Despite growing interest developing in circular strategies for textile waste, results could lag if the apparel industry fails to significantly increase its investment in the space, according to new McKinsey research.
The consulting firm’s latest report details California’s role in closing the loop and reversing the traditional linear model for production and consumption. McKinsey data from an October survey shows that 92 percent of consumers in California would participate in an apparel recycling program if they had the opportunity. More than half of respondents (54 percent) said they expect to buy more clothes made with recycled materials.
While consumer interest is on the upswing, the industry is slow to scale efforts around circularity, according to McKinsey partner Steve Hoffman. “As brands buy and sell more recycled garments, they demand more recycled fibers,” he said. But so far, demand and supply have remained at “a constant equilibrium,” with recyclers creating these fibers at a relatively small scale limited their wider adoption.
California has seen relatively little investment or research into closed-loop apparel and textile processes, Hoffman added. Infrastructure to support the collection, sorting and recycling of clothing remains limited. “There are millions of dollars needed to build capacity” to support the recycling of garments, including funding labor, building out factory space, and pushing research into recycling techniques, which are “still in their infancy.”
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McKinsey research shows that in 2020, California residents purchased up to 530,000 tons of clothing, with 500,000 tons likely ending up in landfills. Almost all (97 percent) of the textiles used in clothing bought in the state are made from virgin materials, and less than 1 percent of the garments worn today are likely to be used to create new products in the future.
McKinsey’s research indicates that a closed-loop textile recycling system could yield significant benefits for California, providing new revenue streams for companies and jobs for residents. McKinsey estimates that advancing circular solutions for polyester, which makes up about 50 percent of California’s landfilled garments, could have an economic impact of $3.5 billion to $4.5 billion per year in revenue growth, job creation, and GDP growth attributed to those new roles.
“A lot of these materials could actually be put directly back into the existing supply chain,” Hoffman said, given the proximity of the Ports of Long Beach and Los Angeles. Recycled fibers developed in California could be sent to Asian garment producers in containers that were already en route to the region, limiting unnecessary carbon emissions. But current investment is “not moving fast enough” to make a significant impact, even as textile recycling is “a need that everyone identifies and agrees with.”
Brands including McKinsey report collaborators Allbirds, Gap Inc. and Patagonia have committed to increasing their use of recycled polyester. More than 70 labels signed on to the Textile Exchange’s 2025 Recycled Polyester Challenge, promising to increase their use of the material to 45 percent by 2025.
But private companies need to partner with each other—along with state-run programs like waste management—to level the playing field across the sector. “Our research shows that recycled fibers should become less expensive than virgin fibers over time, but there is a financial hump we need to get over,” Hoffman said. Collaboration between industry players during the pre-competitive production stages would help amass a critical volume of feedstock for recycling more quickly, and fund advancement in the space. This would allow innovators like Ambercycle, a polyester recycling plant in Downtown Los Angeles, to scale its operations.
To date brands have been reticent about planning investments or sharing resources. Hoffman believes many hesitate to fund processes that aren’t proprietary. They are preoccupied with whether they should invest in changing shoppers’ consumption habits, only to have competitors jump on board once progress has been made. “There’s a lot of that kind of jockeying and wondering, ‘Am I using my dollars to subsidize others in the industry?’” he said.
This attitude will limit progress, but Hoffman believes the growing attention to ESG issues could force brands to collaborate. “You can’t solve these issues one company at a time, or without public-private partnerships,” he said.