This post was co-authored by Trina Roy & Nancy Charaya
There is no denying that the current fashion and textile industry is entrenched in a largely wasteful ‘take-make-use-dispose’ system. Being one of the highest pollution generating industries, the level of waste generated by the industry itself begs for serious reconsideration about its operations, processes and incentives.
A promising way to reduce this environmental impact is by scaling circular business models i.e. strategies that help reduce waste, make more efficient use of resources and extend the life of existing resources and products. Contextualised to India, this approach has an additional dimension that can not be ignored — the social dimension. With roughly 45 million people employed by the Indian textile industry, any discourse on fundamentally changing the operating system must not leave behind the people in it.
Project Circular+ launched by CAIF with the support of the Laudes Foundation is focussed on creating evidence for circular business models that not only achieve positive environmental outcomes but also create social impact. Broadening our understanding of circularity, the ‘+’ refers to going a step further and ‘designing for inclusion’ within businesses. With this background, over the past seven months, we have worked towards creating industry-wide engagement to co-creating solutions that put environmental and social impact at the very core of their design, while continuing to make business sense. Through a stage gated approach, the Circular Plus Working Group brought together industry stakeholders to collaborate and build solutions that are Circular+, thereby mitigating environmental risks as well as generating sustainable business and livelihoods.
Our experience in the course of these past months have repeatedly stood testament to the potential of and need for collective action. With the completion of Phase One of the project — designing of solutions — there are critical learnings that are essential for initiatives that holistically look to address the challenges of the textile industry.
- Engaging in industry-wide dialogue
Mainstreaming circularity in the current ecosystem necessitates a systemic shift. With the complexities of the textile value chain itself, bringing all key stakeholders to share a common vision and framework of action is a criticality, so that solutions are not built in silos or remain limited in scale. The Circular+ Working Group consisted of a diverse group of thought leaders and practitioners including representatives of brands, SMEs, NGOs and experts on technology, gender policy and early stage investment. The composition of the Working Group was a crucial element that enabled validation built into the process of solution building. Enriched by real time feedback from industry thought leaders and practitioners, the innovators could dynamically tailor their solutions that ensure a market fit.
Moreover, with the project’s aim to anchor these solutions in a strong ethos of social inclusion and impact, the perspectives shared by the Working Group members were invaluable to learn about various best practices, challenges as well as failures of the industry in this regard. It equipped the innovators driving the solutions with practical knowledge that enabled them to design solutions responsive to industry needs, increasing probabilities of its large scale adoption.
- Circularity has to be tied with a business case
Positive environmental impact and social inclusion within business practices has traditionally been perceived as a ‘charitable activity’ rather than a business goal. This mindset has reflected the conventional business priorities towards which a company invests its capital and efforts. This mindset also percolates to businesses of different scales, including micro, small and medium enterprises.
To seriously change the current system, it is imperative that circularity is made to be profitable, and linearity is made to be unprofitable. Unless the goals of environmental impact and social outcomes are embedded within the business goals that ensure revenue and profitability, the adoption of circular business models and practices will remain a mere side activity.
With Project Circular+, our focus has been on identifying and strengthening the business case to generate evidence that the adoption of ‘Circular Plus’ principles will enable business advantages.
For example, Collections Reloved gives their customers access to pre-owned clothes. This model of reselling helps keep clothes in use for longer, while allowing consumers to access them at affordable prices. This establishes a business case for circularity, but it is slightly complicated to do the same for inclusion. At Collections Reloved, some of the clothes need repairing before they can be resold — upskilling tailors would increase their capacity, which would in turn generate more business, which would result in an increased income for the worker who forms a critical part of the value chain.
- Ecosystem partners will play a key enabling role in this shift
Currently, ecosystems are designed to help linear business models scale and succeed. The ecosystem including the capital infrastructure, venture building support, policy framework, among others are designed to the needs of linear business models.
To truly mainstream circular business models, the ecosystem must not only enable but catalyse the shift to circularity. The questions to ask here are, how can investors integrate a circularity lens in their investment decisions? Can financial instruments be designed to de-risk uncertainties that may come with the adoption of circular business practices? Are regulatory mandates like sustainable procurement policies the need for incentivising circularity?
- Having a common language and understanding of circularity
Similar to other sectors, circularity in the apparel sector is at a nascent stage in India. While we have established the need to contextualise circularity to the realities of India, the complementary need is to develop a common language and understanding around it.
As models such as rental and re-commerce gain momentum, the time is right to shape a common agenda around circularity. Without an industry wide common and shared approach that fixes accountability, corporations and brands find it difficult to measure and assess the returns as well as potential that comes with investing in circularity.
References:
https://www.ibef.org/industry/textiles.aspx
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