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Hot on the heels of the biggest election year in history, change is afoot in Europe.
It’s been six years since the European Green Deal was introduced, and three since the strategy for sustainable and circular textiles. Both kick-started a comprehensive flurry of EU regulations and directives, spanning ecodesign, waste, forced labour, unsold goods, digital product passports, traceability and transparency. It’s fair to say the EU has “rained” regulations for the last two years, says Lisa Lang, chairwoman of green industry transformation platform Open Connector Alliance, as members of the European Parliament rushed to fulfil their promises before their terms ended with the elections in June 2024.
A new report outlines the key takeaways from 15 legislative initiatives, with the hopes of giving suppliers a voice as the landscape evolves.
Now, a new parliament is in place, cementing Europe’s swing to the right, and it has a new mandate to boot. This is focused on strategic autonomy and European competitiveness. “Considerable progress has been made on the initiatives outlined in the strategy for sustainable and circular textiles, many of which will either be put on the table or enter into force in 2025,” a spokesperson for the European Commission told Vogue Business. “We must and will stay the course on the goals set out in the European Green Deal. However, as announced by President von der Leyen, supporting measures will also be introduced to boost competitiveness and clean industrialisation in Europe. EU measures aimed at enhancing strategic autonomy allow for fostering self-reliance and reducing dependency on non-EU suppliers, increased competitiveness and boosting innovation.”
Exactly how this new focus will play out is still up for debate. Almost every day, there are new rumours swirling and new proposals being leaked. But clues are starting to emerge.
Sustainability in service of competitiveness
In the previous parliament, sustainability was the end goal for EU policymakers. Now, sustainability is a means to an end, in service of European competitiveness, explains Andreas Rasche, professor of business in society at the Copenhagen Business School Centre for Sustainability.
The writing has been on the wall for a while. In September, former European Central Bank president Mario Draghi published a long-awaited report on EU competitiveness, as requested by the European Commission. He concluded that Europe has lost its competitive edge over other countries, pointing to its failure to capitalise on the technological revolution (fashion was one of the industries specifically called out on this point), and its vulnerability in the face of increased geopolitical instability, having become dependent on other countries (including Russia as its most important energy supplier). As a result, the EU is failing to achieve “sustainable growth”, and the GDP gap between Europe and the US is widening. He made a number of “horizontal” or cross-sector recommendations, including: accelerating innovation, closing the skills gap, sustaining investment, revamping competition and strengthening governance.
The renewed emphasis on competitiveness is quickly trickling down into regulation. At the end of January, the EU published its Competitiveness Compass, described as “a roadmap to restore Europe’s dynamism and boost economic growth”. Within it, there is a proposed omnibus simplification package, which is intended to curb the administrative load of incoming regulations by 25 per cent for larger firms and 35 per cent for SMEs. The three particular regulations reopened for refinement are the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU taxonomy.
This is a direct response to the red flags raised by European businesses — including fashion suppliers — that increased reporting rules would hinder competitiveness, but it has sparked significant debate. Netizens worry that simplifying the reporting processes in particular will water down the impact of regulation, and there have been reports of right-wing groups lobbying policymakers to pull back on hard-won sustainability progress under the guise of simplification.
This is only likely to accelerate as US President Donald Trump settles into his second term — he has already expressed dissatisfaction with CSRD, which will affect US firms selling into the EU.
“The assumption is that if companies report less, they have less paperwork and red tape to contend with, and they become more competitive,” explains Rasche. “[But] simplifying the reporting framework means investors have less information, which is a problem. There is also a risk that efforts to simplify regulations will turn into a deregulation exercise. We will probably see a weakening of more substantive regulations like the due diligence regulation, while some companies will move out of scope and the implementation may be delayed.”
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An opportunity to influence policy
With the introduction of the strategy for sustainable and circular textiles, the EU laid out a clear direction of travel for the fashion industry. Producers would curb waste and take more responsibility for what they created and sold, supply chains would be tightened and made more transparent, with digital infrastructure underpinning them, and there would be a broad shift towards circularity. The change in focus puts this clarity at risk.
If policymakers start to roll back directives or change deadlines after brands have begun the complex and often expensive process of compliance, it could erode trust between the fashion industry and its regulators. “It’s like playing football with moving goalposts,” says Rasche. “What the EU is doing right now is very dangerous, because they are playing with the trust of businesses who have already started investing in new systems. Businesses need certainty, because these changes don’t happen overnight.”
Industries with more established lobbying mechanisms will understand that this regulatory “ping pong” is par for the course, counters Lang. If anything, the shift in focus is an opportunity for fashion to step up and contribute to the way it will be regulated moving forward. “The reason fashion feels targeted or unprepared for regulation is because it has never been regulated before, and it hasn’t tried hard enough to consolidate,” she says. “Other industries come together and negotiate with policymakers. Fashion is missing that backbone.”
Beyond forming a more unified industry position and leveraging it to influence policy, fashion could engage with policymakers in more piecemeal ways, adds Marta Inchausti Moya, public affairs manager at the Global Fashion Agenda. The non-profit is a founding member of The Policy Hub, which acts as a bridge between policymakers and its 700-plus members from the fashion and footwear industries.
Alongside reframing sustainability regulations through the lens of competitiveness, the EU is welcoming debate on what the implementation phase should look like. A spokesperson for the European Commission says it is committed to finding the “simplest, fairest and most cost-efficient way” to implement the existing legal framework for 2030. On this front, there are a number of stakeholder groups forming that fashion brands and suppliers can get involved in. “Engaging with policymakers always seems like a big task, but these channels can be an easy way in,” says Moya. “Beyond forums and public consultations, don’t be afraid to knock on the door of policymakers. They need the industry as much as the industry needs them.”
There have also been some changes to where sustainable fashion sits in the EU matrix, which means there are new faces to know and new doors to knock on, she continues. “With the new mandate, there are new portfolios that didn’t exist before, or which have been spread out across different people where they used to sit under one person. As a result, engagement with EU policymakers may be more intricate, and it’s not necessarily easy to locate where the files sit and who is dealing with them.” She highlights the commissioners below as a good place to start.
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To meet this opportunity, some brands are already starting to bolster their public affairs teams, notes Moya. “Legislation is going to be a big theme moving forward, and brands need to dedicate resources to following global legislation, making sure they can make sense of the whole puzzle. We are looking at the formalisation and institutionalisation of public affairs within companies.”
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