Fashion companies make production decisions months before a collection reaches stores. Quantities are set based on projected demand, trend expectations, and sales forecasts,often accelerated by fast fashion cycles that prioritize speed and volume. Some products perform well. Others fall short. When sales do not meet expectations, brands try to recover value through price reductions, outlet channels and secondary markets. The growth of e-commerce has added further complexity, as high return rates send garments back through warehouses, increasing handling costs and gradually reducing their resale value. Over time, certain items become difficult to sell profitably. Storage ties up capital. Redistribution requires systems and time. Alternative markets cannot always absorb large volumes. In this environment, destroying excess inventory often became the simplest and most predictable solution, rather than investing in circular fashion pathways like resale or refurbishment. Across Europe, an estimated 4-9% of unsold clothing is destroyed each year, generating approximately 5.6 million tonnes of carbon emissions and significantly increasing the overall carbon footprint of the fashion sector. The environmental impact is substantial, yet the practice continued because it aligned with existing commercial incentives, highlighting a key gap in how fashion sustainability has been operationalized. The EU’s recent measures aim to change those incentives by removing destruction as a routine option.
To stop the cycle of destroying unsold stock, the EU is taking two clear steps under the ESPR ; it is banning the practice and making it transparent.
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From 19 July 2026, large companies in the EU will no longer be allowed to destroy unsold apparel, accessories, or footwear. Medium-sized companies will be expected to comply by 2030. There are limited exceptions, such as when products are unsafe or badly damaged. National authorities will monitor how these exceptions are used. Simply destroying excess stock can no longer be the easy way out.
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From February 2027, companies must report how much unsold stock they discard. The information will follow a standard format, so it can be compared. This makes the surplus visible. What used to happen quietly in warehouses will now show up in reports.
Earlier, if brands produced too much and items didn’t sell, they could eventually clear or destroy the excess. That option is no longer available. Now, unsold fashion stays in the system, taking up storage space, handle returns, and report performance. This means companies will need to:
Shift from volume-driven production to data-driven planning, using real sales performance and demand signals rather than optimistic projections.
Improve visibility across warehouses, channels, and regions so excess stock is identified early rather than accumulating unnoticed.
Rationalize product ranges, reduce unnecessary variations, and avoid speculative production runs that inflate inventory risk.
Develop organized resale, refurbishment or redistribution systems that preserve product value instead of treating surplus as waste.
Shorten processing times and reintegrate returned items quickly to prevent markdown cycles and lower margins.
Overproduction is no longer something that can be quietly removed. It must be planned for and managed properly.
The move from silent disposal to accountable surplus management is more than a compliance change. It forces companies to look closely at how they forecast demand, manage inventory, handle returns and report performance. For many businesses, the real challenge will not be the ban itself. It will be understanding where surplus is created in the first place and how that surplus will show up once disclosure becomes mandatory. This is where strategy matters. At Cognitud, we work with companies to turn regulatory change into practical action. That means mapping where overproduction risk builds across the value chain, strengthening data systems so reporting is accurate and defensible, and embedding sustainable fashion into everyday business decisions rather than treating them as a side initiative. Companies that act early will do more than stay compliant. They will improve planning discipline, reduce capital tied up in excess stock, and build stronger governance around inventory and risk. In a market where surplus can no longer stay hidden, the advantage will lie with companies that understand their risks early and act on them.
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Nilanjana Bhowmick
Position your organization with strategies built around your industry realities.
Fast fashion generates massive waste due to rapid production cycles and short product lifespans. Globally, the fashion industry produces around 92 million tonnes of textile waste each year, with fast fashion contributing a significant share.
Secondhand apparel refers to clothing that has been previously owned and is resold or reused. It extends product life, reduces waste, and supports more sustainable and circular fashion systems.
The world generates approximately 92 million tonnes of clothing waste annually. A large portion ends up in landfills or is incinerated, contributing to environmental pollution and carbon emissions.
Damaged clothes can be repaired, upcycled, or repurposed into new products like cleaning cloths or insulation. If reuse isn’t possible, textile recycling programs are a better alternative to disposal.
Most clothing waste ends up in landfills or is incinerated. Some is exported to other countries for resale or recycling, but a significant portion still contributes to environmental pollution.
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