Released in The Interline’s Sustainability Report 2024, this executive interview with TradeBeyond is one of an exclusive five-part series that sees The Interline quiz executives from companies who are defining what the foundations and the frontend experiences of sustainability solutions will be.
For more on sustainability in fashion, download the full Sustainability Report 2024 completely free of charge and ungated.
Last year, it emerged that “sustainability” was still a useful term for capturing a very complex set of variables and conditions. This year, we want to look at how those different elements are being arranged and prioritised. Upstream visibility and traceability, for instance, is a separate piece of the sustainability puzzle from textile-to-textile recycling, or material science, or the circular economy. With all these different parts vying for brands’ and suppliers’ attention, and legislation adding time and compliance pressure to the mix, how do you believe our readers should be thinking about prioritisation?
Sustainability isn’t just about tackling individual concerns. It’s about understanding how various initiatives interconnect and align with strategic goals. The challenge is balancing immediate compliance demands with a long-term vision that includes upstream visibility, material innovation, and circular economy practices, at the level and depth required to align with the organization’s priorities.
In light of regulations like the EU’s Corporate Sustainability Reporting Directive, the Corporate Sustainability Due Diligence Directive, and the U.S. Uyghur Forced Labor Prevention Act, brands must have full transparency across their supply chains, down to the raw material level. Until recently, this kind of transparency was far out of reach for most fashion retailers, but TradeBeyond has introduced first-of-its-kind AI-powered traceability tools which, coupled with our leading supplier mapping capabilities, help brands map their supply chains and create detailed chain of custody documentation for every product they source.
This traceability not only addresses apparel’s most immediate compliance concerns but sets the foundation for all future sustainability practices. Textile-to-textile recycling and material science, for instance, introduce significant environmental benefits, but these innovations must be integrated with broader supply chain transparency. Knowing the origins and lifecycle impacts of materials allows companies to make smarter recycling and material use decisions. The circular economy, too, requires robust data management and traceability. Transitioning to a circular model demands a deep understanding of each product lifecycle stage, which relies on significantly better management of information and data along the full value chain. At TradeBeyond, we view initiatives like the circular supply chain as a continuum of real-time data, enabling effective decision-making and marked improvements in overall sustainability.
A big part of sustainability, from the brand perspective, is mapping and understanding risk. This is not a small challenge when we consider the complexity of global supply chains, and the different dimensions of impact modelling across environmental and ethical. Managing that sort of multi-faceted complexity seems like a potential use-case for AI. Do you see that potential? And if so, how are you seeing businesses making use of it to tackle the challenges of risk?
There’s no mistaking the potential of AI in this area. AI is crucial for managing the complexities of sustainability-related risks in global supply chains. The vast amount of data it can consider—from carbon emissions to product risk factors—makes AI indispensable for brands seeking to mitigate effectively environmental and ethical vulnerabilities across all tiers of their supply chain.
AI can quickly process and analyze large data sets, identifying patterns and anomalies that manual methods can’t catch. Our AI-driven traceability tools allow brands to monitor their supply chains in real-time, mapping each tier down to the raw material level. This capability is vital for identifying high-risk suppliers and ensuring compliance with stringent regulations. AI’s predictive analytics also enable businesses to forecast risks based on historical data, addressing issues before they escalate.
Many fashion companies are already integrating AI into their risk management strategies with notable success. AI-powered platforms cross-reference supplier data with global risk databases, automatically flagging potential ethical or environmental violations. This streamlines compliance and enhances transparency, which is increasingly important as consumers demand more accountability from brands. By automating the identification of ethical or environmental violations, this real-time analysis allows companies to address issues proactively, ensuring compliance with evolving regulations and supporting more informed decision-making.
It’s fair to say that implementing AI is not going to be straightforward, for a range of technical and cultural reasons. Have you seen organisations encounter any problems in rolling out AI capabilities in risk management and overall sustainability initiatives? What strategies have proven effective in mitigating those hurdles?
Retail businesses are understandably excited about the promise of AI. This summer we conducted a survey that found implementing AI is the most cited priority for supply chain leaders, with 28% citing it as their top priority over the next three years. But without the necessary digital infrastructure, they won’t be able to take full advantage of AI’s potential.
A significant hurdle is the lack of a centralized, accurate, and organized data repository. AI thrives on data, and without a robust foundation, AI’s insights and efficiencies fall short. Companies often face fragmented data sources—PO, SKU, factory-level information, and supplier data spread across multiple platforms—leading to inconsistencies and unreliable AI predictions. TradeBeyond’s AI chain of custody toolkit addresses this by automatically scanning and assessing all documents, detecting potential compliance risks, and cross-referencing shipment details against databases of blacklisted entities, ensuring early detection of compliance issues. This ensures that all documentation is ready for customs, allowing retailers to avoid significant delays and potential fines.
Digitalization is the first step to overcoming this challenge. Brands need to build a central repository for all supply chain data, from early-stage planning to sourcing, costing, and logistics. A multi-enterprise platform like TradeBeyond facilitates this, ensuring data is current and accessible for all stakeholders. A vast, centralized data lake sets the stage for AI to function optimally, enabling real-time monitoring, predictive analytics, and automated decision-making.
Cultural and technical adaptation also pose challenges. Many organizations underestimate the learning curve associated with AI tools and the need for cross-departmental collaboration. Success lies in prioritizing training and change management, ensuring teams are equipped to work with AI systems and act on the insights they generate.
As powerful as technology can be, it’s only part of the sustainability picture. Building the right company culture to support sustainability actions and to power genuine collaboration is going to be key. How do you think those two elements – digital transformation and cultural evolution – can support one another, and help deliver a near-term future where professionals at every level of fashion can contribute in a meaningful way to sustainability objectives?
Culture and technology must work hand-in-hand to drive meaningful and lasting change within an organization. Especially in the fashion industry, where traditional practices are deeply rooted, achieving a significant cultural shift requires deep, organization-wide behavioral change. This can cause resistance among employees, who may feel that their previous efforts are being invalidated or may fear the uncertainty that comes with new objectives.
To address these concerns, it’s essential to reassure employees, from designers to supply chain managers, that their past contributions were valuable while also framing the need for change as a pathway to becoming a more responsible and sustainable brand. This not only preserves morale but also sets the stage for a successful transition to new sustainability goals, such as ensuring ethical sourcing and embracing circular fashion.
Technology is critical in this transition. As highlighted in our latest Retail Sourcing Report, driving a sustainable future in fashion goes beyond adopting new technologies; it requires embedding these changes into the organizational culture. Platforms like TradeBeyond provide robust support with features like AI-powered chain of custody and carbon impact tracking, building them into existing workflows specific to fashion production and sourcing. These tools make it easier for employees to adopt new, sustainability-focused behaviors by embedding these practices into efficient processes. As employees begin to see success in their new roles—whether it’s through streamlined processes or improved sustainability metrics such as reduced waste in garment production—they gain confidence and a sense of accomplishment, which helps to drive the cultural shift.
One additional challenge for this cultural shift is overcoming the stigma that AI, essential for deeper sustainability initiatives, is a job killer. To counter this, TradeBeyond’s approach to AI emphasizes value creation and progressive implementation, demonstrating that AI can enhance job roles rather than replace them. This helps to mitigate resistance and fosters a culture where technology and human effort are seen as complementary forces driving the company’s sustainability agenda.
From your vantage point, you must have an idea of where the industry is falling behind on its sustainability targets. What are the areas where brands and retailers need to focus in order to catch up with regulations, consumer expectations, and ethical standards?
One critical area where the fashion industry struggles is managing Scope 3 carbon emissions, which represent the largest portion of a brand’s carbon footprint. These emissions, often misunderstood and poorly managed, leave brands vulnerable to regulatory non-compliance and reputational risks. The regulatory landscape is becoming increasingly stringent with laws like the EU’s CSRD, which mandates detailed reporting on Scope 3 emissions, and the upcoming SEC climate disclosure rules in the U.S., which are expected to require companies to disclose their entire carbon footprint, including Scope 3 emissions.
To effectively monitor and reduce Scope 3 emissions, brands need a robust data foundation. TradeBeyond’s CBX Carbon Impact tool provides a comprehensive framework for tracking and reducing supplier emissions, from energy consumption to industrial processes and wastewater. By automating data collection from suppliers and integrating it into a centralized platform, CBX Carbon Impact simplifies the management and reporting of Scope 3 emissions, ensuring compliance and transparency. Its interactive dashboards centralize data for easy access, offering insights into energy efficiency and emission reductions to help meet targets. The platform also supports corrective action plans, enabling brands to collaborate with suppliers on improving efficiency and reducing emissions.
With sustainability destined to bring sweeping changes to many different parts of the fashion value chain, it seems inevitable that some (or many) current ways of working will have a limited shelf life. Where do you see the industry changing the fastest and most acutely? What do we take for granted today that’s unlikely to be viable in the future? And how can fashion businesses get ahead of that shift?
The fashion industry is rapidly transforming, particularly in supply chain management. A significant change is the growing demand for digital transparency. Brands can no longer afford limited insight into their suppliers’ practices. New regulations demand clear, traceable records of every stage in production, driving the adoption of advanced traceability tools that ensure real-time visibility and compliance.
Consumer expectations around product life cycles are also shifting. The traditional linear model of fashion is being replaced by a more sustainable, circular approach. Consumers now demand products designed for longevity, reuse, and recycling. Brands that innovate by integrating circularity into their offerings will not only meet regulatory demands but deliver on increasing consumer expectations for responsible practices.
The fashion industry, as one of the most polluting and wasteful sectors, faces significant challenges due to its reliance on low-cost manufacturing regions where environmental impact has often been overlooked. Brands must also embrace a daring transparency in their sustainability efforts, clearly communicating both their successes and the areas needing improvement. This honest approach is crucial for building credibility and avoiding accusations of greenwashing. Collecting and organizing full value chain data accurately will be essential for brands to report their sustainability performance effectively.
Despite these challenges, it’s been inspiring to watch as the industry has moved from reactive compliance to proactive sustainability leadership. Sustainability is no longer just about meeting standards, but about driving long-term value. Companies that embrace this shift, using tools like TradeBeyond to embed sustainability into every aspect of their operations, will lead the industry into the future.