Can Fast Fashion Survive with the Upcoming Stringent Regulations?

The European Union’s new wave of sustainability regulations is set to disrupt fast fashion as we know it. Brands like SHEIN, known for their low-cost, high-volume production, are facing mounting pressure to overhaul their business models as these regulations target transparency, environmental impact, and labor practices.

Fast fashion’s reliance on rapid, disposable clothing has long been at odds with sustainability efforts. But now, with the EU’s Eco Design for Sustainable Products Regulation (ESPR) and a host of other policies aimed at improving supply chain transparency, reducing waste, and promoting circularity, brands must make significant changes—or risk being left behind.

Here are the 5 main challenges fast fashion companies face as they try to adapt:

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5 Key Challenges for Fast Fashion Companies

Environmental Standards: Fast fashion's reliance on rapid production and disposable clothing creates immense waste and pollution. Regulations requiring sustainable product design, longer-lasting materials, and more eco-friendly processes will require heavy investments, squeezing their margins.

Circular Economy Requirements: Fast fashion thrives on mass production and frequent new collections. Policies promoting circular fashion—such as garment recycling and upcycling—are directly opposed to this model, forcing brands to slow down and rethink production cycles.

Supply Chain Transparency: Many fast fashion brands are criticized for poor labor practices and environmental neglect in their supply chains. As regulations demand full transparency from sourcing to production, brands will need to overhaul complex, opaque supply chains—an expensive and time-consuming process.

Consumer Perception Shift: Regulations aren’t the only driving force—consumer demand is evolving too. Younger consumers are increasingly prioritizing sustainable, ethical fashion over fast fashion, which diminishes the long-term market viability of unsustainable practices.

Cost Implications: Sustainable materials, ethical labor practices, and compliance with new regulations will increase operational costs. This clashes with the low-cost nature of fast fashion, potentially leading to higher prices that could alienate its core customers.

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The Case of SHEIN: +80% Emission Increase!

In 2023, fast-fashion giant SHEIN faced intense scrutiny as its business model clashed with growing sustainability concerns and emerging regulations. 

Known for its rapid production and global reach, SHEIN relies heavily on AI to predict consumer demand and churn out trendy clothing at an unprecedented speed. While this has allowed the brand to dominate the fast-fashion market, it has also led to a massive environmental impact. 

A report revealed that SHEIN nearly doubled its carbon dioxide emissions between 2022 and 2023, with emissions exceeding those of four coal power plants (Wired, 2024). 

The company’s reliance on air transport for shipping its goods across the globe further compounds its emissions. 

Despite pledging to reduce its carbon footprint by 25% by 2030 and achieve net-zero emissions by 2050 (Wired, 2024), critics argue that the core of SHEIN's business—ultra-fast production and disposable fashion—remains incompatible with true sustainability efforts. 

Fast fashion’s environmental toll, including heavy microplastic pollution and wasteful practices, suggests that SHEIN faces a monumental challenge in aligning its operations with the rising demands for transparency, circularity, and lower emissions in the fashion industry.

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Will they Survive? Potential Evolutions to Compliance

Fast fashion brands like SHEIN face a challenging future as they navigate the upcoming EU regulations focused on sustainability and transparency. To comply, these companies have several options, each with its own trade-offs.

Some may choose to fully commit to sustainability, investing heavily in eco-friendly materials, transparent supply chains, and circular economy practices, though this would likely raise production costs and slow their rapid production cycles.

Others might adopt a hybrid approach, maintaining their core fast-fashion model while introducing selective sustainable collections and improvements to meet the minimum regulatory requirements, risking accusations of greenwashing.

Alternatively, brands could choose to shift their focus away from highly regulated markets like the EU, relocating production to less stringent regions, but this could damage their reputation in the long run as consumer demand for ethical fashion grows.

Each path presents significant challenges and opportunities as the industry faces increasing pressure to transform.

At Renoon, we understand the challenges companies are facing with the upcoming EU regulations.

To find out how we have been supporting other companies in this path, you can talk to our team by booking a 1:1 session.