Meeting sustainability standards and navigating an evolving regulatory landscape has become a painstaking challenge for the fashion sector. Brands face increasing pressure from global legislation, shifting consumer expectations and complex supply chains, all while trying to reduce environmental impact and maintain operational efficiency.
According to Hrishikesh Mohan, director of product management and sustainability at Centric Software, brands seeking to tackle this environment fall within three tiers of “data-readiness.”
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At the forefront are the leaders, which consist of brands already aligning with regulations like CSRD and CSDDD, and preparing for European Union’s introduction of digital product passports.
“From their perspective, all departments—whether it’s sustainability, sourcing, design—they seem to be working well together to meet those objectives,” he said during Sourcing Journal’s annual Fall Summit.
Leaders have already mapped tier-one, tier-two, and even some tier-three suppliers, invested in traceability systems, and upgraded PLM and ERP systems to ensure seamless data flow.
The next group includes brands starting to engage with European regulations, seeking a better understanding of supplier traceability and data management.
The final cluster is comprised of companies that are just beginning the mapping process, inquiring about the necessary data points but hesitant to fully commit, Mohan said. These companies have often been hit the hardest by tariffs introduced in 2025, in addition to the rollback of certain sustainability-related regulations under the Trump administration.
As companies still try to optimize their data-readiness capabilities, material innovation has emerged as a critical lever for change. From recycled fibers to bio-based textiles, the choices brands make at the material level have far-reaching consequences for product sustainability, supply chain traceability, and compliance.
Mohan said the percentage of recycled fiber used in apparel is still in the single digits, “so that needs to change.”
During the panel, he acknowledged that material innovation is about more than swapping fabrics, saying “it’s not just one path of switching to recycled [fiber].”
For outerwear and footwear, where multiple materials are layered, mono-material design can drastically improve recyclability, Mohan told Sourcing Journal’s senior news and features editor Kate Nishimura. He also said that designing products for repair and longevity extends lifecycle impact, reducing waste and resource use.
Bio-based fibers must align with recycling infrastructure, and mono-material designs require manufacturing partners capable of handling simplified materials, he noted.
Mohan emphasized that software tools help brands understand the detailed composition of materials used, and ensure that this information flows across supply chains.
“Our customers use the software to understand [what percent of the material] is bio-based, how much is recycled,” he said. This level of insight allows brands to experiment with new fibers and materials while maintaining compliance with CSRD and CSDDD, as well as digital product passports.
Operational systems are equally critical to upholding consistent sustainability standards. Andrew Carlin, sales executive at Centric Software, described the challenge as a “frankenstack” of spreadsheets, emails, and disconnected systems. Without a centralized solution, brands cannot reliably measure environmental impact or manage reporting obligations, he said.
Carlin said centralized systems allow for material-level tracking and dual accounting—tracking financial and environmental costs simultaneously—all built to help companies adapt quickly to evolving regulations.
“Whether that’s water, CO₂ emissions or recyclability, you can get really granular” in connecting every material choice to its environmental impact, Carlin said.
Integrating PLM and ERP systems ensures that all departments—from design and sourcing to sustainability and finance—can access the same information. This can better provide real-time insight into environmental impact, enabling brands to adjust materials, processes and sourcing in response to regulatory or market changes.
The benefits of these systems are tangible. Outdoor Research, for example, has leveraged integrated product data to tie together material details with volume and mass to measure both its carbon footprint and sustainability impact.
For brands still hesitant to prioritize sustainability, the advice is clear: start measuring, even if the data is imperfect.
“You don’t need perfect data by any means. You need better data than you have today, but it really comes down to an improved structure,” Carlin said.
Mohan emphasized that early action mitigates risk and positions brands for compliance, which is increasingly non-negotiable.
“Think in terms of risk medication, so if more regulations come, you are better prepared,” Mohan said. “Also think in terms of telling a story to your customer, because now, no matter what you offer, there is a storytelling piece to your product.”
