New academic research questions the circulatory economic narrative of the fashion industry and reveals fundamental economic defects.
The long-propagated model of the circular economy in the fashion industry, praised as a solution to reduce textile waste, lower CO2 emissions and at the same time secure economic growth, could be based on incorrect economic assumptions. This suggests a new scientific study.
An investigation by the Loughborough University London, published in Sustainability, shows that the frequently cited number of $ 500 billion in potential savings by circuit in the fashion industry could be massively overestimated-by up to $ 450 billion.
Questionable economic assumptions
The study led by Talia Hussain analyzed 20 influential reports of non-academic organizations, including the Ellen Macarthur Foundation and McKinsey. She found that many of these documents contain insufficiently defined concepts that do not rely on established economic theories. This raises serious doubts about the implementability of current approaches to the circular economy in fashion.
The fashion industry is faced with massive sustainability problems, which it has so far hardly been successfully managed. “At every level and in every dimension of the system we observe serious grievances- from water and land use to the use of chemicals, fossil fibers and exploitative working conditions to overproduction and ultimately for textile waste,” said Hussain in the report. “The overuse of water resources is visible from space. Polyester microfibers not only pollute the deepest sea regions, but also our bodies. Our investigation shows that the concept of circulatory fashion that is propagated by governments and industry does not withstand a critical examination.”
The circulatory paradox
The results of the study illustrate a fundamental tension that many industry insiders have been discussing for years behind closed doors: the contradiction between economic growth and the goals of the circular economy.
According to the industry magazine Ecotextile News, the investigation reveals several serious economic inconsistencies. Due to higher processing costs and logistical challenges, circular economy practices often lead to lower profit margins. A reduction in production quantities to achieve environmental goals inevitably leads to declines of sales that further endanger profitability. Extended life cycles of clothing undermine the classic business model of the fashion industry and could ultimately devalue entire value chains.
“There have been quiet doubts about experienced industry experts for years: inside,” said Ecotextile News in its April edition, in which the study was first reported. “Successful entrepreneurs: Inside, trade fairs and conferences have repeatedly questioned whether circulatory -based business models can really make sustainable profits.”
The effects on the labor market are particularly worrying. A completely circular system could endanger millions of jobs in production countries and at the same time make many of the sustainability initiatives created in recent years.
Misguided focus on consumer behavior
The study also criticizes a serious incorrect control in the approach of the industry in sustainability. Consuming behavior is often considered a key to change, while systemic failures, in particular the disposal of unsuccessful goods and production inefficiencies, are far less noticed.
This corresponds to the view of many pragmatists: inside that have been demanding for years to use existing textile technologies and infrastructures to produce high -quality, fitting clothing that naturally have a longer lifespan. This approach could achieve the double effect of reducing environmental pollution and even increasing or even increasing profit margins.
Technology is not the problem
It is particularly alarming that the technologies necessary for a functioning circular economy have existed for decades. Research suggests that the problem is not technological limits, but rather the fundamental economic incompatibility of the circular economy with profit -oriented business models. These findings come at a crucial point in time when political decision -makers: inside in Europe and worldwide, legal framework works based on the principles of the circular economy develop. However, the study warns that such regulations could be ineffective or even counterproductive without taking into account the economic contradictions.
The researchers: Inside, actors ask: Inside the industry, to critically question existing concepts of the circular economy and explore new approaches that prioritize a real systemic transformation – even if this challenges traditional profit models.