Circular: A vision for a new textile economy

In 2020, Mehathab Joharullah, Production Manager at SupplyCompass was part of the first cohort of the Ellen MacArthur Foundation’s From Linear to Circular program. With expansive experience in sustainable production, Mehathab shares her musings in the circular economy space and what it means for the future.

What makes that one-dollar T-shirt so inexpensive is a combination of factors including high levels of mechanization, modern production techniques and the affordable labour from many garment exporting countries. But does this dollar truly cover all the costs?

Fast fashion comes at a cost to several lesser-known stake-holders including labour and most importantly the environment. While focusing on quick turn-around times and minimizing costs, participants in the supply chain often find it easy to turn a blind eye towards practices such as high consumption of water, high chemical runoff, high use of pesticides, higher carbon footprint, labour exploitation etc. These social and environmental costs of fast fashion are creeping normality that is slowly beginning to gain higher visibility nowadays. Also, given the low costs, the garments are rarely used till the end of its reasonable usable life and often litter landfills almost at the same pace at which it was produced. This makes the fashion industry one of the top contributors to environmental pollution.

What is a circular economy? How does material flow in a circular economy?

The traditional economy that grew in the aftermath of the industrial revolution has given rise to a linear model of material management where value is generated by manufacturing processes that convert virgin raw materials into finished goods which more often than not end up in landfills after the user no longer has a need for them. This is true of inexpensive mass-manufactured products. This has a high environmental footprint in every phase of the product life cycle and this footprint is most amplified in the manufacturing and discarding stage.

In contrast, the paradigm of circular economy proposes a system whose goal is to create value with the least environmental footprint and to reduce the requirement of virgin materials in production. Most definitions of circular economy focus on two major approaches:

1. The raw materials approach which encourages reduce, reuse, recycle and upcycle
2. The systems change approach which encompasses concepts of Systems thinking, Closed-loop and focus on renewable energy.

Modern proponents go a step further in defining a system that is not just about least harm to the environment but about restoring the environment through economic practices. One such model views the circular economy as one where materials circulate in two separate cycles: the bio cycle of organic materials and the techno cycle of technical or synthetic materials. The goal is to keep materials in the highest possible value while they are being used, keep them in use for the longest possible time and one in which products and materials are designed to be durable as well as easily reusable and recyclable. At the inevitable end of the usable life, materials in the bio cycle are expected to go back to create a richer organic system while the materials in the techno cycle are expected to be fed back into the manufacturing process to be remade into usable products.

Kantamanto market, Ghanaa. Photo by Dead White Man’s Clothes

The Circular Economy of Fashion

The textile industry today works in a linear fashion starting from fibre production (natural and man-made), clothing production, use and finally often ending in land-fills. This has serious environmental impacts in every phase. The industry today is characterised by massive underutilisation of clothing and high environmental footprints in terms of use of raw materials and energy as well as pollution at every stage. At the current pace, the fashion industry would prove to be one of the biggest contributors to the global carbon footprint.

Solutions to the environmental impact of fast fashion, would involve the creation of new business models that increase clothing use, safe and renewable inputs and solutions to turn used clothes into new ones. This is the idea behind the concept of a circular economy where the industry reduces its need for virgin materials and increases reuse and recycling.

The concept of a circular textile economy envisions a system characterized by

• a move away from fast fashion and towards production and access to high quality individualised clothing that is also affordable
• design of materials and processes that allow maximum utilization of the full value of the clothing during and after use
• use of renewable resources for raw materials and renewable energy for processing
• a pricing system for clothing that reflects the true cost of production including the environmental and societal costs
• a restorative and regenerative system that helps rebuild natural capital
• a system of distributive and inclusive growth where the benefits are enjoyed by all employees, businesses and the society as a whole

Business Opportunities in a Circular Textile Economy

The key goal of the new business models in the circular economy would be to keep clothes in use and to ensure clothes are perceived as durable and not disposable. Some business models that have proven successful in the fashion industry include subscription services, clothing rental, and peer-to-peer sharing.

Examples of new business models that are already gaining traction in the industry include MUD Jeans offering high-quality denim, Vigga offering a subscription for babywear and Rent the Runway targeting working women and offering an ‘unlimited’ subscription service.

Making durability more attractive

One of the key opportunities in the circular economy is to design long-lasting, high quality, functional and aesthetic garments that would encourage consumers to view textiles as durables rather than disposables. This ensures that the materials are kept at their highest value and for a longer time in use. If proven a successful trend this would signal a significant shift from fast fashion and a move towards a circular economy. As a business opportunity, early proponents would have a first-mover advantage.

Image by Thrift+ and Farfetch

Making resale attractive to a wider range of customers

When the quality and durability of clothing increases it allows for it to be in use for a very long time. This presents the opportunity of resale. In fact, one of the markets that are beginning to gain popularity is resale in the luxury segment. This evidence reinforces our assumption because luxury products are known to be durable and of high quality. That consumers acknowledge the high value of such products by showing interest means that in a circular economy to there would be a huge potential for resale because we expect all merchandise (not just luxury) to be of high quality and durability.

Boosting Clothing Care

Highly durable clothing that is also often resold and/or reused would require services that make the clothing suitable and in good shape for every subsequent use. Also, given the focus on least environmental footprint, clothing care practices should evolve to themselves have the least pollution and optimal utilization of energy and resources. Both of these factors present opportunities for innovation and new business models in the clothing care segment.

A shift to a circular economy would mean the creation of many more such business opportunities and these opportunities would allow for value creation in a more holistic sense than ever before.