A quantified case study of the value in the circular economy for clothing and textiles

The fashion industry is remarkably wasteful in its consumption of natural resources and its environmental impact through, inter alia, generation of CO2 and microfibre waste in the oceans. Nearly 39 million tonnes of used clothing are discarded to landfill and incineration each year across the world. This is well documented in the literature and recognised by some in the fashion industry as an existential problem. However, the economic power of the industry and its social and cultural importance is a major brake on the introduction of responsible production and consumption.

Yet there are hundreds of millions of people in poverty, in developing nations, who are inadequately clothed. Many of those developing nations are at the same time the manufacturing origins of the cheap clothing to which people in wealthy countries are wastefully addicted. Consumption based in low wage production is exploitation and modern slavery is endemic; together these conditions create conditions of deprivation for many millions.

Through its 17 Sustainable Development Goals for 2030, the United Nations has identified the many changes that are needed in the global system. It is clear that the fashion industry must play its part in changing its operating models to be totally sustainable, not just more sustainable. The concept of the circular economy is an important element of the measures to achieve sustainability. It concepts and application are receiving considerable academic, industrial and political attention. This paper introduces the 7 R’s of the circular economy with specific reference to clothing and textiles. They are: Reduce, Reformulate, Retain, Rent, Recover, Reuse, Recycle. Of these the last three are the focus of the case study.

Goonj, an NGO in India working on social and economic development of poor rural communities, has pioneered a business model to Recover, Re-use and Recycle clothing and other goods discarded in the cities of India. It is a remarkably sophisticated operation involving, repair, re-manufacturing, upcycling and re-distribution; it has also achieved considerable scale and now employs 600 people in its processing centres handling more than 5,500 tonne per year.

This work is presented as a case study evaluating the effectiveness of the Goonj operation in purely economic terms relative to other methods of disposal. Techniques from supply chain management concepts and practice have been applied to achieve this assessment.

The finding is that the operation is remarkably effective, delivering family kits of clothing to rural communities for around 25 rupees per kilo in comparison to the lowest cost benchmark obtained for new product of 200 rupees per kilo. For the products that have been remanufactured or upcycled the cost compared with new product range from 60% down to 13%.

The opportunity cost savings of avoiding landfill, incineration and industrial reprocessing have been identified as in the range 2 – 9 rupees per kilo. While a relatively small number, it still represents a substantial sum, as much as 50 million rupees for the reprocessing option, just on the Goonj volume.

The value of the redistribution of used clothing to the communities supported by Goonj can be more than 1 month’s income for a household in direct monetary terms. The social and wider economic benefits are likely to be very much larger and are the subject of separate academic investigation.

We can find no comparable study of the intrinsic value of the circular economy in action; this case provides new insights. While the generation of the estimates has involved a range of assumptions, the overall scale and relativity of the conclusions are considered robust. In the context of the global levels of waste in clothing and textiles, the analysis makes a powerful case for the wider application of such a circular economy business model to meet the SDGs.

#circulareconomy #clothing #supplychain #logisistics #sustainability

This is a Trans-India Challenge Project. The full paper will be published after peer review in a journal as well a fuller article in a supply chain magazine. Please correspond if you want more detail.

Authors: Alan Braithwaite (Aston University), Dr Stella Claxton (Nottingham Trent University), Prof PK Dey (Aston University), Prof Omera Khan (Royal Holloway London), Prof Pammi Sinha (Leeds University)