The fashion industry is staring down the barrel of 2030 and faced with forking interests: a confluence of geopolitical turbulence, tariff turmoil, and pervasive economic uncertainty is driving what some industry insiders are calling a sustainability retreat. And on this fiscally-fraught getaway—otherwise known as trade’s ever-changing landscape—suppliers represent ground zero.
So, what’s the next stop?
“My answer may change based on what happens tomorrow,” prefaced Sarosh Kuruvilla, academic director of Cornell University’s ILR Global Labor Institute and professor of industrial relations and Asian studies.
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Speaking at SJ’s Fall Summit, Kuruvilla addressed the fate of the European Union—more specifically, the Corporate Sustainability Due Diligence Directive (CSDDD)—and its potential impact on worker rights and accountability for brands.
More specifically, he’s referencing the “tense and intense” crunch-time negotiations currently unfolding. From Kuruvilla’s perspective, the industry doesn’t have a method of holding everyone accountable if the due diligence legislation is watered down significantly enough; a death-by-omnibus could undermine supply chain accountability across the value chain at large.
“If the CSDDD doesn’t come in at all, if everything is gutted, I’m pessimistic about the future of labor rights and sustainability,” Kuruvilla said. “What makes me a little optimistic is that, even the legislation will have a base minimum—to do risk analysis and make that risk analysis public.”
MAS Holdings, meanwhile, emphasized the importance of long-term vision and innovation, given the current environment exerts extreme price pressure on suppliers that are already operating on “mid-single-digit margins,” leaving little room for additional costs or endeavors.
“I think in the most volatile times are when companies are tested,” said Nemanthie Kooragamage, director of group sustainable business at MAS Holdings. “For us, it’s been not having that perfect strategy but having leaders who can keep sight of the long-term vision in a short-term world, and having that clarity of thought, being able to understand what is non-negotiable. What can be paused?”
These combined pressures force difficult choices, Kooragamage said; a company may have to make decisions about where to invest (like energy) and what initiatives (like biodiversity restoration) to pause as a result. Kooragamage confirmed that while the “wellbeing of our people is a non-negotiable,” they may have to pause things like “biodiversity restoration” to prioritize necessary areas, such as energy.
Snags aside, a clear business case for sustainability persists, repositioned as a crucial driver of competitive advantage and long-term for supply chain resiliency.
“The cost of not taking action is potentially even greater,” said Beth Jensen, chief impact officer of Textile Exchange. She outlined the economic barriers facing raw material producers who are on the “front line of climate change.” Challenges like commodity pricing hinder scaling what the multi-stakeholder organization sees as where impact happens: the “preferred production systems.”
“If we don’t invest in preferred production systems now, we won’t have supply in the way that companies want to be sourcing—now and into the future,” Jensen said. These systems are categorized into three main areas: natural fiber cultivation, animal fiber sourcing and technical recycling solutions.
“We need to reduce impacts related to climate and nature, make sure that people have good livelihoods, make sure animals are treated well on the supply chain—all of those things are true,” Jensen said. “And also, there’s a huge risk to not investing in these types of production systems now. A huge risk to businesses, to be able to go forward and do the type of work that they want to be doing and make the type of products that they want to be making.”
When asked why businesses should still care about sustainability while putting out other fires, Jensen said supply chain resiliency and managing business risk are “what it’s all about.”
“Apart from the moral issue—respecting human rights everywhere—the trend we are seeing for businesses is to focus on resilient and steady supply chains,” Kuruvilla said. “From that perspective, I think sustainability is a business requirement as well.
For Kooragamage, the answer is based on one’s belief systems.
“It’s a question of whether you want to be in it only for pricing, or do you want to create something more than that,” she said, noting that the company employs 95,000 people across the world; not only are their well-being, but the environments that they live in, are essential to protect.
“Our business has always been built in being able to deliver a quality garment on time,” Kooragamage continued. “That doesn’t happen if you don’t have workers who are looked after.”
