TOWARDS A FUTURE CIRCULAR FASHION ECOSYSTEM

The previous sections of this report described the need and the case for systemic change in the UK fashion ecosystem. This section sets out our framework for accelerating the transition to a circular fashion ecosystem. This framework has three core components.

This section introduces each component in turn. It also features exploratory financial modelling to gain insight into how financial value might be generated through circularity.

THE STRATEGIC FRAMEWORK FOR REALISING A CIRCULAR FASHION ECOSYSTEM

THREE TARGET OUTCOMES FOR A CIRCULAR FASHION ECOSYSTEM

The reasons for change described in ‘The case for change’ on pages 38-39 form the basis of our proposed target outcomes for a future circular fashion ecosystem, which are laid out below. Informed by the literature review, stakeholder voice consultations, and consumer research, the target outcomes represent areas where primarily UK-based stakeholders have the potential to deliver significant impact reductions across the value chain. Combined, they make up the target state for the circular fashion ecosystem and allow for long-term viability, resilience, and prosperity.

Reduced volume of new physical clothing

Through circular and sharing business models, extended product lives, consumer empowerment and digital innovation, the UK fashion market could retain revenue and profitability at the same time as significantly reducing the volume of new physical product and material supply.

Maximised utilisation through product circularity

Through improved conditions for reusing garments, the value and enjoyment of every garment produced is maximised.

Optimised sorting methods and materials recovery

Through infrastructure and technologies that ensure advanced and efficient methods for sorting used clothing, optimal ‘next lives’ can be ensured. Rewearable items can be recovered for repair and reuse while sorting of non-rewearables provide the quality feedstock needed for improved recycling.

JEFF DENBY

CO-FOUNDER, THE RENEWAL WORKSHOP

“The idea is to reduce waste and restore value to the products that have already been produced. The goal is to help brands transition from linear to circular business models and have profitable solutions at scale.”

Achieving the target outcomes would entail significant changes to material flows, industry operations and consumer practices across the UK fashion value chain and ecosystem. These are summarised in ’The circular fashion ecosystem’ on pages 44-45, which is organised along the following parts of the value chain:

  • A. BRANDS AND DESIGNERS.
    Use of digital prototyping to design both virtual and physical garments with circular design principles in mind.
  • B. DIGITAL TRACKING.
    The unique characteristics and journeys of garments are tracked from the first stage of the value chain and accessible to stakeholders throughout the ecosystem.
  • C. RAW MATERIALS.
    Raw material inputs for manufacturing are either renewable, recycled or both.
  • D. MANUFACTURING.
    Zero-waste manufacturing and reuse of waste materials, water and chemicals is the norm. On-demand manufacturing and distribution mean that excessive and unsold stock is minimised.
  • E. RETAIL.
    Provision of pre-owned clothing, virtual clothing, rental clothing, and clothing subscription is mainstream and available through both online and physical retail.
  • F. USERS.
    UK consumers buy less clothing overall. When they do purchase, they buy more pre-owned than new, and items of a higher quality and durability. Consumers wear items more often and for longer (or pass them on for reuse).
  • G. REPAIR.
    Consumers maintain their clothing and repair items at tailors, retailers or at home.
  • H. REUSE.
    Consumers take clothing directly back to retail to be resold or rented to a new user or pass on clothes through recommerce platforms that engage in redesign, upcycling, garment care, tailoring and repair before the item is resold. Consumers also resell clothing to new consumers directly through online trading platforms.
  • I. DONATION AND COLLECTION.
    Consumers have easier and more convenient access to expanded collection and donation channels, including private, kerbside, charity, and via retailers.
  • J. SORTING.
    All used clothing collected in bulk is sorted using sophisticated sorting technologies at efficient sorting facilities and other venues. This allows for optimised determination of the ‘next destination’ for individual garments, be those channels for reuse or for recovery.
  • K. RECYCLING FOR OTHER INDUSTRIES.
    Material outputs in the form of fibres, yarns, textiles, and clothing that cannot be reused in the fashion industry longterm are utilised by other industries such as agriculture, homewares, and construction, as part of a wider material ecosystem.
  • L. TEXTILE RECYCLING.
    In the short to medium term, non-wearable garments suited to textile recycling are channelled to existing mechanical recycling facilities. In the long term, the destination will increasingly be facilities for chemical recycling.
  • M. FIBRE MANUFACTURING (POLYMER FILAMENT EXTRUSION)
    In the long-term, improved sorting and scaling of fibre-to-fibre recycling mean an increase in fibre manufacturing from recycled chemical inputs instead of raw materials, including through polymer filament extrusion

MODELLING FINANCIAL IMPACTS OF A CIRCULAR FASHION ECOSYSTEM

Given the urgent need for a circular fashion economy and the target outcomes we must achieve, it is important to consider what this necessary transition to fashion circularity might look like. Specifically, what are the potential financial implications of the changes to consumer behaviour required for the transition to a circular fashion ecosystem? To this end, we developed a model to assess potential recovery values for customers and other stakeholders within the post-use ecosystem (e.g. recommerce platforms, charities, recyclers, etc.). The model is designed to provide high-level insights into how financial value could be generated through circularity based on a comparison of scenarios in current and future states. This model is an indicative scenarios assessment tool, and is neither intended for, nor suitable as, a vehicle on which to base a business case or for attracting investment.

Modelling scenarios

Three scenarios are modelled, under business-as-usual and two potential future states, with each assuming a different customer spend pattern for garment purchases:

CUSTOMER PURCHASES UNDER MODEL SCENARIOS (% OF ANNUAL PURCHASES)

Current State Scenario

The current state scenario assumes that a customer’s annual garment purchases consist of 90% new items and 10% pre-owned* items.
* Garments that were previously owned by another person: including those passed on by friends, purchased through online trading systems and those purchased in retail outlets such as vintage and charity stores. Buying a reused garment is assumed to replace the need for a new one.

Interim State Scenario

The interim state scenario is based on a shift towards more circular behaviours. We assume a customer’s garment purchases in the interim state would be 65% new garments, 25% pre-owned items and 10% virtual garments**.
** Garments that only exist online and are used for social media, avatars and gaming characters.

Target State Scenario

The target state scenario is in line with the more radical shift needed in customer purchasing behaviour to realise a circular fashion ecosystem. In this scenario, we assume a significant reduction in consumption of new garments. This would be 50% new items, 25% pre-owned garments, 15% virtual garments and 10% temporary access garments such as rentals and subscriptions.

The ‘Customer purchases under model scenarios’ diagram below summarises the assumed splits of customer garment purchases under each scenario. 

Based on the different customer purchase combinations described above for each scenario, and using publicly available data from WRAP67 on current discard and disposal routes for UK consumers, the model assumes a likely split among different potential end-of-life options for garments entering the post-use ecosystem i.e. recycling, recommerce, repair, reuse and disposal. These likely end-of-life options help estimate the financial values that those garments may attract (i.e. via recommerce, tailoring and repair, donation for reuse/ recycling or discard to landfill). We assume that financial value for resold garments can be captured either by the customer or by resellers or reprocessors downstream, such as collectors, charities, and recyclers.

The estimated financial values that can be recovered by customers and downstream industries under each scenario are modelled for two types of fashion consumers:
1. ‘Average’ shoppers, defined as those shoppers who typically buy two fashion items per month, and
2. ‘High intensity’ shoppers, defined by the initial omnibus survey of our consumer research as those shoppers who shop often for fashion items and who purchase relatively high quantities on average. An average purchase rate of six fashion items per month was used for modelling this shopper type based on data from our targeted quantitative consumer survey 

SONIA THIMMIAH

HEAD OF SUSTAINABLE BRANDS AND CUSTOMER PARTNERSHIP, RECKITT

“In the UK we dispose of 350,000 tonnes of clothing waste into landfill each year. This represents £140 million in terms of value. Can you imagine what we could do if we kept that value in the economy, recycled it so to speak to spark innovation, develop new industries and drive job creation, all to enable better circularity?”

Key Results

The figure ‘New item spend and financial recovery values’ on this page presents the key findings of the modelling. It shows the amount spent annually on clothing for each scenario and customer type, compared with how much financial value could be recovered for that clothing by the consumer and other stakeholders through the post-use ecosystem. There is a significant opportunity under the interim and target state scenarios for customers and/or other resellers/processors to recover more financial value through utilising circular routes that keep existing items of clothing in use for as long as possible compared to linear disposal. Such routes offer greater value recovery, with potential customer spend recovered through circularity as high as 43% in the target state scenario for average shoppers (and 36% in the analogous scenario for high intensity shoppers). This compares with the minimal return of 6% and 7% (for average and high intensity shoppers, respectively) that can be recovered in the current state scenario.

Specifically, there is far greater financial value gained through using routes such as recommerce, reuse, repair and rental/subscriptions than recycling, which contributes just over 1% to the post-use financial value, or disposal.

The scenarios modelled in this analysis indicate that a circular fashion ecosystem will present significant opportunities for many stakeholders but there are also some clear challenges for those in the fashion industry who are currently focused on making and selling new products. Some of these opportunities and challenges are summarised below.

  • There is market growth potential for circular services

    While the model presents high-level scenarios rather than a forecast, it indicates potential for a significant new market in the downstream ecosystem through reuse, repair and subscription services. Many stakeholders stand to benefit from this market, with brands and retailers well placed to capitalise by embracing circular and sharing business models. This includes implementing and expanding recommerce, take-back, repair and rental schemes, facilitated by utilising existing logistics and customer engagement routes.

  • The greatest value is retained through reusing rather than recycling existing garments

    Stakeholders are likely to recover the most value from reusing garments rather than recycling them (e.g. for fibre recovery). This should not, however, detract from the vital role that fibre recycling will play in managing those garments that are no longer usable in any form. 

  • The retail market for new garments would likely shrink

    With the focus on garment longevity and switch to circular and sharing business models to promote re-use, consumer demand for new physical fashion garments will likely shrink. Innovative and genuinely sustainable brands may adapt by switching revenue streams to circular offers. However, it is possible that other brands may seek to cling on to large-scale linear business models. No policy incentives currently exist to drive an industry-wide change, but this could be partially addressed through an extended producer responsibility scheme (EPR).

  • The retail market for new garments would likely shrink

    With the focus on garment longevity and switch to circular and sharing business models to promote re-use, consumer demand for new physical fashion garments will likely shrink. Innovative and genuinely sustainable brands may adapt by switching revenue streams to circular offers. However, it is possible that other brands may seek to cling on to large-scale linear business models. No policy incentives currently exist to drive an industry-wide change, but this could be partially addressed through an extended producer responsibility scheme (EPR).

Next steps

The model used a straightforward scenarios assessment approach, providing some useful high-level insights that demonstrate that there is market potential for circular measures and more durable products can be key to liberating these financial returns. 

The switch to circular services will be complex, and as indicated by our consumer research, service providers must clearly show the benefits to customers to secure their investment (e.g. reduced financial costs for customers over time due to greater product longevity, appealing to customers’ desire for more conscious consumption, etc.).

Our scenario modelling indicates there would be value to developing a detailed, rigorous financial model for returns under different future states. To do this effectively would require key stakeholders to collaborate to provide the required information across the fashion ecosystem, and the results of which could be used to inform the business case for investment in circularity. This modelling exercise could fall within the activities of Phase 2 of the Circular Fashion Ecosystem Project.

REALISING THE CIRCULAR FASHION ECOSYSTEM

Achieving systems change through 10 priority action areas

Transitioning to the target state requires transformation across multiple dimensions of the current system, from behaviours and mindsets to the infrastructure and policies underpinning the fashion and textiles industry. Strategies for realising the target state should be re- evaluated on an ongoing basis to monitor both success and unintended consequences. This is due to the complexities of this system and the need for a fair and just transition.

This section presents the next components of the framework for transitioning the UK fashion economy towards the three target outcomes laid out previously. The first of these are our ten priority action areas. We have developed these by analysing the changes needed to bridge the gap between the current and target state for a circular fashion ecosystem. Transitioning complex systems requires pressure to be applied to several points simultaneously. Through the stakeholder consultations, we were able to better understand which parts of the UK fashion ecosystem that need changing to achieve the target outcomes. The action areas were developed to cover each of these dimensions, and are shown in ‘10 priority action areas for realising the target state’.

30 recommendations for stakeholders

Achieving the changes set out in the ten action areas will require involvement from all stakeholders across
the UK fashion ecosystem. This report presents 30 recommendations for stakeholders to kick-start
these efforts. As shown in ‘Stakeholder actions and connections’ on the next pages, each recommendation has an identified ‘lead’ stakeholder and main priority action area under which it sits. Because each action area requires several stakeholders to make it a reality, a series of ‘enabling’ stakeholders are also identified.

There are also synergies between the different priority action areas. As such, each recommendation also has a secondary ‘synergy action area’ listed. For example, developing a digital tracking system for clothing could be done to ensure that sorters and reprocessors have the information they need to determine how best to recycle an item. Digital information could also provide more information to consumers on the environmental and social footprint of a garment and how to best look after the item.

The following section presents each of the action areas in turn together with its relevant stakeholders, synergy action areas, and recommendations. Selected case studies of global best practice are also featured to illustrate the type of activities that will help make the circular fashion ecosystem a reality. Government and brands will be instrumental to achieving the target outcomes as they are identified as lead stakeholders for 18 out of 30 recommendations

Taken together, the recommendations suggest the following:

  • The UK government should lead on policy creation, incentive-setting and investment for developing the required innovations and enabling infrastructure.
  • Brands and retailers should embrace circular and sharing business models, and empower consumers to adopt circular practices.
  • Significant research and coordination are needed to maximise collaborative actions. Information accessibility and transparency throughout the ecosystem must be improved.
  • There is more work to be done to educate the consumer on garment care, end of garment life, and recycling.
  • A shift in attitudes towards circular products and services is required to motivate the transition. Positive messaging and an increased understanding of the value of circular business models will increase demand for a more circular fashion ecosystem.
  • Digital technologies can facilitate and unlock multiple elements of the target state.
  • A shift in attitudes towards circular products and services is required to motivate the transition. Positive messaging and an increased understanding of the value of circular business models will increase demand for a more circular fashion ecosystem.

A perspective on Life Cycle Assessments by Claire Bergkamp, Textile Exchange

Life Cycle Assessment (LCA) is one important piece of the apparel and textile industry’s data equation, particularly given the EU Commission’s adoption of LCA as the underlying methodology for its forthcoming product labeling legislation. However, Textile Exchange also recognises that LCAs do not capture the breadth of impacts and trade-offs involved in our Climate+ Strategy, which prioritizes the areas of biodiversity, soil health, and water along with climate.

Where LCAs focus solely on reducing negative impacts – ‘doing less bad’ – we strongly believe in the need to drive positive outcomes as well. Additionally, LCA methodology requires a selection of specific parameters, in a specific location, at a specific moment in time, with ample room for different approaches and assumptions. This makes LCA data difficult to compare, and the steep cost to conduct a single LCA makes it challenging to get and maintain representative data at scale.

Textile Exchange employs an approach to impact data we call ‘LCA+.’ This means that in addition to working toward improving the LCA data and methodologies used by the industry, we are also looking to other sources of data to help us benchmark and measure the positive impacts being driven by our members through our programs and initiatives.

A perspective on exporting clothes for reuse and the global recycling market by Alan Wheeler, The Textile Recycling Association

The used clothing and textile recycling industry has been finding sustainable solutions and markets for second hand textiles for many decades. Our sector has played a leading role in bringing the environmental impacts of the fashion industry to the fore and the proposals that are being put forward here offer a real opportunity for us to work together with stakeholders from across the clothing supply chain to deliver a circular and sustainable fashion sector.

We will continue to increase the longevity of clothing by placing good quality reuseable clothing into sustainable markets. This keeps clothing higher up the waste hierarchy and reduces demand for new clothing. It also creates real social and economic benefits by employing millions of people globally and providing good quality clothing at affordable prices.

We also look forward to working with our partners to establish new processes to help improve the efficiency of collections and processing of used textiles, whilst at the same time working towards developing new markets and applications for the material that our sector deals with, thus helping to ensure that the circularity of textiles is maximised.

SELECTED UK DESIGNERS WHO ARE PART OF THE VANGUARD FOR CHANGE

The following designers are highlighted here due to their commitment to environmentally and socially conscious design that has the potential to inspire larger businesses.

CASE STUDY

Bethany Williams

Bethany Williams is a sustainable fashion designer focusing on positive social and environmental change. Her collections are approached from a social manufacturing perspective, creating long-standing partnerships with initiatives like ‘Making for Change’, a project that has been teaching level 1 and level 2 garment making at HMP Downview since 2014, as well as international social initiatives including San Patrignano and Manusa. Her designs use organic, recycled and deadstock materials, from book waste to reclaimed fabrics. Bethany Williams co-created the Emergency Designer Network in 2020 in response to a lack of PPE in hospitals, and is working to establish a textile recycling and upcycling hub in London.

CASE STUDY

Helen Kirkum

Helen Kirkum is a footwear designer who reworks discarded and recycled sneakers, working with clients including Adidas, Reebok, Lacoste and Nike. She collects sneakers from recycling charities such as Traid, often taking single sneakers which cannot otherwise be reused. In both 2021 and 2019 Helen Kirkum created 20 unique pairs of Reebok trainers from deconstructed component parts of Reebok sneakers with stitch lines still in place. Her work promotes the craftsmanship of handmade footwear, using social media to build awareness about extending the lifespan of products.

DILYS WILLIAMS

PROFESSOR OF FASHION DESIGN FOR SUSTAINABILITY AND DIRECTOR OF CENTRE FOR SUSTAINABLE FASHION, LONDON COLLEGE OF FASHION

“We should look at what micro and small businesses are doing – look at the exemplars and how large businesses could be inspired by that”

CASE STUDY

Graeme Raeburn

Graeme Raeburn is the Lead Designer at cycling clothing company Albion and was previously Lead Designer at Rapha. He favours the term “responsible” design because it implies designer and business accountability. As part of his work at Albion, he is developing a ‘closer to market’ method of sampling and manufacturing, using digital patterns that can be printed out and sampled within the London studio prior to scaling up. This enables much greater flexibility and efficiency than the traditional longer lead sampling time.

CASE STUDY

PHOEBE ENGLISH

Phoebe English is a fashion studio that focuses on a solution-based fashion practice. The studio creates garments that are entirely produced in England with a focus on mitigating environmental impact and attempting to positively influence our environment by working with other small businesses and their fabric waste. Phoebe English co-founded the Emergency Designer network in 2020 as a response to a lack of PPE in hospitals and created a WhatsApp group named ‘Fashion on Earth’ to share sustainability resources with other designers and students.

CASE STUDY

Joshua James Small

Joshua James Small is a sustainable womenswear designer who applies a couture approach to design and construction. His garments use organic fibres and ethically produced fabrics, as well as upcycled deadstock fabrics and embellishments from companies including Ultrafabrics, Swarovski and Sophie Hallette. In order to provide transparency, all components of each garment are listed through his website on the date of release. The garments are all made in England, produced on a made-to-order basis, and can be re-made after use.

CASE STUDY

Olubiyi Thomas

Olubiyi Thomas is a fashion designer with an artisanal approach to design, exploring multiculturalism as a self-reflection on his Nigerian origins and Scottish upbringing. His collections reimagine the linkages between British Post-Colonialism and African cultural history, focusing on craftsmanship and hand manipulated textiles rich in identity and meaning. Each piece is handmade in London using natural fibres such as wool, cotton and silk; and antique hand woven and dyed West African textiles. Geometric pattern cutting explores universal and archetypal shapes of Africa and the East, such as Nigerian bubas, kimonos and kaftans.