As new EU sustainability legislation rolls out, compliance is no longer just a reporting exercise – it’s a rising cost center. The industry is now confronting both direct expenses and broader operational upheaval.

EU compliance requirements are increasing apparel costs by an estimated US$0.38 to US$0.78 per garment, depending on the brand’s product mix and technology maturity, according to Trustrace data.

The biggest contributors to these costs include product-level data collection for Digital Product Passports, Scope 3 emissions tracking across the supply chain, and documentation and audit requirements for EU Due Diligence. Additionally, technology upgrades and platform integration also play a significant role.

Deploying systems to cope with ever expanding compliance requirements can run from €10,000/year ($11,600) for basic compliance software, QR generation and limited SKU support to €100,000 to €500,000/year ($116,000-581,000) for the kind of comprehensive system that large enterprises require, according to Renoon, a technology company that has helped apparel brands with traceability.

Bigger Than You Think

Even for a brand that already collects basic product data, creating a Digital Product Passport is a much more complex task than it sounds, according to data integration specialists, who point out that it’s not just gathering the data. That data, which comes from a vast number of sources, then needs to be integrated into systems that can analyze it and prepare the necessary documentation.   It’s a task that only the biggest brands can realistically tackle.