Rethinking Circular Economy in Fashion

In recent years, the idea of a circular economy has gained significant traction across industries, governments, and academia. Unlike the traditional linear model of “take, make, dispose,” the circular economy aims to separate economic growth from environmental harm and the overconsumption of natural resources. The ultimate goal is a system with minimal to no waste, where materials are continuously reused, repaired, or recycled throughout production, distribution, and consumption.

Many fashion brands, including H&M, Filippa K, Martine’s, and Levi’s, now promote circular economy initiatives. Notably, Swiss architect Walter R. Stahel envisioned the concept as early as the 1970s, outlining a system where economic activity could coexist sustainably with the planet.

Circular economy practices in fashion can be understood through two main types of resource efficiency loops. The first is product-focused, aiming to extend the life of individual items through strategies such as repair, resale, or technical upgrades. Since no product lasts forever, the second loop concentrates on the material itself, emphasizing recycling of fibers like cotton or wool. From a business perspective, circularity requires considering a product’s full lifecycle—from design and material sourcing to manufacturing, retail, usage, and eventual end-of-life management.

In the fashion sector, circularity translates into designing durable and reusable garments, developing sustainable fiber strategies, improving production efficiency, managing post-consumer products, and incorporating recycled materials into new collections.

Despite its growing popularity, the circular economy faces several challenges. For it to work at scale, legal frameworks, technological innovation, material development, and shifts in consumer behavior all need to align. Scholars also question whether closing loops of materials and products truly reduces the reliance on virgin resources. For instance, buying secondhand clothing while continuing to purchase new items may double consumption rather than reduce it. The promise of circularity is only realized if secondary production reduces primary production; otherwise, environmental impacts can accumulate.

Still, many experts view the circular economy as a leading framework for building a more sustainable fashion industry. With finite resources, the industry must rethink how products are made and consumed. Designing circular business models requires systemic change, collaboration across the supply chain, and technological advancements—but it also provides a roadmap for achieving a fashion industry that is more responsible, resource-efficient, and environmentally conscious.

Source: Copenhagen Business School