A new report by Moody’s Investors Service says, global fast fashion and discount brands are most at risk as sustainable processes assume greater importance for buyers of their apparel. The report expects large international brands such as Hennes & Mauritz AB, Nike. and Adidas, and luxury companies such as Ralph Lauren, will fare better. Greater scrutiny of sustainable practices will challenge the credit quality of many global apparel firms, and transform the way they do business, it says.

Analyst Guillaume Leglise, says, environmentally conscious and socially aware consumers will compel global fashion brands to adapt to sustainability measures with environmental and social factors putting the apparel industry’s profitability at risk.

As per the report, another challenge facing apparel companies stems from regulation related to data protection, Brands using online and data analytics are vulnerable to data protection risks, cyberattacks and non-compliance fines, all of which can tarnish their reputations, it says.