Companies that do business in Europe face new regulations poised to dramatically reshape the fashion industry. 

As of Oct. 1 — in the middle of Paris Fashion Week — many brands in France will have to publish an “eco-score” of their products’ contributions to the climate crisis.

Meanwhile, on Sept. 5, the European Union passed a directive requiring textile companies to bear the responsibility for what happens to their goods after use. It’s the biggest extended producer responsibility (EPR) law for fashion, following California’s similar Responsible Textile Recovery Act of 2024.

All of this adds increased pressure to the sustainability and supply chain teams of apparel and footwear businesses in Europe. For example, the 130 signatories to the UN Fashion Industry Charter for Climate Action agreed to halve their emissions by 2030. However, the sector has only achieved 8.6 percent of that goal, a short-term step toward net zero by 2050, according to the Apparel Impact Institute.

EPR in the EU

The European Parliament’s directive aims to slash the nearly 7 million metric tons of textile trash generated annually, most of it mixed into household waste.

It will require brands and retailers to pay third parties to handle the clothes, shoes, accessories, blankets and curtains they have sold. That will fund producer responsibility organizations (PRO) that collect, sort, reuse or recycle the materials on the ground.

With this law in place, producers will essentially be paying for merchandise to flow through takeback collection infrastructure that the EU began requiring in January under its 2018 Waste Framework Directive.

Fees are supposed to be higher for products that are harder to reuse or recycle, and lower for circular items that include durability, repairability, recyclability and safer materials.

This leaves businesses that sell or ship fashion to Europe with a new checklist: audit product portfolios, engage PROs, design for circularity, prepare compliance systems and budget accordingly.

However, the new rules don’t go into effect immediately. Member nations have 30 months to adapt the directive to meet their individual concerns and requirements. This could take years, leaving businesses with runway to plan.

By March 2028, however, they are supposed to have the EPR pieces in place and begin reporting on the volumes of goods collected. 

Smaller businesses selling less than $890,220 per year have an additional 12-month grace period.

As with all regulatory sausage making, particularly in Europe, the directive leaves many details TBD. Unknowns include the extent of fees and fines for failing to comply, 

The H&M Foundation has publicly endorsed EPR regulation, and other brands have exercised their support through involvement in collective groups advancing sustainability in the industry, including Global Fashion Agenda and Fashion for Good.

Backers hope the results will include accelerated investments in recycling, design for durability and secondhand markets.

However, the European Branded Clothing Alliance (EBCA) and Amfori trade association have argued against the rules, warning of the high costs of compliance and needless complexity.

What could EPR look like in practice in each country? France and Netherlands, which already have EPR laws in place, offer clues. 

France, which introduced its version in 2007 and updated it in 2020 for clothes, shoes and household linens, bans destroying unsold goods and requires labeling around recycled content and the potential presence of microplastics. 

Producers and distributors pay fees that help sorters and recyclers, but complaints about inadequate support forced France earlier this year to provide $58 million in aid.

One PRO, Refashion, helped collect 268,161 metric tons of some 833,000 tons sold on the market in 2023. That’s a 32 percent collection rate, which the law demands to reach 60 percent by 2028. 

Eco-cost rule in France

As part of the 2021 Climate and Resilience Law requiring environmental labeling, France on Sept. 4 shared the final text for its eco-score rule.  

It applies to any company manufacturing, distributing or importing clothes in and into the nation. Companies must consider a life cycle assessment that takes into account 16 environmental factors. These include the contributions to climate change as well as the acidification and eutrophication of the oceans, freshwater pollution and the use of fossil fuels. 

The result is a weighted score for the coût environnemental, or environmental cost for apparel with at least 80 percent textile materials. Shoes, leather accessories, personal protective equipment and used goods are exempt. 

The French government uses a calculator called Ecobalyse to estimate the impacts of products. Third parties such as Carbonfact offer benchmarking tools as well.

For the next year, it’s voluntary for brands to calculate and publish the scores. However, they’re forced to do so if they already publish their carbon footprints or other environmental metrics. 

Full enforcement follows in October 2026. At that time, a third party may impose its own eco-score upon the products of brands that fail to comply. Businesses that don’t cooperate face fines of 5 percent of annual revenue or could be forced to pause their sales. 

Meanwhile, France has been cracking down on hyper-fast fashion under the same Climate and Resilience Law. On June 10, the nation voted to essentially ban direct-to-consumer companies with practices like Shein’s and Temu’s from advertising if they encourage overconsumption. Designing for disposability is a no-no, and violators face fines or sanctions.

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After several years of stuttering progress, the idea that carbon credits can be used to fund regenerative agriculture took a leap forward this week with the release of what might be the largest tranche of farmland credits. In a separate move, a national government announced that it would buy hundreds of thousands of credits from another project developer.

Danish startup Agreena said Monday that the carbon credit registry Verra had verified its work with farmers in 10 European nations, resulting in the release of 2.3 million credits. Farmers earned the credits by deploying regenerative agriculture techniques on close to 4 million acres over the past three years. The methods, including the use of cover crops and reduced tillage, store carbon in soils and reduce emissions from farmland operations. Potential co-benefits include improved yields and better water retention.

Radisson Hotel Group and Ryanair are among 15 companies that have purchased credits, said Simon Haldrup, Agreena CEO and co-founder.

Price points

The news is the latest milestone for a field that previously promised more than it delivered. A flurry of soil carbon startups launched at the start of the decade, but delays ensued after Verra and other registries took longer than expected to approve projects. This May, the U.S.-based project developer Indigo Ag issued 500,000 credits — its fourth annual batch — and said that farmers in its network, which spans 28 states, had stored almost a million tons of carbon dioxide in soils. The following month, Agoro Carbon, another soil carbon startup, announced a deal to deliver 2.6 million credits to Microsoft over a 12-year period.

“Soil carbon and regenerative ag fits the bill with a lot of the corporate buyers,” said Haldrup. “Both from a carbon and integrity perspective, but also from all the co-benefits and a reasonable price point.”

Haldrup declined to share the price of Agreena’s credits, noting that the company is still working to understand the market. Rather than sign long-term offtake agreements, as have become common in other areas of the carbon market, Agreena will be relying on spot market sales in the immediate future. Ewan Lamont, head of sustainability solutions at Indigo Ag, told Trellis in May that his company’s most recent credits cost between $60 and $80 per ton.

National interest

Another buyer with confirmed interest in the sector is the government of Singapore. Boomitra, a project developer that works with farmers in lower-income countries, said Monday it will deliver 625,000 soil carbon credits to the government between 2026 and 2031. The credits will be generated by paying ranchers in Paraguay to use regenerative grazing practices and will be used by Singapore to help meet its Paris Agreement emissions commitment.

The surge in interest is in part due to increasing confidence in the models used to estimate the carbon removals and avoided emissions associated with regenerative agriculture. Yet questions remain about the long-term capacity of farm and ranch soils to store carbon, as well as the reliability of the models. Soil sampling is the most accurate method for measuring soil carbon, but it is too expensive to carry out on every field.

Holdrup said Agreena took 200,000 samples last year across its network and collected 100 data points from each field, including information from farmers on crops planted, tillage and fertilizer use. Satellite imagery is also used to confirm where and when specific crops were planted.

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The International Organization for Standardization (ISO) and Greenhouse Gas (GHG) Protocol plan to “harmonize” their frameworks for emissions accounting and reporting, a move greeted with enthusiasm by professionals responsible for voluntary corporate disclosure.

The strategic partnership disclosed Sept. 9 by the two well-known international standards organizations seeks to unify the approaches used in ISO’s 1406X series of standards for managing greenhouse gas emissions inventories and product carbon footprints with GHG Protocol’s rules for how companies prepare statements for annual ESG and environmental reports. 

GHG Protocol’s guidelines are used by 97 percent of all companies that report. ISO, which represents 170 international standards bodies, has more than 25,000 standards, including around 600 processes related to energy, materials reuse and areas core to corporate climate action. 

The net effect of the new relationship will be to standardize how certain categories are defined across the frameworks for easier comparison. The partnership doesn’t apply to existing standards. New guidelines will eventually replace them.

“Investors need consistent, reliable data to deploy capital effectively in the transition to a low-carbon economy,” said Clara Barby, senior partner at investment firm Just Climate. “Together, ISO and GHG Protocol can provide coherent protocols as the basis for disclosure regions globally, offering the credibility and simplicity the market needs.” 

Deeper relationship

The two organizations have already been collaborating. ISO’s forthcoming net-zero standard, anticipated in late 2025, uses GHG Protocol’s definitions for its reference materials about how to consider emissions for Scope 1 (operational), Scope 2 (energy-related) and Scope 3 (upstream and downstream impacts). ISO and GHG Protocol are also aligning how they consider claims about carbon neutrality. 

Existing technical work at each organization will continue — both ISO and GHG Protocol are preparing big standards overhauls in 2025 — but governance teams are being asked to consider the harmonization process during that work, according to an ISO spokesperson.

No timeline was given for the work, but sustainability consultant Andrew Griffiths, who is involved with the ISO net-zero standard working group as co-founder of the Carbon Accounting Alliance, suggested it would take at least 18-24 months for the organizations to publish combined standards. 

There will be a lot of difficult negotiations ahead, said Griffiths in a LinkedIn update about the partnership that was reposted more than 120 times by sustainability professionals, most of whom were enthusiastic. 

The ISO-GHG Protocol partnership will be “transformative, bringing greater cost savings, efficiencies and interoperability to a market crying out for just this,” he said. “It is fundamentally a good idea, and it’d be a dereliction of duty if we didn’t seriously try to make this happen in the best possible way.”

The two organizations will remain fully independent in their governance and decision-making processes, the ISO spokesperson said. 

The agreement doesn’t explicitly include the Science Based Targets initiative, which has been consulting with both ISO and GHG Protocol on the overhaul of its corporate net-zero standard.  

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Everlane launched 14 years ago as an ethical apparel brand extolling “radical transparency,” a term that it trademarked. This year, the company has shifted to a “clean luxury” message to elevate its image and focus on sustainability.

Advancing lower-impact, certified and mostly natural materials supports the company’s net zero goal for 2050 and hedges against future regulatory risks. The strategy also seeks to rebuild trust lost five years ago, after workers blasted Everlane for greenwashing and poor labor and social practices.

Steering Everlane forward is Alfred Chang, a former Fear of God and PacSun chief executive. Last October, he became Everlane’s third CEO since co-founder Michael Preysman stepped away in 2021.

Katina Boutis, the senior director of sustainability and sourcing who joined Everlane early in 2021, described the label as “moving from transparency of pricing to transparency of supply chain to a very robust and holistic view of sustainability across social and environmental impacts.”

For instance, the company is closing in on a goal of 100 percent “preferred” materials that eliminate virgin plastics by the end of this year, according to Boutis, previously the sustainability director at luggage maker Away. Ninety percent of Everlane’s materials in 2024 met such “lower-impact” standards, such as being organic, recycled or responsibly sourced. 

“We’ve proven over the years that we can build a strategy that is meaningful and also attain very lofty goals,” Boutis told Trellis.

Shifting recognition

“Everlane now stands out less for its marketing claims and more for the tangible steps it’s taking on materials, emissions and accountability,” said fashion industry veteran and consultant Liz Alessi.

The company recently topped a list of 52 brands in the 2024 Fashion Accountability Report by Remake, a San Francisco advocacy group.

External estimates, which the privately held Everlane declined to verify, peg its 2024 sales around $200 million or more, with 420 employees across six continents. Although not a brand leader by size, Everlane’s transparent and ethical selling points have invited scrutiny since its founding. 

It holds a longtime narrative of eliminating middlemen to sell finely crafted, timeless fashions directly to consumers at a markdown. Its graphic of the “true costs” of a garment went viral.

Tracing the trouble

Despite this focus, Everlane was from its earliest days subject to watchdog complaints that it was short on sustainability details. And those complaints paled next to a March 2020 tweet by Sen. Bernie Sanders, who shamed the company after it had laid off hundreds of retail and customer support roles following attempts to unionize. 

That summer, former employees (self-described as the “Everlane Ex-Wives Club”) penned a public letter complaining of the company’s systemic racism and “convenient transparency.” 

Following an apology and investigation, Everlane changed leadership and began publishing annual impact reports.

Still, the company’s social responsibility disclosures fall short of being “radical,” according to Luke Smitham, a senior manager at Kumi Consulting in London.

“Currently they are very much within the pack but their communication tends to be more detailed and in some places refreshingly honest,” he said. For instance, the company explains why achieving living wages within its supply chain is very challenging, according to Smitham.

Material matters

Although the company declined to comment on past controversies, it is eager to discuss its progress on sourcing and manufacturing. Both are pivotal to hitting its net zero target, validated by the Science-Based Targets initiative. Sixty percent of the business’s climate footprint originates from materials, and 99 percent from Scope 3 sources.

Boutis described leading sustainability and sourcing across “a very tightly wound, cross-functional team.” She reports to a senior vice president who reports to Chang and the board.

“While many brands dabble in sustainable fabrics, Everlane has created a clear roadmap toward 100 percent preferred materials and tied it directly to science-based climate targets,” consultant Alessi said. “They’ve already achieved 90 percent of their materials meeting those standards and they’re one of the few brands close to fully sourcing sustainably. The choices they make in closing that final gap will define what true material leadership looks like in the industry.”

Everlane’s preferred materials ramp-up

Last year, the company counted an emissions drop of 52 percent per product unit against a baseline year of 2019 — close to the 2030 aim of 55 percent. So far, 95 percent of its cotton is either organic, regenerative, recycled or traceable back to the farm. Everlane invests in climate- and soil-friendly farming projects. In addition, all of Everlane’s virgin leather, manmade cellulosic fibers and down meet third-party standards. 

The company has switched 45 core materials to recycled versions, although 4 percent of its polyester and nylon still included virgin sources in 2024. Everlane originally sought to eliminate virgin plastics by 2021 for products and packaging, too. It succeeded with packaging, but moved the product goal to 2025.

“We see this less as pushing out a deadline and more as doubling down on a systems-level challenge,” Boutis said. After realizing that the hard-to-recycle items like zipper pulls, buttons and stretchy fabrics were an industry-wide problem, Everlane sought to support related startups.

In addition, 91 percent of the label’s goods were made under third party-certified chemicals standards, such as Oeko-Tex. And 78 percent of its Tier 2 mills, including for dyeing and finishing, had cleaner chemistry certifications.

“Once we achieve one goal or one milestone, we have to set our sights further,” Boutis said. “Sometimes, what we’ve noticed is that the solutions don’t even exist today.” That applies, for example, to Everlane’s participation with the Apparel Impact Institute in its efforts to help suppliers adopt low-emissions practices.

And although bottle-to-textile recycling may be the best “circular” solution so far, textile-to-textile recycling could be better. To that end, Everlane is partnering with Fiber Club, a multi-brand project by the startup Circ, to feature Circ’s recycled lyocell in a small 2026 collection.

Reducing plastic risks

The natural fiber-forward approach is also about risk reduction. Everlane actively supports policies, including the nation’s first extended producer responsibility law, which in California this year began requiring fashion brands to account for their sold merchandise. 

The company developed its first synthetics at the same time it devised materials targets in 2018. That shed light on the lifecycle impacts of polymer fibers, which Everlane limits to items like jackets with low rates of shedding. (Everlane lobbied for a California bill that would have required filters on washing machines.)

“It’s not just the public that is starting to really understand and grapple with the subject,” Boutis said of concerns about plastic pollution from fashion. “The industry and lawmakers in particular are on that same pathway.”

“We’ve been able to demonstrate that we’re making real, meaningful progress, whether it’s our climate commitments or material commitments,” Boutis said. “We are actually succeeding, both on the business end and the sustainability end, which I think many times are positioned as in opposition to one another.”

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The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.​

Throughout the past few months, we’ve discussed how to set sustainability strategy through an approach we call Sustainability Tension Management, which allows practitioners to adapt and operate fluidly in both the profit and loss culture of business and the policy and impact world of sustainability. But it’s always helpful to see what this strategy looks like in practice and we’ve gotten that opportunity by observing the UPS sustainability team led by chief sustainability officer Scott Childress.

Childress brings a unique profile to the CSO role. An economist by training, he spent most of his UPS career in the finance and accounting department, rising to serve as the CFO for specific business lines. Someone with Scott’s background represents a prime example of a business insider leading the function. Our research has found business insiders often lean towards making modest, incremental moves, while sustainability experts from outside of business frequently push for more ambitious impact.

While it may sound as if insiders’ lower ambition might make them less impactful, their ability to leverage business acumen, internal relationships and navigate corporate bureaucracy provides them with a set of Akido-like capabilities, where force is not met with force but by redirection.

These skills can drive tangible impact for people and profit, as we’ve seen with Childress and his team. Below are five lessons we’ve learned from UPS’ sustainability transformation.

Lesson 1: Use data to drive change

Disclosure and reporting processes, while essential, can make incredibly rich, varied and strategic emissions and energy data start to look and feel static and siloed. Our research finds the most successful sustainability leaders prioritize creating systems and processes that go beyond disclosures and foster the use of data to drive insight and impact for people, planet and profit. To advance this, the UPS Sustainability team moved away from ad hoc data management via Excel and centralized the data collection process, working with tech partners and the IT department to create a solution that fit UPS’s approach to information management.

Childress and his team intuitively understood that sustainability needs to align with the organizational culture and entrepreneurial style of UPS. At its heart, UPS manages logistics with an engineering firm’s approach: laser-focused on data-driven efficiency. “We view validated, high-confidence data as a huge enabler,” he said. That’s because robust data and analytics encourage decision makers to devote resources to improve energy performance and keep the company on track towards its 2050 carbon neutrality commitment.  

Lesson 2: Get data in the hands of the right decision makers

Too much sustainability data often remains visible only to a company’s sustainability team. Childress and his team saw that data collection was set up to respond to the requirements of specific government reporting standards. However, it was missing the opportunity to better inform internal operational decision makers.

The UPS team set up their group to serve as the central hub for all sustainability data, which they then translated into actionable, user-friendly, consistently updated formats for teams across the business. To affect decisions and behaviors of decision makers, the data needed to be “bilingual” and speak the language of the business in addition to the language of sustainability reporting standards, rating systems and regulatory requirements. The sustainability team made sure to connect with key internal stakeholders to understand what questions they wanted to answer, how frequently they wanted updates and what kind of analytic functionality would best support them.

Lesson 3: Help decision makers balance tensions and resolve tradeoffs

Childress’ own experience as CFO helped the sustainability team recognize that UPS decision makers wanted a data management system that would allow them to track emissions tied to financial and accounting modeling. While many GHG tracking tools support reporting and disclosure, this functionality was not readily available. “Instead of going to others to look at ROI on invested capital we used our own company models to build a cash flow model to determine how an option for reducing emissions would affect budget expenditures and financial outcomes such as reduced costs,” Childress recalled.

Doing so helped company leaders translate GHG data to familiar financial analytics. They could now understand GHG and energy from the lens of efficiency and treat GHG as a waste stream that needed management optimization. Now anyone who might not have ever heard of Science Based Targets could accelerate their evaluations and scenario analysis and make decisions regarding capital allocation that would drive financial and low carbon outcomes.

Lesson 4: Drive impact and business benefits

The outcome of the sustainability team’s work is an interactive data management tool that allows business leaders to get granular carbon and energy data by emission source. It enables leaders to craft scenarios that show the impact of changes on emissions and related costs and/or savings.

For example, the company’s European operations can monitor monthly consumption of ground fuels, natural gas, diesel and bio-based and renewable fuels in its vehicle fleets. The database taps into purchasing invoices to get location specific data on the amount of fuels purchased and consumed and then calculate GHG emissions. The data even shows miles driven and related emissions by location. The sustainability team can track every flight and the amount of fuel burned by route. Auditing teams constantly make sure the numbers are validated. In addition, the database helps UPS respond to customer request support in reducing GHG emissions tied to their supply chain and logistics.

Lesson 5: Shift the focus of accountability from inputs to impacts

The data management system, “gives us tremendous flexibility,” Childress said. “We can now implement initiatives and measure monthly to see how seasonality affects us, and to see if initiatives are effective. It was super important to start with the data and then the ecosystem possibilities came to life.”

The database has become an invaluable tool for leaders across the business to pull their weight in reducing emissions. Rather than reviewing data and brainstorming ways to reduce emissions on an annual basis, decision makers can review and trial actions on a monthly basis. In addition, decision makers can develop the knowledge and skillset to connect better GHG and energy management to enhanced business and financial results.

The data also helps decision-makers make more informed calculations regarding fuel choices as they compare fossil fuels with renewables, biofuels, hydrogen, electric and other options.

For example, if UPS shaves a minute off a process, the savings across a global company of around 490,000 employees is substantial. The GHG and energy database catalyzes innovative ideas that improve efficiency.

Sweet spot alignment

The UPS example shows the potential of adapting business thinking to sustainability and sustainability thinking to business. Sustainability practices can get caught up in an over-emphasis on tracking inputs. But the UPS story reminds us of how important it is to make the subtle but profound shift to set up systems and incentives that establish accountability for delivering positive results for people, planet and profit.

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