The Circular Fashion Ecosystem

Executive Summary

A blueprint for the future.

Findings from phase one of the Institute of Positive Fashion's Circular Fashion Ecosystem. 

Climate change, resource depletion and the destruction of the natural environment are existential crises for humankind. The fashion and textiles industry has a significant adverse environmental and social impact and is cited as the joint third highest emitter of greenhouse gases (GHGs) globally. Urgency to mitigate climate change has never been more important, with the industry facing unprecedented challenges to serve citizens’ needs whilst reducing environmental impact.

The future of fashion will have to radically transform as the entire value chain shifts towards sustainable and responsible practices in a resource-constrained world.

“Driven by industry, recognising the role of government and the consumer, we challenged ourselves to imagine the future circular fashion ecosystem in the UK. By providing an actions-oriented blueprint for the future of fashion, we looked to accelerate the transition towards a circular fashion economy that thrives in its own right and to which other nations can look for inspiration and guidance.” 

Caroline Rush CBE, Chief Executive, British Fashion Council

 

 

 

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The need for change

The Sixth Assessment Report of the IPCC sends a stark message – time is running out to prevent catastrophic climate change, with some experts stating that society has four years to deliver urgent and radical action. 

The fashion and textiles industry is the joint third highest emitter of greenhouse gases globally, accounting for around 5% of global emissionsc. In addition, it consumes 98 million tonnes of non-renewable resources every year, and uses 93 billion cubic metres of water annually. Fashion is a complex industry with extensive, often opaque, global supply chains whose environmental and social impacts reverberate across the globe. These impacts have been exacerbated by the global pandemic as a dramatic reduction in the demand for fashion items resulted in mountains of unsold inventory. This has exposed just how dependent the fashion industry is on its status quo of overconsumption and has shed light on the critical need for change.

By its very nature, fashion encourages expression, offering the potential to connect citizens to global issues. However, the industry is facing unprecedented challenges to inspire and clothe consumers around the world while dramatically decarbonising and reducing the waste arising from its activities. Fashion has a considerable impact on the UK economy. The industry employs 890,000 people and contributes £35 billion to the UK gross domestic product (GDP). If acted upon globally and across sectors, the circular economy can deliver the reductions in greenhouse gases needed to reach the goals of the Paris Climate Agreement. For the fashion sector, this chance to transform the economy to be more regenerative also presents an opportunity to address the systemic environmental and social challenges that exist within its global supply chains, while realising commercial opportunities in its consumer market.

This report presents the findings from Phase 1 of the CFE Project based on research conducted from January to August 2021. The findings provide a framework for how identified actors can work together to lead and enable change in multiple, interconnected areas of the fashion ecosystem and achieve greater circularity.

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A letter from the BFC

At the 10 year mark in my role as CEO of the British Fashion Council, I took a moment to reflect on all that had been achieved in helping build a successful fashion industry in the UK. We have built a global reputation for creativity, innovation, and excellence in design, and I set out to think about the next ten years.

I have been inspired by the designers coming through the BFC Foundation Talent support schemes who are constantly innovating and leading the charge with new ways of doing things, including local and community-based production, upcycling, and transparency in the storytelling around the garments. There is a fantastic amount of innovation in new disruptive start-ups that are enabling clean growth and new skills across the UK. With the backdrop of the global pandemic, which highlighted social inequalities, the impact of climate change and with the goals set out in the Paris Agreement to limit global warming to well below 2°C above pre-industrial levels, it was important to me that we refocused our strategy to create a sustainable industry that was able to play its part in change and set the blueprint for the next generation.

In 2020, the British Fashion Council launched the Institute of Positive Fashion to create a new industry standard for accountability, acting as the catalyst for change. The IPF is focused on three key pillars: Environment, People, and Craftmanship & Community. 

Through the IPF Steering Committee we decided on a roadmap for change which needed research, education, development, innovation, and funding. Starting with the Environment Pillar, we launched the Circular Fashion Ecosystem Project in 2020 with the aim to focus on the creation of a circular fashion economy in the UK.

Driven by industry, recognising the role of government and the consumer, we challenged ourselves to imagine the future circular fashion ecosystem in the UK. By providing an actions-oriented blueprint for the future of fashion, we looked to accelerate the transition towards a circular fashion economy that thrives in its own right and which can be shared with other nations to collaborate on best practice.

The BFC is uniquely positioned to unite the industry and believes that collaboration is key to success. We hope to avoid duplication, and through convening businesses of different sizes and with different expertise we hope to be able to share knowledge and innovations to create a fashion industry for the future. The target is to convene a fashion ecosystem that reduces waste, uses new techniques to disrupt and improve supply chains, and invests in the people and communities that make this possible.

Globally, the transition to a more circular economy will play a vital role in delivering reductions in greenhouse gases. For the fashion sector, this chance to transform the economy to be more sustainable and regenerative also presents an opportunity to address the systemic environmental and social challenges that exist within its global supply chains, while realising commercial opportunities in its consumer markets. 

This report presents three target outcomes for a future circular fashion ecosystem in the UK. If realised, these target outcomes offer long-term viability, sustainability, resilience, and prosperity in the fashion ecosystem. This is the first phase of a programme that has collaboration at its core and will enable the UK fashion industry to make a positive change. It is insightful reading and is unique in how it sets out the roles and responsibilities that all parts of our ecosystem need to play. 

This is a good start but there is much more to do. I want to thank Vanish and DHL as well as the Arts Humanities Research Council (AHRC) and our IPF Committee and CFE Project Advisory Board, without whom this important work would not be possible. I ask government to help us incentivise and scale the findings of this report, and I look forward to implementing the next phases.

Thank you for playing your part in change.

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What we need to do

Presented here are three target outcomes for a future circular fashion ecosystem in the UK. Combined, they make up the target state for the circular fashion ecosystem and allow for its long-term viability, resilience, and prosperity.

Target outcome 1: Reduced volume of new physical clothing

There is a clear environmental case for reducing the flow of new materials and new physical clothing through the system.

Garments purchased in the UK have a significant environmental footprint, with the production of new fibres and manufacture of clothes having the largest contribution to this. Decarbonising and improving the efficiency of production and manufacturing can significantly reduce this footprint. But the most effective way for UK stakeholders to reduce their individual and collective detrimental impact on the environment is through reducing consumer demand for new, physical clothing.         

Target outcome 2: Maximised utilisation and revaluation through product circularity

There is a clear environmental, economic, and social case for reversing the trend of declining clothing utilisation.

The current global trends of increasing consumption and a reduction in the number of times a garment is used before it is discarded means that less value, use, and enjoyment is derived from products that are environmentally, economically, and socially expensive to make. The UK population purchases more clothing per person than many other European countries and throws away over a million tonnes of clothing every year. Circular business models can recover this missed value and deliver greater profitability and stability to the supply chain.                    

Target outcome 3: Optimised sorting methods and materials recovery

Emerging technologies show potential for unlocking closed-loop and regenerative recycling of used clothing at scale in the future if planning and investment starts now.

The net impact of any recycling technology depends on its energy and material inputs, efficiency, emissions, and potential to replace the use of environmentally detrimental materials. Emerging technologies for fibre-tofibre recycling demonstrate potential for replacing virgin inputs for clothing with recycled inputs, thereby eliminating the environmental impacts of many virgin clothing fibres.

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Ten Priority Actions

Urgent, bold, and ambitious action is required from all stakeholders to realise the target state. This report identifies ten priority action areas, each of which involves efforts across many different parts of the fashion ecosystem. Each action area is equally important and has the potential to amplify the effects of the others. They jointly contribute to the target outcomes, as shown under ‘10 priority action areas for realising the target state’ at the end of this summary and on pages 50-51 of the report.

 

Who needs to act?

Achieving the changes set out in the action areas will require collective action by all stakeholders across the UK fashion ecosystem. The ‘Stakeholder actions and connections’ diagram presents 30 recommendations for leading and enabling stakeholders to kick-start efforts across the action areas. The diagram is available on pages 54-55 of the report and at the end of the executive summary. An interactive version can be found on the IPF’s website, which enables the user to illuminate elements by Stakeholder – Recommendations – Action areas. Further information regarding the specific recommendations for each stakeholder can be found in Appendix 2.1.

The role of the BFC and IPF...

...require collective action by all stakeholders across the UK fashion ecosystem. The ‘Stakeholder actions and connections’ diagram presents 30 recommendations for leading and enabling stakeholders to kick-start efforts across the action areas. The diagram is available on pages 54-55 of the report and at the end of the executive summary. An interactive version can be found on the IPF’s website, which enables the user to illuminate elements by Stakeholder – Recommendations – Action areas. Further information regarding the specific recommendations for each stakeholder can be found in Appendix 2.1.

The Institute of Positive Fashion (IPF) sits at the heart of the British Fashion Council. The IPF is helping the British Fashion Industry meet its goal to be more resilient and circular through global collaboration and local action.

The IPF will use the BFC’s convening power to bring together actors across the ecosystem to address the largest climate-related issues facing the industry. Global experts are brought together to share their knowledge and resources to fast-track collective positive change.

The three pillars of the IPF are Environment, People, and Craftmanship & Community. The CFE Project’s goal is to enable a target state which generates positive change across all pillars, offering a holistic blueprint for change for UK fashion.

The British fashion industry is a flagship for creativity, design, innovation, and craftsmanship. The IPF and BFC have a significant influencing power on the global stage and will use their unique position to foster research between industry and academia and become a centre of excellence for innovation, commercialisation, education and cutting-edge research.

Furthermore, the IPF will promote knowledge sharing, the early embedding of circular design amongst the BFC network, and upskilling emerging talent with skills and strategies for their businesses to be future-proofed, responsible and resilient.

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Importance of the Report

This report uniquely reflects the diverse ecosystem of stakeholders required to achieve a circular fashion ecosystem in the UK. Led by the British Fashion Council’s Institute of Positive Fashion, it comprises an extensive and multi-disciplinary team of contributors; 3Keel LLP, QSA Partners LLP, Flourish CSR, Adam Smith Business School at the University of Glasgow, and Icaro Consulting. Combined with findings from an extensive review of existing literature, included in this report are rich insights gained from consultations and research into the perspectives of academia, brands, collectors, consumers, designers, institutions, industry bodies and third sector, logistics providers, manufacturers, reprocessors, and retailers.

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The report presents a blueprint for the future of fashion, which includes recommendations for these actors as well as for government, digital innovators, and investors as additional stakeholders.

It contributes to wider knowledge on the interconnected nature of circular fashion by proposing meaningful and applied steps to transformation as part of a call for collective action. The Circular Fashion Ecosystem Project is a story about the role the UK fashion industry can play to help build a world-leading approach to circular economy transition.

 

HRH The Prince of Wales

The Institute of Positive Fashion Forum 2021

“Only with collaboration will we see substantial and radical change, and a sustainable revolution... We must be able to demonstrate wholesale change in attitudes, actions and processes; and allow the UK to become an exemplar for forward-thinking practice in the global fashion community.”

Conclusion

COMING TOGETHER TO DELIVER A BETTER FUTURE

Climate change, resource depletion and the destruction of the natural environment present existential crises requiring fundamental shifts in both how the economy functions and how society acts. The Sixth Assessment Report of the IPCC sends a stark message – time is running out to prevent catastrophic climate change with experts stating that society has four years to deliver urgent and radical action. Within this context, the fashion and textiles supply chain is the third most detrimental globally, accounting for around 5% of global greenhouse gas emissions, consuming 98 milliontonnes of non-renewable resources every year, and using 93 billion cubic metres of water annually.

Circularity has a key role to play in addressing these challenges. If acted upon globally and across sectors, the circular economy can deliver the reductions in greenhouse gases needed to reach the goals of the Paris Climate Agreement. For the fashion sector, reducing the flow of materials, improving clothing utilisation, andplanning and investing in the solutions needed to scale closed-loop recycling, will collectively lead the transition.

In this report on Phase 1 of the Circular FashionEcosystem Project, we have presented our analysis ofthe current state of the ecosystem, the case for change and our vision for a new, circular target state for the UK fashion industry. This vision is centred around three target outcomes:

Target outcome 1:
Reduced volume of new physical clothing

Target outcome 2:
Maximised utilisation through product circularity

Target outcome 3:
Optimised sorting methods and materials recovery

Collectively, the 30 recommendations proposed in this report, across ten priority action areas, provide a blueprint for the future of the fashion industry. They drive change across the multiple dimensions of the system, clearly setting out the areas and initiatives where different stakeholders should take ownership of removing barriers and lead implementation of solutions.

For the fashion sector, this chance to transform the economy to a more regenerative model also presents an opportunity to address the systemic environmental and social challenges that exist in its global supply chains, while realising commercial opportunities in its consumer markets as the balance of products and services shifts. In pursuing partnerships for change, it will be vital to consider which groups, regions or environments might be negatively impacted by the transition. Including them on the journey and re-evaluating strategies as needed, to minimise potential unintended side effects, is fundamental to achieve a circular fashion ecosystem that brings improved societal and planetary wellbeing, resilience, and prosperity.

The way we behave and relate to clothes is shaped by the social, cultural, and material structures around us. However, a shift in mindset is essential to bring about the change required. Wide-scale collaboration by all parties will be critical to success, requiring all stakeholders, including those viewed as competitors, to work together as never before and deliver against the vision.

The transition required is significant, but the ecosystem is ripe for change. With stakeholders aligned behind the need for transformation and the collective vision to achieve it, the UK fashion industry has a real opportunityto drive that transition and create a world-leading circular fashion ecosystem that retains its creativity and emotion, is fair and equitable and provides a radical blueprint for change for others to follow.

This report calls on all those engaged in UK fashion to come together, embrace that vision, and create a circular fashion ecosystem for the UK.

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Circular Fashion Ecosystem Steering Committee

Chair: Caroline Rush, British Fashion Council
Adam Mansell, UKFT
Claire Bergkamp, Textile Exchange
Cyrill Gutsch, Parley for the Oceans
Dax Lovegrove, Jimmy Choo
Jalaj Hora, Nike
Judith Rosser Davies, British Fashion Council
Lynda Petherick, Accenture
Shailja Dube, British Fashion Council
Simon Platts, ASOS