Fashion: A Critical Force for Circularity

Introduction

The fashion industry is a complex, global supply chain heavily utilizing fast and low-cost production. The ‘fast fashion’ business model originated in the 1980s when fashion brands and retailers started selling designer-inspired, low-cost fashion products in chain stores across the United States and Europe (a). The success of this model has resulted in negative environmental and societal impacts, including pollution, forced labor, and large quantities of textile waste. This paper provides an overview of the current state of the industry, emerging trends within the industry, and a proposal for how three critical roles can make the fashion industry a force for circularity.

Current State of the Industry: Low-cost and fast production, clothing under-utilization

The current fashion industry largely utilizes the fast fashion model. The model’s availability, scalability, economic viability, and instantaneous production times have increased consumption patterns (a). Consumers are purchasing more items due to low price points and accurate reflection of designer style in easily accessible retail locations. (a) Low-cost production and clothing under-utilization are key qualities of the current state of the industry.

Low-Cost and Fast Production: The model relies heavily on low-cost inputs and fast production. Businesses typically use materials and labor as a way to reduce costs. 63% of the fiber inputs for the industry are synthetic, the majority being polyester, nylon, acrylic, and elastane (b). These fiber options are used predominantly due to their low cost and high availability (c). Since the 1980s, fashion production has moved out of the United States and Europe and into developing economies where labor practices are less regulated and wages are lower (a). Most of the world’s clothing production is in Bangladesh, Pakistan, Cambodia, Vietnam, and China (a). Labor can be subcontracted out in multiple phases of the supply chain, increasing the complexity of monitoring and auditing efforts. Fast production is needed for brands to capitalize on designer trends and stock products in large numbers throughout retail stores across the globe (a). An emphasis on low-cast and speedy production can result in excessive waste, polluted waters, and negative health effects (b).

Clothing Under-utilization: The model results in increased availability of clothing. Over the past 15 years, clothing consumption has doubled yet the use of clothes, utilization, has decreased by 36% (b, k). This decreased utilization of fashion items generates upwards of 15 million tons of discarded clothing items per year in the United States (b). The average American discards 80 pounds, or 36 kilograms, annually (b, h). 84% of this waste is sent directly to landfills or incinerated, representing USD 460 billion worth of usable clothing that is wasted every year (a, b).

Industry Trends: Consumer sentiment, slow fashion, online retail

Emerging trends in the industry offer an insight into the changing economy. Consumer sentiment, slow fashion, and online retail have emerged as opportunities for the fashion industry to explore as alternatives to the current state.

Consumer Sentiment: Sentiment has shifted among nearly all consumers. Millennial and Gen Z consumers are moving away from fast fashion clothing due to increased awareness of its environmental and social impact (d). 52% of Millennials and 45% of Gen Zs report that they research background information online before buying products (d). These consumers represent $350 billion spending power in the United States and account for 40% of global consumers (d). 90% of this consumer group believes companies have a responsibility to address environmental and social issues (d). This shift in sentiment is evident in social media metrics, where sustainability mentions are increasing a third faster than overall social media growth (l). 

Slow Fashion: Slow fashion is emerging as an alternate method for clothing production. Slow fashion entails the localization and regionalism of design and production to reduce carbon footprint and promote a localized economy (a). Localized fashion markets are emerging in the United States and forming concentrated clusters of value services in cities including Nashville, Tennessee and Austin, Texas (e). Researchers found Nashville has the largest per capita concentration of independent fashion companies outside Los Angeles and New York, employing more than 16,200 artisans and adding USD 5.9 billion to the local economy (e). Companies, including Elizabeth Suzzane in Nashville, Tennessee and Esby Apparel in Austin, Texas, are ensuring high quality standards throughout the production process, creating garments at a slower and more deliberate rate via the slow fashion model.

Online Retail: Fashion retail has shifted away from brick and mortar and emerged as the second highest category of United States e-retail (a). Global fashion e-commerce sales were USD 481.2 billion in 2018 and are expected to reach USD 713 billion in 2022 (a). The digital restructuring has allowed for circular business models to emerge and increased ease of communication on sustainability practices. Flexible warehousing and distribution methods have resulted in business models allowing on-demand production, customization and delivery direct to consumers. This approach reduces inventory and warehousing requirements and allows consumers to digitally collaborate with fashion brands to obtain a unique product with longer utilization rates. Online retail platforms have also increased the effectiveness for fashion brands to communicate to their customers. Companies have used this capacity to provide social and environmental reports, stories, and information to customers on their various platforms. Companies include Everlane who create cost transparency reports for articles of clothing, Nisolo who publish annual sustainability impact reports, and Able who includes the name and story of the producer.

Future State of Fashion: The critical roles for circularity

The circular economy model has emerged as a new approach for sustainable and equitable economic development. It incorporates environmental and social impacts unaddressed in previous models. As one of the largest industries in the world, the fashion system is a critical ingredient to achieving a circular economy.

Circular economy adoption requires multifaceted involvement from all who participate in the industry. Businesses, NGOs, and consumers each play a powerful role in the transition. Fashion brands can reduce waste in production and retail operations while exploring novel business models, NGOs can create standards, policies and tools to aid the transition, and consumers can realign consumption habits by leveraging their spending to support entities that reflect circular economy values. Each role possesses unique leverage and can significantly accelerate the transition to a circular economy.

Role 1: Businesses Businesses play a vital role in the promotion of a circular economy. Fashion brands have a critical influence over the production of fashion items, retail operations, and the implementation of novel business models. The following areas are proposed for incorporating circular practices. 

Production: Businesses should consider raw materials inputs and production practices used to create products. Fibers that can be safely cycled through the system without causing health or environmental harm should be used. Biological fibers (e.g. cotton, hemp) can be recycled into rags or insulation and will biodegrade at the end of their useful life. Recycled fibers (e.g. recycled down, recycled polyester) repurpose existing waste and pose a viable alternative. Use of virgin plastics (e.g. polyester, acrylic) should be avoided due to their reliance on fossil materials and release of microplastics during wash cycles. Additionally, the durability of clothes should be increased. Currently, average clothing items are designed to last 10 wash cycles (c). This lack of durability significantly impacts the average of one garbage truck of textile waste disposed of every second in the United States and Europe (c). Consumers prioritize high quality clothing over sustainability, and brands investing in the durability of their products can successfully increase their market share and profits by capturing this demographic (c, f). By increasing the durability of clothes with high quality fiber inputs, businesses can influence increased clothing utilization by consumers and promote sustainable business practices.

Retail Operations: Physical stores are an opportunity to create an environment that promotes circularity. Reused furniture, LED lighting, minimal retrofits, and recycling availability should be incorporated whenever possible. Businesses can utilize recyclable paper, cardboard, and metals instead of plastic and eliminate all excess packing, including single use plastic bags and polybags. Opportunities for recycling used clothing should be made available for consumers and unsold merchandise should be donated instead of discarded.

Online retail operations provide additional versatility and opportunity to engage circularity. 89% of consumers expect companies to report on sustainability (f). 66% of consumers acquire information on issues pertaining to sustainability through online searches and social media (f). Marketing and advertising efforts can be used to get, keep and educate customers on applications of circularity, including benefits of biological or recycled fabrics, reduction of plastic packaging, or how to properly wash and mend clothes. Social media platforms are a low-cost method of sharing circular economy concepts without creating content, as articles and ideas can quickly be shared from one profile to another. Communicating standards and practices increases consumer awareness on the circular model and its societal, environmental, and economic benefits.

Novel Business Models: Additional business offerings should be evaluated, including rental, repair and reuse services. 42% of consumers get rid of clothing because it no longer fits (c). Short-term rental offerings provide a unique opportunity for providing value to customers whose size needs rapidly change, products such as children’s clothes or maternity wear. 26% of consumers dispose of clothes because they no longer like the item (c). Additional business models incorporate platforms for brands and consumers to sell their underutilized and gently used clothing. New offerings provide incentives for consumers to switch brands, as 50% of consumers will switch if they discover a brand that acts more sustainably (f). Adapting consumer offerings to include renting, alterations or reuse provides additional revenue streams that reduce consumption and promote circularity (b).

Role 2: NGOs NGOs play a significant role in the implementation of a circular economy. The creation of industry standards, tools to aid transition, and consumer education initiatives pose unique opportunities for NGOs to move the fashion industry towards circularity. The following areas are proposed for incorporating circular practices. 

Standards: The adoption of consistent standards and language of sustainability is crucial for promoting circularity. The mission of the Ellen MacArthur Foundation (EMF) is to accelerate the transition to a circular economy and works with academia and businesses to create standards and implementation recommendations (c). The EMF Make Fashion Circular program brings sustainable fashion brands together to advocate for the circular model in legislation and business practices. Continuation of efforts to create congruent language will aid the education of consumers, businesses and legislative bodies to analyze issues and act accordingly.

Tools: The increase of product traceability and impact measurement will support the adoption of the circular model. The Sustainable Apparel Coalition created The Higgs Index tool for businesses to measure their environmental and social impact throughout a product’s life cycle (g). The Higgs Index environmental measures evaluate greenhouse gas emissions, energy use, water use, water pollution, deforestation, hazardous materials and animal welfare. The social measures evaluate child labor, discrimination, forced labor, sexual harassment and gender-based violence in workplace, non-compliance with minimum wage laws, bribery corruption, working time, occupational health and safety and responsible sourcing (f). This tool provides valuable benchmarks for the industry and policy makers and serves as a model for future tools for consumers.

Consumer Education: The creation of consumer educational initiatives is necessary to ensure a circular economy is created. Educational items on issues pertaining to the environmental and social impact of a fashion product’s life cycle can aid in realigning global consumption and disposal habits. Good on You (source) provides articles for consumers on clothing sustainability issues and a simple, scoring tool for a business’ planet, people, and animal impact. Fashion Revolution offers a variety of educational tools and marketing paraphernalia for businesses to use to increase education for their customers (h). Printable signs bearing the #whomademyclothes campaign and digestible statistics on the impact of the industry are available for free for businesses to use to educate their customers. Consumer education is a crucial component for support of the circular economy.

Role 3: Consumers Consumers play a critical role in promoting circularity within the industry of fashion. Spending habits and care habits are powerful leverages in a value-based system that can be utilized to promote circulation in the fashion industry . The following areas are proposed for incorporating circular practices. 

Spending Habits: Consumers should align their purchasing with companies that incorporate principles of circularity. Over the past three years, 33% of consumers worldwide have aligned their purchasing decisions with companies that reflect their values and views (d). The average spending on apparel for the 330,000,000 United States adults is USD 1,715, resulting in a total spend of $565.9 billion (h, l). 33% alignment of spending would result in a $186.7 billion size market for businesses promoting circular fashion (d, l).

Slow fashion brands should be considered. Transparency and communication of a fashion brand’s environmental and social impact can provide insight into a business’ circularity practices. Higher quality and lower impact apparel should be purchased. Fabrics that can be cycled successfully through the system should be considered, and virgin plastic synthetics should be avoided due to heavy release of microplastics when washed (c). Consideration of the utilization of clothing items should also be considered. An average of 21% of annual clothing purchases stay in the home and are not worn (i). Garments for unique occasions (e.g. clothing for formal occasions) could be rented and duplicate garments that serve similar functions (e.g. raincoats) should be avoided.

Care Habits: Consumers should care for and dispose of apparel appropriately. Reducing the frequency of washing clothes and utilizing high performing washing machines will reduce water waste and emitted microfibers (b). The washing and drying of clothes emits approximately 120 million tons of CO2 equivalent per year (c). Washing clothes is estimated to require 20 billion cubic meters of water per year globally, Americans using approximately 8.8 gallons of water per day for the clothes (c, j). Additionally, washing clothes releases high volumes of microfibers into the water, which is an increasing pollution issue in oceans and waters (b). Half a million tons of microplastics are expelled each year from laundry cycles, a waste equivalent to 3 billion polyester tops (c). Air drying clothes should be utilized whenever possible to reduce energy usage. Air dried clothes can be fluffed in machine dryers to reduce wrinkles and increase softness, if desired. Clothing and shoe repairs should be made when needed. Professional services from cobblers or tailers can extend the life of many items of clothing, but simple repairs can be done at home with needle and thread, glue, or a sewing machine.

Consumers should bring their apparel to fashion recyclers once items are ready for disposal. The United States and Europe landfill or incinerate over USD 460 billion worth of usable clothing that could be reused domestically or exported for reuse in growing markets (k). Clothes that are donated can be efficiently sorted by used clothing experts, who send items to appropriate resale stores or recyclers who will repurpose the clothing into other goods (k).

Appropriate washing, repairing, and recycling of fashion items will significantly support principles of regeneration and reuse, each major components of the circular economy. Additional consumer-focused education on the subject can be obtained from online sustainable fashion organizations including  Good on You,  Fashion for Good, and Fashion Revolution.

References

a. ­­Thomas, D. (September 2019). Fashionopolis: The price of fast fashion and the future of clothes. Penguin Press.

b.  Ellen MacArthur Foundation. (2017). A new textiles economy: redesigning fashion’s future.

c. Tanvir, S.I. (2014). Solid waste for knit fabric: Quantification and ratio analysis. Journal of Environment and Earth Science, 4(12), pp 68-80. https://pdfs.semanticscholar.org/4c02/2ff855a63d58c262797aa7821cc609dc7aea.pdf

d. McKinsey & Company. (November 2018). “The State of Fashion 2019”

e. Gherzi Textile Organization AG. (2016). NFA fashion cluster impact study.

f. Global Fashion Agenda & Boston Consulting Group. (2018). Pulse of the fashion industry.

g. Sustainable Apparel Coalition. (n.d.) The Higg Index. https://apparelcoalition.org/the-higg-index/

h. U.S. Bureau of Labor & Statistics. (n.d.) Consumer Expenditures Survey 2014- Table 1300. https://www.bls.gov/audience/consumers.htm

i. Mukherjee, S. (2015). Environmental and social impact of fashion: Towards an eco-friendly, ethical fashion. International Journal of Interdisciplinary and Multidisciplinary Studies, 2(3), pp 22 -35. http://eprints-bangaloreuniversity.in/4528/1/mukerji.pdf

j. Golden, J, Irizarri, G.M.A.U., Meier, F., Subramanian, V., & White, P. (2010). Energy and carbon impact from residential laundry in the United States. Journal of Integrative Environmental Sciences, 7(1), 53-73. Retrieved from: https://doi.org/10.1080/19438150903541873

k. Ellen MacArthur Foundation. (2013). Towards the Circular Economy Vol. 2. https://www.ellenmacarthurfoundation.org/assets/downloads/publications/Ellen-MacArthur-Foundation-Towards-the-Circular-Economy-vol.1.pdf

l. United States Census Bureau. U.S. and World Population Clock. https://www.census.gov/popclock/