In the fashion industry, the concept of circularity is a trendy mirage

Published: May 26, 2023
Author: Fashion Value Chain

-By Ankita Dutta.

The H&M Group recently announced its ambitious plan to double its sales while halving its environmental footprint by embracing circularity. This sustainability strategy focuses on reusing and recycling old clothes to create new ones while implementing business models such as rental, resale, and repair. H&M is not alone in this commitment – other major players in the fashion industry, including Nike, Adidas, Gucci, Shein, Crocs, and Timberland, have also made circularity a key pillar of their sustainability commitments. However, while circularity may seem like a promising solution on paper, the reality is that less than one percent of old clothes are currently recycled to make new ones, due to various obstacles that hinder its implementation.

One of the core challenges of circularity is the misaligned goals and incentives that govern the fashion industry. Many companies are compelled to prioritize growth and earnings over reducing carbon emissions or water intensity, as they are beholden to rules that prioritize profit-making. Since there is no standardized measure for circularity, companies may be tempted to promote ephemeral gains and make empty promises.

Another significant obstacle is the technological and economic gaps that currently hinder widespread adoption of circularity. While the concept of an infinite loop where products are continuously upcycled into new garments is appealing, each loop involves energy consumption and quality degradation. In addition, recycling for blended fabrics is not yet proven at scale, and building sufficient new recycling infrastructure will necessitate trillions of dollars in investment.

In an op-ed for Business of Fashion, experts note that circularity is a fashionable fantasy in the fashion industry. While this approach offers a way for companies to maintain their license to operate while continuing to feed hyper-consumption, it falls short in terms of its feasibility. The Ellen MacArthur Foundation and McKinsey & Company have produced studies that tout circularity as a multi-trillion-dollar opportunity. Still, until some of the core obstacles can be overcome, these gains will remain mostly conceptual.

In conclusion, while circularity may be a trendy buzzword in the fashion industry, it is not as simple as it sounds. The primary challenges of misaligned goals and incentives, technological and economic gaps must be addressed before circularity can be a reality. The fashion industry must find ways to align its goals with sustainability and overcome technological and economic problems. As long as these obstacles remain, circularity will remain a fashionable fantasy, providing an alluring vision of the future
without much substance.

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