Achieving end-to-end visibility is notoriously challenging. Supplier networks are fragmented across the globe, visibility often stops at primary manufacturers, and many brands lack dedicated ESG teams to chase every thread.

Yet, besides the challenges, in recent years, both regulators and buyers have become stricter with brands that cannot demonstrate full transparency.

In 2020, UK fashion retailer Boohoo faced a harsh wake-up call when an independent review exposed “major failings” in its supply chain. In 2021, Trustrace pointed out that roughly half of major apparel brands were publicly disclosing their Tier-1 factories, although the majority hadn’t traced deeper supplier tiers.

As conversations and regulations intensify, having full knowledge of your supply chain, especially as a fashion brand, is now unnegotiable.

While supply chains are complex and achieving full traceability is challenging, with the right tools and understanding of necessary steps, transparency can become a core part of your business operations.

That said, keep reading to get an insight-driven guide, where we’ll explore how fashion brands can overcome traceability barriers and evaluate supplier transparency for stronger compliance.

What Exactly Are Traceability and Compliance (And Why They Go Hand-in-Hand)

In sustainability discussions, key concepts often lose their clarity. Sustainability itself has multiple definitions, approaches, and categories. Traceability and compliance fall under this sustainability umbrella, but are frequently misunderstood or misinterpreted. 

That’s why its crucial for fashion brand to really understand each concept and why they are different while still going hand-in-hand.

In simple terms, traceability means being able to track each component of your product’s supply chain, from raw material origin to final factory. Fashion for Good outs it this way:

Traceability is the process of making information available to understand how fibers and materials were sourced, processed and produced through the supply chain.

In other words, traceability is about having a clear, verified view of who made your clothes, where they were made, and how they traveled through the supply chain. Transparency is a related concepts, and it can be defined almost similarly, but they are also not the same. We can say transparency means openly sharing the traceability information, for example publicly disclosing “where, when, and how a garment was created across every stage of the value chain”.

On the other hand, compliance, in a straight-forwar definition, means adhering to laws, legal regulations (labor laws, safety codes, environmental rules) or voluntary ethical standards (certifications, codes of conduct) that apply to your products.

Why are these two concepts deeply interlinked? Because you can’t prove compliance without knowing and documenting your supply chain. In fact, without robust traceability data, brands cannot demonstrate that they aren’t contributing to issues like labor abuses or environmental harm.

Regulators have recognized this connection, and regulatory changes are moving faster then ever. For example, one of the most known regulations is the EU’s upcoming Digital Product Passport (DPP), that will require detailed product origin and lifecycle information; and when it becomes mandatory, having great products won’t be good enough if you can’t verify where it came from and how it was made.

In short, we can affirm traceability provides the evidence that powers compliance, and both are fast becoming non-negotiable in fashion. As Seth Casden, CEO and co-founder of Hologenix, a materials science company, expressed:

Comfort is king, quality is queen, and sustainability is no longer a nice-to-have, but a must-have “table stakes”.

Why Transparency Matters More Than Ever

Regulatory pressure is rising on all fronts. New laws across the world are forcing brands to own their supply chain, like the U.S. Uyghur Forced Labor Prevention Act, the EU’s Due Diligence Directive, and the Deforestation Regulation (which applies to imports of wood, leather, rubber, and other raw materials), all of which impact supply chains globally, despite originating in the EU and USA.

And there’s more to bring to the conversation. Most brands already know the EU is rolling out the DPP as part of its Sustainable Products Initiative, and considering carbon border tariffs (CBAM) that penalize hidden emissions.

In the U.S., proposals like the New York Fashion Sustainability Act would require accountability through mandatory due diligence. Canada’s recent law against forced labor in supply chains is another example of accountability being requested from brands to address risks across every tier.

These are just a few examples of how accountability is being demanded across the globe, extending well beyond specific regions. In short, transparency is becoming a compliance issue, failing to have visibility could mean failing to meet legal requirements, with all the fines and market access problems that entails.

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Meanwhile, the negative perception that comes from limited transparency has never been greater. Today’s customers and business partners simply won’t give their trust (or money) to brands that stay in the dark about their sourcing.

What Apparel Brands Must Track (and Why)

To achieve true traceability, fashion brands need to map and monitor key aspects of their supply chain. Here’s what you must track and why each element matters:

Tier 4: Raw Material Source

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Tier-4 is the very start of the chain: the farms, fields, or forests where raw materials are grown or extracted (or the recycling collectors in case of recycled materials).

Examples include cotton farms, sheep farms for wool, rubber plantations, silkworm farms, or petrochemical refineries for synthetic fibers. Tracking Tier-4 is challenging but increasingly necessary for claims about sustainability and ethics.

Why track Tier-4?

Because the most egregious issues can originate in this sector. Forced labor has historically occurred in cotton harvesting in regions like Xinjiang (China) and Uzbekistan, deforestation has been linked to cattle ranches supplying leather in the Amazon, and heavy pesticide use or water depletion on farms can undermine a brand’s environmental goals.

By knowing your raw material sources, you can avoid sourcing from conflict zones or unethical producers. Moreover, many regulations (like the mentioned before EU’s deforestation-free products regulation, or due diligence directives) explicitly require companies to ensure their raw materials are responsibly sourced.

Impact metrics at Tier-4 include things like:

• Water usage per crop.
• Pesticide and chemical inputs.
• Land-use change (carbon emissions from deforestation).
• Biodiversity impact.

Documentation at this stage could be certifications like:

• Organic or Fair Trade certificates for farms.
• FSC certification for forest-based fibers.
• Membership in programs like the U.S. Cotton Trust Protocol (which provides farm-level data on soil, water, GHG emissions).

and others.

Ultimately, Tier-4 transparency turns unknown inputs into known, accountable sources.

Tier 3: Raw Material Processing

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This tier covers the facilities that take raw inputs and turn them into spinnable fiber or other material precursors.

Think of cotton ginning facilities (which separate cotton fibers from seeds), spinning mills (turning fiber to yarn), polymer processing plants for synthetic fibers, or even slaughterhouses and leather processors for hides.

Transparency in Tier 3 means identifying the sources of your fiber, which spinning mills or processing units are in your supply chain, and checking their practices.

Why track Tier-3?

This stage is often far upstream and many brands have very little contact or visibility into Tier-3, but it’s where serious issues can hide. Risks in Tier-3 include forced labor or child labor in agriculture processing, significant pollution from fiber production and animal welfare concerns (for leather, wool, etc.).

Documentation to gather here might envolve: 

• Bale traceability records.
• Fiber content certification (BCI or CottonConnect for cotton provenance).
• Audit reports from intermediaries.

Brands should aim to at least know the country of origin of their primary materials at Tier-3, and any known intermediaries, as a baseline. That information feeds into compliance with laws like the U.S. Uyghur Forced Labor Prevention Act, for example.

Tier 2: Material and Processing Facilities

Image from World Collective’s Ecosystem, featuring seller Calvelex.

Tier-2 includes the mills and factories that produce the fabrics or textiles, or components used by Tier-1. This might be fabric knitting or weaving mills, dyeing and finishing facilities, printing and embroidery units, laundries for wash treatments, and tanneries for leather.

Brands should track where their fabrics and materials come from (which mill, in which country) and gather verifiable documentation on those suppliers’ environmental and quality practices. For example, chemical management certificates (like OEKO-TEX), wastewater test reports, or compliance with standards like ZDHC for safe chemicals.

Why track Tier-2?

The why is critical: Tier-2 is often where much of the environmental impact occurs. It’s noted that many processes here are “chemical, water, and carbon-intensive”, and mismanagement can lead to rivers polluted with dye or high factory emissions.

In fact, an estimated [70% of a fashion brand’s Scope 3 emissions come from upstream suppliers, especially at Tier-2 and Tier-3. By tracking Tier-2, brands can monitor key impact metrics such as water usage per fabric roll, energy consumption, and the discharge of effluents.

Documentation might include impact data from tools (like the Higg Facility Environmental Module scores for a mill) or certifications (Bluesign or ISO 14001 for environmental management).

Many brands have historically overlooked Tier-2, but with new regulations (like the EU requiring information on materials and processes in the DPP), this tier can’t be ignored.

Tier 1 – Finished Goods Manufacturers

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These are the cut-and-sew factories or assembly facilities that make the final product. They are typically your direct suppliers (the factory that stitches your garments and attaches your labels, for example). It’s crucial to track who and where these Tier-1 suppliers are, along with key compliance documentation: social audits, safety inspections, and labor certifications.

Why track Tier-1?

Tier-1 is where brand reputation often hits the most visible risk. This is the stage involving garment workers, so risks include workplace safety, overtime and wage violations, and workers’ rights issues.

Thats why regular audits or compliance checks at Tier-1 (e.g. via programs like WRAP, Fair Trade, or SA8000 certification) are essential documentation to verify that these factories uphold labor standards. If a supplier is unwilling to even disclose their Tier-1 factories, that’s a red flag; transparent brands should know this information down to the names, addresses, and conditions of each factory.

Your Supplier Transparency Checklist

When vetting suppliers or evaluating how transparent your existing vendors are, you can use the following checklist of criteria. These are key signs of a supplier committed to transparency and compliance:

1. Do they disclose their own supply chain tiers?

Does the supplier openly share details about their operations and sub-suppliers? Transparent suppliers will provide the names and locations of their factories or mills, the sources of their materials, and other pertinent info without excessive secrecy.

If a supplier resists sharing even basic data (like where they source fabric or who their parent company is), it may indicate future transparency roadblocks. Prioritize suppliers who treat traceability as a collaborative effort, for example, those who fill out detailed questionnaires, allow site visits, and proactively inform you of any subcontracting. Engaged suppliers are the foundation of end-to-end transparency.

2. Can they provide documentation to prove claims?

Look for suppliers who can back up their claims with evidence. This includes third-party certifications (GOTS for organic, OEKO-TEX for chemical safety, Fair Trade or SA8000 for labor, FSC for forest fibers, and so on) and audit reports. Crucially, verify these documents, checking their validity and scope.

The supplier should be willing to share recent audit results or compliance assessments. As Daren Abney, Executive Director of the U.S. Cotton Trust Protocol, noted, certifications and audits “build trust, validate sustainability claims and provide transparency across the supply chain” by involving independent verification.

In practice, this means a supplier who is transparent might maintain an up-to-date portfolio of certificates (with logos or license numbers you can cross-check) and even allow you to speak with the auditors or certifiers if needed. Be cautious of suppliers that make big claims (e.g. “100% ethical” or “all recycled”) but cannot produce documentation beyond self-declarations.

3. Are they prepared for new compliance requirements?

A forward-thinking, transparent supplier stays informed about laws like the EU’s Digital Product Passport (DPP) and Extended Producer Responsibility (EPR) rules. Why does this matter? Because if your supplier knows what these mean, they’re likely preparing to comply, which reduces risk for your brand.

For example, the EU’s DPP will require standardized data on product sustainability metrics to be recorded and shared via QR code.

Does your supplier understand this? Are they designing products for recyclability or providing data on materials to help with this kind of reporting? An informed response indicates a partner who will support your compliance needs, not hinder them.

4. Do they offer real-time traceability data?

The best suppliers are moving beyond static yearly audits to real-time tracking. Some now integrate digital tools – for instance, providing a dashboard or API access to supply chain data, or even physical traceability tech like QR codes and tags on shipments.

If a supplier can plug you into timely, digital traceability feeds, you’ll have much greater confidence and agility in managing compliance.

5. Have they been independently vetted or accredited?

Consider whether the supplier has been screened by a reputable third party. For example, are they listed on a trusted sustainable sourcing platform or certified by an industry initiative?

Working with suppliers that have passed an independent vetting process (for ethics, quality, and transparency) gives you extra assurance. It means someone has already checked their credentials so you don’t have to start from scratch.

As an example, suppliers featured on digital ecosystems like World Collective are pre-vetted for certifications and transparency, making it easier for brands to source responsibly.

How Fashion Brands Can Build Transparency Without a Full ESG Program

For many small and mid-sized fashion brands, the idea of mapping an entire supply chain and vetting every supplier can feel overwhelming, especially if you don’t have a dedicated sustainability department.

So, to help you make the best out of the information you have or can obtain, here are practical, low-barrier steps to build supplier transparency:

Start with Verified, Trustworthy Suppliers

The simplest way for a lean team to ensure transparency is to choose the right suppliers from the get-go. Favor suppliers who have credible certifications or are known for ethical practices, even if their costs are a bit higher.

By working with suppliers that prioritize transparency (and can readily share data), you won’t need to micromanage or chase down information, it will flow to you as a natural part of doing business. Essentially, you’re outsourcing some of the ESG heavy lifting to partners who have already invested in it.

Use Digital Tools to Track and Store Data

You don’t need a custom IT system; affordable supply chain management or traceability software can help organize your sourcing info. Even a well-structured spreadsheet beats a pile of emails.

The key is to start **recording data now (**supplier names, certificates, batch numbers, etc.) in a consistent way. Look for tools (even free or entry-level ones) that enable continuous monitoring or alerts.

Many companies already offer solutions to guide brands along this path. Take Kinset, for example: through their platform, they help brands integrate core business data while ensuring compliance with global environmental standards.

One of their solutions is the “real-time product data” which equips teams with actionable insights to reduce environmental impact, optimize resources, and align every product decision with long-term sustainability goals. It’s a system that helps you:

• See real-time product impact metrics from sourcing to final production.
• Instantly align designs with evolving sustainability regulations, including DPP.
• Connect material choices, production processes, and environmental outcomes.

This tool basically shows brands exactly where they can slash their environmental footprint, make better use of resources, and make sure their products are on track with long-term compliance goals.

Although these tools aren't always accessible for all teams, they're definitely a worthwhile investment, as they allow the brand to benefit from proactive, data-driven decision-making systems rather than relying on reactive compliance frameworks.

Lean on Pre-Vetted Platforms and Networks

You don’t have to map the whole world alone. There are industry platforms and networks that do a lot of the legwork for you by aggregating vetted suppliers and their data.

For instance, World Collective’s digital sourcing ecosystem connects brands with pre-vetted, certified material suppliers and even provides traceability tools out of the box.

By tapping into these resources, you gain a shortcut to transparency. You’re essentially borrowing the credibility and data that’s already been gathered. This can save huge amounts of time and ensure you’re working with reliable partners from day one.

Focus on Your Most Used Materials First

You don’t need 100% traceability across every SKU overnight. A smarter strategy is prioritization. Identify the materials or products that make up the bulk of your business or pose the highest risk.

Maybe 80% of your items are cotton; start by tracing your cotton supply chain deeply. Or if you use a small amount of leather, that might be high-risk ethically; focus there.

By zeroing in on critical areas first, you make manageable progress and learn lessons that you can expand later. Over time, you can widen the transparency circle to more materials and tiers as you gain experience (and as your resources grow).

Traceability as a Business Advantage

Embracing traceability and transparency isn’t just about staying compliant or avoiding scrutiny, it can actually boost your brand’s performance. Here are some concrete advantages that transparent supply chains offer forward-thinking fashion brands:

Earn Consumer Trust and Loyalty

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Modern consumers, especially Gen Z and Millennials, actively seek out brands that align with their values. If you can show exactly where and how your product was made, those consumers are more likely to reward you with their trust and repeat business.

Studies even show that companies with strong transparency initiatives saw an average 15% increase in market share over a recent 3-year period. Moreover, shoppers are increasingly willing to pay a premium for products that come with proof of ethical sourcing.

The takeaway: transparency can translate directly into brand loyalty and sales.

Appeal to Retail Partners and Investors

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It’s not just end-consumers who care.  Nearly 70% of investors say they plan to increase holdings in companies that manage sustainability well.

In other words, transparency makes you a more attractive business partner.

Major retailers are under pressure to ensure the products they sell are responsibly sourced, so they increasingly prefer brands who can provide detailed supply chain info. Similarly, investors and financial stakeholders look at ESG criteria now. If you can demonstrate solid control and visibility over your supply chain, you de-risk the investment in their eyes.

By showcasing traceability, you’re signaling that your company is well-managed, forward-thinking, and less likely to be hit by scandals, all of which are ‘green flags’ for investors and partners.

Outshine Larger, Less Agile Competitors

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Many major fashion brands have recently suffered setbacks due to opaque, unethical supply chains and their slow response to demands for transparency. This is a chance for smaller or mid-sized brands to differentiate.

Your agility is an asset, you can implement traceability measures faster and pivot to new standards more easily than a giant corporation can. By making your supply chain an open book, you offer something that many established players cannot: genuine proof of sustainable and ethical practices.

This not only appeals to consumers and partners as noted above, but also sets your brand apart in a crowded market. Transparency becomes part of your unique value proposition.

It tells a compelling story that can resonate more than any glossy ad campaign, because it’s real.

A Conclusion for Smarter, More Transparent Fashion

Rather than viewing it merely as a compliance obligation, traceability now stands as a defining characteristic of industry leadership in fashion.

In a world increasingly wary of greenwashing, being able to pull back the curtain and show the real story of your products is a powerful differentiator. Transparency, in essence, transforms compliance from a headache into a business advantage by powering brand differentiation, strengthening stakeholder relationships, and ultimately contributing to a more sustainable and profitable fashion enterprise.

Evaluate where your brand stands on this journey. Conduct a gap analysis on your current traceability versus where you need to be for upcoming compliance. Start small but start now; the brands that act with urgency (and authenticity) on supplier transparency will be those that thrive in this new era of accountable fashion.

Explore more on transparency, traceability, and building strong supplier partnerships in the blog posts below:

• Sourcing Smarter: A Guide to Finding Reliable, Responsible Textile Suppliers
• Beyond Retail: How Overlooking Your Supply Chain Limits Growth
• Leather in Fashion: Navigating Debates Through Transparency and Digital Innovation
• Building Trust Through Transparency: Showcasing Your Product’s True Value
• World Collective & Kinset: A New Chapter in Fashion Traceability Starts Here