Global industries are feeling the added strain from increasingly stringent sustainability regulations. For fashion brands today, how a company reports its ESG efforts can define its reputation just as much as its success on the runway.
The UK Sustainability Reporting Standards (UK SRS) currently going through consultation, will demand the same precision in sustainability reporting that brands apply to other areas of business, like their financial accounts. The rigor added to reporting means every choice made will need to be documented with the upmost precision.
But Europe’s experience with the Corporate Sustainability Reporting Directive (CSRD) has shown that while compliance can be challenging, brands that embed it into the foundations of their business will unlock new ways to cement their position in a market that’s very prominently in the public eye.
Here are five ways they can get a head start.
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1. Get a grip on supply chains early on.
When the EU introduced the CSRD, adhering to the new regulation was only part of the puzzle. The directive also highlighted an ongoing challenge within many organizations: siloed data and disconnected systems that made reporting far more challenging than expected. The difficulty in the fashion space is that every stage of the supply chain, right from raw fiber extraction to garment manufacturing, logistics and retail, has its own blind spot when it comes to traceability, data quality and accountability. This poses a challenge for brands that — now more than ever — need to see a full picture of their environmental impact.
These difficulties are further amplified for global fashion companies by regional differences in how data is tracked. For example, suppliers in Europe may already collect emissions information, while smaller factories in South Asia or Latin America may lack the systems to do so, resulting in inconsistent data records that make it difficult to produce credible and verifiable sustainability reports.
2. The growing importance of materiality.
One of the biggest lessons from Europe’s CSRD rollout is that materiality isn’t purely technical, but instead shaped by what stakeholders, communities and customers expect.
While the UK SRS focuses on “financial materiality,” meaning issues that affect a company’s value, global investors and consumers increasingly expect visibility into broader social and environmental impacts. For fashion, this includes topics such as water use, deforestation, labor rights and circularity.
The key takeaway here is that brands should embrace both financial and impact materiality, not just to comply with regulations but to position themselves for global relevance. This will enable them to show investors and customers that sustainability isn’t a tick-box activity for them, but a measure of long-term resilience.
3. Deeper assurance is needed.
Under CSRD, limited assurance (an audit-style verification of sustainability data) is already mandatory, with reasonable assurance to follow. While limited assurance focuses on surface-level checks of reported figures, reasonable assurance will require deeper testing and evidence, similar to a full financial audit. Many European companies underestimated the rigor of this process, as auditors began reviewing data lineage, supplier inputs and documentation to ensure the same level of credibility expected in financial reporting.
This is a lesson for brands worldwide. Regardless of geography, sustainability data is moving into the same governance space as financial data. Sustainability claims must be traceable, evidence-based and verifiable. For fashion brands operating across borders, this means harmonizing data systems so that information can withstand audit anywhere in the EU, the UK or beyond.
4. Strong reporting equates to a stronger market position.
Across Europe, the CSRD has shown that sustainability disclosures aren’t simply for regulatory matters; they shape how investors, lenders and retailers perceive a brand. Poor data quality can damage credibility and limit access to finance, while strong, transparent reporting strengthens market positioning.
This is a global dynamic. A fashion company in India or Brazil that can produce credible, audit-ready data will have an advantage when negotiating contracts with European buyers or applying for green finance. Sustainability reporting has become a form of business diplomacy, in a way, a language that builds trust across markets.
5. One repository for multiple frameworks.
The most successful multinational fashion companies are moving toward a “file once, serve many” approach to reporting. Instead of creating separate datasets for each regulation, like the CSRD in the EU, SDS in the UK and SEC rules in the US, they are building centralized systems of record that can export to multiple frameworks.
This interoperability saves time and ensures consistency across global operations. More importantly, it future-proofs brands against the inevitable wave of new disclosure requirements coming from other regions.
Global fashion brands have a real opportunity to get more out of the efforts towards sustainability compliance. Replacing fragmented, spreadsheet-based approaches with intelligent platforms that bring data together for accurate, traceable and auditable reporting brings greater confidence to compliance, and fuels a stronger growth strategy for the overall business.
Juanjo Mestre is the CEO and Co-founder of Dcycle. With a unique background in UX design and philosophy, he transitioned from creative roles at top agencies in Spain to leading Dcycle, with a mission to make sustainability both accessible and actionable for businesses. Driven by a deep passion for philosophy, strong leadership and an innate inclination toward innovation, Mestre provided Dcycle with the vision and direction it needed to become the #1 ESG solution in Spain within just a few years. The company has attracted over €6 million in funding, gained more than 2,000 clients and expanded its operations across Spain, Portugal, Italy, and the UK. Mestre firmly believes that sustainability should be a strategic lever for businesses, not merely a compliance requirement. His vision is to empower companies of all sizes to seamlessly integrate sustainability into their core operations through intelligent data solutions.
