With digital product passports (DPPs) and extended producer responsibility (EPR) moving toward enforcement, compliance is shifting from a strategic consideration to an operational reality for the fashion industry.
Both EPR and DPP requirements will apply to any brand—no matter where it’s based—that sells products in the European Union market. Companies will need to fund end-of-life waste management systems while collecting and sharing detailed data on product composition, supply chains, and environmental impact.
A simplified version of the DPP, covering mandatory product information and basic lifecycle data, is expected by late 2027. EPR will become mandatory across the EU by April 2028. These two deadlines are close together, and as brands move from planning to execution, a tougher reality is becoming clear: the infrastructure needed to meet them—from machine-readable supplier data to local sorting and recycling facilities—doesn’t yet exist at the scale required.
“DPPs are being developed as a data layer,” says Liz Alessi, founder of the Crisis of Stuff and a sustainability consultant with Bank & Vogue, which works on resale and end-of-life aspects of the fashion value chain. “But the systems they’re meant to support—sorting, resale, recycling—aren’t ready to fully use that data yet. Without investment in physical infrastructure, the impact of DPPs will stay limited.”
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But focusing only on compliance might be the real issue. Natasha Franck, founder and CEO of Eon, which builds digital product identity systems for brands like PVH and Mulberry, says DPP is better seen as a driver for a broader transformation already happening. “Digital product passports may be the ‘why now,’ but in AI-driven commerce, structured product data is the price of entry—and digital product identities will become the main way products are discovered, recommended, bought, and sold. Without them, brands risk becoming invisible.” Treating DPP as just a narrow compliance or labeling task carries a real long-term risk of limited visibility and irrelevance in systems where catching up becomes extremely difficult.
EPR, on the other hand, shifts financial and operational responsibility for a product’s end of life back to the brand. In theory, this encourages brands to design for recyclability and invest in systems that handle returns, sorting, and processing. In practice, those systems aren’t ready for the volumes EPR will create.
“EPR is forcing the industry to face end-of-life capabilities that have been overlooked for a long time,” Alessi says. Local infrastructure for large-scale sorting, assessment, and processing is still underdeveloped. Existing systems rely heavily on export markets and resale channels to stay financially viable—a dependency that won’t scale.
This gap—between the data ambitions of DPP and EPR, and the physical reality of what happens to a garment at the end of its life—is a glaring tension in fashion’s compliance discussions. And it’s far from the only one.
The data problem starts at the supplier
The first phase of DPP—described in EU guidance as a minimal, simplified passport focused on mandatory product information and lifecycle data—is targeted for late 2027, with the specific rules still being written. Full circular passport requirements, covering complete lifecycle data, will follow later. Even this first, simplified phase requires brands to track and share detailed product-level information: material composition, recycled content, chemical substances, chain of custody, supply chain mapping, or lifecycle assessment data. In principle, much of this already exists somewhere in theThe value chain. In reality, it’s scattered, inconsistent in format, and mostly out of reach.
“Not all of this data exists today,” says Philipp Mayer, co-founder of Retraced, a supply chain transparency platform. “Even basic details like product weight often aren’t systematically available and need to be gathered from suppliers.” Where data does exist, he adds, it’s spread across product lifecycle management (PLM) and ERP systems, traceability platforms, lifecycle assessment tools, and lab reports—rarely digitized, standardized, or brought together.
The biggest gaps aren’t really about the regulations themselves, says Liza Amlani, principal and founder of Retail Strategy Group. “DPP and EPR are exposing two things that were already broken: functional silos inside most brands, and supplier relationships that are too shallow to support real information flow. If merchandising and sourcing are isolated from each other internally, imagine how isolated they are from suppliers three tiers up the chain. The regulation is just a magnifying glass.”
Amlani argues that brands aren’t so much underestimating the coordination needed as they are overcomplicating their response. The silo problem has been around for decades, following the same pattern that has long held back operations improvements in the apparel and footwear sector. “The fix isn’t a new capability,” she says. “It’s cross-functional authority applied to a structural problem that’s been solvable all along.”
“If merchandising and sourcing are isolated from each other internally, imagine how isolated they are from suppliers three tiers up the chain. The regulation is just a magnifying glass.”
The challenge is both organizational and technical. Data ownership is spread across sourcing, production, sustainability, and quality teams, with no single person responsible for pulling it all together. “DPP requires alignment across the full product lifecycle,” Mayer says. “It’s a major change management effort, not just a simple compliance task.” Many brands, he notes, are seriously underestimating the internal transformation needed—not just for the sustainability team, but for every department that touches a product.
The biggest gap in readiness is beyond Tier 1, the factories that make finished goods directly for brands. Ashley Gill, chief standards and strategy officer at Textile Exchange, says the vast majority of certified facilities still rely on manual processes—PDFs, spreadsheets, email—especially among small and medium-sized suppliers. Enterprise traceability platforms exist, but they’re mostly used by larger brands, not by the upstream facilities that hold certifications and generate the data DPP will ultimately depend on.
“A DPP framework that assumes widespread digital traceability adoption at the supplier level wouldn’t reflect the current reality,” Gill says. “The readiness gap isn’t at the brand level, where digital systems are more common, but at Tier 2 and beyond,” including textile mills, dyeing and finishing facilities, and raw material suppliers.
Sheng Lu, professor and director of graduate studies in fashion and apparel at the University of Delaware, points to another constraint that rarely comes up in compliance discussions: labor. “Technology alone can’t make it happen,” he says. It takes time to build a skilled workforce, he continues, one that can collect, verify, and report data in line with DPP requirements. For suppliers in developing countries operating on thin margins, that investment in people is just as hard to absorb as the IT costs.
Convergence without coordination
DPP and EPR are usually discussed as separate initiatives—one focused on product-level transparency, the other on shifting end-of-life financial responsibility back to producers. In practice, both rely on the same foundation: accurate, product-level data. But they’re largely being treated as separate workstreams, leading to parallel compliance efforts.Companies are duplicating their investments. Amlani points out a specific downstream consequence of this disconnect. She says most companies might have product-level data somewhere in their systems, but they lack the data governance needed to bring it all together into a single source of truth.
Because the data isn’t consistent across spreadsheets, PLMs, ERPs, warehouse management systems (WMS), or point-of-sale (POS) systems, this mismatch causes chaos when products are returned, sorted, and set aside for reuse or circular initiatives. “If brands can’t track and trace their inventory from concept to market to end-of-life, they won’t be able to report DPP or EPR metrics accurately,” Amlani says.
For Mayer, the structural fix is simple in theory, even if it’s not in practice. “It doesn’t make sense to treat them separately,” he says. “The best approach is to build a central product data layer that supports both DPP and EPR, instead of creating separate systems.”
“If brands can’t track and trace their inventory from concept to market to end-of-life, they won’t be able to report DPP or EPR metrics accurately.”
The risk of not doing this isn’t just inefficiency. Chelsea Murtha, senior director of sustainability at the American Apparel and Footwear Association (AAFA), warns that fragmented, country-specific implementation is already turning sustainability regulations into an administrative burden. France’s Ecoscore system—a product-level environmental rating—requires different data than what’s proposed under the EU’s product environmental footprint method. Similar differences are appearing across member states’ EPR programs.
“A lack of harmonization threatens to turn sustainability-focused regulations into more of an IT overhaul than an environmental one,” Murtha says. While compliance systems are needed to make environmental progress, fragmented requirements across markets could force companies to build parallel systems—taking time, money, and focus away from the real changes those regulations are meant to drive. This makes it harder for finance teams to justify the investment in the first place.
Textile Exchange’s Gill shares this concern. “There’s divergence across the broader industry, where different standards bodies, certification schemes, and regulatory frameworks define overlapping terms with subtle but meaningful differences,” she says. She points to terms like “recycled content” or “organic,” which have scheme-specific definitions that can cause real confusion at scale. “Convergence across the sector will take time.”
The infrastructure gap
If the data challenge is the visible side of DPP compliance—requiring brands to capture, organize, and share product-level information—the infrastructure gap is the deeper problem that EPR is bringing to light: whether the physical and economic systems needed to collect, sort, and process those products at the end of their life actually exist. EPR becomes mandatory across the EU by April 2028, just months after the simplified DPP deadline. Brands will need to have basic product data in place just as the end-of-life system faces its biggest demands. The data layer and the physical infrastructure are being stress-tested at nearly the same time.
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The economics remain the main constraint. The cost to collect, sort, and process most garments currently exceeds the value that can be recovered from them. Recyclers operate under strict material thresholds that most products on the market don’t meet. Without structural changes to both product design and processing economics, EPR risks creating a requirement without a workable path forward.
“If the system is forced to absorb volume without the“Without the right infrastructure or economic incentives in place, the system will default to the fastest and cheapest routes, not the ones that create the most value,” Alessi says. “That leads to more downcycling, more waste-to-energy, and less value captured overall—which goes against the whole point of EPR.”
For brands, the takeaway goes beyond just compliance planning. Alessi argues they need to design with the end system in mind from the start—simplifying material choices, cutting down on blends and complex trims, and making sure product specs match what recyclers can actually handle at scale. This is a conversation about design and sourcing, not just regulation.
What compliance will reshape
Beyond the challenges of infrastructure and data, DPP and EPR regulations are likely to have a quieter but significant impact on how fashion companies structure their supply chains.
Lu predicts a consolidation in sourcing. To meet data collection and transparency requirements, brands may work with fewer suppliers—choosing partners who can build and share compliant data systems. “Fewer suppliers may meet all the criteria,” he says, with relationships shifting from transactional to more strategic. Brands that invest in upgrading their key suppliers’ digital and traceability capabilities will be in a stronger position; those that don’t will keep running into compliance gaps at the same points in their chains.
Lu points out that the cost burden is currently falling mostly on suppliers—especially smaller manufacturers in developing countries who lack the money, IT infrastructure, and skilled workforce to comply. Over time, he expects brands and retailers to share more of the costs directly, treating compliance investment as a strategic expense rather than just a supplier requirement. “The goal is to move from a transactional relationship to a long-term partnership,” he says, “and truly invest in suppliers to help them build capacity.”
H&M Group, which has been building circular infrastructure longer than most, sees the regulatory direction as aligned with its existing strategy. The company has expanded resale across multiple brands and markets, and says it is actively working with policymakers to push for harmonized EPR implementation across EU member states—a recurring concern as brands try to build systems that work consistently across markets. “Clear and harmonized legislation on textile end-of-life management and extended producer responsibility are essential tools to support and drive systemic change across the entire industry,” a spokesperson for the group says.
Adwoa Aboah for the Stella McCartney H&M campaign.
Photo: Courtesy of H&M Group
Ready or not
There are real signs of progress. Industry awareness of DPP and EPR has grown sharply, notes Amlani from Retail Strategy Group, and some brands are adding new roles focused on circularity, though with mixed success. Investment in traceability and data infrastructure is speeding up. Pauline God, policy and industry expert at TrusTrace—a traceability and compliance platform that helps brands collect and verify supplier-level production data—says the company has seen a “decisive shift” in recent months, with more brands moving from cautious exploration to actively investing in the systems needed for DPP readiness.
But the underlying challenges remain unresolved. Standardizing data across different methods requires government-to-government coordination that goes far beyond what any single company or trade group can achieve. Physical infrastructure for sorting and recycling hasn’t kept up with policy goals. And the economic model behind circularity at scale—where the value recovered from a garment exceeds the cost of processing it—is still fragile.
“Since the requirements aren’t fully defined yet, no solution today can claim to fully support the EU DPP end-to-end,” Mayer says. What matters most right now, he argues, is building flexible data infrastructure that can adapt as rules become clearer.It can evolve as requirements grow—because whatever is defined at the start is just a beginning. With a simplified DPP deadline in late 2027 and EPR at scale by April 2028, the time to build compliant infrastructure is tighter than the industry’s current pace suggests. The question is no longer whether the industry supports the direction—it’s whether the necessary systems can be built in time, and who pays the price if they aren’t.
Franck offers a more optimistic view on the execution challenge. “What’s often overlooked,” she says, “is that once a product has a digital product passport, it becomes an active part of the system—it connects communication across departments, provides visibility across value chain partners, reports to regulators, authenticates itself, and supports customer service. The hardest part is getting started. Once it’s in motion, the system starts to build its own momentum.”
The tougher question is: what happens to companies that treat the starting line as their final goal? For Amlani, the risk is that compliance becomes the ceiling instead of the floor—limiting the process innovation and deeper supplier relationships the industry needs to build resilience against future shocks. She argues that DPP and EPR, when pursued with real commitment, are the catalysts the industry has long needed. “The biggest mistake is treating compliance as the finish line,” Amlani says.
The consequences of fragmented implementation go far beyond compliance budgets. “Without a holistic systems approach,” Alessi says, “regulation risks adding complexity on top of unresolved infrastructure gaps.”
Frequently Asked Questions
Here is a list of FAQs about the fashion industrys reckoning with compliance written in a natural tone with clear direct answers
BeginnerLevel Questions
1 What does fashions reckoning with compliance actually mean
It means fashion brands are finally being forcedby laws activists and customersto prove they are paying fair wages keeping workers safe and not polluting the environment For decades they got away with promising to do better now they have to actually show receipts
2 Why is this happening now
A few big reasons New laws in Europe and the US make it illegal to ignore supply chain problems Plus social media makes it easy for scandals to go viral instantly
3 Is this just about sweatshops
No but sweatshops are a huge part of it Compliance covers everything fair wages safe buildings no forced or child labor water pollution from dyeing chemical use and even animal welfare Its the whole messy system from cotton field to store rack
4 How does this affect me as a shopper
You might see prices go up slightly but youll also get more honest labels Ethical or sustainable claims will actually mean something instead of just being marketing buzzwords Youll also have more power to sue brands if they lie about their practices
5 Whats a simple example of a compliance failure
Imagine a brand says their jeans are made in a fair trade factory But an audit finds workers are paid below minimum wage and the fire exits are locked Thats a compliance failure The brand gets fined the factory loses the contract and the label gets removed
IntermediateLevel Questions
6 What are the biggest challenges brands face in fixing compliance
Supply chains are incredibly complex A single tshirt might involve farmers in India spinners in China dyers in Bangladesh and sewers in Turkey A brand doesnt own these factoriesthey just buy from them Getting every single step to follow the rules is like herding cats across 20 countries