The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
COPENHAGEN, Denmark — Today, in the Danish capital's otherworldly Koncerthuset, the organisers of the Copenhagen Fashion Summit will ask the global fashion industry to come together and work towards the adoption of a circular economic model. This call to action has already been co-signed by some of fashion's biggest and most influential businesses, including Adidas, Kering, H&M and Target.
"We need to accelerate the fashion industry's transition to a more circular system by increasing the volume of textiles collected, reused and recycled by 2020," says Eva Kruse, president and chief executive of the Global Fashion Agenda (GFA), which organises the summit. Unlike a traditional, linear model — in which raw materials are extracted, manufactured into commercial goods and then bought, used and eventually discarded by consumers — a circular model is rooted in reuse, eradicating waste by breaking down products at the end of their life cycle and turning them into the building blocks of new products, continuing the cycle as many times as possible.
While implementing a circular fashion system may have once seemed far-fetched, today it’s becoming urgent. If the global population rises to 8.5 billion people by 2030 as the United Nations expects, overall apparel consumption will jump by 63 percent from 62 million tonnes to 102 million tonnes according to The Pulse of Fashion 2017, a report by the GFA and the Boston Consulting Group. That is the equivalent of more than 500 billion t-shirts, 400 billion of which would end up being discarded at current recycling rates. But the shift to a circular system is not only an environmental imperative. Within the report, BCG identities the opportunity to unlock €160 billion worth of value in the world economy by 2030 if it is able to produce increased levels output (in line with the 2030 projections) using an improved environmental and social footprint model per unit.
If you believe in climate change you should already be starting to make quite radical changes to your business model.
Some businesses are already adopting a range of initiatives to shift the way they source raw materials, and alter how they design, manufacture, transport, retail, recover and recycle their goods. Nike and Dutch apparel retailer C&A have sought to design sustainability principles into many of their products. From 1992, Nike spent about $50 million in R&D to swap the gas in the sole of the Nike Air shoe from FS6 — a potent greenhouse gas, which contributes to global warming — to nitrogen. This change also yielded performance innovations that led to the Air Max 360. In February 2012, Nike released its Flyknit trainers, which are made with woven, micro-engineered polyester. The design reduced waste by about 60 percent, amounting to a total saving of 3.5 million pounds since 2012.
In June 2016, C&A developed two Cradle to Cradle (C2C) certified t-shirts priced at €7. The Cradle to Cradle Certified Products Programme sets standards on raw material and chemicals usage, designing products with materials that allow reutilisation, releasing only clean water, renewable energy sources, made in safe working conditions. After nine months of development, the garments were C2C certified at “Gold” level, the first fashion garment produced in Asia at scale to comply with the C2C Certified Product Programme.
Kering has built innovation labs dedicated to creating new materials from recycled nylon using fishing nets and regenerated cashmere, which it already uses in production. The company has also invested in start-ups including Worn Again, who have developed "closed loop" recycling techniques, separating cotton and polyester fibres. "The aim is for the recaptured polyester and cellulose from cotton to be spun into new fabric creating a 'circular resource model' with the same level of high quality materials," says Marie-Claire Daveu, chief sustainability officer and head of international institutional affairs at Kering.
Other businesses have focused on more downstream initiatives like garment recycling. In 2013, H&M launched its Garment Collection initiative, which has since collected 39,000 tonnes of clothing. In January 2017, the Swedish fast-fashion giant launched its Bring It garment recovery campaign, with the aim of recycling 25,000 tonnes of clothing a year. Additionally, between its initial launch in 2005 and its relaunch in 2011, Patagonia’s Common Threads recycling initiative recovered 45 tonnes of clothing to make 34 tonnes of new clothes.
Mapping how the physical material flows is going to underpin the whole of this approach.
“Your circular business model is going to be very different if you’re a giant incumbent or an emerging business. If you believe in climate change, demographic and resource constraints, and all those big macro-challenges, then you should already be starting to make quite radical changes to your business model. If you don't, I suspect you’re in for a fairly brutal ride in the medium term,” says Esther Maughan Mclachlan, a sustainability consultant who previously worked with the UK government advising former British prime minister Tony Blair on his national sustainability strategy, and now works in-house at The Communication’s Store advising the agency’s clients on sustainability.
Yet fashion on the whole continues to lag significantly behind other industries, such as consumer electronics. The Ellen MacArthur Foundation puts the global average recovery rate for clothing at 20 percent. “The challenge, first of all, is getting enough volume of raw material from consumers through recycling to make it commercially viable. Then you have to have the market to sell back that reworked fibre for its second life. Those are the two things that are missing more than the actual technical ability to breakdown and reconstruct cotton fibre,” explains Maughan Mclachlan.
Brands like M&S and Patagonia have been successful at incentivising consumers to recycle goods with store vouchers and other rewards. But the complexity of fashion’s supply chain makes the practical implementation of a circular model difficult. “Brands do not have direct control over the business models within their supply chains because they don’t usually own them. Getting real change in the supply chain as one company is often challenging. Collaboration in our industry will be critical to support a circular economy,” says Daveu. “It should become the norm to be able to source from renewable or recycled sources, which are also aesthetically viable and lead to the most desirable products.”
Technology can help. “To try and have a system-wide snapshot of the whole loop — rather than just an immediate snapshot of the people adjacent to you in the linear supply chain — is going to require the kind of complexity that only big data can provide,” says Maughan Mclachlan. “Woolmark is already using technology to map the supply route of differing fleeces, while Provenance, a company working in the fishing industry, has tagged individual fish to guarantee they were sourced from sustainable stocks. Mapping how the physical material flows is going to underpin the whole of this approach.”
Legislation could also have a part to play. The European Commission’s Waste Electronic Equipment Environment (WEEE) directive, which placed the responsibility for dealing with consumer electronics waste with the companies that manufacture the gadgets in the first place, forced industry collaboration. “Suddenly, you had competitors coming together to create recycling systems and factories that would then dissemble the pieces of value,” says Maughan Mclachlan.
None of the big players are asking: 'How do we stop the consumption?'
However, despite big improvements, collecting materials will always include some kind of waste, be it through the use of fossil fuels in the collection process, or the inevitable losses incurred. In fact, taken to its most extreme, a 100 percent recycling rate can actually damage the environment through the energy expended in collecting and processing the least accessible waste. What’s more, with each cycle in a circular system, materials slowly degrade as they are downgraded in recycling processes from clothes to car seats and further.
“The real challenge is saying, ‘I’m not going to sell 10 pairs of jeans this year; I’m going to sell one and I’m going to make them last and [as a result] incredibly expensive,’” says Dr Sandy Smith of Thinkstep, a leading sustainability consultancy that counts about 40 percent of the Fortune 500 as clients. Patagonia, which generates about $700 million in annual sales, offers life-long guarantees for its core product through repair or replacement (the company conducts over 30,000 repairs a year). But the brand remains an exception to the rule. “None of the big players are asking: ‘How do we stop the consumption? How do we produce one item of clothing and ask our consumers to buy it and keep it?’” Smith continues.
Despite this, there are reasons to be positive — if not complacent. “Those of us who have worked on sustainability for 20-odd years, we’ve always been surprised about how late to the table the fashion industry has been,” says Maughan Mclachlan. “But in the last 18 months to two years, there has been so much momentum and activity; it does feel like it’s starting in the sector now.”
To answer the Global Fashion Agenda’s call to action by signing a letter of commitment to adopting circular economic principles in your business, and receive a toolbox of expert advice and case studies, click here.
Research for this article was contributed by Megan Doyle.