Will Fashion Supply Chains Shift to Next-Gen Materials?

The fashion industry relies on materials to shape the look, feel and function of every garment. Beyond aesthetics, materials define a brand’s identity and consumer appeal.

However, they also carry a significant environmental cost.

A report from Boston Consulting Group (BCG) and Fashion for Good, 'Scaling Next-Gen Materials in Fashion', finds that materials account for 92% of the industry’s emissions — generated through extraction, processing and production.

Katrin Ley, Managing Director of Fashion for Good, stresses the urgency of change: “The fashion industry is at a pivotal moment — next-generation materials are no longer just an opportunity but a business imperative.

"The takeaway is clear: early adopters will secure a strong competitive edge in the future market. The time to scale is now.”

Reshaping supply chains with next-gen materials

The report presents a roadmap for businesses to rethink their supply chains, reduce risk in material sourcing and scale up innovative alternatives. The message is clear — next-gen materials are essential for the industry’s future.

Catharina Martínez-Pardo, Managing Director and Partner at BCG, explains: “Materials drive both cost and environmental impact in fashion, yet most brands don’t have comprehensive sourcing strategies.” She outlines three key actions to scale next-gen materials:

• Demand – Stronger commitments from brands to stabilise supply
• Process & cost efficiencies – Reducing costs through innovation and scale
• Capital – Investment to accelerate commercialisation

By adopting these strategies, brands can lower their cost of goods sold (COGS) and build more resilient supply chains.

Next-gen materials — including textile-to-textile recycling and bio-synthetics — offer a path to reducing the industry’s dependence on virgin resources while meeting sustainability requirements.

However, challenges remain. Recycling solutions, particularly chemical recycling, depend on sophisticated pre-processing steps.

While partly biosynthetic materials are available, fully bio-based options face hurdles such as performance limitations and dyeing constraints.

Despite these obstacles, the potential is vast — by 2030, nearly 13 million tonnes of next-gen materials could enter the market, making up around 8% of the total fibre market.

Disruptions in fashion’s global supply chain

The shift to sustainable materials is happening against a backdrop of increasing disruptions in fashion’s global supply chain. Climate change, geopolitical tensions, regulatory shifts and commodity competition are all reshaping sourcing strategies.

Natural fibre supply is already being affected by extreme weather.

Pakistan’s cotton production fell to a 30-year low in 2023–2024 due to humidity and declining fibre quality. Meanwhile, cashmere prices in Mongolia have surged by 11–18% due to severe weather and drought in Australia could shrink wool production by 30%.

Geopolitical instability is another major factor. The war in Ukraine has disrupted raw material imports from Asia, leading to delays and rising textile prices.

Meanwhile, additional tariffs on Chinese imports in the US are making global trade more complex and expensive.

Regulations are also tightening. The Netherlands plans to mandate 5% textile-to-textile recycled content in clothing by 2027, increasing by 2–3% annually.

France’s Extended Producer Responsibility scheme imposes fees of up to US$0.06 per garment for products that fail to minimise environmental impact.

At the same time, the competition for polyethylene terephthalate (PET) is increasing.

The EU requires plastic bottles to contain at least 25% recycled content by 2025, rising to 30% by 2030. This growing demand for PET in packaging is squeezing availability for the textile industry, making the transition to next-gen materials even more urgent.

The path forward for fashion brands

The move towards next-gen materials is not just a sustainability goal — it is a strategic necessity. Brands that fail to adapt risk supply chain instability, regulatory penalties and rising costs.

Meanwhile, those that act now stand to gain a competitive advantage by securing access to innovative materials before they become mainstream.

Next-gen materials, particularly advanced recycling and alternative fibres, will be key in navigating these challenges.

Chemical recycling solutions, which break down textiles into their raw components, are expected to dominate material innovation. These technologies can process a wider range of waste sources, making them a more flexible and scalable solution than traditional recycling methods.

Despite the promise of next-gen materials, widespread adoption still requires cost optimisation and technological refinement.

For brands, this means integrating preferred materials — those with proven environmental benefits — into existing supply chains while investing in new solutions that push the industry forward.

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