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How Can Fashion Embrace the Circular Economy?

When industry leaders have an unusually frank and anonymous conversation about sustainability, what does it reveal? Uncomfortable questions about class, control, hypocrisy and anxiety over jobs, to name a few.
Textile waste | Source: Shutterstock
  • Chantal Fernandez
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OXFORDSHIRE, United Kingdom — Despite the wealth of reports finding that millennials and members of Generation Z say they prefer fashion made in a more ethical and less environmentally destructive way, they can't seem to get enough of ultra-fast fashion brands like Boohoo and low-price private-label basics from retailers like Amazon. Clearly, for many, price and speed trump conscience.

The dilemma — and how a shift to a circular fashion system could help — was just one of many issues discussed at VOICES, BoF's annual gathering for big thinkers in partnership with QIC Global Real Estate, in December last year. Speakers and guests gathered in five salons designed to spark debate and explore resolutions for some of the most important issues facing the industry today. Each VOICES salon addressed a central question. Among them: "How Can Fashion Embrace the Circular Economy?" Held under the Chatham House Rule, the salon ensured anonymity while creating an intimate, candid environment.

At today’s pace, the textiles economy is projected to release over 20 million tonnes of plastic micro-fibres into the ocean by 2050, according to the Ellen MacArthur Foundation, an organisation dedicated to accelerating the adoption of a circular economy. The term describes a restorative and regenerative system that uses innovation to cut waste and minimise negative impact, replacing the traditional linear model in which products are cheaply made, consumed and then disposed.

"Just using less is not a solution [though]; it just buys you time," says fashion consultant Julie Gilhart, one of the passionate pioneers who introduced many in the fashion industry to sustainability issues in the early years. "It's like a crisis situation right now. The way we do things has to change and it isn't going to be comfortable."

Where does this leave fashion? Business leaders from the biggest luxury conglomerates, department stores and ready-to-wear brands joined the salon's facilitators — fashion consultant Julie Gilhart and Andrew Morlet, chief executive of the Ellen MacArthur Foundation — to discuss fashion’s belated embrace of the circular economy.

To kick off the proceedings, Morlet explained how the Ellen MacArthur Foundation’s research has shown that progress towards such a system is possible without regulatory change or a shift in consumer behaviour thanks to its profit generating potential. New business models based on reusable or recycled raw materials can pay off in long-term revenue by reducing the costs of production or creating new revenue streams, such as rentals or other new forms of ownership. Such a shift is, of course, challenging to implement, and has long concerned business leaders.

Executives from fashion sectors as diverse as manufacturing, retail, design and the media then chimed into the debate. Seven key points emerged from the discussion:

1. Don't count on consumers to lead the charge. The industry is still in service to consumers, many of whom value price, novelty, quality and design more than they value the ethical considerations of their purchasing decisions. Therefore, the industry cannot take direction from consumers or wait for them to shift their purchasing habits. "Consumers aren't right on this one, it's going to have to be up to businesses that understand that and if they want to reduce and reuse," said one participant. "If the consumer doesn't care, does that suddenly give you permission to pollute?" said another guest. "Of course it doesn't."

2. Some consumers are still confused about what sustainability means. Everyone in the industry — particularly the media — has an important role to play in educating consumers better. "If someone understands the difference of a dollar to a cotton farmer… then we start to change them," said one participant. "Some people who say they care about those values don't understand what they are doing when they are voting for cheap products [with their wallets]." At the same time, some believe that it is important to avoid making consumers feel overly guilty, because their choices do not include any single brand or company that is truly sustainable. "There is not a single fashion company in the world that can make that claim," said a guest.

3. Consider reframing what consumption means. Several participants advocated for "reframing the way people participate in the [fashion] system." The growing rental market is one way to achieve that, especially for uniforms and more basic or timeless daywear. "There are items that have value no matter what the season," said one participant. As for trend-driven or seasonal pieces, one option is a "tiered system for borrowing," as one guest described it, where in-season pieces get filtered either through rentals or through the resale market from luxury shoppers to "fashion followers" who are content to pick up on trends after they debut on the runways. "We know that there are people that look for 'now and next' and we know they are willing to pay a premium," the participant explained.

4. Concerns about job elimination. How does the circular economy create jobs in new areas? This was a point of concern at the salon for several participants who are worried about the impact of automation or decreased consumption on the industry. Automation will make production more efficient, but at what cost to the workforce? Or will increased recycling processes offset some of the potential job loss?

5. Not every consumer can afford to be conscious. Is caring about sustainable fashion only something that the wealthy can afford? To what degree ethically responsible purchases — typically more expensive than mass market selections — are feasible options for shoppers of lower socioeconomic backgrounds than higher net worth consumers is unclear. While many argue that sustainability — from organic food to hybrid cars — is a luxury reserved for the rich, others say it is in fact the middle classes who are becoming better to reducing and reusing in effective, practical ways.

6. Finding a way to get started is sometimes the hardest part. What are the steps that even a small brand can take to reboot its approach to materials, waste and recycling without negatively affecting the bottom line? This question was a key concern for most participants who felt isolated in trying to begin tackling sustainability in a way that wouldn't endanger their businesses. Some felt it was up to the industry's largest players to take large public steps that "start to shake the economics of the system" and "bring others along." Others took matters into their own hands, taking small but meaningful steps to reduce packaging or recycle hangers by shipping them to other countries or donating them to community organisations.

7. Collaboration is key. There is no silver bullet to sustainability and, "because no single actor can actually shift the system, collaboration becomes essential," said one participant. "We need to find ways of creating new forms of cross-industry coordination that just doesn't exist today," said another. Finally, transparency with industry peers and consumers was called out as an essential point. "[The industry] better do something now or you are going to get caught with your pants down in five years or less," said one guest.

To learn more about VOICES, BoF's annual gathering for big thinkers, visit our VOICES website, where you can find all the details on our invitation-only global gathering in November, in partnership with QIC Global Real Estate.

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