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Fashion that doesn't go out of style

, by Francesca Romana Rinaldi - Direttrice Monitor for Circular Fashion SDA Bocconi School of Management
From the recovery of materials to ecodesign, the fashion industry aims to be sustainable. But for now, EU regulation remains the strongest push to drive change towards circularity in the industry. However, there is the risk of merely adapting to what is required by law, and not being able to grasp all the advantages that derive from a business transformation oriented towards circular value chains

The recent decree proposal for the establishment of an Extended Producer Responsibility (EPR) regime for the textile supply chain of clothing, footwear, accessories, leather goods and home textiles is shaking up the Italian fashion sector, which has started a rush towards implementing circularity policies to prepare for upcoming post-consumer waste obligations.
In 2020, the European Commission's Circular Economy Action Plan of the related Green Deal established seven key areas essential for achieving a circular economy: textiles, plastics, electronic waste, food and water, packaging, batteries and vehicles, buildings and construction. On 30 March 2022, the Commission published a proposal for regulating the eco-design of sustainable products; in November 2022, it proposed new EU-wide rules on packaging. More recently, in March 2023, a proposal for a directive on Green Claims was published while the revision of the Waste Framework Directive is underway, including the EPR also for the European fashion sector.

Why is the focus increasingly on waste? Just look at the numbers, although they are still approximations given that there is still no obligation to collect data on textile waste in European countries. In the recent report "LCA-based assessment of the management of European used textiles" by Norion Consult for EuRIC Textiles, European data updated to 2019 speak of about 5.4 million tons of textile products placed on the market: of these, only about 2 million tons are collected as post-consumer waste. Of all used textiles, therefore, only about 38% are separately collected for reuse, recycling and disposal. At the moment a rather wide range is estimated for the various destinations: 50-75% is aimed at reuse, between 10-30% is recycled and the remainder is used for energy recovery or disposed of in landfills. The worrying fact that emerges from the report is that the remaining 62% is not collected separately and therefore ends up directly incinerated or landfilled. Also, according to the report in 2018 146,000 tons of textile waste were collected in Italy, of which approximately 68% was destined for reuse, approximately 30% was recycled, an approximately 2% was destined for landfill.
A McKinsey study "Scaling textile recycling in Europe - turning waste into value" published in 2022 with 2020 data estimates instead that between 7 and 7.5 million tons of textile waste are generated in Europe (with an average of 15 tons per person): about 85% are post-consumer waste and only 30-35% are currently separately collected. Starting from the post-consumer waste collected in Europe, 40% would be exported to second-hand markets outside Europe and the remaining 60% would be destined for the internal market (about 60% sold in second-hand markets, while the remaining 40%, or about 0.5 million tons, would be destined for recycling).

Let us remember that uncollected waste ends up in the incinerator or is sent to the landfill. Regardless of the estimates on the absolute numbers - on which there is still no certainty - there is still a lot to do, and the legislation on EPR should guide the sector towards a better use of discarded textiles as a resource.
But the focus on waste is not enough. We need to apply the principles of eco-design and supersede a system based on overproduction and overconsumption, by innovating business models. Managing sustainability and circularity requires a holistic approach: focusing only on end-of-life stage would be a mistake that reinforces the linear system. The implementation of eco-design principles along the circular fashion value chains constitutes a real opportunity to accelerate the green transition in the coming years.
The ultimate goal of a circular approach is to keep products and materials in use while maintaining their quality and minimizing the environmental impact throughout their life cycle. In its 2022 research report, SDA Bocconi's Monitor for Circular Fashion highlighted the challenges and advantages deriving from business transformation oriented towards circular value chains. Among the main pluses we find: the improvement of brand reputation and consumer/end-user loyalty, new business opportunities, new jobs and cost reductions.

In summary, legislation is today the strongest push driving change towards circularity in the fashion industry but it is not enough: political decision-makers and companies, trade associations, universities and research centers, media and non-profit organizations must work together to build a sustainable and circular fashion culture that puts consumers and end users at the center.
To build a sustainable and circular fashion culture, a multi-stakeholder approach that starts from education and information is needed.