Sustainability-focused fashion brands have talked about the importance of brands moving toward a more circular model, the positive impact it would have on the environment and the current demand from consumers. But going circular requires a big investment. At the very least, it requires securing partners that can handle taking back clothes and recycling them.
But the companies that have already embraced circularity — and those whose business is built on helping others do so — are hoping that a new wave of legislation and policy in the U.S. and E.U. will help grow the category.
For example, in March, the E.U. proposed as part of its Circular Economy Action Plan a suite of laws that includes the creation of a digital passport for all European-made goods. The passport would indicate a product’s lifecycle and make it traceable. As such, it would allow customers to compare, in a standardized way, the durability of products to evaluate their sustainability. Fast-fashion products made to only last a few wears before going in the trash would be graded poorly compared to something made with a long intended life and ease of recycling in mind.
Peter Comisar, managing partner of Story3 Capital, which just invested $100 million into the circular materials company Recover, said the E.U. is ahead of the U.S. in legislation around products’ sustainability.
“European brands like Primark and Inditex are more forward-thinking in this space,” Comisar said. “And [their local] governmental entities are pushing for more mandates around circularity and sustainability. We hope governments will put more pressure on U.S. players.”
Recent pieces of legislation in the U.S. have indicated that things are moving in that direction. New York’s proposed Fashion Sustainability Act would require any fashion brand or retailer that does business in New York to disclose their sustainability processes and track their outcomes. In October, California passed a suite of circularity laws restricting the creation of plastic waste and requiring proper labeling of compostable and recyclable materials.
Alfredo Ferre, CEO of Recover, said the hope is that, once more regulations are in place requiring fashion brands to be more responsible with the materials they use, Recover will be there ready to supply them with recycled cotton. Recover already has $500 million in committed orders for the rest of the year, Comisar said, with a goal of recycling 350,000 metric tons of cotton by 2026.
Other companies in the circular space are also pushing for more legislation. On June 8, resale companies including The RealReal, Fashionphile and ThredUp and rental companies like Rent the Runway were among 11 American companies to form the American Circular Textiles group. The group’s stated goal is to produce policy suggestions that would help push the American fashion industry to be more sustainable and more circular. The first suggestions are set to be released later this year.
“To take our collective work to the next level, we need solutions that will help scale textile recycling and reuse once a garment has reached the end of its wearable life,” said Megan Farrell, head of sustainability at Rent the Runway.
But like all elements of the fashion industry, the U.S.’s bad economic situation may cause problems for circularity. A circular business model can be more expensive than using cheap traditional materials, and when brands feel economic pressure, they may abandon costly sustainability goals in favor of saving their bottom line.
But Comisar said he hopes the push toward circularity will be strong enough to withstand that urge. That’s why it was important that Recover offers recycled cotton at the same cost as, or as close to, virgin cotton.
“In this environment, where brands are being pushed on margin, if it’s got a huge cost premium or it’s hard to implement, sustainable action will be harder to focus on,” Comisar said.
But policy changes in the U.S. are slow and brands shouldn’t wait to be forced before they do something, according to Kristy Caylor, founder of the circular apparel brand For Days.
“Policy is incredibly effective,” Caylor said, speaking at the Glossy Fashion & Luxury Summit earlier this month. “Seeing the E.U. doing what they’re doing is great. It’s a signal and a roadmap for how we should do things. But the U.S. has so far only seen movement on the coasts. Policy change is slow here. If we can build consumer traction and show that dollars are being spent on circular and sustainable fashion, that’s the most effective thing outside of policy that we can do to push this movement.”