CIRCULAR FASHION ADVOCACY - ECOPRENEUR.EU
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ECOPRENEUR.EU
EUROPEAN SUSTAINABLE BUSINESS FEDERATION
CIRCULAR FASHION
ADVOCACY
A STRATEGY TOWARDS A CIRCULAR FASHION
INDUSTRY IN EUROPE
2019
DISCLAIMER
This report has been produced by Ecopreneur.eu, which takes full responsibility for
the report’s contents and conclusions. While funders, members, their company
partners, members of the Board, participating organisations, and those experts
who were consulted and acknowledged here have provided significant input to the
development of this report, their participation does not necessarily imply
endorsement of the report’s contents or conclusions.
2
CONTENTS
Foreword p. 4
Executive summary p. 8
Chapter 1. Introduction p. 12
Chapter 2. What could a circular fashion economy look like? p. 16
Chapter 3. How to get there: The role of advocacy p. 21
Chapter 4. An advocacy strategy for Europe p. 26
Chapter 5. Conclusions and recommendations p. 59
Colophon and acknowledgments p. 63
References p. 64
3
FOREWORD
The fashion industry is at a crossroads. The fast spinning wheels of apparel production
have reached such pace and scale that the waste and pollution generated have
become a critical global issue. A staggering 73 per cent of materials used for clothing
are sent to landfill or incinerated, with less than just 1 per cent of the fibres recycled.
Textile production creates greenhouse gas emissions larger than that of international
transport. Hazardous substances escape into the environment and affect the health of
those making and wearing the garments. Plastic microfibres released from clothes in
the laundry machine are polluting the oceans. The fashion industry hasn’t considered
the planet’s boundaries, as it too often focuses on solving short-term economic
problems.
Recent modelling results by the Stockholm Resilience Centre suggest that creating an
economy that meets the Sustainable Development Goals within planetary boundaries
is still possible. However, only by rapid, radical transformations for our entire economy
that decouple natural resource use and impacts from economic progress. This study
shows that the fashion industry is increasingly aware of the need for action to become
a fully circular system. If combined with true efforts to overcome social issues in
producing countries, this can lead to real change and open new opportunities in the
apparel sector.
However, companies cannot act in isolation. Markets cannot ensure efficiency in the
allocation and use of resources if prices do not reflect the true value and costs of
resources. Rewards to capital determine the business case and invite to disregard
environmental externalities and costs. Most managers still make short-term
investment decisions, overly influenced by bonuses based on short-term share prices.
4
FOREWORD
Technological progress is essential for the circular economy, but will not be developed
fast enough without a strong demand for circular fashion products – and will not fix
adverse incentive systems.
This report provides insights into the economic dynamics of circular fashion. Based on
the collective experience and business sense of European green small and medium-
sized enterprises and pioneering companies in various sectors, the report provides a
more detailed picture of what policy measures such as extended producer
responsibility, procurement, fiscal incentives and ecodesign regulation can do.
Moreover, where these measures are often opposed by business, the report strongly
advocates their rapid development and implementation in the fashion sector.
Political consensus on how to change it is still lacking, both in the more general
circular economy debate and for fashion. Advocacy is therefore crucial to build
enough support for the EU and member states governments to take decisive
measures to foster sustainable resource management and circularity. While some
businesses achieve great progress already, only governments and adequate
governance models can enable global markets to adopt circular fashion as the new
normal.
I therefore call on the fashion industry to join this advocacy for change.
Janez Potočnik
Partner, SYSTEMIQ
5
About the author - Ecopreneur.eu About the funder - C&A Foundation
Ecopreneur.eu, the European C&A Foundation is here to transform
Federation of Sustainable Business, the fashion industry. We give our
sets a course toward sustainable partners the financial support,
economic policies on the European expertise and networks so they can
level to support the economic and make the fashion industry work better
societal transformation across Europe for every person it touches. We do this
and beyond. Ecopreneur.eu aims at because we believe that despite the
opening solidified structures and vast and complex challenges we face,
brings sustainable matters to we can work together to make fashion
European policy-makers. Ecopreneur a force for good.
is a non-profit non-governmental
organisation that now holds six www.candafoundation.org
associations from different countries
of the European Union. Together they
represent over 3000 green businesses,
mostly small and medium-sized
enterprises. While several of these
companies are active in fashion,
Ecopreneur does not represent the
fashion industry.
www.ecopreneur.eu
6
”
The best way to
predict your future
”
is to create it.
― Abraham Lincoln
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Textiles and clothing are a fundamental This report focuses on the role that
part of everyday life and the fashion advocacy can play in realising a circular
industry forms an important sector in fashion economy. In a circular fashion
the global economy. However, the economy, products and materials flow
current system for producing, through a closed loop system by way of
distributing and using clothing cannot repair and maintenance, sharing and
be sustained. It operates mostly in a rental, re-use of materials and products,
“linear way”, following the take-make- collection after use, separation, sorting,
waste model. Large amounts of non- industrial processing, design and up-
renewable resources are extracted from cycling, and recycling into fashion
the earth to produce clothes that are products or into other industries (or
often used for only a short time, after from other industries). The system only
which they are discarded. The industry uses safe material inputs, regenerates
as a whole is extremely wasteful and ecosystems and does not pollute the
polluting. Less than 1 per cent of environment; processes run on
material used to produce clothing is renewable resources and energy, and
recycled. In the words of the Ellen recycled materials streams are clean.
MacArthur Foundation, “on current Competition from cheap, low-quality
trend, the negative impacts of the products is eliminated.
fashion industry will be potentially
1
catastrophic”. In addition to the To realise a circular fashion economy,
environmental ones, the industry is there are certain systemic issues that
facing a number of social issues such as need to be addressed. A trend is needed
poor working conditions, poverty, to move away from business models
exploitation, abuse and gender based on product sales at lowest price
inequality. only to service models based on true
pricing and performance. Furthermore,
The fashion industry therefore needs to countries need to create and enforce
move away from a ‘linear’ model governance and legislation geared
towards a ‘circular’ one. In a ‘circular’ or towards circular fashion. In other words,
‘flow’ fashion economy, clothes, textiles, a system which ensures transparency,
and fibres are kept at their highest value taxes resources, externalities and
during use and re-enter the economy to energy more heavily and labour less,
avoid becoming waste. sets up minimum requirements for
fashion products on the market and
The fashion industry is increasingly bans those that do not meet them.
committed to a circular model, but is
only at the beginning of a journey to
create a more ethical and sustainable
future for fashion.
9
EXECUTIVE SUMMARY
Governments have driven all major innovations, and only they can change legislation to
foster change. By combining policies for procurement, economic incentives and
regulation, governments can tilt the existing linear ’level’ playing field into a circular
one. But how do we ensure government action?
Advocacy is key to creating a new system of governance acting as a powerful lever in
driving change alongside proofs of concepts, pre-competitive collaboration and
convening, increasing and bundling demand, capacity building, raising worker and
community voice, and transparency and accountability.
According to Ecopreneur, a set of policy instruments to accelerate and mainstream a
circular fashion economy should be based on the following five pillars:
1 Innovation policies – research programmes with government subsidies, investment
tax deduction, technological development and innovation, small and medium-sized
enterprises (SMEs) support, with a focus on textile recycling, preventing
i
microplastics release, and calculating external impacts and true prices.
2 Economic incentives – procurement, extended producer responsibility, VAT and a
tax shift to drive market demand for circular products and services by making make
them cheaper and “linear” ones more expensive.
3 Regulation – establishing a common regulatory framework for transparency and
traceability, circular design and improved end-of-waste status across the EU. This
regulation should apply to substances of very high concern (SVHC) and textile
waste, and should be enforced through taxes, bans and fines – for example, with a
ban on landfilling of textiles. The Sustainable Apparel Coalition’s (SAC) Higg Index
can play a major role here by measuring material flows and environmental impacts
of manufacturing systems.
4 Trade policies – facilitating export of semi-finished products and sorted, reusable
textile waste to producing countries. Negative social impacts in producing
countries should be avoided. Waste transport across the globe should be
minimised.
5 Voluntary actions – covenants, commitments and standards are encouraged to
engage stakeholders, with legislation standing by in case of lacking results.
i The true price of a product or service reflects the true cost (environmental and societal) of materials and
production processes.
10EXECUTIVE SUMMARY
Ecopreneur proposes that the A key message would be to urge the EU
recommendations for advocacy to move first to create a circular fashion
messages and actions listed in this economy because it forms a huge
report are used by the EU and other key economic opportunity, both for Europe
stakeholders to develop a collaborative and for producing countries; globally,
strategy and plan up to 2030 that overall annual benefits are estimated by
supports a circular fashion economy. In Eurochambres to amount to € 161
addition, philanthropic funders should billion.7 For the fashion industry to
connect and build the advocacy realise the economic, social and
capacity of non-profit organisations that environmental benefits of a circular
support circular economy and a circular economy, immediate action and long-
fashion sector. This is particularly term commitment towards advocacy is
important given the strong influence of needed.
lobbyists advocating for the ‘linear’
status quo.
11CHAPTER 1 INTRODUCTION
CHAPTER 1
Textiles and clothing are a fundamental According to the Ellen MacArthur
part of everyday life and the fashion Foundation, approximately 73 per cent
industry forms an important sector in of the materials used for clothing are
the global economy. The EUR 1.1 trillion sent to landfill or incinerated with less
clothing industry employs more than than 1 per cent being recycled to make
1
300 million people along the value new clothing. The 2017 Pulse of the
1
chain. At the same time, the fashion Fashion Industry report, put together by
industry is problematic. The current Global Fashion Agenda and the Boston
system for producing, distributing and Consulting Group, estimated that in
using clothing operates mostly in a 2015, the global textiles and clothing
linear way, following the take-make- industry was responsible for the
waste model. Large amounts of non- consumption of 79 billion cubic metres
renewable resources are extracted from of water, 1.7 billion tons of CO2
2,3
the earth to produce clothes that are emissions and 92 million tons of waste.
often used for only a short time, after Should growth continue as expected,
which they are discarded rather than total clothing sales would more than
reused or recycled. This is damaging the triple in 2050.
environment faster than it can recover.
Figure 1. World fibre production 1980-2025, showing a huge increase in the use of polyester fibres.
Source: Tecnon OrbiChem 4
13CHAPTER 1
With the share of plastic-based fibres Fortunately, measures to foster circular
projected to remain at 63 per cent, this fashion not only tackle waste, but also
would mean a threefold increase of offer considerable economic
microplastics entering the oceans as opportunities. The economic advantage
1
well. In the words of the Ellen in adopting a circular fashion economy
MacArthur Foundation, “on current was recently estimated by
trend, the negative impacts of the Eurochambres at € 161 billion (land use
fashion industry will be potentially 7
1 externalities excluded). In addition, the
catastrophic”.
transformation of the fashion industry’s
business model from a linear to a
In addition to the environmental costs,
there are a number of negative social circular system has risen far up on the
8
issues that proliferate the fashion agenda of the fashion industry. To
industry such as poor working support the transition to a circular and
conditions, poverty, exploitation, abuse inclusive fashion industry, a holistic
and gender inequality. approach to social, environmental and
economic policy-making is necessary.
The fashion industry therefore needs to
move away from a ‘linear’ model This report focuses on the role that
towards a ‘circular’ one. In a ‘circular’ or advocacy can play in realising a circular
‘flow’ fashion economy,ii clothes, fashion economy. The focus is on
textiles, and fibres are kept at their apparel, but it has implications for all
highest value during use and re-enter textiles applications. It discusses what a
5
the economy to avoid becoming waste. circular fashion economy could look
Measures to tackle fashion waste
like, what government policies are
include the development of resource
needed to realise it and how advocacy
efficient and durable fabrics and
can accelerate its development into a
clothes, leasing and rental services,
improved infrastructure for the second- mainstream phenomenon. The report
hand market or ‘recommerce’, iii,6 builds on a Circular Fashion Policy Lab
recycling of textile waste or discarded organised in May 2018 (see Colophon
clothing and increased transparency and Acknowledgements) and includes
throughout the value chain. input from various experts and
stakeholders.
ii 1
Or a “new textiles economy” as it is called by the Ellen MacArthur Foundation.
iii
The process of selling previously owned, new or used products.
14CHAPTER 1
Some of the measures proposed in this Reading guide
report, for example increased
transparency and a tax shift from labour Chapter two analyses the circular
to resource use and pollution, address fashion system: the structure, the
both the environmental and social characteristics and the policy regime.
impacts (Chapter 4.1). Ecopreneur is Chapter three further explores the
carrying out a separate study about the transition from the linear to a circular
impacts of an EU circular fashion fashion economy in terms of what needs
economy on producing countries. to change and how policy can make
However, additional measures to those changes a reality. Chapter four
address social impacts are outside the describes the role of advocacy in the
scope of the report and require further transition to a circular economy.
stakeholder collaboration. Chapter five sets out a strategy to drive
policy development, amendment,
This is the first report delivered by adoption, implementation and effective
Ecopreneur.eu. Ecopreneur has operation of a circular fashion economy.
welcomed the opportunity provided by It introduces the most important lobby
C&A Foundation to apply and test our and advocacy organisations within the
cross-sectoral policy recommendations EU and explores how together they can
to the fashion industry and hope it will set the wheels of policy-making into
form the basis for other sectors to motion. Finally, Chapter six presents a
follow. number of recommendations and a set
of policy instruments to accelerate and
mainstream a circular fashion economy.
15CHAPTER 2
WHAT COULD A CIRCULAR
FASHION
ECONOMY LOOK LIKE?CHAPTER 2
In a ‘circular’ or ‘flow’ fashion economy, Figure 2 visually represents many
clothes, textiles and fibres are kept at important aspects of a circular business
their highest value during use, and re- ecosystem for textiles, with a focus on
enter the economy to avoid becoming material flows.
waste, benefitting business, society and
the environment. 1
Figure 2: Schematic view of many important aspects of a circular business ecosystem for textiles, with a
9
focus on material flows. Source: Ethica.
The diagram shows how a circular is coloured in green and the flow of non-
fashion industry could function in the reusable textiles is coloured in blue. The
future with closed loops besides some green flow suggests in total three ways
in- and outflux to and from other the user can reuse textiles.
industries. The model is showing us It covers:
two flows: the flow of reusable textiles
17CHAPTER 2
Repair and maintenance, using do it There are large regional differences
yourself or special repairing services. in collection rates – in Germany 75
Re-use as a product, including per cent of discarded garments are
second-hand market, sharing and collected, while in the US and China,
giving or clothing rental services. rates are between 10 per cent and 15
Re-use as material, including 1
per cent. Many countries,
handcraft, takeback or collection particularly in Asia and Africa, have
after use, recycled textile production
no collection infrastructure at all1
and design & up-cycling.
with recycle rates as low as one per
The second, blue flow is a sustainable cent. While in the Netherlands, where
way of recycling non-reusable textiles. It apparel reuse is relatively well
includes pick up and separation, sorting, established compared to many other
industrial processing, chemical or sectors, there are only around 550
mechanical recycling, textile design and stores for second-hand clothing,
production, and links with other compared with more than 9,000
11
industries. regular stores.
Run on renewable energy and use
Figure 2 is not showing everything. safe, renewable resources. This
Connecting the Ethica model to the EMF excludes recycling processes using
1 fossil fuels as an energy source. The
report and the vision of Fashion for
10 input of renewable energy, such as
Good, a circular fashion economy
solar and wind allows the fashion
should:
industry to counter the processes of
wear and degradation. Insofar as
Produce and provide access to an
virgin material input is still needed to
abundance of high-quality, affordable
supplement recycled input for
clothing that enhances customer well-
producing synthetic fibres, it should
being. increasingly come from renewable
Capture the full value of materials and resources. This means using
clothing during and after use. This renewable feedstock for plastic-
means using clothing longer and based fibres and regenerative,
more often (following the green flow sustainable agriculture to produce
in figure 2) and recycling items that any renewable resources. Plastic
can no longer be used (following the microfibres are not released into the
blue flow). This provides a challenge environment and ocean. During the
because only around 25 per cent of whole producing, utilisation and
garments globally are collected for recycling process CO2 emissions are
reuse or recycling through a variety of minimised.
systems.
18CHAPTER 2
There is zero landfill and incineration The legislative system geared
of fashion products and materials, towards circular fashion. Circular
excluding the small fraction that can fashion provides the best business
no longer be recycled. case. Procurement is circular, both in
Regenerate ecosystems by net public authorities and companies.
positive impacts, such as producing Material costs are reduced by using
clean water from production recycled instead of virgin inputs.
processes and not polluting the Production using recycled materials
environment. The economy consists in producing countries is facilitated
of an ‘ecology of things’ inspired by by cross-border take-back systems
strategies such as ecomimicry. and free trade of post-consumer
Be distributive by design, meaning it waste – provided it is used for
creates a thriving ecosystem of recycling.
enterprises from small to large, Labour costs are reduced by
retaining and then circulating enough decreasing or eliminating income
of the value created so that taxes and prosperity increases.
businesses and their employees can Taxes and levies on fashion products
participate fully in the wider and materials reflect their ecological
economy. and social footprint. Minimum
Reflect the true cost (environmental requirements eliminate the most
and societal) of materials and hazardous substances and worst
production processes in the price of performing products from the market
products. and ensure that recycled materials
Use a transparent and traceable streams are clean. Mandatory
transaction system, committing to full material passports and intensified,
and regular public disclosure of all global market surveillance ensure
policies, procedures, progress and transparency throughout the fashion
real-world impacts on workers, and textile value chains. Finally, as a
animals, communities and the result, competition from cheap, low-
8,13
environment. quality products is eliminated.
Be socially fair at a global level. This
means safe and just working Importantly, in a circular economy, the
conditions without exploitation or use of fashion products is only limited by
abuse, fair wages, gender equality, the amount of materials and capital
and inclusivity. available in the economy. This is possible
because the negative impacts of fashion
Ecopreneur adds to this the following consumption in the form of waste and CO2
characteristics of the legal and socio- have been designed out of the system.
economic system in a circular fashion The main question becomes: how can this
economy: circular fashion economy be realised?
19”
The circular fashion system of the
future needs to be inspired by nature.
Take the example of a blossoming
cherry tree; it may look wasteful at first
view, being covered with an abundance
of flowers in spring. However, the
flowers provide birds and insects with
fruit. The soil, microorganisms and
neighbouring plants benefit when the
tree drops the blossom on the ground.
In the end, nothing is wasted.
”
― Enrico Rima, LebenskleidungCHAPTER 3 HOW TO GET THERE: THE ROLE OF ADVOCACY
CHAPTER 3
In light of the growing issues of climate Based on their general transition model,
change and ocean plastics and the DRIFT describes how the fashion
recent interest in the Sustainable industry can transition to a circular
Development Goals (SDG) we should economy through the application of six
first ask, can we create a circular fashion transition pathways of transformative
economy? change through a set of specific
interventions. One of these pathways is
New modelling results by the Stockholm advocacy, which includes lobbying,
Resilience Centre suggest that creating campaigning, commissioning and
a circular economy is still possible. Their publishing research, and other activities
new complex systems dynamic model intended to influence decision making
“Earth-3” combines the SDGs with by policy-makers and financial
global planetary boundaries including institutions. The others are proof of
the climate, biosphere and economy. concepts, pre-competitive collaboration
The outcome shows that we are not and convening, increasing and bundling
doing enough and tougher interventions demand, capacity building, worker and
are needed to tackle increasing community voice and transparency and
10
consumption. Rapid, radical accountability.
transformations are needed not just for
the fashion industry but our entire The importance of advocacy as a
economy. 14 powerful lever of change is severely
underestimated. This stems from
The good news is that we are not too several misconceptions. Firstly, the role
late to start the process and the fashion of governments in realising innovation is
industry is increasingly committed to a heavily underestimated. Contrary to
more sustainable and ethical future for popular belief that major innovations
fashion. Also, the current European can only be realised by business and
Commission (EC) sees the textile sector industry, they can in fact only be
as a potential priority accelerated realised by government interventions. In
activities towards circularity and creates the words of prof. Mariana Mazzucato,
an urgency about planning for the “In fact, there is not a single key
future. technology behind the iPhone that has
15
not been state-funded.” She
This begs the question of how we can advocates for an “entrepreneurial state”
create a circular fashion economy. that leads the country towards a shared
Insights to this question have been common future.
provided by DRIFT (Dutch Research
Institute for Transitions).
22CHAPTER 3
In the words of Jocelyne Bourgon, a Moreover, the influence of small NGOs
former public servant that led some of doing advocacy can be much larger
the most ambitious public sector than the relative size of their
reforms in Canada, recently declared in constituency compared to, for example,
a report from Origame that: BusinessEurope, provided they gather
“Government needs to go where no one good intelligence covering a range of
16 18
else goes.” And in the words of Jason EU member states.
Kibbey from the Sustainable Apparel
Coalition: “Governments have the Without advocacy, legislation will not
possibility to become powerful actors in change. Fortunately, the fashion
the fashion industry; they can ask for a industry increasingly acknowledges the
different future.” 10 importance of the government
regulation, amplified by a regulatory
Secondly, governments are often seen and political focus on the environmental
as weak. Businesses are far more and social issues present within the
interested in acquiring EU innovation fashion industry. Examples of this
subsidies than in EU policy-making, include China’s ban on the import of
even though about 50 per cent of all plastic waste, as well as single-use
new legislation proposals (including plastic bans from the EU, New Delhi and
some with far-reaching implications) Costa Rica, which are already having a
come from Brussels. significant effect on European waste
streams. 6
Finally, the power of lobbying is widely
acknowledged. Professional lobbyists In addition to providing innovation
try to influence legislation, regulation, or subsidies, such as those described by
other government decisions, actions or Mazzucato, the government also holds
policies on behalf of a group or the role of procurer, legislator and
individual who hires them.17 While it has facilitator of collaboration between
come to be expected that major industries and within value chains.
industries, such as tobacco and oil will Legislation is vital in creating a
lobby to block all legislative change that methodology for transparency,
impacts their profitability, introducing price incentives that will
environmental organisations such as the influence consumers to buy
European Environmental Bureau (E.E.B.) circular products and services,
and Friends of the Earth, are powerful and ensure standardisation and
16
lobby organisations as well. harmonisation of a framework that
enables (eco-)innovation and circular
business models. In addition, market
surveillance is crucial to ensure
compliance.
23CHAPTER 3
Circular products/services
Linear products/services
Procurement
Price incentives
Regulation
Linear products/services
Circular products/services
Figure 3. Schematic view of the linear (top) and circular (bottom) economy as a football field
Figure three illustrates the possibilities The desire to create a circular economy
for governments using policy instruments (represented by the green arrows) is
to create a true level playing field. In the pointing in the opposite direction and
current linear economy, the system is much weaker. As a result of this uphill
completely geared to optimisation of the battle, very few companies can
‘free’ market. The market forces, successfully bring products and services
customers and companies (represented to the market.
by the orange arrows) are driven in the
direction of linear products and services.
24CHAPTER 3
In contrast to what traditional Being ‘connected’ can be accelerated by
economists and politicians often state, advocating governments to facilitate
our current economic system is not a collaboration between industries and
‘level playing field’. To help drive within value chains. ‘Internalising’
developments and the transition to a impacts, costs and benefits is in fact the
16
circular economy (bottom), government core task of advocacy. Finally,
policies for procurement, economic advocacy campaigns can encourage
incentives and regulation must all point governments to highlight the ‘value’ of
in the same direction and create a truly materials and products as valuable
‘level playing field’. resources and implement circular public
procurement and waste management in
According to DRIFT, there are four the transition to a circular system, and
shaping principles for a future in which to initiate government campaigns
fashion is a force for good. The future explaining the benefits of going
fashion industry should be; connected, “circular” in general. The next chapter
accountable, where all negative impacts will work all of this out further.
are internalised and materials are valued
in a way they can move from one
product cycle to the next. Advocacy has
an important role to play in all four
shaping principles.
25CHAPTER 4
AN ADVOCACY STRATEGY
FOR EUROPECHAPTER 4
4.1 Creating the right policy framework
According to Ecopreneur, an adequate Through Horizon 2020, the LIFE
set of policy instruments to accelerate Program (with e.g. ECAP, the European
and mainstream circular fashion should Clothing Action Plan), the Cohesion
be based on the following five pillars for Funds and the Executive Agency for
a circular fashion economy: Small and Medium-sized Enterprises
(EASME), the EU is already subsidising
1. Innovation policies – programs with research, technological development
subsidies for research, technological and innovation, and SME support.
development and innovation, SME Projects cover topics such as; textile
support and investment tax reductions. waste, chemical recycling, reducing the
2. Economic incentives – procurement, environmental impact of clothing across
extended producer responsibility (EPR), the supply chain, collaboration, as well 21,22
tax shift and VAT. as measuring and sharing best practice.
3. Regulation – creating a general Advocacy is needed to lobby for budget
regulatory framework that creates for innovation programmes that
harmonised transparency and facilitate technological large-scale pre-
traceability and minimum requirements competitive collaboration and joint
for circular design. implementation of common design and
4. Trade policies – adapting the waste material selection standards, in line with
definition for export to producing the relevant efforts of the Sustainable
countries.19 Apparel Coalition (SAC), Fashion for
5. Voluntary actions – covenants, Good and Zero Discharge of Hazardous
commitments and standards. Chemistry (ZDHC).
These pillars were the outcome of the The EU subsidy schemes should launch
Circular Fashion Policy Lab organised by calls for developing a shared
Ecopreneur and the European Circular technological innovation programme
Economy Stakeholder Platform (ECESP) with a supply chain perspective that
on 24 May 2018 (see Colophon and forges partnerships between innovators
Acknowledgements) and are explored in and frontrunner companies (brands,
more detail in the following pages. retailers, suppliers, manufacturers),
select key innovations and initiate joint,
Pillar 1: Innovation policies large-scale projects in transformative
innovations (e.g. in product traceability,
To a large extent, innovation policies are recovering fibres, green chemistry
10
‘business as usual’. R&D).
27CHAPTER 4
Advocacy is vital to increasing the 2. Preventing microplastics release.
budgets for existing European With plastics forming 63 per cent of the
Commission supported programmes materials used for apparel, the release
such as: of plastic microfibres from washing
machines into the environment and
1. Textile recycling. The difficulties of oceans is a growing issue. Only partial
recycling used apparel, preferably solutions, such as ball filters and laundry
23,24,25
without downgrading of the raw bags, have been identified.
materials, is probably the major hurdle Microfibre waste pollution has also been
for creating a circular textiles economy. recognised by five European industry
The current status of recycling within associations representing the global
the textile industry compares to that of value chain of garments and their
22
the glass industry 20 years ago. associated maintenance. They have
Recycling became a success only once signed a voluntary Cross Industry
purity issues for collected glass were Agreement (CIA) to collaborate for the
resolved. Problems with textile recycling prevention of microplastic release into
include the widespread use of the aquatic environment during the
26
biodegradable (natural or man-made) washing of synthetic textiles. Similarly,
and synthetic fibre (60-70 per cent of all there is a Microfibre Consortium with
textiles groups) blends. Blends are used several live research projects (but only a
to achieve optimal end-use properties limited number of stakeholders behind
27
but complicate recycling. After it). An EU funded project should aim
shredding, these blended yarns, fabrics for real solutions to prevent the
and garments can only be used for microplastics release from a systems
downcycling as insulating materials or and life cycle perspective. Research
floor protection for painters. Separating topics should include; a switch from
natural and synthetic fibres leads mainly staple to filament yarns (like silk) which
to irreversible damage to the fibres, have no open ends and are therefore far
rendering them unusable for further less prone to breaking; the development
textile processing. Furthermore, the of synthetic fabrics that don’t shed
recycling industry is faced with coated microfibres; fibres that are biobased,
fabrics, deep colours and finally, the biodegradable and sustainable at the
recycling costs. Government support for same time; microfibre filtering methods;
the development and upscaling of new and methods to clean apparel without
technologies for textile recycling into water.
quality products is therefore crucial
(also see pillar two).
28CHAPTER 4
3. Fashion & textile innovations. Circular design of textiles and
Innovations with the potential to garments for recycling, durability,
reshape the industry 28,29 such as those reparability and waste prevention.31
identified by Fashion for Good and For instance, apparel made from
Ecopreneur member MVO Nederland either pure synthetic or from pure
(CSR Netherlands). natural fibres instead of blends can
be readily recycled into new textiles.
In addition and connected to the
The first steps towards circular
aforementioned, EU and member states
design have already been taken.
government support is needed for:
Recycled bottles are already being
The development and used to produce polyester or
implementation of new artificial polyolefins fibres. Dutch company
intelligence technologies that could Schijvens is the first company to
help prevent apparel waste by produce 100 per cent recycled
predicting future trends in fashion corporate clothing made of 50 per
with forecasting errors reduced by up cent worn textiles and 50 used
32
to 50 per cent.
30 plastic bottles. Circle Economy is
Enabling the sharing economy, piloting a Circular Fashion Tool in a
servitization (the changing face of consortium with three brand and
service and manufacturing in retailer partners.33 Dutch company
fashion), and proof on concepts of UPSET is using a new technology
new, performance-based business capable of transforming 100 per cent
models even in the absence of new cotton waste into 100 per cent
technologies. recycled fibres, without adding
Overcoming the demand reduction resource-intensive virgin cotton.34,35
challenge. With waste prevention and UPSET is a partner of the consortium
recycling still in development, some Clothes the Circle, which also
form of ‘slow fashion’ is needed to includes MVO Nederland, and is
reduce the negative impacts of a developing several circular textiles
growing population. But, how can value chains as part of a cooperation
brands become sustainable without with India and Sri Lanka.36 The
compromising their bottom line? Are Austrian company Lenzing has
there other models that de-link developed a technology which
revenue from mass consumption involves upcycling a substantial
besides servitisation? How will proportion of cotton scraps to
apparel remain accessible to low- produce new Lyocell fibres to make
31,37
income segments? fabrics and garments.
29CHAPTER 4
Finally, trials at Chemnitz University The system uses chemical and heat
show that socks made from natural recovery for the production of
fibres have a higher abrasion viscose and Lyocell fibres.38 To make
resistance than conventional socks sure the circular economy objective
using nylon instead. All of these new of recycling is in line with climate
technologies are in urgent need of objectives, the use of EU subsidies
further development, implementation should be restricted to processes
and upscaling. with net positive CO2 emissions and
Calculating the external impacts be accompanied by research on
along multiple lifecycles for all recycling using renewable energy. In
fashion products and developing a the long term, subsidies for recycling
user-friendly tool to do this as part of processes based on fossil fuel energy
the design process, ideally using the should be phased out.
Sustainable Apparel Coalition’s Higg Facilitating the replacement of
Index (see pillar two). hazardous chemicals by safer
Calculating financial incentives based alternatives.
on external impacts, i.e. create Communicating the safety and risks
standard calculation schemes for of chemicals in textiles and fashion
levies, fees, taxes or premiums for a and debunking any existing myths.
specific product or service based on Circular fashion policy research,
its external impact (needed for pillar including planetary boundaries and
two). For impacts that cannot be science-based targets, which is often
quantified by a life cycle assessment a forgotten topic that is needed to
or similar method, such as provide insight into the economic and
microplastics release, levies triggered social aspects and consequences of
by political action should accelerate the transition to a circular textiles and
change, such as the €0.15 plastic fashion industry between now and
bag levy. 2050. For example, the effect of
Developing chemical recycling on clothing production from secondary
renewable energy. Chemical materials close to end customers or
recycling has the attractive potential replacing cotton by a new type of
to transform old clothes into environmentally-friendly fibre may
secondary raw materials, but the result in job losses for economies
processes used are generally energy reliant on manufacturing, like
intensive. Practical examples to Bangladesh.
reduce energy use in textile
production include the closed-loop
production system used by Lenzing.
30CHAPTER 4
The revolutionary transition to a Finally, the support should extend to
circular fashion economy requires EU-wide knowledge-building by
accompanying measures to avoid connecting existing networks such as
social conflicts, poverty and civil unrest Cradle-to-Cradle and the Dutch
in producing countries. 31 Circular Textile Valley and facilitating
Extending existing support (e.g. by collaboration between industries and
39
the Europe Enterprise Network and within value chains (see Chapter
building on the European Resource three).
Investment tax reductions for sorting,
Efficiency Knowledge Centre - EREK)
purifying and recycling installations, a
for SMEs in the textiles and fashion
common aspect of existing
industry (including small brands,
innovation policies, but then geared
design schools and retailers) with
to circular change.
national and regional support in the
Training programmes for those
form of awareness campaigns,
providing finance for the fashion
communicating best practices and
industry, giving them the necessary
successful new business models,
background and means to evaluate
harmonised circular design training,
the risk and opportunities of circular
tools and communities of practice.
business models. This should enable
Circular fashion hubs with regional
the finance sector to use natural
networks, knowledge, capacities and
capital approaches, shift financial
learning processes focusing on
incentives and support the
circularity and innovation should be
institutionalisation of valuing natural
set up in each EU member state. The
capital. Similarly to how (part of) the
Circularity Check launched by
finance sector is currently
Ecopreneur, MVO Nederland and
accelerating the energy transition by
WeSustain can be used by companies
taking the CO2 footprint of
for self-assessment, as input for 10
investments into account.
internal discussions about their
The acceleration of social enterprises,
circularity strategy and to measure
for instance those that are active in
the completeness of their circular
40 the reuse and remanufacturing
strategy. The circular fashion hubs
industry.
should also facilitate access to
National programmes for circular
various sorts of funding for SMEs,
fashion and textiles separate to the
including start-ups, with schemes
EU. As it stands, EU Programmes only
that are funded or backed up by EU
receive funding 14 per cent of the
financial programmes, venture capital
time due to poor proposal selection,
and loans.
31CHAPTER 4
long lead times and bureaucratic red There may be some opposition to
tape. National schemes can alleviate subsidies from a limited number of
some of these shortcomings sustainable companies claiming they
through SME vouchers with simple distract from other more important
access: fast, low threshold, clear market-driven activities. Also, the
criteria, a guaranteed voucher if history of subsidies has in many cases
these criteria are met, minimum red been perverse, resulting in a negative
16
tape and immediate closure of the effect or perpetuating the status quo.
online application form if the budget Ecopreneur however supports the
is exhausted. importance of well- targeted subsidies
supporting innovation.
Circular textiles and fashion innovation
Pillar 2: Economic incentives
policies are needed for two reasons: to Far more important than lobbying for
accelerate the new regime and to subsidies, is lobbying for the
destabilise the old one. Lack of access implementation of economic incentives.
to funding is a major bottleneck for Without these incentives to create a
innovation and growth for many SMEs, strong demand for circular business
including start-ups and sustainable models, technologies will not be
companies. Government subsidies are implemented (despite the subsidies). To
also needed to engage the potential attract consumers, circular fashion
‘losers’ of a circular economy. ‘Losers’ products must have the same properties
in this case could refer to traditional and care conditions as their linear
companies with a strong dependence counterparts and ideally (but not
on linear business models and low necessarily) be available at a lower price.
innovation potential, lagging behind If these targets are achieved, no
campaigning for new products is
on resource efficiency. Industrial
necessary. However, without a driving
associations and confederations are
force for this development, this process
lobbying for subsidies because the
will take decades - or may never
majority of companies they represent,
happen. In the absence of market
whether profit-driven multinationals or demand and a clear business case,
conservative SMEs, need years to company boards will continue to favour
innovate. And yet, if the markets were linear business models despite their
demanding circular products and circular ambitions.
services, no subsidies would be
needed at all.
32CHAPTER 4
Therefore, industry incentives to This will stimulate job creation and
develop and implement circular incentivise the industry to value
business models are necessary to drive materials and create clean, circular
10
the transition, similar to how the price cycles. In concrete terms, we are
on CO2 emissions is driving the talking about new measures to boost
transition to cleaner energy sources. the demand for circular products and
Economists hail CO2 pricing as the most services through procurement,
effective, efficient and honest way to extended producer responsibility (EPR),
motivate industry to move ahead with VAT and a long-term tax shift from
41
the switch to renewable energy. labour to resources. Like innovation
Ecopreneur member MVO Nederland, policies, economic incentives are
representing over 2000 sustainable needed for two reasons: to accelerate
companies, stresses the need for carbon the new regime and to destabilise the
42
pricing and true pricing as well. By old one. From the perspective of
setting a clear long-term framework, the sustainable companies, such as those in
government creates the conditions in the membership of Ecopreneur, the lack
which companies can plan a long-term of demand for circular products and
investment strategy. The same should services at current prices is the number
be done for pricing resource- one hurdle for implementing circular
inefficiency. To the fashion industry’s business models. While some circular
advantage, objects and materials can be products and services can already
traced where carbon cannot. On the compete on price, incentives are needed
other hand, the impacts of waste on the to remove this fundamental barrier by
environment are much more diverse and making circular products and services
far harder to measure than CO2 cheaper than their linear counterparts.
emissions. For the rest, both policies are In addition, these incentives are needed
a classic example of ‘mechanism design’ to destabilise the old regime by making
to motivate specific behaviour by linear products and services more
setting the framework conditions expensive than circular ones through
43
without specifying how to meet them. the inclusion of their externalities.
Brands, retailers, suppliers and In the following section we further
manufacturers should seek to influence explore the four types of economic
governments in buying and sourcing incentives.
countries by advocating for tax shifts
from labour to capital, natural resource
use and the production of externalities.
33CHAPTER 4
Pillar 2.1: Circular Procurement This not only prevents the annual
incineration of old uniforms, but also
Circular procurement can accelerate the save tens of millions of euros; the
45,46
transition by creating demand for business case is already there.
circular products and services, thereby
helping to create economies of scale. A continued absence of commitment,
Making green public procurement (GPP) visible from a lack of GPP by the
– a tool that favours products, services European Commission, Parliament and
and works that respect the environment member states, is a risk to a circular
– mandatory is not enough. Circular fashion future. It becomes clear that in
procurement sets out an approach to order to overcome the complex
GPP which pays special attention to challenges associated with generating
what the European Commission states revenues, a basic level of political
as, "the purchase of works, goods or commitment is needed. Finally, GPP and
services that seek to contribute to the circular procurement would be greatly
closed energy and material loops within facilitated by a reform and simplification
supply chains, whilst minimising, and in of the EU procurement rules.
the best case avoiding, negative
environmental impacts and waste Pillar 2.2: Extended Producer
44
creation across the whole life-cycle". Responsibility (EPR)
Supply chains for the fashion industry
should also be simplified. The Green Extended Producer Responsibility (EPR)
Deal Circular Procurement, a deal led by is a strategy to add all of the
Ecopreneur member MVO Nederland environmental costs associated with a
and several other public and private particular product’s life cycle to the
47
organisations from the Netherlands, market price of that product. These
involves a € 100 million commitment of costs will have to be paid by the
circular investments from companies, producer of the end product, typically
municipalities and the government to the brand owner or the company that
pilot circular procurement, facilitating determines the specifications of the
implementation and the removal of garment or footwear, either by
obstacles in regulation. Flanders, Paris producing it themselves or by
and other regions are already following procurement on price and
this example. This example highlights specifications. While in need of further
how circular procurement can boost the improvements, EPR is a proven policy in
demand for circular products and sectors such as packaging, electronics,
services. The Netherlands Ministry of tyres, cars and batteries.48,49
Defence and police force have switched
to circular procurement of uniforms.
34CHAPTER 4
Existing EPR schemes work because This ‘bonus’ for companies working on
from all partners in the value cycle, the increasing sustainability throughout the
producer has a key position to change product life cycle is important for the
the product design to minimise waste. transition to a circular fashion system.
For the fashion industry, high EPR fees Companies can provide their own
on garments lacking circular design and takeback system or contribute to
with high costs for waste management collective recycling, thus ensuring that
will reflect their true price and increase pioneering initiatives are not stifled by
the demand for circular alternatives. An mandatory participation in a collective
important aspect of EPR schemes is scheme. In addition, EPR also has the
that they are private schemes backed by potential to generate private funding for
the government, in contrast to taxation, activities supporting the transition, such
which is a government scheme. as research or circular textile covenants.
Provided good governance, this For ECO-TLC 70 per cent of the budget
element of self-control allows industry goes to sorting, 20 per cent to
to design tailor-made schemes fostering communication, and 10 per cent to
51
innovation. research and innovation. For these
reasons, EU recyclers’ and waste
France is the only country in the world management federations are strongly
implementing an extended producer advocating to step up the EU EPR
responsibility (EPR) policy for end-of- policies, even if some individual SME
use clothing, linen and shoes.57 The recycling companies oppose it. In
French EPR organisation ECO-TLC has addition, by 2025 all EU member states
contributed to a threefold increase in are required to have separate collection
the collection and recycling rates of for textiles, providing a secure input
post-consumer textiles (clothes, linens stream. 52
and footwear) since 2006. In addition,
the material recovery rate of post- Despite these achievements and
consumer textiles can reach 90 per opportunities, there are several issues
cent, of which 50 per cent can be connected to EPR for the fashion and
directly reused. ECO-TLC has created textiles industry:
financial incentives for ecodesign
Sorting and recycling of textiles
specifically on using recycled content,
including a 50 per cent discount for any suffer from system cost and
product containing a minimum of 15 inefficiency. For instance, a technical
per cent recycled fibres sourced from solution is needed for cotton-
50 51
post-consumer textiles. polyester mixes. The current market
for recyclable textiles and clothing
are limited.
35CHAPTER 4
Advanced recycling technology is Public communication needs to be
required to replace or complement improved. Alternative schemes in
57
inefficient mechanical recycling. other countries have produced
Without this, increasing collection will better results. Recommendations to
lead to bankruptcy of the EPR the French government to address
organisation. The waste will be these challenges include an option to
eliminated because it accumulates either preserve the current structure
51
and cannot be recycled. In addition, of the EPR sector or to totally
54
ensuring clean secondary raw redesign its governance.
materials is important for the industry WRAP concludes that the fee income
to make the switch to the sourcing of collected as part of an EPR scheme
recycled materials (as described in such as ECO-TLC could be used in a
pillar one). Until solutions for textile range of ways to help the UK secure
sorting and recycling are found, EPR and develop textile waste prevention
fees to stimulate recycling would and landfill diversion. However, the
have an adverse effect and only lead fees might look quite different in the
to the piling up of textile waste. For
UK due to political priorities and a
this reason, Euratex, the European
different starting position, with
Apparel and Textile Confederation
considerable collection achieved
representing a large fraction of 55
European textile producers, is critical without EPR.
53
of EPR. The R&D investments The market for ‘reuse’, the most
needed to improve recycling (in preferred option for textiles recovery,
France) are estimated at € 20 million has been shrinking in the last few
54
over a period of three years. years. Its main market is in Africa,
An evaluation of the ECO-TLC system and a growing number of African
by the French General Council of the countries are banning the import of
Environment and Sustainable used textiles to encourage a
Development (CGEDD) concludes competitive textiles industry locally
56
collection rates are growing steadily and internationally. And in France
but below the targets set. Sorting there has been an increase in
51
outlets respect the order of priority of recycling at the expense of reuse.
the treatment methods but largely The quality of new clothing is
depend on the acceptance of the becoming lower and the export of
57
countries receiving the waste to be clothing is becoming more difficult.
reused, and even though the costs Discovering new markets for ‘reuse’
remain moderate, the cost and increasing second- hand clothing
components remain unclear. demand in Europe are challenging
but critical.
36CHAPTER 4
Companies investing in the circular On the other hand, the only existing
economy are under the impression EPR example for the fashion industry,
that they pay several times for the French ECO-TLC, struggles with
everything. Cost calculation schemes fundamental issues which need to be
are unclear, and they would like solved before a roll-out in other
positive incentives rewarding their member states becomes an option. The
efforts and achievements. French governance of textile waste may
Verification poses operational issues be totally redesigned. Ecopreneur,
as well and raises the questions of therefore, recommends the fashion
how the system verifies recycled industry works towards realising a
content or ecodesign. It may be strong EPR system for textiles by 2030
necessary to audit a company after it by building on all available lessons and
files for a 50 per cent discount on the recommendations from other sectors
fee, which raises further questions and from France (see also Chapter 4.2).
(amplified by e- commerce) as to how
to trace and enforce these national Pillar 2.3: Tax shift from labour
EPR schemes on the international
market. to resource use and
environmental impact
EPR offers large opportunities for textile
waste reduction by focusing on the most The third major economic incentive to
promising streams and on good mainstream circular fashion is a tax shift
practices in other sectors. This presents from labour to resource use and
great potential to identify new markets environmental impact, as taxes
for ‘reuse’ and to improve the textiles influence purchase and investment
waste sector. Such an EPR policy also decisions by consumers and businesses.
could drive societies to financially Currently, tax revenue is raised largely
support innovation and research to on employment. In OECD countries,
provide feasible solutions for fashion labour taxes account for 52.1 per cent
of total public revenue raised, while
producers to adopt ecodesign and
57 green taxes account for only 5.3 per
design for recycling practices.
cent. There is some variation across
Moreover, where ecodesign regulation
continents; African, Asian, Latin
can effectively raise the bar in low-
American and Caribbean countries may
performing parts of the market (see rely more on taxes on goods and
below under pillar three), EPR has the services. Nevertheless, labour taxes
unique potential to foster innovation in provide a significant share of revenues
circular design for all companies by in all regions and substantially more
applying eco-modulation of fees to give than green taxes. 58
a positive economic incentive.
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