12th February 2025: Luxury fashion brands that fail to consider sustainability from source to shelf are risking their future viability as consumers turn away from poor performers and regulators crack down, according to a new report that sets out four key areas for action.
As global fashion weeks begin, BSI’s new whitepaper, From source to shelf: Creating sustainable fashion for the future, identifies risks including potential loss of consumer trust or regulatory sanction for luxury brands that do not prioritize areas such as sustainable materials or ethical procurement.
The paper explores the obstacles to the luxury fashion industry embedding sustainable business practices across operations, and provides a strategy for overcoming these. It provides information on how to embrace end-to-end sustainability, from the early design process to acting on human rights challenges and ensuring safe working conditions, or using blockchain to enhance the traceability of materials.
It follows BSI research revealing that nearly two-thirds of people globally (63%) consider a company’s social and environmental purpose when making purchasing decisions and 63% would abandon a product or business acting inconsistently with its purpose. Furthermore, three-quarters of consumers are more likely to trust a business’s environmental claims if they are verified, certified, or backed by credible evidence.
Luxury fashion brands must also adapt to evolving regulatory landscapes, particularly in the EU. The EU Green Claims Directive (GCD) now requires businesses to provide clear evidence for their environmental claims, eliminating greenwashing, or face fines, market bans or other sanctions. The directive mandates compliance by March 2026 and includes restrictions on generic environmental claims without proof, misleading carbon offset claims, and unauthorized sustainability labels.
Additionally, brands must prepare for the Digital Product Passport (DPP), a regulatory framework set to be mandatory in the EU by 2030. This initiative will require products to have virtual labels detailing their origin, materials, manufacturing processes, and recyclability.
BSI’s whitepaper outlines four priority areas for luxury brands to consider to stay on the front-foot:
- Concept and design: integrating sustainability into the early design process to enhance transparency and environmental impact, and considering sustainable materials such as organic cotton, recycled polyester, and plant-based alternatives like TENCEL™, bamboo, and hemp
- Raw materials: guidance on ethical procurement and supplier collaboration to ensure responsible sourcing that considers its environmental, social, and ethical impact.
- Production and manufacture: How to address human rights challenges, including fair wages, safe working conditions, and the elimination of forced labour throughout its supply chain while considering environmental concerns such as such as water consumption and decarbonization.
- Retail and Beyond: creating sustainable retail strategies to reduce CO2 store emissions, the use of blockchain to trace materials and embedding circular economy principles, exploring resale, rental, and recycling initiatives to extend product lifecycles.
The luxury fashion market, encompassing apparel and footwear, is projected to reach US$115.90 billion in revenue by 2024 and grow to US$131.67bn by 2028. While it is a market traditionally associated with elegance and high-quality craftsmanship, consumer attitudes are evolving and sustainability has been found to be a key factor when looking to make a purchase.
Nicolas Carneiro, global director for consumer, retail and food, BSI said: “The journey to a sustainable future is no longer a ‘nice to have' goal for the luxury fashion industry but is now a critical part of long-term planning, underpinned by upcoming regulation in the EU and evolving consumer behaviours, as demonstrated in our research. But rather than being a risk, taking action here can be seen as a differentiator, one that has the potential to bring enormous societal and environmental benefit.
“Luxury fashion brands have an unprecedented opportunity to lead the wider industry towards a sustainable, responsible future. By embracing end-to-end sustainability, from sourcing and production to retail and consumer engagement, brands can meet regulatory demands, strengthen consumer trust, and set a new benchmark for sustainable excellence.”
For more information and to access the full whitepaper, click here.
