In today's rapidly evolving fashion landscape, fast fashion reflects a societal "trend” toward convenience and immediacy, but it comes with severe environmental and ethical consequences. This “disposable” society model of buy, wear, and dispose of clothing has impacted majorly the consumer behaviours, leading to a culture of overconsumption and waste. However, the future of fast fashion is now being questioned, as significant regulatory changes are rising, particularly in Europe.
The Shift in Luxury Fashion's Future
According to Business of Fashion (2024), many of the fashion industry’s most prestigious brands are often responsible for some its’ “worst environmental and social sins”. Often pitched as an evidence of responsible practice, quality, and craftsmanship, their high prices and European supply chains offer very little operational transparency and marked by high-margin mass production .The broader luxury sector has also been hit by slower economic growth, declining consumer confidence, and rising geopolitical uncertainty, leading to a sharp decrease in sales.
While the luxury fashion landscape is shifting, consumer behaviours toward ethical fashion remain complex. According to the Sustainable Fashion Forum, 56% of consumers are willing to make some sacrifices to be more sustainable, although they are not ready to entirely change their shopping habits. Price point remains a significant factor in purchasing decisions; while some consumers are willing to pay more for ethically made products, when a highly desired item is involved, ethical considerations are often placed secondary.
As Rachel Walker, CEO of LLUK, emphasises, the fashion industry needs an urgent reform, especially in its supply chain governance. "The change needs to happen now," she states, highlighting that regulation is essential not just for protecting the environment and workers but also for ensuring accountability throughout the production process. For luxury brands, this shift is even more crucial, as they stand to lose consumer trust if they fail to meet higher ethical standards.
Recent Legal and Regulatory Changes in Europe
In June, Italy’s Competition Authority launched an investigation into companies controlled by luxury fashion groups Giorgio Armani SpA and LVMH’s Christian Dior over alleged unfair commercial practices. This quickly expanded, with Milan prosecutors probing supply chains of around a dozen more manufacturing suppliers for labour violations, workers exploitation, tax envision, and pension contribution issues, which puts an immense pressure on the luxury sector’s value proposition.
At the same time, the European Union has intensified its crackdown on fast fashion and greenwashing, with new legislatives measures holding brands accountable for their environmental and ethical claims. These measures could soon impose penalties of up to 5% of global revenues for non-compliance. However, as Marcus Rebuck warns, luxury brands will also face significant risks if they fail to act and align their practices with the new ESG rules and regulations.
“Greenwashing will be investigated, and sanctions will follow. Regulators are increasing pressure, forcing companies to change, while consumers are driving a movement demanding a different, more responsible approach.”
(Marcus Rebuck)
ESG in Supply Chains: Future-Proofing a New Era of Accountability
One of the most critical areas for improvement in the fashion industry is supply chain transparency. The integration of ESG principles into supply chains is no longer optional but necessary to future-proof the luxury manufacturing sector. Brands must ensure that every stage of their supply chain, from sourcing raw materials to final production, is managed ethically and sustainably. Rachel Walker emphasises the importance of a more “robust governance” to protect everyone involved in the supply chain and manufacturing process, ensuring accountability and building consumer trust is met.
Integrating ESG into supply chains isn’t just about protecting profits; it’s about securing the future of ethical, sustainable fashion. Rachel Walker suggests that one step toward this goal is building financial models that allows brands to offer repairs services, contributing to the circular economy and promoting sustainable practices.
Marcus Rebuck highlights the risks of ignoring these changes, warning that brands failing to address ESG will face challenges from all sort of angles. “At a time where margins are under more pressure than ever, companies will increasingly be asked by their suppliers to prove compliance with ESG, failure to do so could result in losing key partnerships.
Moreover, investigations into greenwashing and misleading claims are expected to rise, with regulatory bodies imposing sanctions on companies that fail to meet transparency standards. This legal pressure, combined with increasing consumer demand for ethical products, is forcing the fashion industry to reassess its’ approach.
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