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Circular Business Models: The Future of Sustainable Fashion

Chloe Holland, Programme Manager for the Fashion Initiative at the Ellen MacArthur Foundation, urges brands to rethink their business models in order to make a circular economy for fashion a reality.

Clothing is a thread in our lives which connects each and every one of us – whether it is the outfit we have ready for that long-awaited summer vacation or just for lounging on those lazy Sundays.

Today’s fashion industry largely operates under our wasteful linear economy. Every year, millions of tonnes of garments are produced, worn, and thrown away. This results in a truckload of garments being incinerated or landfilled every single second. It shouldn’t be this way.

But the fashion industry has the opportunity to reinvent itself and embrace a new way of doing things so garments are used more, made to be made again, and made from safe and recycled or renewable inputs.

The transition is underway. To continue to advance on this important journey we must now get to the heart of the problem and bring an increased level of investment and ambition to circular business models.

Circular business models, such as rental, resale, and repair are designed to keep products in use. A study in 2022 by the Foundation estimated that this could grow to up to 23% of the global fashion market by 2030, representing a USD 700 billion opportunity and could lead to a 16% reduction in CO2 emissions.

The Fashion ReModel – a new demonstration project recently launched by the Foundation – includes leading global brands such as Arc’teryx, Reformation and H&M Group.

With the support of the Foundation, they will challenge conventional linear models, identify solutions and break down barriers to begin to scale circular business models and create a new norm for the fashion industry.

Whilst businesses are beginning to take action in decoupling their revenue from production, this must also be matched by the continued implementation of new policies, such as globally aligned Extended Producer Responsibility (EPR). Without this, millions of tonnes of textiles will continue to go to waste and be leaked into the environment.

To create a thriving fashion industry and meet climate goals, we need to fundamentally transform the way we design, make, and ultimately enjoy our clothes. We need a circular economy for fashion.

For further information about The Fashion ReModel project, please visit

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