The new set of global ESG rules to future-proof your business

  I  
November 28, 2023
  I  
xx min read

Enabling companies to make well-considered decisions about their purchasing

European consumption of textiles has the fourth highest impact on the environment and climate change, after food, housing and mobility. It is one of the top three pressures on water and land use, and the top five in terms of raw material use and greenhouse gas emissions.

The average European throws away 11kg of textiles every year. Around the world, a truckload of textiles is landfilled or incinerated every single second. Global textile production almost doubled between 2000 and 2015, and the consumption of clothing and footwear is expected to increase by 63% by 2030.[1]

Against this alarming backdrop,  the European Union and national governments in the EU pushing for laws and regulations that promote sustainability in the textile industry. The “EU Strategy for Sustainable and Circular Textiles” was adopted in March 2022. The plan proposes several measures that target the entire life cycle of textile products:

  • New design requirements with mandatory minimums for recycled fibres in textiles
  • Clearer information on textiles and a Digital Product Passport with mandatory information on circularity and other key environmental aspects
  • Tighter controls on greenwashing
  • Action to address the unintentional release of microplastics from textiles
  • Harmonised EU rules on the Extended Producer Responsibility (EPR) for textiles
  • A transition pathway for the Textile Ecosystem to define how to achieve the 2030 goals.

It is not only in the EU that measurements are being taken. In the U.S., for example, we see the adoption of the Fashion Act, which focuses on requiring retailers and manufacturers to disclose their environmental and social policies. On top of this, they have to establish a fund for projects that verifiably contribute directly to communities and environmental justice. [2]

Also passed is the UK Modern Slavery Act, which holds companies accountable for the working conditions of their suppliers throughout their value chain. This requires annual reporting that slavery and human trafficking are excluded from the business and value chain. [3]

Why should you care?

Companies in the textile industry must prepare themselves for the upcoming rules and regulations, to future-proof their business. The sooner action is taken to start the necessary preparations for compliance with these regulations, the higher chance textile and fashion companies will have to de-risk their business.

Here is a short explanation of the regulations that are either already in force or soon will be:

Extended Producer Responsibility (EPR)

​The EPR is an environmental policy that regulates the producer’s responsibility for the full product life cycle from design until the end of life. This includes the mitigation of the environmental impact of products throughout their complete life cycle, including for example waste collection and recycling. The legislation of the EPR is already in effect in France and Germany and will follow soon in other EU countries.

The Corporate Sustainability Reporting Directive (CSRD)

The CSRD is the new EU legislation requiring all large companies to publish regular reports on their environmental and social impact activities. It helps investors, consumers, policymakers, and other stakeholders evaluate large companies’ non-financial performance. Large companies, with more than 250 and a turnover of 40 million euros or a 20 million euro balance, must be ready by 2025.

Digital Product Passport​

The Digital Product Passport (DPP) will enhance product traceability, allowing consumers and manufacturers to access all the information concerning a specific product. It can provide information on the origin, composition, repair, and disassembly options of a product, as well as how the various components can be recycled.

With these upcoming legislative changes, digital solutions are driving force to a more sustainable economy. Data and technology can enhance much-needed transparency in the fashion industry to the benefit of all.

At tex.tracer we can help you become compliant with the upcoming rules and regulations and prepare you for the digital product passport, based on transparency within your value chain. It is our mission to create a better fashion industry and work with you to realise this. Get in touch to find out more!

[1]https://ec.europa.eu/commission/presscorner/detail/en/QANDA_22_2015

[2]https://static1.squarespace.com/static/61dd9f6e0419d83f2fb548fb/t/6373f904f4f9177c12dfc2bc/1668544782604/Fact+Sheet.pd

[3]https://www.legislation.gov.uk/ukpga/2015/30/enacted