2018, the year close the loop was taken seriously by the industry
Until now, fashion titans have been trying out circularity with small lines and collections. However, in 2018, they have set it at their strategies’ core. Political and social pressures have put the sector under the spotlight.
Pablo Isla, the president of Inditex, exposed in an article of The Wall Street published in January which were going to be the four pillars of fashion’s future. In the fifth, Pablo Isla referenced the integration of circular economy into corporative strategies. In 2018, circularity was no longer something for eco-fashion only but something that would underpin the current system’s survival in the future. Parallelly, social and political pressure to shift towards circular economy is growing, and thus fashion, as one of the most important economic sectors in the world, is under the spotlight.
In May, H&M, Burberry, Nike, Stella McCartney and Gap joined forces to move forward together in this matter. These were the five companies chosen as strategic partners by Ellen MacArthur Foundation, the main lobby of circular economy. The collaboration was aimed at developing solutions for some of the biggest challenges of the fashion industry.
Sixteen companies more, amongst them Inditex, Kering, Primark or VF Corporation, showed their support towards the initiative. All of them committed to work together under three parameters: the development of business models that promote a longer conservation of clothes, the use of renewable and safe materials and the promotion of solutions for the treatment of used clothes.
Fashion titans have accelerated circular economy through inter-company agreements
Beyond agreements, the companies have started to give firm steps forward following that line. Thus, all through 2018, Zalando and Bestseller partnered up with start-up incubator Fashion for Good in their search for projects linked to circular economy; C&A invested 1.3 million euros for the release of five pilot projects that would implant circular economy in the fashion industry; American Guess joined forces with I:Collect, a global supplier for the reutilisation and recycling of clothes and footwear, whereas H&M, one of the pioneers regarding close the loop, advanced in this matters together with Hong Kong Institute of Textiles and Apparel (Hkrita).
Being sustainable is starting to be profitable too. In the last edition of Copenhagen Fashion Summit, The Boston Consulting Group together with Global Fashion Agenda presented the report Pulse Score, in which they revealed that the companies who build a business model in base to sustainability and manage to escalate it will improve their gross operating profit (Ebitda) in 2030 by one or two percentage points. The research also claimed that those who continue working with traditional systems will contrarily reduce it by three or four percentage points.
On the other hand, the social and political pressure also accelerates this situation and forces giants to speed up in investigation matters. At the beginning of the year, the French Government presented a series of legislative proposals to advance in circular economy. Amid them, there was the prohibition to incinerate or destroy clothing items that brands or stores do not sell out and forces both to donate them to institutions for their recycling or to NGOs for their reutilisation.
The British Parliament, for its part, has questioned the fast fashion system. The Lower House created a multi-party Environmental Audit Committee which started a profound investigation of the environmental impact of fashion and its wastes.
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