Over the last 12 months, the fashion industry’s slow progress on sustainability has drawn mounting scrutiny.

Regulators called out big brands for greenwashing, rising inflation worsened the squeeze on garment workers’ already precarious livelihoods, and increasingly extreme weather highlighted the urgent need for action to meet global ambitions to curb climate change.

“Our industry, and almost every other industry, is not on-target to hit these goals,” said Amina Razvi, chief executive of the Sustainable Apparel Coalition (SAC).

Heading into 2023, the industry is under increasing pressure to move beyond buzzy marketing commitments, with regulatory action set to drive the agenda this year. But at the same time, brands are contending with economic headwinds that threaten to derail progress even as the window of opportunity to avoid catastrophic climate change narrows.

“With 2023, we’re getting deep into the decade of [delivery and] needing to produce results,” said Elisa Niemtzow, vice president, consumer sectors and global membership at the Business for Social Responsibility consultancy.

Regulation, Regulation, Regulation

Until recently, fashion’s sustainability efforts have been almost entirely voluntary and unregulated. That’s changing fast, with policymakers taking aim at the industry’s manufacturing impact, marketing claims and waste generation.

Regulatory momentum is only picking up. EU legislative proposals for substantiating green claims and reducing microplastic pollution, initially slated for late last year, are expected to come out in the first quarter of 2023 — part of a wider European push to reduce the industry’s environmental impact and improve labour conditions in its supply chains by the end of the decade.

On the other side of the Atlantic, the New York State Senate reopens this month with fashion-focused bills to consider, including mandatory disclosures about responsible supply chain management and improved labour protections for models and creatives. A ban on toxic “forever chemicals” is due to take effect at the end of this year.

At the federal level, the Federal Trade Commission has opened the door to updating its “Green Guides” for environmental marketing claims, while the FABRIC Act, which builds on existing laws protecting garment workers in California, hopes to garner lawmakers’ support across the political divide.

Beyond Greenwashing or a New Greenhushing?

How brands talk about efforts to operate more sustainably is in for an overhaul this year, as the fallout from the ongoing crackdown on greenwashing ricochets across the industry.

Last year, regulators and consumers called time on flimsy eco-marketing claims, putting big brands on notice that they face reputational, legal and financial risks if they can’t back up claims of operating in an environmentally and socially responsible manner.

This year should bring further clarity and consensus from regulators on how brands should measure their environmental impact and make credible sustainability claims, as well as a greater push from the industry to improve the quality of underlying data.

The claims brands are putting out there “have to be rooted in reality, and not just a marketing ploy,” said Ayesha Barenblat, founder and CEO of ethical fashion advocacy group Remake.

But there’s also a risk that mounting scrutiny of green claims could prompt brands to go quiet about their sustainability efforts — a process known as greenhushing — potentially undoing years of effort to establish a more transparent and accountable industry.

“Greenhushing is a way of backtracking on all the progress that we’ve made,” said Whitney McGuire, co-founder of intersectional climate advocacy group Sustainable Brooklyn.

Circularity, Growth and Difficult Questions

After years of pilot programmes and capsule collections, 2023 is an important year for brands to start delivering on circularity commitments and seriously grappling with fashion’s waste problem.

New textile-to-textile recycling plants are scaling up, with interest in the space supported by incoming regulation in Europe. But substantial investment is still needed to build out the infrastructure and overhaul design processes to make recyclable fashion a reality in meaningful volumes.

“We’re moving away from a technical challenge … into a supply chain logistical challenge,” said Laura Balmond, fashion lead at the Ellen MacArthur Foundation

“There’s been really fantastic energy and pockets of innovation and commitment [to circularity], but … how do you take that and make it your mainstream business model?”

The focus is also set to move beyond recycling solutions as brands face growing pressure to tackle overproduction itself. Degrowth — a vague but increasingly popular buzzword that highlights the tension between brands’ consumption-driven business models and sustainability goals — has moved from a radical anti-capitalist concept to a regular feature in mainstream debates that are set to shape the future of the industry.

“There’s all this conversation and buzz around alternative growth models, degrowth and overconsumption, which we’ve been talking about in the industry for quite some time,” said Niemtzow, “but I think the new spin on that is [realising] there could be a discrepancy between our business strategy and our environmental goals.”

Fragile Supply Chains

Though regulatory action is adding momentum to sustainability efforts heading into 2023, the gloomy economic outlook is a countervailing headwind that threatens both brands’ investments in environmental improvements and pay security and personal safety for the industry’s predominantly female garment workforce.

Labour rights advocates are already sounding the alarm on increased risk of gender-based violence and harassment of workers at the hands of (typically male) managers, warning that pressure to cut labour costs and meet quick-turnaround production targets could result in longer hours, increased verbal and physical abuse, and more precarious employment contracts, with pregnant workers particularly vulnerable to being fired.

“It’s a pressure-cooker situation within factories,” said Thulsi Narayanasamy, director of international advocacy at the Worker Rights Consortium. “Essentially, that means levels of abuse for women go up and brands just don’t take responsibility for the direct link between their purchasing practices and the experiences of women in factories.”

As well as the current economic downturn, fashion supply chains face broader, enduring challenges in the form of climate change. Extreme weather events continue to threaten raw material production and destabilise operations further down the supply chain, making it crucial for brands to get serious about mitigating risks and building more resilient supply chains in the year ahead.

“All of those social sustainability topics that maybe weren’t [considered] essential before are now becoming business-critical issues,” said Niemtzow. “It means that companies need to up the ante in terms of making sure that they have their strong foundations in play, on human rights due diligence, on scenario planning.”