Circular Economy Basics: A Case Of The Fashion Industry

Circular economy

A circular economy, according to UNCTAD, entails markets that incentivize reusing products rather than scrapping them and extracting new resources. It promotes the reuse and recycling and the sustainable use of natural resources, offering an alternative that could generate $4.5 trillion in economic benefits globally by 2030. In such an economy, all types of waste, such as clothing, scrap metal, and obsolete electronics, are recycled or reused. This can be used to protect the environment and use natural resources more wisely, as well as to develop new sectors, create jobs, and develop new capabilities.

The Make-Use-Return model of the circular economy accounts for 8.6% of the global economy, and it evolves from the traditional Take-Make-Dispose model. Under the take-make-dispose model, raw materials are sourced to produce products that are then disposed of after use. This disregards the fact that the world’s resources are limited and businesses ought to be thinking of smart alternatives to resource management.

Resource extraction has tripled since 1970 and is expected to increase by another 70% by 2050, with the effects of climate change, biodiversity loss, and pollution felt all over the world. Moving to a more circular approach, represents a huge opportunity for businesses, opening doors to new markets and the possibility of increasing market share; lowering costs and risks for businesses; driving innovation, attracting talent, and aligning business performance with public expectations. To accomplish this, businesses can use a value-chain approach to prioritize where they should take action in order to have the greatest impact on greenhouse gas emissions, biodiversity loss, and pollution.

The circular economy speaks to the green agenda on waste management and getting more use from a product. It entails having to shift the general mindset and reimagine waste as a resource in every single sector and value chain.

Adapting The Fashion Industry To A Circular Economy

According to UNEP, a pair of jeans requires an average of 3,781 liters of water, which equates to 33.4 kg of carbon emissions equivalent. The fashion industry is worth USD 1.5 trillion globally, and it is the world’s third-largest manufacturing sector after the automobile and technology industries. The sector accounts for 10% of total global carbon emissions, with half a million tons of plastic micro-fibres dumped into oceans each year, equivalent to 50 billion plastic bottles.

The Ellen MacArthur Foundation predicts that global apparel consumption will rise from 62 million metric tons in 2019 to 102 million tons in ten years, owing to changing demographics and lifestyle patterns. Today’s average consumer buys 60% more clothing than in the year 2000, thanks to fast fashion. 50 billion new garments were produced in 2000; nearly two decades later, that figure has more than doubled. Only about 1% of used clothing is recycled into new garments. Ellen MacArthur Foundation research estimates that approximately USD 500 billion in value is lost each year as a result of clothing that is barely worn, not donated, recycled, or ends up in a landfill.

As the world races to meet its commitments to reduce carbon emissions to net-zero by the middle of the century, the fashion industry faces a monumental task. To achieve the net zero goals in the fashion industry, higher-quality garments with longer product life are recommended. This will stimulate a shift to a circular economy, in which the value of products and materials is preserved for as long as possible while waste and resource use are reduced. Combined with efforts to reduce negative environmental impacts from production, these interventions will result in a more sustainable industry.

Businesses must recognize the vastness of the textile industry pollution and develop recycling and reuse departments for used textile fabrics; necessitating a complete circular value chain of production, use, and collection for reuse, recycling, and upcycle. Other initiatives are on using alternative production materials that are bio-friendly and cause no harm to the environment. The fashion industry necessitates thorough planning and management of business units. Some companies have developed a return mechanism for used clothing in order to easily manage the disposal value chain and help reintroduce disposals into the system.

Global Initiatives Towards A Circular Economy

Global leaders have been at the forefront of developing a circular economic system; and in 2018, the World Economic Forum formed the Platform for Accelerating the Circular Economy (PACE). PACE is a global community of leaders working together to accelerate the transition to a circular economy, bringing together public, private, international, and civil society executive leaders and over 200 members championing 18 circular economy related projects around the world. The platform hosts a series of value chains in plastics, electronics, batteries, cars, fashion/ textiles as described below:

  • Global Plastic Action Partnership

GPAP is a public-private partnership platform that was developed in 2018 to assist in translating commitments to transition plastics to a circular economy into actionable strategies and investible action plans.

  • Circular Electronics Action Partnership 

To unlock the circular economy potential for electronics, the partnership works across the value chain, from manufacturing to reverse logistics, material recovery, and e-waste management.

  • Global Battery Alliance

A 60-member public-private collaboration platform aiming to establish a long-term battery value chain.

  • Trade & Circular Economy

A collaboration between the trade and circular economy initiatives to assess the role and function of trade in facilitating a successful transition to a circular economy.

Future successful businesses will be those that provide excellent value with minimal resource use and environmental impact; while rapidly moving toward nature-positive solutions and net-zero carbon emissions. The world is in a constant supply and production of products and proper alternative to resource availability, innovation, and human sustainability will be critical going forward. The climatic crisis has worsened and while the green agenda compliance is being discussed and executed, the circular economy must be a top agenda on how to properly manage the waste generated from daily human activities.

To achieve a circular economy, it’s not only technology that will enable change but also a shift in cultural perspectives and individual commitments. By deploying circularity principles businesses can leapfrog into making rapid and successful transition to these critical priorities for humanity and the planet.

Author: Victor Otieno & Dickson Ndoro