Right now, a global “wave” of due diligence and transparency legislation is reshaping the regulatory landscape for fashion companies. The European Union is leading this regulatory charge with several interconnected directives that seeks to fundamentally alter how fashion brands approach supply chain management. The Corporate Sustainability Due Diligence Directive (CSDDD), although significantly narrowed from its original scope, is expected to have substantial impact on large fashion companies operating within or selling to the EU.
The Corporate Sustainability Reporting Directive (CSRD) is another regulatory development, requiring detailed assessment of environmental and social risks across supply chains, including labour practices and material sourcing. By mandating standardised, auditable disclosures, the CSRD aims to drive greater accountability and transparency, compelling companies to actively manage sustainability risks beyond mere reporting. This approach means fashion companies must develop robust systems for identifying, assessing, and addressing risks throughout their supply chains.
The EU Forced Labour Regulations, set to take effect in 2027, will directly target forced labour by banning products linked to child labour, requiring companies to identify and eliminate any form of child labour from their supply chains. The regulations don't explicitly mandate due diligence, but the idea is to force companies to implement comprehensive monitoring and verification systems.
Beyond EU-wide legislation, individual countries are implementing their own mandatory due diligence requirements. Germany's Supply Chain Due Diligence Act (LkSG) and France's Duty of Vigilance Law impose strict obligations to identify, assess, and mitigate human rights and environmental risks throughout the supply chain. The Netherlands' proposed Responsible and Sustainable International Business Conduct Act would enhance corporate accountability, particularly around child labour and broader sustainability issues.
The regulatory momentum extends globally, with Australia's Modern Slavery Act reforms introducing mandatory due diligence requirements following a 2023 review. Norway's Transparency Act requires companies, including fashion brands selling in Norway, to conduct human rights due diligence through regular assessment, prevention, and reporting. In the United States, the proposed Slave-Free Business Certification Act could impose significant obligations on large companies with global supply chains, requiring annual audits to detect and eliminate forced labour.
The United Kingdom's Modern Slavery Act continues to evolve, with the 2025 guidance update emphasising proactive measures to address supply chain risks. Although due diligence isn't yet a legal obligation, large companies are increasingly expected to conduct comprehensive risk assessments and integrate anti-slavery practices into their core operations.
Environmental regulations add another layer of complexity. The EU Deforestation Regulation (EUDR) directly targets the fashion industry by focusing on leather and rubber, both widely used in apparel, footwear, and accessories. Companies must demonstrate that their products aren't linked to deforestation through robust due diligence procedures, requiring detailed traceability systems and supplier verification processes.
This regulatory convergence represents a fundamental shift from voluntary corporate responsibility to mandatory compliance. Fashion companies can no longer rely on self-reporting or general commitments; they must implement comprehensive systems for identifying, assessing, and addressing supply chain risks whilst providing detailed, auditable evidence of their efforts.