…and a message to fashion executives.

While fashion has always reflected societal shifts (through design, labor, and production) today’s global pressures are reshaping how the industry defines responsibility. ESG (Environmental, Social, and Governance) is at the center of this shift, emerging as a critical framework guiding how brands operate, innovate, and grow, moving beyond creative expression toward measurable impact and systemic change. What was once relegated to annual sustainability reports and niche teams is now informing decisions in boardrooms, on runways, and throughout global supply chains. As climate urgency escalates, regulations tighten, and consumers demand greater transparency, fashion’s future will hinge on its ability to evolve—through circularity, accountability, and innovation.

ESG in Fashion: Setting the Stage

For decades, fashion followed a linear “take-make-waste” model, fueling a $2.5 trillion global industry built on low-cost labor and rapid consumption. The rise of fast fashion brought style to the masses, but it also accelerated environmental damage and human exploitation: water pollution, excessive carbon emissions, poor working conditions, and mountains of textile waste.

Corporate Social Responsibility (CSR) helped lay early groundwork for values-driven business practices, encouraging companies to acknowledge their broader societal role. But CSR initiatives often relied on voluntary commitments, vague language, and qualitative reporting, making it difficult to hold brands accountable.

ESG builds on CSR by offering a more rigorous, data-backed approach. Where CSR emphasized good intentions, ESG focuses on measurable outcomes: anchored in third-party standards, investor scrutiny, and an evolving landscape of legal mandates. The shift from CSR to ESG marks a broader evolution in the industry: from storytelling to strategy.

Circularity as Core Strategy

Circular fashion is no longer an experimental concept; it’s a core ESG priority. The Ellen MacArthur Foundation estimates that less than 1% of material used to produce clothing is recycled into new garments. In response, brands are rethinking the entire product lifecycle—from fiber to finish—and finding business opportunity in circular models.

Take Eileen Fisher’s Renew program or Patagonia’s Worn Wear, which extend product life through repair, resale, and recycling. Meanwhile, LVMH and Stella McCartney are investing in textile innovation startups that turn waste into regenerative material, helping ruse of newly extracted natural resources.

Circularity isn’t just about fabric, it’s about system design. Companies like Vestiaire Collective and The RealReal have normalized resale, while startups like ThredUp have turned secondhand into scalable business. These models reduce waste, retain brand value, and (when measured and reported properly) can improve a company’s ESG profile.

Accountability: From Voluntary to Mandated

Evolving policies are beginning to shape how fashion approaches sustainability and accountability.

In 2023, the New York Fashion Act proposed mandatory climate and social disclosures for large fashion companies, requiring transparency on material sourcing, labor practices, and emissions across supply chains. Concurrently, the EU’s Corporate Sustainability Reporting Directive (CSRD) is expected to impact thousands of companies globally, forcing them to disclose ESG risks, impacts, and due diligence strategies.

This marks a shift from soft, brand-led narratives to hard, enforceable metrics. Investors, too, are demanding more than glossy reports. ESG ratings, third-party audits, and materiality assessments now influence brand valuation and access to capital.

Greenwashing, once a tolerated marketing tactic, is now a liability. Regulators and consumers alike are demanding proof—not promises.

Innovation: Tech-Enabled Sustainability

Technology is enabling the fashion industry to move from intention to implementation. New tools help brands map emissions, analyze supply chain risks, and meet ESG goals with precision.

• Blockchain is being used for traceability, allowing brands like Prada Group and LVMH’s Aura Blockchain Consortium to verify origin, authenticity, and sustainability claims.
  
• AI and machine learning help forecast demand more accurately, reducing overproduction—a major driver of waste.
  
• Digital twins and 3D design tools reduce reliance on physical sampling, cutting material use and shortening product development cycles.
  
• Next-gen materials—like mycelium leather (Mylo), recycled polyester, and regenerative cotton—are helping brands reduce environmental impact at the source.
  

Beyond product innovation, some companies are using ESG data platforms like Worldly or EcoVadis to standardize sustainability metrics and reporting. These systems help brands benchmark progress and meet growing stakeholder expectations.

The Future of Fashion is ESG-Driven

The fashion industry’s ESG evolution isn’t just a corporate exercise in risk management, it’s a creative challenge, a cultural shift, and ultimately, a roadmap for staying relevant in a changing world. Today’s consumers, especially Gen Z, are paying attention: A McKinsey report stated, 49% say sustainability influences their purchasing decisions. But it’s not just about the checkout line. Employees, investors, and regulators are all raising the bar, expecting fashion to be part of the solution—not the problem.

In this new landscape, success won’t be measured solely by runway hype or quarterly profits. It will be defined by a brand’s ability to:

• Design with circularity in mind
• Disclose impact with honesty and transparency
• Embed ESG into the DNA of business strategy

The next generation of fashion leaders will be those who treat ESG not as a box to check, but as a source of creative momentum and long-term value. This is where fashion meets future.

For the Executives: I Get the Fear—But Here’s Why We Must Move Forward

Let’s be honest—executives in fashion are facing real pressure. I understand the fear. Quarterly earnings drive stock prices. Supply chains are complex. Sustainability isn’t always cheap or easy. Shifting to new materials, overhauling logistics, and building transparency into every step of the value chain feels like a monumental task. And yes, there’s still a gap between what consumers say they value and how they spend. Even more frustrating, greenwashing often gets rewarded, and enforcement of ESG claims is still catching up.

But here’s the truth: those short-term fears are blinding us to a long-term reality.

The fashion companies that don’t adapt now will soon find themselves outpaced, not just by regulators, but by more agile competitors who harness innovation, attract top talent, and build meaningful brand trust with a rising generation of conscious consumers.

The future is being shaped by tech, transparency, and a mindset that prioritizes longevity over quarterly optics. Early movers may take a short-term hit, but they’re investing in something far more valuable: resilience. The brands that attract sustainability-minded employees, develop ESG-fluent leadership, and partner with credible tech innovators will be the ones shaping the industry, not reacting to it.

It’s not just about compliance. It’s about competitive advantage. And it starts with leadership that’s willing to look beyond the next quarter.

A Note on ESG’s Complexity in Fashion

While this article focuses primarily on circularity, regulatory developments, and technological innovation (the areas rapidly reshaping fashion’s environmental impact), it’s important to recognize ESG’s full scope is much broader. Social factors such as labor rights, fair wages, and community well-being remain critical, especially in developing economies where many garment factories operate. Governance challenges around transparency, ethical sourcing, and inclusive leadership also play a huge role.

This piece highlights key environmental and innovation trends as a lens into the future, but the path to truly sustainable fashion requires addressing all these interconnected layers. Circularity and tech advancements are part of the solution—but they’re only the beginning.

I’ll be writing more pieces exploring the future of fashion supply chains with ESG at their core. To dive deeper into the changing dynamics of global supply chains and how they intersect with sustainability, I encourage you to check out some of my previous articles: 1) Can Fashion Make Nearshoring Work in a Globalized World? 2) It Starts at the Source: The New Frontier of Product Development 3) On-Demand Everything: Why Made-to-Order Might Finally Scale

Looking Ahead: Questions to Consider

As fashion evolves toward circularity and greater accountability, these questions remind us of the real-world challenges and trade-offs ahead. I’ll be exploring these topics in future articles—stay tuned.

If fashion shifts toward circularity and reuse, does production need to move closer to consumption? How feasible is this globally?

What happens to communities and economies built around factory jobs if production relocates or automates? How can we ensure a just transition?

Can sustainable materials and technologies replace traditional ones without creating new environmental or social challenges?

How can brands balance innovation with the need to uphold fair labor standards, especially in developing economies?

What role should governments and policymakers play in supporting workers and regions affected by ESG-driven changes?

How transparent is product lifecycle information to consumers, and does technology like blockchain truly empower them or serve as marketing?

When sustainability becomes a competitive advantage, how can brands avoid greenwashing and deliver measurable impact?

To what extent can AI, robotics, and other emerging tech reduce waste and emissions without exacerbating social inequalities in the workforce?

How do companies manage the complexity and cost of scaling circular and ESG initiatives across global supply chains?

What does true ESG success look like when integrated across product design, governance, community engagement, and resource management?