I. Maurizi of Ebca Stresses the Importance of Universal Regulatory Application

Is the fashion industry ready to be hyper-regulated? Has it started lobbying too late? Is all fashion produced in Europe sustainable? The CEO of the European Branded Clothing Association (Ebca), Isabelle Maurizi reflects on the new challenges for the industry around the new European laws that will affect the sector, as well as their impact on the fashion industry on a European and global scale.

Question: Does Europe offer growth opportunities for fashion companies?

Answer: Before I can answer this question, I would like to back up a bit and talk about how much the sector contributes to Europe, because it generates both significant economic and cultural value. Just to give some numbers, the sector represents around €300 billion contributing to the Gross Domestic Product (GDP) of the European Union, which equates to approximately 4.5 million jobs that depend on the sector, a little more than the 1.3 million direct jobs, mainly held by women, that contribute to the life of urban centers through retail activities, logistics and so on. Beyond the economic value, it is also cultural, as we play an essential role in cultural identity and self-expression. We contribute a lot to Europe and we believe that the sector still offers opportunities for growth, because it remains one of the most integrated and dynamic markets in the world for the fashion industry, in terms of sustainability, innovation and creativity. And we would like to see this continue and develop further.

Q.: With all the additional regulation that the fashion industry is currently experiencing, or will experience in the future, is there really a level playing field between European and foreign fashion companies?

A.: The European Boundary Closing Association represents and brings together 75 global brands operating in the European Union market. We share the same ideas and the same direction of action, which focuses on sustainability, as Ebca members have a strong track record in sustainability. It is therefore very important that there is a level playing field, and we are pushing for all economic operators, regardless of their business model, origin or size, to comply with EU regulations. We were very pleased to see the European Commission’s proposal on ecommerce, which highlighted some measures to level the playing field, and in particular measures to strengthen customs enforcement to ensure that all products entering the European market are safe and comply with eco-design requirements.

Q.: Is the fashion industry ready to be hyper-regulated?

A.: The fashion industry needs consistent and effective regulation. The European Commission has the opportunity to drive this change, as we are under heavy scrutiny by the European institutions. One of the key issues is that data and reporting requirements must be consistent. We need to support informed consumer choice, encourage strong sustainability ambition, and preserve the competitiveness of the sector, as well as help companies to comply with the regulation through enforceable and easy-to-implement tools and measures.

Q.: The sector is made up of a large number of SMEs and a few fashion giants. How does Ebca adapt its strategy to represent both realities?

A.: It is true that the textile sector is extremely fragmented and interdependent. It is important for regulators to understand this division and the complex nature of the supply chain. This helps us to have a clear understanding of the challenges facing SMEs as the industry becomes more regulated. What this means is that EU regulations must allow sufficient time for implementation, establish consistent reporting requirements to avoid unnecessary administrative burdens and work for suppliers, while ensuring that reporting requirements enable compliance and serve broader objectives.

“The industry has worked collectively prior to the European legislation to improve product performance”

Q.: And what about when we talk in national and international terms? What is the role of international companies, as well as U.S. companies, within this framework?

A.: Ebca members launch products and operate in the European market with a strong track record in sustainability, so it doesn’t matter if they are European or not. Ebca’s membership is broad and global, we have sites both in Europe and outside. What really matters is to ensure that the regulation applies to everyone, regardless of business model, size or origin, because it is important that everyone plays under the same legislation. It is also important that Ebca facilitates dialogue through a forum where all international brands can collaborate to support European legislation and their ambition towards greater sustainability.

Q.: Has the fashion industry started lobbying too late? What can it learn from other sectors?

A.: Yes, this is something we have heard a lot. Sustainability regulation is relatively new, but Ebca was created in 2007 as an informal alliance, and since then we have already started to support European legislation in terms of international trade. In addition, we have consistently supported the European institutions to guarantee market access from third countries, ensuring that there are no barriers to trade. What is remarkable is that the sector itself and Ebca members have not waited for European legislation to launch individual and collective initiatives to reduce environmental and social impacts. The sector has worked collectively in advance of European legislation to improve product performance, strengthen supplier capacity and reduce its climate impact. What we can learn from other industries is how to ensure that we are recognized as a sector and not just an ecosystem. We also need to ask ourselves how we transfer the knowledge and experience we gain through individual and collective initiatives to support policymaking.

Q.: What has the sector done well so far in the negotiations with Brussels? And what needs improvement?

A.: I think there are two key points. First, more generally, and considering that it is an ongoing process, Ebca has always ensured that the fashion sector is not just about style and fashion, but also about economic and social value. I already mentioned how much we contribute to the European economy, through GDP, through direct and induced employment, and through livelihood and cultural changes, which has been a key success for Ebc and an ongoing effort, because as regulators evolve and change, we need to keep an open dialogue to inform them about what we stand for and what we do. Secondly, we can get better at being effective when our contribution already started before the policies. This ensures that EU rules support competitive sustainability rather than creating unnecessary burdens. A recent example is our support to the European Commission in providing opinions on member states’ notifications regarding specific legislation, because we are pushing for harmonized requirements in the EU.

Q.: The most recent has been the law against deforestation, but also the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive. In recent months, some sustainability regulations have been relaxed or postponed. Is this delaying the inevitable? What is the purpose of these delays?

A.: In fact, there has been significant discussion about amending the Corporate Sustainability Reporting Directive (Csrd) and amending the Corporate Sustainability Due Diligence Directive. We have been actively involved in these discussions because we have always advocated maintaining the EU’s sustainability ambition, ensuring that Due Diligence is based on a risk-based approach and framework, so that it is guided by international principles, such as those of the OECD, to ensure that each link in the supply chain provides feedback and scrutinizes its work diligently, according to its level of influence and p.osibilities. This approach will help protect workers, ensure that communities in the supply chain are also engaged, and also ensure that smaller suppliers are not overburdened. The discussion in the EU is also looking for a premise on how to ensure greater engagement and diligence in the supply chain, while simplifying processes. Our view is to continue to focus Due Diligence on what works, based on the methodology of the international guidance.

“There is more need to focus on consistency and harmonization than on specific legislation.“

Q.: Which legislation has generated the most concern in the industry? And which should do so, in your opinion?

A: I don’t think there is any legislation that generates concern per se, but what is important is legal certainty, i.e. ensuring that all legislation is consistent and harmonized within the EU framework. If we want to improve the sustainability of all our products and look at our business model more diligently, it is important to have legislation that generates real impact. There must be harmonized requirements and consistency across legislation. For example, a waste law should not contradict what is expected in eco-design requirements. Due diligence must also take into account other legislation, such as that on forced labor, and that the information required for reporting uses the same data needed for compliance, so that the company can allocate resources to generate real environmental impact and not to deal with overlapping obligations. Therefore, it is more necessary to focus on consistency and harmonization than on specific legislation.

Q.: From the point of view of fashion brands, what would you ask European industrial companies to do to move forward in sustainability?

A.: We need to be proud of how much we represent to the industry, it’s important to speak with one voice and have a consistent approach within the ecosystem. It’s about avoiding fragmentation, because it weakens the collective impact.

Q.: Should fashion companies relocate their supply chains to Europe? Is this really possible?

A.: Relocating the supply chain to Europe seems a bit unrealistic. What we would support, instead, is having an environment that allows us to drive a more profitable secular business model, i.e. making sure that sustainable innovation is appropriate and can compete with a linear model. What we are looking for is how the European Commission and, in general, economic operators, can invest in adequate recycling infrastructure and how we can have a harmonizing role to avoid market fragmentation, as well as ensure that products can move from one country to another. How do we ensure access to tools that enable companies to scale up sustainable practices? These include financing, non-financial incentives, access to information on what steps to take and how to find a supplier or vendor.

Q.: Is all fashion produced in Europe sustainable? And is all fashion produced in Asia fast fashion?

A.: The textile supply chain is complex and fragmented, and much of the textile production takes place outside Europe. Given that Ebca members have demonstrated a commitment to sustainability along the entire value chain, this statement is not necessarily correct. European legislation can help to level the sustainability standard, ensuring that it applies to the whole sector and not just the few leading companies. This is always progress, but having harmonized rules for eco-design criteria at the European level would improve the sustainable business model, ensuring that all products placed on the market, whether produced in Europe or outside, are subject to the same rules and meet the same sustainability requirements.