Making business sense of the EU’s sustainable and circular textiles strategy
Photo by Guillaume Périgois on Unsplash
Brussels can be a bit of black box. Even to Europeans and even to (former) political scientists (like me). You may have heard about the EU’s push to reduce the environmental impact of the (fast) fashion industry. But do you know what this entails in detail and how both both consumers and textile manufacturers will be affected? The following article sheds lights on the scope and timelines.
Here is what you need to know:
The EU strategy for sustainable and circular textiles was presented on 31 March 2022. It prescribes that (garment) products have to be free of hazardous waste. It also sets standards with respect to social and environmental conditions accompanying textile production (link), thus accounting for the greater context of garment production. Additional facets are shown in the below graph. All of this has to be implemented by 2030 (link).
Declaring a strategy is nice, but it has to be brought to life. It is not worth much without accompanying measures. The sustainable and circular textiles strategy is being fleshed out with the help of legislative measures, product design guidelines, labelling, outlawing the destruction of garments, and stricter supply chain accountability. This is where the current degree of confusion may set in. If you happen to be a textile manufacturer attempting to assess the actual implications of this on your business prospects, if you ask yourself, “Can I continue to export clothes to the EU market? At what costs? What do I have to change?”, you are still somewhat left in the dark as the greater picture is still emerging.
What could be a potential reaction if you are confronted with this scenario? You could switch markets, sell your products to another geography. The EU market consists of approximately 440 million consumers (link). Of course there are other markets like the US with roughly 337 million inhabitants (link). But experience shows that sooner or later, the US legislative branch follows suit and mimics some of the EU’s requirements. Recall US legislative initiatives such as the 2022 Uyghur Forced Labor Prevention Act, preventing imports from China’s Xinjiang province (link). Changing your commercial focus is not a viable option.
EU strategy for sustainable and circular textiles: One of the relevant measures that is already in place and that is currently being revised is the EPR (extended producer responsibility) scheme for textiles.
Think of a game plan to incentivize garment manufacturers and exporters to introduce products with a higher percentage of recycled material to the product portfolio, and to ensure a higher degree of post-consumer/ end-of-lifeycle management (a fancy way to say: you are made responsible for recycling garments). The impact of this scheme:
manufacturers will have an obligation to finance waste collection systems at the local level (link). Enhancing or creating systems for post-use management of textiles will also require both financial as well as operational resources (link).
Change is inevitable (I quote: change “at the technical, material, organizational, economic and sociocultural levels”. Link).
Some questions to consider are:
Which of these requirements do you tackle first?
How do you mitigate the degree of disruption this will most likely cause?
How is this being financed and what is a potential return on investment (ROI) of introducing these changes?
Which cooperations and strategic alliances does one have to build (regarding the systems for post-use management of textiles, for instance)?
Change management: how do you get the partners of an extensive and fragmented (garment production) supply chain on board? And how about your actual employees?
Note that I have not found any articles or research studies regarding the anticipated cost of complying with these EU measures.
Reflecting on the implications of the EPR (extended producer responsibility) scheme goes to show: the transformation of the (fast) fashion industry will have to happen quickly in order to comply with upcoming EU regulations.
From a change management perspective, a myriad of factors have to be taken into account as part of this process; ranging from the sheer number of actors involved in the fashion supply chain to the issue of traceability.
For which the EU suggests a solution: a digital product passport. I will elaborate on this in another article.
Do you have questions? Please visit my website at www.clulbrich.com.
Sources:
Piera Centobelli, Stefano Abbate, Simon Peter Nadeem, Jose Arturo Garza-Reyes, in: Current opinion in green and sustainable chemistry. “Slowing the fast fashion industry: An all-round perspective”. 19 August 2022. Link.
Sayan Chakraborty, Pay Yiu, Lien Hoang, Nikkei Asia: “From China to India, Asia braces for EU plan to kill fast fashion”. June 10, 2022. Link.
CIA.gov. The World Factbook: “United States”. Link.
Congress.gov: “H.R.1155 — Uyghur Forced Labor Prevention Act”. Link.
EurEau: “EU Strategy for Sustainable and Circular Textiles”. 31 March 2022. Link.
European Commission: “Waste Framework Directive”. Link.
Dr. Sheng Lu, University of Delaware: “WTO Reports World Textiles and Clothing Trade in 2021”. Link.
Valentina Romano for EurActiv: “EU countries prepare for textile recycling big bang”. 20 December 2022. Link.
Helene Smits, guest writer for Sourcing Journal: “Fashion Industry, We Must Prepare for New Regulations”. 15 April 2022. Link.