The fashion industry once hoped that sustainability regulations would provide clear direction and help shape their strategies, aligning with both industry and government expectations. But now that these rules are arriving, brands and suppliers are overwhelmed.

Morten Lehmann, co-founder and CEO of sustainability advisory firm Tailwind and former chief sustainability officer of the Global Fashion Agenda, describes the influx as a “tsunami.” “We’ve been saying for so long that we need regulation, and suddenly it all came at the same time,” he says.

The landscape is a maze of acronyms. In Europe, there’s the Ecodesign for Sustainable Products Regulation (ESPR) with its digital product passport (DPP), the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the Green Claims Directive (GCD)—just a few of the measures keeping supply chain leaders awake at night. In the U.S., efforts are more fragmented but equally confusing, with California’s Responsible Textile Recovery Act (SB-707), the Garment Worker Protection Act (SB62), and the Climate Corporate Data Accountability Act (SB253), plus the yet-to-be-passed Fashion Act (not to be confused with the New York Fashion Workers Act, which passed in December 2024).

These regulations all aim to make fashion more responsible for how it outfits the world, and some are already taking effect. They bring a host of new guidelines and laws that companies must quickly comply with.

The ESPR, which outlined new measures this month and will see requirements roll out this summer, is part of Europe’s push toward a more circular, sustainable economy. A recent measure, announced last week, will ban large companies from destroying unsold clothing and shoes starting July 19, 2026.

The CSRD requires large EU and non-EU companies to publicly report their ESG efforts. However, the bureaucratic burden it introduced upon taking effect in 2024 led to an agreement in December to simplify it. The provisional Omnibus agreement, currently awaiting European Parliament endorsement, would reduce the number of companies subject to the CSRD by 80%—applying only to those with over a thousand employees and a net turnover exceeding €450 million—and delay reporting deadlines from this year to 2028. Industry leaders, concerned about Europe’s competitiveness if compliance becomes too burdensome, recently called on the European Commission to continue supporting such regulatory relief.

The CSDDD focuses on establishing due diligence to identify and prevent adverse human rights and environmental impacts in supply chains. It currently applies only to companies with at least 5,000 employees and a net turnover of €1.5 billion.

The GCD, which targets greenwashing by requiring companies to substantiate their sustainability claims, “is the most important one, especially after the watering down of the [CSRD] reporting,” says Barbara Oswald, chief commercial officer at Swiss sustainability certification provider Bluesign. Oswald notes that this directive, expected to take effect in September, will help brands identify reliable sustainability data from suppliers and build consumer trust.

Lehmann observes that both the sustainability regulations and the language used to describe them are changing “almost as fast as fashion.” “On top of geopolitics, we also have this kind of volatility where you don’t even know where lawmakers are taking us,” he adds.

In the U.S., lawmakers appear to be leaning toward deregulation. On Thursday…The Trump administration announced plans to discard the long-standing federal assessment that climate change harms people and the environment, stripping the government of its authority to limit the emissions driving global warming.

This rollback is “deeply alarming,” says Lehmann. “Cheap, reliable renewable energy isn’t just climate policy—it’s economic strategy. It drives job creation, attracts investment, and builds future-proof industrial leadership,” he explains. “Meanwhile, stepping back from climate safeguards risks losing markets, innovation, and economic resilience to nations that view the clean energy transition as the next frontier of global competitiveness.”

Beyond politics, the volatility—and sometimes confusion—around sustainability is creating bottlenecks in the supply chain. Brands are struggling to prioritize actions, suppliers are left covering costs, and developing new business takes longer as both sides navigate compliance requirements.

For brands to comply, they need data from their suppliers. For suppliers to comply, they must invest in upskilling workers, installing new hardware and software for data collection, and sometimes running multiple systems simultaneously—all before making actual sustainability improvements. These efforts come at a significant cost. Adding tariffs into the mix complicates matters further. “The pressure is on manufacturers to absorb part of those tariffs, so you end up with lower prices but more work,” says Matthijs Crietee, secretary general of the International Apparel Federation (IAF). “That’s a difficult equation.”

At Ereks-Blue Matters, a circular garment manufacturer in Istanbul serving clients like Fiorucci and Wrangler, new reporting requirements have been both a benefit and a burden. While they have “definitely improved conditions” by providing benchmarks to track environmental progress year over year, according to Romain Narcy, head of strategy and innovation, they also demand more time and staff to manage data collection and ramp up production. “The onboarding process for clients now takes significantly longer, as comprehensive social and environmental audits must be completed and assessed before production can begin.”

Narcy notes that ESG regulations have led brands to request “comprehensive documentation,” including Digital Product Passports (DPPs), Life Cycle Assessments (LCAs), and Social Life Cycle Assessments. “With the exception of one brand that covers the cost of a single audit, our factory is currently absorbing the majority of these compliance costs,” he says. Narcy emphasizes that factories need more support to meet these growing demands; without it, brand-supplier relationships could become strained at a time when collaboration is essential to keeping a troubled supply chain moving.

Beyond costs, data collection lacks sufficient harmonization. “If you’re a supplier with 20 clients, and they aren’t aligned on what they ask for, how they ask for it, or what format to use, that multiplies the work you have to do,” Crietee explains. “This is really an industry challenge.”

Some brands are attempting to align their data collection efforts through initiatives like The Fashion Pact’s European Accelerator. Launched in November with signatories including Chanel, Kering, Prada Group, and Zegna Group, this initiative aims to establish a simplified reporting process for suppliers across luxury fashion. “Trust, open discussions, and a willingness to find common ground are the key enablers of this initiative,” says Edoardo Zegna, chief marketing and sustainability officer.At the time, an officer from Zegna Group commented that the new ESG requirements need not slow the industry. “Bottlenecks can occur when these rules advance a bit too quickly,” said Bluesign’s Oswald. “But any brand that understands its supply chain, knows where its data originates, and is aware of the materials used in its final products and their applications has nothing to fear.”

For now, any bottlenecks reflect bureaucracy taking precedence over the values that should drive sustainability. Oswald emphasizes that brands must return to what truly matters: their core commitments.

Alongside other retailers such as Cascale, Fair Wear, and Zalando Group, Zegna is developing a unified tool—the Retailer Brand Due Diligence Questionnaire—as well as a platform called One Retail Hub, created in partnership with TrusTrace to enable seamless data exchange. According to a statement from Zegna Group, this effort aims to address the “fragmented landscape of initiatives and systems” that has emerged alongside new regulations.

Frequently Asked Questions
FAQs Is Sustainability Slowing Down Supply Chains

BeginnerLevel Questions

1 What does sustainability in supply chains actually mean
It means managing the flow of goodsfrom raw materials to the final customerin a way that minimizes environmental harm ensures fair treatment for workers and remains economically viable for the long term

2 So is it true that going green makes everything slower
It can especially at first Adding new steps like vetting ecofriendly suppliers using slower lowcarbon transport or implementing circular systems often adds complexity and time compared to traditional lessregulated methods

3 What are the main things that cause these slowdowns
Common bottlenecks include finding and certifying sustainable suppliers longer shipping routes or modes to cut emissions more rigorous tracking and paperwork for materials and the initial setup of recycling or reuse programs

4 Are there any benefits that might offset the slowness
Absolutely While there can be initial delays sustainability often leads to greater longterm efficiency and resilience Benefits include cost savings from reduced waste and energy use stronger brand loyalty compliance with future regulations and less risk from climate disruptions or resource shortages

Advanced Practical Questions

5 Isnt faster always better in supply chain management
Not necessarily The old model prioritized speed and low cost above all else which can be fragile A sustainable model prioritizes resilience and stability A slightly slower but predictable and ethical chain is often better than a fast one that breaks down due to environmental social or regulatory shocks

6 Can you give a real example of this tradeoff
Sure A company switching from air freight to ocean or rail freight for most goods dramatically reduces carbon emissions but adds weeks to delivery times Conversely a company investing in a network of local sustainable suppliers might have shorter shipping distances potentially speeding up parts of its chain while being greener

7 How are companies trying to make sustainable chains faster
Theyre using technology and new strategies
Advanced Tech Using AI and data analytics to optimize routes and inventory and blockchain for instant transparent tracking of sustainable materials