Circular fashion: Brands can’t make the leap alone, according to new Circularity Gap Report

Circle Economy Foundation’s Circularity Gap Report 2024, launched this week, wastes no time in setting out its mission: after six years of measuring the state of global circularity, it’s time to shift from theory to action. This comes in response to the finding that despite the volume of debates, discussions and policies on the circular economy nearly tripling over the last five years, global circularity has fallen year on year—from 9.1percent in 2018 to 7.2 percent in 2023.

With overhauls to policy, finance and the labour market posited as key levers for change, the report lays out key actions for governments and financial institutions across key world sectors, from manufactured goods to construction and mobility.

Reforming fast fashion can catalyse a circular manufacturing sector

Manufacturing is at the core of the global economy; we need it to fashion the clothes on our backs, produce the cars we drive and make the appliances we use day-to-day. Its environmental impact, however, is far from negligible—the fashion industry alone is the world’s 6th most polluting, accounting for 4% of global emissions, with the average EU citizen’s textile consumption racking up a carbon footprint of around 270 kilogrammes in 2020. With fast fashion—and even luxury brands—becoming increasingly trend-driven, production and consumption are spiralling: according to McKinsey, the number of garments purchased per person increased by 60 percent between 2000 and 2014, for example.

On the whole, we’re stuck in a distinctly linear cycle of buying, wearing and replacing garments. Now, a French study has shown that consumers largely toss cast-off clothing because they’re bored of it or feel it no longer suits them: items simply being worn out is only a factor in around one-third of cases (En Mode Climat, 2022). And despite growing environmental concerns, the fast fashion industry’s hold on the global market is set to expand, with estimates suggesting that it could reach a value of US$185 billion by 2027—a sizable jump from US$106 billion in 2022.

The Circularity Gap Report 2024 imagines a different future for fashion: one where flimsy, trend-driven garments are replaced by durable, easy-to-mend and recyclable clothing, and businesses commonly offer affordable services like repair, rental and second-hand sales, with take-back schemes making it easy to give clothing items a second life. This future also sees a new consumer ethos: people swap, share and upcycle their clothing through community-led initiatives that make living a ‘circular’ lifestyle as convenient as possible. Donation bins are used as a last resort, and clothes are never thrown into general rubbish containers.

This may sound utopian to many. But while we have a way to go, initiatives of this ilk are already cropping up worldwide: from Patagonia’s famed ‘Worn Wear’ programme to the City of Amsterdam’s 40 percent discount on clothing repairs for lower-income residents. Brands are increasingly championing sustainable materials and processes, although greenwashing still runs rampant. What’s more, the technology needed for a circular industry—think fibre-to-fibre recycling, for example—is ready to go. In the end, however, real progress is muddied by an inability to scale: going circular in a linear world is next to impossible, and without the necessary logistics, infrastructure and mindset firmly entrenched across disparate factions—from policymakers and financiers to consumers—the transition can’t happen at the speed needed to meaningfully address ecological breakdown. A surge in investment from key industry players and stricter regulatory support are needed, or one-off efforts from brands may take place in a vacuum and fail to set the bar for those falling short.

High-income countries must scale down overproduction and consumption

So where do we start? It’s time to ‘walk the talk’, the report urges: we need to see concerted action from governments and financial institutions if a circular fashion industry is to progress beyond the realm of ‘utopian’. Higher-income countries face a unique set of challenges along this path. Their residents are high consumers: the average American, for example, purchased 68 new clothing items a year in 2018, while Europeans purchased an average of 42 new garments per person in 2023. What’s more, these goods are largely produced elsewhere, offshoring impacts such as severe pollution from the use of hazardous chemicals. Lower-income countries often bear the brunt of the end-of-life stage, too: millions of tonnes of cast-off clothing are shipped around the world yearly, ending up in markets for resale, or as waste in the informal landfills or shores of less affluent countries, largely in Africa (46 percent) and Asia (41 percent) (EEA, 2023).

With this in mind, shifting consumer perspectives and setting new standards for sustainable production can’t come from brands alone. Radical collaboration is needed across public and private sectors. To this end, the report recommends:

Strengthening Extended Producer Responsibility (EPR) schemes. These aim to shift the burden of responsibility for old or worn-out products upstream, incentivising producers to design lasting, easy-to-recycle products. Although EPRs are gaining popularity—the Netherlands rolled out a scheme for textiles mid-2023, for example—current iterations are failing to meaningfully extend product lifetimes or put a dent in proliferating textile waste. There’s a chance to do better: by tweaking current regulations, legislators can ensure EPRs’ full potential is reached. This could mean explicitly centring schemes on the reduction of textile consumption and lifecycle expansion, rolling out stricter sorting criteria and international trade regulations to prevent ‘waste colonialism’ and using funds collected through the EPR to scale fibre-to-fibre recycling and fibre-based sorting infrastructure.

Banning the destruction of unsold goods. Fashion’s dirty little (not-so) secret: the destruction of unsold items. From luxury labels like Burberry and Coach to fast fashion giants like H&M and Urban Outfitters, the burning, shredding and landfilling of brand-new garments is all too common. Cheaper and easier than recycling, companies destroy their own leftover stock in an attempt to protect brand value—or simply because they’ve produced too much to sell or store. The EU cracked down on this practice at the tail end of 2023, with a ban set to go into effect for big businesses by 2025. While this is a step in the right direction, there are still some kinks to iron out: ensuring, namely, that the alternative to destruction isn’t mere downcycling (into insulation, for example) or shipping off excess stock to be dealt with in other corners of the world.

Banning the advertising of high-impact goods—including fast fashion. An ad-free world seems unthinkable: we’re bombarded with images, from models and makeup to fast food and electronics, nearly everywhere we go. The original ad ban—rolled out for cigarettes several decades ago—has had promising results, sparking a broader discussion about banning ads for products like junk food and alcohol. As of yet, talk on bans for fast fashion advertising is minimal, aside from recommendations from the University of Amsterdam and the Amsterdam University of Applied Sciences to the Dutch government on the matter. While so-called ‘fossil advertising’ may encounter hurdles—with the legality of these measures recently called into question—wealthier nations may explore how ad bans can be equitably rolled out to reshape their residents’ consumption behaviour.

Requiring an environmental ‘score’ label for garments. Environmental labelling isn’t new—but current schemes are highly fragmented, with countless certifications and labels in Europe alone. The EU’s ‘Ecolabel’ programme—an early attempt to harmonise these—does cover clothing and textiles, but only denotes products that have met their criteria: garments that aren’t up to par aren’t publicly marked as such. Governments could explore a harmonised way to ‘grade’ clothing items—similar to the five-colour Nutri-Score scheme for food—that could allow consumers to easily compare options and make more informed choices.

Encouraging consumers to change their habits through financial incentives. Old habits die hard—and for many, chucking a holey old garment in the bin seems far more convenient than seeking out repair services or picking up a darning needle. Providing bonus cheques or slashing taxes on repair services could nudge consumers in the right direction, an initiative already cropping up in Europe: Sweden, for example, has cut VAT rates for repair, while France has launched a bonus scheme offering discounts of up to 25 Euro per repair.

It’s time to return to a simpler life, the report urges

This year’s Circularity Gap Report sets a high standard for the world, but it’s nothing if not encouraging. Ultimately, it’s time to be bold and rethink the rules of the game—and a shift in perspective is needed from everyone, from consumers and companies to policymakers and financiers.

The report’s vision for the future can be summed up by the pithy ‘consuming less but cherishing more’, which will see the rise of lifestyles marked by quality and connection over quantity and consumption. Even if the high-level statistics suggest otherwise, there seems to be a growing desire for such a life: swathes of people are trading the glitz and glamour of city life for rural settings, with seemingly old-fashioned activities like growing and preserving food and making and mending clothes on the rise.

Only time will tell if—in the looming face of climate breakdown—this can turn from trend to touchstone.