How new EU regulations are going to shape fashion industry
Bangladesh is the second largest apparel exporting country in the world, and Europe is our largest export destination. Therefore, we need to be aware of the directives and regulations that will largely impact the industry
In September this year, new Members of the European Commission were elected to lead the European Union's most powerful institution for the second term till 2029. Just after the election result, the Chief of the European Commission, Ursula von der Leyen, said at a press conference that combating climate change would remain her top priority in this term.
And some of her key appointments include Spain's Energy and Environment Minister Teresa Ribera as the bloc's new antitrust chief. Teresa Ribera is considered one of Europe's most ambitious policymakers on climate change.
So, it's expected that a plethora of regulations and directives related to climate change, which have already been approved by and proposed to the Commission in the last few years, will be implemented at a faster pace.
Bangladesh is the second largest apparel exporting country in the world, and Europe is our largest export destination. Therefore, we need to be aware of the directives and regulations that will largely impact the industry.
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Now, let's delve into the upcoming EU regulations and directives!
The European green deal: The European Green Deal aims to make Europe the first climate-neutral continent by 2050. To do so, it establishes ambitious environmental goals and targets, which in turn serve as the foundation for directives and regulations that are continually being introduced.
Among its primary objectives are significant reductions in net greenhouse gas emissions, targeting a minimum decrease of 55% by 2030 as compared to the levels recorded in 1990. Emphasising the importance of reforestation and ecosystem restoration, the initiative also strives to plant 3 billion trees within the EU by the year 2030.
EU strategy for sustainable and circular textiles: To implement the commitments of the European Green Deal, the EU has developed a specific strategy for the textile sector. The EU Strategy for Sustainable and Circular Textiles will reinvent the entire lifecycle of textile and footwear products, not only changing how fabrics are made, but how they are consumed, and eventually disposed of.
This includes increasing the longevity of textiles, increasing the use of recycled fibres, curbing fast fashion, and making products easier to repair or recycle with a Digital Product Passport.
EU circular economy action plan (CEAP): The CEAP is a cornerstone of the European Green Deal. Comprising 35 specific actions, it places a special spotlight on the textiles sector, which is recognized as one of the most resource-intensive industries.
The Circular Economy Action Plan introduces an array of initiatives that are crafted to promote sustainable product design, establish circular economy practices, and curtail waste generation.
Corporate sustainability reporting directive (CSRD): While not part of the European Green Deal, the Corporate Sustainability Reporting Directive works in tandem with these new regulations as part of the Sustainable Finance Initiative. Essentially, the CSRD requires companies to not only consider their financial health, but their sustainability as well. It will have numerous implications for fashion and textile brands.
This directive will mandate enhanced sustainability reporting, making it applicable to large companies with 250 or more employees and all companies listed on the EU market. It will require these companies to provide detailed disclosures on environmental, social, and governance (ESG) matters, such as greenhouse gas emissions, supply chain transparency, labour practices, and diversity initiatives.
European sustainability reporting standards (ESRS): In 2023, the European Commission launched the European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD) to standardise sustainability reporting across the EU. The ESRS enhances the comparability and reliability of environmental, social, and governance (ESG) data, addressing prior inconsistencies and requiring detailed disclosures from companies, including fashion brands.
These standards are divided into four main categories: Cross-cutting, environmental, social, and governance, each mandating specific disclosures that cover both the impacts of company operations and the internal risks from sustainability factors on financial performance. Additional textile-specific standards are set to be introduced by 2026.
Ecodesign for sustainable products regulation (ESPR): Product design determines 80% of a product's environmental impact. The current Ecodesign Directive, which at present only covers energy-related products, will be expanded to include textiles, and other sectors will follow. This regulation aims to make products more "durable, reliable, reusable, upgradable, reparable, easier to maintain, refurbish and recycle, and energy and resource efficient."
Fashion brands wishing to sell in the EU marketplace will need to address product design from beginning to end, taking into account a product's durability, recyclability, and inclusion of recycled materials. The new ecodesign requirements for textiles are expected to be finalised by mid-2025.
Digital Product Passport: Digital Product Passport will have significant implications for the fashion and textile industry. All products placed on the European market must have a product passport. This tool will serve as a digital record that provides comprehensive information about a product's environmental footprint throughout its lifecycle.
For fashion and textile brands, every product must include a machine-readable passport— such as a QR code— that is linked to a unique product ID. The European Commission will be establishing a dedicated web portal where all digital product passports will be registered.
Directive on green claims
The Green Claims Directive will empower consumers to make informed decisions by mitigating greenwashing and misleading environmental claims. Any green claims—such as "this product has a reduced carbon footprint"— will need to be independent, third-party verified and scientifically proven.
Additionally, there will be rules ensuring claims are clearly communicated. For example, aggregate scoring of a product's environmental impact may no longer be allowed. Any new labelling schemes will no longer be allowed unless permitted by the EU, and they can clearly demonstrate added value to the authorities.
Apart from the above EU regulations and directives, some of the EU member states individually have also put forward some laws linked to climate change. The current and forthcoming laws by the EU membership states which will have an impact on the apparel and textile are explained below.
France: Anti-waste law for a circular economy
France's Anti-Waste Law for a Circular Economy was first published in 2020, and revised in 2023. This legislation aims to eliminate the improper disposal of waste, as well as reduce waste altogether.
In particular, it will tackle single-use plastic packaging, phasing it out altogether by 2040. This will include the plastic polybags that many fashion brands use to distribute their products.
France: The climate & resilience law – environmental labelling for products
The Climate and Resilience Law was passed in 2021. According to the law, all large fashion corporations with €50M+ turnover and 25,000 units sold in France will be required to provide an environmental impact label on their products.
Eventually, this law will apply to all companies with €10M+ turnover and 10,000 units. This mandatory disclosure aims to empower consumers to make informed choices by promoting transparency and eco-consciousness.
The Netherlands: Extended producer responsibility
The Dutch Extended Producer Responsibility for Textiles aims to improve the circular economy within the fashion industry. According to it, all fashion and textile producers either based in the Netherlands or selling on the Dutch market will be responsible for the collection, recycling, reuse, and waste of their products.
This regulation applies to apparel, as well as household items like bed linens and tablecloths. According to this Dutch law, in 2029, all textiles will need to include 75% recycled materials with 25% prepared for reuse.
Germany: Supply chain due diligence act
This piece of German legislation addresses human rights and working conditions in the supply chain. Fashion and textile brands will be required to implement rigorous due diligence processes throughout their supply chains, focusing on human rights and environmental standards.
Moreover, companies will need to establish effective grievance mechanisms and provide transparent, accessible information to the public and authorities.
Norway: Transparency act
The Norwegian Transparency Act carries substantial implications for fashion and textile brands operating in Norway. The primary aim of this act is to enhance transparency and promote respect for human rights and decent working conditions throughout the entire value chain of businesses.
To achieve this, the act mandates that companies conduct due diligence assessments and document their efforts to mitigate associated risks.
So, it's high time Bangladesh engaged with the European policy stakeholders as well as with the EU brands and retailers through dialogues. These discussions are important not only for taking our preparations but also for conveying our points to the Commission.
The Bangladesh Mission in Brussels in collaboration with our trade bodies can play a vital role in securing the interest of Bangladesh's apparel and textile industry; when the new EU regulations and directives are going to shape the future of the fashion industry.
Ashikur Rahman Tuhin is the Managing Director of TAD Group. He is a former Director of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.
