EU ban on destroying unsold clothes takes effect tomorrow, forcing fashion giants to reuse or donate

What the ban covers

From 19 July 2026, large enterprises in the European Union's textile and fashion sector will be prohibited from destroying unsold or returned clothing, footwear, hats and accessories. The ban, set out in the EU Ecodesign for Sustainable Products Regulation (EU 2024/1781), requires companies to prioritise reuse, recycling, repair or donation. Derogations apply only to products that are dangerous, non-compliant, counterfeit, damaged or otherwise unfit for reuse. Medium-sized companies will have until 2030 to comply, while small businesses are permanently exempt.

The scale of textile waste

Assoutenti, the Italian consumer association, estimates that up to 9% of all textile products placed on the EU market are destroyed before ever being used. That amounts to roughly 594,000 tonnes of fabrics per year, generating 5.6 million tonnes of CO2 emissions. The online shopping boom has compounded the problem: the average return rate for clothing bought online is 20%, and a significant share of those returned items never re-enter the sales cycle.

In Europe up to 9% of all textile products placed on the market are destroyed before use, for an annual total of up to 594,000 tonnes of textiles, generating CO2 emissions of 5.6 million tonnes.

Why destruction was common

For years, destroying unsold goods was a systematic practice, especially in the luxury segment. Brands considered incineration or landfilling more economical than discounting, which could dilute brand value or fuel parallel markets. The most notorious case emerged in 2018, when Burberry disclosed it had destroyed £28.6 million worth of unsold products in a single year. The public backlash prompted Burberry to abandon the policy, but the practice persisted across the industry.

New transparency rules

Alongside the destruction ban, the regulation introduces mandatory annual reporting. Companies must disclose the number and weight of unsold consumer products discarded each year, broken down by product category, the reasons for disposal, and the percentage sent for preparation for reuse, recycling, other recovery (including energy recovery) or landfill. The European Commission adopted clarifying measures in February 2026 on the circumstances under which destruction remains permissible, such as safety concerns or product damage.

Industry impact and the CFO's new role

The ban is already reshaping corporate strategy. Research by Heidrick & Struggles, presented at the Financial Times Luxury Summit in Borgo Egnazia, found that the regulation is accelerating a shift in the role of chief financial officers at major Italian fashion and luxury houses. With unsold inventory no longer a release valve, planning quality becomes a competitive differentiator.

The European regulation does not just introduce a new operational obligation. It redefines how companies make decisions. If unsold inventory no longer represents a release valve, the quality of planning becomes a competitive factor and the CFO takes on an increasingly relevant role in balancing product desirability, capital discipline and risk management.

CFOs are now intervening more directly in supply chain management, product development and inventory forecasting to prevent overproduction. The regulation, Iuticone added, makes finance a strategic partner to creativity rather than a replacement for it.

What happens next

From 19 July, large fashion groups must have systems in place to redirect unsold goods away from destruction. Assoutenti president Gabriele Melluso said the change will benefit both consumers, who may access discounted clothing and shoes, and the environment. The regulation's implementation will be closely watched as the first major test of the EU's broader push toward a circular economy in textiles.

Thanks to the new rules, fashion companies will no longer be able to waste products that can have a second life, and will have to put them back on the market or donate them, with benefits for consumers, who will be able to buy clothing or shoes at discounted prices, and for the environment.