The fashion industry is undergoing a seismic shift as traceability and transparency moves from being an aspirational goal to an absolute necessity. This concept, once touted as a differentiator for forward-thinking brands, is now a non-negotiable and table stakes for operating in today’s global market. While consumer and investor focus on transparency has shifted, regulatory pressures and operational accountability continue to drive brands toward these practices to remain competitive.
Traceability and transparency—knowing where and how products are made and sharing that information openly—have become critical for fashion brands. In the past, many companies focused on marketing sustainability initiatives without fully committing to the comprehensive work of supply chain accountability. However, external forces are now dictating a new reality.
Though consumer interest in sustainability remains relevant, research indicates that the broader consumer base often prioritizes affordability, convenience, and quality over detailed insights into supply chain practices. Surveys frequently suggest that consumers are willing to “vote with their pocketbooks” for brands aligned with their values, yet real-world behavior often tells a different story. Similarly, while investors have historically sought explicit ESG benchmarks as indicators of long-term stability, recent market uncertainties have shifted their focus toward immediate financial performance.
This does not mean that customers and investors have stopped caring about ESG. For consumers, purchasing decisions may sometimes prioritize personal preferences over a brand’s ESG initiatives, but there is strong evidence that authentic and transparent practices in ethical sourcing and supply chain management foster trust and build long-term brand loyalty—an essential element of sustained business success. For investors, ESG remains important as a framework for assessing long-term viability and risk. Transparency, in particular, plays a critical role in mitigating operational and reputational risks, which are key considerations for any business seeking stability and growth.
As a result, transparency efforts today are less about directly responding to consumer or investor demands and more about meeting regulatory requirements, mitigating risks, and establishing resilience in an increasingly complex business environment.
This evolving landscape means brands must adapt, not necessarily to meet external clamor for visibility, but to future-proof their operations, mitigate risks, and establish resilience in an increasingly scrutinized industry.
Achieving traceability and transparency is not a one-and-done task; it requires a fundamental shift in how brands approach their operations. This work must be deeply integrated into the sourcing strategies, processes, and procedures of fashion companies.
To begin with, traceability demands end-to-end visibility of the supply chain, which means mapping every tier—from fiber and raw material suppliers to finished product manufacturers. This is no small feat, especially in the fashion industry, where supply chains are notoriously complex and often involve multiple intermediaries. However, advancements in artificial intelligence (AI) are revolutionizing how companies can track, analyze, and manage supply chain data.
AI is enabling brands to identify risks, flag irregularities, and ensure compliance in near real-time. By leveraging AI-powered tools, companies can process vast amounts of supply chain data, monitor supplier practices, and predict potential disruptions with unprecedented efficiency. Unlike earlier technologies like blockchain, which primarily focused on static tracking, AI offers dynamic insights, adaptability, and predictive capabilities that help brands respond to challenges proactively.
Integrating traceability and transparency into sourcing strategies also requires a cultural shift within organizations. For many brands, this means moving away from the traditional focus on cost and speed at the expense of ethical considerations. Instead, sourcing teams must prioritize responsible practices as a core element of decision-making.
This shift has far-reaching implications for how brands operate globally. For instance:
As traceability and transparency become standard expectations, brands must rise to the challenge by embedding these principles into every aspect of their operations. It’s a complex journey, but the benefits—from regulatory compliance to strengthened operational resilience—are well worth the effort.
The fashion industry stands at a crossroads. Companies that embrace traceability and transparency not only contribute to a more ethical and sustainable future but also position themselves as leaders in an increasingly complex market. Those that don’t risk being left behind, overshadowed by competitors who understand that accountability is the new currency of success.
The work is ongoing, demanding vigilance, innovation, and collaboration at every level. But as the industry evolves, one thing is clear: traceability and transparency are no longer optional. They are the foundation upon which the future of fashion must be built.
Liz Hershfield, Green-ish.co Founder and Council Member of Better Cotton
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