Articles | In-Depth Analysis | Industry View

Modifying the Textile Supply Chain for Circular Economy

Published: January 12, 2024

By Tanvi Munjal

In the past few years, there has been an increasing acknowledgement of the necessity to shift from a linear economy to a circular model, to reduce the environmental consequences associated with multiple industries. Among these sectors, the textile industry has specifically attracted attention due to its excessive use of resources and the substantial volume of waste it generates. To tackle these issues, it is pivotal to make adjustments to the textile supply chain and adopt circular practices.

Definition of a Circular Economy

The concept of the circular economy revolves around ensuring that materials never go to waste and that the environment is restored. In this system, products and materials are continuously looped back into circulation through practices such as maintenance, reuse, refurbishment, remanufacturing, recycling, and composting. 

By doing so, the circular economy addresses pressing global issues like climate change, biodiversity loss, waste, and pollution. It achieves this by breaking the link between economic activity and the consumption of finite resources, creating a sustainable and regenerative approach to production and consumption.

Importance of a Circular Economy in the Textile Industry

The significance of a circular economy within the textile sector cannot be emphasized enough. By adopting sustainable measures, minimizing wastage, and optimizing the utilization of resources, the industry can make a substantial impact on global sustainability objectives. 

Incorporating a circular economy not only safeguards the environment by curbing pollution and preserving resources, but it also unlocks economic prospects and fosters a more robust industry. Ensuring that sustainability remains a top priority for the textile sector is vital as it strives towards constructing a more circular tomorrow.

Challenges in the Textile Supply Chain

The textile industry is one of the largest and most influential industries worldwide, with its products being an essential part of our daily lives. However, the traditional linear economy model that governs the textile supply chain has significant negative impacts on the environment and sustainability.

Therefore, we need to explore the challenges faced by the textile supply chain and the urgent need for a shift towards a more sustainable and circular economy.

Negative Environmental Impact of Linear Economy

The linear economy, which follows a “take-make-dispose” approach, has become the norm in the textile industry. This model promotes wasteful production and consumption practices, depleting valuable resources and increasing pollution levels. The extraction of raw materials, such as cotton or petroleum-based polyester, involves substantial energy consumption and leads to air and water pollution. Moreover, the manufacturing processes utilize vast amounts of water and chemicals, further exacerbating environmental degradation.

Wasteful Production and Consumption Practices

One of the significant challenges in the textile supply chain is the wasteful production and consumption practices that contribute to its negative environmental impact. Fast-fashion brands often prioritize low-cost production and quick turnover, resulting in overproduction and excessive consumption. The trend of buying and discarding clothing at an alarming rate leads to a significant amount of textile waste.

High Levels of Textile Waste: A Growing Concern

The high levels of textile waste are a pressing issue that demands attention and immediate action. According to the Ellen MacArthur Foundation, the equivalent of one garbage truck of textiles is landfilled or burned every second. This unsustainable disposal of textile waste not only burdens landfills but also releases harmful emissions into the environment. The synthetic fibres used in many textiles can take hundreds of years to decompose, further contributing to the accumulation of waste.

Ways to Modify the Textile Supply Chain 

With the fashion industry flourishing, there is a rising apprehension regarding its environmental repercussions. The entire textile supply chain, from inception to disposal, adds to substantial waste and landfill buildup. Nonetheless, embracing a circular economy mindset can tackle these challenges and elicit a constructive transformation. By adjusting the textile supply chain, we can curtail waste, safeguard precious natural resources, diminish carbon emissions, and generate economic prospects.

Sustainable Sourcing and Production

  • Use of Eco-Friendly and Recycled Raw Materials: Traditional textile production heavily relies on virgin resources, such as cotton and polyester, which contribute to environmental degradation and resource depletion. By incorporating recycled materials, such as reclaimed fibres from post-consumer garments or plastic bottles, textile companies can significantly reduce their environmental footprint.
  • Implementing Clean and Energy-Efficient Manufacturing Processes: To align with the principles of a circular economy, textile manufacturers need to adopt clean and energy-efficient manufacturing processes. This includes optimizing energy consumption, reducing water usage, and minimizing chemical inputs. Using advanced technologies, such as waterless dyeing techniques or closed-loop recycling systems, can help minimize the environmental impact of textile manufacturing while improving resource efficiency.
  • Encouraging Transparency and Traceability: Consumers are increasingly demanding to know the origins of their garments and the production processes involved. By providing detailed information about the supply chain, including the source of raw materials and the manufacturing locations, textile companies can build trust with their customers and ensure ethical and sustainable practices.

Design for Durability and Recyclability

  • Creating Products That Are Meant to Last Longer: One of the key principles of the circular economy is the idea of “closing the loop,” which means keeping products and materials in use for as long as possible. To achieve this, manufacturers should design products that are built to last. By using high-quality materials, implementing robust construction techniques, and conducting thorough testing, we can ensure that garments have a longer lifespan.
  • Modular Designs for Easy Repair & Maintenance: Another important aspect of designing for a circular economy is to create modular products. This means breaking down garments into separate components that can be easily repaired or replaced. By employing modular designs, manufacturers can extend the life of products and reduce the amount of waste generated. For example, a jacket with removable and replaceable zippers can be repaired easily, making it last longer.
  • Designing Products That Can Be Easily Disassembled and Recycled at End-Of-Life: When products reach their end-of-life, it is essential to have systems in place to ensure effective recycling. Designing products that can be easily disassembled and separated into their core materials is crucial in achieving this. By considering the recyclability of each component during the design phase, manufacturers can make recycling processes more efficient and reduce the amount of waste going to landfills.

Implementing Reverse Logistics

  • Establishing Efficient Collection and Sorting Systems for Textile Waste: Efficient collection and sorting systems are key components of reverse logistics for textiles. Creating partnerships with local authorities, NGOs, and recycling centres can help establish collection points where consumers can conveniently drop off their used textiles. Additionally, implementing innovative technologies, such as smart bins that automatically sort different types of textiles, can streamline the process and maximize efficiency.
  • Promoting Take-Back Programs and Incentives for Consumers: Take-back programs encourage consumers to return their used textiles to designated collection points. By participating in these programs, consumers can contribute to the creation of a circular economy by ensuring that their textiles are properly recycled or repurposed. Incentives, such as discounts on future purchases or loyalty rewards, can further motivate consumers to participate actively.
  • Developing Partnerships with Recycling Facilities: Developing partnerships with recycling facilities is essential to ensure that textile waste is properly disposed of and effectively processed. These facilities have the expertise and infrastructure to sort and recycle various textile materials, transforming them into new products or raw materials for other industries. By partnering with recycling facilities, textile companies can close the loop and eliminate waste from their supply chain.

Promoting a Sharing and Rental Economy

  • Encouraging Consumers to Rent or Share Clothing Items: Instead of purchasing new clothing items that may rarely be worn, consumers can choose to rent or share clothing through various platforms and companies. This not only provides individuals with access to a wider range of fashion choices but also reduces the demand for new production. By renting or sharing clothing, we can extend the lifecycle of garments and diminish the amount of waste ending up in landfills.
  • Supporting Rental Platforms and Companies: To further promote a sharing and rental economy, it is essential to support rental platforms and companies that offer clothing and textile services. These businesses play a crucial role in facilitating the reuse and redistribution of clothing items, reducing the need for new production. By investing in these innovative platforms and businesses, we can contribute to a more sustainable fashion ecosystem.
  • Educating Consumers: Education plays a significant role in driving change and encouraging consumers to embrace a sharing economy. By raising awareness about the benefits of renting or sharing clothing, we can help individuals make more informed choices. Highlighting the positive environmental impact of a sharing economy, such as conserving resources and reducing waste, can motivate consumers to participate in the circular textile supply chain.

Benefits of a modified textile supply chain for a circular economy

  • Reduction in Textile Waste and Landfill Accumulation: The fashion industry is notorious for generating a massive amount of textile waste. It is estimated that around 92 million tons of textile waste are produced globally each year. By implementing a modified textile supply chain, we can significantly reduce this waste and prevent it from ending up in landfills.
  • Conservation of Natural Resources Through Recycling and Reuse: Textile production is resource-intensive, with significant water, energy, and raw material requirements. Adopting a circular economy approach helps conserve these valuable resources. By recycling and reusing textiles, we can reduce the need for virgin materials and minimize the environmental impact associated with the extraction and processing of natural resources.
  • Decreased Carbon Emissions and Energy Consumption: The fashion industry is often criticized for its high carbon footprint and immense energy consumption. A modified textile supply chain can play a pivotal role in mitigating these environmental challenges. By promoting recycling, reusing, and reducing textile waste, we can curtail the need for energy-intensive production processes. Additionally, incorporating renewable energy sources into textile manufacturing further contributes to a reduction in carbon emissions. These sustainable practices help combat climate change and foster a greener future.
  • Economic Opportunities and Job Creation: Transitioning to a circular economy in the textile industry not only benefits the environment but also creates economic opportunities. The recycling and rental sectors are poised for growth as they become integral components of the modified textile supply chain. Recycling facilities can process discarded textiles into new raw materials, fostering a sustainable closed-loop system.

Case Studies

  1. H&M Group


Trade name H&M Group
Founded 1947
Founder Erling Persson
Products Clothing, accessories

The Problem/Issue: The fashion industry has traditionally operated linearly, leading to environmental challenges like climate change and biodiversity loss. To address these issues, there is a need to shift towards a circular ecosystem.

Solution overview: H&M Group is committed to implementing a circular system that utilizes resources responsibly. This approach aligns with the Ellen MacArthur Foundation’s definition of a circular economy, focusing on waste elimination, product and material circulation, and nature regeneration. Specifically for the fashion industry, products should be designed for extended use, made with safe and sustainable materials, and created for multiple cycles of use.

Key Innovations: H&M Group’s circular approach encompasses three interconnected areas: circular products, circular supply chains, and circular customer journeys. This involves creating durable products from recycled or regenerative materials, establishing scalable systems for repair and recycling, and providing convenient ways for customers to engage circularly.

Circular Practices & Impact: A study conducted with the Stockholm Resilience Centre and the Ellen MacArthur Foundation identified six targets for a sustainable textile industry, guiding H&M Group’s goal setting and sharing the findings with the wider fashion industry. Additionally, the impact of a circular fashion industry on people, including job opportunities, is being actively investigated to ensure fairness and inclusivity.

Challenges to Scale: Despite progress, there is still a long way to go for the entire industry to fully embrace a circular ecosystem. Overcoming financial and operational challenges, as well as ensuring collaboration among stakeholders, are key hurdles that need to be addressed.


  1. IKEA

Trade name IKEA
Founded 1943
Founder Ingvar Kamprad
Products Ready-to-assemble furniture, Homeware

The Problem/Issue: IKEA recognizes the need for convenient and relevant solutions to foster circularity and reduce waste. They aim to help customers reduce time, money, and effort by extending the lifespan of products and altering the purchasing process.

Solution Overview: IKEA is exploring various circular solutions, such as furniture leasing, take-back and buy-back programs, encouraging furniture repair, reuse, and recycling, as well as facilitating furniture resale.

Key Innovations: To achieve its goal of becoming a circular business by 2030, IKEA has committed to enabling customers to obtain, care for, and pass on products in circular ways. They are also focused on producing 100% circular products, utilizing renewable and recycled materials, and advocating for a circular economy through collaboration and partnerships.

Circular Practices & Impact: IKEA values waste as a resource and strives to repurpose leftover materials or recycled resources in its designs. By using surplus or recycled materials, they offer products made from 100% sustainable sources, turning their current products into material banks for future production.

Challenges to Scale: While IKEA has made significant progress towards circularity, they acknowledge they are not yet fully there. However, in 2019 alone, they successfully gave 47 million products a second life, 38 million were resold, and more than 9 million were repackaged for resale.



The alteration of the textile supply chain to adhere to a circular economy is of utmost importance when addressing the urgent environmental issues associated with the textile industry. The circular economy concept emphasizes the continuous flow of materials through practices such as maintenance, reuse, recycling, and composting, providing a sustainable and regenerative approach to production and consumption. 

By adopting sustainable measures and optimizing resource utilization, the textile industry can have a significant impact on global sustainability goals. Embracing a circular economy not only safeguards the environment but also unlocks economic potential and strengthens the industry. However, there are obstacles to be overcome within the textile supply chain. The traditional linear economy model encourages wasteful production and consumption practices, resulting in environmental degradation and excessive textile waste. 

To tackle these challenges, adjustments must be made to the textile supply chain. These adjustments involve sustainable sourcing and production, designing for durability and recyclability, implementing reverse logistics, and promoting a sharing and rental economy. Such modifications will reduce waste, preserve natural resources, lower carbon emissions, and create economic opportunities. 

By embracing a circular economy mindset and implementing these alterations, the textile industry can build a more sustainable and circular future, contributing to the conservation of natural resources and the reduction of textile waste and landfill accumulation.

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