Posts tagged ecodesign

Is Circular Progress in Fashion Moving Forward or Far Away?

Introduction

The fashion industry fuels a linear economy with waste greater than $460B of value each year through unsustainable disposal of clothing (Ellen MacArthur Foundation, 2017). Characterized as one of the most polluting and wasteful industries, it consumes 98 million tonnes in non-renewable resources, 93 billion cubic metres of water, and 53 metric tons of fibre to produce clothes used for a short time, after which 13% of the total material input is recycled and 73% of the materials are sent to a grave via landfill or incineration (Ellen MacArthur Foundation, 2017). One estimate suggests that as global population grows to 16% by 2030, the mass-consumption of clothing will grow 65% as 3 billion people move into the middle class (Rosa, 2016).

Reimagining the current take-make-dispose linear process, a circular economy (CE) model demonstrates an opportunity to prevent value leakage by decoupling economic activity from the consumption of finite resources, including shrinking or decreasing use, slowing, and closing material loops as depicted in Figure 1 (Ellen MacArthur Foundation, 2015). This analysis will explore circular approaches that collectively address system-level waste in the textile and clothing system, and the effectiveness of each approach in the acquisition of materials, production of goods, consumption, and disposal.

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Figure 1: Outline of a Circular Economy (Ellen MacArthur Foundation, 2017)

Circular Economy Approaches

According to the Ellen MacArthur Foundation (2017), “A circular economy is restorative and regenerative by design and aims to keep products, components and materials at their highest utility and value at all times, distinguishing between technical and biological cycles.” It represents a paradigm shift in the way products are designed, manufactured, used, and recovered, beyond reducing the negative impacts of the linear economy (Lacy & Rutqvist, 2015). The following CE approaches, particularly when used together, can reduce waste and impact to natural systems throughout the entire textile and clothing system.

Product Design

CE starts with designing products with zero waste, understanding material inputs and dynamics, planning for asset recovery, and considering the total cost of ownership in a product’s lifecycle (Rydberg, 2016). Design also includes development of product lines that meet demand without deteriorating assets. CE design must source material from within regenerative loops, rather than from linear flows and enable businesses to develop a revenue model that generates value across the supply chain as depicted in Figure 2 (PWC, 2017). This may include designing products to last longer, with higher quality specs, and that are easily repairable by the customer.

Figure 2: Value Leakage in Linear v. Circular Economy Model (PWC, 2017)

Recovery and Recycling

CE views recovery and recycling waste as a resource holistically integrated into the business model, not as an external problem (Rydberg, 2016). Upcycling converts an old product or material into something of higher valuable, while downcycling deconstructs the properties of a material for reuse (Lacy & Rutqvist, 2015). Conceptually, reuse enables the mining of resources from current products, repurposing material inputs previously funded (PWC, 2017). One variation includes recovering end-of-life products that recapture value in an actor’s own closed loops or any actor’s open loops as depicted in Figure 2 (PWC, 2017). A second variation recovers waste and by-products from a company`s own production process and operations to recapture value (Marino & Pariso, 2016). Therefore, the CE model can generate a revenue stream from large amounts of inefficiency in waste and disposal that are valuable to the broader supply chain or another actor (Marino & Pariso, 2016).

Raw Materials and Innovation

Disassembling a garment for reuse and recycling can be labor intensive and ineffective (Rosa, 2016). Current linear business models rely on large quantities of natural resources. Little or no control over price and supply of commodities forces companies to accept the risk of fluctuations affecting raw material acquisition and production, and mitigate risk or remove it from the supply chain (PWC, 2017). Integrating CE in sourcing and procurement risk management strategy provides, “a more predictable, long-term, cost-effective source for the energy or materials” (Lacy & Rutqvist, 2015, p. 36). Additionally, advances in raw material innovation fuel eco-design and feed CE loops across the supply chain. Examples of innovation include: a dissolving thread called Smart Stitch that aids in recycling, Crop-A-Porter that makes fabric out of crop waste, a compostable clothing called Algae Apparel, and a design that uses mycelium to grow clothing (Sandvik, 2017).

Product Life Extension

Product Life Extension (PLE) lengthens a product’s useful lifecycle by generating revenue through longevity instead of volume; an example is selling a product second hand, or repurposing it until worn out. Manufacturers leverage human behavior and consumerism in the form of trade-in or buy back models. Additionally, companies help customers extend PLE with repairs, maintenance services, care guidelines, and DIY repair alternatives.

Policy and Regulations

Governments and regulators, particularly in Europe, are rallying to enable the CE. Broad changes include eco-design directives, green public procurement, extended producer responsibility, and taxation mechanisms. Promoting longer product lifetimes, defining sustainable performance criteria, a standard of labeling, metrics to define circularity, and avoiding hazardous substances progress the CE model through legislation and compliance.

Sustainable thought leader Walter Stahel suggests leveraging policy and taxation, “That legal considerations, especially taxing systems have to be reconsidered. If we had ‘sustainable taxation’, a tax on non-renewable resources and no tax on renewable resources, where human labor is a renewable resource, it would give activities of the circular economy an immediate incentive” (Sustainable Taxation, n.d.). As depicted in Figure 1, the smallest loops create the highest social benefits because they are labor intensive (Ellen MacArthur Foundation, 2017). Another key component of sustainable taxation is value added tax (VAT). Since all the activities of a circular economy inherently maintain value, actors who adapt CE approaches should not have to pay VAT. “This concept has been accepted in principle by the UK treasury and several other European countries, such as in Scandinavia, where there is 25% VAT. By not levying VAT on repairs, re-marketing or re-manufacturing of goods, you would create a clear signal to business that it’s beneficial to get involved in the sustainable activities of the circular economy” (Stahel, 2013, p. 2).

Certifications play a major role in CE because they validate the quality and sustainability in the complex, multi-tier process of a fabric (Sandvik, 2017). Although a single commodity is certified, there are factors that influence the total life cycle assessment of feedstock. Several organizations including the Global Organic Textile Standard, Oeko-Tex, Made in Green, and the Better Cotton Initiative define high-level requirements in environmental criteria, technical quality, and minimal social criteria in the supply chain of organic textiles’ to be certified. Standardizing disclosures and labels for eco-compliant products facilitate trust between actors upstream in raw material acquisition through production, and downstream to distributors, retailers, and consumers (Rosa, 2016). Alignment of power and incentives between actors is critical to improve cross-cycle and cross-sector performance.

Sharing Platform and Product as a Service

The sharing platform business model simplifies ownership through channels of renting, sharing, swapping, lending, gifting, or bartering of resources and allows businesses to expand into new markets (Lacy & Rutqvist, 2015). Consumers choose sharing platforms for convenience, diversity, lower price, and better product or service quality (Lacy & Rutqvist, 2015). The product-as-a-service (PaaS) model offers an alternative for products with high costs and high operating costs where consumers are users not owners. PaaS user adoption influences include infrequent use, lack of capacity, and unaffordability. Product design and quality are critical to performance because “quality degradation, short lifespan, low utilization rate and low recycling or return can directly impact a company`s bottom line” (Lacy & Rutqvist, 2015, p. 103).

 Changes in Human Behavior

Customer behavior is evolving and demand is increasing for sustainable and responsible products. Manufacturing quality products coupled with access to new CE business models transforms the perception of clothing as a disposable item to being a durable product as described in Figure 3, ‘Customer Personas and Access Model Types in a New Textiles Economy’ (Ellen MacArthur Foundation, 2017). Shifting the consumption of fast fashion to purchasing green garments, while increasing garment lifecycle and the number of wears, could be the most powerful way to capture value, reduce pressure on resources, and decrease negative impacts. For example, if the number of times a garment is worn is doubled, on average GHG emissions would be 44% lower (Ellen MacArthur Foundation, 2017).

Figure 3: Customer Personas and Access Model Types in a New Textiles Economy (Ellen MacArthur Foundation, 2017)

Collaborative Supply Chains

Adopting a circular model is gaining momentum as actors across the supply chain agree to share the cost and benefits of innovation and product design (Lacy & Rutqvist, 2015). To optimize material flows, supply chain actors must improve how they trace material flows, which includes in-depth information sharing, often times with competitive overlap that includes design, pricing, costs, volumes, lead times, and supplier terms. The Higg Index is a “self-assessment tool that empowers brands, retailers and facilities of all sizes, at every stage in their sustainability journey, to measure their environmental and social and labor impacts and identify areas for improvement” (Sustainable Apparel Coalition, 2018). “Using the Higg Index is the most adapted and reliable way to measure textile value chains, manage their impact and to finally create a common language on sustainability practice” (Sustainable Apparel Coalition, 2018).

Circular Approaches: Moving Forward or Far Away?

The Ellen MacArthur foundation estimates that “CE could deliver $1.8 trillion for Europe by 2030” (2017) with “savings in materials alone could exceed $1 trillion a year by 2025”. Although the CE approaches outlined herein are beneficial, when applied separately in a global trading environment, they are insufficient to move forward because they address only certain parts of the transition, products, process, policy, or actor in the supply chain. Largely, the textile and clothing system is directed by compliance rather than innovation, with exceptions like Levi’s, Nike, and Patagonia to name a few. Many companies try to be “less bad” by optimizing the wrong system, using less input, less energy, and less hazardous materials, striving for eco-efficiency (Braungart & McDonough, 2002).

Consumerism and mass-production create bad demand and economic signal inputs that do not encourage efficient resource use, pollution mitigation, or space for CE innovation. In developing countries, mass production of cheap, fast fashion creates Gross Domestic Product and influences the quality of life for citizens. Globalization and cost competitiveness force production economies of scale, while unethical labor conditions and unsustainable business practices are necessary to compete. Developing countries lack strict standards, environmental laws, and institutions to reinforce sustainable measures. So, the traditional linear economy still has many economic advantages for actors because businesses can still externalize the cost of risk, non-compliance, and waste (Lacy & Rutqvist, 2015).

There are two key challenges: maintaining the quality of resources and keeping ownership rights to high-quality resources (Franco, 2017). Secondly, controlling the return flow and maximizing the quality of recovered resources through improving waste separation, inspection, processing and refining. For example in downcycling, fibres are recovered into materials of lower quality. At some point, fibres cannot be further cascaded and retire to a landfill (Franco, 2017). Downcycling is therefore only a mitigating factor. Product design, raw material innovation, and cooperation across the supply chain is critical for progress.

Other challenges that delay the scale and adoption of CE include insufficient skills and investment in circular product design and production that could facilitate greater re-use, remanufacture, repair and recycling (Anderson, 2016). There is an insufficient investment in the CE recycling and recovery infrastructure, which further propagates a lock-in linear mindset. Scale economies for PaaS, sharing platforms, production and recovery technologies are still comparatively immature to alternatives (Lacy & Rutqvist, 2015).

Current policies do not promote widespread end-to-end adoption of CE, slowing and closing resource flows. There are weaknesses in policy compliance in bioenergy and waste management. Potential policy actions include economic incentives, targeted and increased funding, efforts to engage and link actors across the supply chain. Collaborative supply chains have limited information, and lack no-brainer economic incentives to encourage repair and reuse (Gam, Cao, Farr, & Heine, 2008). Other policy improvements include taxes on aggregates of unsustainable materials and products, CO2 and waste disposal taxes, and landfill taxes.

Conclusion

To disrupt the current linear process for clothing, new models to access and maintain clothes are essential. Economic opportunities already exist for these approaches, and are achievable through refocused marketing, scaling sharing models, making higher quality and durability more attractive, and increasing clothing utilization further through brand commitments and policy (Sandvik, 2017).

References

Anderson, R. (2016). The Firms Planning on Making Less and Recycling More. Retrieved March 18, 2018, from http://www.bbc.com/news/business-35755492

Braungart, M., & McDonough, W. (2002). Cradle to Cradle. New York: New Point Press.

Cardoso, A. (2013). Life Cycle Assessment of Two Textile Products: Wool and Cotton. Universidade Do Porto, Environmental Engineering. U.Porto.

De Vries, B. (2013). Sustainability Science. Cambridge: Cambridge University Press.

Ellen MacArthur Foundation. (2015, December 9). Towards a Circular Economy: Business Rationale for an Accelerated Transition. Retrieved March 19, 2018, from https://www.ellenmacarthurfoundation.org/assets/downloads/TCE_Ellen-MacArthur-Foundation_9-Dec-2015.pdf

Ellen MacArthur Foundation. (2017, January 12). A New Textiles Economy: Redesigning Fashion’s Future. Retrieved March 20, 2018, from https://www.ellenmacarthurfoundation.org/publications/a-new-textiles-economy-redesigning-fashions-future

Franco, M. (2017). Circular Economy at the Micro Level: Dynamic View of Incumbents’ Struggles and Challenges in the Textile Industry. Journal of Cleaner Production, 168, 833-845.

Gam, H., Cao, H., Farr, C., & Heine, L. (2008). C2CAD: A Sustainable Apparel Design and Production Model. International Journal of Clothing Science and Technology, 21(4), 166-179.

Harrington, L. (2013, September). Fashion Unleashed: The Agile Fashion Supply Chain. DHL Supply Chain.

Lacy, P., & Rutqvist, J. (2015). Waste to Wealth: The Circular Economy Advantage . New York: Palgrave Macmillan. Retrieved 2018, from https://www.forbes.com/sites/tomiogeron/2013/01/23/airbnb-and-the-unstoppable-rise-of-the-share-economy/#729b2ccfaae3

Maia, L., Alves, A., & Leao, C. (2013). Sustainable Work Environment with Lean Production in Textile and Clothing Industry. International Journal of Industrial Engineering and Management , 4(3), 183-190.

Marino, A., & Pariso, P. (2016, May). From Linear Economy to Circular Economy: Research Agenda. International Journal of Research in Economics and Social Sciences , 6(5), 270-281.

PWC. (2017). Spinning Around: Taking Control in a Circular Economy. Retrieved March 22, 2018, from https://www.pwc.com/gx/en/sustainability/assets/taking-control-in-a-circular-economy.pdf

Rosa, A. (2016). Circular Economy in the Clothing Industry: Challenges and Strategies. KTH Industrial Engineering and Management.

Rydberg, A. (2016). Circular Economy Business Models in the Clothing Industry. Uppsala University, Department of Earth Sciences.

Sandvik, I. (2017). Applying Circular Economy to the Fashion Industry in Scandinavia Through Textile-to-Textile Recycling. Monash University, School of Social Science.

Stahel, W. (2013, July). The Circular Economy. Retrieved from http://www.makingitmagazine.net/?p=6793

Stahel, W. (n.d.). Sustainable Taxation. Retrieved March 27, 2018, from http://www.progressiveeconomy.eu/content/sustainable-taxation

Sustainable Apparel Coalition. (2018, March 27). Retrieved from The Higg Index: https://apparelcoalition.org/the-higg-index/

Sustainable Brands. (2015, September 25). NIKE Commits to 100% Renewables, Partners With MIT Climate CoLab on Materials Innovation. Retrieved from http://www.sustainablebrands.com/news_and_views/products_design/sustainable_brands/nike_commits_100_renewables_partners_mit_climate_

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