Embracing ‘circular business model’ in textile and apparel sector

As we strive to maintain a healthy planet, we need to revisit our business models and policies attached. Hence, the concept of ‘circular economy’ is gaining momentum. As you may be aware a circular economy is on everyone’s mind when we talk about green recovery.

It is mainly adapted to benefit businesses, society while safeguarding mother nature is its priority. It is the alternative and contrary to the old-school linear model concept: Take, Make, and then Waste/Dispose.

A circular economy contributes to several development objectives leading to climate change mitigation coupled with, new opportunities for trade, job creation, reduce the costs of waste disposal and many more. Researchers estimated that reusing, repurposing, or recycling could reduce 33% of the carbon dioxide emissions embedded in products. However, “circular economy” as a concept can be best exercised in a particular industry, which is – textile and apparel.

The global textiles market is estimated at around USD 1 trillion, and the clothing industry employs more than 300 million people along the value chain (UNCTAD). Unfortunately, this BIG industry is one of the most polluting industries in the world where Carbon Di-Oxide emissions is being increased every year, around 1.2 billion tons[1] and account for around 20 percent[2] of global industrial water pollution.

So, it is quite understandable that this industry is not a good example of how to make good use of circular economy approaches. Additionally, this industry is currently being dominated by the fast fashion model which is characterized by overproduction and overconsumption of low-cost clothes, often produced under poor working conditions.

Against these backdrops, companies and brands are increasingly looking to circular fashion models, including resale, rental and repair, to mitigate these impacts.

In technical terms, the concept of circular economy is built on the foundation of five pillars, namely, design for reuse, resilience through diversity, energy use from infinite sources, system thinking and bio-based basis.

Based on these, circular economy-led solutions, aiming to keep fiber and material inputs in the productive chain, have become a key approach to improve the eco-performance of textile and apparel supply chains.

Moreover, by designing clothes ensuring durability, recycling old garments, introducing bio-based materials and reconstructing business models, the textile and apparel industry can radically curtail its resource input as well as waste output in contrast with the trendy ‘linear’ model in which 87 percent of textile fiber input gets burnt or landfilled, representing a lost economic opportunity of $100 billion globally every year.

While the potential positive environmental impact to be driven by the circular economy model is enormous, industry insiders are also considering potential social impacts that may emerge from a mainstream shift to circular fashion.

Different platforms are proposing to design circular fashion business models to be inclusive and fair. Because this model requires new systems for collecting, sorting, recovering, and re-purposing textiles and fibers, demanding new infrastructure, skills, as well as social protection and professionalization of informal workers.

If environmental and labor market policies do not complement each other, or re-shoring becomes a practice, millions of textile and garment workers will lose their jobs without any alternative employment option.

Hence, it is imperative to provide a set of guiding questions for companies and organizations to practically think through the societal impacts of their shifts to circular fashion models, aiming to avoid and mitigate negative social impacts and more consciously target positive social impacts.

Interestingly, the ongoing pandemic opened up avenues to explore and instrumentalize the circular model for the textile and apparel industry. Because, this COVID-19 pandemic has exposed decades-old risks, while creating new ones, in the global textile industry relating to certain fragilities like disrupted supply chain, capital crunch, geopolitical tensions, and many more.

The pandemic has made us aware of the fragilities of our current economic system and of just how vulnerable we are to people, especially workers and their communities. As we are resorting to “Build Back Better” by emerging from the crisis with a more coordinated, resilient, and sustainable means, textile and apparel industries are planning to integrate circularity into their recovery plans.

However, even before the COVID-19 outbreak, circular economic models had been gaining momentum in the fashion industry, both to combat its enormous environmental impact and to respond to untapped economic opportunities.

However, the circular economy can potentially provide solutions to mitigate the risks associated, but the transition will need to involve new governance mechanisms and incorporate pro-people transition principles to ensure transparency. Also, key stakeholders including global fashion brands, multilateral bodies, and financial institutions need to be vigilant to counteract the rise in inequality caused by these shocks.

Furthermore, CSOs must also continue holding dialogues with governments and companies to ensure job security and to control environmental pollutions. The good news is that consumers, businesses, and regulators search for ways to make textiles and apparel into a more sustainable, pro-labor and less polluting sector.

Their growing interest in circular economy approaches in the textile and apparel industry calls for greater reuse and repair business models to be mainstreamed and made easily accessible to consumers.

So, the work to ‘build back better’ across circular textile value chains needs to start with substantial investments in upstream capacities to navigate the circular transition. It is worth mentioning that, in April 2021, over 30 international fashion brands, manufacturers and recyclers started collaborating in a new initiative to capture and reuse the textile waste in Bangladesh.

This gives a strong signal that by taking a collaborative approach, we can build a more resilient industry and respond to the calls from stakeholders through safer inputs that increase the health and safety of workers and production communities, enabling creative and dignified employment, and building inclusive models adapted to the needs of a diverse consumer base.