Policy for the Fashion Circular Economy
June 28, 2023
Listen to my voiceover here
This week we are going to lift up to a hugely important and high-level lever for the circular economy: policy. What laws do we have (or not) to promote the adoption of the circular economy? Are they incentivizing or penalizing?
In my experience, when I join cross-stakeholder conversations about key levers to advance the circular economy, I end up with two answers: consumer behavior and policy. In this week’s newsletter, I’ll be addressing policy. I am certainly not an expert on this topic, so my goal here is to paint a broader picture of where we are, where we are going and what that may mean for brands.
European Union + Policy
Super high level, it’s clear that the EU (and France especially) is taking sustainability and circular economy seriously, and they are absolutely leading the way. There have been multiple measures presented and passed in the last few years, with a stronger momentum in the past 12 months. Here’s my high-level understanding of where policy stands in the EU:
The EU Strategy for Sustainable and Circular Textiles was passed in 2022 and covers most of if not all of the key issues for circularity.
It “sets out the vision and concrete actions to ensure that by 2030 textile products placed on the EU market are long-lived and recyclable, made as much as possible of recycled fibres, free of hazardous substances and produced in respect of social rights and the environment.
Moreover, consumers will benefit longer from high-quality textiles -fast fashion should be out of fashion- and economically profitable re-use and repair services should be widely available.
The specific measures will include eco-design requirements for textiles, a Digital Product Passport and a mandatory EU extended producer responsibility scheme.
In addition, the Strategy foresees measures to tackle the unintentional release of microplastics from textiles, to ensure the accuracy of green claims, and to boost circular business models, including reuse and repair services.
To address fast fashion, the Strategy also calls on companies to reduce the number of collections per year, take responsibility and act to minimise their carbon and environmental footprints, and on Member States to adopt favourable taxation measures for the reuse and repair sector.” (link)
I am so inspired by this comprehensive approach being adopted by so many influential countries. Here’s a visual fact sheet to accompany the above.
It’s also important and newsworthy that France banned the destruction of unsold goods in 2020 and the larger block of EU countries is doing the same in 2023. Where companies will send their unsold goods is a challenge to tackle, but banning their destruction is a step in the right direction because it sends a signal to big companies that overproduction cannot be swept under the rug (or in this case, burned under the rug).
USA + Policy
The US has a few different irons in the fire, both at federal and state levels. Here’s what I could round up:
Washington, California and New York are all working on different types of recycling and extended-producer responsibility laws, not all of them aimed at fashion, but I see any type of EPR regulation as a step in the right direction because it signals to manufacturers that they need to start making their products recyclable and trackable. California is helping me make this point,
“Building on some of the legislative work done as part of a landmark year for plastic and battery recycling in California, Senator Josh Newman has introduced a bill to create a statewide collection and recycling program for textiles. Under SB 707, producers of clothing and other textiles will be required to implement and fund an extended producer responsibility (EPR) program that will enhance recycling and increase reuse in this important sector.”
This bill was introduced in Feb. 2023 and has not passed yet.
The FABRIC Act is a federal bill proposed by a NY senator and a NY congresswoman. The bill “proposes major new workplace protections and manufacturing incentives to cement the US as the global leader in responsible apparel production.” This bill is focused on workers’ rights, rebuilding the US garment industry and reshoring manufacturing.
The Fashion Act: “The Fashion Sustainability and Social Accountability Act is a groundbreaking piece of legislation that holds companies accountable and levels the playing field for those already trying to do the right thing. If passed, it will establish New York as the global leader in thoughtful accountability for the fashion industry.” This effort is for New York State and focuses on ensuring social and environmental sustainability.
American Circular Textiles is a policy group aiming “to align fashion’s circularity stakeholders around supportive policy and to drive scalable change.” They recently published a policy paper which makes the case for moving towards a fashion circular economy. (See Q+A with founder Rachel Kibbe further down in this newsletter.)
Here are the ways ACT is imagining shaping policy: “The proposed public policy measures outlined in this paper…that could support a transition to a circular fashion industry include (but are not limited to):
a) circular fashion tax incentives for consumers and businesses;
b) EPR (extended producer responsibility) for textiles;
c) government fiscal support to enable widespread and accessible circular fashion solutions for Americans;
d) increased oversight over fashion waste pollution contributors.”
The US is still very much in a building phase with circularity and sustainability policies, but I am excited that individual states are starting to propose their own bills, especially highly populous states where many large businesses are based.
Every Brand’s Role
While there is no American law (yet), I think brands should take what’s happening in the EU as a preview of the types of laws they can expect in the United States. The US may never go as far as the EU has and will, but it will adopt some of these practices. One of the most obvious places a brand can start equipping itself is in the area of Extended Producer Responsibility. Brands will be held accountable for what they produce and put out into the world, and they need to provide a way to get those products back from customers when they’re no longer wanted. A straightforward take-back program where any item of a brand’s products is taken back is an amazing way to deliver EPR. Brands can work with expert sorting vendors like debrand or take operations in-house and do it themselves. These take-back programs can naturally feed resale, repair, reuse and recycling programs. (This is my specialty! Please let me know if you want to learn more and discuss how this could work for your brand or retailer.)
Waste → Value
One important takeaway for me in all of this is how we think about the textiles we are done with or no longer want (on an individual or company level). I believe most of us consider damaged textiles as waste, in which case why should we care what happens to them if they are no better than trash? I think the fundamental mindset shift from ‘waste’ to ‘recyclable material / valuable material’ is happening, and it’s also what so many of us are working towards. When I spoke with Steven Bethell of BVH (who buys 4 million garments/week from charities) he made this point as well. Many of us today would consider what he’s buying to be ‘waste’- items that a charity cannot resell and therefore probably have little to no perceived value, but Steven and others see the monetary value in these items. They know they can be sorted, resold, reused and recycled. We all have to learn how to identify and create value from damaged goods.
I think about plastic bottles and how until recently they would go in the garbage, but now, with the evolution of plastic recycling (at least where I live), it feels just plain wrong to throw away a single use plastic bottle. (All the better if you don’t use them at all and opt for a reusable water bottle, but I know at least in my house we haven’t fully escaped the single use plastic bottle yet.) I’m confident that we will also get to this place with textiles, where every consumer will look at their damaged t-shirt and know that it definitely doesn’t belong in the garbage because it is not waste. To get to that point, we need to create an easy way to recycle textiles, and some places have proposed curbside textile recycling, just like cardboard, metal, paper and plastic. Here’s an example of Norwalk, CT’s curbside recycling program in partnership with Helpsy.
What can we each do?
As individual consumers, we choose what we consume. We can purchase used goods and we can buy new goods from responsible companies. We can also call our government representatives (here’s a link to find out who your governor is and contact them). This circles back to my earlier comment that consumer behavior and policy are the 2 biggest levers to work towards a circular economy. (More on consumer behavior in another newsletter.)
Spotlight on Rachel Kibbe, founder of ACT
To wrap up this newsletter, I am highlighting Rachel Kibbe who is heading up the ACT policy group. I was curious to understand what her work is like as someone that is directly participating in the policy side of change. Here’s our brief interview.
What is the ACT policy group?
We are a formal, membership based, coalition of fashion organizations operating in the circular economy. Our members have a vested interest in supportive policy to bolster and catalyze circular over linear fashion systems domestically, to grow our market as renewable energy and transportation have grown into durable, competitive industries.
What’s the role of the group?
Our role is to provide a collective voice for a critical growing sector, whether through influencing or leading. We provide a necessary space to share common goals, learn from each other, and educate policy makers on the nuances and complexities of their businesses, in order to lead or shape pending policy to ensure it maintains and catalyzes industry strength.
What has the last year been like for you?
We spent the first quarter of the year writing a policy position paper on The U.S Opportunity for Circular Fashion. It’s an accessible, but heavily researched and comprehensive summary of the problems we are trying to solve in the U.S. as they relate to textile waste, and the domestic economic and job opportunities provided by potential policy solutions. We’ve leveraged that work to build relationships and make inroads on the Hill, and work with other trade associations who have aligned interests, to create a larger and more unified voice for both their and our members alike, who aim to stand up circular business models.
On the state side, we endorsed a Maryland secondhand sales and use tax exemption bill, and we continue to engage with California on their textile EPR bill, hoping to shape the language so that both reuse, resale and recycling businesses are supported. On the Federal side, we wrote a letter to the FTC on our Green Guides Position on reuse and recycling, and wrote and Open Letter with another organization, Politically in Fashion, to the FTC, signed by dozens of brands and other organizations calling for public forums on textile reuse and recycling, which have still been an overlooked topic on their agenda. The work is intense, and much of it goes on behind the scenes.
On the business leadership side, I onboarded two retailers and three additional circular economy players, with more organizations up for consideration. I met my initial fundraising goals for the year, and accomplished what I thought we’d only be able to achieve with double those funds, which has been one of my proudest achievements as an entrepreneur and also speaks to the strength of our membership, and their personal time and contributions.
What's bringing you down these days? What are your current challenges?
A lack of resources for critical work, and any questioning regarding the need, importance, and inevitability of a more circular fashion economy. The idea that “it will never work” is just misguided.
On the personal side, it’s being in a position of eternal scrappiness. Leadership, for anyone though, can be lonely, and a continuous battle for resources; especially in the sustainability realm which remains wildly under-resourced, and the headwinds of entrenched and legacy industry, and corresponding policy, sometimes feel insurmountable.
What gives you hope and makes you feel excited?
ACT and our members' willingness to participate in something so novel and entrepreneurial, and be along for the ride, gives me optimism every day. The reception and warm welcome we’ve received from many policy makers is probably the most surprising thing to me. The world is ready for our work and I have absolute faith that ACT will accomplish paramount positive change for our industry.
Anything else?
Stay the course. This is just the beginning.
Okay, that was another long one! I hope you enjoyed it and learned something new.
Take care of yourselves- as my coach says to me, ‘do something sweet for yourself today’.
Cynthia
