Climate regulations and carbon footprint requirements for suppliers

Introduction and Background

Climate regulations and carbon footprint requirements for suppliers within the textile and apparel industry have become an extremely important framework in recent years. This issue is constantly being highlighted as brands, governments, and consumers place pressure on companies to reduce the environmental harm of their production and business practices. As the apparel industry grows, supplier practices play a more direct role in whether companies can meet sustainability goals and comply with emerging legislation.

Climate regulations are defined as laws, policies, reporting standards, and environmental requirements set by governing bodies to reduce harm to the environment, particularly in greenhouse gas emissions and unsustainable production processes. These regulations include supply chain oversight requirements, sustainability disclosure laws, and broadened circularity goals for textiles.

Moreover, the term carbon footprint refers to the total amount of greenhouse gas emissions produced directly and indirectly by a person, company, or supply chain activity. These emissions increase the number of heat-trapping gases in the atmosphere, directly causing global warming. Measuring this value can be complex because emissions can arise at many stages in the supply chain, such as textile production, sewing, packaging, and transportation.

Continuously, carbon footprints are commonly grouped into one of three scopes. Scope 1 refers to direct emissions from companies, such as company vehicles and facilities. Scope 2 describes a third-party energy acquired by the company, namely electricity, heating, and cooling for their factories. Scope 3 emissions, usually the largest in the apparel industry, include all indirect processes in and around the supply chain.

Trend Analysis

Currently, the apparel industry is experiencing a major shift from brands voluntarily making sustainability efforts in their production process to a much more regulated and enforced system. In the past, sustainability initiatives aimed to help with the global climate problem were subjective to each brand and sometimes used as a marketing tactic that was not always verified or enforced. However, as climate concerns grow in the apparel industry, new regulations are being enforced for companies to take more responsibility. This is significant because most emissions in the apparel industry come from supply chains and the production process. Research shows that over 75% of a firm’s carbon footprint is linked to logistics, transportation, and production (Karaman et al., 2024). As a result, companies are now being held accountable not only for their own operations, but for the environmental impact of their suppliers.

While the implementation of mandatory sustainability practices is a necessary step for protecting the environment, it has a large impact on how companies run their daily operations. Implementing changes that will have a better impact on the environment affects many areas, including cost, the supply chain timeline, where a company is sourcing from, and how much product a company is developing. Timelines will likely increase, and production costs will go up. Sustainability practices typically add extra steps to the supply chain process, making it more time-consuming and expensive. This is the most common reason suppliers have cut corners in these practices in the past. Previously, climate regulations and reducing the globe’s carbon footprint seemed like a respectable idea that was voluntary for brands to work towards. Now, with the introduction of mandatory regulations and reporting, it is essential that companies take a broad look at their daily operations within their supply chain and evaluate the most effective way to move forward.

The origins of these regulations can be traced back to past global efforts, such as international agreements like the Paris Agreement. The Paris Agreement has been adopted by 197 countries, requiring participating nations to submit climate action plans that work to reduce emissions over time (Chua, 2017). In addition to international agreements, standardized regulations like the Greenhouse Gas (GHG) Protocol have been developed to help companies consistently measure and report emissions (GHG, 2004). Overall, these regulations have always been an effort to improve transparency, ensure accountability for brands, and make sustainability efforts measurable across different industries. This has helped in the apparel production sector, where monitoring is difficult.

When comparing past and current sustainability regulations, a clear shift can be seen. In the past, since sustainability efforts were largely voluntary, there have been widespread greenwashing issues in the apparel industry. Companies could make environmental claims without providing strong evidence, and there was minimal pressure to change supply chain practices.

Today, however, regulations are becoming more structured and mandatory. For example, California has introduced climate disclosure laws, including Senate Bills 253 and 261, which require large companies to report greenhouse gas emissions and climate-related risks (Johnson, 2026). This reflects the broader trend towards enforced global compliance with carbon emission regulations. There are also clear differences in how regulations are enforced globally. In the United States, climate regulations are still developing and can be inconsistent due to political changes. Examples of this include the decision to withdraw from the Paris Agreement, which has led to uncertainty about the progress of national climate policy. Donald Trump’s decision to withdraw from the Paris Agreement in 2015 sparked global backlash because it signaled a retreat from climate concerns or regulations by a global leader. In response, industry leaders such as Chip Bergh made it clear that companies would continue advancing sustainable efforts (Chua, 2017). This highlights a growing disconnect between government policy and companies’ commitments to reducing environmental impact.

In contrast, the European Union has taken a more aggressive and structured approach to creating regulations. The EU Strategy for Sustainable and Circular Textiles requires products to be durable, repairable, recyclable, and made with fewer harmful substances, while also introducing tools such as Digital Product Passports to improve transparency (European Commission, 2022). In major manufacturing regions like China, regulations are still evolving, but suppliers are heavily influenced by the global brands they are contracted by and international consumer expectations. This is reinforced by Jason Kibbey, who notes that “when you look at where the supply chains are, those countries are still going to be bound by the Paris Agreement,” meaning that “improvements in factories and various manufactures up and down the value chain are still going to happen anyway” (Chua, 2017). Even as national policies differ, the overall trend still shows global supply chains, pushing suppliers to meet similar sustainability standards to remain competitive.

This growing pressure for sustainability is becoming more urgent as the environmental impact of the apparel industry continues to rise. The industry is already considered one of the leading contributors to global pollution, and its carbon footprint is projected to increase by 60%, reaching nearly 2.8 billion tons per year by 2030 (Li, 2024). This level of emissions is comparable to the output of almost 230 million passenger vehicles. This emphasizes the scale of the climate issue and the need for more structured global interventions.

Implications for Sourcing Professionals

With brand reputations at stake and growing sustainability laws to uphold, there will be many things to consider in the near future as a sourcing professional. Sourcing professionals should start implementing traceability throughout their supply chains to remain in good social standing. Socially, consumers are putting pressure on companies to take responsibility for how their clothes are made and how their production impacts emissions. While more developed countries, like the U.S., may have stricter regulations, outsourcing has allowed major companies to “avoid responsibility for how they make their clothes” (Weber, 2025).

Therefore, traceability has become a major interest in sustainability recently. According to Weber, “Traceability refers to full supply-chain visibility that allows consumers and governments to effectively monitor brands at every stage of production”. Consumers are also particularly interested in traceability because it decreases the likelihood of greenwashing among companies. Soon, there may be laws in place that require better traceability; therefore, it would be beneficial to start the implementation early.

In order to improve traceability, companies need to look both internally and externally to evaluate how their products are being made. As Scientific Research Publishing states regarding traceability, “Key gaps in the process include a lack of comprehensive and transparent information about how, where, and by whom materials are sourced, processed, and assembled” (Aakanksha & Aravendan, 2023). The article highlights a new software called Tex.tracer that is attached to a garment with a QR code that consumers can scan to gain in-depth insight into each step of the supply chain process.

Now more than ever, it is essential for companies to evaluate all options throughout the supply chain and immediately avoid resorting to the cheapest and fastest ones. Through supply chain mapping involving all tiers, companies can get the information they need to make more informed decisions. It is not only helpful for companies to decide what suppliers they want to work with, but it is necessary to hold existing facets accountable.

Growing legal regulations affect both regional and global companies. However, the effects look different for each. Climate disclosure regulations are already active in some countries, such as the United Kingdom and Mexico. In the United States, each state has its own climate disclosure regulations. However, as of January 2026, regulations are spreading across states. New York has recently “reintroduced climate disclosure laws that mirrored California’s” (Johnson, 2026). As we move forward, we will see regulation implementation expand rapidly across the global market.

Global companies may have a difficult time applying multiple local and international laws. Having to abide by numerous regulations may “affect their production and scale capacities at home and abroad” (Weber, 2025). In nations like Australia and Spain, they have introduced new regulations that will require large companies to report climate-related financial risks in the upcoming years. Additionally, nearly 40 jurisdictions worldwide have either adopted or are in the process of adopting disclosure frameworks aligned with the International Sustainability Standards Board (Johnson, 2026). Overall, this demonstrates a clear shift toward standardized, global enforcement of sustainability practices. As this trend continues, companies within the apparel industry will be expected to operate with greater transparency and accountability.

Looking toward the future, the EU Commission has set up a detailed plan for how textiles and their production will ideally look by 2030. On their website, they expand on their goals, actions to reach these goals, and what implementation is set to look like. They are striving to move away from fast fashion, have an influx of profitable reuse and repair services, and high-quality products on the market. Specifically, all products on the market will be “durable, repairable, recyclable, and, to a great extent, made of recycled fibers, free of hazardous substances, and produced in respect of social rights and the environment” (European Commission, n.d.). According to their implementation plan on their website, there will be a new ban being enforced later this year. The date July 19, 2026, is listed on their timeline to introduce a “Ban on destroying unsold textiles and footwear begins for large enterprises” (European Commission, n.d.)

Essentially, long-term planning is essential for sourcing professionals to make sure they meet both government and consumer demands. By increasing visibility and examining existing and potential new partners, companies are setting themselves up for success. With government regulations frequently changing and abruptly going into effect, it is important for companies to always look toward the future and plan ahead. By doing so, they can avoid long timelines, public scrutiny, and failed compliance results.

Conclusion

In conclusion, the voluntary sustainable efforts by companies that were previously accepted are no longer sufficient. The industry will need to shift towards stronger and more enforceable regulations. This means sourcing professionals can expect additional sustainability laws and social pressure for transparency. Companies need to immediately start making proactive changes in order to meet sustainability goals and comply with emerging legislation.

References

Aakanksha, L., & Aravendan, M. (2023). Impacts of Transparency and Traceability on Fashion Supply Chain System. Scientific Research Publishing. https://doi.org/10.4236/IIM.2023.153006 

Chua, J. M. (2017). Apparel’s Response to the US Paris Agreement Exit. Sourcing Journal (Online). https://www.proquest.com/trade-journals/apparel-s-response-us-paris-agreement-exit/docview

European Commission. “EU Strategy for Sustainable and Circular Textiles.” European Commission, 2022, environment.ec.europa.eu/strategy/textiles-strategy_en.

Johnson, L. (2026, January 29). Companies Face Fragmented Climate Risk Disclosure Landscape in 2026. ESGDive. https://www.esgdive.com/news/corporate-climate-risk

Karaman, A. S., Ellili, N. O. D., & Uyar, A. (2024). Do sustainable supply chain practices mitigate carbon emissions? The role of supplier environmental, social and governance training. Business Strategy and the Environment, 33(8), 8126–8148. https://doi.org/10.1002/bse.3931

Li, J. (2024). Fast Fashion and Emissions: What’s The Link?. Earth.org. https://earth.org/fast-fashion-and-emissions-whats-the-link/

The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard. (2004). World Business Council for Sustainable Development ; World Resources Institute. https://ghgprotocol.org/sites/default/files/standards/ghg-protocol-revised.pdf

Weber, M. (2025). “Seam-ingly” Compliant or Creating Consciously: A Comparative Survey of Fashion Industry Targeted Sustainability Laws in the European Union and the United States. The International Lawyer, 58(1), 158–173. https://www.proquest.com/scholarly-journals/seam-ingly-compliant-creating-consciously/docview/3203362364/se-2