Global fashion industry can reach 80% circularity by 2030: Report

The global fashion industry can become 80% circular by 2030 with increased investments in existing recycling technologies and infrastructures, according to a new report. 

To deliver the 2030 scenario, the textile industry will need about $5-$7 billion investment by 2026. 

The shift also requires increased confidence in the business case, calling for greater transparency of the demand for recycled output and the consistent supply of traceable high-quality feedstock, the report said. 

In the aftermath of COP26, Global Fashion Agenda (GFA), the leading non-profit for industry collaboration on sustainability in fashion, and its strategic knowledge partner, McKinsey & Company, on Monday published the report titled "Scaling Circularity", which reveals opportunities and investments required to scale circular fashion systems. 

The report also highlights learnings from the Circular Fashion Partnership in Bangladesh. It has mapped and traced over 1,000 tonnes of textile waste in Bangladesh in a year since October 2020. The quantity is expected to reach over 200 tonnes a month by the end of this year – a significant achievement in the context of the global pandemic. 

The analysis showcases the strong case for scaling this model to other markets, including Vietnam, Turkey, India, Malaysia, Indonesia and Bangladesh, claiming there is a $4.5 billion opportunity.

The case study also illuminates the critical actions needed to overcome the barriers to scaling systems including: formalising the informal waste management sector, providing alternatives to current use-cases for textile waste and assuring supply of quality feedstock and demand for recycling output. 

The  clothing and textile industry accounts for 4% of global CO2eq emissions, equivalent to the emissions of France, Germany and UK combined, and material production is the largest polluter within the value chain – accounting for 70% of fashion's greenhouse gas (GHG) emissions, according to the McKinsey & Company and Global Fashion Agenda. 

Yet currently, less than 1% of material used to produce clothing is recycled into new clothing, representing a loss of more than $100 billion worth of materials each year.  Therefore, scaling circularity is crucial to deliver the radical emissions reduction needed to meet the Paris Agreement's 1.5 degree pathway and the other ambitious climate targets that were recently announced at COP26.

Scaling Circularity modelled the potential for scaling textile recycling across the full value chain in 2035 based on existing technologies. This analysis suggests current technologies have the potential to deliver 75% textile-to-textile recycling into the fashion system, and a further 5% recycled feedstock from other industries.

The analysis also indicated that major recycling technologies deliver better environmental outcomes across greenhouse gas emissions, water depletion and land use. Plus, all technologies have the potential to be more cost effective than using corresponding virgin materials if they are scaled.

Federica Marchionni, chief executive officer at Global Fashion Agenda, said this research proves that the necessary recycling technologies exist, deliver huge improvements in environmental impact and that the economics work at scale.  The challenge is providing conditions for scaling.

"With sufficient investment, supportive policies, and by enabling pre-competitive collaborations, I am optimistic that we can create a profitable circular system and accelerate fashion's journey to net zero," she also said.