The Global Fashion Agenda has come up with a report that seeks to guide fashion brands, retailers, their value chain partners and logistics providers on the essential elements necessary to leverage reverse logistics for a holistic and effective circular fashion system.
Laying the foundations for reverse logistics, the Reverse Logistics for Circular Fashion Systems guide outlines three essentials:
1. Network design: Effective network design is fundamental for understanding where and how reverse logistics is required to support a circular fashion system.
- Reverse logistics involves transporting and managing the reverse flow of previously wasted materials and products from end-users, and returning them back into the system for resale, remaking and recycling, followed by safe end-of-life disposal.
- It requires a fundamental rethink of how to keep resources in a closed loop and relies on local and global partnerships, interconnected networks and multidirectional flows of information.
2. Financial ownership: Clarity on financial models in circular fashion systems is key for attracting investment, a major priority given the substantial upfront cost of implementing solutions.
- Furthermore, clear financial models help demonstrate the viability of business models, while enhancing collaboration, risk management, regulatory compliance and system scalability.
3. Boosting collection volumes: Securing large feedstock volumes is crucial for piloting new solutions and for commercially viable scaling. Efficient sorting, resale, repair and recycling solutions are required for both post-industrial and post-use textile waste.
- Reaching economies of scale in collection requires collaboration between multiple companies.
- Accessible collection points, coupled with effective education and incentives, are vital to foster consumer engagement and fuel demand for circular solutions.
NEXT STEPS: The imperative to act has never been greater: if it continues on its current trajectory, global consumption of fashion is projected to surge by 63% by 2030, generating more waste and threatening resource availability.
To effectively leverage reverse logistics for circular systems, fashion brands, retailers and logistics providers, supported by knowledge experts and initiatives, must take the following next steps:
- Engage in collaborative conversations: Initiate discussions with all stakeholders to identify needs, preferences and solutions for circular fashion systems, and explore how reverse logistics can facilitate their implementation.
- Track product and material flows: Enhance transparency and efficiency in reverse logistics through advanced technologies. Track current material flows to identify opportunities for extracting value from waste streams and invest in solutions that align with strategic goals.
- Secure participation and support Launch educational campaigns and incentives to promote the participation of value chain partners and consumers in textile waste initiatives and drive demand for circular solutions.
- Test and evaluate: Conduct trials and pilots to assess feasibility, scalability and sustainability impacts, ensuring investments lead to tangible outcomes and long-term socio-economic viability.
- Engage with policymakers Collaborate with policymakers to promote supportive legislation, financial incentives and clear regulatory frameworks that reduce risks and pro.
THE CONTEXT: Despite the promise of circular fashion, the industry lacks a comprehensive system to support it. Existing approaches are fragmented and often fail to deliver commercial viability. Companies need to take a holistic approach that caters to the needs and expectations of multiple actors, achieves scale and demonstrates ROI, while effectively deploying advanced technology with deeper integration of logistics partners.
- Globally, over 520 regulations are pushing companies to rethink their sourcing and design strategies, and focus on regionalisation and circularity.
- EU regulations such as the Waste Framework Directive, the Ecodesign for Sustainable Products Regulation and the EU Strategy for Sustainable and Circular Textiles aim to accelerate the transition to a circular economy in view of its prospective positive impact on multiple dimensions.
- Research indicates that shifting to circular business models (resale, rental, repair, remaking) could also generate a $700 billion value pool by 2030, with 45% of brands surveyed by the Global Fashion Agenda reporting that they have set targets to derive at least 10% of their revenue from circular business models by 2040.
THE REPORT: Supported by logistics provider Maersk, this report includes insights from consultations with eight distinguished experts from top brands and organisations: Maersk, Nike, H&M Group, Target, PUMA Group, Ellen MacArthur Foundation, VF Corporation, and Circle Economy Foundation.
- The authors of the report are Holly Syrett and Felicity Lammas. It has been edited by Sergio Laguna.
WHAT THEY SAID:
Global Fashion Agenda’s new report on reverse logistics is a crucial guide for the fashion industry, offering clear strategies for embracing circular systems that not only enhance business operations but also harness the opportunities of used textiles. I strongly encourage leaders to engage deeply with their logistics partners, use innovative technologies, and adopt a comprehensive approach to circularity. By doing so, we can collectively extend the lifecycle of products, reduce waste, and create substantial economic value.
— Federica Marchionni
Chief Executive Officer
Global Fashion Agenda
