Fashion's future: adapting to the EU's new Ecodesign regulation

The fashion and luxury industry, long associated with exclusivity, craftsmanship, and heritage, is now facing a global shift towards more sustainable and environmentally responsible practices. As sustainability concerns gain momentum it is becoming a key factor in the entire product lifecycle, with consumers and investors favouring brands that combine luxury with ethical values. 

This change is driven by growing consumer awareness, shifting behaviours, and stricter government regulations. Is your brand fit for the future?

We explore the EU's latest legal requirements on Ecodesign, looking at what brands need to do to address these changes and the practical steps they can take going forward.   

What is the ESPR?

On 18 July 2024, as part of the European Green Deal and the Circular Economy Action Plan, the European Commission introduced the Ecodesign for Sustainable Products Regulation ('ESPR'). This regulation aims to improve the sustainability and impact of products placed on the EU market by introducing measures such as digital passports for products and a ban on the destruction of unsold consumer goods.

Digital product passport (DPP)

A key component of the ESPR, is the Digital Product Passport ('DPP'), designed to track the carbon footprint of products. This digital profile will provide essential information about a product's sustainability, composition, and lifecycle. It will include details on materials used, recyclability, repairability, and expected lifespan of a single product. Accessible via a scannable QR code, the DPP will enable consumers and authorities to verify sustainability data through a centralised registry. 

Banning the destruction of unsold goods

Starting on 19 July 2026, large companies will be required to report the quantity and weight of unsold consumer goods, including the reasons for their destruction, with this information made publicly available annually. Medium-sized companies have until 19 July 2030 to comply, while smaller companies are exempt but encouraged to adopt sustainable practices. More details will be provided in the working plan set for release in April 2025.   

Will the ESPR impact non-EU companies?

The ESPR applies to all products sold within the EU, regardless of where they are manufactured. For non-EU manufacturers, this means adapting their products to meet EU sustainability standards, which include durability, repairability, and recyclability. Additionally, compliance with the new digital passport system will be mandatory. 

For manufacturers in developing countries that export large quantities of textiles to the EU, the new requirements may present significant challenges. The DPP will monitor the sustainability performance of products and materials, potentially complicating matters for companies relying on global supply chains that are not yet fully automated. 

While the ESPR does not apply in the US, similar domestic regulations are in place, such as the New York Fashion Act and the California Climate Corporate Data Accountability Act.

What are the challenges and opportunities for companies?

The ESPR presents both challenges and opportunities for fashion brands operating in the EU and those exporting to the EU market. While the regulation raises the bar for product design, sustainability, and transparency, it also offers an opportunity to innovate and remain competitive in a rapidly evolving market.

Some of the main challenges businesses will face include:

Redesigning products for durability, repairability and recyclability 

The regulation requires businesses to rethink the traditional composition of garments, designing products that last longer, are easier to repair, and can be recycled. This may necessitate significant investment in research and development for new, flexible product designs. Collaborating (or consulting) with sustainability experts and major environmentally focused brands, which focuses on both sustainable materials and repair service for customers, can help companies meet these new requirements. 

Complying with the digital product passport system

Global supply chains, often involving numerous suppliers and regions, may complicate compliance with ESPR standards. Enhancing communication with suppliers, conducting regular assessments, and adopting lifecycle assessment tools will help brands stay on track. Some prominent brands now offer product descriptions with sustainability scores to help customers make more informed purchasing decisions.

Substance transparency and reducing hazardous materials

The ESPR mandates the reduction of harmful substances, requiring companies to review their materials used and find eco-friendly alternatives. Today, a vast number of brands are already producing sustainably sourced garments and partnering with mills to ensure non-toxic dyes and sustainable fabrics, which serve as a model for those looking to reduce their environmental impact. Alongside that, reworking fashion waste into new products is gaining momentum. For example, a community led organisation in Ghana is collecting fast fashion waste from their beaches and turning it into contemporary furniture.

Cost of implementing new technologies and processes

The investment required to implement these changes can be particularly taxing for smaller businesses. Taking advantage of the EU grants with funding opportunities to help companies comply with sustainability regulations and focusing on long-term savings through resource efficiency will help mitigate some of these costs. 

Our recommendations

Overall, the ESPR presents a major opportunity for proactive companies to gain a competitive edge by embracing sustainable product design. As consumer awareness of environmental issues grows, transitioning the product offering to be genuinely sustainable will enhance brand reputation, customer loyalty and attract environmentally-conscious customers. 

Over the long-term, the ESPR will help fashion brands future-proof their operations. With environmental regulations becoming stricter worldwide, companies that adopt ESPR standards now will be better prepared for similar regulations in other markets, making them more resilient to future policy changes. 

What are the key deadlines?

The ESPR requirements will be implemented gradually. The Ecodesign Forum and ESPR Working Plan will determine the timeline and product priorities. The first working plan is due by April 2025, outlining the products to be prioritised and when the requirements will take effect. 

How can we help?

• Offering guidance on the ESPR, whether manufacturing goods within the EU or exporting goods in the EU;
• Assisting with cross border corporate governance audits and reviews to meet the EU and US regulatory requirements;
• Identifying reputational risks, planning ahead, and assisting with crisis management; and
• Providing guidance on sustainability partnerships, commercial agreements and associated due diligence.

Our global, multi-disciplinary team, with extensive experience in the fashion sector, is here to address your complex needs. Please get in touch if we can assist you.