The growth of the circular economy and a new understanding of fashion

Among the many changes we witnessed in 2020, the placement of sustainability at the core of many business strategies is one of the most urgent and promising. Companies all over the world pledged to reduce carbon emissions: Nestlé, the world’s largest food company, committed $3.6B to curb emissions and boost sustainability.

A report from the Financial Times pointed out that eco-friendly products are ‘green gold’ and that sustainability is a ‘trend that will intensify as companies seek to meet evolving consumer expectations.’

The fashion industry had come under fire for its high carbon footprint for years. According to the World Bank, the fashion industry is responsible for 10 percent of annual global carbon emissions: more than all international flights and maritime shipping combined.

Furthermore, the UN reports that the fashion industry is the second biggest consumer of water, as well as losing $500 billion every year due to failure to recycle and landfill disposal of brand new clothes. In total, 51.2 million tonnes of plastic were used in Europe in 2018, of which 40 percent was packaging.

No waste, no pollution: the circular economy

Could 2021 be the year to reverse this reality? An increasingly mainstream concept for businesses, especially those on the fashion scene, the circular economy is based on principles of regeneration and elimination of waste and pollution from supply chains. This contrasts with the linear economy in which products are made, used, then disposed of.

According to the Waste and Resources Action Program (WRAP UK), a circular approach could benefit British businesses by up to £23 billion per year through low-cost or no-cost improvements in resource efficiency. Such developments are particularly likely to bring optimal results and value to the fashion industry.

In 2020, governments decided that it was time to take action by promoting more sustainable fashion practices. Last November, the European Union launched the New Cotton Project, a three-year sustainable fashion enterprise which will collect textile waste to be recycled and turned into cellulose-based fibres. Adidas and H&M Group are among the brands to embrace the programme. Climate Action says that the New Cotton project aims ‘to contribute to a circular economy in which textiles never go to waste, but are reused, recycled or regenerated into new garments.’

Infographic from WRAP UK

In the UK, the Ellen MacArthur Foundation is one of the steering names in promoting and educating about the circular economy. According to the foundation, the United States has one of the shortest fashion product life cycles, with clothes being worn for about a quarter of the global average. At a global level, customers lose USD460 billion worth of clothes every year by throwing them away.

Organisations like Oxfam have started campaigns calling for the end of fast fashion and overconsumption of fashion garments. Oxfam’s Second Hand September campaign hopes to address the 11 million items of clothing that end up in landfill every week. In 2019, more than 60,000 people pledged to say no to new clothes for the month of September.

Fashion brands have already shown enthusiasm for this new trend. The Italian brand Comistra is a ‘model of a true circular industrial economy’ by recycling old clothes to produce raw textile materials. The company has a complete carbonisation and water shredding plant and produces over 250 colours of regenerated fibres.

(On our next #FinancialFox podcast, we’ll be talking to the founders of Comistra about sustainable fashion and the circular economy.)

Be sure to follow us on social media @cassiopeia_ltd to keep up with more news and updates in this exciting sector, and don’t forget to subscribe to our channel to hear about further upcoming interviews on FinancialFox.

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