Sustainability has always been a top priority for fashion businesses and it matters more than ever in 2026. The rules around ESG in the fashion industry have shifted, and not in the direction many businesses expected. The EU’s Omnibus package has reduced reporting obligations for a large number of organizations. But lighter regulations have not lowered stakeholder expectations. Investors, retail buyers, consumers, and supply chain partners still expect brands to demonstrate measurable progress on sustainability, ethical sourcing, and transparency.
The difference is that ESG is no longer just a compliance exercise. It has become a data challenge. Most fashion brands already have sustainability goals. What they often lack is evidence, a reliable way to collect, validate, and report the data needed to prove progress.
Information is typically spread across ERP systems, PLM platforms, supplier portals, inventory systems, spreadsheets, Supply Chain Networks and customer channels. As a result, ESG reporting becomes a manual exercise rather than a strategic capability.
What’s the Omnibus package and why does it matter for the fashion industry now?
In February 2026, the EU published the Omnibus I Directive (Directive (EU) 2026/470), which significantly narrowed the scope of the Corporate Sustainability Reporting Directive (CSRD). This change directly impacts all textile players from global enterprise brands facing strict mandates to mid-market labels and suppliers who must still report to satisfy commercial partners. Roughly 80% of companies were removed from mandatory reporting, and several deadlines were pushed back by two years.
For textiles specifically, only brands with more than 1,000 employees and over €450 million in turnover remain in mandatory scope, and the sector-specific textile reporting standards became voluntary.
While this reduces regulatory pressure, it does not eliminate the need for ESG data. Sustainability reporting requirements now come from multiple sources, including investors, retail buyers, financial institutions, and value-chain partners.
The takeaway: Whether you report under CSRD, voluntarily, or simply to keep a major retail account, your sustainability claims are only as credible as the data behind them.
Why is fashion's ESG challenge really a data problem?
Fashion’s environmental footprint is dominated by one thing: manufacturing clothes that never sell. According to Oxfam around 40% of garments produced globally each year, which is up to 46 billion pieces, go unsold and a large share of what does sell moves only on markdown.
Every unsold unit is wasted material, water, energy, and labour. Yet the data needed to measure and reduce it rarely sits in one place. It’s spread across ERP, PLM, supplier spreadsheets, and email threads, captured manually, updated once a year, and almost impossible to audit.
That is the real bottleneck. Organizations cannot improve, or credibly report on, what they cannot measure.
What does report-ready sustainability data look like?
Report-ready ESG data is information pulled directly from operational systems, captured continuously, granular enough to trace to a product or component, and verifiable by a third party.
In practice, report-ready sustainability data should be:
- Connected – drawn from ERP, PLM, and supply chain systems rather than rebuilt by hand each cycle.
- Continuous – refreshed as operations happen, not reconstructed at year-end.
- Granular – traceable to SKU, material, or supplier level, which supports both ESG reporting and fashion supply chain transparency.
- Verifiable – time-stamped and auditable, so claims hold up to scrutiny and reduce greenwashing risk.
Because reporting criteria are still evolving, as Omnibus I itself demonstrates, ESG data capture shouldn’t be hard-coded into a brand’s systems. Ideally, the relevant fields and metrics should be optionally configurable within ERP, PLM, and other standardized transactional software, so brands can adapt what they capture as requirements shift, without re-architecting their core systems each time the rules change.
How can AI agents turn operational data into ESG signal?
This is where AI agents earn their place. Rather than producing ESG reports directly, they generate and surface the operational data that credible sustainability narratives depend on and they attack overproduction at the same time. Fortude’s AI agents offer two clear examples. These agents come pre-integrated with Infor’s CloudSuite platform, and can also be mapped to additional ERP, PLM, or supply chain applications a brand already runs.
Cutting overproduction at the source: The Signal Based Forecasting agent
Fortude’s Signal Based Forecasting Agent produces SKU-level demand forecasts by combining internal data, inventory, sales tickets, and purchase orders, with external signals such as weather, holidays, promotions, economic indicators, and trends . It sorts those signals into short, medium, and long-term influences and recommends purchase-order quantities and in-house dates accordingly.
The ESG link is direct: more accurate forecasts mean fewer units made that won’t sell. Less overproduction is less deadstock, less markdown, and less waste, and it produces hard, reportable figures, from forecast accuracy to the volume of excess purchase orders avoided.
Selling what you have already manufactured: The Sentiment Analysis agent
Overproduction isn’t only about how much you make; it’s also about stock stranded in the wrong place. Equilibrium forecasts selling rates store by store, calculates safety stock and inventory gaps, flags stock-out risks, and recommends where to pull stock from and where to send it.
By moving existing inventory to where it will actually sell, the agent lifts sell-through and cuts the markdowns and deadstock that come from imbalanced stock, turning product you have already produced into revenue instead of waste.
Is it worth investing before reporting is even mandatory?
For most brands, yes. The business case for ESG never rested solely on compliance. Strong ESG data is risk mitigation: it protects against supply shortages, price volatility, and reputational damage, all of which hits fashion harder than most sectors.
It is also a hedge against the next regulatory turn. Brands that build the data foundation now avoid a frantic scramble if rules tighten again. They would also be able to answer a retail buyer’s sustainability questionnaire today rather than in a year. The brands that should prioritize this fastest are those selling into the EU, those whose positioning leans on sustainability, and any supplier inside a larger brand’s reporting value chain.
Where should fashion brands start?
A practical sequence looks like this:
- Map the gap: Identify which ESG data points you already capture and where the gaps are.
- Connect the core systems: Unify ERP, PLM, and supply chain data into one trusted source, as one global apparel supply chain leader did with a unified analytics platform.
- Target overproduction first: It’s the highest-impact, most measurable place to start, and the agents above plug straight into it.
- Build for audit: Design data capture to be continuous and verifiable from day one.
The bottom line
ESG in fashion has moved from a compliance checkbox to a data discipline. The mandate got lighter but the expectations haven’t changed. Brands that prioritize and treat sustainability data the way they treat financial data — connected, continuous, and credible — will be able to report their sustainability measures in clear detail.
Fortude helps fashion brands build that foundation, from unifying enterprise data to deploying AI agents that cut overproduction.
Talk to our Data & AI consultants today. We will assess your current fashion ESG data and deploy AI agents to streamline your reporting, fast-tracking your path to true sustainability.
