With digital product passports (DPPs) and extended producer responsibility (EPR) moving toward enforcement, compliance is shifting from a strategic consideration to an operational one for fashion.
Both EPR and DPP requirements will apply to any brand — regardless of where it is headquartered — that sells products within the European Union market, requiring companies to finance end-of-life waste management systems while collectsing and disclosing granular data on product composition, supply chain, and environmental impact.
A simplified DPP covering mandatory product information and basic lifecycle data is targeted for late 2027. EPR becomes mandatory at scale across the EU by April 2028. The two deadlines arrive in close succession — and as brands move from planning to execution, a more difficult reality is coming into focus: the infrastructure required to meet them, from machine-readable supplier data to domestic sorting and recycling facilities, does not yet exist at the scale being demanded.
“DPPs are being developed as a data layer,” says Liz Alessi, founder of the Crisis of Stuff and a sustainability consultant with Bank & Vogue, which works across the resale and end-of-life side of the fashion value chain. “But the systems they’re meant to support — sorting, resale, recycling — are not yet equipped to fully use that data. Without investment in physical infrastructure, the impact of DPPs remains limited.”
Extended producer responsibility, one of the European Union’s most hotly anticipated — and fiercely debated — sustainable fashion regulations, is ready to be enforced.
But the compliance framing may itself be the problem. DPP is better understood as a forcing function for a broader transformation already underway, says Natasha Franck, founder and CEO of Eon, which builds digital product identity infrastructure for brands including PVH and Mulberry. “Digital product passports may be the ‘why now’, but in AI-driven commerce, structured product data is the price of entry — and digital product identities will become the primary interface through which products are discovered, recommended, transacted, and sold. Without them, brands risk becoming invisible.” Treating DPP as a narrow compliance or labeling exercise carries real long-term risk of limited visibility and irrelevance in systems where catching up becomes extraordinarily difficult.
EPR, meanwhile, shifts financial and operational responsibility for a product’s end of life back onto the brand. In theory, that creates an incentive for brands to design for recyclability and invest in the systems that handle returns, sorting, and processing. In practice, those systems are not ready for the volumes EPR will generate.
“EPR is forcing the industry to confront end-of-life capabilities that have historically been overlooked,” Alessi says. Domestic infrastructure for large-scale sorting, assessment, and processing remains underdeveloped. Existing systems depend heavily on export markets and resale channels to remain financially viable — a dependency that will not scale.
That gap — between the data ambition of DPP and EPR, and the physical reality of what happens to a garment at the end-of-life stage — is a glaring tension in fashion’s compliance conversation. And it is far from the only one.
The data problem starts at the supplier
The first phase of DPP — described in EU guidance as a minimal and simplified passport focused on mandatory product information and lifecycle data — is targeted for late 2027, with the delegated acts defining precise requirements still being written. Full circular passport requirements, encompassing complete lifecycle data, follow on a longer horizon. Even that first, simplified phase requires brands to track and disclose granular product-level information: material composition, recycled content, chemical substances, chain of custody, supply chain mapping, or lifecycle assessment data. In principle, much of this already exists somewhere in the value chain. In practice, it is scattered, inconsistently formatted, and largely inaccessible.
“Not all of this data exists today,” says Philipp Mayer, co-founder of Retraced, a supply chain transparency platform. “Even basic data points like product weight are often not systematically available and need to be collectsed from suppliers.” Where data does exist, he adds, it is spread across product lifecycle management (PLM) and ERP systems, traceability platforms, lifecycle assessment tools, and laboratory reports — rarely digitized, standardized, or consolidated.
The biggest gaps have little to do with the regulations themselves, says Liza Amlani, principal and founder of Retail Strategy Group. “DPP and EPR are exposing two things that were already broken: functional siloes inside most brands, and supplier relationships too shallow to carry real information flow. If merchandising and sourcing are isolated from one another internally, imagine how isolated they are from suppliers three tiers upstream. The regulation is just a magnifying glass.”
Amlani argues that brands are not underestimating the coordination required so much as overcomplicating their response to it. The silo problem has persisted for decades, following the same pattern that has long stymied operations improvement across the apparel and footwear sector. “The fix isn’t a new capability,” she says. “It’s cross-function authority applied to a structural problem that’s been solvable all along.”
The challenge is as much organizational as it is technical. Data ownership sits across sourcing, production, sustainability, and quality teams, with no single function accountable for pulling it together. “DPP requires alignment across the full product lifecycle,” Mayer says. “It is a substantial change management effort rather than a simple compliance exercise.” Many brands, he notes, are significantly underestimating the internal transformation required — not just for the sustainability team, but for every department that touches a product.
The preparedness gap is sharpest beyond Tier 1, the factories that manufacture finished goods directly for brands. Ashley Gill, chief standards and strategy officer at Textile Exchange, says the vast majority of certified facilities still rely on manual processes — PDFs, spreadsheets, email — particularly among small and medium-sized suppliers. Enterprise traceability platforms exist, but their adoption is concentrated among larger brands, not among the upstream facilities that hold certifications and generate the data DPP will ultimately depend on.
“A DPP framework that assumes widespread digital traceability adoption at the supplier level would not reflect the current reality,” Gill says. “The readiness gap is not at the brand level, where digital systems are more common, but at Tier 2 and beyond,” including textile mills, dyeing and finishing facilities, and raw material suppliers.
Sheng Lu, professor and director of graduate studies in fashion and apparel at the University of Delaware, points to a further constraint that rarely makes it into the compliance conversation: labor. “Technology alone cannot make it happen,” he says. It takes time to build a qualified workforce, he continues, capable of collectsing, verifying and reporting data in compliance with DPP requirements. For suppliers in developing countries operating on thin margins, that workforce investment is as difficult to absorb as the IT costs.
Convergence without coordination
DPP and EPR are typically discussed as parallel initiatives — one focused on product-level transparency, the other on shifting end-of-life financial responsibility back onto producers. In practice, both depend on the same foundation: accurate, product-level data. But they are largely being approached as separate workstreams, creating parallel compliance builds and duplicated investment. Amlani identifies a specific downstream consequence of that disconnect. Most companies, she says, may have product-level data somewhere in their systems, but lack the data governance to consolidate it into a single source of truth.
Because the data is not consistent across spreadsheets, PLMs, ERPs, the warehouse management (WMS) or point of sale (POS) systems, this discrepancy will cause chaos when products are returned, sorted, and allocated for reuse or circular initiatives. “If brands cannot track and trace their inventory from concept to market to end-of-life, they won’t be able to report DPP or EPR metrics accurately,” Amlani says.
For Mayer, the structural fix is straightforward in principle, if not in practice. “It does not make sense to treat them separately,” he says. “The most effective approach is to build a centralized product data layer that supports both DPP and EPR, rather than creating parallel infrastructures.”
The risk of failing to do so is not just inefficiency. Chelsea Murtha, senior director of sustainability at the American Apparel and Footwear Association (AAFA), warns that fragmented, nationally divergent implementation is already turning sustainability regulation into an administrative burden. France’s Ecoscore mechanism — a product-level environmental rating system — requires a different data set than what is proposed under the EU’s product environmental footprint methodology. Similar divergences are emerging across member states’ EPR schemes.
“A lack of harmonization threatens to turn sustainability-minded regulations into more of an IT transformation than an environmental one,” Murtha says. While compliance infrastructure is necessary to deliver environmental progress, fragmented requirements across markets risk forcing companies to build parallel systems — diverting time, capital, and attention from the underlying changes those regulations are intended to drive, a dynamic that makes it harder for finance teams to justify the investment in the first place.
Textile Exchange’s Gill echoes the concern. “There is divergence across the broader industry where different standards bodies, certification schemes, and regulatory frameworks define overlapping terms with subtle but meaningful differences,” she says, pointing to terms like recycled content or organic, which carry scheme-specific definitions capable of generating real confusion at scale. “Convergence across the sector will take time.”
The infrastructure gap
If the data challenge is the visible face of DPP compliance — requiring brands to capture, structure, and share product-level information — the infrastructure gap is the deeper problem EPR is forcing into view: whether the physical and economic systems needed to collects, sort, and process those products at their end of life actually exist. EPR becomes mandatory at scale across the EU by April 2028 — arriving just months after the simplified DPP deadline. Brands will need to have basic product data in place just as the end-of-life system comes under its heaviest obligation. The data layer and the physical infrastructure are being stress-tested almost simultaneously.
DPPs will require unprecedented transparency in global supply chains and enable greater circularity. There are potential benefits beyond compliance with incoming EU legislation, but challenges remain.
The economics remain the core constraint. The cost to collects, sort, and process most garments currently exceeds the value that can be recovered from them. Recyclers operate to strict material thresholds that most products on the market do not meet. Without structural changes to both product design and processing economics, EPR risks creating a mandate without a viable pathway.
“If the system is forced to absorb volume without the infrastructure or economics in place, it will default to the fastest and cheapest pathways, not the highest-value ones,” Alessi says. “That means more downcycling, more waste-to-energy, and less value capture overall — which undermines the intent of EPR.”
The implication for brands is more fundamental than compliance planning. Alessi argues they need to design with the end system in mind from the start — simplifying material choices, reducing blends and complex trims, and aligning product specifications with what recyclers can realistically process at scale. That is a design and sourcing conversation, not just a regulatory one.
What compliance will reshape
Beyond the infrastructure and data challenges, DPP and EPR regulations are likely to have a quieter but significant effect on how fashion companies structure their supply chains.
Lu predicts sourcing consolidation. To meet data collectsion and transparency requirements, brands may work with fewer suppliers — prioritizing partners with the capability to build and share compliant data systems. “Fewer suppliers may meet all the criteria,” he says, with relationships shifting from transactional to more strategic. Brands that invest in upgrading key suppliers’ digital and traceability capabilities will be better positioned; those that don’t, will face repeated compliance gaps at the same points in their chains.
The cost burden, Lu flags, is currently falling disproportionately on suppliers — particularly smaller manufacturers in developing countries who lack the financial resources, IT infrastructure, and skilled workforce to comply. Over time, he expects brands and retailers to participate more directly in cost-sharing, treating compliance investment as a strategic expenditure rather than a supplier requirement. “The goal is to shift from a transactional relationship to a long-term partnership,” he says, “and truly invest in suppliers and help them build capacity.”
H&M Group, which has been building circular infrastructure longer than most, frames the regulatory direction as aligned with its existing strategy. The company has expanded resale across multiple brands and markets, and says it is actively engaging with policymakers to push for harmonized EPR implementation across EU member states — a recurring concern as brands attempt to build systems that can operate consistently across markets. “Clear and harmonized legislation regarding textiles end-of-life management and extended producer responsibility are essential instruments to support and drive systemic transformation across the entire industry,” a spokesperson for the group says.
Ready or not
There are genuine signs of progress. Industry awareness of DPP and EPR has increased sharply, Retail Strategy Group’s Amlani notes, and some brands are adding new roles focused on circularity, though with varying degrees of success. Investment in traceability and data infrastructure is accelerating. Pauline God, policy and industry expert at TrusTrace, a traceability and compliance platform that helps brands gather and validate supplier-level production data, says the company has seen a “decisive shift” in recent months, with more brands moving from cautious exploration to actively investing in systems required for DPP readiness.
But the underlying challenges remain structurally unresolved. Data standardization across methodologies requires government-to-government coordination that goes well beyond what any individual company or trade body can drive. Physical infrastructure for sorting and recycling has not kept pace with policy ambition. And the economic model underpinning circularity at scale — where the value recovered from a garment exceeds the cost to process it — remains fragile.
“Since the requirements are not yet fully defined, there is no solution today that can claim to fully support the EU DPP end-to-end,” Mayer says. What matters most right now, he argues, is building flexible data infrastructure that can evolve as requirements expand — because whatever is defined initially will only be a starting point.
With a simplified DPP deadline in late 2027 and EPR at scale by April 2028, the window for building compliant infrastructure is narrower than the industry’s current pace of progress suggests. The question is no longer whether the industry supports the direction of travel, it is whether the systems required to get there can be built in time — and who bears the cost when they aren’t.
Franck offers a more optimistic read on the execution challenge. “What’s often overlooked,” she says, “is that once a product has a digital product passport, it becomes an active participant in the system — it bridges communication across departments, provides visibility across value chain partners, reports to regulators, authenticates itself, and supports customer service. The hardest part is getting started. In motion, the system begins to drive its own momentum.”
The harder question is: what happens to companies that view the starting line as their final destination? For Amlani, the risk is that compliance becomes the ceiling rather than the floor — capping the process innovation and deeper supplier relationships the industry needs to build resilience against future shocks. She argues that DPP and EPR, when pursued with serious vigor, are the catalysts the industry has long needed. “The biggest mistake is treating compliance as the finish line,” Amlani says.
The consequences of fragmented implementation extend well beyond compliance budgets. “Without a holistic systems approach,” Alessi says, “regulation risks layering complexity on top of unresolved infrastructure gaps.”
