Lecture 10 circular economy and fashion PDF

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06/04/2019

Enterprise in the Circular Economy Week 10 – Circular Economy and Fashion Industry

Learning Outcomes  Understand the context of fashion industry in terms of trends, usage, and disposal  Discuss the main biological and technical nutrients/materials flow  Gain an understanding of linear business model, particularly the rise of ‘Fast – Fashion’ and the resulting challenges from a circular economy perspective  Evaluate the drivers of, and approaches associated with emerging circular economy solutions

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The Context of Fashion Industry

Fast-moving Consumer Goods  Fast-moving consumer goods include food and beverages, apparel, beauty products, and others.  Characteristics of fast-moving consumer goods: High throughput volumes and frequent purchases Large physical volume Relatively low prices Short lifespan Uses maximum packaging

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Fashion  Fashion is defined as “a broad term that typically encompasses any product or market where there is an element of style that is likely to be short-lived” (Christopher et al., 2004:367).  Luxury, premium and high-price segments Stronger identity Design driven Small-scale and long-life

 Medium and low price segments Market and cost driven Large-scale and short-life (Ross and Harradine, 2010)

Fashion Industry  The second-largest category in consumer spending.  The garment sector is a significant part of the global industry.  Total annual global consumption amounts to USD 1.4 trillion or an estimated 91 billion garments sold.  In the U.K., consumers spend USD 63 billion (representing 5% of total consumer expenditure) on the purchase of 1.8 billion garments annually (an average of 30 garments per capita). (EMF, 2017)

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Growth of the Fashion Industry  Almost 75% of the world’s fashion market is concentrated in Europe, USA, China and Japan.  The US is the largest importer of garments in the world; nearly 40% of apparel products sold in the US are imported from China.  British shoppers buy far more new clothes than any nation in Europe  Emerging economies are climbing up the ladder, facilitated by technological development.

Input Material  Natural/Organic Plant and animals E.g. Cotton, Angora, Cashmere, Wool, Flax, Hemp, Sisal, silk 85% of natural fibres used worldwide is cotton

 Technical/Synthetic Cellulosic sources from plants and trees – Viscose, TENCEL™/Lyocell, and modal By-products of petroleum – Polyester, Nylon, and Acrylic Half the tonnage of all textiles produced is synthetic fibres from petroleum.

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The Linear Business – Fast Fashion and associated challenges from CE perspective

Fashion Industry – Linear Business Model  The vast majority of the clothing industry currently operates on linear consumption model.  Business model – ‘Fast Fashion’  Limited useful life in high-income countries.  A large proportion of all items ends in landfill.  The consumption stage accounts for by far the largest share of waste in the clothing category (64%), in comparison to processing (23%), manufacturing (11%), and distribution (1%) (EMF, 2013).

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Fast-Fashion Business Model Fashion markets

Survival depends on • Short life-cycles – Designed to capture mood, i.e. short, seasonal, weeks/months • High volatility – Demands rarely stable and linear to go with the flow, i.e. weather, films, stars, • Low predictability – Volatility of demand makes prediction extremely difficult

• Flexibility • Quick responsiveness • Dependence on cheap labour and cheap raw materials.

Two fundamental characteristics of fast-fashion concept • Fastness • Newness

• High impulse shopping - Decisions made at the point of purchase and therefore there is a critical need for product ‘availability’

Zara and Fast- Fashion Business Model  Zara has set the standard for the fastfashion sector.  It launches about 12,000 new designs every year.  It manages to design, produce, distribute and sell its collections in 25 days.  Responsive to customer’s need and give the customers what they want before they ask for it.  Limited production seasons and a high turnover of products, which they change every 15 days.

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Fast-Fashion Phenomenon  Fast fashion is a 15- to 20-year phenomenon and emerged in 1990s.  Follows business strategy aiming to reduce the processes involved in the buying cycle and lead times for getting new fashion products into stores as fast as possible.  Focus on trendy clothing making available quickly in cheaper, faster and sooner than ever before.  Connected to low quality products that are mass-produced and standardised, for easy consumption.  The increased speed of production and fashion cycles adopts the concept of planned obsolescence.  Increasing perceptions among consumers that cheap clothes are disposable, ‘throwway’ due to perceived obsolesce.

Problems from the circular economy perspective

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Fashion Life  According to Greenpeace, global clothing production doubled from 2000 to 2014.  The average person buys 60 percent more items of clothing every year and keeps them for about half as long as 15 years ago.  The average lifetime of a cloth is approximately 3 years, most of which is spent on the back of wardrobe.  Three in five garments end in landfill or incinerators within a year.  WRAP estimates that U.K. consumers have around USD 50 billion worth of clothing hanging in their wardrobes that hasn’t been worn for a year or more.1  The U. S. is the largest exporter of second hand clothing. It exports over a billion pounds of used clothing every year  More than 70 percent of the world's population uses secondhand clothing.

Problems from the CE Perspective – Resource Consumption  Cotton  The most important non-food agricultural commodity worldwide.  Toxic chemicals - Cotton farming is responsible for 24% of insecticides and 11% of pesticides, despite using only 3% of the world’s arable land.  Intensive water use for irrigation

 Others  Energy – 60 billion Kg of fabric uses 1,000 billion kWh of electricity  Water – 60 billion Kg of fabric uses 6-9 trillion litters of water, 20,000 litres of water is needed to produce one kilogram of cotton  Land – 30 to 35 million hectares for cotton production, competition with food production

(EMF, 2017)

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Problems from the CE Perspective – Environmental Pollution  Second to oil, the clothing and textile industry is the largest polluter in the world.  Major polluter – air, water, soil, groundwater  The fashion industry contributes 10% of global greenhouse gas emissions due to its long supply chains and energy intensive production.  Pollution from fertilizer and pesticides as excess nutrients in the role ‘run-off into water sources.  Synthetic clothes like polyester are shedding microplastic particles into the wastewater stream with every wash and then enter the food chain.

(EMF, 2017)

Problems from the CE Perspective – Unethical Practices  Social issues connected with fashion production are: Child labour, Force labour Unfair pay, Corruption Unhealthy working conditions and exposure to hazardous chemicals Animal cruelty

 It is estimated that approximately 300 million poor and vulnerable homeworkers within the fashion industry worldwide.  In Bangladesh, many garment workers have to work 14-16 hours shifts each day (often six days per week) with the salary of 68 USD per month.

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Problems from the CE Perspective – Waste Generation  Clothing accounts for a considerable amount of waste in the form of garments that are discarded at end of use.  Across Europe and North America, 15 million tonnes annually are discarded and end up in landfill.  In the UK, despite high rates (65%) of collection rates of used clothes, close to half a million tonnes of clothing is sent to landfill or incinerated each year.  Australians buy an average of 27 kilograms of new textiles each year and then discard about 23 kilograms into landfill – and two-thirds of those discards are manmade synthetic/plastic fibres that may never breakdown.  Figures from China and India are not known.

(EMF, 2017)

Problems from the CE Perspective – Existing Approaches  Extending Product life Used by many companies (e.g. Patagonia, Nudie Jeans, Vigga and Filippa K) Despite efforts to extend the life of garments, 82% of clothes are sent to incineration or landfill at the end of use.

 Life-extending practices by itself is not sufficient to address the amount of textiles that are unwanted.  Recycled fibres – Shorter in each cycle, and unsuitable for reuse.

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Problems from the CE Perspective – Legislation  Abolition of international regulatory framework contributing to consumerism  Multi Fiber Agreement (MFA) was established in 1974 to regulate global trade in the garment industry  MFA placed import quotas on clothing and textiles, protecting certain markets such as US, Canada and Western Europe  Phase out of MFA in 2005, shifted majority of the production from industrialized countries to countries in Asia, such as China, Bangladesh and Cambodia due to competition.  Boom on imports  In 1982 US textile and apparel imports were 10 billion dollars while in 2006, the figure was 96 billion dollars.

 Decrease in prices and a boom in consumption  Falling clothing prices - 26.2 % in Europe and 17.1% in the USA

 Garments and textiles are not regulated by law and there is no expectation on fashion companies to be responsible for the end-of-life destiny of their products.

Emerging Circular Economy Approaches

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Motives for Circular Solutions  Clothing is a large sector, measured by both expenditure and resource use.  Clothing producers are increasingly vulnerable to volatile input costs.  The textiles industry is highly reliant on non-renewable resources across all stages of the value chain.  Pressure for a change  The MPs have written to the UK's top fashion bosses asking how they can maintain the £28bn benefit their industry brings to the UK economy, while reducing the environmental harm.  Companies approached are: M&S, Primark, Next, Arcadia, Asda, TK Maxx and HomeSense, Tesco, JD Sports Fashion, Debenhams, Sports Direct International (BBC, 2018)

CE and Fashion ‘A circular textiles industry is based on a system where textiles products, fabrics and fibres are infinitely and effectively cycled through connected loops within and across industries in a transparent and economical way, where producers apply business practises that enable circular use of textile resources and promote social justice, and consumers have a healthy relationship with textiles, based on sustainable consumer practices’.

(Mathews, 2015: 54 -55).

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CE Solutions - Inputs  Recycled fibres  Cotton, wool and polyester  Use of PET-bottles, e.g. Patagonia and Nike

 Two common ways of recycling  Mechanical recycling - Cutting, shredding and disassembling materials. E.g. SOEX Group and H&M on testing mechanical recycling.  Chemical recycling is a process where synthetic materials are broken down for repolymerisation. Eco Circle™ a Japanese company, Teijin, developed chemical recycling system for polyester products.  Chemical recycling maintains fibre quality throughout the recycling process

 Lack of technology as a barrier for recycling

CE Solutions – Product Design  Design for circularity and regeneration  Longer lasting fashion, fewer returns, and greater customer loyalty  Modular designs for durability, longevity, and looks  Use of natural materials and cradle to cradle certified materials  Switzerland-based Rohner—maker of ‘Climatex Lifecycle’, a synthetic fabric ‘safe enough to eat’.

ZE O ZE Modular Shoes by Daniela Bekerman

 PUMA’s InCycle™: a new line of biodegradable or recyclable shoes, clothes and apparel, all Cradle-to-Cradle™ certified.

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CE Solutions – Process Design  Use less production inputs  Waterless programme from Lei Strauss  Digital technology for printing avoiding dyes  Use ‘waste as food’  Use of surplus materials

CE Solutions – Increase Product Lifetime  Reuse/Resell  Charity, Second hand

 Repair /Remanufacture  Service oriented

 Recycle/Upcycle  Establish industry-wise end-of-use collection system  Design for recyclability

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CE Solutions – Access instead of Ownership  Exchange  Sharing  Renting

Potential CE business models  Profitable business models that reflect circularity principles can be expanded in three main areas  Optimising the end-of-use flow (Collection and reuse)  Creating radical new collaborative consumption model  Cascading into other industries and other uses (e.g. stuffing, insulation), and decomposition into compost for return to the soil.

 However,  Important to distinguish between short-life fashion and long-life fashion

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Transforming Fashion Industry – Radical and Systems Thinking  We need to move towards more radical and systematic innovation thinking while challenging the whole industry and its current practices of doing business (Mathews, 2015).  It includes  Changing practices throughout the whole value chain such as design and management of end-of-life  Requires collaboration between clothing companies and stakeholders such as government, researchers, collectors and recycling companies

EMF (2017) – A New Textile Economy

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Circular Fashion – Systems Thinking

Summary  The second-largest category of spend within the consumer sector is clothing and footwear, accounting for sales of USD 1.8 trillion annually.  The vast majority of the clothing industry currently operates an entirely linear consumption model, with a large proportion of all items ending in landfill.  The fashion industry is the second most polluter after oil.  The consumption stage accounts for by far the largest share of waste in the clothing category.  The CE opportunities comes from – recycling, use of technology to reduce harmful chemical, and product and process design for longevity  Changes are happening, but there is a need to move towards radical and systemic thinking for circular fashion.

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