Transition from Take-Make-Waste System to More Circular NextGen Inputs Still in Early Stage

If you look at other Asian countries like China, Vietnam, Bangladesh, Philippines, Indonesia, and the like, where's India? What is it that India needs to do to leverage on the existing opportunities? Because India is known to miss buses because of its huge size, too many stakeholders, too many things happening. So how, as somebody who can look very dispassionately and at the same time quite invested, what do you think that India needs to do right to move ahead?
Nicole Rycroft: On this path? I think the table is set for India to be a leader and an early leader with NextGen production, especially within the man-made cellulosic and the packaging spaces. There does need to be a mobilisation of the scale of investment. And we estimate that that's like $13–15 billion dollars in the next decade.

We're also cognisant that India could be producing 10 million tonnes of NextGen textiles as well as Nextgen packaging. So low carbon, more circular products into the marketplace. Within the last five years India has brought online 10 million tonnes of recycled paper capacity. There is an ability for India to move quickly, but you do need the right kind of investment coming into the country. It needs to be low-cost capital.

There's a real opportunity for blended finance to be mobilised at the state level, as also India at large. The infrastructure transition that needs to be built and financed would be about $13–15 billion. This is because the cost of private capital in this country is currently too high for the kind of infrastructure transition that's needed.

And you also need the enabling policy. India needs to look at other leading jurisdictions that are further ahead like Singapore, France, Italy, China that have enabling policies in place. They've got tax breaks, industrial sites, financing opportunities. They're looking to enable the feedstock to be affordable, to be able to feed back into building more circular economies. India can therefore put in place grants to support the kind of recycling infrastructure that needs to be built.

And with the right kind of enabling policies India could really attract some of the leading NextGen innovators to build their facilities here in partnership with some of the conventional producers. But this needs a more proactive approach. And when I say in comparison to the countries that we just spoke about, I would say the regulations in China are further ahead than what is available in India at the moment. The same with Singapore, and European countries like France. They're really springing out ahead, but they provide a great model that India can kind of plug in.

Let’s go back to Canopy and how did it all start? 
Nicole Rycroft: In brief, I had a lot less gray hair (laughing) when I started Canopy with just the belief that we were smarter than cutting down 400-year-old trees to make clothing and  the packaging that gets sent around the world, that there were more sustainable options that were on the table that were better for our planet as well as better for the communities that live both in forest ecosystems and in urban settings; that we could utilise more recycled content; that we could utilise some of the alternatives that are currently seen of as waste and are burnt like agricultural residues and things that are just sent to landfills.

And so I started Canopy recognising that there's a business adage that the customer is always right, and if we could mobilise these large corporate customers to be sending a clear signal and aligning their purchasing practices behind more sustainable sourcing, then that could actually help create the economic incentives for the big producers of viscose, the big producers of packaging to change business. We work with about a thousand large corporate customers of packaging and viscose.

In the beginning, how did you go about convincing the first few companies? 
Nicole Rycroft: This was way back in 1999. At that time, it was absolutely unheard of. The environment was not big. To be honest, I started with companies that had a track record of being progressive on anything. I was just looking for that then—if they were progressive on child labour issues, or if they'd been progressive on social issues.

How did the idea hit you?
Nicole Rycroft: I was standing on a logging road trying to stop and watching the logging of trees that were 1,500 years old. I have had an activist mindset from the very beginning. And I recognised that there were only so many logging roads that people could stand on and that ultimately, you know, whether it was in Canada or in Indonesia or Australia or Sweden or Russia, that forests were going to continue to be logged until the marketplace actually required something different.

Your website says each year more than 300 million trees are cut down, many from the most vital forest ecosystems to create fabrics for things like t-shirts, dresses and home textiles. How do you keep track of the trees that are down for textiles?
Nicole Rycroft: That's a very good question but I don't have a more up-to-date number than 300 million. We have a base and there's a calculator that we have that kind of estimates based on the tonnage of MMCF that's being produced in the world, and then we back calculate.

If MMCFs actually do come across as 100% clean or let's say 100% green then does it mean that MMCFs can be projected as an alternative to synthetic fibres?
Nicole Rycroft: There are three main impacts with MMCFs. One is the impact that they have on forest ecosystems—300 million trees every year, much of it from high carbon, high biodiversity value forests, and the devastating impact that has on destabilising our climate and biodiversity. The second impact area is that it takes a lot of water, a lot of chemicals to take trees and turn them into that soft silky fabric that's next to your skin. And then the third area is the fact it's quite a wasteful, and an inefficient pulping process. If you take newsprint for example, for every tree that you feed in at the front end, you end up with about 95% of that tree coming out the other end as newsprint.

When you feed a tree into a dissolving pulp process, which is the foundation for making MMCF, you only end up with, depending on the efficiency of the mill, 22-40% of the tree coming out the other end as dissolving pulp. That’s a lot of waste in a resource-constrained world. We just don't have that much. We don't have the budget for that. What will actually competitively position man-made cellulosics from a resiliency and a sustainability perspective, will be when there's a diversification of the fibre basket.

It will be when there's a significant amount of MMCF made from more circular NextGen inputs like discarded clothing, agricultural residues and industrial food waste. That will drop the carbon footprint by at least four tonnes per tonne of product. It will reduce the water that's being used by 50 percent. It will reduce the impact on biodiversity five-fold. That's the NextGen MMCF direction.

My next question is, if the fashion industry has or is itself a problem, then it needs to be accepted that much of it has been because of brands and retailers themselves. So how tricky is it to engage with brands as partners? Don't you think a platform like Canopy provides brands to greenwash themselves? What checks and balances do you have in place?
Nicole Rycroft: We work with them specifically on their work to ensure that their MMCF and their packaging isn't driving deforestation and forest degradation and to really help accelerate the transition to more circular and just supply chains. We're very specific in any communication that we do around the scope of the collaboration that we have with brands. We are in regular contact with our brand partners around how their implementation efforts are going. 

But what about the checks and balances? Does Canopy have some kind of verifying method apart from the information that they feed to you?
Nicole Rycroft: See what happens is many a times, say, you know, somebody wants a Canopy rating. This year we are going to be developing a tool and publication specifically that looks at brands’ performance around NextGen adoption. 

Canopy calls for low carbon fabric solutions. Does that mean you would like brands to move away from MFCFs? How do you see the next-gen materials market?
Nicole Rycroft: There's a lot of promise, but very little to indicate that things are moving. Yeah, so low-carbon MMCF is NextGen MMCF. It's MMCF that is derived from waste textiles, from agricultural residues, or from food waste as the input, rather than from forests being cut down. That's what fundamentally reduces the footprint of MMCFs. 

Now, we're still in the early stages of this transition from a take-make-waste production system that relies on 300 million trees to be cut down every year to more circular NextGen inputs. We're at that stage where it's a little bit of the chicken and the egg situation where you know there's an emerging and very promising pipeline of technology, and there's building market demand but we need to do what we need to do. Some of the conventional producers have really stepped in and started to trial these new lower impact fibres. 

But what we need now is accelerated scaling. And that requires us to mobilise the scale of investment that's needed for the infrastructure transition. So here in India, I reiterate, that's $13–15 billion that needs to be brought in to build the new infrastructure or retrofit existing infrastructure. This would need a real step in by government to provide the enabling policy as well. 

This is my last question. In India there's a huge chunk of MSMEs, the medium and small scale industries. What would Canopy's advice /  recommendation be so that you encourage more MSMEs into this field? 
Nicole Rycroft: I think SMEs have a really important role to play at various points in the production system. SMEs are going to be absolutely essential in the fibre collection, be it agricultural residues and the role of farmers and farmers cooperatives in aggregating agricultural residues and pre-processing or be it in the textile aggregation and sorting. MMCF production tends to be kind of more with the larger industrialised players and then it moves from the fibre stage back into quite a dispersed value chain for which you need a different policy and different financial mechanisms. 

Like there needs to be lower cost working capital for SMEs in the value chain to be able to access with an incentive, like working capital that actually incentivises, has a lower interest rate for those that are using NextGen. The kind of capital that a farming cooperative would need would be  looking at aggregation technologies or perhaps share pre-processing machinery within a region. I think it's really the financial mechanisms and the policy that need to be coming to place. They need to account for both the larger industrial and the smaller players. 

• Note: CanopyStyle is a collaboration between Canopy, fashion brands, retailers, designers, and their MMCF suppliers to follow the product thread and keep Ancient and Endangered Forests out of textiles. Together, we transform outdated supply chains, reduce company risk, catalyze Next Generation Solutions, and engage in collective advocacy that advances forest conservation, and changes the world for the better.