Cracking The Code On ESG Challenges For Fashion Supply Chains

Forbes

06-05-2025

Paul F. Magel | President, CGS | Leads global software & cloud co. CGS and its BlueCherry® digital supply chain platform for fashion brands. getty
Today's fashion and apparel brands—from global icons to mid-size businesses—are under more pressure than ever to meet increasingly tough environmental, social and governance (ESG) requirements. Consumers are demanding greater transparency, investors expect accountability and regulators are getting tighter on their compliance measures than ever before. The bottom line is that sustainability is no longer optional.
Here's the thing, though—ESG isn't just about compliance and added complexity. It's a massive opportunity. The very same digital supply chain strategies that help companies mitigate ESG risks can also unlock powerful, data-driven insights that can sharpen their competitive edge and drive growth through a much more resilient supply chain—one that's better prepared to absorb the impacts of tariff shifts or other global disruptions.
Supply chain visibility is no longer just a luxury. A single misstep, whether an environmental violation or a labor rights issue, can spiral into a full-blown reputational crisis. However, many brands still struggle to track materials, labor practices and environmental impact across their complex global networks.
Why? Because traditional supply chains were never designed with transparency in mind. Data sits in silos, fragmented across different systems, making it difficult for brands to get the full picture. Without real-time insights, businesses risk compliance failures, financial penalties and a loss of consumer trust. These insights also help ensure success for the oldest adage in the book—delivering the right product at the right price at the right time! ESG's Biggest Hurdle: The Data Gap
ESG compliance is all about the data. And for too many brands, that data is ... a mess.
Regulations are evolving fast, demanding detailed reporting across the entire supply chain. Still, many companies continue relying on outdated, manual processes to track sustainability metrics across a disconnected supply chain. This results in incomplete, inconsistent and unreliable ESG and operational data that puts compliance and brand reputation at risk.
Data silos are another roadblock. When product details are stored separately from sustainability metrics, companies can't generate accurate, holistic reports. Without a clear view of their supply chain, brands are flying blind and unable to identify risks (or prove compliance) when it matters most.
Digital transformation is a key solution for ESG compliance. A robust, connected digital supply chain can enable brands to collect, analyze and report ESG data in real time while eliminating unnecessary guesswork and enhancing transparency.
Here's how supply chain digital transformation is helping fashion and apparel brands crack the ESG code: Real-Time Tracking
Internet of Things (IoT) sensors and AI-driven analytics can provide end-to-end supply chain visibility, allowing companies to monitor material origins, labor practices and environmental impact at every stage. For example, fashion retailer C&A Modas implemented an AI-infused platform to optimize its inventory processes—from planning to shipping—enhancing visibility and efficiency across its supply chain. Automated Compliance Management
Digital audit trails, supplier self-assessments and AI-based risk assessments can help brands stay ahead of regulatory requirements while minimizing human error. Data Unification
Cloud-based platforms can help consolidate ESG data from multiple sources, making reporting faster, easier and more accurate. Predictive Analytics
AI-powered tools can forecast potential ESG risks—financial or reputational—before they escalate into crises. For instance, BlueCherry's Planning AI (which is part of my company's applications solutions division), developed in collaboration with FirstShift, integrates AI-driven demand sensing and predictive analytics to help fashion brands anticipate disruptions, optimize inventory and proactively address ESG-related challenges. Future-Proofing ESG: A Smarter Approach
With ESG regulations constantly evolving, brands must take a proactive approach to compliance. That means:
• Aligning with global reporting standards. Frameworks like the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) provide solid benchmarks for ESG transparency.
• Investing in adaptable, modular systems. A flexible digital infrastructure helps ensure brands can scale and adjust to new requirements without overhauling their entire tech stack.
• Strengthening supply chain collaboration. Engaging suppliers at all levels—and leveraging digital tools to simplify data collection—drives consistency, efficiency and trust. The Bottom Line: ESG As A Strategic Advantage
Instead of viewing ESG compliance as a burden, brands should embrace it as a strategic advantage. Digital supply chain strategies don't just help businesses meet regulatory demands—they drive operational efficiency, strengthen consumer trust and support long-term growth.
The future of fashion supply chains is digital, transparent and sustainable. To get started: Understand the role of supply chain platforms.
Before investing in a supply chain platform, organizations should first conduct an internal audit to assess where their data gaps and operational bottlenecks lie. Cross-functional conversations between supply chain, compliance, IT and sustainability teams are key to aligning on business goals and defining what success looks like.
It's also important to evaluate existing infrastructure, as some systems may already contain valuable data that just needs to be unified. One common pitfall is underestimating change management, so having a clear roadmap and executive buy-in from the outset can dramatically improve outcomes. Begin a data governance strategy.
This will help ensure the data you collect can be aggregated and contextualized in a meaningful way. Start by designating a cross-functional data governance team that includes representation from the supply chain, IT, compliance and sustainability. This group should establish clear ownership of ESG data, define data quality standards and align on how data will be collected, verified and reported.
Investing in tools that support metadata management and audit trails can also help ensure traceability and accountability. One key to success: Avoid trying to boil the ocean. Instead, begin with your highest-risk areas and scale from there as your governance framework matures.
Companies that act now won't just be keeping up with ESG requirements—they can lead the industry forward and build the resilient supply chain required for today's turbulent times.
Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?