public debt or other SEC registration requirements may also be subject to the same rules. This broad applicability ensures that investors have access to consistent and comparable climate-related data for all companies that are part of the US financial markets.
Implementation Timeline
The SEC's climate disclosure rule will begin to take effect in 2026, with companies required to report their Scope 1 and Scope 2 emissions in their annual reports and registration statements. This will provide stakeholders, particularly investors, with the most up-to-date data on the climate risks facing companies. However, the rule introduces a phased implementation timeline to account for the different sizes and reporting capabilities of companies.
Starting in 2026, companies will need to disclose their climate-related risks and emissions data, with more detailed disclosures becoming mandatory over time. By 2029, additional assurance requirements will be introduced, with companies needing to verify the accuracy and reliability of their reported emissions data. The phased implementation timeline gives companies ample time to develop internal systems for data collection and ensure compliance with the SEC’s reporting standards. This gradual approach also allows regulators to assess the effectiveness of the rule and make any necessary adjustments.
The SEC’s climate disclosure rule reflects the growing recognition of climate change as a material financial risk, and its phased implementation is designed to give companies time to adjust to this new reporting landscape.
Uyghur Forced Labor Prevention Act (UFLPA) (Approved Law)
Scope of Regulation
The Uyghur Forced Labor Prevention Act (UFLPA) specifically targets forced labor practices in the Xinjiang Uyghur Autonomous Region (XUAR) of China. It mandates that all imports into the U.S. must be free of forced labor, particularly those from the Xinjiang region. This regulation focuses on ensuring that any product—whether it's raw material, intermediate goods, or finished products—that has been produced with forced labor is prohibited from entering U.S. markets. The law applies to a broad range of goods, including textiles and apparel, and emphasizes that companies importing from this region must prove their compliance through credible and verifiable documentation, such as supply chain audits.
Targeted Stakeholders
The Uyghur Forced Labor Prevention Act impacts:
- U.S. companies: All U.S.-based companies, including fashion brands, that import goods from Xinjiang or have supply chains linked to the region.
- Foreign companies: Any non-U.S. companies whose products or raw materials are sourced from Xinjiang and enter the U.S. market.
- Customs enforcement authorities: The U.S. Customs and Border Protection (CBP) is responsible for enforcing the law by rejecting shipments that fail to meet the proof of no forced labor.
Implementation Timeline
- 2021: The Uyghur Forced Labor Prevention Act was signed into law.
- 2022: The act went into effect, and U.S. companies must now demonstrate that products from Xinjiang are not made with forced labor.
- Ongoing compliance: As of 2022, companies must continuously ensure that their goods are free of forced labor to avoid detention or rejection of shipments by CBP.
The FABRIC Act. (proposed)
Scope of Regulation
The FABRIC Act is designed to address the environmental and social impacts associated with outsourced garment production. It aims to enforce minimum wage standards in garment factories, a crucial step toward ensuring that workers are not underpaid. The act specifically seeks to abolish piece-rate pay systems, where workers are compensated based on the number of garments they produce rather than the time spent working. Brands will be held accountable for wage violations within their supply chains, with penalties for non-compliance. Moreover, the FABRIC Act encourages transparency in the fashion industry by requiring brands to disclose the labor practices and environmental impacts of their production. One of its key incentives is the provision of a 30% tax credit to clothing manufacturers that relocate their production to the U.S. This aims to reduce reliance on low-wage countries, improving both labor standards and reducing the environmental footprint of garment manufacturing.
Targeted Stakeholders
The FABRIC Act targets fashion brands that source their products from regions with lower labor costs, especially in countries where labor laws and wages are less regulated. It holds these brands accountable for the wages and working conditions in their supply chains. Garment manufacturers in these regions who are found to violate wage standards or fail to meet transparency requirements will face penalties. Additionally, retailers in the U.S. that import garments manufactured under exploitative conditions are also targeted by the law. The act incentivizes U.S.-based manufacturers by offering them a tax credit for relocating production back to the U.S., which could potentially reduce environmental costs associated with long-distance shipping and increase domestic garment production.
Implementation Timeline
The FABRIC Act was reintroduced to the U.S. Senate in 2023, but it is currently in the proposal stage. Before it can be enacted, it requires approval from both the Senate and the House of Representatives. The timeline for implementation depends on the legislative process, but once approved, the act will likely go into effect within a few years. The tax credit provision could be phased in gradually to encourage manufacturers to relocate production, while the wage standards and transparency requirements will be enforced sooner, possibly within 1-2 years of enactment. The act may also require ongoing compliance checks and reporting to ensure brands adhere to its mandates.
The New York Fashion Act (proposed)
Scope of Regulation
The New York Fashion Act, if passed, would require fashion brands to disclose comprehensive reports on the environmental and social impacts of their products. This includes identifying any negative effects caused by their operations and supply chain, and taking appropriate remedial measures to address them. The law seeks to increase transparency in the fashion industry, ensuring that companies are aware of and actively working to minimize their environmental footprint and social impact. The act would also introduce more rigorous due diligence requirements, compelling apparel brands to evaluate and improve their sustainability practices. These changes would push brands to go beyond merely reporting their environmental and social impacts and move towards genuine, meaningful change in their supply chains.
Targeted Stakeholders
The New York Fashion Act is aimed at fashion businesses with an annual global revenue of over $100 million. This includes both domestic and international fashion brands operating in New York, and it requires them to comply with the detailed reporting and due diligence obligations stipulated by the act. Brands that fall within this revenue range would be held accountable for both direct and indirect impacts, and they would need to implement processes for identifying, mitigating, and reporting any negative consequences of their business activities. The act also holds companies responsible for their supply chains, making it applicable to all stakeholders involved in the production, distribution, and sale of fashion products.
Implementation Timeline
As of early 2025, the New York Fashion Act is still in deliberation and has not yet become law. For it to be enacted, the bill will need to pass both the New York State Assembly and the New York State Senate. While an official timeline for the implementation of the law has not been finalized, it is expected that once the bill passes, companies will be given a transition period to comply with its reporting and due diligence requirements. It is likely that the act, if enacted, would come into effect within 1-2 years after passage.
California Fashion Accountability Act: AB 405 (proposed)
Scope of Regulation
The California Fashion Accountability Act, AB 405, has been introduced in the California State Assembly but is not yet law. If enacted, it will require fashion brands to measure and report their Scope 1, 2, and 3 greenhouse gas (GHG) emissions across their entire supply chain. The law mandates that brands submit an annual Environmental Due Diligence Report, which includes emissions baselines, reduction targets, and wastewater data from Tier 2 suppliers. This would ensure that brands provide detailed environmental impact information, with a particular focus on emissions and wastewater management within the supply chain. The law aims to promote transparency in the fashion industry and encourage brands to take responsibility for their environmental footprint, beyond just direct operations.
Targeted Stakeholders
The California Fashion Accountability Act targets companies that generate over $100 million in annual revenue and operate within California. This includes large fashion brands with a significant presence in the state, and potentially applies to brands with supply chains in California or selling products to California consumers. Non-compliant brands could face fines of up to 2% of their annual revenue, incentivizing compliance with the law’s emissions reporting and due diligence requirements. The law is intended to hold larger fashion businesses accountable, encouraging them to adopt more sustainable practices in their operations and supply chains, while also driving transparency around their environmental impact.
Implementation Timeline
The timeline for the California Fashion Accountability Act depends on its approval and eventual enactment into law. If passed, the following milestones are expected:
- 2026: Reporting of Scope 1 and Scope 2 GHG emissions will begin, requiring companies to report their direct emissions and emissions from purchased energy.
- 2027: Scope 3 emissions reporting will start, with brands required to submit their first Environmental Due Diligence Report, including emissions data across their supply chain.
- 2028: Tier 2 suppliers in specific sectors such as dyeing, finishing, printing, and garment washing will need to report wastewater chemical levels and water usage annually.
The law’s timeline is subject to the bill’s approval, and these dates may shift accordingly.
Proposition 65
Proposition 65—formally called the Safe Drinking Water and Toxic Enforcement Act of 1986—was passed by California voters as a ballot initiative in November 1986. Its purpose is to safeguard the state’s drinking water from contamination by chemicals known to cause cancer, birth defects, or other reproductive harm. It also requires businesses to notify Californians about potential exposure to these chemicals.
- Under Proposition 65, the state must maintain and regularly update a list of chemicals covered by the law.
- For more information, visit the Proposition 65 Warnings website
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