Case study: Fashion and textiles — a leading organization's implementation and lessons learned

In 2024, the global textile industry generated 120 million metric tons of waste, with 85% of discarded clothing ending up in landfills or incinerated. Despite the fashion industry's $1.7 trillion valuation and employment of over 300 million workers, less than 1% of textiles are recycled into new clothing, representing over $100 billion in lost material value annually according to the Ellen MacArthur Foundation. This case study examines how leading organizations are implementing circular fashion strategies, the trade-offs they navigate, and the lessons that engineering and sustainability teams can apply to their own operations.

Why It Matters

The fashion and textiles sector sits at the intersection of climate, waste, and social equity challenges. The industry accounts for approximately 10% of global carbon emissions—more than international aviation and maritime shipping combined—while producing 1.2 billion tons of greenhouse gases annually. For organizations seeking to decarbonize their value chains, textiles represent both a material risk and a transformational opportunity.

The circularity gap in textiles is stark. Only 0.3% of resources used by the global textile industry in 2024 came from recycled sources, and merely 12% of discarded textiles are recycled into apparel-grade fabric. This linear model creates regulatory, financial, and reputational exposure that is accelerating under new EU Extended Producer Responsibility (EPR) legislation mandating separate textile collection by January 2025.

Consumer attitudes are shifting faster than behavior. While 73% of Gen Z consumers report willingness to pay more for sustainable goods, only 3% actually do so at point of purchase. This value-action gap means that circularity strategies must deliver cost parity or superior value propositions—not rely on sustainability premiums alone.

The business case is strengthening. The circular fashion market is projected to grow from $7.2 billion in 2024 to over $18 billion by 2035, representing a 9.4% CAGR. Secondhand clothing sales reached $211 billion in 2023 with 19% year-over-year growth. Organizations that build circular capabilities now will capture this value; those that delay will face stranded assets and compliance costs.

Key Concepts

Circularity in textiles

Textile circularity encompasses three interconnected loops: (1) extending product life through repair, resale, and rental; (2) recovering materials through mechanical and chemical recycling; and (3) designing out waste through material choices, modular construction, and manufacturing efficiency. Each loop has distinct economics, technology readiness, and infrastructure requirements.

Loop Type	Technology Readiness	Key Barriers	Economic Viability
Repair/Resale	High	Logistics, labor costs, consumer habits	Profitable at scale
Mechanical Recycling	Medium	Fiber degradation, blended materials	Marginal without subsidies
Chemical Recycling	Low-Medium	Energy intensity, feedstock purity	Pre-commercial

Fiber composition and recycling constraints

Approximately 69% of global fiber production is now synthetic, with polyester alone accounting for 59% of total production (78 million tons in 2024). Blended fabrics—polyester-cotton blends, elastane additions, and multi-fiber constructions—create the primary technical barrier to textile-to-textile recycling. Current mechanical recycling processes degrade fiber length by 30-50%, limiting recycled content to downcycled applications unless virgin material is added.

Extended Producer Responsibility (EPR)

The EU's March 2024 textile EPR legislation shifts end-of-life costs from municipalities to producers. Key provisions include mandatory separate collection infrastructure, fee modulation based on recyclability and recycled content, and reporting requirements across member states. For organizations selling into the EU, packaging and product design decisions now directly impact cost structure and market access.

Supply chain traceability

The EU Digital Product Passport (DPP) framework, though not yet mandated for textiles, signals the direction of regulation. Leading organizations are building traceability systems using RFID, blockchain, and GS1 identifiers to track materials from raw fiber through manufacturing, retail, and end-of-life. This infrastructure supports both compliance and commercial differentiation—no major brand has yet achieved full supply chain transparency according to the 2024 Fashion Transparency Index.

What's Working and What Isn't

What's Working

Five implementation patterns consistently delivered measurable outcomes across leading fashion organizations:

1. Integrated repair-resale ecosystems Patagonia's Worn Wear program demonstrates the economics of repair at scale. Operating North America's largest garment repair facility in Reno, Nevada, the company has repaired over 500,000 pieces since inception and sold 120,000+ repurposed items. In Europe alone, approximately 30,000 garments were repaired in 2024. The program generates additional revenue while increasing customer lifetime value—trade-in customers return to purchase new items at higher rates than non-participants.

2. Material composition simplification Organizations achieving recycling targets have systematically reduced fiber blends in core product lines. Mono-material designs (100% cotton, 100% polyester) enable closed-loop recycling without costly separation processes. This requires upstream collaboration with design teams and trade-offs on product performance—elastane improves fit but complicates recycling.

3. Renewable energy transition in manufacturing H&M achieved 96% renewable electricity across operations in 2024 while increasing recycled polyester usage to 94% of total polyester consumption. Energy source determines the carbon intensity of recycling processes; chemical recycling in particular is only viable as a climate solution with renewable power inputs.

4. Take-back logistics optimization Centralized collection hubs rather than store-by-store programs reduce transportation emissions and sorting costs. Organizations using third-party reverse logistics specialists achieved 2-3x collection volumes versus in-house programs, though this introduces partner dependency and data sharing requirements.

5. Claims governance with version control Successful programs established clear ownership for every sustainability claim, with documented data sources, methodology, and update cycles. This reduced greenwashing risk—59% of fashion sustainability claims in 2024 were found to be vague, misleading, or unverifiable under EU Green Claims Directive scrutiny.

What's Not Working

Recurring failure modes created delays, cost overruns, and credibility risks:

1. In-store recycling as theater H&M's Looop garment-to-garment recycling machine, launched in Stockholm in 2020, demonstrated technical feasibility but failed to scale. The visible recycling container transformed old garments into new yarn in 5 hours without water or chemicals, charging €10-15 per item. However, the installation proved too expensive to replicate, and no sustainability outcomes were publicly reported. The technology remained a proof-of-concept rather than an operational solution.

2. Volume growth outpacing efficiency gains Despite H&M's progress on materials, total emissions increased 6% year-over-year to 5.7 million tonnes CO2e in 2024, driven by higher sales volume. Emissions per product rose 2%, indicating that efficiency improvements could not keep pace with production growth of 524,739 metric tons. Circularity at scale requires absolute decoupling, not just intensity reductions.

3. Resale as marginal business line Even leading circular fashion adopters struggle with resale economics. H&M's resale and circular offerings doubled in 2024 but still represent only 0.6% of total sales. Without structural incentives—such as cannibalization targets for new product sales—resale remains a corporate social responsibility initiative rather than a business model transformation.

4. Underestimating chemical complexity UNEP's 2024 analysis identified over 15,000 chemicals used in textile manufacturing, many unregulated. Material transparency initiatives frequently stalled when brands discovered the gap between declared and actual chemical use in supplier facilities. Effective programs built chemical management into supplier contracts and audit protocols from the outset.

5. Consumer education without behavior change mechanisms Awareness campaigns about textile waste achieved high engagement metrics but minimal behavior change. Successful interventions combined education with friction-reducing infrastructure: convenient drop-off locations, financial incentives (trade-in credits), and social proof (community repair events). Information alone did not shift purchasing or disposal patterns.

Key Players

Established Leaders

• Patagonia — Ranked #1 globally for circular economy practices by Kearney with an 8.5/10 rating. Uses 36% recycled cotton, operates Worn Wear repair/resale program, and achieved B Corp certification with 151 points (minimum 80 required).
• H&M Group — Largest clothing retailer with 89% recycled or sustainably sourced materials in 2024. Collected 16,855 tons of textiles globally in 2023 through in-store take-back programs.
• ASICS — One of only 4 brands (of 250 largest) disclosing emission reduction targets aligned with UN 55% absolute reduction by 2030 from 2018 baseline.
• Marks & Spencer — UK retailer with integrated Plan A sustainability strategy including textile circularity targets and supplier engagement programs.

Emerging Startups

• Renewcell (Circulose) — Swedish company producing recycled textile pulp from cotton waste. Supplies Levi's, H&M, and Inditex with feedstock for regenerated cellulosic fibers.
• Worn Again Technologies — UK-based chemical recycling startup separating polyester-cotton blends back to raw materials. Raised £20M+ from H&M and Kering.
• Infinited Fiber Company — Finnish company using carbamate process to regenerate cellulosic fibers from textile waste. Commissioned commercial-scale plant in 2024.
• The Or Foundation — Ghana-based nonprofit addressing secondhand clothing trade impacts while developing local circular economy infrastructure.
• EON — Digital platform providing product identity and traceability infrastructure for DPP compliance and circular business models.

Key Investors & Funders

• Fashion for Good — Innovation platform backed by Adidas, Bestseller, Kering, and Target providing funding and piloting support for circular fashion startups.
• Closed Loop Partners — Circular economy-focused investment firm managing the Beyond the Bag initiative and textile recovery programs.
• HSBC Climate Solutions — Launched textile industry transition financing products tied to circularity KPIs.
• EU Horizon Europe — Funding €100M+ for textile circularity research including the ReHubs pilot for textile sorting and recycling infrastructure.

Examples

1. Patagonia — Building repair infrastructure as competitive advantage

   • Context: Multi-decade investment in repair capabilities culminating in North America's largest garment repair facility and mobile Worn Wear tours across Europe and the US.
   • Implementation lesson: Repair economics improve with durability—Patagonia's premium pricing and product quality enable repair-for-life models that would fail for disposable fashion. The ReCrafted collection demonstrated upcycling economics: manual restitching of irreparable items into new products through Suay Sew Shop partnership.
   • Key outcome: 500,000+ pieces repaired; customer retention rates exceed traditional loyalty programs; 85% of emissions traced to supply chain, making product longevity the primary decarbonization lever.

2. H&M — Navigating the fast fashion circularity paradox

   • Context: Global scale (4,000+ stores) combined with high-volume, low-margin business model creates fundamental tension between circularity goals and growth imperatives.
   • Implementation lesson: Technology pilots (Looop) generated visibility but not scalability. Supply chain interventions (recycled materials, renewable energy) delivered measurable impact but could not offset volume growth. The company's 2024 results showed that relative decoupling is insufficient—absolute emissions continued rising despite efficiency improvements.
   • Key outcome: 94% recycled polyester achieved; resale still <1% of revenue; total emissions increased 6% YoY despite material progress.

3. Renewcell — Scaling textile-to-textile recycling feedstock

   • Context: Chemical recycling requires consistent, high-purity feedstock that post-consumer textile waste cannot reliably provide. Renewcell addressed this by establishing partnerships with industrial textile waste generators and developing sorting technology to create pulp for regenerated cellulosic fibers.
   • Implementation lesson: The critical path for textile recycling runs through sorting infrastructure and feedstock quality—conversion technology is necessary but not sufficient. Commercial relationships with brands willing to pay premium for recycled content enabled capital investment before regulatory mandates.
   • Key outcome: Commercial-scale production of Circulose pulp supplying major brands; demonstrated pathway from pilot to production-scale textile recycling.

Action Checklist

• Conduct fiber composition audit across product lines to identify mono-material candidates for closed-loop recycling and prioritize design modifications.
• Map current EPR exposure by EU member state and model fee impacts of packaging and product design changes under new legislation.
• Establish repair program economics: calculate breakeven volumes, labor costs, and logistics requirements for in-house versus partner models.
• Implement traceability infrastructure (RFID, GS1 identifiers) on priority product categories to prepare for DPP requirements and enable take-back logistics.
• Set absolute circularity targets (not just intensity metrics) that account for production volume growth and define cannibalization rates between new and resale channels.
• Develop chemical transparency protocol for tier 1-3 suppliers including audit frequency, restricted substance lists, and non-compliance consequences.

FAQ

Q: What are the most effective metrics for measuring textile circularity progress? A: Focus on absolute metrics rather than intensity ratios. Key KPIs include: total textile waste diverted from landfill (tons), fiber-to-fiber recycling rate (% of collected materials actually returned to textile production), product lifespan extension (average wears per garment before disposal), and recycled content by fiber type. Avoid vanity metrics like "sustainable materials" without clear definitions—59% of such claims fail verification under EU Green Claims Directive standards. For financial integration, track EPR fee exposure, resale revenue as percentage of total, and repair program unit economics.

Q: How should organizations prioritize between repair, resale, and recycling investments? A: Follow the waste hierarchy: extend product life before recovering materials. Repair has the highest environmental return on investment (avoiding new production entirely) but requires product durability and customer engagement. Resale is viable for brands with residual value and can be capital-light through platform partnerships. Recycling is necessary for end-of-life materials but faces technology and infrastructure constraints. Most organizations should build repair/resale capabilities first while supporting industry recycling infrastructure development. The critical trade-off is labor cost (repair) versus logistics cost (resale) versus technology cost (recycling).

Q: What infrastructure investments are most urgent given EU EPR timelines? A: Separate textile collection capability by January 2025 is the immediate compliance requirement. Organizations should secure collection partnerships or establish take-back programs with reverse logistics providers. Sorting infrastructure determines downstream value—investment in automated sorting technology (near-infrared spectroscopy for fiber identification) enables higher-value recycling pathways versus undifferentiated waste streams. Data systems for EPR reporting across member states should be in place, as requirements vary by country. Digital product passports represent a medium-term investment (2026-2028 timeframe for likely textile mandates) but early movers gain supply chain visibility and consumer trust benefits.

Q: How do emerging chemical recycling technologies change the circularity calculus? A: Chemical recycling (depolymerization back to monomers) theoretically enables infinite recycling without quality degradation, unlike mechanical processes. However, current economics require high feedstock purity, energy inputs remain substantial (making renewable electricity essential), and commercial-scale operations are just beginning. For planning purposes, assume chemical recycling reaches economic viability for polyester by 2028-2030 and for blended materials by 2032-2035. In the interim, design for mechanical recyclability (mono-materials, removable components) remains the practical priority. Watch regulatory treatment of chemical recycling under EU frameworks—classification as recycling versus incineration determines its role in EPR compliance.

Q: What lessons from leading implementations are most transferable to smaller organizations? A: Three patterns scale effectively: (1) Design simplification—reducing fiber blends requires design discipline, not capital investment. (2) Partnership models—third-party repair networks, resale platforms, and collection logistics avoid fixed costs while building capabilities. (3) Claims governance—clear documentation of sustainability statements protects against greenwashing allegations regardless of company size. Avoid copying capital-intensive infrastructure (repair facilities, recycling technology) until volume justifies investment. Focus instead on supplier engagement, material transparency, and customer-facing take-back programs that can scale with demand.

Sources

• Ellen MacArthur Foundation. (2017). A New Textiles Economy: Redesigning Fashion's Future. https://ellenmacarthurfoundation.org/a-new-textiles-economy
• UNEP. (2024). Sustainability and Circularity in the Textile Value Chain: A Global Roadmap. United Nations Environment Programme.
• European Parliament and Council. (2024). Regulation on Ecodesign for Sustainable Products and Extended Producer Responsibility for Textiles.
• Fashion Transparency Index. (2024). Annual Report on Supply Chain Disclosure Practices. Fashion Revolution.
• Kearney. (2024). Circular Fashion Index: Ranking the World's Leading Apparel Brands on Circularity Performance.
• H&M Group. (2024). Annual and Sustainability Report 2024. https://hmgroup.com/sustainability/
• Patagonia. (2024). Environmental and Social Footprint Report. https://www.patagonia.com/our-footprint/
• Textile Exchange. (2024). Materials Market Report: Fiber Production and Recycled Content Trends.