Socioeconomic and Governmental Factors
Socioeconomic and governmental factors encompass laws, regulations, social beliefs, and economic conditions that impact the fashion industry, particularly in sustainability and technology. These factors drive systemic change, influencing how fashion brands operate, and shaping product design, production, and consumption as the industry adapts to shifting societal expectations and economic realities. New laws and regulations play a critical role in shaping the sustainability practices of fashion brands. Governments worldwide are increasingly implementing legislation aimed at reducing the environmental impact of the fashion industry, including regulations on carbon emissions, waste management, and hazardous materials. These laws push brands to adopt greener practices, invest in sustainable technologies, and enhance transparency across their supply chains. Compliance is not only a legal obligation but also a key component of corporate responsibility and brand reputation.
Societal beliefs and values significantly drive change within the fashion industry. As consumers become more aware of the environmental and social impacts of their purchasing decisions, there is a growing demand for ethically produced and sustainable fashion. This shift encourages brands to prioritize sustainability, embrace ethical labor practices, and develop products that align with socially conscious values. Brands that fail to adapt to these evolving beliefs risk losing market share and facing public backlash. Economic conditions, such as inflation, unemployment rates, and overall economic stability, directly affect fashion consumption patterns. During economic downturns, consumers may cut back on non-essential items, leading to decreased demand for fashion products. Conversely, periods of economic growth can lead to increased disposable income and higher consumption, often fueling the fast fashion industry. However, economic factors can also drive the adoption of sustainable practices as consumers seek durable, high-quality products that offer long-term value.
Governmental policies on trade, taxation, and labor also influence the fashion industry. Trade agreements can affect the cost of raw materials and finished goods, impacting pricing and profitability. Tax incentives for sustainable practices or penalties for environmental harm can encourage brands to adopt greener technologies and practices. Labor laws, particularly those regulating working conditions and wages, are crucial in ensuring that fashion production is both ethical and sustainable. Systemic change, driven by these socioeconomic and governmental factors, compels fashion brands to continually adapt and evolve. This evolution often requires significant investment in new technologies, the development of more sustainable business models, and the alignment of corporate strategies with societal and governmental expectations. Brands that proactively engage with these changes are better positioned to thrive in a dynamic global market, while those that resist may struggle to maintain relevance and consumer trust.
Case studies
tonlé / Conscious Assembly – Zero-waste production and circular marketplace
Founded as a zero-waste fashion brand in Cambodia, tonlé developed production systems using remnant and scrap textiles, prioritising fair wages and dignified work for local artisans. As the brand evolved into the Conscious Assembly platform, its zero-waste and circularity ethos expanded into a broader ecosystem of makers and small brands, demonstrating how economic precarity, social values, and circular-economy policies reshape small-scale fashion infrastructures.
Project link
Textile ETP – Textiles of the Future Strategic Research & Innovation Agenda (SRIA)
The Textile ETP’s “Textiles of the Future” SRIA (2024) outlines a coordinated European research and innovation roadmap for sustainable fibres, clean manufacturing, circular business models, and digital value-chain transformation. It aligns the European textile ecosystem with upcoming EU environmental, social, and traceability regulations while guiding Horizon Europe investments across industry and regional clusters.
Project link
EU Strategy for Sustainable and Circular Textiles – Transition Pathway for Circular Textiles
The EU Strategy for Sustainable and Circular Textiles sets requirements for all textiles placed on the EU market by 2030: durability, repairability, recyclability, high recycled content, low toxicity, and robust social and environmental due diligence. It effectively establishes the transition pathway shaping new EU legislation for ecodesign, transparency, extended producer responsibility, and circular business models.
Policy link
EU Twin Transition – Digital and Green Transformation of the Textile Sector
The EU Twin Transition initiative integrates decarbonisation and digitalisation into one coordinated transformation agenda, encouraging traceable value chains, circular data infrastructures, and energy-efficient production systems across the textile sector. It reframes innovation and competitiveness through combined sustainability and digital strategy, supporting compliance with future regulatory expectations.
Overview link
Kowtow – Fairtrade organic cotton and sustainability strategy
Kowtow’s sustainability strategy is built on Fairtrade-certified organic cotton, ethical manufacturing, and circular design principles, explicitly aligned with the UN Sustainable Development Goals. Its Responsible Business framework connects socio-economic justice with increasing EU expectations for value-chain transparency, worker protections, and environmental performance.
Project link
References
Buchel, S., Hebinck, A., Lavanga, M., & Loorbach, D. (2022). Disrupting the status quo: A sustainability transitions analysis of the fashion system. Sustainability: Science, Practice and Policy, 18(1), 231–246. https://doi.org/10.1080/15487733.2022.2040231
Gazzola, P., Pavione, E., Pezzetti, R., & Grechi, D. (2020). Trends in the fashion industry: The perception of sustainability and circular economy — A gender/generation quantitative approach. Sustainability, 12(7), 2809. https://doi.org/10.3390/su12072809
Brydges, T. (2021). Closing the loop on “take, make, waste”: Investigating circular economy practices in the Swedish fashion industry. Journal of Cleaner Production, 293, 126245. https://doi.org/10.1016/j.jclepro.2021.126245
Peleg Mizrachi, S., & Tal, A. (2022). Regulation for promoting sustainable, fair and circular fashion. Sustainability, 14(1), 502. https://doi.org/10.3390/su14010502
Diddi, S., & Yan, R.-N. (2019). Consumer perceptions related to clothing repair and community mending events: A circular economy perspective. Sustainability, 11(19), 5306. https://doi.org/10.3390/su11195306