After three years of rough regulation, supply chain risk is rising again, according to Oritain.
Fashion brands tend to treat traceability as a documentation exercise, the company said, relying on supplier declarations and chain-of-custody certifications to substantiate sourcing claims. But as forced labor enforcement expands and tariffs distort manufacturing networks, Oritain identified a growing number of companies that are confronting a new reality: one where paperwork alone may not be enough.
New data published by the forensic origin verification firm revealed that 64 percent of brands in 2024 had at least one “risk-consistent” prohibited cotton result. That figure jumped to 90 percent in 2025—marking what the New Zealand-born business defined as a “traceability regression.”
“Trust takes hold when all parts of the ecosystem are connected by credible, independent evidence,” Alyn Franklin, CEO of Oritain, said. “Good intentions or paperwork alone won’t cut it.”
Built on five years of forensic analysis, the 2026 Oritain Supply Chain Intelligence report explores why “document-heavy compliance” doesn’t work—and why “executives are being forced” toward physical proof to avoid regulatory exposure.
“Full accountability now requires defensible evidence; what brands and supply chains need are trusted partners who can demonstrate a recognized standard of due diligence, regardless of manufacturing country,” Franklin continued. Most U.S. and U.K. companies surveyed said they now trace all or most of their cotton supply chains.
That said, Oritain’s testing showed a sharp increase in exposure to banned cotton worldwide in 2025.
“The purpose of our study was to obtain an independent and objective snapshot of the prevalence of prohibited cotton in key western apparel markets,” said Anjali Gupta, Oritain’s head of data science. “What the data shows us, year on year, is that risk does not completely disappear when brands change their manufacturing location.”
As tariffs and trade restrictions reshape sourcing, apparel production shifts to hubs such as Vietnam, Bangladesh and Cambodia. But moving production does not necessarily eliminate sourcing exposure, per the report. Many of those markets remain dependent on imported Chinese yarn and fabric, creating what Oritain called a redistribution—not a removal—of risk.
“The tariff environment has exacerbated substitution. Mills are under greater margin pressures than they were two years ago, which increases the financial incentive to quietly source cheaper inputs into a production run,” said Rebecca Brocato, chief government affairs officer of Oritain. “You are accountable and will be under fire if these other sources are not declared in finished products.”
Enforcement is no longer limited to detained shipments at the border. Brands are increasingly navigating pressure tied to the U.S. Uyghur Forced Labor Prevention Act, the EU Forced Labor Regulation and a growing number of customs and origin-fraud cases brought under the False Claims Act.
On that note, the stakes are becoming more personal for executives. Oritain reported that enforcement of the False Claims Act is now a major risk in trade fraud and origin misrepresentation cases. CEOs and CFOs may face financial and criminal liability even if they are not directly involved in sourcing decisions.
“Authenticity and quality are central to material trust, and both begin with visibility into origin,” said Gemma Lynch, chief customer officer of Oritain. “If you can’t prove where your product comes from, then you can’t substantiate the claims supporting it.”
According to Oritain, that backdrop sees brands beginning to look beyond traditional traceability systems toward physically-verifying methods. Forensic testing can identify naturally occurring chemical markers within materials themselves, per the report—what Oritain said gives companies a way to substantiate sourcing claims beyond supplier declarations and audit paperwork.
The Next Level Apparel partner also contends that ongoing testing programs are more effective at catching substitution risks as supply chains shift over time, particularly compared with periodic audits or one-time reviews.
“The program included well-known brands, many of which are making concerted efforts to source sustainable and ethical cotton for their product by working with their suppliers,” Gupta said. “The trust placed in suppliers by brands is huge, considering the financial and reputational implications of being caught using forced labor cotton.”
That regulatory pressure is unfolding alongside a broader credibility crisis among shoppers.
By and large, consumers are more skeptical of brands’ sustainability messaging; some 60 percent now avoid products from untrustworthy or unethical sources, per the report. Oritain’s survey saw scientific traceability among the most trusted proofs—second only to government regulation.
“The future of global supply chains depends on building networks, creating community and basing trust on science,” Franklin said. “That is how confidence scales for compliance and for long-term resilience.”
