Sustainability Begins with the Circular Economy

A Common Misconception

Before delving into a discussion on the circular economy, I think a quick level set is in order since “sustainability” and “circular economy” are often used interchangeably. While these terms may be contextually similar, their true definitions are vastly different; with circular economy being a subset of sustainability.

Sustainability

In 1987, the United Nations Brundtland Commission defined sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” Abiding by this definition, sustainability consists of any activity that strives to meet this goal. It is the whole journey from the vision of a sustainable future to the implementation of sustainable practices.

Circular Economy

The circular economy, as defined by the Ellen MacArthur Foundation, is a system where materials never become waste and nature is regenerated. In a circular economy, products and materials are kept in circulation through processes including maintenance, reuse, refurbishment, remanufacture, recycling, and composting. The circular economy addresses climate change and other global challenges, such as biodiversity loss, waste, and pollution, by decoupling economic activity from the consumption of finite resources.

Circularity is often taken at face value, which adds to the confusion. Many people think circularity is an “all or none” proposition. They believe a material or product, in order to experience circularity, has to go from cradle to grave, then back to cradle. While this may represent the best-case scenario, it’s not accurate since a circular economy strives to keep products in use for as long as possible using the Five Rs, as identified by Roadrunner Modern Waste and Recycling:

1. Refuse – Including wasteful production methods or the use of non-recyclable items

2. Reduce – Eliminating or “cutting back” the use of harmful, wasteful, and non-recyclable products

3. Reuse – Extending the use of a product and avoiding single use items, such as plastic water bottles and plastic shopping bags

4. Repurpose – Finding additional uses for existing materials and/or products. Repurposing, or upcycling, is limited to one’s imagination. While conducting research for this article, I came across a couch made from a porcelain tub; wall planters made from discarded bottles and a wine rack made from discarded pallet pieces.

5. Recycle – Breaking down materials and products to be recycled into new materials, such as recycling plastics to make pellets or feed stocks.

It is important to note some products or processes may fall under multiple Rs. For example, used tires that are shredded and resold as mulch can fit within the reduce, reuse, and repurpose categories. Even rubber remnants can be used as feedstocks for the production of crumb rubber – a type of rubber granule used in the manufacturing of athletic surfaces and fields, playgrounds, and rubber modified asphalts and sealants – just to name a few.

A Case in Point

The fashion industry is often cited as a challenge in debates over sustainability and circularity. This is not surprising considering the accelerating growth of “fast fashion.” Fast fashion is the rapid production of apparel meant to closely follow, and take advantage of, current clothing trends. It’s a business model that is finding increasing favor with both manufacturers and consumers.

According to research by CoherentMI, fast fashion was worth more than $41 billion in the U.S. last year. Over the next five years this fashion segment is expected to reach a market value of nearly $60 billion. But the industry’s growth alone is not concerning; it is the very nature of the fast fashion segment that continues to draw attention from eco-conscious pundits and environmentally aware consumers. Focusing on mid-to-lower priced items leads to more frequent purchases from more fashion-conscious and trend-sensitive consumers. Frequent purchases, in turn, translate into fewer “wears” as the target market eagerly awaits the newest fashion trend.

Pursuing profitability at these lower price points means manufacturers have to contain costs everywhere along the path to market and back (returns). Additionally, the accelerated fashion timelines, during which the items are most in demand, are often less than four weeks and require production of more “safety stock.” Over production is commonplace as running out of stock in Week 2 of a particular fashion cycle means a manufacturer/retailer may risk losing sales and loyal customers until the next cycle begins – or potentially forever.

New online players in ultra-fast fashion, like Shein1 and Temu, are creating additional challenges with even lower price points and faster cycle times. Looking to operate on what they see as the safe side; many manufacturers intentionally produce more than their demand signaling systems indicate. It is not uncommon for garment overruns to be in the neighborhood of 30 percent. This excess inventory is commonly slated for landfill as the most economically preferred method of disposal. Therefore, this approach is neither sustainable nor circular.

However, this extra inventory could become part of the circular economy in a number of ways, including:

• Liquidation and recommerce – This would keep the goods in commerce and out of landfills, while increasing value recovery by selling into secondary channels or out-of-market geographies.

• Energy-from-waste programs – Instead of being sent to landfills these overages could be sent to energy production facilities, where materials are combusted in closed-loop systems and generate energy for internal use or by municipalities.

• Donations – While donations do not keep the goods in commerce, they do extend the life of garments while helping those in need.

Fashion Companies Working on Circularity

Many companies are embracing circularity ahead of governmental mandates. This is true for companies in fast fashion, slow (traditional) fashion and footwear. For example, H&M’s Weekday, which describes itself as “The official street fashion & lifestyle brand,” is currently using recycled or sustainably sourced materials in the majority of its products. The company is also offering curated, second-hand fashions. These second-hand goods can be bought and sold at select locations in Belgium, Netherlands, Sweden and the UK. Items that don’t sell can be picked up or sent to Remondis, an eco-friendly company that will ensure your unsold second-hand goods will be reused, remade or recycled. But Weekday’s goal of reaching net-zero emissions by 2040 will require even greater action.

As consumer budgets continue to be strained, the U.S. used clothing market reached $43 billion in 2023, up from about $23 billion in 2018, according to ThredUp’s most recent resale report. Year over year, the U.S. second-hand market grew 11% in 2023, which was seven times faster than the broader U.S. clothing market.

Footwear Companies Working on Circularity

A 2024 article on Run.outsideonline.com, a website for running enthusiasts, states that running shoes are basically made from two key ingredients: plastic and rubber. Since plastic is a petroleum-based product, the manufacturing and selling of the 300 million pairs of athletic shoes purchased by consumers each year puts a significant strain on the environment. According to MIT, the athletic shoe industry generates roughly four million metric tons of CO2 annually. Factor in the impacts of oil drilling, extraction, transportation, refining -- and spills -- and that number jumps to the equivalent of 5,200 million metric tons of CO2. Traditionally, extending the life of a pair of running shoes has been relegated to sharing used shoes as “hand-me-downs,” which does give new life to old shoes. While extending the usefulness of a product is a key tenet of circularity, in this case it only delays their inevitable disposition of being landfilled.

Reinventing the Running Shoe

In the same article referenced above, Hana Kajimura, Head of Sustainability at Allbirds, a footwear and apparel company with a very public focus on eco-friendly production, states:

“We as the brand dictate what materials we use and what the supplier buys to make our shoes. It is an issue of cost, but there are viable alternatives. Recycled nylon is very available today. Recycled nylon is less [environmentally] impactful than virgin nylon because the raw oil does not have to be extracted to create new materials, and it prevents used nylon from ending up in a landfill or in the environment.”

Additionally, Allbirds uses a bio-based foam made from castor oil in its midsoles, and eucalyptus fiber or wool for its uppers. Materials like wool, cellulose-based fibers, or bioplastics (plastic compounds derived from biological sources) have smaller impacts than virgin, plastic, fossil fuel derived materials.

Allbirds, partnering with Adidas, has manufactured the lowest carbon footprint running shoe at 2.94 kg CO₂. The company plans to introduce a truly, carbon-neutral shoe later this year. Allbirds is a good example of a company simultaneously working on sustainability and circularity.

Another footwear company on the leading edge of circularity is ON. ON recently introduced CyclonTM, a subscription-based running shoe. For approximately $30 a month runners can always have current versions of CyclonTM shoes. Subscribers simply return their worn kicks to ON and receive a new pair, which are made from recycled materials. What cannot be recycled into a new pair will be used in other products, such as picnic tables. ON’s goal, like Allbirds’, is to keep materials in use and to reduce waste.

Change Our Thinking. Change Our World.

As previously illustrated, companies are capable of profitably operating in a circular economy, which eventually drives sustainability. However, these examples represent outliers, and do not comprise the norm. A recent study by Deloitte and Circle Economy Foundation found that global circularity is still in decline despite a circular economy “megatrend” – meaning the circular economy continues to garner significant attention. Over the past five years, discussion and debate surrounding circularity have almost tripled, yet we have not experienced a decline in the use of virgin materials.

On a brighter note, the Deloitte study projects that, in the coming years, the circular economy is projected to help reduce emissions by 40%, generate nearly two million jobs and become a $2-$3 billion market in the U.S.

Similarly, The World Economic Forum highlights the transformative impact of recycling, reuse, and remanufacturing, suggesting that by 2025, these practices could unleash annual untapped resource savings of $1 trillion. Looking even further ahead, this value is predicted to double, reaching an impressive $2 trillion per year by 2050.

1. Shein’s “evoluSHEIN” roadmap is a comprehensive plan that focuses on people, planet and process. The key tenets of evoluSHEIN are equitable empowerment (people), collective resilience (planet), and wasteless innovation (process). Using this integrated roadmap, Shein plans to have a fully circular textile supply chain by 2050.