Navigating Sustainability: Key Challenges for Fashion Brands in 2025

• Why Focus on Sustainability?
• Key Challenges for Fashion Brands
• How Technology Can Help?
• Conclusion: No more excuses

92 million tons of discarded garments in landfills, 20% of the world’s water pollution, and 10% of global carbon emissions – these staggering statistics are the contributions of the fashion industry. While fashion may be aspirational, its consequences on the planet are not something one would aim for.

With the population expected to reach 8.5 billion by 2030, the demand for apparel will only increase multifold. The need for sustainability in fashion is, thus, imperative, but what does the implementation entail?

Let’s explore the key challenges that sustainability poses for fashion brands in 2025 and the way forward with insights from Centric Software's Steve Carmody (Director, Global SMB Sales) and Friederike Haal (Sr. Consultant, Presales).

Steve Carmody points to three factors that mandate fashion brands to make sustainability a core priority:

1. Ecological Impact

Consumption is increasing disproportionately to resources and waste generated by apparel production. Overconsumption- propagated by the fashion industry in general, and fast fashion, in particular, is a trend that has a devastating ecological impact.

The estimated energy requirement of the industry is set to grow by 63% in 2030, further burdening the depleting resources. Given the wide-reaching environmental consequences, it is high time the industry looks inward to minimize the damage.

2. Legislation/Regulation

The heightened sense of urgency created by climate change is pushing governments to tighten environmental regulations for industries. The European Union (EU) had already introduced the Corporate Sustainability Reporting Directive (CSRD) on 5 January 2023 to enhance accountability and transparency in sustainability initiatives. The European Green Deal plan will require companies to focus on eco-design, eliminate hazardous chemicals, and promote circular business models.

Non-compliance with these regulations will carry hefty penalties while companies promoting sustainable measures are likely to receive incentives.

3. Economic Benefit

Here is how brands will benefit economically by implementing green practices:

• Green strategies that comply with existing regulations will help avoid penalties imposed by authorities. Besides avoiding fines, companies that go green will benefit from incentives to support the transition.
• As people become aware of their role in reversing climate change, the market demand is inclined towards green products. Businesses that prove their commitment to responsible practices will build trust with both the consumer and stakeholders.
• Pressure from financial investors and institutions is also growing. The emphasis is on prioritizing ESG metrics for measuring the success and credibility of a business. A failure to comply with regulations may lead to reduced access to capital.

Addressing the polluting effects of garment production and supply involves significant structural and operational changes. Some of the key challenges for brands to navigate are:

1. Adherence to Regulations

EU Corporate Sustainability Reporting Directive (CSRD), the Digital Product Passport (DPP), and other emerging Government regulations imply a stricter code for companies to follow.

Regular audits will make it compulsory for brands to comply with global standards to survive in the market. This will entail an overhaul of traditional data collection and reporting systems and result in operational challenges.

The immediate steps required to integrate green practices might seem like a financial burden, but they will deliver economic and operational benefits by future-proofing the business to climate change and resource scarcity.

2. Shift Towards Circular Business Models

A circular economy focuses on reducing wastage through reuse, recycling, repair, and resale. The EU's Circular Economy Action Plan and the EU Textile Strategy are encouraging companies to adopt the resource-efficient model of a circular economy.

The transition to a circular economy is a monumental shift that involves redesigning linear supply chains and innovating products to fit into the model. This is both a challenge and an opportunity for forward-looking brands.

Technology can play a pivotal role in making this switch smoother. AI, automation, and digital tools enable a seamless transition that helps companies build scalable and profitable circular solutions.

3. Supply Chain Transparency

The supply chain is a core component of sustainability initiatives. By embedding sustainability into the supply chain, brands can address both social and environmental impacts.

This requires leveraging technology to enhance product traceability. Product Lifecycle Management systems are emerging as the solution to track the movement of products in the supply chain. 

Steve describes it as: “Software that would be used by design, sourcing, product development, compliance, costing, and supplier portal, and what it does is it's everything around product ideation through development to when the product is ready to go to market.”

Friederike further explains how PLM is a centralized data repository for all product-related information across departments. It can be accessed by internal teams as well as vendors to store product details at each step of the product life cycle. This also helps in breaking silos and promoting collaboration across teams leading to better communication.

4. Innovation in Material and Design

Design plays a crucial role in determining a product’s environmental impact. Friederike quotes the Ellen McArthur Foundation to emphasize the importance of design in sustainability – “80% of a product's environmental impact is influenced by decisions made at the design stage.”

Bio-based fabrics and recyclable fabrics are the future of apparel. Many brands have already made the switch fully or partially towards sustainable fabric. Working with these new fabrics while maintaining style and profitability is a challenge brands need to overcome.  

The path forward is to invest in R&D for material innovation and collaborate with other brands and industries to accelerate the process of innovation.

Blockchain, AI, AR/VR, and Digital Printing are just some examples of technological tools that can make the transition to sustainability easier for fashion brands. Advancements in technology provide innovative solutions for better resource management, improved production processes, enhanced supply chain transparency, and optimized product design.

Solution providers like Centric Software work dedicatedly with fashion brands globally to boost sustainability initiatives. “Basically, everything you need to know is stored in our software, and we can help you drive sustainability initiatives by providing for traceability and transparency of your products in our software.”, explains Friederike to emphasize what technology can do to make it easier for brands to adopt green practices.

The role of technology extends to the decision-making process. Tools like the Centric software collect all company and product data and make it available to everyone in one place. This aids in better analysis of metrics and promotes informed decision-making in the organization.

Sustainability is no longer a buzzword but rather a reality that brands have to address to stay relevant. The rising consciousness about the fashion industry’s role in environmental pollution is driving governments as well as consumers to demand the implementation of green strategies. The way forward is to leverage sustainability initiatives as an opportunity to push the brand forward and be future-ready.