Navigating Sustainability: the biggest challenges for fashion brands in 2025

Addressing the polluting effects of garment production and supply involves significant structural and operational changes. Some of the key challenges for brands to navigate are:

1. Adherence to Regulations

EU Corporate Sustainability Reporting Directive (CSRD), the Digital Product Passport (DPP), and other emerging Government regulations imply a stricter code for companies to follow.

Regular audits will make it compulsory for brands to comply with global standards to survive in the market. This will entail an overhaul of traditional data collection and reporting systems and result in operational challenges.

The immediate steps required to integrate green practices might seem like a financial burden, but they will deliver economic and operational benefits by future-proofing the business to climate change and resource scarcity.

2. Shift Towards Circular Business Models

A circular economy focuses on reducing wastage through reuse, recycling, repair, and resale. The EU’s Circular Economy Action Plan and the EU Textile Strategy are encouraging companies to adopt the resource-efficient model of a circular economy.

The transition to a circular economy is a monumental shift that involves redesigning linear supply chains and innovating products to fit into the model. This is both a challenge and an opportunity for forward-looking brands.

Technology can play a pivotal role in making this switch smoother. AI, automation, and digital tools enable a seamless transition that helps companies build scalable and profitable circular solutions.

3. Supply Chain Transparency

The supply chain is a core component of sustainability initiatives. By embedding sustainability into the supply chain, brands can address both social and environmental impacts.

This requires leveraging technology to enhance product traceability. Product Lifecycle Management systems are emerging as the solution to track the movement of products in the supply chain. 

Steve describes it as: “Software that would be used by design, sourcing, product development, compliance, costing, and supplier portal, and what it does is it’s everything around product ideation through development to when the product is ready to go to market.”

Friederike further explains how PLM is a centralized data repository for all product-related information across departments. It can be accessed by internal teams as well as vendors to store product details at each step of the product life cycle. This also helps in breaking silos and promoting collaboration across teams leading to better communication.

4. Innovation in Material and Design

Design plays a crucial role in determining a product’s environmental impact. Friederike quotes the Ellen McArthur Foundation to emphasize the importance of design in sustainability – “80% of a product’s environmental impact is influenced by decisions made at the design stage.”

Bio-based fabrics and recyclable fabrics are the future of apparel. Many brands have already made the switch fully or partially towards sustainable fabric. Working with these new fabrics while maintaining style and profitability is a challenge brands need to overcome.  

The path forward is to invest in R&D for material innovation and collaborate with other brands and industries to accelerate the process of innovation.