The role of sustainable fashion technology in boosting ESG
April 02, 2025
Sustainability has transitioned from a peripheral concern to a central operational imperative within the fashion industry. As regulatory pressures intensify and stakeholder expectations escalate, the capacity to monitor and manage environmental and social performance through sustainable fashion technology has become a critical differentiator.
Despite ambitious goals, execution remains a significant hurdle. Many fashion brands contend with fragmented data, outdated systems, and manual processes. Bridging the gap between aspirations and outcomes necessitates embracing fashion technology as a catalyst for sustainability.
This article explores the best sustainable fashion technology and how they all drive enhanced performance. Some of the technology we’ll explore includes:
Digital Product Passports (DPPs),
Learn more about how this sustainable fashion technology drives tangible progress.
What is Fashion Technology?
Fashion technology refers to the use of advanced tools, digital systems, and innovative processes to design, produce, market, and distribute clothing and accessories. It encompasses everything from smart textiles, wearable technology, and 3D printing to artificial intelligence, augmented reality, and supply chain optimization. By integrating technology into the fashion lifecycle, brands can improve efficiency, reduce waste, enhance sustainability, and create personalized experiences for consumers.
At its core, fashion technology merges creativity with data-driven insights. It allows designers to experiment with new materials, predict trends, and produce garments with greater precision. Consumers benefit from interactive experiences, custom-fit products, and transparent information about the sourcing and sustainability of their purchases. In essence, fashion technology is transforming traditional fashion into a smarter, more connected, and more responsive industry.
What are some fashion technology trends?
As technology changes and advances, it brings with it a whole host of trends and changes. We’ve explored some of the key trends and changes in supply chain management based on technology advancements, and you can learn more in our downloadable guide.
Fashion’s Top Supply Chain Shifts
To sum up some of the emerging trends from fashion technology, things include:
AI and Machine Learning
Artificial intelligence (AI) and machine learning are reshaping the fashion industry by providing unprecedented insights into consumer behavior and market trends. AI-powered tools can analyze vast amounts of data from social media, sales, and browsing patterns to predict which styles, colors, and fabrics will be in demand. This predictive capability helps brands minimize overproduction, optimize inventory, and create collections that resonate more strongly with their target audience.
3D printing and design
3D printing is revolutionizing the production side of fashion by enabling on-demand manufacturing and highly customizable garments. Designers can create intricate patterns, shapes, and textures that would be difficult or impossible to achieve with traditional methods. This technology also reduces waste because garments can be produced only as needed, rather than relying on mass production, which often results in excess inventory.
Internet of Things (IoT)
The Internet of Things (IoT) is making clothing smarter and more connected than ever before. Wearable technology, such as fitness trackers embedded in fabrics or smart jackets that adjust temperature, demonstrates how IoT can enhance the functionality of everyday apparel. For brands, IoT devices in garments or production facilities provide real-time data on inventory, shipping, and consumer usage patterns, enabling more efficient operations and better decision-making.
Sustainable fashion
Sustainable fashion technology continues to be a central focus in the industry, driven by both consumer demand and regulatory pressures. Advances in technology have made it possible for brands to track and optimize every stage of the supply chain, ensuring that materials are ethically sourced, production processes are environmentally friendly, and waste is minimized. From digital supply chain platforms to eco-friendly textile innovations, technology enables fashion companies to measure and reduce their environmental footprint more accurately than ever before.
How technology acts as the bridge to ESG execution
The fashion industry's environmental and social footprint is substantial: production and transportation contribute 8–10% of global greenhouse gas emissions; over 92 million tons of textile waste are generated annually; and issues like excessive water usage, chemical runoff, and labor violations persist across global supply chains.
To address these challenges, regulations such as the Corporate Sustainability Reporting Directive (CSRD), Product Environmental Footprint Category Rules (PEFCR), and Digital Product Passports (DPPs) are redefining the reporting and tracking obligations for fashion brands. In this context, technology is not merely optional—it forms the backbone that enables compliance, agility, and long-term value creation.
7 Key Technologies Powering Sustainable Fashion
1. Merchandise planning: balancing profitability and sustainability
Merchandise planning is pivotal in delivering the optimal mix of products across various channels, regions, and timeframes. Modern fashion technology and tools now incorporate sustainability into decision-making processes, allowing brands to optimize not only cost, margin, and timelines but also environmental impact.
Leveraging artificial intelligence (AI) and advanced analytics, brands can assess the environmental footprint of each assortment across collections, categories, and seasons, aiding in waste reduction and aligning product strategies with ESG regulations and targets. Integration with warehouse management systems and demand planning enhances inventory positioning, reduces markdowns, and lowers emissions associated with redistribution.
2. Product lifecycle management (PLM): sustainability by design
PLM software integrates sustainability considerations into the initial stages of product development. It facilitates the selection of certified materials, modelling the impacts of design choices, and planning for recyclability, durability, and repairability.
Brands utilizing PLM report decreased material waste, streamlined sampling processes, and enhanced traceability—all contributing to reduced environmental impact and improved product stewardship.
The significance of sustainable product design is escalating. The European Union's Ecodesign for Sustainable Product Regulation (ESPR) mandates that, via the Digital Product Passport, brands must declare their sustainability design strategies for all textile products sold in the EU from 2027 onward.
3. Enterprise resource planning (ERP): operationalizing ESG
ERP systems connect sustainability objectives with sourcing, manufacturing, and financial operations. Through integrated data flows, teams can monitor resource usage, emissions, and compliance in real time.
AI-driven ERP systems assist in managing overproduction, minimizing waste, and streamlining sustainability audits while embedding ESG reporting into daily decision-making processes.
4. ESG platforms: from reporting to real-time insight
Modern ESG platforms transcend static reporting by automating data capture across suppliers and facilities, providing dashboards for real-time tracking, and employing AI to identify risks or inconsistencies in ESG data.
Capturing data from all tiers in the complex and fragmented fashion supply chain is a formidable challenge. Pursuing data from suppliers without direct relationships is inherently difficult, compounded by the need to validate information from newly onboarded suppliers and continuously verifying data across diverse sources.
With the impending wave of new regulatory compliance and reporting requirements, fashion companies need flexible and robust ESG platforms that offer a low-code/no-code configuration of integrations, forms, and reports to accommodate the rapidly evolving landscape. These tools enable teams to detect non-compliance early, engage suppliers proactively, and deliver credible sustainability performance to stakeholders and regulators.
5. Shop floor control: manufacturing efficiency with impact visibility
Shop Floor Control systems utilize sensors to provide real-time visibility into production performance. This is the Internet of Things (IoT) and the Industrial Internet of Things (IIoT) at work. Smart devices allow brands to monitor energy consumption, equipment efficiency, and waste at the factory floor.
Predictive maintenance and automated quality checks contribute to reduced downtime, lower energy costs, and support responsible manufacturing practices. Data captured can also inform broader ESG analytics for factory-level performance tracking.
Shop Floor Control Product Sheet
6. Warehouse management: optimizing distribution with sustainability in mind
Sustainability considerations extend beyond manufacturing. Warehouse Management Systems (WMS) are instrumental in ensuring efficient and environmentally friendly distribution. From optimizing warehouse layouts to reducing transportation emissions through improved route planning, WMS tools support greener logistics.
When integrated with Merchandise Planning and demand forecasts, WMS enhances order fulfilment precision, reduces returns, and helps brands intelligently balance stock across multiple sales channels—all while minimizing waste and emissions.
Warehouse Management Product Sheet
7. Digital product passports: enabling transparency and compliance
Digital Product Passports (DPPs), set to become mandatory in the EU by 2027, provide a scalable solution to trace a product's journey from material sourcing to end-of-life. By connecting material, production, and usage data, DPPs assist brands in meeting Extended Producer Responsibility (EPR) obligations and demonstrating accountability within circular economy initiatives.
Sustainable fashion technology case studies
To better understand the impact of applying sustainable fashion technology into your process, here’s some key examples of how the technology mentioned above can drive revenue, loyalty, and more.
1. Digital Product Passports in Practice
A global luxury brand implemented Digital Product Passports (DPPs) to provide consumers with full transparency across material sourcing, labor practices, and sustainability credentials. The initiative not only built deeper consumer trust but also positioned the brand as a leader in regulatory readiness, fully aligned with EU traceability standards set for 2027.
2. PLM & ERP in Unison
A leading sportswear company deployed AI-powered PLM and ERP systems to improve material selection and lifecycle sustainability performance. By embedding real-time impact data into the product development process, the company achieved a 20% reduction in the carbon footprint of its flagship collections - while also accelerating time-to-market and reducing sourcing risks.
3. Shop Floor Control in Action
A major fast-fashion retailer targeted overproduction and textile waste by integrating Shop Floor Control systems with recycling initiatives and demand planning tools. This digital-first approach enabled a 50% increase in textile recycling volumes and a measurable decrease in unsold inventory, demonstrating how operational efficiency and sustainability can be achieved simultaneously.
Explore more Supply Chain success stories and browse our BlueCherry case studies
The Path toward Sustainable Fashion: Powering ESG with Technology
The path to a more sustainable fashion industry runs through data, integration, and sustainable fashion technology. For brands, the transition from ESG ambition to execution depends on the strategic use of technology across every phase of the value chain - from product design and sourcing to manufacturing, logistics, and reporting.
As regulations such as CSRD, ESPR, EPR, and the DPP framework rapidly approach enforcement, fashion companies must prioritize infrastructure that supports transparency, circularity, and compliance. Technology is no longer a "nice to have", it is a competitive necessity.
The future will favor brands that adopt digital tools capable of adapting to regulatory change, surfacing impact insights, and empowering supply chain collaboration. Investing now in scalable, flexible, and interoperable platforms is the key to leading the next generation of sustainable fashion.
Book a demo with us today to see how our integrated ESG platform connects your PLM, ERP, and supply chain systems — simplifying compliance, enhancing transparency, and supporting measurable progress across your sustainability goals