For the last years we’ve seen sustainability evolve from a “nice to have” topic in the agenda into a “must have” in the strategy for almost every organization; textile and fashion industries have been key stakeholders in these conversations mainly due to the fact that “clothes are worn by almost everyone, nearly all the time” and also because it’s an industry worth 1.3 trillion USD and employs more than 300 million people along the value chain[1].

However, more than 80% of the clothes discarded worldwide become garbage because they are not produced to last, be reused or to biodegrade. This fact obliged the world to re-think about the impact of having 24 collections per year and the effects that fast fashion brands are having in the way we consume, use, and dispose garments.

In order to tackle that unfortunate tendency, companies like H&M and C&A have partnered with organizations like Ellen Macarthur Foundation to move from a linear model – take, use, waste-  to a circular ecosystem that covers all parts of the business. “Repair, reuse, remake and recycle” is more than a marketing slogan, it’s a strategic consideration to take in when thinking about the future of a fashion brand.

Circular Economy comes as a compelling approach to reshape the way we visualize our business model with a sustainable perspective. In recent years this model has gained high-level political attention in Latin America and the Caribbean, from economic policies to public initiatives.

The COVID-19 pandemic has shown us the vulnerability of global value chains, the exacerbation of social inequalities and the depletion of natural resources, revealing all the shortcomings in the linear economy. It has also increased the time and effort we put into future thinking.

In our region we have at least three challenges to address: adding local value to compete with international brands, increasing collaboration between suppliers and customers and innovating to develop new processes and products.  The circular economy offers opportunities to create regenerative value from our natural resources while pushing innovation.

But which are the core elements of a circular economy solution? The definition varies depending on the problems addressed, however we can identify the following core elements:

  • Prioritizing regenerative resources by ensuring renewable, reusable, and non-toxic resources being utilized as materials.
  • Stretching the lifetime: maintaining, repairing and upgrading the resources to maximize their lifetime or give them a second life through “take back” strategies (recycle or upcycle).
  • Using waste as a resource: recovering waste for reusing and recycling when possible.

An important consideration to take into account is  the switch from a linear model into a circular one doesn’t mean sacrificing revenue, it means looking for an innovative revenue model with a positive impact. The paradigm of circular economy aims to generate economic prosperity, protect the environment and prevent pollution[2].

Taking a look into the industry in Latin America, the latest figures in Statista show that the expected apparel market value for 2021 is USD 102,127 million in South America, USD 5,867 million in Central America and USD 24,158 million in Mexico, with women’s apparel as the largest segment, except for Mexico where men’s apparel takes the lead. In terms of growth, we can expect an average of 9.48%, mainly for non-luxury goods. These numbers reveal that LATAM is a market full of opportunities.

We need to rethink the business, looking for opportunities to create greater value and build on the interaction between products and services. This rethinking process has to consider the impact in every stage: reducing the production of waste from its design, since 80% of the environmental impact of the industry is generated at this phase, reusing resources at the highest possible value, and trying to return the used materials into the environment.

There are interesting companies such as LISH Clothing in Colombia which  has the  brand purpose of turning fashion into a sustainable industry with initiatives like buying local, fair prices for providers, small production, zero waste patterns, supra-recycling, amongst others.

Whether you are a small independent brand or a consolidated company, the key is about designing for the future with a systemic perspective that works with the supply chain, as well as internally within the organization.

[1] A New Textiles Economy: redesigning Fashion’s Future. Ellen Macarthur Foundation. 2017. https://www.ellenmacarthurfoundation.org/publications/a-new-textiles-economy-redesigning-fashions-future
[2] Prieto‐Sandoval, V., Jaca García, C., & Ormazabal Goenaga, M. (2016). Circular Economy: An economic and industrial model to achieve the sustainability of society. In Joanaz de Melo, J., Disterheft, A., Caeiro, S., Santos, R. F., & Ramos, T. B. (Eds.), Proceedings of the 22nd Annual International Sustainable Development Research Society Conference. Rethinking Sustainability Models and Practices: Challenges for the New and Old World Contexts. ISDRS, Lisbon, pp. 504–520.
Entrepreneurship Sustainability