For apparel brands, chemical management has traditionally had a fairly clear objective. Keep restricted substances out of products and production, make sure wastewater meets requirements and keep goods moving to market.
That is no longer enough.
Brands are beginning to connect chemical and wastewater performance to a much broader set of sourcing decisions, including where production is concentrated, which suppliers need investment and where environmental pressures could eventually threaten capacity.
The result is a move away from treating every supplier the same. Instead, companies are looking at factory performance alongside local water conditions to identify where intervention could have the greatest environmental and business impact.
“Different locations might have different pressures and expose as well different risks depending on the local circumstances,” said Philipp Meister, global lead, fashion and chemicals at environmental sustainability consulting group Quantis, during a World Water Week discussion hosted with chemical management authority ZDHC Foundation.
That means two factories with similar compliance records may not carry the same risk. A facility operating in a highly stressed water basin could require more attention and investment than one with comparable performance in a less vulnerable location.
Quantis is helping companies change how they’re operating. Rather than imposing identical measures across a supplier base, brands can combine facility impact, local environmental conditions and the cost of improvements to determine where money will go furthest.
Meister said this is a much for efficient way to make a significant impact and reduce risk.
H&M moves away from one-size-fits-all
H&M Group is putting that thinking into practice.
The retailer establishes common expectations for suppliers but adjusts its intervention based on performance and risk.
“The consistency that we have been expecting from our supplier doesn’t mean that every supplier has to do the same thing with the same rigor,” said Sharif Hoque, impact lead at H&M Group. “We really focus on where we have the highest impact and where…we need to act first.”
Performance data helps H&M identify suppliers that require additional support and capacity building. More advanced factories may need little assistance, while others require closer engagement.
Location adds another layer.
“The same discharge can have a different consequence depending on where the receiving body is and what the basin conditions are,” Hoque said.
That gives brands a reason to look beyond whether a factory passes a wastewater test. The more useful question for sourcing teams is what that factory’s operations mean within the local environment where production is taking place.
For H&M, the direction is toward combining facility performance with those local conditions and tracking whether suppliers improve over time.
Chemicals become a business risk
The approach also changes who needs to care about chemical management.
Historically, sourcing and operations teams have often viewed chemicals primarily as a product-compliance issue, according to Sheila Shek, director at Adidas.
“When they hear chemicals, they only focus on the product compliance. Whether the product can be shipped to the market, whether they can sell it,” she said.
But poor chemical and wastewater management can become an operational problem long before it becomes a product problem.
Pollution can trigger regulatory action. Water-quality problems can interrupt factory operations. Suppliers may need capital to continue operating in increasingly constrained production regions. A five-year sourcing plan can quickly become less attractive if environmental pressures threaten the reliability of an important manufacturing cluster.
Better impact data can therefore inform decisions about where brands source and invest.
Shek said the information can help sourcing teams assess “whether their sourcing strategy is really sustainable or resilient or whether they need to really prioritize any other investment.”
Meister pointed to an Indian tannery that was forced to stop production because of the toxicity of its effluent.
“Standstill of a production means additional cost, means maybe loss of sales,” he said. “So it has a direct impact on the financials of a brand and of the operations.”
That puts water quality in the same conversation as other supply chain risks that can affect production continuity.
Regulation pushes brands to prove impact
Regulatory requirements are adding pressure to connect chemical programs with measurable results.
H&M considers water part of its broader nature agenda and is examining how years of supplier work connect with reporting and target-setting requirements, including [European Sustainability Reporting Standards] and [Corporate Sustainability Reporting Directive] CSRD.
The challenge is no longer simply demonstrating that a program exists.
Brands increasingly need to show what changed because of it.
“Incorporating those things into the reporting requirements or into the target-setting process is the next way forward,” Hoque said.
That same question is being asked inside Adidas.
The company has spent years implementing ZDHC’s Manufacturing Restricted Substances List, or MRSL, and wastewater requirements across its supplier base. Shek said more than 90 percent of its suppliers have reached ZDHC’s wastewater compliance level.
But that milestone raised another question internally. What did all that supplier work actually deliver?
“We not only want to take the actions that we’ve done on chemical management, we done on wastewater,” Shek said. “We really want to quantify the impact.”
Adidas worked with Quantis to assess those results. According to Shek, the analysis showed that better chemical inputs and wastewater controls reduced pollutants while making it easier for suppliers to recycle wastewater into production.
There can also be operational benefits. Cleaner inputs can reduce the burden placed on wastewater treatment systems, potentially lowering the resources needed to treat what comes out of the factory.
For brands, quantifying those gains can make years of supplier investment easier to connect to both environmental targets and business performance.
Better chemistry can make factories more efficient
Some improvements can deliver benefits much earlier in the production process.
Hoque pointed to cotton-polyester dyeing as one example. Traditionally, the fibers may be dyed in separate processes, requiring additional water, chemicals, energy and time.
New chemical solutions can allow suppliers to combine those processes.
“We have seen that there are chemicals available where our suppliers can do these things in one go,” Hoque said.
The result can be lower chemical and resource consumption alongside shorter processing times and improved material flows.
H&M is also seeing new chemistry emerge for pretreatment, including processes that operate at lower temperatures. Reducing temperature requirements can cut energy demand while some processes can also reduce water consumption.
The benefits go beyond sustainability targets. A process that uses less water and energy but also eliminates production steps is easier to make a business case for than one that delivers environmental benefits alone.
What goes in determines what comes out
Those improvements underscore why brands should not separate chemical inputs from wastewater performance.
Better wastewater management does not begin at the treatment plant. It starts with the chemicals entering production.
“When we using more compliant chemicals that means less pollutants coming into the collection,” Shek said.
That can reduce the treatment burden downstream.
Stefan Seidel, senior director, climate and environmental impact at ZDHC, said chemical pollution remains a blind spot in many corporate water strategies. Companies have spent considerable time addressing water consumption, while water quality and hazardous chemistry have often received less attention.
For wet processors, however, the two are inseparable. A factory can reduce the amount of water it consumes without addressing what is being discharged into the surrounding environment.
Managing inputs and outputs together gives companies a better opportunity to tackle both.
Start where the impact is highest
The expanding scope can make chemical management look increasingly complicated, particularly for brands that have not spent a decade building supplier programs.
Hoque cautioned against looking for an overnight fix. “It’s a long game,” he said. “Chemical management cannot be kind of done overnight.”
But brands do not have to build everything themselves.
A straightforward starting point is preventing hazardous substances from entering factories by requiring suppliers to use chemical formulations that already meet established standards.
“It’s nothing that anyone need to reinvent,” Hoque said.
Shek offered a similarly practical path. First, identify the suppliers responsible for the greatest chemical and wastewater impacts, particularly wet-processing facilities. Then apply established tools to improve performance and verify whether those actions are producing measurable results.
That approach can give management near-term evidence while a larger program develops.
The next challenge will be connecting those factory improvements to what happens outside factory gates.
H&M is increasingly interested in whether better chemical and wastewater performance is actually improving the condition of the surrounding basin and reducing impacts on nearby communities.
“We are not choosing one over other,” Hoque said of wastewater quality, product quality and basin health. “We are choosing all together.”
