What would a smarter fashion system look like?

The fashion industry is at a crossroads. For decades, it has thrived on speed, scale, and convenience. But behind the glamour and growth lies a broken system - one that overproduces, overconsumes, and undervalues both people and the planet. The question is no longer if change is needed, but how we can redesign the system to be smarter, fairer, and more resilient.

The broken system

It’s no secret that fashion is one of the most resource-intensive industries in the world. But the scale of the challenge continues to grow:

• Massive overconsumption: With ultra-fast fashion brands producing new collections in days, the volume of garments hitting the market has skyrocketed. Many of these clothes are worn fewer than 10 times (!!!), if at all, before ending up in landfill or incineration.

• Overproduction: Industry estimates suggest that around 30–40% of clothing produced globally is never sold. Excess inventory is either heavily discounted, destroyed, or shipped to second-hand markets in the Global South, often overwhelming local economies and waste systems.

• Abuse of raw materials: From cotton grown using intensive water and pesticide inputs to polyester derived from fossil fuels, the materials feeding fashion’s appetite carry enormous environmental footprints.

• Workers’ rights: While fashion’s global supply chains support millions of workers, too many remain in precarious conditions - earning less than a living wage, facing unsafe environments, and lacking basic rights.

• Lack of recycling infrastructure: Despite the rise in “sustainable collections” and “circular initiatives,” only around 1% of textiles are currently recycled into new garments. Infrastructure gaps mean most post-consumer clothing still has no viable end-of-life pathway.

• Lack of transparency: Supply chains remain opaque. Many brands cannot trace their garments back to raw material level, leaving blind spots when it comes to environmental impact, human rights, and compliance.

At first glance, one solution seems obvious: simply stop producing. But stopping also has consequences. Millions of workers rely on the industry for livelihoods, communities depend on the trade it generates, and innovation is often born from within the system rather than outside of it. The challenge isn’t just to slow down - it’s to redesign.

Redesigning the fashion ystem

If the old system is no longer fit for purpose, what would a smarter one look like? The answer lies in balancing business needs with social and environmental responsibility. Some key principles are emerging:

A “just transition” ensures that as the industry shifts towards sustainability, the people most vulnerable to change - factory workers, farmers, artisans - are not left behind. Without fair planning, the drive for sustainability risks deepening inequality. This means investing in skills training, safe working conditions, and support systems that allow communities to thrive alongside industry reform.

Circular fashion is about more than just recycling - it’s about designing waste out of the system. Products must be created with reuse, repair, and regeneration in mind. Business models like rental, resale, and repair services are growing, but to scale, they require genuine commitment from brands and infrastructure that works across borders.

Degrowth doesn’t mean shutting down businesses; it means moving away from endless pursuit of volume and instead prioritising quality, durability, and shared value. Smarter brands are exploring how to decouple profitability from overproduction, focusing instead on services, storytelling, and longevity.

A smarter system requires fairer distribution of value across the supply chain. That means ensuring that profits don’t remain concentrated at the top, but are shared with the people and communities who create fashion in the first place. Fair wages, profit-sharing models, and investment in supplier countries will be essential.

Emerging regulations such as the EU’s Corporate Sustainability Reporting Directive (CSRD) and Digital Product Passport are raising the bar on supply chain visibility. But transparency is also a tool for trust. Tomorrow’s consumers expect proof, not promises, and brands who can credibly show where, how, and by whom products were made will win loyalty.

The fashion industry is responsible for an estimated 8–10% of global carbon emissions. Smarter systems will require immediate reductions through renewable energy use in factories, low-impact material choices, and regenerative agriculture. Protecting biodiversity must also become central, from safeguarding soil health to reducing chemical inputs.

The legislation debate

One of the biggest tensions facing the industry is whether voluntary measures are enough—or whether only legislation can force change.

• On one hand, free trade and voluntary action allow for agility, innovation, and market-driven solutions. Some pioneering brands are already setting ambitious sustainability targets, pushing boundaries faster than regulation requires.

• On the other, legislation ensures a level playing field. Without legal obligations, laggards can continue business as usual while pioneers carry the burden of investment and risk.

We’re already seeing the regulatory landscape shift. The EU is leading the way, but similar conversations are happening in the UK, US, and beyond. For global brands, the smarter move is clear: don’t wait for legislation to catch up. Prepare now by embedding transparency, compliance, and accountability into your operations.

Towards a Smarter Future

The fashion system is undeniably broken, but the future doesn’t have to be. The blueprint for a smarter, more sustainable system is already emerging: one that values people as much as profit, the planet as much as product.

This isn’t just a moral imperative - it’s a commercial opportunity. The brands, retailers, and suppliers who embrace transparency, circularity, and fairness will not only comply with future regulation but thrive in it.

Fashion has always been an industry built on reinvention. Now it’s time to reinvent the system itself.

What would you prioritise in a smarter fashion system - legislation, degrowth, circularity, or redistribution?

At Source Fashion, these are the conversations shaping the future of retail. Join us as we bring together global leaders, innovators, and changemakers to build the smarter system our industry - and our planet - urgently needs. Watch these conversations, and more, in-person at our next event; register your interest here