Trade Tensions, ESG pressure: Why Fashion Can’t Afford to Wait on Supply Chain Transparency

By Debbie Shakespeare, Senior Director of Sustainability, Solutions Group, Avery Dennison

​There’s never been a tougher time for fashion supply chains. Trade tensions are rising, sustainability regulations are looming, and customers are asking harder questions about where and how their clothes are made.

For years, green innovation was mostly about marketing. Now it’s about business survival. Evolving ESG (Environmental, Social, and Governance) compliance is also a consideration. While it’s true that reduction of CO₂ emissions is deemed off-track in some countries, the Paris Agreement’s goal of Net Zero emissions by 2050 is still in place. There’s also a growing emphasis for governments and companies to shift from ambition to implementation. 

EU legislators are leading the way. Every textile product imported and sold across Europe will soon need to carry a Digital Product Passport (DPP), a scannable digital label potentially packed with information about material origins, carbon footprint, recyclability, and working conditions.

This is part of a bigger shift toward a ‘circular economy’, but the impact for brands is immediate: DPPs will turn transparency from a nice-to-have into a must.

ESG regulations demand transparency

The message is clear: if you want your brand to flourish, you’ll need full visibility into your supply chain, or risk being shut out. 

Textile products placed in the EU market will require a DPP from either late 2028 or 2029, according to the Ecodesign for Sustainable Products and Energy Labelling Working Plan 2025-2030. But, a recent Avery Dennison survey has found that nearly half of UK and US fashion retailers (49%) admit they’re not prepared, and only a tiny minority say they feel fully ready. The risk if you can’t comply? Fines, border delays, market bans, and public backlash.

But here’s the flip side: smart brands see this as more than a compliance headache – it’s an opportunity. DPPs aren’t just digital labels. They’re a gateway to supply chain agility and enhanced decision-making. Each product gets a ‘digital twin’ that stores key data from source to shelf, giving stakeholders from regulators to customers to recyclers access to the story of that dress, T-shirt, or jacket. 

DPPs for future-proofed fashion

Many brands are taking positive steps towards supporting the circular economy that fashion urgently needs, if Net Zero targets are to be met. 

DPPs will be pivotal to facilitating that circularity as well as improving market agility. Here are just some of the business benefits of achieving item-level visibility in this way: 

• Spot bottlenecks and reduce waste early.
  With real-time data on materials, supplier activities, and production, brands can identify issues before they snowball, cutting both costs and carbon footprints. Better visibility means fewer surprises, fewer delays, and fewer unsold goods piling up.
• Align production more closely with actual demand.
  When you know where your inventory is at every stage, you can produce smarter, not just more. This avoids the classic fashion snag of overproduction and markdown-heavy sales cycles, and helps brands pivot faster when consumer demand shifts.
• Validate sustainability claims with confidence.
  Consumers are actually more attuned to greenwashing than ever before. DPPs give brands the data they need to prove, not just promise, their environmental and social credentials, helping protect reputation and meet both regulatory and consumer expectations.
• Streamline customs clearance and avoid costly delays.
  In an era of rising tariffs and shifting trade rules, embedded proof of origin and production details can make the difference between smooth sailing and containers stuck at port. DPPs and easily-accessible data help border agents verify products fast, cutting friction and downtime.
• Open new channels for customer trust and engagement.
  DPPs don’t stop at compliance – they also support brand engagement. With one scan, shoppers can see where an item was made, how to care for it, how to repair it, and even how to recycle or resell it to extend its life, reinforcing trust and helping extend the product’s life cycle. In this way, DPPs become a compelling, data-rich storytelling tool, opening a direct dialogue between brands and consumers, weaving together provenance, purpose, and ESG narratives.

Don’t delay as DPPs and circularity make business sense right now 

One optimistic view is that rising trade barriers and tariffs on imported textiles are reshaping global supply chains — and unexpectedly opening new doors for circularity in fashion.

As importing virgin fibres and finished garments gets more expensive, brands are rethinking their supply chains and investing closer to home. This shift is driving innovation in advanced textile recycling technologies — from chemical fibre regeneration to textile-to-textile mechanical systems — making it easier to turn old clothes into new ones. 

Higher tariffs also make a strong business case for designing products that can be taken apart easily, and setting up take-back programmes that turn yesterday’s collections into tomorrow’s raw materials. 

In short, what used to be a nice-to-have sustainability goal is becoming a smart, strategic move — helping brands cut risks, lower costs, and build more resilient, circular systems for the future. DPPs can help facilitate and champion these new models of circular production.

Brands that act now and build supply chain visibility into their business will be better placed to stay agile, competitive, circular, and resilient in the face of whatever comes next. While it’s not entirely clear how committed to ESG rules governments will be in the next decade, there’s undoubtedly a lot to be said for being prepared and taking responsibility, while your competitors scramble to catch up.