Textile Exchange, in collaboration with the Apparel Alliance comprising Apparel Impact Institute (Aii), Cascale, Textile Exchange, and ZDHC, has launched a comprehensive Supply Chain Taxonomy aimed at bringing clarity and consistency to how the textile, apparel, and fashion industry defines and measures its global value chain.
The new framework introduces a standardized classification system that clearly scopes supply chain tiers, aligning terminology and process definitions from raw material production through finished goods and distribution.
The move addresses long-standing inconsistencies in how companies categorize supply chain stages, which have often led to misaligned reporting, emissions allocation challenges, and confusion across sustainability initiatives.
Across the industry, tier-based language has become common practice. References to Tier 1, Tier 2, Tier 3, and Tier 4 suppliers are widely used in sustainability reports and regulatory disclosures. However, interpretations of what each tier includes have varied significantly.
In some cases, fiber production has been grouped differently across organizations. In others, primary processing steps such as pulp production or extrusion have been categorized inconsistently, resulting in discrepancies in greenhouse gas modeling and life cycle assessments.
The Supply Chain Taxonomy seeks to resolve these differences by establishing five clearly defined tiers. Tier 4 encompasses raw material production and primary processing, including extraction, farming, collection, and the conversion of raw inputs into commodity states.
Tier 3 covers intermediate material processing, such as spinning fibers into yarn or equivalent forms. Tier 2 includes material manufacturing processes like knitting, weaving, fabric formation, and finishing. Tier 1 addresses finished product manufacturing, where materials are assembled into apparel, footwear, home textiles, and other end-use goods. Tier 0 captures branding, retailing, warehousing, and distribution functions.
By defining each tier with clear boundaries and output categories, the taxonomy creates a common language for stakeholders across the textile value chain. The framework also distinguishes between raw materials, processed raw materials, intermediate materials, finished materials, and finished products.
This structured approach enables more consistent aggregation of production and impact data across fiber types and material categories. A central objective of the initiative is to support improved greenhouse gas emissions accounting. As companies adopt science-based targets and governments strengthen climate disclosure regulations, accurate allocation of emissions across supply chain tiers has become critical.
Inconsistent classification of processes can lead to variations in reported emissions footprints, undermining comparability and transparency. The harmonized taxonomy provides a foundation for allocating environmental impact data more consistently, improving alignment across sustainability reporting frameworks.
The taxonomy reflects collaboration among four major industry organizations that have been working to align sustainability goals, measurement systems, tools, and training programs. A key shared objective is reducing greenhouse gas emissions across the apparel and footwear sector by at least 45 percent by 2030. Standardized definitions and consistent supply chain mapping are viewed as foundational components of that effort.
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Beyond climate reporting, the framework enhances transparency and accountability throughout the industry. Uniform tier definitions simplify supplier mapping and help clarify where specific processes and impacts occur within complex global production networks.
For brands and manufacturers operating across multiple countries and material categories, this alignment reduces ambiguity and supports clearer communication with regulators, investors, and civil society.
The taxonomy also incorporates a broad range of materials commonly used in the textile and fashion sector. Natural fibers such as cotton, wool, flax, and silk are included alongside manmade cellulosic fibers, synthetic polymers, leather, down, natural rubber, and composite materials. It accounts for both virgin raw materials and reclaimed or secondary materials, reinforcing circular economy principles and encouraging improved traceability.
Importantly, the framework is designed as a high-level aggregation tool rather than an exhaustive technical breakdown of every possible process variation. While some processes could be further subdivided into more granular categories, the emphasis remains on harmonization and usability across reporting systems. The structure allows flexibility for companies to add sub-tiers when needed, without compromising overall consistency.
The launch comes at a time of increasing regulatory scrutiny and rising expectations for environmental disclosure. Policymakers in major markets are introducing new requirements related to supply chain transparency, carbon accounting, and sustainable product labeling.
A standardized taxonomy can help companies align internal data systems with emerging regulatory frameworks, reducing duplication and minimizing reporting friction.
Industry stakeholders emphasize that widespread adoption will be key to realizing the taxonomy’s full potential. If embraced across brands, manufacturers, and sustainability platforms, the framework could serve as a foundational reference for supply chain classification in the textile and fashion industry.
By establishing a shared language and consistent tier definitions, the Supply Chain Taxonomy represents a structural step toward improved collaboration, clearer measurement, and more reliable sustainability reporting across one of the world’s most complex and globally interconnected industries.
