At the halfway point of the so-called “decade of action”, there was a lot riding on 2025. But who could have predicted the course of events that came to define the year in sustainable fashion? From regulatory U-turns to unprecedented tariffs, uncertainty was almost certainly the theme of the year.
As Hannah Phang, co-founder of sustainability consultancy and recruitment platform The Now Work, put it: “2025 was humbling but necessary.” Below, Vogue Business reflects on the peaks and troughs — and what may come of them.
Regulations rolled back, but progress continued
Over the last few years, sustainability teams have pinned their hopes on regulation to galvanize progress. For a while, it seemed like that might come true, but 2025 burst the bubble. “The biggest low of 2025 was how quickly the political winds shifted, and how that shift permeated the industry,” says Donatela Bellone, founder and CEO of transparency platform Alu AI, who previously led McKinsey’s ESG Insights. “Sustainability teams that once relied on discussions of regulation and compliance to get internal buy-in suddenly lost that leverage.”
The European Union — which previously led the charge for sustainability regulation — saw a changing of the guard, placing renewed emphasis on European “competitiveness” and “strategic autonomy”. As a result, many hard-won sustainability regulations were slashed or significantly scaled back. Among those on the chopping block was the Green Claims Directive, which has been shelved until further notice, as well as the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), which have both been reduced in scope, while more ambitious measures have been gutted.
For the regulations that remained in play, enforcement kicked into gear this year. Several EU countries began issuing fines for unsustainable practices, although few used sustainability frameworks to do so, notes Bellone. “Much of this action was pursued through consumer protection, labor and competition law,” she explains. “This showed that regulators are increasingly willing to use existing legal tools to address upstream practices.” Among those fined were ultra-fast fashion giant Shein and Italian brand Armani. Meanwhile, the rush for individual EU countries to interpret the upcoming extended producer responsibility (EPR) regulation led to mass confusion and calls to streamline regulation across borders.
Amid the uncertainty, many brands paused or pulled back on sustainability commitments, adopting a “wait-and-see” approach, adds Bellone. But all hope is not lost, says Phang. “Regulation, compliance, reporting and disclosure drove a huge amount of activity and also a huge amount of overwhelm. Teams had to move fast to set up data systems, governance structures and internal understanding,” she explains. This flurry of activity — however confusing or overwhelming — means sustainability teams now have the right infrastructure to push forward, whether regulation continues to flip-flop or not. “This year has also shown that regulation isn’t everything. Compliance is raising the floor, but it isn’t raising the ceiling. It doesn’t, on its own, drive the business transformation the industry needs.”
Supply chains were rocked by scandals and tariffs
While regulation rolled back, reputational risks became a primary motivator for change. This was driven largely by Italian authorities’ ongoing investigations into exploitative working conditions and illicit subcontracting in luxury supply chains. Just this month, authorities requested additional governance and supply chain documents from 13 more brands (bringing the total to 19), proving just how endemic these issues can be. After Loro Piana and Tod’s were named in the investigation earlier this year, Italy proposed a new voluntary agreement to clamp down on poor practices, but doubts remain over whether luxury can ever guarantee clean supply chains. (In a statement shared with Vogue Business at the time, Loro Piana said it “firmly condemns any illegal practices” and terminated all relations with the highlighted suppliers within 24 hours of being notified by Italian authorities. Tod’s said it welcomes the court’s decision to postpone judgement until the company completes its “control-strengthening measures” and extended an invitation to show prosecutor Paolo Storari its supply chain.)
While experts hope this will serve as a wake-up call, it remains to be seen. “2025 will be remembered as the year the Pandora’s box of luxury business models finally opened to reveal their supply chain secrets,” says Politecnico di Milano associate professor Dr. Hakan Karaosman. “Luxury fashion brands must recognize that their business continuity depends on their suppliers’ abilities to deliver the highest quality products and services. Brands should avoid using contractual tactics to chase cost reduction. They need to build stronger relationships with their suppliers, recognize their key expertise and reward their efforts accordingly. Sustainability is not a surveillance system; it is a partnership.”
The chaos surrounding fashion supply chains was compounded by US President Trump’s so-called Liberation Day tariffs, first announced in April. “I saw meetings canceled at the last minute, while cost scenarios were recalculated and priorities reshuffled. Activity in sustainable fashion later resumed for the most part, but there was an undeniable shift toward prioritizing cash flow, pricing and inventory risk,” says Bellone.
For many brands, this meant shifting supply chains to countries with lower tariffs — a major blow for established manufacturing countries with hard-won social and environmental protections, notes Dr. Karaosman. “Fashion brands are now pursuing supply chain diversification, while suppliers are struggling to build long-term resilience,” he says. “Some suppliers who have invested heavily in sustainability over the years feel that they are being punished by brands. In countries being abandoned, relocation strategies will exacerbate socioeconomic injustices and eradicate essential tacit knowledge.”
Supply chain representation is slowly increasing
Amid all the uncertainty, one silver lining has been brands engaging directly with their suppliers, be it as a traceability play, to drive progress on sustainability, or to avoid reputational risks. More brands are recognizing the value of forming direct partnerships with strategic suppliers, from Theory working with a specific farm on regenerative wool, to Monica Vinader partnering with a women-owned mine to source gemstones and Veja supporting rubber tappers in the Amazon. Still, there’s a long way to go, says Claire Bergkamp, CEO of global non-profit Textile Exchange, whose annual conference had a renewed focus on producer representation this year. “Although producers and farmers were more visible this year, they remain underrepresented in decision-making and are not receiving the levels of investment needed compared with the expectations placed on them,” she says.
To truly progress, brands need to challenge top-down approaches to supply chain management — a shift manufacturers are starting to push for more vehemently, as evidenced by the launch of the Fashion Producer Collective earlier this year. “Brands and initiatives are increasingly inviting manufacturers to provide input. This seems promising, but the reality is that engagement is often shallow,” says co-founder Kim van der Weerd. “Manufacturers are asked for feedback on solutions already defined without them, and there is rarely clarity on how their time or expertise will influence the outcome.”
Coming out of 2025, it’s now clearer than ever that brands must rebalance this relationship to achieve their climate targets on time, says Apparel Impact Institute (Aii) president and CEO Lewis Perkins. “Supplier-level financing and collaborative implementation became central, not peripheral, to the sustainability agenda. The biggest questions were: who will pay for the transition? How durable is sustainability regulation? And how credible are brands’ climate plans?”
Climate adaptation ‘entered the chat’
With supply chains in the spotlight, the unfolding impacts of climate change and extreme weather became impossible to ignore — be it floods and heatwaves, or droughts and cyclones. The year commenced with devastating wildfires across Los Angeles, the impacts of which were felt from garment production to retail. In the last few months alone, catastrophic floods have hit cotton farmers in Pakistan and India, while Sri Lankan suppliers and garment workers are still reckoning with the aftermath of Cyclone Ditwah.
Among the top concerns this year was extreme heat, which the International Accord (established to improve factory safety following the 2013 Rana Plaza collapse) is currently weighing up adding to its protections. “Climate change poses a significant threat to garment workers in all contexts,” says Dr. Karaosman. “Heat stress-related issues must be considered in the context of human rights violence, and these conversations must be led by people with firsthand experience of what is really happening in the field.”
Reports of garment workers fainting from extreme heat and struggling without proper protections forced brands to take note. Now, says van der Weerd, climate adaptation strategies are much higher up the agenda — some brands are even requesting these from suppliers. And insurance companies are taking note, too, hoping to provide more instant relief as the climate crisis evolves.
Exactly how much this changes remains to be seen. “Climate adaptation strategies like preparing factories and workers for real-time impacts like extreme heat, flooding and water stress remain significantly underinvested in,” says Perkins. “These adaptation efforts have often been perceived as complex, costly and difficult to tie to immediate business returns, yet they will be essential for long-term supply chain resilience.”
True change will only come when brands recognize that workers are not “risks” or “costs” but “rights holders”, adds Kalpona Akter, executive director of the Bangladesh Center for Workers Solidarity (BCWS). “The most overlooked area remains worker-led solutions. There is still very little direct investment in trade unions, worker education, collective bargaining and social protection systems. Workers are not just the beneficiaries of sustainability, but essential actors in making it real.”
Sustainability teams circled back to the business case
Between the various geopolitical tensions and economic headwinds squeezing brands and suppliers alike this year, the need to build a strong business case for sustainability was front of mind for many sustainability professionals.
“A major theme was the need to make sustainability efforts more business-ready and business-proof,” says Textile Exchange’s Bergkamp. “Instead of only talking about the importance of impact, the sector began to engage more seriously with capital, risk and the business models that can support long-term transformation. This is needed to strengthen the credibility of the work.” The risks of inaction — especially margin erosion, supply chain disruption and long-term competitiveness — were critical to this, Perkins adds.
“I think there was a welcome increase in honesty,” says Phang. “The industry became more open about where we’re falling short in making a compelling enough business case, about not bringing cross-functional partners on board early enough, or not clearly showing how sustainability ladders up to business strategy and growth.”
A mixed year for alternative materials
Among the bright spots this year was the renewed optimism around — and increased adoption of — textile-to-textile recycling, says Bergkamp. Circulose (formerly Renewcell) signed major partnership deals with H&M, Mango, Reformation, Bestseller and John Lewis, among others. Swedish recycler Syre was announced as Nike’s lead strategic supplier of textile-to-textile recycled polyester. Ganni inked a four-year deal with Ambercycle. And several innovators announced their first commercial-scale production plants. Meanwhile, two separate textile recycling alliances launched: the T2T Alliance in March and the European Circular Textile Coalition in October. “We saw real progress on both the technology and commercial sides, and we are at the precipice of this finally becoming a tangible part of supply chains,” says Bergkamp. “There is still work to do on collection and sorting, but the foundational steps for scale are now clearer.”
In many ways, this exemplifies the broader shifts in sustainable fashion this year: even as headlines highlighted setbacks, teams behind the scenes were laying the groundwork for genuine breakthroughs. Among those setbacks were a slew of closures and cost-cutting measures at major alternative leather startups, including Natural Fiber Welding, Mycoworks and Piñatex creator Ananas Anam. This “cast doubt on the viability of scaling next-gen materials at industrial scale under the current market conditions”, says Shaway Yeh, founder of Chinese sustainable fashion consultancy Yehyehyeh and the Sustasia Fashion Prize for emerging designers, which launched late 2024.
This could actually be a sign of maturity, says Emma Håkansson, founding director of Collective Fashion Justice, which also orchestrated several animal fur bans this year. “It’s sensible for Mycoworks to focus on finishing and tanning Mycelium really well, when innovators like Ecovative are already focused on perfecting the growth of Mycelium. Working in this collaborative network — like Mycelium itself — makes sense and is more efficient, and that’s what we need to scale these critical innovations.”
