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How Three Firms are Putting Their Stamp on Circular Fashion

Three forward-thinking companies that are pushing the envelope in developing circular, traceable fibers and raw materials peeled back the curtain on the process, and some of the challenges that stand in front of their growth at the Sourcing Journal Sustainability Summit.

Alt Tex is a biomaterials startup that develops biodegradable and carbon-neutral alternatives to polyester out of food waste using fermentation technology. Chief executive officer and co-founder Myra Arshad noted that while the firm is still in its early stages, it has maintained an advantage due to its ability to blend nearly any other fiber with its own.

“That’s really exciting because polyester, which is what we’re trying to replace, is very frequently blended with cotton. What that does is it takes an otherwise biodegradable material like cotton, and it renders it completely unbiodegradable, it’s very difficult to separate the two,” said Arshad in a panel moderated by Sourcing Journal founder Edward Hertzman. She said the Alt Tex technology alleviates this concern, noting that “we’re able to integrate when mixing with cotton, the properties of polyester, but maintain the biodegradability of the end garment.”

Thus far, Alt Tex has raised $4 million, but Arshad said that for the firm to reach critical mass—which she defines as replacing approximately 30 percent of polyester—the company would need “nine figures” worth of funding. But for the time being, Alt Tex is focusing on integrating its technology with existing fermenters.

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“When investors invest in these spaces, they’ll invest in one company just to have that stamp on their website, and that’ll be it,” said Arshad. “But the reality is that when we talk to suppliers every single day, it’s clear that there aren’t enough recycled or circular fibers to satisfy demand from brands. So investors need to understand that the investment needs to be continuous and needs to be lateral and it needs to be in the entire ecosystem, and not in a one- or two-off.”

Mustafain Munir, director and CEO, Cyclo Recycled Fibers, said as his company scales, he is seeing more competition arise in the firm’s home market of Bangladesh, as well as neighboring countries like Pakistan and India.

“The overall capacity to recycle, let’s say 100 percent, cotton waste, or cotton-rich waste is growing quite a bit,” said Munir. “And the brands are demanding more of it, so there’s a general overall improvement in the amount of volume used.”

However, the proliferation of recycled cotton also comes with a higher propensity for greenwashing, he said. In particular, Munir called out a problem in the certification chain, where he said businesses often use their spinning waste and call it recycled.

Munir said that the problem typically occurs in the carding process within textile spinning, when individual fibers are separated from each other before being realigned to improve quality. While cotton fiber can be 40 percent recycled before entering the stage, the final spun yarn may contain as little as 10 to 20 percent recycled cotton, he said.

Citing Sourcing Journal and AlixPartners’ 2022 survey report, Hertzman said that fewer than 20 percent of companies are tracking their sustainability progress.Traceability platform provider Aware is hoping to help fill this industry void, offering an integrity solution that combines both a physical tracer and blockchain technology.

Aware, a partner of Cyclo, provides users with a “digital product passport” of each item of clothing, according to founder and managing director Feico van der Veen.

During the panel, van der Veen even scanned Munir’s shirt with a tracer to show how the digital product passport works, revealing that the shirt was 50 percent recycled cotton and 30 percent organic cotton. To create the digital product passport, the company creates digital twins which represent the materials at the factory level that are placed on the public blockchain. Additionally, Aware’s systems will add a QR code to every final product for mobile scanning.

Van der Veen said the solution is coming at a time when more companies are feeling pressure to prove the sustainability of their garments.

“The dilemma is consumers are asking for much more transparency, they’re much more demanding. They don’t accept just a hangtag or certification anymore. And in Europe, by 2030, all sustainable products must have a digital product passport,” said van der Veen.

He cited the internal pressures brands are now feeling as they set their own sustainability goals.

“It goes through the designers, the buyers, the buying officers to the factories, through the tangled supply chains and creates a dilemma on how to implement their own goals,” said van der Veen. “All the big brands try to get control of their supply chain, but it’s extremely difficult.”

Van der Veen also noted one more pressure point, calling the certification standard often “complicated” and indicated that in some instances, companies will come up with their own fraudulent certification.

All three firms are backed by the Singapore-based sustainable fund, Presstar, which invests exclusively in companies that are reducing water consumption and chemical pollutants in the textile supply chain while positively impacting CO2 emissions.