Circular Economy in the apparel industry

Even though it is a contemporary development in environment solving, the circular economy is built in an old concept - cradle-to-cradle which uses renewable energy instead of non-renewab

Subject Coordinator: Malliga Marimuthu

Lecturer: Tariq Halimi

ASSESSMENT 2

Critical Analysis Assessing the Linkages between Marketing & Management for Sustainability

Table of Contents

1.

1 Introduction

Global warming is the most urgent emerging problem that scares the existence of creatures and the living of human beings on this planet It is undeniable that this has resulted from the rapid development of urbanization and the endless consumption demand The textile and clothing industry which is an essential part of daily life, is the second giant cause of environmental issues, just after the oil industry (Sweeny 2015)

At the time when governments, scientists and international organizations are seeking for innovative ideas and solutions in order to lessen the spread of this disaster from different angles, the raising concern of circular economy is perceived as a promising solution to diminish the pressures of sustainability (Ellen MacArthur Foundation) which is a framework allows an economy may be endless restore and regenerate due to good design (Ellen MacArthur Foundation) Gap Inc, H&M, Nike Inc, Stella McCartney, HSBC, and many fashion trademarks have been joining Make Circular Fashion which launched at the Copenhagen Fashion Summit in 2017 as the Circular Fibres Initiative supported by the C&A Foundation and Walmart Foundation (Hendriksz 2018) Members of the initiative would involve in creating interests for society, the environment and business

This report will discuss the indication of the circular economy, following by evaluating whether or not the fashion leaders are implementing the principles of circular economy business development and value dimensions

2 Circular economy

The circular economy is a possible solution to replace the traditional linear economy (make, use, dispose) in which resources are kept in use for as long as possible while maximizing their values, and after that products and materials can be repaired, reused and recycled at the end of their lives (The Waste and Resources Action Programme)

Even though it is a contemporary development in environment solving, the circular economy is built in an old concept - cradle-to-cradle which uses renewable energy instead of non-renewable, and eliminates the waste level and toxic chemicals used through sustainable strategies (the advanced design of materials, products, systems) (Lewandowski 2016)

3 Examples on apparel industry

3.1 Resources issues and the solutions/applications on business context

Brands Resources issues The solutions or applications

H&M Raw materials –

microfibres - Develop the bio-degradable fibers that

potentially preplace synthetic fibers

Water management

- Apply water-efficient equipment to facilitate the operations

- Become 100% sustainable by using renewable and sustainable energy across the operations

Chemical management

-Adopt "Chemical Management Roadmap" and

"Screened Chemistry" to find the best chemicals that safe for human health and environment, and restrict hazardous chemicals

Burberry

London Raw materials --Disregard and ban the use of real fur Switch from non-renewable to more sustainable

on key raw materials Plastic - Replace the single-use shopping bags by

innovative sustainable packaging Chemical

management

- Cooperate with supply chain partners, set an apparent chemicals management

Energy -Develop an energy reduction program, also

inspire suppliers to increase the use of renewable energy across the supply chain

C&A Raw materials - Consume sustainable materials that use fewer

natural resources in the growing and production process, and adheres to human morals, animal welfare, and environmental ethics

Chemical management

-Apply "clean factory" approach and work with other organizations to broaden the elimination

of hazardous chemicals in the whole industry Water management -Use more sustainable cotton underpins

approach which consumed less water to grow than the conventional one

-Determine the water consumption and pollution level within and without the production process in three categories by which can find the most feasible solutions to tackle

Marks &

Spencer

(M&S)

Raw materials -Use 100% sustainable cotton that is beneficial for

humans and the planet

-Sponsor the Microfibre Consortium's research to shorten and preclude the releases of microplastic from synthetic materials

Chemical management

-Introduce new guidance and best practice for suppliers and involve elements on environmental management

Energy -Obtain 100% renewable electricity and to remain

carbon neutral globally

-Improve the efficiency of energy used in operated stores, offices and warehouses

ASOS Raw materials -Practice recycled materials in all products

-Progress a specific strategy for departments that

use large volumes of synthetic fibers

-Stop selling agora, and acquire suppliers to follow the animal delivered materials rule

Chemical management

-Perform the test of intensity control monthly to ensure the global regulations implied in all products

-Consume more eco-friendly chemicals Energy -Replace lighting by low-emission LED alternatives

-Use 100% electricity delivery vehicles in the UK and so on

ABFRL Raw materials -Source sustainable materials from farms and

manufacture at factories guarantee environmental and social trustworthiness

-Implement the set of 'Guidelines' on product sustainability

Energy - Turn into a closed-loop approach which can

reduce the overall energy footprint of the product

- Adopt innovative technologies, renewable energy, and install efficient equipment to assist the energy efficiency measurement

Water management -Apply water-efficient appliances, rainwater

harvesting, sewage treatment plan Chemical

management

-Replace artificial dyes by pigments and natural dyes that cause fewer negative impacts on human health and environment issues

3.2 The implications of resource loops

Brands Slowing Closing Narrowing

H&M - Create a circular

design of long-life products that can easily to reuse and recycle

- "Take Care" service - caring customers' garments and inspire them to extend the utilization period of products

-Increase the percentage of recycled materials or sustainably-sourced materials in total materials on products and packaging

-Increase the use of leftover textiles in regenerating new fibers or yarns

- Reduce the level of freshwater

consumption whilst increasing the ability

to reuse discharge wastewater and maximizing the use

of rainwater

- Increase zero discharge of hazardous chemicals

in the supply chain and the usage of safer alternatives Burberry

London

- Extend the product life by donating the

-A part of unsellable items collection is

- Remove real-fur used

in all garments

unsellable items collection resold, repaired, reused or recycled

instead of destroying

-Revaluate the waste

of luxurious items and transfer into new products

- Diminish the use of plastic materials in packaging and distributions

C&A - The life of unwanted

garments that collected from the take-back project may

be extended by donating

-Refurbish and reconstruct all waste into new items or materials

- Reduce the impacts of

hazardous chemicals

in every tier

- Lessen the water used through sustainable materials

M&S - A repair service is on

planned for the introduction in 2025

- Give clothes from Shwopping program a second chance by giving to charity organizations

- Reuse and recycle at least three million wearable garments from Shwopping collection each year

- Exclude hazardous chemicals and heavy metals in all products

- Reduce the usage of fuel in store delivery

- Decline the use of plastic on packaging

ASOS - Use a circular design

that lasts longer the useful life of products

-Increase post-consumer recycled fabric materials in products

- Use less of virgin materials in the making process of denim products

- Replace real fur by faux fur

- Reduce the carbon footprint by using innovative solutions

in the previous section

maximizing utilization

of clothing & textile after the

collaboration with Intellecap for ‘Circular Apparel Innovation Factory' (CAIF)

-Recycle and recharge consumed water via a water management system

- Reduce fossil-fuel-based energy which results in a reduction

in carbon emissions

- Adopt sustainable processes which significantly decrease the negative impact

of making products

on the ecosystem

3.3 Value dimensions

3.3.1 H&M

Value proposition - Manufacture high-quality durable products which can

last long, attract consumers those have a limited budget

- Exploit residual value of resources Value creation and delivery - Consumers get incentives from the take-back system

- Distribute long-product life and cheaper product, supported by design for durability and repair activities Value capture - Consumers are likely to become more loyal as products

more durable and cheaper

3.3.2 Burberry London

Value proposition - Be stated as the most sustainable luxurious fashion

iconic based on Dow Jones Index (Peter 2018), by which can enhance the image and reputation of the brand

- Exploit residual value of products Value creation and delivery - Distribute high-end garment that is sustainable and less

harmless for the ecosystem Value capture - Upper-class customers who go green may be more

preferred the brand due to its green image and reputation

3.3.3 C&A

Value proposition - Exploit residual value of products and resources

- Consumers receive a voucher for the next item when participating ‘we take it back' program

Value creation and delivery - The costume service helps to expand the lifespan of

products

- Customers are encouraged to be more sustainable via the take-back program

Value capture - Customers are more loyal because they spend less

money (take-back system)

3.3.4 M&S

Value proposition - Exploit residual value of products

- Support customers to repair and maintain the product condition

Value creation and delivery - Repairing service helps to prolong the product life

Value capture - Consumers spend less than before because of the

tailoring service and the value to customers of the product

3.3.5 ASOS

Value proposition - Exploit residual value of products

- Attract the middle-class segment who have a tight budget and protect the environment

Value creation and delivery - Product is more robust and cheaper because of the

circular design and larger share of recycled materials Value capture - The consumer loyalty can be improved as products

more durable and cheaper, hence buyers may be more favourable to the brand

3.3.6 ABFRL

Value proposition - Attract consumers those have a tight budget as the price

is lower due to a drop-in manufacturing cost Value creation and delivery - The price is lower as fewer virgin materials used in the

manufacturing process Value capture - Consumers may now become more loyal to the brand

because they spend less (through value proposition)

4 Conclusion

The report has examined the practices of the six fashion brands in the circular

economy within their business context (due to the available information via corporate websites and annual reports) The classification of slowing, closing and narrowing loops was based on the paper of Bocken et al (2015) that can be found in section 3.2

Although many solutions have been put in action to address the resource issues (section 3.1) and promote a more sustainable and circular fashion industry, entrepreneurs need further innovative solutions such as product strategies, technologies, redesign or infrastructure factories, distribution channels For instance, sponsorships can probably inspire the collaboration of economists, researchers, innovators, and environmentalists to introduce more sustainable and innovative solutions/strategies for the development of the garment industry and contribute to environmental conservation programs

Furthermore, the annual sustainability report likewise needs to be improved and more transparent with a statistical table of items or collections manufactured by reused or

sustainable materials, and its contribution to the total revenue of the brand, by which the stakeholders can evaluate the business performance

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<

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