For decades, the fashion industry has quietly absorbed the cost of destroying perfectly usable products. Returned garments, unsold stock, end-of-season leftovers — all routinely sent to incineration or landfill as a line item on a balance sheet, not a crisis to be solved.
The numbers are striking. In France alone, where earlier disclosure requirements brought some visibility to the problem, an estimated €630 million worth of unsold non-food products — including textiles — are destroyed every year. In Germany, nearly 20 million returned items are discarded annually. The European Environment Agency estimates that between 4% and 9% of all textile products placed on the EU market are destroyed before ever being worn — somewhere between 264,000 and 594,000 tonnes each year, generating up to 5.6 million tonnes of CO₂-equivalent emissions: roughly comparable to Sweden's total net emissions.
Extrapolated across the whole EU, the value of goods being wilfully destroyed runs into the billions of euros. An extraordinary economic loss that the industry had, until very recently, treated as unremarkable.
Overproduction was incentivised by low manufacturing costs and economies of scale. Returns — running at around 20% for online clothing sales, with an estimated one third of those eventually destroyed — were absorbed as an operating cost. The economics of fashion became so distorted that high levels of waste were not a problem to solve but a price worth paying.
Neither brands nor retailers were under any real obligation to account for it. Products that failed to sell in a retail environment were marked down, returned to the brand, or quietly discarded — and the cost was spread thin enough across the value chain that no single party felt compelled to act. Overproduction was a strategic choice, not a failure. Destruction was a budgeted outcome, not a scandal.
That tolerance is what makes the new EU rules so significant.
Under the Ecodesign for Sustainable Products Regulation (ESPR), the destruction of unsold apparel, clothing accessories and footwear will be banned for large companies from 19 July 2026, with medium-sized companies following by 2030. But the legislation goes further than a simple prohibition. Companies will be required to publicly disclose the volumes of unsold consumer goods they discard, using a standardised reporting format. Derogations — limited exceptions, for instance due to genuine safety concerns or irreparable product damage — will need to be specifically justified, with national authorities overseeing compliance.
Critically, the new framework enforces adherence to the waste hierarchy: prevention first, then reuse, then recycling — with disposal only as a last resort. Brands will need far greater levels of evidence and documentation to explain the decisions and actions that lead to waste. Writing off destruction as an acceptable operating cost will no longer be tenable. Every unsold or returned product that ends up destroyed will need a clear, auditable rationale demonstrating that all higher-order options were genuinely explored first.
Here is where it gets complicated — and where much of the industry has yet to catch up.
Brands face the most direct legal consequence under the ESPR. But brands do not sell most of their products directly to consumers. They use retailers as distributors. Wholesale partners, department stores, multi-brand outlets, and online platforms carry the stock, manage the shopfloor, and handle the customer relationship.
So what happens when a retailer is unable to sell goods on behalf of a brand?
Today, the options are familiar: mark it down, return it to the brand, sell it to a liquidator, donate it, or — in many cases — destroy it. Under the new rules, that final option effectively disappears for textiles and footwear. But the question of who carries the responsibility to comply is far less clear.
If a retailer sends unsold stock back to a brand, the brand must now demonstrate that it followed the waste hierarchy before any product is destroyed. But what evidence does it have? It may know the product was returned, but not why it didn't sell, how long it was on the shopfloor, whether it was displayed effectively, or whether alternatives to destruction — markdowns, reallocation to another store, resale through secondary channels — were genuinely attempted at the retail level.
Equally, if a retailer chooses to destroy unsold goods rather than return them, it may now be the party in breach — or at the very least, it will need to document and justify that decision in a way the industry has never had to before.
The uncomfortable truth is that the ESPR creates a shared burden. Brands set the production volumes and wholesale terms. Retailers manage the sell-through. Both contribute to the conditions that create waste, and both will need to cooperate to demonstrate compliance — not just at the point of disposal, but across the decisions that led there.
This means new conversations between brands and retailers about:
These are not hypothetical questions. They are operational gaps that will need to be closed before July 2026 — and the companies that fail to address them risk finding themselves unable to demonstrate compliance when regulators come asking.
It is worth pausing on what the waste hierarchy actually requires in practice, because the ESPR does not simply ask brands to prefer reuse over destruction. It requires them to prove it.
Prevention comes first: could the waste have been avoided entirely through better forecasting, tighter stock control, or more accurate demand signals from retail partners?
Reuse comes next: was the product offered for resale, reallocation, or donation before disposal was considered?
Recycling follows: if the product could not be reused in its current form, was it channelled into a legitimate recycling pathway?
Only after all of these have been demonstrably explored does disposal — incineration, landfill — become permissible, and even then, only with documented justification.
For brands, meeting this standard will require data they may not currently have — particularly about what happens to their products once they leave the warehouse and enter a retail environment. For retailers, it will mean capturing and sharing information about product performance, customer behaviour, and end-of-life handling that has historically stayed within their own systems.
This is where in-store recycling and take-back programmes become not just a nice-to-have, but a strategic necessity.
A well-designed in-store take-back programme sits squarely within the waste hierarchy. It provides a reuse or recycling pathway for products that might otherwise be destroyed — whether those products are unsold stock, customer returns, or garments brought back by consumers at end of life. It gives retailers a compliant route for handling products that can no longer be sold at full price, and it gives brands something they critically lack: visibility into what happens to their products after the point of sale.
But for these programmes to serve the compliance needs of both brands and retailers, they need to generate data — not just collect garments. The value lies not only in diverting products from destruction, but in creating a documented, auditable trail that demonstrates the waste hierarchy was followed. That means capturing data on the product itself (what it is, who made it, why it was returned or surrendered), on the pathway it follows (reuse, resale, recycling), and on the customer who participates (enabling brands to understand behaviour, build loyalty, and close the loop on product lifecycle data).
This dual data flow — back to the retailer and back to the brand — is what transforms a take-back programme from a PR exercise into a compliance tool. It answers the questions regulators will ask: what was the product, what happened to it, and what alternatives to destruction were pursued?
The ESPR does not just create obligations. It creates an uneven playing field that rewards early movers.
Brands that invest now in better demand forecasting, transparent stock management, and partnerships with retailers to capture end-of-life data will find compliance straightforward. Those that continue to overproduce, push excess stock into wholesale channels, and treat destruction as a write-off will find themselves exposed — not just to regulatory penalties, but to the reputational cost of public disclosure.
Retailers that build take-back and recycling infrastructure into their stores — and that can offer brands the data and documentation they need to demonstrate waste hierarchy compliance — will become more valuable wholesale partners. They will be the ones brands choose to work with, because they reduce risk rather than creating it.
The economics of fashion have been distorted for a long time. Waste was treated as normal. Returns were a cost of doing business. Destruction was a budgeted line item. The new laws do not just ban destruction — they demand evidence that brands and retailers genuinely tried to prevent it. The companies that build that evidence into their operations now will be the ones best positioned for what comes next.
At Utilitarian, we build in-store recycling and take-back technology that captures product and customer data for both retailers and the brands they carry — creating the documented, auditable pathways the waste hierarchy demands. If you're a brand or retailer preparing for the ESPR, we'd welcome the conversation.