There is an urgent need for fashion brands to up their game to move the industry toward greater sustainability and circularity, and also educate consumers not only about the importance of sustainability, but also actions such as recycling, upcycling, and renting apparel.
- The just released 2023 Circular Fashion Index (CFX) by global management consulting firm Kearney says that the needle has barely moved since last year's report, with the 200 global brands analysed barely reaching an average of 2.97 on a circularity scale of 10.
- However, there was a slight improvement in the scores of the brands analysed in last year’s study. Consistent with Kearney’s 2022 results, none of the seven circularity levers is activated extensively by the brands, with all of them operating in the 2–6% range.
- Notwithstanding the Fashion Pact launched at the G7 Summit in France in 2019, the industry remains one of the highest global polluters—hence the value of measuring progress.
THE FINDINGS: The major findings include:
- The survey of consumers in Italy, France and the United States clearly shows a lack of education on sustainability when it comes to buying and disposing of fashion products.
- Almost half of respondents could not say whether virgin materials are better or worse than recycled/upcycled ones, and 30–40% either weren’t aware they could return clothes for recycling/upcycling or didn’t know how to do it.
- No surprise then that most consumers would rather donate clothes or share them with friends and family. In the best scenario those clothes are used again, but more often they end up in a closet until it’s time for the next donation.
- The secondhand resale market is not developed as much as it could be.
- Similar to post-consumer products, pre-consumer products (unsold stock) and textiles (scraps) aren’t making their way back into the circular supply chain to the extent they should.
- The clothing drop-off and collection infrastructure is underdeveloped. Even sorting is complex and expensive because fashion products are not designed to be disassembled into sub-components for reuse.
- On the technology side, mechanical and chemical recycling are still in their infancy, and both are expensive. Mechanical recycling is more developed, while chemical recycling is just starting to gain traction.
- Other value chain partners such as equipment manufacturers are trying to adapt their machines toward re-/upcycled materials.
CALL TO ACTION: The report makes a call to action, including:
- Brands need to design their products for sustainability—be it recycling or upcycling.
- Traceability needs to be widely implemented.
- Social and environmental impacts need to be measured on a consistent basis.
- While international standards do not exist yet, the industry has access to multiple tools that can be easily implemented to measure carbon footprints and other impacts, enabling a more conscious sustainability decision-making process.
- Finally, most companies do not set or disclose clear and measurable environmental targets, making it difficult to trigger industry-wide environmental systems such as circularity.
TOP PERFORMERS: Familiar faces populate the 2023 CFX winner’s podium. This year’s top firms were Patagonia, Levi’s, and The North Face—brands that have led each of the earlier two studies—scoring 8.65, 8.30, and 7.90 respectively.
While Patagonia and Levi’s were able to improve their (already high) score versus 2022, The North Face’s score decreased slightly.
- Brands showing the strongest improvement over last year are sports/outdoor brand Athleta, premium brand Timberland, and luxury brand Jimmy Choo.
NEW JOINERS: Among the newly added brands, the ones which scored the highest are mass market brand Madewell (overall rank #6), sports/outdoor brand Mammut, premium/affordable luxury brand Ganni, and luxury footwear brand Golden Goose.
COUNTRY WISE: More than 80% of the 200 brands analysed in CFX 2023 are from the United States, France, Italy, India, Germany, and the United Kingdom.
- Except for Indian brands, which score significantly lower than the rest of the panel, the results from other countries are fairly aligned, with average scores ranging between 2.6 and 3.4, confirming that there is a lot to do everywhere across the globe.
- French brands have the highest average score followed by American and German brands.
SCORES BY CATEGORY: The 200 brands analysed are evenly distributed across the six categories in scope:
- As in the results by country, the different categories are aligned with average scores ranging between 2.5 and 3.5.
- Sports/outdoor brands have the highest average score.
- Fast fashion scores the lowest.
THE RESEARCH: Based on proprietary analysis, the CFX acts as an objective tool helping companies understand where they rank in their sustainability practices and which circularity levers remain to be pulled. Each company's CFX score is based on seven dimensions affecting the circularity impact of the brand:
- share of garments made from recycled fabrics, repair and maintenance availability
- circularity in brand communications, detail/accessibility of care instructions
- breadth/depth of secondhand sales
- breadth/depth of rental services
- availability of drop-off locations for worn clothing
WHAT THEY SAID:
Brands are still showing low scores across geographies and market segments. Only 19 of the 200 global brands we looked at scored above 5 out of 10, and only the top three scored above 7 in any areas. This year's CFX shows that concrete action is required to close the gap and move the industry toward greater sustainability and circularity.
— Dario Minutella
Co-author & Principal
Kearney
Consistent with our 2022 results, brands are not extensively activating any of the seven circularity levers; rather, all are operating in the 2 to 6 percent range. Beyond this, they are failing to educate consumers not only about the importance of sustainability, but about actions such as recycling, upcycling, and renting apparel. More than a third of consumers remain unaware of these options. There is so much more to do, and brands can be upping their game.
— Brian Ehrig
Co-author & Partner
Kearney
