Top European brands flunk on circularity; avg score 1.99 on 10

The top 100 European fashion brands have fared disastrously in the Circular Fashion Index (CFX) scores that were published by global management consultancy Kearney late last week. The average score of the brands was an abysmal 1.99 on a scale of 10, with the bottom 80 brands scoring less than a paltry 2.50.

The Index has revealed that only three companies have achieved an acceptable score: Patagonia, The North Face, and Levi’s. Kerney released only the rankings, but not the individual scores of the companies, in its report titled Can circularity save the fashion industry?

The Methodology and the Rankings

• A company’s circularity performance was scored based on eight dimensions that affect the garments’ longevity.
• These dimensions include two perspectives: the primary market (affecting new product sales to consumers) and the secondary market (such as the secondhand market or recycling).
• The CFX weighted the scores for each dimension, giving the most weight to secondhand sales, rental services, and reuse of returned clothes as raw material. Next these scores were combined to give an overall score between one and 10, with one representing the lowest score and 10 the highest.
• CFX classified the brands with scores between seven and 10 as leaders and those with scores between one and three as laggards.
• The CFX ranking provides an overview of the circularity performance of largest 100 fashion brands operating in Europe, regardless of their country of origin.

Only three companies achieved an acceptable score: Patagonia, The North Face, and Levi’s. These three brands share a commitment to investing in sustainability and, in particular, to prolonging the longevity of their clothes, seeing sustainability as a business opportunity and an environmental requirement rather than a sacrifice or marketing campaign, the report remarked.

What the Leaders Do

• These three leaders communicate openly that their products should last longer and encourage consumers to consider the environmental impact of buying another piece of clothing. As part of this drive, the companies encourage consumers to drop off their old clothes in a store, incentivising them with coupons or discounts. Then, they sort the old clothes and either donate them, sell them as secondhand items, or recycle them. The top-scoring brands are steadily increasing the amount of recycled fabrics, such as polyester or cotton, that they use in their products.
• In addition, the three top scorers offer new services such as repair and maintenance of clothes, and they invest in new business models that focus on secondhand offerings, strengthening their circular efforts to prolong the life of garments.

What Most Do, and Don't

• Only 15% use recycled materials to a credible extent: 46% do so, but only for a few selected items or a few product features, and 39% use no recycled materials whatsoever.
• Communication and promotion of circularity efforts are the easiest and fastest measures to implement, yet 47% of brands don’t do it at all. Only 14 companies do it credibly, and 80% settle for giving the minimum amount of care instructions required by law.
• The results are worse for circularity actions that require a higher commitment. Only eight companies offer extensive repair services, yet this is where luxury brands such as Prada, Burberry, and Gucci score the highest, driven by their very demanding clientele and supported by their high prices and margins.
• The least common circularity actions are those that require introducing a new business model, such as introducing a rent or lease offer or a secondhand sales offering.
• Just five companies considered renting services, and only one, Lindex, achieved a credible score beyond the end of the testing phase. Secondhand sales are slightly more common, with 12 companies testing or already running this service.

So, What Should Companies Do?

The Kerney report lists a slew of recommendations, backed by illustrations that work:

1. In the short term, fashion brands can start with easy-to-implement measures such as educating consumers about how to treat their clothes properly. Example: H&M publishes detailed care instructions and repair tips on its website.
2. Companies need to encourage consumers to wear clothes longer and restyle them more often instead of chasing the latest trends. Example: Lindex tells customers to make “conscious” purchases by only buying what they really need. Swedish startup Asket in 2019 unveiled a gigantic billboard on Stockholm’s main shopping area saying F*** Fast Fashion.
3. Another way is to reduce the amount of product launches per year and to take pressure off the consumers to be on trend. Example: Recently, Giorgio Armani announced it would go back to a traditional summer/winter–rhythm, with many other designers following suit.
4. Education and communication are a good start, but fashion brands must also address design issues in order to credibly embrace circularity i.e. creating longer-lasting collections based on designs that can be worn on multiple occasions and can be easily restyled. Product quality, such as durability and no discoloration, also plays a crucial role in encouraging consumers to wear their clothes longer.
5. Fashion brands need to re-examine their use of traditional materials such as polyester and cotton in favour of exploring more environment-friendly options such as recycled or biodegradable materials. Examples: emergence of fabric alternatives made from wood (Lenzing), mushrooms (Amadou and Boltthreads), algae (Algalife and Algiknit), and fruits (Pinatex and Orange Fibre).
6. Brands need to invest (either directly or through partners) in reverse logistics to collect clothes and prevent them from ending up in a landfill. They can also extend the longevity of garments by establishing repair services, enabling customers to send in or drop off damaged clothes and have them repaired by experts in days.
7. The secondhand market is maturing. Although 30% of transactions are still happening within the circle of friends and family, several start-ups (ThredUp, TheRealReal, I:Collect, and Vinted) are professionalising this burgeoning market. More consumers are seeing the benefit of secondhand clothing as they seek out more unique and sustainable alternatives—not necessarily always much cheaper, too.
8. Even luxury brands such as Burberry are embracing this trend. Zalando just launched a pre-owned business where consumers can buy and trade-in clothes.
9. Rental models are also an intuitive option. Rent The Runway, Le Tote, and Glam Corner give customers an opportunity to rent a few items for a limited amount of time in exchange for a monthly subscription fee. Once the items are returned, the company has the clothes professionally cleaned and then rents them out to someone else. So, users can refresh their wardrobe on a regular basis without actually buying new clothes—and harming the environment in the process.
10. Garments damaged beyond repair can still be used to produce new ones. Pure Waste Textiles, Circular Systems, Tyton BioSciences, and Worn Again, have developed solutions to transform textile waste into virgin-quality recycled fabric. Recycled fabrics will become the rule rather than the exception.