| Circular, Legislation, Reconomy

The state of the circular economy in the fashion industry

The fashion industry is a massive global force, valued at a staggering $1.7 trillion. According to Dana Thomas’ book Fashionopolis, it employs one out of every six people worldwide, producing over 100 billion garments each year. According to the EU, 12.6 million tonnes of textile waste is generated within member states every year, with clothing and footwear accounting for 5.2 million tonnes of waste. Less than 1% of all textiles worldwide are recycled into new products. As a result, the fashion industry is a major contributor to textile waste and carbon emissions with billions lost each year due to the underutilisation of clothes and lack of recycling.

Polyester, a petroleum-based fabric, dominates the garment production market, accounting for 52% of global fibre usage . Although companies like Plan B have developed methods to recycle 100% polyester , the process becomes complicated when polyester is blended with other materials. This is problematic, as recycled polyester is often created from plastic bottles rather than recycled garments. In 2020, less than 0.5% of the global fibre market came from recycled textiles . The production of polyester and other synthetic fibres continues to significantly contribute to greenhouse gas emissions and pollution.

As the importance of sustainability grows, the fashion industry is slowly transitioning towards a circular economy model, which emphasises waste reduction and the reuse, repair, and recycling of products. This article explores the current state of the circular economy in the fashion sector, examining its challenges, benefits, and the strategies to become more sustainable.

The concept of circular economy in fashion

The circular economy in fashion seeks to extend the lifecycle of products, reduce waste, and regenerate natural systems by shifting from a linear “take, make, dispose” model to a more regenerative approach. In a circular system, garments are designed for longevity, can be easily repaired, and are made from materials that can be recycled. The goal is to create a closed-loop system where every product is fully utilised and then returned to the production cycle.

James Beard, Head of Voluntary Compliance and EPR expert at Reconomy puts it simply: “The first step in a circular solution is design. Both in terms of longevity and for recyclability. Choices made at the concept stage are really where circularity efforts live or die.”

Here’s how the circular economy is applied to fashion:

Design for longevity

Fashion items are designed to last longer, reducing the need for frequent replacements. Eco-modulation, the concept of penalising the use of less environmentally friendly materials and rewarding the use of those which are better are being built into legislation and policy. Effective eco-design will set your product on a sustainable path.  By increasing the lifespan of clothing, the circular economy aims to reduce waste and the demand for new resources.

Sustainable materials

The circular economy begins with selecting sustainable materials, which are recycled, recyclable and responsibly sourced. Brands are increasingly turning to organic cotton, recycled polyester, and other eco-friendly materials. Better Cotton Initiative (BCI) members are required to carry out independent assessments of their cotton fibre consumption to demonstrate that the materials have been sustainably sourced. Reconomy brand Valpak is set up to carry out these audits.

Technology and innovation

It is critical to introduce technology early into your process. The fashion industry is leveraging technology and innovation to support circular practices, from developing new materials and recycling techniques to using digital platforms like digital product passports to manage textiles throughout their lifecycle. Reconomy collaborates with fashion brands to implement new recycling technologies and digital platforms for tracking and managing the lifecycle of fashion products.

Rental and resale markets

Circular fashion encourages clothing and footwear rental and resale, allowing items to have multiple owners throughout their lifecycle. This approach extends the life of garments and provides consumers access to high-quality fashion at affordable prices. Companies like Reconomy support fashion brands by providing logistical and operational support for establishing omni-channel returns management, refurbishing used items for resale or rental, and supporting circular business models.

Recycling and upcycling

In a circular economy, the end of one product’s life marks the beginning of another’s. Fashion items no longer wearable can be recycled into new materials or upcycled into new products, minimising waste and reducing the need for new raw materials. Reconomy’s waste management and recycling services are crucial for fashion brands aiming to recycle and upcycle garments, offering expertise in exploring recycling routes for products.

Use and care

Circular fashion also emphasises the use phase, encouraging consumers to take better care of their clothes to extend their lifespan. This includes washing at lower temperatures, drying naturally, and repairing instead of replacing. Pre-consumer industrial washing can capture microplastics shed during the initial wash, reducing environmental impact before reaching the consumer.

Consumer awareness and participation

The success of the circular economy in fashion relies heavily on consumer participation. Consumers are encouraged to buy less but better quality, care for and repair items, and dispose of them responsibly at the end of their lifecycle. Reconomy assists fashion brands in educating consumers about the importance of sustainable practices, increasing engagement in reuse and recycling.

Implementing circular economy principles in fashion addresses pressing issues like waste reduction, resource conservation, and environmental degradation. It represents a shift from the traditional, linear model to a more sustainable, regenerative approach.

Current practices and innovations

Several pioneering brands and startups are leading the way in circular fashion, exploring innovative solutions such as:

Materials innovation

Brands are utilising sustainable materials that can be recycled, such as plant-based materials, organic cotton, recycled polyester, and novel biomaterials like recombinant silk or biofabricated ingredients for biosynthetics . Companies like Spiber and Mango Materials are at the forefront of these advancements.

Take-back schemes

Brands are encouraging consumers to return worn-out items for recycling or refurbishment. Take back collections either in-store or direct from consumers is a service Reconomy can assist brands with as part of a pre-compliance or post compliance initiative.

Rental and resale platforms

Brands offer services that allow consumers to rent clothes or buy second-hand items, extending the life of garments and reducing waste.

Repair services

Brands are setting up online portals to register repairs, allowing consumers to pack, prepare, and drop items off for fixing at a repair centre.

Digital technology

Brands are leveraging blockchain for transparency, virtual fitting rooms to reduce returns, and digital passports for products to inform consumers about the lifecycle and recyclability of their purchases.

Challenges ahead

Despite advancements, the fashion industry faces significant challenges in transitioning to a fully circular economy:

Scale and speed

The sheer volume of clothing produced and the fast fashion business model conflict with circularity principles.

Consumer behaviour

Changing consumer habits towards more sustainable practices remains a significant challenge.

Recycling technologies

Current recycling technologies, especially for blended fabrics, are still in their infancy and not widely available or economically viable.

Sortation technologies

Advanced sortation technologies are crucial for efficiently separating textiles for recycling but require significant investment and development.

Regulatory frameworks

Stronger regulations and incentives are needed to encourage businesses to adopt circular practices.

Systemic change involving collaboration between brands, governments, NGOs, and consumers is required for the circular economy in fashion to thrive. Brands must invest in sustainable practices and technologies, governments should create conducive regulatory frameworks, and consumers need to adopt more sustainable consumption habits.

The European EPR vote: A game changer

On March 13, 2024, the European Parliament’s environment committee made a significant stride by passing the initial reading of the EU-wide textile EPR legislation. This decision mandates schemes for the separate collection of textiles for reuse and recycling by January 2025. James Beard, Head of Voluntary Compliance and EPR expert at Reconomy, emphasises that this is not just a legislative change but a profound shift requiring businesses to undertake significant operational transformations.

This move aligns with global momentum towards implementing EPR schemes in the textile industry, aiming to improve recycling and reuse rates. EPR schemes incentivise sustainable design, improve recycling infrastructure, and promote investment in new technologies by extending the responsibility of producers to the post-consumer stage. While countries like France, Hungary, Latvia, and the Netherlands have already embraced textile EPR, the EU’s new directive promises a unified approach across member states.

Why EPR is critical in the textile sector

EPR is crucial due to the environmental toll exerted by the textile industry, marked by high resource intensity and significant contributions to water and land use, carbon emissions, and microplastic pollution. The industry uses 93 billion cubic meters of water annually and is among the top users of land and producers of carbon emissions worldwide. Less than 1% of materials are recycled into new textile products, leading to considerable natural and economic losses.

Preparing for a new era

For businesses, the impending EPR legislation represents both a complex challenge and an opportunity to lead in sustainability. Starting preparations early and understanding new obligations and legislative timelines is crucial. With regulations emerging globally, textile producers with international operations must prioritise EPR compliance.

Beyond EPR, the EU’s Circular Economy Action Plan introduces initiatives like Digital Product Passports and Microplastics legislation, further propelling the industry towards circularity. Companies must adapt to EPR requirements and embrace broader sustainability measures, integrating them into core operations and strategies.

Transforming fashion’s future: Reconomy’s game-changing EPR solution

Reconomy leads the charge with its innovative EPR solution, poised to transform how the fashion industry tackles textile waste. Leveraging capabilities across brands like Valpak, RLG, ReBound, and Advanced Supply Chain, Reconomy manages over 132 million product returns annually, submits over 10,000 data declarations yearly, and has achieved a 20% reduction in carbon intensity among its customers since 2020. This new solution promises compliance and a pathway to a more sustainable, less wasteful future.

Recognising the pressure and challenges businesses face in adapting to new EPR regulations, Reconomy offers a holistic solution promoting sustainability leadership within the sector. Aptly named ReDress, this service aims to redress the balance between textile producers and their global environmental responsibilities, covering modular services from legislative horizon scanning to take-back and repair services.

Reconomy’s offering

  • Horizon scanning: Reconomy’s international compliance team keeps clients informed on environmental legislation and insights to mitigate risk within an evolving global legislative landscape.
  • Data management: Reconomy pairs high-quality data management with innovative tools to make compliance reporting easier and more efficient. Insights into the economic and reporting demands of EPR schemes equip companies with the knowledge and data to navigate the new landscape effectively.
  • Environmental compliance: Supporting clients through the process, Reconomy simplifies compliance with its global Producer Responsibility Organisation (PRO) operation.
  • Pre-compliance and post-compliance take-back programmes: Legislation likely includes mandatory take-back programs. Reconomy provides a complete ecosystem to handle used textile take-back through integrated software and an extensive logistics network, reducing the environmental impact of fashion operations.
  • Repair: With producers now obligated to provide consumers with repair facilities, Reconomy’s repair network can restore used textiles to a reusable or resalable condition, offering advice in this area.

Built on a robust international network and profound resource management expertise, Reconomy’s service reinforces the commitment to waste reduction and environmental preservation, promising compliance and a journey toward a sustainable, less wasteful fashion future.

Embracing a new era in fashion

The introduction of textile EPR legislation and the launch of Reconomy’s comprehensive EPR solution represent significant leaps forward for the fashion industry’s sustainability agenda. As businesses navigate these changes, regulation and innovation propel the sector towards a more circular and environmentally responsible future. By embracing these developments, the fashion industry can transform its environmental footprint, ensuring a greener, more sustainable path forward.

Consumer engagement and behaviour change in circular fashion

While research indicates that consumer awareness and engagement in sustainable fashion are rising, there’s room for improvement. For instance a 2022 report by the World Economic Forum highlights that 75% of consumers surveyed stated that sustainability is extremely or very important to them. However, only 34% had made a purchase based on these values in the past year, showing a gap between consumer intentions and purchasing behaviour.

These statistics underscore the importance of enhancing consumer education, providing clearer information, and making sustainable options more accessible and appealing. They also highlight the need for brands to align marketing with genuine sustainability efforts to bridge the gap between consumer intentions and actions.

Shifting consumer behaviour toward more sustainable practices

Consumers wield tremendous power in driving the demand for sustainable fashion. It’s about making conscious choices every day. Whether it’s repairing a torn garment, opting for a second-hand item, or choosing brands that prioritise eco-friendly practices, each decision contributes to a larger change. Consumers’ purchasing decisions, care habits, and disposal methods significantly drive demand for more sustainable, circular practices. Here are some strategies to foster consumer engagement and promote behaviour change:

Educational campaigns

Brands, governments, and NGOs should collaborate on educational campaigns to increase awareness about the environmental impact of fashion choices and highlight the benefits of circular fashion practices, such as buying second-hand, renting, and recycling.

Incentivising sustainable behaviour

Companies can incentivise customers to adopt sustainable behaviours through loyalty programs or other benefits for participating in recycling programs, purchasing sustainable products, or engaging in repair services.

Transparency and traceability

Consumers increasingly seek transparency in their clothing’s lifecycle. Brands can leverage digital tools like blockchain and digital passports to provide customers with information on a garment’s origin, materials, and recommended care practices, empowering them to make more sustainable choices. Examples of these are already been seen by, for example, Tesco who is piloting digital product passports for its F&F clothing range.

Making sustainable fashion accessible

Brands can make eco-friendly options more accessible by offering a range of products at different price points and educating consumers about the long-term value and cost-effectiveness of sustainable garments. Introducing convenient ways for consumers to return items for repair, resale, or recycling will help keep textiles in the resource cycle longer. The perception that sustainable fashion is more expensive also needs to be addressed.

Sustainable clothing often comes at a higher price point because people in the supply chain are paid a living wage, and the objective is to buy less and invest in long-lasting items.  Brands can work towards making eco-friendly options more accessible by offering a range of products at different price points and educating consumers about the long-term value and cost-effectiveness of sustainable garments compared to fast-fashion items. If a more expensive item can be worn ten times more than a cheaper item, then it is more expensive initially, but on a cost-per-wear basis, it may be much cheaper. The broader perception of “value” should encompass societal benefits, such as fair wages and reduced environmental impact. Introducing convenient ways for consumers to return items for repair, resale, or recycling will support in keeping textiles in the resource cycle for longer.

Community initiatives

Encouraging clothing swap events, repair workshops, and local recycling drives can foster a sense of community and collective responsibility, transforming sustainable fashion from a niche interest into a mainstream movement.

Highlighting the aesthetic value of sustainable fashion

Designers and brands should showcase the creativity, quality, and timelessness of sustainable fashion, challenging stereotypes that eco-friendly choices lack style or variety.

Personalisation and engagement

Creating personalised experiences, such as tailored recommendations for sustainable products or involving consumers in the design process, can increase engagement and loyalty. Brands that listen to customers and involve them in their sustainability journey foster a deeper connection and commitment to circular practices.

By incorporating these strategies, the fashion industry can mobilise consumer participation in the circular economy, turning individual actions into a collective impact. As consumers become more informed and engaged, they can drive significant change, supporting the industry’s transition toward a more sustainable and circular future.

Economic analysis: transitioning to the circular economy in fashion

The Ellen MacArthur Foundation highlights the critical need for the fashion industry to adopt circular business models for sustainability and environmental preservation. These models decouple revenue from raw material production and resource use, encompassing practices like resale, rental, repair, and remaking. Valued at over USD 73 billion, these practices have the potential to grow significantly, potentially occupying 23% of the global fashion market by 2030, equating to a USD 700 billion opportunity.

The Foundation categorises circular business models into three types: “More use per user,” “More users per product,” and “Beyond physical products.” Each aims to enhance the lifecycle and utility of fashion products through extended individual use, product sharing, or developing digital or service-oriented alternatives. Designing products for extended use is essential for their longevity and sustainability.

Despite the potential benefits, implementing circular business models faces challenges, such as the industry’s traditional focus on sales volume, which can undermine environmental benefits. Products may not be designed for the extended use required by circular models, and supply chains often lack the support for reverse logistics needed for repair, recycling, or remaking. Therefore, systemic change in measuring success and product design and use is necessary.

Circular business models include resale and rental platforms like ThredUP, Hire Street, Rent the Runway, and brands like Mud Jeans and Net A Porter are also exploring rental subscription services . Innovative companies like The Fabricant create digital-only fashion, reducing physical waste. These examples demonstrate diverse approaches to incorporating circular principles, showcasing potential paths for industry-wide transformation.

Economic analysis: detailing cost-benefit analysis for companies and market implications

Transitioning to circular models can present substantial cost benefits and market opportunities for companies in the fashion industry.

The Ellen MacArthur Foundation reports that the circular economy could unlock a $560 billion economic opportunity within the fashion industry by reducing waste, increasing clothes utilisation, and improving recycling. However, initial investments can be significant.

A McKinsey & Company 2024 study estimated that transitioning to a more sustainable business model could increase costs, offset by long-term savings and increased consumer demand.

Companies like Patagonia, which heavily invest in circular practices, have seen growth in customer loyalty and brand value. Patagonia’s initiatives in repair services, resale platforms, and sustainable sourcing contribute to their annual growth rates, consistently outpacing traditional retail growth. Source: Patagonia Inc. Financial Reports and Sustainability Updates.

The adoption of the circular economy could increase the value of the UK economy by £82 billion and create around 284,000 jobs in London by 2030 and an estimated 450,000 jobs nationally by 2035. Across Europe, The European Environmental Bureau estimates over 700,000 new jobs could be created by 2030. Reducing dependency on raw materials can protect companies from fluctuating prices and supply chain disruptions, offering more economic stability.

Emerging trends for the future of the circular economy in fashion

“The future of sustainable fashion heavily relies on technological advancements and collaborating with those who will run the fashion industry in the future,” notes Amber Valletta, a fashion model and entrepreneur involved in sustainable fashion tech startups.

As the fashion industry evolves, several emerging trends are coming through:

Digital integration

Digital technologies like blockchain, IoT, and AI are increasingly important in enabling transparency and traceability in the supply chain. Digital Product Passports could become standard, providing information about a product’s lifecycle and recyclability.

Material innovation

The development of new, sustainable materials is expected to accelerate, and improved recycling technologies reducing the industry’s reliance on virgin resources.

Business model transformation

Rental, leasing, and subscription models are emerging and challenging the traditional buy-and-dispose model. This shift will require companies to rethink their business strategies to cater to changing consumer preferences.

Consumer shifts

Awareness and demand for sustainable products are expected to grow, leading to more informed consumers driving the market towards sustainability. Education and engagement strategies will evolve to meet this demand.

Regulatory push

Governments around the world are likely to introduce more stringent regulations and incentives to promote circular practices, such as extended producer responsibility (EPR) schemes and subsidies for sustainable initiatives.

Collaborative efforts

The complexity of the fashion supply chain means that no single company can achieve circularity alone. Collaborative efforts across industries and with governments and NGOs are expected to increase, creating more unified approaches to sustainability.

Local and global solutions

There will be a growing emphasis on localising production and solutions to reduce transportation emissions and waste while still thinking globally about sustainability standards and practices.

Circular design focus

Design for circularity will become a fundamental part of fashion education and practice, with designers increasingly equipped with the skills needed to create garments meant to last and be eventually recycled or repurposed.

These trends indicate a significant shift towards a more sustainable and circular fashion industry. As these developments continue, the fashion sector stands on the brink of a transformative era that prioritises environmental responsibility, resource efficiency, and social equity. Reconomy will continue to partner with ambitious companies, providing innovative solutions and strategic insights to navigate this transition, fostering a more sustainable, inclusive, and economically viable fashion ecosystem for the future.

 

Frequently Asked Questions

How can consumers contribute to the circular economy in fashion?

  • Purchasing Choices: Consumers can support circular fashion by choosing brands that prioritise sustainability, use eco-friendly materials, and adopt circular practices like recycling or take-back programmes. Buying second-hand items is a powerful way to contribute to circular fashion, extending the life of garments, reducing waste, and often providing unique and high-quality pieces at a lower cost. Choosing quality over quantity and preferring timeless designs over fast fashion can also make a difference.
  • Care habits: Proper care of clothing extends its lifespan, reducing the need for frequent replacements and waste. This includes following washing instructions, avoiding excessive washing, and repairing instead of discarding damaged clothing.
  • Disposal practices: Instead of throwing away old clothes, consumers can donate, sell, or recycle them. Engaging in clothing swap events or using platforms for second-hand clothes can contribute to a more circular fashion ecosystem.

What are examples of circular fashion in practice?

  • Patagonia: This outdoor clothing brand encourages customers to repair their garments, provides guides on self-repair, and offers a repair service. They also take back used Patagonia products for recycling or resale.
  • Eileen Fisher: This brand has a take-back programme called “Renew,” where they clean, repair, and resell used Eileen Fisher clothing.
  • Levi Strauss & Co.: They have implemented Water<Less® technology, reducing water used in the finishing process, and encourage consumers to wash jeans less frequently and use cold water to save energy.
  • Elvis and Kresse: Established in 2005 to save London’s decommissioned fire-hose from landfills, Elvis & Kresse crafts beautifully designed bags and homeware from 15 different reclaimed materials, donating profits to charitable causes.
  • OhSevenDays: A slow fashion label based in Istanbul, produces pieces using leftover fabric from fast fashion manufacturers, emphasising minimalism and using recyclable materials.
  • Marine Serre: Known for integrating reclaimed textiles into her collections, French designer Marine Serre upcycles waste materials into high-quality, luxury fashion items.
  • Nkwo by Nkwo Onwuka: This British-Nigerian designer developed a new African textile called Dakala by reworking discarded denim, transforming garment waste into valuable resources while improving local communities’ living conditions.

How can technology and innovation advance circular fashion?

  • Recycling technologies: Innovations like mechanical, thermal, and chemical recycling can break down textiles into their original fibres, enabling new garments from old ones.
  • Digital platforms: Online platforms for renting, sharing, or reselling clothing can extend the lifecycle of garments and reduce waste.
  • Material innovation: Developing sustainable and recyclable materials can reduce environmental impact and contribute to a circular economy.
  • Digital product passports: Implementing digital passports for products can provide detailed information about the item’s lifecycle, enhancing transparency and encouraging sustainable consumer behaviour.

How is circular economy measured in fashion?

  • Circularity indicators: Metrics such as the percentage of recycled materials used, the recyclability of products, and the reduction of waste and water usage.
  • Lifecycle assessments: Evaluating the environmental impact of products throughout their lifecycle from production to disposal.
  • Consumer engagement: Tracking participation in take-back programmes, repair services, and second-hand markets.

What Is the future of circular economy in fashion?

  • Consumer awareness and demand: Increasing consumer awareness and demand for sustainable products can drive more brands to adopt circular practices.
  • Collaboration across the industry: Collaboration between brands, manufacturers, and waste managers can facilitate a more cohesive circular system.
  • Technological innovations: Continued innovation in materials, production processes, and recycling technologies will further enable circularity.
  • Regulatory support: Stronger policies and regulations can accelerate the shift towards a circular fashion economy.