The fashion industry is lagging when it comes to circularity

According to a recent survey conducted by Kearney Consumer Institute (KCI) in Italy, France, and the United States, there is a clear deficiency in consumer education regarding sustainability in the purchase and disposal of fashion products.

The findings indicate that almost half of the respondents were unsure whether virgin materials were superior or inferior to recycled/upcycled alternatives. Between 30 percent and 40 percent of participants either lacked awareness of the option to return clothes for recycling/upcycling or were unfamiliar with the process. Consequently, it is unsurprising that a majority of consumers prefer to donate clothes or share them with friends and family. While this may result in the reuse of garments in the best-case scenario, more often than not, they end up stored away until the next donation cycle. Even the secondhand resale market, which has the potential for further development, falls short of its full potential.

Kearney's third annual "Circular Fashion Index" CFI 2023 report equally unveils a disconcerting lack of urgency among 200 assessed brands regarding climate goals. Despite the pressing need for action, clothing manufacturers continue to prioritize flooding the market with more products while resorting to incineration as a means of disposing of unsold inventory, rather than finding alternative uses.

The report highlights that manufacturers heavily rely on virgin materials and fail to educate consumers about responsible ways to dispose of used garments. Moreover, it notes that the infrastructure for clothing drop-off and collection remains underdeveloped. The process of sorting used clothes is deemed complex and costly due to the lack of design for disassembling fashion products into reusable sub-components.

Kearney asserts that consumers also bear responsibility for their limited exploration of donation, recycling, and repair options. The popularity of the resale market is recognized, primarily driven by its profit potential, according to Brian Ehrig, a partner at Kearney and co-author of the report.

Lack of circularity

Kearney also emphasised the inadequate efforts in communicating the significance of circularity to consumers, a concern reinforced by the findings of its report.

In terms of the secondary market, there is a noticeable lack of progress in the development of rental services, which Kearney says is understandable given the complexities involved in implementation. It is disconcerting to observe the limited availability of convenient drop-off options for worn clothes, as this plays a vital role in extending the lifespan of garments and ensuring materials are accessible for recycling and upcycling. Furthermore, the assortment of pre-owned items remains constrained, potentially due to the involvement of specialised players in this particular sector.

Nevertheless, Kearney identifies a few brands as notable exceptions that demonstrate a commitment to sustainability. The list of top 10 brands recognised for their responsible practices is similar to 2022 and includes Patagonia, Levi's, The North Face, OVS, Gucci, Madewell, Coach, Esprit, Lululemon Athletica, and Lindex. Madewell is commended for accepting used jeans in its retail stores and offering used or upcycled clothing through its "Madewell Forever" program. Coach earns praise for its "Coachtopia" sub-brand, which focuses on selling items made from recycled or recyclable materials.

Kearney did not publicise the list of worst performers.

In Kearney’s observations, a majority of companies fail to establish or disclose well-defined and measurable environmental objectives, hindering the establishment of industry-wide environmental frameworks like circularity.

However, a swift transformation is anticipated as a result of upcoming regulations. One such example is the recently introduced European Corporate Sustainability Reporting Directive (CRSD), which aims to align sustainability reporting standards with financial reporting.

Under the CRSD, sustainability reporting will become an integral part of annual reporting and will undergo third-party auditing. Initially applicable to listed companies, the CRSD will gradually extend its reach to all companies operating in the European Union that meet specific criteria in terms of sales and workforce size by 2028. This regulatory development is poised to play a crucial role in driving progress toward environmental accountability and transparency across the business landscape.

For more information or to read the report go to www.kearney.com.