In transitioning to a circular economy, it is critical that key relevant social and political issues are not neglected in favour of purely economic considerations. As noted in the Chatham House research paper entitled ‘Promoting a Just Transition to an Inclusive Circular Economy’73, ‘“Combining circular economy policies with social protection measures will be important in order to ensure that the burden of efforts to promote circularity will not fall on the poor through worsening working conditions and health impacts, reduced livelihoods, or job losses”. The COP24 Just Transition Declaration, signed by 53 countries in 201874, emphasised international concern over the potential for stranded workers and communities, and recognised the need to support these groups to build broad societal support for the transition to decarbonisation75.
A just and fair transition to a circular fashion ecosystem looks to ensure that the opportunities and benefits on offer in the target state are shared equitably across society. This means that all people have access to a viable, prosperous, and secure future76. It also recognises that the transition may represent a moment of instability and fragility for some individuals, communities, businesses, and nations, and that they will need support to avoid being left behind and to take advantage of the opportunities created. Typically, it is the most vulnerable in society who face the largest challenges in adapting to change, and the transition offers a moment in which to address not just existing inequalities, but also historic ones77.
Within the future circular fashion ecosystem, the shift towards circular business models, including clothingas-a-service, repair, take-back services, and resale, will entail significant changes to the supply chain. This will result in a different suite of jobs, and investment in skill development to fulfil these roles. As Dr Ke Wang, Knowledge Lead at PACE, stated in our stakeholder interviews:
“The circular transition will shift jobs from upstream extraction and manufacturing to downstream collection and recycling. It has been estimated that overall, the circular transition will result in a net increase in jobs globally. But each country will look different. Asia, for example, is a large base of both cotton cultivation and clothing manufacturing. On the other hand, jobs in the mid-stream (such as repair and resale) are located close to consumers. Therefore, moving to a circular economy may result in an initial net loss of jobs in the fashion industry in some Asian countries.”
This represents a likely outcome of the shift to a circular fashion ecosystem and demonstrates the value of ecosystem modelling, as cited in our recommendations, in mapping out system changes. During this period of change, the fashion industry must be mindful of its social impact, particularly where the risk of modern slavery remains. According to Simon Platts, Responsible Sourcing Director at ASOS, commenting on UK manufacturing, it will be important to educate and empower workers on their rights and “...work with the community, councils, government, retailers, stakeholders to ensure that this becomes a reality so that we can create a level playing field.”
The imbalance of socio-economically disadvantaged citizens across the entire supply chain was an insight that emerged from our CFE Industry roundtable. Many people buy less expensive clothing out of necessity. Since increasing the amount of recycled materials or improving the longevity of an item often comes at a higher financial cost, initiatives aimed at these outcomes could result in the items being less affordable. There is a perception that sustainable fashion means a higher price point, which needs to be considered in business decisions. The fashion industry must remain accessible.
Within the Phase 1 research, literature on the social and economic impacts of a circular transition was reviewed. While the importance of ensuring a just and fair transition is increasingly being recognised, current research is often highly speculative on the social and political ramifications of the changes ahead. We have endeavoured to incorporate the principles of a just and fair transition in our recommendations for stakeholders where feasible, to create a more holistic outcome and have provided certain actions that reflect the need to invest in, educate, and support workers during such a major economic transition. Such recommendations include ‘supporting manufacturing in the UK’, ‘formalising skills’, ‘directing investment towards circular performance’ and ‘mainstreaming metrics for societal prosperity’.
As outlined in ‘The Circular Fashion Ecosystem Project: Next steps’ on pages 93-94, however, specific targeted research into the complexities of balancing environmental and societal needs throughout the transition with specific reference to the fashion industry should be completed and integrated into Phase 2, to develop an appropriately phased implementation. Ahead of that research, we present below some considerations and opportunities for industry stakeholders as they engage with the transition to a circular economy. These should be considered as cross-cutting themes which are relevant across all the target outcomes, action areas and recommendations laid out in this report.