Fashion brands may be betting on circularity to rehabilitate the industry’s reputation for pollution and profligacy, but few are making “acceptable” progress on claims that they’re closing the loop and carving out a more sustainable future for apparel production, says a new report.
Just three out of 100 brands operating in Europe, in fact—Levi Strauss, The North Face and Patagonia—made the cut in a study by management firm Kearney (previously A.T. Kearney), which created a Circular Fashion Index to evaluate and rank companies based on their efforts to extend the life span of their garments, including the adoption of resale, rental and reuse models.
The three top scorers “communicate openly” that their products should last longer by offering repair and maintenance services, incentivizing garment take-back and investing in secondhand platforms, Kearney said.
“These three brands share a commitment to investing in sustainability and, in particular, to prolonging the longevity of their clothes, seeing sustainability as a business opportunity and an environmental requirement rather than a sacrifice or marketing campaign,” it wrote in the report.
They’re also the exception, rather than the rule. Most fashion brands, Kearney said, achieved “abysmal” scores, with a median 1.6 out of a possible 10 points. The bottom 80 all earned fewer than 2.5 points.
Nearly half of brands missed the lowest-hanging fruit, Kearney said. While communication and promotion of circularity efforts are the “easiest and fastest” to implement,” 47 of brands “don’t do it all.” Just 14 percent, it added, did so “credibly,” and 80 percent extended the minimum amount of effort required by law, such as providing care instructions.
And the greater amount of commitment a circularity action requires, the worse results got. Only eight brands, Kearney said, offer extensive repair services. Unsurprisingly, most of the leaders in that realm are luxury stalwarts such as Burberry, Gucci and Prada, which racked up the highest scores, likely because they’re driven by both a demanding clientele and high prices and margins.
The least common circularity actions are those that require the introduction of a fresh business model, such as renting, leasing or selling gently used items. A scant five out of the 100 brands considered renting services, Kearney said, and just one—Lindex—achieved a “credible” score beyond the end of the testing phase. Resale, on the other hand, is “slightly more common,” with 12 companies testing or operating such a service.
“The results of our Index may seem daunting at first, but they reveal that fashion companies do have the power to become more circular—and Patagonia, The North Face and Levi’s are the living proof,” Kearney wrote.
It warned, however, that circularity laggards might want to catch up—and sooner rather than later.
“Consumer sentiment is shifting as people want to dress not only fashionably, but also in an ethical and sustainable way,” it said. “Sustainability is moving away from being a nice-to-have brand attribute toward becoming a must-have business strategy and operational practice.”
To begin with, brands can start with “easy-to implement” measures such as educating consumers about how to care for their clothing. (H&M, for instance, publishes detailed laundering instructions and repair advice on its website.) Next, companies should encourage consumers to wear their purchases longer and restyle them instead of “chasing the latest trends.” They might borrow a page from Giorgio Armani and ease up on the number of product launches per year, taking the “pressure off the consumers to be on trend,” Kearney said.
To “credibly embrace circularity,” however, brands must tackle issues at the drawing-board stage, creating longer-lasting, multi-functional pieces that can be easily restyled. “Product quality, such as durability and no discoloration, also plays a crucial role in encouraging consumers to wear their clothes longer,” it said.
Brands can also explore recycled or biodegradable alternatives to traditional materials such as cotton and polyester, Kearney said. (Think Tencel x Refibra or textiles derived from agricultural waste.) But to “truly become circular,” they need to invest, directly or through partners, in reverse logistics so they can reclaim clothes and prevent them from winding up in a landfill or incinerator. Another way of extending the longevity of their products is to establish repair services or embracing trade-ins and resale. Finally, garments that are damaged beyond repair can become feedstocks for new ones. In the long term, Kearney anticipates that recycled fabrics will become par for the course.
“In this new business landscape, fashion brands that act swiftly and decisively will be among the winners,” Kearney said. “Consumer sentiment, technological innovation, regulation and the climate crisis are all pacing the way toward circularity.”
Such changes across Europe’s fashion industry could effectively halve the amount of carbon emissions it currently produces, transforming it from an “ecological problem child into the epitome of a sustainable industry,” Kearney said.
Now is the time for a “radical rethink on sustainability,” it added. With a growing world population and rising household incomes, any “half-hearted attempt” to reduce carbon emissions will accomplish little.
“Fashion brands that cannot credibly explain how they are not harming the environment will lose relevance, with many going out of business, which—harsh as it may sound—will lead to a better world in the long run,” Kearney said. “But brands that make a concerted effort now to adopt circular business models will be well-positioned to build the competitive advantages that are crucial at a time when a circular economy has become a matter of survival in the fight against the inevitable impact of global warming.”