Launch of the Circular Economy Simulation: Fashion Forward

Sim Institute is expanding its range of sustainability management simulation games with the launch of the Circular Economy Simulation: Fashion Forward. Following on from other sustainability simulations that are set in hospitality and healthcare settings (Net Zero, Net Positive Hospitality, the Carbon Emissions Learning Lab and Net Zero High School), our new simulation focuses on circularity in the fashion industry.

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Fast fashion is a problem

There is perhaps no other industry that demonstrates the problems with our current linear industrial model of ‘take-make-waste’ better than the fashion industry. Clothing production has doubled over the last 15 years to more than 100 billion units per year, partly as a result of the rise of ‘fast fashion’, with a quicker turnaround of new fashion styles and a shorter product lifespan.

Today, less than 1% of material used to produce clothing is fully recycled into new clothing and 73% of units sold end up in a landfill or are incinerated. The fashion industry generates 92 million tonnes of waste per year and is responsible for 10 per cent of global greenhouse gas emissions. Clearly, something has to change.

Fashion Forward simulation

In the Fashion Forward simulation, learners manage a fashion company for a period of 5 years with the aim of making progress towards circularity and reducing waste, while at the same time optimizing profitability. Although this is not an emissions reduction game, corporate emissions fall as a result of the company’s progress towards circularity.

At the start of each game, it is possible to choose the product line of the company (either trousers, shirts and dresses or shoes, bags and belts). Each year, learners select four initiatives from across the different stages of the company’s supply chain: Design, Manufacturing and Retail, and decide how much to invest in staff training and research & development.

Through the introduction of new business models, waste reduction efforts and design changes, the company can move towards circularity, but the road is challenging. Many initiatives that are effective in improving circularity and reducing waste are associated with reductions in business volume (e.g. reduce number of seasons or improve durability of products). New business models (such as rentals or pre-owned clothing) often struggle commercially.

Although the simulation is set in the fashion industry, these lessons can be applied to many other sectors that face issues of waste generation, including food, electronics, furniture, cars or toys.

Circularity is not easy

As illustrated by our Sustainability Management Simulation: Net Zero, in many cases the business case for corporate emissions reduction is quite straightforward. If companies invest in energy and water saving initiatives, both their emissions and their utility bills will fall. There are often also benefits in terms of customer satisfaction & loyalty, and an enhanced company reputation.

On the other hand, in the fashion industry becoming circular and reducing waste is difficult and requires real trade-offs. Many of today’s leading fashion companies claim to be sustainable, but in practice they continue to push consumers to change wardrobes more frequently and buy more products. Recycling clothes is difficult and costly, and the number of consumers willing to pay a premium for clothes made from recycled inputs is limited. In the end, the best way to reduce waste is for people to buy fewer items, and this runs counter to the profit maximization objectives of fashion companies.

There is plenty of experimentation going on in the industry and there are some examples of companies doing the right thing (e.g. Patagonia), but not always with success. Recently, the pioneering textile recycling company Renewcell filed for bankruptcy. Other companies with innovative business models such as renting, leasing or repairs, have also had mixed success. Environmental product information provided to consumers is often opaque and difficult to verify. In short, there are no easy ‘win-wins’ that improve circularity and the bottom line at the same time.

Change is possible

The fact that progressing towards circularity and increasing profits is not easy, is not a reason to give up. In the Fashion Forward simulation, participants learn to differentiate between actions that have real impact from those that may just sound good. Learners experience the importance of training, research & development, accurate product information and the dangers of greenwashing. There are also lessons about the importance of collective action by different stakeholders, including industry bodies, authorities and consumers.

The aim of the simulation is to let learners understand the importance of moving away from destructive, linear practices and to experience the challenges and opportunities associated with moving towards a circular model, where there is no waste.

The Circular Economy Simulation: Fashion Forward is available through Sim Institute now and from Harvard Business Publishing in April 2024 (announcement to follow). Get in touch with us for further information or a demo.