Fashion’s slow progress on sustainable innovation isn’t a technology problem, it’s a partnership problem.
As fashion brands face mounting pressure to decarbonize, improve transparency and bring new materials to market faster, one message is becoming harder to ignore: innovation often fails because the system doesn’t fully treat suppliers equitably.
The new Deep Dive report from the Transformers Foundation, “Unlocking Equity in Innovation: Balancing the Scales in Supply Chain Partnerships,” interviewed 32 stakeholders across six core groups (suppliers, innovation startups, brands and retailers, investors, industry organizations and regulators).
The findings were stark, although not surprising. Suppliers, despite being the catalysts to bring innovation to market, are often undervalued, underfunded and excluded from key decisions.
“Suppliers are critical value creators of innovation,” said Transformers Foundation Intelligence Director Melinda Tually. “Without equal partnership, the industry cannot achieve the scale, speed or impact needed to meet its climate goals.”
The report outlined three main barriers to achieving full equity: misaligned expectations, supplier inequity and low brand commitment. It then offered actionable opportunities for shared responsibility and more balanced partnerships.
Barrier 1: Misaligned Expectations—innovations stall when stakeholders don’t speak the same language
The report highlighted widespread gaps in understanding across the value chain.
For example, most climate and material innovations take years to scale, but brands and investors often prioritize quick wins. This leads to short-term pilot projects that fail to progress, even when results are promising. The result is wasted capital, strained relationships and stalled climate impact.
Financing remains another challenge. Suppliers in manufacturing regions often lack access to capital—especially during scale-up—while startups in the U.S. and Europe typically have more funding options.
One brand investment arm representative quoted in the report cited the need to spread risk around: “Risk is difficult to put on any one player singularly, it has to be put on the industry collectively instead.”
Opportunity 1: Close the Knowledge Gaps
By bringing top decision makers to the table, and involving suppliers earlier in innovation discussions, brands and suppliers can align on industry goals and realistic plans of action.
Open-source knowledge sharing between brands, suppliers and other stakeholders drives standardization for the supply chain as a whole, and sometimes it’s as simple as getting on a plane to meet your supply chain.
“I’ve often felt in many ways, it is a back-to-basics on communication, things like going to visit suppliers,” said Tricia Carey, COO at Avalo and board member at Transformers Foundation. “How we need to work in business is so important, and maybe we forgot some of that during the pandemic.”
Barrier 2: Suppliers are not considered core value creators of innovation
Put bluntly, suppliers don’t get the respect they deserve, often facing outdated ability assumptions as per certain manufacturing regions.
“A lot of [manufacturers] are five years ahead of brands when it comes to sustainability,” noted one expert interviewed for the report. “But this disconnect is a problem because the brands have maintained a mindset and belief that this part of the world is underdeveloped, which is completely wrong. What suppliers in this part of the world have been able to transform, adapt and innovate is absolutely mind-blowing.”
Suppliers also bear a disproportionate share of innovation risk. Many mills and manufacturers invest heavily in in-house R&D and testing to stay competitive, often self-funding these efforts with no guarantee of future orders or payment for trials.
Opportunity 2: Celebrate and incentivize suppliers
Brands must recognize the true cost of innovation in pricing, and transparently and publicly promote supplier contributions. Putting supplier partnerships center stage doesn’t just promote good will, it raises awareness to other brands always fearful of “betting on the wrong horse.”
Brand and retail offtake agreements that lock in commitments will also incentivize suppliers to partner with startups.
Barrier 3: Insufficient Brand Commitment—suppliers and investors can’t move until brands signal demand.
Suppliers are expected to help commercialize next-generation fibers, dyes, recycling systems and low-impact manufacturing processes, yet brands frequently ask them to shoulder most of the financial and operational risk, often without long-term commitments.
This puts a heavy opportunity cost on the supplier, which the brands don’t often recognize.
“Brands are playing with different modes and they don’t understand what’s happening on the supplier side,” said Saqib Shahzad, head of sustainability at Pakistan-based Diamond Denim by Sapphire. “So we are dealing with quality testing, sampling and trials, which sometimes interrupts our normal production.”
In spite of their power, brands hesitate to make early, multi-year commitments to new solutions that give both suppliers and investors confidence to move forward.
“Supply chain and brands are still looking at the vendor relationship as a buyer-seller relationship versus a strategic partnership,” said Priyanka Khanna, innovation director, scaling, at Fashion for Good. “Longer-term partnerships assure security that you can invest in two to three years of innovation programs.”
Opportunity 3: Accept and Embrace Systems Change
Pre-competitive collaboration, compelling business cases that go beyond sustainability credentials or technical viability, and offsetting price premiums are all necessary mechanisms to successfully scale innovation.
Suppliers and brands alike also need to look at pre-competitive collaboration that can help drive adoption at scale. Fiber clubs have emerged in recent years as a mechanism for such pre-competitive alignment between key stakeholders, helping spread the scaling risk for mutual benefit.
Readiness Checklists
To help turn insight into action, the report includes three tailored “readiness checklists” for brands, suppliers and innovators. These highly detailed lists are designed to encourage frank and transparent conversations before pilots begin, with the aim of encouraging alignment and easing friction.
“Innovations or trials can’t happen in silos. It has to happen in a shared responsibility environment,” said a manufacturer sustainability lead quoted in the report. “When the supplier and brand is on board and everyone is an equal contributor or shareholder, I’ve noticed it has been more successful.”
