In the fashion industry today, meeting the growing expectations around environmental, social, and governance (ESG) practices is essential. As these expectations continue to rise, brands need the right tools and strategies to keep up. One of the most effective ways to manage ESG efforts is by using data to guide decisions. With the right technology in place, fashion brands can track, manage, and report on their ESG progress with greater ease. In this article, we’ll explore how a data-driven approach, supported by the right technology, can help fashion brands meet their goals and stay ahead of changing regulations.

A data-driven ESG strategy

When we talk about ESG, data plays a central role in guiding and measuring progress. But why is data so important in this context? Data allows brands to get a clear view of where they stand, helping them understand their current practices and identify areas for improvement. It provides a snapshot of both internal operations, such as how processes are run and who is responsible for what. and the external impacts, such as the effects on suppliers and the environment.

To effectively integrate ESG into your business, it’s crucial to first anchor ESG principles into your overall business strategy. This alignment allows you to set clear, actionable goals that become part of your larger business policy. By embedding ESG within the broader strategy, you ensure that everyone in the organization is working towards common goals.

Once these goals are set, data becomes a powerful tool for tracking progress. It helps identify the key metrics necessary for achieving these goals and measuring the impact of your efforts. By continuously monitoring data, brands can assess the effectiveness of their initiatives and adjust strategies when needed. Data also enables more informed decision-making. Whether it’s choosing sustainable materials, optimizing production processes, or assessing the environmental impact of supply chains, data empowers fashion brands to make decisions that are not only efficient but also aligned with their ESG commitments. In short, a data-driven approach ensures that your ESG strategy is not just a set of intentions but a measurable, actionable plan that evolves with your business.

Technology plays a key role

As regulations around ESG continue to evolve, the amount of data required to stay compliant is growing rapidly. This creates a need for a system that can store, manage, and organize this data effectively. Without the right infrastructure, data can quickly become scattered, outdated, or difficult to access, making compliance much harder to achieve. This is where technology becomes essential.

Centralizing data is crucial for maintaining accuracy and ensuring that everything is up-to-date. Having all your data in one place not only helps streamline processes but also makes it easier to track and manage. It’s also important to begin collecting data early in the process, as trying to backtrack and gather missing information later on can be time-consuming and and lead to mistakes. This is why PLM (Product Lifecycle Management) is an ideal starting point for data collection. PLM captures early-stage product data, such as material sourcing, design details, and production information.

What data is important?

Figuring out what data is important can be a complex task, as it really depends on each business. Every company has different goals and priorities, which means what one business needs might not apply to another. However, there are some key data points that are important for all businesses to have. For example, general information about the styles and the items associated with those styles is essential. This includes data like materials, sizes, colors, and other basic product specifications that are important during the design and production stages.

For larger businesses, particularly those affected by regulations like the CSRD (Corporate Sustainability Reporting Directive), there’s often a request for more specific data. This data comes from each company’s double materiality assessment, meaning it’s unique to each business based on their specific findings. While the data requested may differ, it’s still helpful to identify the data points that show up more often across different companies. Having an overview of these key data points ensures that you’re always prepared and able to respond to requests quickly while staying on top of compliance.

The year of infrastructure

Now is the time to invest in the right IT systems and infrastructure that can support your ESG initiatives for the long term. It's not just about having a place where all data is created and stored, it’s equally important that this data can flow seamlessly between the different IT solutions your business uses. Integration across systems ensures that information isn’t isolated, making it easier to manage and use effectively.

As actual requirements around ESG become more demanding, it’s crucial that the data collected for each product, or style, can be used across different areas, from reporting to setting up digital product passports and measuring impact. This interconnected infrastructure will allow you to efficiently track and manage ESG data, ensuring you stay compliant and are able to provide accurate, real-time insights when needed.