A New Era of Accountability for European Fashion
On 19 July 2026, the European fashion industry crossed an important regulatory threshold. From that date, large enterprises operating in the EU became subject to the prohibition on destroying unsold apparel, clothing accessories and footwear established by Article 25 and Annex VII of the Ecodesign for Sustainable Products Regulation, or ESPR. Medium-sized enterprises are scheduled to enter the scope of the prohibition from 19 July 2030, while micro and small enterprises are exempt.
But the significance of the change goes beyond the final disposal of excess stock.
Under the wider framework established by Chapter VI of the ESPR, large companies that discard unsold consumer products must disclose information including their number and weight, the reasons they were discarded, the waste-treatment operations involved, and the measures taken or planned to prevent their destruction. Unsold inventory is therefore moving from a largely internal operational issue towards one of documented accountability.
For fashion companies, this creates a new visibility challenge. Knowing that a certain volume of stock has left inventory is one thing. Being able to explain what happened to those products afterwards is another. Products may move through warehouses, logistics providers, resale channels, donation partners, repair operators, recyclers and waste-management companies. Each organization can hold part of the information, while the brand still needs a reliable picture of the final outcome.
The ESPR does not explicitly require every garment to be serialized or individually tracked for the purposes of the destruction prohibition. However, as companies need to connect inventory decisions with documented destinations and outcomes, more granular traceability can become strategically valuable.
This is where unit-level traceability enters the conversation: not as a blanket regulatory requirement, but as a way to create a stronger link between a physical product, its identity, its movement through the value chain and its eventual outcome.
From Disposal Decisions to Product Accountability
Historically, unsold inventory has largely been managed as an internal business issue. Excess stock could be recorded through warehouse systems, financial write-downs and aggregated reports, often by collection, SKU or product category.
Once goods left the primary commercial cycle, however, visibility could become much weaker.
The ESPR changes that dynamic. For companies within scope, the management of discarded unsold products becomes part of a structured disclosure process. This means that inventory information increasingly needs to connect with evidence explaining why products were discarded and what happened to them afterwards.
What Companies Will Have to Disclose
Commission Implementing Regulation (EU) 2026/2 establishes the common format for the required disclosure. It applies from 2 March 2027 and covers large enterprises that discard unsold consumer products directly or have them discarded on their behalf. From 19 July 2030, the disclosure requirement will also apply to medium-sized enterprises, while micro and small enterprises remain exempt.
For each relevant financial year, companies within scope must disclose information including:
- The number and total weightof unsold consumer products discarded;
- The reasons why those products were discarded;
- Any applicable derogations from the prohibition on destruction;
- The proportion delivered for waste-treatment operations, including preparation for reuse, recycling, other recovery, energy recovery and disposal;
- The measures taken, and those planned, to prevent the destruction of unsold products.
The information must follow a standardized structure designed to improve consistency and comparability. This is a significant change. Information that once remained largely within warehouse, logistics and accounting systems is becoming part of a more transparent reporting framework.
From Disclosure to Operational Evidence
The disclosure itself is only the final output.
Behind every reported figure sits a series of operational events: products leaving inventory, moving between organizations, changing status and ultimately reaching a particular destination or treatment. Reliable disclosure therefore depends on the ability to connect these events.
A company may report at product-category level, but the evidence behind those figures can originate much further down the data chain. This creates a practical challenge: how can companies reconstruct what actually happened to the products represented by an aggregated figure?
From Aggregate Reporting to Traceable Product Outcomes
A year-end total is only as reliable as the records behind it. Fashion companies therefore need sufficient visibility to connect aggregated disclosures with product movements, receiving organizations and subsequent outcomes.
This does not mean that ESPR requires each garment to be publicly tracked as an individual unit. It means that more granular product data can help companies reconcile quantities, reconstruct decisions and support the accuracy of the information they disclose.
In practice, three questions become particularly important.
Where Did the Product Go?
When unsold products leave regular inventory, companies need to understand where they went and under which type of process.
Possible destinations may include:
- A resale or recommerce channel;
- An outlet or off-price channel;
- A donation organization;
- A repair or refurbishment operator;
- A recycling or waste-treatment facility.
These outcomes are not interchangeable from a regulatory perspective.
Donation or commercial resale, for example, should not automatically be treated as discarding a product as waste. By contrast, products that have been discarded and are subsequently sent for preparation for reuse, recycling, recovery or disposal fall within the waste-treatment information covered by the disclosure framework.
The objective is therefore not simply to know that products left a warehouse. It is to establish a verifiable destination and correctly understand what that destination represents.
When and How Did the Transition Take Place?
Products do not necessarily move directly from a warehouse to their final destination.
A garment may leave a distribution center and move to a resale partner before reaching a second-hand buyer. Another product may be transferred to a repair operator and later return to the commercial cycle. Others may pass through logistics providers before reaching recycling or recovery facilities.
Maintaining visibility across these transitions can require information such as:
- When the product left inventory;
- Why its status changed;
- Which logistics or service provider handled it;
- Which organization received it;
- The intended destination or treatment;
- The subsequent operation recorded.
These are not presented as mandatory item-level ESPR fields. Rather, they illustrate the type of operational information companies may use to maintain a reliable chain of custody. The real difficulty appears when information crosses organizational boundaries. A warehouse may record dispatch, a logistics provider may record transport, and a downstream operator may record the final treatment.
If those records cannot be connected through consistent identifiers or references, the individual pieces of information exist, but the complete story does not.
Why Was That Outcome Selected?
The reason behind the outcome also matters.
The ESPR prohibits the destruction of unsold apparel, clothing accessories and footwear within its scope, while Regulation (EU) 2026/296 provides specific derogations under which destruction may be permitted.
These include circumstances related to health, hygiene or safety; certain cases involving damaged products; legal or technical unfitness; intellectual-property infringements; unsuccessful donation under defined conditions; and situations in which destruction represents the option with the least negative environmental impact.
Where a derogation is used, destruction therefore needs to be supported by the relevant circumstances and documentation. It should not be treated as simply another status in an inventory system. Under the new framework, it is a restricted outcome that requires justification.
Together, these three questions create the foundation of product accountability: Where did the product go? When and how did it move? Why did it reach that outcome?
Why Current Fashion Systems Are Not Ready
Most fashion supply chains were designed around the commercial life of a product. ERP and inventory systems are extremely effective at answering questions such as:
- How many units are available?
- Where is a particular SKU stored?
- What is the remaining inventory value?
- Which products or collections are underperforming?
They were not necessarily designed to answer a different question: What happened to the products that are no longer in our inventory?
The Granularity Gap
Fashion inventory is commonly managed through structures such as SKUs, product categories, batches, shipments or logistics units. These structures make sense for traditional inventory management. But consider thousands of identical garments recorded under the same SKU.
An ERP may show that 5,000 units were removed from inventory. A warehouse management system may confirm that several shipments left the distribution center. Neither record necessarily explains whether those units were subsequently resold, donated, repaired, prepared for reuse, recycled or, where permitted under a derogation, destroyed.
This creates a granularity gap between the information used to manage inventory and the evidence needed to reconstruct product outcomes.
The ESPR does not require companies to publish the individual history of every garment. Similarly, the granularity of future Digital Product Passports may be established at model, batch or item level through product-specific rules.
The issue is therefore not that every product must automatically be serialized. It is whether the level of identification used is sufficient to support the process the company needs to control. When identical units can follow different routes, more granular identification can provide much greater precision.
Why an ERP Upgrade Is Not Enough
Closing this gap is not simply a matter of adding another status field to an ERP. A label such as “donated”, “recycled” or “destroyed” has limited value if it cannot be reconciled with evidence from the organization that physically received or treated the products.
The challenge is architectural.
Commercial information may sit in an ERP. Physical movements may be recorded in a warehouse management system. Transportation data may belong to logistics providers. Repair, resale, donation and recycling partners may each operate separate platforms. If these environments cannot exchange consistent identifiers and outcome data, every organization may hold part of the story without anyone holding the complete picture.
What companies need is therefore not simply more data, but the ability to maintain a reliable connection between products, movements, decisions and outcomes.
One Traceability Foundation for ESPR and Digital Product Passports
The rules addressing unsold products do not exist in isolation. They form part of the same European framework that establishes the Digital Product Passport, or DPP, and introduces new mechanisms for making product information digitally accessible across value chains.
The two should not be confused.
Unsold-product disclosure and the Digital Product Passport are separate regulatory mechanisms. Their requirements, datasets and timing are not necessarily the same.
From a data perspective, however, they have something important in common: both depend on the ability to identify products consistently and exchange reliable information across different systems and organizations.
How the DPP Creates a Digital Connection to the Product
Under the ESPR, a Digital Product Passport is a structured set of product-related information that can be accessed electronically through a data carrier. The exact data, access rights, identification level and data carrier required will depend on the delegated act adopted for the relevant product group.
Depending on those requirements, the digital connection may rely on technologies such as:
- QR codes or other two-dimensional codes;
- RFID;
- NFC;
- Other machine-readable data carriers based on applicable standards.
The technology, however, is only the access point. The real value lies in establishing a reliable digital connection between the physical product, or relevant product group, and its information.
Importantly, ESPR does not establish that every textile product automatically needs an individual serial identity. A DPP may operate at model, batch or item level, depending on the applicable product-specific rules.
Nor should the DPP automatically be described as a complete, real-time history of every event in a product’s lifecycle. Its mandatory content will depend on the relevant requirements.
This distinction matters. The objective is not to place every operational record inside the Digital Product Passport. It is to ensure that the wider data architecture can connect relevant systems and information when necessary.
Four Capabilities of a Shared Traceability Foundation
Rather than treating every new requirement as a separate data project, fashion companies can focus on several capabilities that can support both compliance and circular business processes.
Persistent product identity
Traceability begins with being able to identify the same product consistently across systems and organizations. Depending on the business process and applicable rules, that identity may exist at model, batch or individual-item level.
The objective is not serialization for its own sake. It is choosing a level of identification that provides enough precision for the processes the company needs to manage.
Verifiable chain of custody
Identification is only the starting point.
Companies also need to connect products or relevant product groups with the business events that affect their status and with the organizations responsible for those events. That creates continuity as products move through warehouses, logistics networks, repair services, resale channels, donation organizations, recyclers and waste-treatment operators.
Detailed transactional records do not all need to exist inside the DPP. They can remain in connected business systems while still referring consistently to the relevant product identity.
Data interoperability
Fashion traceability rarely depends on one company alone.
Suppliers hold manufacturing and material information. Brands manage commercial product data. Logistics providers record movements. Repair, resale and recycling partners generate information later in the product lifecycle. These systems do not have to be identical, but the information they generate must be capable of being interpreted and reconciled.
That requires interoperable identifiers, structured data, defined responsibilities and reliable exchange mechanisms.
Disclosure-ready data
Finally, regulatory disclosure should be the structured output of reliable processes rather than a reconstruction exercise performed at the end of the reporting period. The underlying information needs to be capable of being aggregated according to required categories, reconciled with inventory and logistics records, linked to supporting evidence and retrieved consistently.
That is the difference between simply having data and having disclosure-ready data.
From Compliance Infrastructure to Circular Business Models
These capabilities have value beyond regulatory reporting.
The same foundations can support:
- Return and excess-stock management;
- Repair and refurbishment;
- Resale and recommerce;
- Take-back schemes;
- Reuse and donation;
- Recycling and material recovery;
- Product authentication and provenance.
Different use cases will require different information and access rights. Public regulatory information, commercial data, personal information and operational records cannot simply be treated as one dataset.
The strategic goal is therefore not to build one enormous database containing everything. It is to create a connected ecosystem in which the relevant product identities, events and evidence can be linked across authorized systems.
Luxury Fashion Faces a New Strategic Challenge
For luxury and premium fashion brands, the end of routine destruction creates a particularly significant challenge.
Historically, destruction was one of several mechanisms used by parts of the luxury sector to prevent uncontrolled distribution of excess inventory, limit exposure to grey markets and preserve scarcity. As the destruction of unsold apparel becomes restricted, brands need other ways to manage products that do not complete their intended route to market.
The strategic question changes from: How do we prevent excess inventory from reaching the market?
To: How do we manage a product’s second life without losing control of the brand?
The Rise of Controlled Circularity
This question becomes more important as resale, recommerce, repair, refurbishment and authenticated second-hand channels grow.
For luxury brands, circularity creates both an opportunity and a control challenge. Once a product moves into secondary channels, brands may need to address issues such as:
- Authenticity and counterfeiting;
- Product provenance;
- Condition and previous repairs;
- Warranty eligibility;
- Brand representation in resale environments;
- Sustainability and circularity claims.
Traceability can therefore become a brand-protection capability, not simply a compliance tool.
Reliable digital product identities and connected records can support authenticated resale programmes, certified pre-owned initiatives, repair and restoration services, take-back programmes and other controlled circular models.
Rather than trying to prevent products from having a second life, brands can build the infrastructure needed to participate in that second life.
From Product Destruction to Product Stewardship
This represents a deeper shift in mindset.
In a linear model, an unsold product that could no longer follow its original commercial path became an inventory problem. In a circular model, it still has options.
It may be repaired, refurbished, resold, donated, repurposed or recycled. The challenge is maintaining enough visibility and governance to manage those pathways responsibly. This is where product stewardship begins to replace product disposal.
For luxury brands in particular, traceability offers a way to extend the principles of control, quality and authenticity associated with the first sale into the product’s subsequent lifecycle.
Building the Circular Partner Ecosystem
Traceability cannot stop at the company’s organizational boundary.
That is one of the most important practical implications of the move towards a more circular fashion industry.
As brands rely more heavily on resale, repair, refurbishment, donation, reverse logistics and recycling, external organizations become increasingly important sources of product information.
A resale platform may know when an item was listed and sold. A repair network records interventions. A reverse-logistics provider documents movement. A recycler records how goods or materials were treated.
The challenge is connecting these activities to the same relevant product or transaction. This makes the future of fashion traceability increasingly ecosystem-based.
Brands will need stronger operational relationships with:
- Resale and recommerce platforms;
- Repair and refurbishment operators;
- Donation and reuse organizations;
- Logistics and reverse-logistics providers;
- Recyclers and waste-treatment operators.
The critical capability is not forcing every partner to use the same technology. It is establishing enough interoperability to exchange trustworthy information and maintain continuity across organizational boundaries.
Companies that build these relationships early can create benefits extending beyond compliance, from greater control over excess inventory to better visibility across resale, repair and material-recovery activities.
Traceability in Practice: The Antares Vision Luxury Fashion Proof of Concept
The shift from linear product management to circular product stewardship is not purely theoretical. Digital identity and traceability technologies can already be used to connect physical fashion products with information and services across their lifecycle.
A Proof of Concept developed by Antares Vision Group for a premium shoe factory belonging to an international fashion brand provides one example.
The project focused on footwear produced in Italy’s Marche region and explored how a unique digital product identity could support information throughout several stages of the product lifecycle.
Rather than treating identification as a static product label, the PoC connected the product with information concerning its characteristics and logistical history.
From Product Identity to Lifecycle Services
A connected product identity can become the foundation for services that extend beyond the initial sale.
Repair and after-sales services
Information about a product’s materials and previous interventions can help support repair workflows.
A product record, for example, could show that a previous sole replacement had taken place and provide the information required to direct the customer towards a qualified repair service. This allows product identity to support both lifecycle extension and customer care.
Authenticated second-hand channels
Digital product identity can also contribute to authentication and resale processes.
By maintaining a trusted connection between a physical product and its digital record, brands can create stronger foundations for resale, rental, take-back or certified pre-owned models. For luxury brands, this can be particularly valuable because the secondary market is closely connected with questions of authenticity, provenance and customer trust.
Supporting end-of-life decisions
Product information can remain useful when an item reaches the end of its usable life. Connecting products with details about their materials and appropriate treatment can support more informed recycling and recovery processes.
The broader lesson from the PoC is therefore not simply that a product can receive a digital identity.
It is that the same identity can become a connection point between the product and a wider ecosystem of logistics, repair, customer-care, resale and circular-economy services. In this model, traceability evolves from a way to identify products into an infrastructure for managing products beyond the first sale.
The March 2027 Disclosure Milestone: A Strategic Moment
From 2 March 2027, companies within scope of the ESPR disclosure requirements must use the standardized format established by Commission Implementing Regulation (EU) 2026/2.
This milestone matters not simply because companies will need to report information differently, but because unsold-product management becomes more visible outside the organization.
Stakeholders will have access to more structured information about how companies deal with products that do not complete their intended commercial journey.
For companies that already have strong inventory visibility, traceability and data governance, this can provide an opportunity to support sustainability claims with documented operational evidence.
Companies relying on disconnected systems and retrospective reconciliation may face a much harder task.
The real question ahead of the disclosure milestone is therefore not just: Can we produce the required figures?
It is: Can we explain where those figures came from and support them with reliable data?
That distinction will increasingly separate reporting from genuine accountability.
The Future of Fashion Is Traceable
The prohibition on destroying unsold apparel is more than a waste-reduction measure. It signals a broader shift towards a fashion industry in which product outcomes increasingly need to be supported by reliable, connected information.
ESPR does not require every garment to be individually serialized or publicly tracked throughout its lifecycle. Nor should the Digital Product Passport be treated as a universal database of everything that has ever happened to a product.
But the overall direction is clear.
Unsold-product disclosure, Digital Product Passports and circular business models are all increasing the importance of knowing what a product is, where relevant information about it can be found, and what happens when it leaves its original route to market. For fashion companies, this creates an opportunity that goes beyond compliance.
A traceability foundation built to support reliable product information can also enable repair, resale, authentication, reuse, recycling and new forms of customer engagement.
The companies best prepared for this transition will not necessarily be those collecting the most data. They will be those capable of connecting the right data, products and partners into a coherent and trusted ecosystem. Because in a circular fashion system, a product does not simply disappear when it leaves the primary sales channel.
Its next destination becomes part of the story companies increasingly need to understand, manage and substantiate.
