Speaking at the Practical and Scalable Implementation of a Circular Economy, an online event hosted by news agency Reuters in collaboration with The Institute of Electrical and Electronics Engineers (IEEE), representatives from key organisations shared insight into the current state of the circular economy.

Kim Matsoukas, director of sustainability at Tapestry-owned luxury accessories and apparel house Coach, explained that the company, like many higher-end fashion brands, has in a sense been working circular models for many years.

“We’ve had customer repair option available for about 30 years,” Matsoukas explained, adding that the company repairs handbags and other leather goods that are up to 50 years old. The system gives Coach an idea of how long their products are remaining in circulation. “Our products are meant to last, and I know that they do.”

Holger Berg, vice director of the circular economy division at the Wuppertal Institute for Climate, Environment and Energy, noted that having information on products is the first step – and pending legislation in the EU could bring this closer.

Digital Product Passports and the circular economy

In the coming years, products sold in the EU will require QR codes, or other scannable technology, providing consumers with information about all the materials, sourcing and supply chain involved in creating each item, called Digital Product Passports (DPPs). The scheme aims to provide consumers with better information to allow them to make informed choices, reflecting the importance of sustainability and circularity.

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By GlobalData

Batteries are the first product that will need to comply with the rules, starting in 2026 – although apparel is expected to follow shortly after, with roll-out to other products scheduled between 2026 and 2030.

However, Berg also noted that having and sharing this information via DPPs is just one step towards circularity. “This is just a data set,” he explained. “After having the data somewhere, you have to start doing something with it – it’s not self-explanatory that that’s going to happen.

In December 2023, research from the blockchain and web3 solutions developer Protokol showed a surge in interest around DPPs, with its media coverage up 413% compared to the same period last year.

For Coach, the company is already exploring the idea of product passports with Coachtopia, a sub-brand which aims to accelerate the transition towards a circular economy.

Coach says its Coachtopia products are made with three principles in mind: minimising the use of virgin materials, having circular pathways in place for all products and materials and designing with circularity in mind.

“Having a digital passport allows us to have even more information about the lifecycle of our products,” Matsoukas explained. The company has developed its own internal metrics to measure the circularity of its products, gathering data on when items are repaired, and the eventual lifespan of each item.

Responding to consumer interest

“We’re actually using it for customer engagement as well,” Matsoukas added. “So using the events that have been logged or the life of the product, we’re telling stories to the customer about that product, the life of that product as well, and using it as a point of customer engagement.”

For Coach, this focus on circularity is helping them to connect with consumers, particularly younger generations. “More consumers are becoming aware of the impact of fashion and also the overconsumption of fashion,” Matsoukas explained. “They’re demanding and looking for second-hand products or circular services.”

Matsoukas said the Gen Z consumers are particularly conscious of the environmental impact of their clothing. “I’ve been really happy to see that this new generation is thinking more deeply about their choices,” she said.

However, it’s important reuse and recycling of products is not the same as true circularity. “It’s more about education and lifecycle thinking,” Matsoukas explained. “If you think about all the energy and emissions that were put into the product to begin with, most of the impact of fashion comes from its supply chain.”

Designing for circularity

The Ellen MacArthur Foundation’s senior policy analyst Matteo Magnani explained that the problem reaches right back to the very start of a garment’s life, with many items designed to be used for a very short amount of time. To achieve true circularity, we’ll need to address this in the design process.

“Most supply chains today are still very linear,” Magnani explained. “First and foremost, it’s about circulating products. That means making them more durable, making them reusable and implementing different business models that are based on making money out of the reuse of the products.”

“Eventually, when these products can no longer be used, they should be designed so that these materials can get fed back into the system,” Magnani added. “That’s something that requires not only changes in the product but also the systems, the supply chains that deliver products and keep them in use.”

Magnani explained that the apparel sector has a particular problem when it comes to dealing with waste. Last year, a new report found that discarded textiles in Europe, including used clothing and footwear, are becoming an increasing waste and export problem.

While several companies do make use of post-consumer textile waste products, it’s not easy to make a profit from this model, particularly when the quality is often so mixed. “It is impossible to only collect reusable products,” Magnani explained. The greater the percentage of unusable textiles in each batch, the harder it is to make a profit on resale and it can even leave handlers at a loss, after the cost of sorting and processing.

“There is a fundamental flaw in the system, because if it’s not profitable, then companies are not going to do it,” Magnani says.

One possible solution Magnani suggested is a mandatory fee for apparel producers to pay towards the cost of collecting, sorting and preparing for reuse and recycling of used clothing. “In this way, the business case for reuse improves and can emerge at a larger scale.”

Last year, a pilot study suggested that AI could be used to identify the source of apparel waste and make fashion brands accountable for the end-of-life of their products, offering a potential route to holding individual companies accountable for textile waste.

Moving from supply chains to supply networks

Matsoukas agreed that circularity needs to start with design, having experienced challenges in extending the life of existing products. “We started Coach Re-loves and that definitely extends the life of our products, but what we found is because those products weren’t made to be circular, it’s very difficult to scale that programme immensely.”

Coach found that some of their products required a lot of expertise and leathercraft experience to repair before they could be sold again. The new Coachtopia range focuses on designing items with hardware that is removable at the end of life and doesn’t require a trained craftsman’s skills.

“I would agree with design being key to unlocking true circularity,” Matsoukas added but also added that thinking about the end of a product’s life is also essential. “That’s where a take-back programme and a real mechanism to deal with everything that you get back is important.”

Dr David Greenfield, vice president at the Circular Economy Institute, explained that as we aim towards circularity, we should no longer be thinking about supply chains, but “supply networks” instead.

“If you say supply chain, you’re still thinking linearly,” Berg noted, adding that industries need to move away from the model of selling and buying. “You have to start talking to each other. You have to start thinking with each other in the different instances of the circle.”

Berg added that DPPs could play a role in making this possible, however, he added that it was important not to overcomplicate the concept of circularity and remember common sense. “We can print a QR code on every yoghurt cup, but we could also create every yoghurt cup from the same homogenous plastics […] which is much easier than any DPP system.”