What is a circular economy?

From Adidas to H&M, fashion and apparel companies are looking to practices of circular design and the circular economy to reduce waste and operate more sustainably. One of our goals with Beni is to further accelerate a transition to a more circular economy. But…what the heck does all this jargon really mean?

Right now, our economy is largely a take-make-waste model. We take resources and materials (sun, petroleum, cotton), we make things (jackets), use them when it’s cold outside, and then get rid[1] of them often before they reach the end of their useful life. It’s like a straight line from take to waste. Simply put, a circular economy is one that bends this line into a circle so that what was once “waste” becomes “take” (as input resources) or, even better, “make” (as reused items). The diagram below shows how this works – with the “best” options closer to the center:

As shown above, our top goal is to keep valuable things in use for as long as possible in their most valuable form. For example, if you are not able to keep using your jacket, it is generally[2] better to resell that jacket so it stays as a valuable jacket for longer than it is to recycle the material from one jacket to make another (and recycling is generally better that tossing it and so on). This is because we already put in a lot of work and resources to make that jacket and we lose a lot of that value if we break it down and rebuild a new jacket from it. While we love to see all the momentum around circularity, keep this in mind when you are evaluating the impact of companies’ claims and practices.

For the fashion industry to be sustainable[3], in 10 years we need to live in a world where 1 in 5 garments are traded through circular business models like resale. This means we need to buy and sell clothes a lot more than we do today, but not every piece of clothing. It’s all about progress over perfections. At Beni we hope make this progress easier by making secondhand shopping simple. And, we are definitely not alone – here are a few other incredible companies propelling the circular fashion economy:

• SUAY Sew Shop is vertical sewing and production shop. They use a combination of post-consumer waste (recycle), deadstock and domestically (refurbish), organically grown fibers to create apparel.

• Treet helps brands launch their own fully-branded recommerce sites. In this way, they help build the distribution network that makes recommerce work.

• Renewal Workshop is somewhat similar to both SUAY and Treet. They offer repairs- and resale-as-a-service for brands who don’t what their pre-owned, returned, or slightly damaged products to go to waste.

• For_Days creates and offers clothing in a closed-loop system in which shoppers buy a product and a membership that allows them to send the product back when they are done using it. For_Days then recycles the textiles to make new products!

• Eon is creating a digital tag for products. By doing so, we can track products as they flow within the economy (a.k.a. better data on product lifecycles will help us recapture their value).

Follow these companies and @join_beni to continue to stay up to date on circular fashion vibes. If you want to learn more about circular economy, check out the resources from IDEO and The Ellen McArthur Foundation!

[1] We typically don’t actually “use up” or “get rid” of most things. Throwing something “away” usually just means transferring it elsewhere (landfills, recyclers, resale markets, etc). [2] We say “generally” for both resale and recycling because there could be cases in which doing so requires so much energy and complex logistics that the emissions counteract the benefit of keeping it in the circular system. This is the exception, not the rule, but it is important to keep this in mind when designing circular solutions. For example, see this recent report on the challenges with rental models. [3] From McKinsey & Global Fashion Agenda (2019). In this case, “sustainable” means getting the fashion industry on track to reduce fashion-related emissions by 50% by 2030. This is what has to happen if we are to keep temperatures from rising more than 1.5 degrees