Greenwashing has long been a problem in the apparel industry, but with new sustainability regulations going into effect in Europe and elsewhere, brands will have to back up their green claims or face fines and other consequences.
However, a new report from The Transformers Foundation reveals that the fashion and textile industry has a long way to go to make its sustainability claims match the reality of their supply chains, not to mention the parameters of regulation.
“The End of Fiction” report looks at why many existing textile and fiber traceability systems fail to meet emerging regulatory standards, despite widespread adoption of solutions such as certifications, digital traceability platforms and chain-of-custody models.
“The analysis presented here shows that most current traceability models will fail new regulations structurally, not merely procedurally,” the report said.
The Transformers Foundation report distinguishes between documented traceability—systems that describe supply chains—and evidence-based traceability through systems that preserve identity and produce independent, reproducible proof. At the same time, it points out physical and operational points where traceability failures occur in fiber supply chains, despite good intent.
“In textiles, ‘traceability’ has become genericized, diluted in the same way the industry has diluted terms such as ‘sustainable,’ ‘regenerative,’ ‘ethical’ and ‘circular’ into broad language that conveys confidence without delivering proof,” the report said.
According to the report, the problem lies in the fact that many digital traceability platforms, certification frameworks, chain-of-custody systems and audit regimes validate processes rather than products, relying on what suppliers declare rather than what they actually do.
“Traceability is routinely mistaken for systems that provide genuine value but do not deliver product-level identity,” the report said. “Understanding the distinction is not a technicality, it is a compliance requirement.”
The report names common systems that do not provide the level of traceability necessary for regulation compliance. Farm programs provide governance at origin, but often don’t preserve identity beyond aggregation. Mass-balance systems enable commercial allocation of sustainability attributes, but they can’t prove product-level origin. Certifications such as GOTS and OCS validate management systems and chain-of-custody documentation, but they don’t verify the physical fiber in the finished product. Life cycle assessments model average environmental impacts, but don’t provide origin, identity or product-specific evidence, and scientific origin testing via isotopes and proxies can identify likely geography at a point in time for a fiber but don’t provide continuity through multi-stage processing.
“These systems matter, they contribute context and assurance,” the report said. “None of them deliver traceability, because none follow the physical material through transformation with evidentiary continuity.”
True traceability, according to the Transformers Foundation, must include three elements: persistent identity, continuity of evidence and independent verification. Persistent identity remains attached to the fiber or material and cannot be removed, reconstructed or reassigned. Through continuity of evidence, each supply chain transition must produce a verifiable, tamper-resistant evidence, and through independent verification, that evidence is not self-issued, self-declared or recreated after the fact.
“Without all three, a system may provide visibility,” the report said. “(But) it does not provide regulatory-grade traceability.”
The report said that traceability often fails because the physical structure of fiber supply chains destroys identity before most traceability systems begin. And because new regulations require not just proof of process, but proof of product, textiles must shift their production and traceability protocols to meet that demand.
The Transformers Foundation said that textile brands must meet a new set of traceability standards that focus on true evidence from every point of the supply chain. Materials must carry verifiable physical identifiers that are tamper-resistant and can be independently analyzed. Digital traceability systems must reflect the actual makeup of the physical product, not just merely record what suppliers enter into a system.
“Achieving this requires digital systems that follow the physical batch through transformation, reconcile inputs against outputs, flag impossible or contradictory sequences, detect anomalies and yield inconsistencies, align with ERP and production data, and integrate test results into the record,” the report said.
The report also emphasized that verification must come via a third party that is accredited under ISO/IEC principles, scientifically valid, risk-based and independent of commercial interest. And that brands must engage in risk-based node control—focusing on points where identity is most likely to be lost or manipulated, such as gins, scours, dissolving pulp facilities, wet-blue leather operations, blending stages and subcontracted dyeing and finishing facilities.
“Evidence-grade traceability systems concentrate verification effort at these nodes through targeted sampling, testing and analysis, and anomaly detection,” the report said. “Uniform oversight is inefficient; risk-based control is essential.”
The Transformers Foundation said that brands must focus on a chain of identity, rather than a chain of custody, where fiber identity survives transformation, markers persist through blending, verification occurs at each transition and that the end product represents a continuous, uninterrupted history.
And then, finally, evidence must be attached to the product itself, not relying on representative data, farm or program averages, volume-based models, unverifiable digital twins or documentation detached from identity.
“The product being sold must be capable of answering a single regulatory question: ‘Is this product what the label claims, and can that claim be proven?’” the report said. “If the answer depends on documentation rather than evidence, the claim fails.”
The Transformers Foundation warned that if brands aren’t willing to drill down to this level of traceability and verification, the industry could face everything from legal liability to loss of market access.
“The trajectory for fiber traceability is no longer speculative. Regulatory frameworks are in force, enforcement mechanisms are active and evidentiary expectations are already being applied,” the report said. “Whether the industry adapts willingly or not is increasingly irrelevant. The next decade will be defined by compliance thresholds, proof requirements and commercial risk, not sustainability ambition.”
While some systems are in place to provide the evidence-based compliance that regulators require, the Transformers Foundation said that the textile industry has work to do to ensure their products are truly, verifiably sustainable. The result of sidestepping that level of evidence-based reporting can come at a great cost for brands in an increasingly more regulated future.
“The industry spent two decades building a documentation economy. Regulators are now requiring an evidence economy,” the report said. “The gap between the two is the risk that every brand, supplier and retailer in this supply chain currently carries, whether they have priced it or not.”
