VENICE, Italy — The fashion and textile sectors in Europe are navigating complexity.
Interconnected supply chains, geopolitical turmoil and inflation, AI’s impact on jobs, and climate change’s ripple effects on global consumption patterns are collectively scuppering the tried-and-tested playbook.
The next chapter in the sector’s sustainable journey will be written through innovation. Moving the needle forward will require greater cooperation, greater investment and broader adoption of technology, observers agree.
“The economic and financial viability of this industry is back at the center of the conversation. This is a matter of competitiveness, geopolitics, legality, human capital and technology — all part of the same industrial policy, that must be framed at a European level,” said Confindustria Moda president Luca Sburlati, kicking off the fifth edition of the two-day Venice Sustainable Fashion Forum held here at the Fondazione Cini.
The Italian association was among the organizers of the event alongside Confindustria Veneto Est.
“If we don’t address these issues, the consequences won’t be limited to us; they’ll affect the entire global supply chains that depends on us,” he said.
The stakes are indeed high.
A study by consultancy The European House Ambrosetti, or TEHA Group, titled “Just Fashion Transition 2026,” provided a candid picture of where the fashion sector stands in its journey of transformation.
The industry is pressured by competitiveness, while Made in Italy seems no longer a byword for responsibility, as labor abuse cases have rocked the industry and shaken its reputation.
Regulations are changing too slowly and unevenly, as European policymakers have delayed some reporting and due-diligence requirements, while product and import rules continue to advance.
Technology adoption rates in the industry have a hard time reaching scale for lack of funding and strategic planning. Innovation remains costly and smaller players along the value chain are expected to shoulder it.
“We’re living through an era of profound, systemic disruption,” said Carlo Cici, partner and head of sustainability practice at consultancy The European House Ambrosetti, presenting the study.
“If I were a small or midsize business owner and was told I had to ensure my suppliers were above reproach, keep up with regulations and integrate AI or risk falling behind, I’d be concerned,” said Sandro Veronesi, president of Intimissimi and Calzedonia parent Oniverse.
“We can’t really shape the future, we have constraints. But we can imagine what’s possible and carve out a little space for ourselves,” the entrepreneur added.
The industry seemed conflicted between the inescapability of the forces shaping the future and the opportunities they provide.
“Uncertainty isn’t the opposite of knowledge. It’s part of it. Predicting everything is impossible. Preparing is not,” said Gabriella Greison, a physicist, science communicator and author.
“Resilience isn’t about facing and handling the future — which may shake us and frighten us — only to go back to doing things as before. It means taking an antifragile approach, emerging better, not simply returning to how we were,” echoed Marinella Levi, professor in the department of chemistry, materials and chemical engineering Giulio Natta at Politecnico di Milano.
Can Made in Italy Get Back on Track?
In what was perhaps the most anticipated session of the two-day event, Milan prosecutor Paolo Storari — the man behind the majority of investigations that in recent years have uncovered ties of luxury brands to subcontractors allegedly involved in sweatshop schemes — was uncompromising in his plea, urging the sector to do better and find no excuses.
“We need to stop being bystanders to injustice,” he said, referring not just to the industry but to unions, law enforcement, and prosecutors themselves who have collectively overlooked the issue for too long, he argued.
“This issue was underestimated for too long, not deliberately, but because its serious consequences were overlooked. We need to move beyond the logic of ‘buy wherever it’s cheapest,’” he contended.
Since the first case, of Alviero Martini in January 2024, the prosecutors looked into the operations of between 30 and 40 fashion companies, including Giorgio Armani, Dior, Loro Piana and Tod’s, to name a few.
“These situations are profoundly unfair not only to workers, but also to those who operate lawfully. It’s contractual dumping as well. Even setting aside the ethical dimension, combating illegal labor practices has a direct impact on competition,” the Milan prosecutor said.
“There have been results, but some still think they can outsmart the system and keep doing things the old way. Today, it’s difficult for a company that continues to rely on these sweatshops to claim there was no intent, only negligence. If a company says its supply chain is clean and I find that it isn’t, that may constitute commercial fraud. If a company buys products made using illegal labor, that may constitute receiving stolen goods. It also causes reputational damage, and companies need to understand that,” he said.
Incidentally, on Friday, fashion brands Dixie and Patrizia Pepe, both based on the outskirts of Florence, were placed under judicial administration by a Florence Court after prosecutor Luca Tescaroli found that both companies subcontracted part of their manufacturing to Albanian-owned firms, which allegedly exploited their workers.
Storari, who declined follow-up interviews, suggested a rule book for companies to tackle the issue, including assessing subcontractors’ production capacity; verifying their beneficial ownership and compliance with collective labor agreements; conducting unannounced audits; requesting access to their tax records, and including termination clauses in their contracts.
He concurrently dismissed the usefulness of certifications of compliance that industry associations have been requesting for quite some time.
As reported, Camera Nazionale della Moda Italiana and Confindustria Moda have been among the strongest supporters of a shared, nationwide auditing system and regulation protocols promoted by the Ministry of Enterprises and Made in Italy.
Legislation had seemed to move swiftly through several contacts with Minister Adolfo Urso, which led to a draft proposal for a voluntary certification for fashion brands’ value chains. However, the bill was stalled by the Lower House Commission of the Italian Parliament at the end of 2025.
“I don’t like hearing that certification systems are useless. They serve a purpose. But we need a system that rewards companies for using them. Otherwise, if I’m investigated, I end up on clients’ blacklists while under investigation… Even with all the required documentation, I’m asked to do more and then we start inventing extra steps. That’s cosmetic compliance,” said Maurizio Bortolotto, lawyer and founding partner of Gebbia Bortolotto Penalisti Associati, a law firm with a handful of clients in fashion.
“The first damage this kind of case causes is reputational. Trials are now conducted outside the courtroom, too,” he said.
“What I didn’t like about this case is that business owners are being asked to take on a different kind of responsibility: not just to monitor their supply chains, but to become law enforcement as well. That creates enormous challenges,” Bortolotto said.
“Relationships with suppliers matter. You need to know them, recognize where they’re struggling and help. If you dig deep enough into someone else’s house, you’ll always find a closet with dirty shoes,” said Andrea Rosso, sustainability ambassador at OTB Group, the parent of brands including Diesel, Marni and Jil Sander.
“We shouldn’t penalize our supply chain or keep indulging in Italy’s tendency to beat itself up. We should address the problems, of course — but we also need to talk about the light that fashion brings to the world,” said Carlo Capasa, chairman of Camera Nazionale della Moda Italiana.
“We need to keep this industry strong, active and healthy. The risk is deindustrialization, as we’ve seen elsewhere, including the U.K. We need to project this vision to the world together,” he said.
“Storari’s goals are absolutely right — we all want to achieve them. But I’m not sure the remedy he’s proposing is the right one. I don’t know whether it’s better to tolerate a certain level of wrongdoing to keep things running, or to take a hard line. That can create significant inflexibility within companies,” said Oniverse’s Veronesi, whose companies including Intimissimi and Calzedonia have never been investigated in such probes.
Exerting greater control over the supply chain can be achieved through many a pathway.
Supply chain integration by way of investments or takeovers of long-standing partners has dominated the M&A scene in the immediate aftermath of the COVID-19 pandemic, from luxury juggernauts including Zegna, Chanel, Brunello Cucinelli and Prada to manufacturing players such as Sburlati’s Pattern Group and Gruppo Florence.
“Brands can intrude up to a certain extent, we can surely observe and help suppliers improve. It’s not about ‘us’ — the brands — and ‘them’ — the suppliers. It’s about all of us,” OTB’s Rosso insisted.
A Greater Sense of Cooperation
Calls for closer collaboration reverberated throughout the event, reflecting a shared recognition that no player in the supply chain can meet today’s challenges alone.
“Garments are the visible point of a network that can stretch halfway around the world. We don’t see the system behind them. In a complex system, far away doesn’t mean separate,” the physicist Greison told the forum’s audience.
“Issues travel just like products, and the effects go both ways — especially when we think about climate change. So, sustainability is about the behavior of an entire system… In recent years, we’ve separated our perception of an object from the complexity of making it. Everything in between has disappeared,” she said.
As reported, last May Italy’s Camera della Moda and France’s Fédération de la Haute Couture et de la Mode unveiled a joint ESG harmonization framework aimed at supporting suppliers and preparing brands for incoming European regulatory requirements, while reducing “supplier fatigue” among manufacturers and workshops that are often subject to compliance, auditing and data requests from different brands.
“The challenge we have now… [is] to work even more with each other to qualify and characterize qualitative factors,” said Pascal Morand, executive president of the FHCM. “How can we value the quality and creativity of our products? Because in the knowledge economy what is not measured does not exist,” he said.
Courtesy of Camera Nazionale della Moda Italiana
Brand-wise, members of the Fashion Pact — which includes more than 55 signatories including Kering, Prada, Chanel, Zegna, Ferragamo, H&M and Inditex, to name a few — unveiled the second phase of the European Accelerator, a project aimed at the decarbonization of the supply chain.
“We’re trying to create tools to avoid the unmanageable and manage the unavoidable,” said Guy Morgan, sustainability director for fashion at Chanel and operations committee cochair of the Fashion Pact.
The new tool, called Decarbonization Accelerator Framework, builds on the voluntary, open-source self-assessment survey launched last year, defining practical next steps and an implementation playbook with recommendations and supplier case studies.
The latter include a pilot project in the Italian silk-making district of Como to launch a group energy-purchase agreement for textile suppliers, which is expected to also help lower emissions.
“It’s all been built on trust, because true collaboration can only happen at the speed of trust. It rests on shared values of honesty, humility, partnership and co-creation,” Morgan said.
“We created a decarbonization framework to assess suppliers’ progress and maturity. It also helps suppliers understand what we, as brands, expect — and several players are already aligned on it,” echoed Mickaël Maniez, Kering’s head of sustainable supply chain.
“Most brands have largely eliminated their Scope 1 and Scope 2 emissions, while Scope 3 remains a challenge and accounts for 70 percent of their emissions… To reduce that, we need to engage the supply chain and work together to decarbonize it,” said Davide Triacca, sustainability senior director at Salvatore Ferragamo, also a Fashion Pact member.
“Today, sustainability and innovation are one and the same,” he said, summing up the sentiment of his peers.
Competing for Innovation
The European fashion supply chain has long been at the forefront of sustainability, but its industrial prowess is facing pressure to keep innovating and stay competitive while stemming the “unfair competition” from far-flung manufacturing regions, particularly Asia.
“Asia, the Americas and Europe need to align their regulations — that’s our ambition. Europe is moving slowly, but it’s leading this effort,” said Federica Marchionni, CEO of the Global Fashion Agenda.
“European leaders and policymakers realize that we have a problem: Europe runs a trade deficit with China of one billion euros a day. We need to level the playing field. Industry is disappearing across Europe and across sectors… We need reciprocity. We can’t accept Europe being open to trade when other countries aren’t. We can’t hold European companies to strict standards while foreign products enter the market without anyone auditing the companies that make them,” offered Mario Jorge Machado, president of the European textile federation Euratex.
Italian industry associations have been equally vocal.
“We’re not asking for protectionism, but for reciprocity — with no shortcuts for those who don’t follow the rules,” Confindustria Moda’s Sburlati said.
As part of the European Union’s Ecodesign for Sustainable Products Regulation, the bloc is expected to issue a sector-specific delegated act for the adoption of the Digital Product Passport by fashion and textile companies in the fourth quarter of 2027, followed by an 18-month compliance window, making 2029 the earliest plausible enforcement date.
To some extent, the DPP is expected to level the playing field as it extends to all products circulating in the region.
But that’s not the industry’s only future frontier. So, what’s next?
AI: Headache or Opportunity?
Often viewed as the biggest shift since the second Industrial Revolution, AI is possibly taking the sector’s interconnectedness to a whole new scale.
Global competition in the sector is to increasingly depend also on the technology’s adoption and its ability to enhance industrial efficiency.
“AI is so transformative that, like all general-purpose technologies, it will take time to be fully adopted… [but] Italy is known for production excellence and manufacturing. AI needs to take root in this cultural and industrial identity, enhancing our manufacturing capabilities,” said Giuliano Noci, deputy dean of Politecnico di Milano.
“We need to invest in industrial AI — embrace the technology moving beyond the screen and into the physical world. We need to create algorithms to guide the manufacturing… and we need to act with greater urgency,” he said.
Fashion has yet to fully understand the potential of the technology and where to channel it, observers agreed.
It’s in part due to a European reluctance toward newness, according to Emilio Paolucci, professor in the department of management and production engineering at Politecnico di Torino.
“Italy’s productivity has remained stagnant since the advent of the internet. We’re poor at adopting technology. The same is true of Europe, partly because we’re so attached to the past,” he said.
“AI, like any technology, isn’t something to fight; it’s something to work with. We need to broaden our perspective, not retreat into our own fortresses,” echoed Eugenio Puddu, consumer product leader for Central Mediterranean at Deloitte.
For much of the AI talk that went on at the forum, few larger companies had specific use cases to present. A lot of it is happening at a pilot-stage level at academic institutions and public entity and micro-sized private players, as is the case with Spin, a start-up offering hardware and software that allow physical products and spaces to be identifiable, operable, and AI-ready — essentially tracking them throughout their life cycle.
Meanwhile, the Italian Institute of Artificial Intelligence is helping AI start-ups develop while bringing scientific research and innovation to market.
Shooting for the Stars
If AI seems relatively easier to conquer for the sector, space is also on the table and fashion has probably yet to grasp its full potential.
According to the World Economic Forum and consultancy McKinsey & Co., the space economy will generate between $1.5 trillion and $1.8 trillion by 2035.
Can fashion have a slice?
“The space economy is no longer limited to scientific research and diplomacy. New opportunities for access to space are opening up. It will no longer be the exclusive domain of astronauts; people from other fields will also be able to bring innovation to the sector,” said astronaut and Italian Air Force Colonel Walter Villadei.
“Space is a destination that needs creativity and young talent,” also in fashion, he said.
“So far, clothing in space has played a passive role: it had to meet technical requirements, but it has largely been treated as a commodity. In the future, garments will become interactive tools, enabling people to work more efficiently and safely,” he said.
Marcello Azzoni, chief of research and development at Italian astronaut equipment firm Spacewear, said that space can be “the ultimate laboratory, where we can test materials and performance, as well as new aesthetics.”
Case in point: Prada’s ongoing partnership with Axiom Space, which began in October 2023 with the development of NASA’s AxEMU lunar spacesuit and was followed by the brand’s contribution to the suit’s outer layer. Last June the Italian firm developed a Liquid Cooling and Ventilation Garment, which is slated for use on the Artemis IV lunar mission.
“The fashion-space connection works both ways: fashion can move into space — that’s the ‘spin-in’ — while aerospace technologies can find their way into fashion, or ‘spin out’,” said Cristina Leone, president of the National Aerospace Technology Cluster.
“The microgravity environment of space allows us to conduct tests more quickly, helping us validate products for compliance sooner. Fashion companies may therefore need to bring physicists, chemists and engineers onto their teams,” she added.
