Progress on sustainability in fashion: the move to circularity

Key takeaway

Members of WRAP's 'Textiles 2030' initiative have united to set ambitious, science-based 2030 targets to reduce the carbon and water footprint of new textiles products, with progress against those targets measured annually (against a 2019 baseline). WRAP's most recent Textiles 2030 Annual Progress Report, has found real industry progress against these targets with each tonne of new textiles produced now having a smaller carbon and water footprint than in 2019. Despite this, the report highlights that to accelerate further industry progress, managing demand-side pressures will also be key. The message: brands should embrace circularity and make 'pre-loved' a bigger part of their portfolio. Doing so raises a number of legal questions - from trade mark protection to compliance with consumer protection law.

Background

According to the WRAP report, it is estimated that the fashion and textiles sector accounts for up to 8% of global greenhouse gas emissions and uses 93 billion cubic meters of water each year. Research has also shown that 336k tonnes of clothing are sent to UK landfill or incineration annually. Against this backdrop, Textiles 2030, a UK-based voluntary agreement funded by its signatories and the UK government, aims to reduce the environmental footprint of the textiles value chain. The 130 signatories come from across the fashion and textiles sector, together representing more than 62% of clothing placed on the UK market. They have voluntarily committed to ambitious, science-based 2030 targets, including a 50% reduction in carbon emissions and a 30% reduction in water use, linked to new textile products. Each year, WRAP publishes a progress report assessing signatories' progress in meeting these targets.

Progress against the Textiles 2030 goals

WRAP's most recent report found that brand and retailer signatories are taking proactive steps to reduce the environmental impact of their products through "improvement actions", including fibre substitutions, improved processing and circulatory actions. According to the report, 44% of the products sold or placed on the UK market by these signatories in 2022 had a lower environmental impact than their conventional counterparts. Specifically, between 2019 and 2022, there was a 12% reduction in the industry's carbon intensity per tonne and a 4% reduction in volume of water per tonne. This means that each tonne of textiles produced now has a smaller carbon and water footprint than in 2019.

According to WRAP, industry progress has however been impacted by an increase in overall production levels - a direct result of consumers' continued appetite for new clothes. Between 2019 and 2022, there was a 13% increase in the volume of textile products sold in the UK. The average Briton now buys 28 new items of clothing a year, more than any other nation in Europe, and research shows that over a quarter of most wardrobes have been unworn in the last year.

The upshot is that, despite the industry's continued ambition and hard work, there has been a more limited 2% reduction in the overall carbon footprint of textiles sold by signatories in the UK since 2019, and an 8% increase in overall water usage. This indicates that to accelerate progress, demand-side pressures must also be addressed.

A move to circularity

WRAP's report indicates that to meet the industry's sustainability targets there should be increased focus on circularity across the textiles product lifecycle, including by facilitating increased recycling and re-use by consumers and reducing the amount of clothing sent to landfill. The Textiles 2030 Circularity Pathway estimates that over half of the progress required to meet the Textiles 2030 targets can be achieved by shifting to more circular business models, indicating that the move to circularity is key to unlocking further sustainability progress by the sector.

There is also an increasing legislative push towards circularity. The EU's proposed Ecodesign Regulation, which has been provisionally agreed and is expected to come into force this year, will introduce a new framework for setting minimum ecodesign requirements for products placed on the EU market, to improve their durability, reusability and recyclability. Specific product requirements will be outlined by the European Commission through secondary legislation with textiles (specifically clothing and footwear) flagged as priority products. The Ecodesign Regulation will also introduce an outright ban on the destruction of unsold clothing and footwear in the EU two years after the regulation comes into force (or six years for medium-sized companies – exact thresholds to be confirmed when the final text of the Ecodesign Regulation is published). Separately, proposed changes to the EU's Waste Framework Directive could see the introduction of an extended producer responsibility (EPR) scheme for household textiles, clothing and footwear in the EU as part of a wider push to improve the circularity of textiles and encourage greater re-use and recycling. The European Parliament and European Council are now due to finalise their negotiating positions on the proposed changes.

Circular initiatives

There are already many great examples of circular initiatives by businesses across the fashion and textiles industry which aim to increase re-use and recycling of products and to make 'pre-loved' clothes a greater part of consumer's wardrobes.

Resale

Peer-to-peer resale has exploded in popularity in recent years (see our previous blogs on the resale market here and here). The Business of Fashion estimates that the global second-hand market for clothing will reach $351 billion by 2027, having grown 28% in 2022. According to a recent study, 75% of consumers say they have shopped, or are open to shopping, second-hand – and this figure rises to 83% amongst 'Gen Z'. Resale platforms are now available across the full spectrum of fashion, from Vinted and Depop with broad mass appeal, through to designer resale marketplaces like The Luxury Closet.

Rental

The rental market is also on the rise, offering consumers "clothing as a service" rather than ownership. Examples include L K Bennett's rental subscription service LK Borrowed, and The Devout which offers different plans allowing subscribers to receive 3, 5 or 10 rental items a month. The subscription models mean more revenue can be derived from the same product while also reducing the demand for brand-new products. In addition, there are now numerous third-party platforms that act as marketplaces for one-off rental, such as By Rotation, Rites, HURR and Lampoo (of which, the latter three also have a physical retail space).

Accelerating progress

The UK Government has signalled its intention to help fast-track the adoption of circular business models and change consumption habits. In its 'Waste Prevention Programme for England: Maximising Resources, Minimising Waste', the UK government has committed to  investing £15 million into the UK Research and Innovation's Circular Fashion Programme to drive action to tackle the industry's biggest challenges in adopting circular business models. This includes funding for research, in partnership with industry, focused on developing and supporting new circular fashion projects and services like those above.

Continued collective industry action and collaboration, whether through Textiles 2030 or otherwise, will also be key. For its part, the UK's consumer watchdog, the Competition and Markets Authority (CMA), has sought to support this kind of industry collaboration through the recent publication of guidance for businesses on the application of competition law to sustainability agreements. The CMA's aim is to make it easier for businesses to collaborate on environmental sustainability initiatives without fear of breaching competition law. Together, these developments help to support the fashion and textiles industry to drive even further progress against the Textiles 2030 targets.

Considerations for brands

For brands, the move to circularity through increased re-sale and rental offerings raises not only operational but also legal issues:

• Brands should ensure they have suitable trade mark protection to cover new services like clothing rental. Comprehensive clearance searches and early registration in appropriate classes will be key.
• The contractual frameworks for the rental and re-sale market are also likely to be different and brands entering this space will need to review and update their existing T&Cs and consumer-facing policies to ensure they are fit for purpose.
• Brands will also need to carefully review the language of any green marketing claims they make about any new re-sale or rental offerings and ensure these can be properly substantiated. This is important to avoid allegations of 'greenwashing' and enforcement action by consumer regulators such as the CMA and the ASA.
• Finally, brands selling to consumers in the EU should review the EU's Ecodesign Regulation, and associated secondary legislation, when it is published to assess the impacts for their business.  

Disclaimer: The information in this publication is for guidance purposes only and does not constitute legal advice. We attempt to ensure that the content is current as at the date of publication, but we do not guarantee that it remains up to date. You should seek legal or other professional advice before acting or relying on any of the content.