Regulating the Fashion Sector: What’s on the Horizon?

The fashion sector has been creeping up the priority list of regulators worldwide and there are a number of regulations on the horizon which will force players in the industry to reconsider how they create their products to comply with sustainability requirements. 

Ecodesign for Sustainable Product Regulation

Overview

The EU is taking the lead on ecodesign, having set its agenda under the Circular Economy Action Plan in 2020. As part of this broader agenda, the Ecodesign for Sustainable Products Regulation (“ESPR”) came into force on 18 July 2024 and is the cornerstone of the EU’s approach to improving the circularity, energy performance, recyclability and durability of products on the EU market. 

It broadens the scope of its predecessor, the Ecodesign Directive 2009 (which it repeals), both in terms of products in scope and new obligations. However, to avoid duplication, the ESPR does not apply to products for which sustainability requirements are already covered by existing legislation, such as food, medicinal products, plants and vehicles.

The ESPR sets the broad parameters for the ecodesign of products, while the detailed product specifications will be set out in delegated legislation, which the European Commission will need to publish by July 2029. Once a delegated act has entered into force, the relevant industry will have 18 months to comply with it.

In the meantime, the ESPR itself introduces a number of obligations which have already come into force. For example, companies will have to disclose the volume of their unsold consumer products which were discarded each year. The first deadline for this will be at the end of a company’s first full financial year following the ESPR’s entry into force which, for some companies, may be imminent.

The ESPR also introduces the digital product passport (“DPP”), a digital identity card which will store information about a product’s components and materials to demonstrate its sustainability and provide information for consumers about repair and recycling. The specifications for DPPs will be set out in the relevant product’s delegated act.

What does this mean for the fashion sector?

In addition to its general provisions, the ESPR introduces a ban on the destruction of unsold textiles and footwear. This will come into effect for large companies from 19 July 2026, and for medium-sized enterprises from 19 July 2030.

Additionally, we should expect a delegated act for textiles - in particular garments and footwear - as a matter of priority based on the Commission’s Ecodesign Working Plan, likely in 2027. The delegated act will set out the detail of the specific ecodesign requirements for the relevant products, as well as (among other things) requirements for labelling, the obligations for the different players in the supply chain, and the specifications for DPPs. 

Compliance with the DPP specifications will be a condition for placing fashion products on the market, and as such will be an important aspect of how the ESPR’s requirements are enforced. We know that many companies are already giving thought to how to implement the expected changes across their supply chain to ensure uninterrupted market access.

Outside of the EU

Other jurisdictions are also taking steps to consider the impact of the fashion sector on sustainability and circularity, notably in the UK and New York, as considered in more detail here.

Packaging Extended Producer Responsibility Regulations

While not specific to the fashion sector, the UK also has product circularity on its agenda. The upcoming changes to the UK’s packaging regulations are expected to have a significant impact on companies selling products in the UK. Given the fashion sector’s reliance on online sales and delivery, this will be of particular importance. 

The regime on packaging extended producer responsibility (the “pEPR”) is mainly implemented by the Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024 (SI 2024/1332) (the “PRO Regulations”), which came into force on 1 January 2025. The pEPR will come into effect from 1 October 2025 and will make producers (which includes distributors, brand owners, importers, sellers, and others) responsible for the financial burden of managing all types of packaging waste. 

The PRO Regulations differentiate between small and large producers, both of which will need to collect and report on data about their packaging and waste. However, recycling obligations are only placed on large producers, who will also be required to pay disposal and administration fees for the household packaging they supply. Such fees will be based on the volume of packaging placed on the market, but will be reduced if the packaging is easier to recycle (known as fee modulation). 

Updated illustrative fees were published in December 2024 and they indicate that, for large producers, costs under the pEPR regime may well range in the tens of millions of pounds. The government is expected to publish information in 2025 regarding pEPR fee modulation, which will be crucial for producers looking to improve the sustainability of their packaging and reduce their costs.

The New York Fashion Act

Earlier this year, the Fashion Sustainability and Social Accountability Act (the “FSSA Act”) was introduced in the New York Senate and Assembly. This bill was first proposed in 2021 and again in 2023, and on both occasions the bill failed to pass in either house. This third iteration of the bill is substantively similar to the previous two, which raises questions as to whether it will get any further this time given very little has changed. The bill is currently under consideration in both the Senate and Assembly but, before it can go to the New York State Governor, an identical draft of the bill would need to be approved by both houses.

The FSSA Act would require fashion sellers to carry out environmental due diligence for the parts of their business which relate to apparel, footwear or fashion bags. In addition, companies would be required to set science-based targets to reduce their greenhouse gas emissions, embed responsible business practices throughout their supply chains, and work with suppliers to improve chemical management during the production process. 

While the fate of the FSSA Act remains uncertain, the repeated attempts to introduce it into law implies ongoing pressure on the sector to improve its sustainability credentials.