Prioritising the Circular Economy: Policies, Promises and Pitfalls

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Monday this week was the hottest day ever recorded globally, according to data from the U.S. National Centers for Environmental Prediction. The average global temperature reached 17.01 degrees Celsius (C) and 62.62 Fahrenheit (F), surpassing last year’s record of 16.92C (62.46F). Temperatures reached as high as 50C (122F) in parts of North Africa as well as in the southern US and Mexico caused by the heat dome. Antarctica also broke its temperature high with 8.7C (47.6F). Climate change, combined with El Niño are thought to be responsible for the soaring temperatures.

These temperatures are ominous given objectives outlined in the Paris Agreement to restrict global warming to limit the temperature increase to 1.5°C above pre-industrial levels. The sentiment throughout the fashion and textiles industry – and basically everywhere else – is that there is a high possibility that climate targets are set to be missed if urgent and substantial action is not taken. ****“Ambition to action” was a key theme at the Global Fashion Summit in Copenhagen last week, and perfectly captures the frustration of the industry around the lack of meaningful change despite a massive amount of ongoing discussion.

Earlier this week, the Special report 17/2023: Circular economy – Slow transition by member states despite EU action, was released by the European Court of Auditors. It found that the €10 billion that EU member states received to stimulate the circular economy has not been used effectively. The majority of the budget was instead spent on waste management, rather than on circular design innovations to reduce waste. This is worth reiterating: a huge amount of money set aside to help industries generate less waste and give their products longer lifespans was instead used to orchestrate and optimise the disposal of waste, with little – if any – signal that overall waste production was reduced as a consequence of this investment.

So far, then, the EU’s efforts towards preserving materials and minimising waste (key objectives of its Green Deal, circular economy action plans (CEAP) 1 and 2, and industrial strategy) have been subpar, with the average percentage of recycled products in all 27 EU Member States only increasing by 0.4% between 2015-2021. The Netherlands was one of the few countries where progress was made: where the circular share of material consumption had increased by almost 34% by 2021, putting them on track to achieve the target of 50 percent reuse of materials in 2030. But the overall picture is bleak. As the report states: ‘While the Commission’s CEAP 2 objective is to double the 2020 circularity rate by 2030, the actual circularity rate has declined slightly since 2019… seven member states regressed during this period.”

What is going wrong? It’s maybe easier to answer this by looking at what is going right – taking The Netherlands as an example. The small country has emerged as a leader in circular fashion and textile innovation, due to early adoption of sustainable practices given the country’s size; a supportive local government; excellent infrastructure and education; the presence of highly skilled talent; English as the primary language of business allowing for international relations; a focus on world-class design; and a thriving startup and fashion non-profit scene including Fashion for Good and Fashion Revolution – who connect sustainable fashion entrepreneurs with brands, mentors and investors through its global accelerator programs. And according to the white paper ‘Fair Thread: Policy Recommendations for a Sustainable Textile Industry’ SMEs are the core of the EU fashion industry, making up 98.8% of all EU fashion businesses in 2022.

The Netherlands is also a major European hub for post-consumer textile imports, sorting and export for reuse, open-loop recycling and downcycling. Alongside France, the country is the only other in the EU that has introduced an Extended Producer Responsibility (EPR) scheme for textiles. The EPR, which launched on the 1st of July, requires all manufacturers to take the reins on the collection, sorting, recycling and reuse of the products they bring to the Dutch market.

Along with the factors at a macro-level, Dutch citizens and residents also play a part in the overall prioritising of sustainable practices, assisted by the incentives in place and partly due to it being ingrained into the culture of the country to save rather than to spend – which fits in well with the sustainability objectives.

Is a large part of the issue a cultural one? In Holland, circularity and sustainability aren’t encouraged, they’re expected. This is in contrast to some of the other EU nations as well the UK, where expectations are just not the same, speaking broadly. It’s not to say that the Netherlands has zero flaws in its systems, but the mindset does seem to be markedly different.

For example, this week supermodel Naomi Cambbell faced backlash for partnering with UK-based fast-fashion retailer PrettyLittleThing. Like its counterparts, the company has regularly been accused of producing cheap, poor quality clothing while exploiting workers – with protesters gathering at the brand’s 2022 fashion show, claiming the brand had unsafe working conditions and offered unfair wages. Campbell, on the other hand, has up until now been recognised for her work in the fashion industry and her humanitarian efforts, running her own Fashion for Relief foundation.

The debacle is not dissimilar to Shein’s recent influencer trip fiasco, where money and exposure was enough incentive to put profit before the planet. But the difference here is that this is Naomi Campbell, forget about social media numbers – Campbell is one of the most famous faces in the world. Her endorsement of any company with questionable environmental and ethical credentials is something that is going to be seen and felt globally. One online user wrote: “Is this just proof that the whole sustainable fashion system is so unattainable that we’ve pretty much given up? We’re all guilty of turning a blind eye but this feels… like a turning point.”

If this is a tuning point, who should spearhead it? Is it the responsibility of all countries to aspire to follow the Netherlands model and the citizens follow from there, or should it begin with private citizens and work upwards? Both at the same time, would be the ideal, as policy moves slowly but is effective when in place, and the dynamics of social media and business evolve rapidly. Just as the Netherlands isn’t perfect, places like the UK also are in the process of shifting their circularity paradigms. Selfridges, the iconic London department store, is launching its first ‘swap shop’ in partnership with circular fashion platform Loanhood.

In the pursuit of enhancing circularity, the leadership role in driving change will vary across nations. In certain contexts, policy measures are expected to assume the forefront, with governments taking proactive steps to introduce and enforce regulations that promote circular practices, while elsewhere, the impetus for driving circularity will emerge primarily from the actions and initiatives undertaken by citizens.. And ideally, synchronising top-down and bottom-up strategies will be what creates a more comprehensive and effective transition towards a circular fashion economy, meeting the ambitious 2030 objectives.