Italy’s luxury fashion houses — synonymous with heritage, precision, and timeless elegance — are facing their most profound test: ESG accountability.
In 2025 alone, Tod’s, Giorgio Armani, Valentino, and Loro Piana have each come under scrutiny for alleged gaps between their ethical commitments and the realities of their supply chains.
What was once a reputational matter has evolved into a judicial and governance crisis, reshaping how sustainability, compliance, and luxury intersect.
Armani: the high cost of “social greenwashing”
In August 2025, Italy’s antitrust authority (AGCM) fined Giorgio Armani S.p.A. €3.5 million for unfair commercial practices.
Investigators found that Armani’s corporate communications — notably its “Armani Values” and sustainability statements — overstated the company’s control over subcontracted workshops. Evidence showed unsafe working conditions, poor hygiene, and undeclared labour, directly contradicting the brand’s ethical claims.
The AGCM called this “social greenwashing” — the misrepresentation of social responsibility in marketing.
“Ethics cannot be a matter of marketing — they must be operationally true.” — Italian Competition Authority (AGCM), August 2025
Armani’s fine marks a turning point: sustainability language is now a matter of legal precision, not brand narrative.
Tod’s: judicial administration over labour exploitation
In October 2025, prosecutors in Italy moved to place Tod’s Group under judicial administration following evidence of labour exploitation in its subcontracting network.
Investigations found Chinese-owned workshops paying as little as €2.75–€3 per hour, deducting wages for accommodation, and forcing long working hours under unsafe conditions.
Tod’s stated that it audits suppliers and was not directly implicated, yet prosecutors argue that oversight mechanisms failed in deeper tiers of its supply chain.
If confirmed, this could set a precedent for corporate accountability beyond first-tier suppliers, expanding ESG responsibility across the full production chain.
Valentino: “culpable failure” in supply chain oversight.
In May 2025, a Milan court placed Valentino Bags Lab Srl — a Valentino subsidiary — under judicial administration for one year due to systemic labour exploitation in its Italian supply chain.
Investigators discovered migrant workers sleeping in workshops, operating machinery with safety protections removed, and working excessive hours for minimal pay.
The court described Valentino’s approach as a “culpable failure to oversee suppliers,” asserting that the brand prioritised cost efficiency over ethical diligence.
Although Valentino itself was not fined, the judicial administration — with an external monitor appointed to enforce compliance — operates as a functional penalty, reflecting a shift from punitive to
corrective ESG enforcement.
Loro Piana: the cost of silent subcontracting
In July 2025, another name joined the list: Loro Piana S.p.A., the cashmere brand under the LVMH Group, was placed under judicial administration for one year after similar findings of labour
exploitation.
Italian courts found that some subcontractors in Lombardy and Piedmont outsourced work to unauthorised workshops where employees worked up to 90 hours per week, earning about €4 per hour, and lived in unsafe, unsanitary housing conditions.
While Loro Piana is not under criminal investigation, the court ruled that it had “culpably failed” to supervise its supply chain adequately. The company has since terminated relationships with implicated suppliers and pledged to strengthen oversight, but the decision marks a reputational inflection point for one of Italy’s most exclusive brands.
The case has reignited debate about the hidden social cost of artisanal luxury, challenging the myth that small-scale craftsmanship is inherently ethical.
The ESG paradox of Italian luxury
Across these five brands, a common paradox emerges:
the heritage networks that define Italian luxury — artisanal, regional, family-based — are also the source of deep opacity.
| Dimension | Tod’s | Armani | Valentino | Loro Piana |
|---|---|---|---|---|
| Main ESG issue | Labour exploitation in subcontracted workshops | Misleading ethical and social claims (“social greenwashing”) | Labour exploitation and governance failure | Labour exploitation and supplier oversight failure |
| Regulatory status | Judicial investigation | €3.5M AGCM fine | Judicial administration (1 year) | Judicial administration (1 year) |
| Customer interaction | High-reatil, SMEs, underserved groups | High-policyholders, claims, coverage | Low-mostly B2B and institutional | |
| ESG exposure | High (social) | High (governance/social) | High (social/governance) | High (social/governance) |
| Key risk | Multi-tier subcontracting | Misrepresentation | Governance oversight failure | Supply-chain opacity |
The systemic weakness is not intent, but traceability: brands rely on networks so fragmented that enforcing ESG standards becomes practically — and legally — unmanageable.
Expert view — comment by Roberto Randazzo, Partner at Legance
In a political context where ESG regulatory obligations are slowing down significantly – with proposals to “lighten” the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D) – it is the Italian Prosecutor’s Office that has stepped in to fill the regulatory gap and reaffirm the importance of protecting human rights throughout the entire supply chain.
The judicial administration of several fashion companies has highlighted the structural deficiencies of various companies in managing actual or potential negative impacts on the environment and human rights across all actors in the value chain. Market operators are now required to comply with much
higher due diligence standards than in the past.
As confirmation of this, the Prefecture of Milan, jointly with the Prosecutor’s Office, has recently adopted the so-called Protocollo Moda (“Fashion Protocol”) – a voluntary tool identifying commitments and governance structures such as Codes of Conduct, contractual clauses, and periodic audits – to strengthen the protection of human rights along the entire supply chain. These safeguards reflect the well-established mechanisms of sustainable governance embedded in the CSRD and CS3D and now constitute not merely recommendations but actual operational standards assessed by the authorities to verify the adequacy of companies’ ESG due diligence measures.
The investigative developments in the fashion sector have therefore marked a turning point in managing relationships with suppliers. Unlike in the past, the mere adoption of formal safeguards is no longer sufficient and, more importantly, does not exempt companies from the concrete risk of sanctions and reputational damage. For businesses, the challenge is to transform these obligations into governance and organisational structures aimed not only at reducing risks but also at demonstrating to stakeholders – authorities, investors, and the market – a serious and verifiable commitment to sustainability.
Regardless of the direct applicability of the EU ESG regulatory framework, companies are now required to implement integrated compliance programmes – legal, ethical, and social – as an essential lever to ensure legality, competitiveness, and credibility in the market.
Conclusion: accountability as the new luxury
While Europe debates the Omnibus package — seeking simplification, regulatory relief, and even the potential cancellation or dilution of the CSDDD — Italy’s experience tells a different story.
2025 has shown that, with or without Brussels, ESG enforcement is already real.
Judges, prosecutors, and competition authorities are no longer waiting for new directives to act; they are applying existing labour, consumer, and governance laws to close the ccountability gap.
For Italian luxury, this year marks the moment when storytelling met regulatory reality. ESG is no longer an accessory to brand identity — it has become the fabric of legal compliance and investor trust.
Luxury brands must now build traceable, auditable ecosystems that extend ethical responsibility beyond ateliers and design studios to every subcontractor, craftsman, and material source.
Whether or not the CSDDD survives the legislative process, the direction is irreversible: accountability is becoming the core of competitiveness.
The future of luxury will belong to those who transform craftsmanship into compliance and aesthetics into evidence.
Because in this new era, accountability is — and will remain — the ultimate mark of excellence.
