ESPR, CSRD & DPPs: What Fashion Suppliers Need to Know Before 2027
Aug 2, 2025
3
min reading
Sustainability was long seen as a niche concern. However, a major shift is underway: compliance is becoming mandatory, and regulations are expected to tighten even further.
No wonder way, Digital Product Passports (DPPs) are emerging as the key to transparency and sustainability in textiles. These digital records travel with a product, encapsulating everything from material origins to environmental impact.
DPPs are expected to become “the information backbone of the global circular economy,” ensuring that every fiber’s journey is documented and accessible.
For textile suppliers, this will be not only mandatory but also an opportunity, as they now become the central actors in delivering the data that brands, regulators, and consumers demand.
In this article, we explore why traceability and compliance through DPPs are rising in importance, how new EU laws like the Ecodesign for Sustainable Products Regulation (ESPR) and Corporate Sustainability Reporting Directive (CSRD) are accelerating the need for digital transparency, and how U.S. market pressures are following suit.
We make the case that suppliers can lead this industry transformation by unlocking data from the deeper, often opaque tiers of the supply chain.
Keep reading if you’re supplier in the industry, or a brand trying to understand more about DPPs and how the right partnerships can be definitive for your future.
EU Raises the Bar: ESPR, DPPs, and the Compliance Clock
In Europe, regulators have decisively moved toward mandating transparency. The Ecodesign for Sustainable Products Regulation (ESPR), which entered into force in July 2024, is a cornerstone of the EU’s Green Deal ambitions.
Among its provisions, the ESPR will introduce a Digital Product Passport (DPP) – essentially a digital identity card for products – to “store relevant information to support products’ sustainability, promote their circularity and strengthen legal compliance”.
In practice, this means every garment or textile product sold in the EU will eventually carry a digital record of its lifecycle attributes. This information will be accessible electronically, allowing stakeholdersto make informed decisions and verify compliance at the scan of a code.
The European Commission envisions DPPs containing data such as:
a product’s technical performance,
materials and their origins,
repair and recycling information,
environmental footprint.
In short, the DPP is about total traceability: any company selling into the EU market must be prepared to collect, verify, and share data about each stage of a product’s journey.
Crucially for textile suppliers, the timeline is tight, as textiles have been flagged as a priority sector for DPP implementation. According to EU planning, delegated acts specifying DPP requirements for textiles are expected by January 2026, with companies likely given 18 months to comply – that is by mid-2027.
That said, in just two years’ time, every textile product in the EU may need a compliant Digital Product Passport attached.
Early movers in sectors like batteries are already piloting DPP schemes, and textiles are up next, so it’s not a far-off scenario.
For suppliers, this means that compliance is no longer solely the brand’s responsibility.
Every supplier needs to anticipate what data regulators will ask from the brands and have systems ready to deliver that data. As one industry compliance expert noted…
Regulators and investors alike are demanding concrete proof that brands are delivering on their sustainability promises – not just making claims. Brands and suppliers will need the data to back up their ESG and corporate responsibility claims.
In practical terms, this translates to having digital records of each batch of material, each processing step, certifications, and impacts ready to feed into Digital Product Passports and reports. The era of opaque subcontracting and manual record-keeping is swiftly ending; a new era of digital transparency by design is beginning.
CSRD & DPP: What It Means for You as a Supplier
While the Digital Product Passport (DPP) and the Corporate Sustainability Reporting Directive (CSRD) are technically separate EU regulations, they are deeply connected in practice, especially for suppliers.
The DPP is being introduced to give every product a digital identity that captures key sustainability data, such as:
Carbon footprint
Material content and recyclability
Chain-of-custody and production stages
On the other hand, CSRD requires brands and retailers to publicly disclose their environmental and social impact across their entire value chain, including at the supplier level.
Image sourced from PICOPUBLISH
What this means for suppliers:
The data you provide for DPPs –emissions, materials used, processing methods, certifications– can also feed directly into your customer’s CSRD reports. That creates a strategic opportunity:
One set of verified data can serve dual purposes: product-level traceability (DPP) and corporate-level ESG reporting (CSRD).
By proactively aligning your data systems to capture DPP-compliant information, you're not just meeting future product-level requirements, you're also making yourself a valuable partner for brands under growing pressure to report accurate, audit-ready supply chain data.
In other words, the more reliable and granular your sustainability data, the more compliant and attractive you become in a market shifting rapidly toward regulatory-driven transparency.
Beyond Europe: U.S. Buyers Aligning with the Transparency Trend
While the European Union is clearly spearheading the traceability mandate through formal legislation, the ripple effects are being felt globally – and the United States is no exception.
U.S. apparel buyers and retailers are increasingly expecting similar traceability from their supply chains, driven by both regulatory pressure and market forces. In fact, some U.S. regulations have already made supply chain transparency a necessity.
A prime example is the Uyghur Forced Labor Prevention Act (UFLPA), in effect since June 2022, which bars imports of goods made wholly or in part in certain regions (like Xinjiang, China) due to forced labor concerns.
The UFLPA “places the burden of proof on importers to demonstrate that their goods are not produced using forced labor”, effectively requiring detailed provenance information for inputs like cotton.
In practice, to import cotton textiles into the U.S., a supplier may need to provide clear documentation of where the cotton was grown and ginned, proving it did not come from banned regions.
This level of verification presupposes robust traceability systems – a digital paper trail for raw materials and intermediates.
Moreover, American brands with global reach are voluntarily moving toward EU-level transparency standards, knowing that alignment is both ethically prudent and commercially smart.
Many U.S. companies sell products in Europe or source from countries that export to Europe, so they anticipate needing DPPs and supply chain data to continue doing business seamlessly.
Trade associations are also pushing for change: the American Apparel & Footwear Association (AAFA) has urged U.S. policymakers to modernize labeling rules to allow digital disclosures, seeing the writing on the wall from Europe’s example.
This is a strong signal that the EU’s model could become the global standard, with digital product information expected everywhere.
Even at the state level, we see momentum for supply chain transparency laws. In New York, the proposed Fashion Sustainability and Social Accountability Act (known as the “Fashion Act”) has gained significant support.
While not yet law, it points to where expectations are heading. The act would require major fashion companies to “map and disclose at least 50% of [their] suppliers by volume across all tiers” – explicitly including raw material producers and textile processors, not just finished-goods factories.
The mere fact that such legislation is on the table (with backing from brands, NGOs, and even consumers) indicates that large buyers consider deep supply chain visibility a must-have, not a nicety.
For textile suppliers serving U.S. clients, this means you may soon get the same kinds of data requests as your EU-facing peers.
Forward-thinking American brands are investing in traceability tech and pilot programs, often inspired by the EU’s DPP initiative, to pre-empt regulations and meet consumer demand for authenticity.
Consumers in the U.S., especially younger demographics, are caring more about where and how products are made, pushing brands to substantiate “sustainable” or “ethically made” claims with real data.
All of this adds up to a clear trend: even without a U.S. federal “digital passport” law, market forces are converging on the notion that supply chain transparency is non-negotiable.
Suppliers who can demonstrate verifiable provenance and compliance will have a distinct advantage in securing and retaining business with these discerning buyers.
Unlocking Opaque Tiers: Suppliers as Leaders in Traceability
Historically, supply chain transparency efforts in fashion have hit a wall at Tier 1, the finished goods manufacturers. Brands often know their garment sewing factories, but visibility tends to fade further upstream – at the textile mills, dye houses, yarn spinners, and farms.
Tiers 3 and 4 (raw material processing and raw material production) have been particularly opaque. This is exactly where the greatest challenges – and opportunities – now lie.
In the new traceability paradigm, suppliers are not just passive data providers but pivotal partners who can drive change by illuminating these hidden tiers.
In fact, suppliers who proactively unlock data from these previously hidden corners can reap multiple benefits.
Firstly, they future-proof their operations against upcoming compliance requirements – there will be no last-minute scramble when a customer asks for proof of, say, recycled content percentage or the carbon footprint of a fabric.
Secondly, they gain a competitive marketing edge: being able to tell a credible story about your product’s origin and impact can differentiate your offerings in a crowded market. Brands are looking for partners who make their lives easier by providing verifiable data.
A supplier that can say, “Here’s the digital passport for this fabric roll, with provenance and sustainability metrics ready to go,” will be more attractive to a buyer than one who cannot.
Thirdly, deep traceability opens up possibilities for operational improvements. By tracing processes, suppliers may identify inefficiencies, resource waste, or areas for quality improvement in their own supply network, leading to cost savings and better resource management.
Perhaps most importantly, empowering transparency down to Tier 4 is a systems-oriented solution that benefits the entire industry.
When each tier shares data upstream and downstream, trust is built. Collaboration becomes easier when everyone is speaking the language of data. As World Collective’s CEO, Jeanine Ballone, observed,
Suppliers hold the critical data we need to achieve true, industry-wide transparency. By prioritizing their participation and strengthening data systems at every tier, we can build a supply chain that is resilient, traceable, and ready for the future.
The good news is that suppliers don’t have to do it alone. Industry initiatives and technology providers are increasingly focusing on these upstream tiers.
In the next section, we look at one such collaborative effort – a pilot program that leverages partnership to bring Tier 2–4 data to life.
World Collective & Kinset: Bridging the Traceability Gap
One practical example of supplier empowerment in action is the Digital Product Passport pilot program launched by World Collective in partnership with Kinset.
Announced in July 2025, this pilot is deeply focused on what both organizations call the hardest part of supply chain transparency: connecting the data all the way through Tiers 2, 3, and 4.
World Collective (a women-led fashion ecosystem) joined forces with Kinset (a modular traceability technology provider)to bridge the gap that has long stymied the industry’s transparency efforts.
What is this pilot doing?
In essence, it’s building a “blueprint for action” to show how supplier data can feed into scalable Digital Product Passports in practice. Instead of another roundtable or white paper, the pilot is hands-on: each supplier is integrating its data into a unified digital system provided by Kinset, facilitated by World Collective’s industry relationships and sourcing knowledge.
The combined solution will take previously fragmented information – e.g., farm IDs, batch numbers, processing logs, certification IDs – and turn it into usable, verifiable insights that can populate a DPP.
By the end of the pilot, each participating supplier aims to have a DPP-ready dataset for their products, essentially a prototype digital passport that meets anticipated EU requirements.
The key objectives of the pilot illustrate how it’s tackling both technology and teamwork challenges. The pilot aims to:
Deliver real-world proof that Digital Product Passports can be implemented at scale, moving beyond theory and white papers.
Integrate supplier data into one modular platform, essentially creating a DPP-ready framework that links Tier 2–4 data seamlessly.
Equip suppliers with dashboards and tools for data verification, certifications, and impact scoring, empowering them to manage and share their own sustainability information.
Enable deeper collaboration and trust across the chain by making data visible and shareable, accelerating more sustainable decisions between buyers and suppliers.
Unlock economic opportunities and simplify compliance, by proving that transparent practices can open doors to new business (and ensure everyone meets regulations with less friction).
Already, the pilot is showing how aligning around data can create shared value for both brands and suppliers.
For brands, having suppliers on a traceability platform can reduce due diligence costs and compliance risks, strengthen alignment with EU DPP regulations and CSRD, and provide credible data for sustainability claims and sourcing decisions.
In turn, suppliers gain increased visibility and trust with brands looking for responsible partners, faster and easier reporting of their sustainability metrics, and a competitive edge by demonstrating transparent and verifiable practices.
In other words, the pilot reframes traceability not as a burden, but as a value proposition for suppliers: those who can prove their claims can attract better customers and even potentially command better terms.
It’s also worth noting how the World Collective–Kinset pilot aligns with the regulatory landscape. The program is explicitly designed to meet the coming requirements of EU DPP 2026 and the CSRD, as well as international standards like the Greenhouse Gas Protocol and OECD due diligence guidelines.
For suppliers observing this pilot (or considering joining similar initiatives), there’s a clear takeaway: collaboration and technology together can crack the code of Tier 4 traceability.
By participating in such programs, suppliers not only prepare themselves for DPP compliance, but they also help shape the standards and solutions that will likely become industry-wide.
World Collective’s role as a facilitator between tech providers and suppliers underscores the collaborative spirit needed – neither suppliers nor brands nor tech firms can achieve this transition alone. It takes a collective effort to build the digital infrastructure of a truly transparent supply chain.
Strategic Outlook and Next Steps for Suppliers
For suppliers, the strategic play is clear. Now is the time to invest in your data infrastructure and partnerships.
Begin by mapping your supply chain if you haven’t already:
Know your Tier 2, 3, 4 sources and gather whatever data is available (material certifications, origin information, process parameters, etc.).
Engage with your sub-suppliers and encourage them to digitize records – a chain is only as strong as its weakest link, and in a data-driven chain, the weakest link is an offline spreadsheet or missing certificate.
Consider joining industry platforms or pilots that can help you structure and standardize your data.
The earlier you familiarize yourself with concepts like unique product IDs, QR code tagging, or data-sharing protocols, the smoother your transition will be when DPP compliance becomes mandatory.
It’s also wise to align with the emerging standards. Keep an eye on the delegated acts for your product category; if you’re in textiles, you know the clock is ticking toward 2027 for DPP enforcement.
Pay attention to the European Sustainability Reporting Standards (under CSRD) relevant to your operations – even if you’re not the one reporting, your clients might need your input to fulfill their reporting obligations.
By aligning your data collection with what CSRD or DPPs will require (for instance, tracking carbon footprint per unit, or ensuring traceability down to farm level), you ensure that when a brand asks for information, you can provide it readily, accurately, and confidently.
Crucially, attitude matters. The most successful suppliers will be those who see traceability not as a cost center, but as a value driver.
Join the Journey of Traceable Fashion
As we’ve discussed, suppliers can lead the shift to a transparent supply chain. World Collective is here to support and amplify your leadership, providing the digital infrastructure and ecosystem connections to make your data work for you.
By engaging with World Collective and our partners, you’ll not only stay ahead of regulations – you’ll also join a community dedicated to collaborative progress.
Whether you need guidance on structuring your material data for a DPP, or want to improve how you track certifications and impacts, or seek to connect with more buyers through transparent sourcing, our upcoming solutions can help.
Together, we can build efficient, data-driven, and transparent supply chains that meet the letter of the law and the spirit of sustainability. In an industry undergoing such rapid evolution, collaboration is the smartest path forward.
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