Apparel brands Asket and Lindex are the first of four brands to join Circle Economy’s Switching Gear project in order to explore circular business models and connect with a global network of rental and recommerce experts.
“Circular business models such as recommerce and rental offer commercial opportunities for brands to innovate their business model while optimising the useful life of clothes to their full potential and reducing the overall impact of the industry. With Switching Gear, we aim to accelerate these business models in the apparel industry by providing brands with the expertise they need and connecting them with the right partners to successfully launch a pilot by 2021.” says Gwen Cunningham, Circle Textiles Programme Lead.
In partnership with Fashion for Good, the project has also established the Switching Gear Enabling Network; a network of over 30 rental and recommerce experts and service providers to support Asket, Lindex and other participating brands that join in their journey to develop and pilot a new business model. Members of the network include: ThredUP, RePack, Eileen Fisher, Style Lend, Lizee and The Renewal Workshop.
The Swedish menswear brand Asket is on a mission to rewrite the rules of the whole fashion system and focus on putting care back into apparel – addressing how clothes are made, marketed and consumed. Having stepped out of seasonal collections that only fuel fast-consumption habits, the start-up instead introduced a single permanent collection of zero-compromise garments. Every piece is in the collection is marked with its traceability journey, breaking down the garment into its raw components and tracing it back to their origin. They also offer stain, repair and care guides, aimed at getting people to better care for their garments.
“We want to continue to lead by example and see that a recommerce or rental business model would allow us to take our mission to change the way we consume clothes and reduce waste even further. Joining Switching Gear will fast track our thinking, and we are excited for the collaboration opportunities that come with the Switching Gear Enabling Network.” – August Bard-Bringeus, Co-founder at Asket
Lindex, following up on sustainability promise
Back in April, Swedish fashion retailer Lindex launched a sustainability promise that positioned climate action, a circular business approach, and water responsibility at the core of the company’s vision. The sustainability promise also set the fashion company’s climate goals around emissions, materials, and water efficiency, such as ensuring 100% of Lindex materials are either recycled or sustainably sourced by 2025.
“We want to prolong the lifetime of our products and use resources in the smartest way possible throughout our operations. A circular business approach will help us with our goals to reduce material streams and sending zero waste to landfill, and the guidance of the Switching gear project team will be of great value in our work to fulfill our promise to future generations”, says Anna-Karin Dahlberg, Corporate Sustainability Manager at Lindex.
Towards an inclusive, fair, and sustainable industry
The past two decades have seen a dramatic decrease in the amount of times clothes are worn. Coupled with a shift towards fast fashion, average consumers today buy 60% more items than they did 15 years ago and wear them for half as long. 70% of closets usually go unworn and it is estimated that 33% of women wear items as little as 5 times before disposing of them.
The Switching Gear project, supported by C&A Foundation, is part of the Bridging the Gap initiative, a group of six organisations working to stimulate sector-wide collaboration, facilitate innovative technologies and the design of best practices to enable the implementation of circular business models in the fashion industry’s supply chain. Other strategic partners of the Bridging the Gap group include the World Resources Institute, WRAP, London Waste and Recycling Board, QSA Partners and Forum for the Future.
The Circle Economy project team is currently looking for additional brands interested in developing a rental or recommerce pilot and exploring circular economy opportunities for their brands. “Interested brands and organisations should contact us”, Gwen adds.
For press enquiries, please contact yasmina@circle-economy.com
To join the project, please visit https://circle-economy.com/textiles/switching-gear
About Circle Economy
We work to accelerate the transition to a circular economy. As an impact organisation, we work to identify opportunities to turn circular economy principles into practical reality.With nature as our mentor, we combine practical insights with scalable responses to humanity’s greatest challenges. Our vision is economic, social and environmental prosperity without compromising the future of our planet. Our mission is to connect and empower a global community in business, cities and governments to create the conditions for systemic transformation.More than 50 businesses are now part of our membership community (from large multinationals to active SMEs and innovative start-ups) with whom we co-create practical and scalable solutions, making the circular economy happen. In addition, we work with cities, governments, CSOs, NGO’s, advisory boards and intergovernmental bodies. www.circle-economy.com
About Asket
Founded 2015 in Stockholm by August Bard Bringéus and Jakob Dworsky, ASKET is an independent online-only menswear brand on a mission to end overconsumption and restore value in apparel. Replacing the mindless churn of seasonal collections with a single permanent collection of meaningful essentials built on full transparency and constant improvement, ASKET is reducing wardrobes to the pieces we actually need and helping us care for them longer.
About Lindex
Lindex is one of Europe’s leading fashion brands, with approximately 460 stores in 18 markets and sales online. Lindex offers inspiring and affordable fashion for the fashion interested and conscious woman. The assortment includes several different concepts within women’s wear, kids’ wear, lingerie and cosmetics. Lindex sustainability promise is to make a difference for future generations by empowering women, respecting the planet and ensuring human rights.
About Fashion for Good
Fashion for Good is the global initiative that is here to make all fashion good. It’s a global platform for innovation, made possible through collaboration and community. With an open invitation to the entire apparel industry, Fashion for Good convenes brands, producers, retailers, suppliers, non-profit organisations, innovators and funders united in their shared ambition. At the core of Fashion for Good is our innovation platform. Through our Fashion for Good-Plug and Play Accelerator we give promising start-up innovators the expertise and access to funding they need in order to grow. Our Scaling Programme supports innovations that have passed the proof-of-concept phase, with a dedicated team that offers bespoke support and access to expertise, customers and capital. Our Good Fashion Fund will catalyse access to finance to shift at scale to more sustainable production methods.
Fashion for Good also acts as a convener for change. In October 2018 the Fashion for Good Experience has opened: the world’s first interactive tech museum dedicated to sustainable fashion innovation. In its hub in Amsterdam, Fashion for Good also houses a Circular Apparel Community co-working space, creates open-source resources like its Good Fashion Guide about cradle-to-cradle apparel. www.fashionforgood.com Fashion for Good’s programmes are supported by founding partner C&A Foundation and corporate partners adidas, C&A, BESTSELLER, Galeries Lafayette Group, Kering, Otto Group, PVH Corp., Stella McCartney, Target and Zalando.
About C&A Foundation
C&A Foundation is a corporate foundation here to transform the fashion industry. They work with change-makers all over the world, offering financial support, expertise and networks to make the industry work better for every person it touches. The foundation collaborates with a variety of stakeholders, including NGOs and industry partners, and works closely with smallholder farmers and garment workers. C&A Foundation is driven by the belief that despite the vast and complex challenges, collaborative action can make fashion a force for good. www.candafoundation.org
About Switching Gear
“Switching Gear” is a C&A Foundation supported project that will guide 6 brands on a circular innovation process towards the design and launch of rental and recommerce business model pilots by 2021. Find more information about the project here: https://www.circle-economy.com/textiles/switching-gear/
The Circular Brands Workshop brings together the world of strategic innovation consulting and creative brand building. Where the common understanding and analysis of circularity starts from the supply chain perspective, Circular Brands makes marketing, branding and consumer culture the starting point for circular opportunities.
We live in an era of creativity, where we can redesign everything from the ground up – including how we do business. Brands have the power to do this. They have the opportunity to drive business innovation and change consumer culture and consumption. But how do we create brand & business growth whilst creating a positive impact on society?
We invite you to learn from circular leaders sharing their best practices, insights, experiences and tools to become the driver of a circular vision, able to envision and map a circular future for your brand. Learn how to apply design thinking methods to create a portfolio of circular brand opportunities with your team and join the growing network of circular brand pioneers.
Circular Brands is a one-day innovation workshop rooted in a co-creation approach. Brands can participate with a multidisciplinary team of creative, brand, design and marketing leaders, and other leading brands. The workshop is led by a team of circular experts, creative/design coaches and experienced innovation facilitators.
During the workshop brands will map and create a circular future vision, define brand-led business opportunities and develop brand concepts, products and services, and create a roadmap for implementation and circular leadership development.
Are you interested to join our Circular Brands Workshop? The Next edition will take place on the 11th of December in Amsterdam
Contact us for more information!
The circular economy offers great business opportunities. In 2015 McKinsey and the Ellen MacArthur Foundation estimated that it could even generate a net economic benefit of 1.8 trillion in Europe by 2030. But, the circular economy can never lift off without businesses putting the concept into action. And with innovative circular companies like Product-as-a-Service Models (PaaS) struggle to find financing, this remains a big barrier. On the other hand, we see that many financiers are starting to set ambitious targets to grow their circular portfolio. but to this day the PaaS love story between entrepreneurs and financiers has been lost in translation.
The main issue is a lack of knowledge on both sides and the absence of a financial narrative for Product-as-a-Service models that fit within the risk parameters of financiers. More concretely, PaaS models are, sometimes falsely, perceived as risky due to the way businesses present themselves and how financiers assess risk.
To close the knowledge gap between circular entrepreneurs and financiers, Circle Economy has developed the PaaS Question Kit: A comprehensive guide to PaaS business models. The Kit leads both entrepreneurs and financiers through a series of questions they need to ask themselves before starting their conversation. The ultimate goal of the PaaS Question Kit is to remove the knowledge barrier and open up more financing opportunities for circular companies.
After presenting the Kit to our network the initial responses from both sides have been positive. "The PaaS Question Kit gives a perfect overview of the advantages and the complexities of a PaaS business model. The questions and manual are an easy tool to use in preparation for financial interviews, both with financiers and end-users of our product" says Pim Dekkers, founder from Occony, a high-end circular furniture company.
Joost van Dun, Circular Economy Lead at ING Sustainable Finance commented: "Paas business models are seen as one of the most powerful business models of the Circular Economy. Within ING there is a clear ambition to increase our support to our clients who transition to this model. The PaaS Question Kit is a helpful tool in this process".
The PaaS Question Kit is available open-source. We would love to receive feedback from circular entrepreneurs and financiers alike to increase our understanding and make necessary improvements. We also provide tailored workshops and support to financiers and entrepreneurs on these topics.
We would love to hear from you! For more information, questions and comments please feel free to reach out to our finance team!
The Coalition Circular Accounting (CCA) brings knowledge partners together to co-create solutions in overcoming the barriers to transition from a linear to a circular economy. In order to better reflect the financial reality of circular companies, it is vital to adjust existing economic principles and reporting rules. The CCA, co-financed by Nederland Circulair, is a collaboration between Circle Economy, NBA, Dura Vermeer, ABN AMRO, KPMG, Province of Overijssel and scientists affiliated with Erasmus University, Open University, University of Groningen, Nyenrode Business University and Avans University of Applied Sciences.
NEW PRINCIPLES
The circular economy is characterised by principles including reuse and value retention. In many cases, these principles require innovative business models in which parties form long term collaborations, and in which material cycles are closed. New, circular business models require an adjustment of economic principles and reporting rules.
COALITION CIRCULAR ACCOUNTING
The NBA, together with Circle Economy, has taken the initiative to set up the Circular Accounting Coalition. The aim of the coalition is to jointly identify accounting challenges in the circular economy and to work together to co-create solutions and best practice in overcoming these barriers, e.g. valuation issues in circular products during and after their lifespan. Members of the coalition include senior financial decision-makers (CFO, finance manager), users (financiers, shareholders), and advisers/auditors (accountants) alongside science and advisory experts. The NBA's Annual Reporting Committee will act as a consultative group.
Findings will be consolidated in a quarterly open-source white paper.
'Circularity, the energy transition, sustainable entrepreneurship or sustainability are about economic lifetimes, cost price determination, valuation issues, depreciation periods, residual values and business models. That is 100% our profession'.
Fou-Khan Tsang, chartered accountant and booster Green Brigade NBA
CASE DURA VERMEER
The first case study is a pilot project from Dura Vermeer and the Province of Overijssel to operate a "Road-as-a-Service". The idea is that Dura Vermeer becomes the economic owner of the road and takes care of the maintenance while the Province pays a periodic fee for the use of the road. A crucial point is determining the residual value when entering into the contract and (being able to) include this residual value in accounting and financing. This
leads to the question: How can the residual value of the road be determined and what effect does this have on the revenue model and on the profit and loss account? The above parties will work on this case until November
Transitioning to a circular economy requires new business models that focus on optimising the lifespan and value of products. To unlock the value of a circular economy, we need to identify current barriers in accounting and valuation standards and redesign rules where needed.
Fieke de Haan, Lead Circle Finance Program, Circle Economy
RESULTS
The Coalition will deliver the following concrete results:
MORE INFORMATION OR PARTICIPATION?
If you are interested in participating in the Circular Accounting Coalition or would like to know more, please do not hesitate to contact the project manager Aglaia Fischer
The construction sector consumes 42 billion tonnes of resources annually, making it the most material-intensive sector. The construction sector also produces about one-third of all global waste, most of which is not recycled or reused, but ends up in landfills. This is a known problem faced by actors across the industry value chain. Changing one of the largest industries in the world is no easy feat, but change is already happening.
Circle Economy has teamed up with ROCKWOOL one of the frontrunners, committed to change the sector. ROCKWOOL recognises the potential of the circular economy and has decided to join Circle Economy's member community. They aim to address the global environmental and social challenges caused by the industry while simultaneously creating new commercial opportunities. The concept of a circular economy is not new to ROCKWOOL. For instance, the group upcycles secondary materials from industries such as the utilities and metallurgical sector. ROCKWOOL also recycles its own waste in closed loops and designs products for extended life spans and nearly indefinite recycling thereby leveraging the natural recyclability and durability of stone wool.
"Our membership with Circle Economy can help us better understand the opportunities we have in our value chain and help us connect with other stakeholders so the impact can be wider,”
Dorte Vigsø, Sustainability Manager, ROCKWOOL Group.
To further improve ROCKWOOL's operations, Circle Economy assessed the company's value chain and identified opportunities to increase impact. Applying a system mapping methodology to measure and assess circularity across ROCKWOOL’s value chain, from resource extraction to end of life, Circle Economy identified a range of opportunities to build on existing activities. It also showed that ROCKWOOL has the potential to become fully circular in the future.
"We need better incentives to improve the management of demolition and construction waste. Investigating ROCKWOOL's value chain helped us understand the structural issues holding back the industry. Far-reaching collaboration across the value chain and with legislators is needed to move forward."
Marc de Wit, Director Strategic Alliances, Circle Economy
Looking at the industry as a whole, a lot still needs to happen. The collaboration with ROCKWOOL uncovered three key levers to improve circularity: (1) Increase the sourcing of non-virgin and regenerative materials for both raw materials and energy supply; (2) Develop more high-value and circular product applications that can be integrated into modular, adaptive building components; (3) Reclaim more waste from the construction sector through ROCKWOOL’s internal recycling and partnerships with other players.
The biggest steps towards circularity can only be taken with the support of and collaboration with legislators and value chain partners. Circle Economy found multiple opportunities for ROCKWOOL to improve the circularity within its own operations. However, structural barriers in legislation and other parts of the value chain impede the development of the necessary recycling infrastructure for construction and demolition waste to become fully circular. ROCKWOOL and Circle Economy call on both legislators and value chain partners to join forces in developing pragmatic solutions to overcome the identified barriers. Doing so will drastically improve economic incentives for a circular utilization of construction and demolition waste thereby unlocking the full potential of the circular economy model. To start the dialogue, ROCKWOOL is open to discuss the opportunities identified in the report via sustainability@rockwool.com and through their Circle Economy membership.
Almaty is the world's first Central Asian City to identify circular economy opportunities. A resource metabolism scan uncovers how Almaty can use circular economy strategies to shape its future as an international trading hub at the intersection of Europe and Asia.
Almaty in Kazakhstan is the first city in Central Asia to identify circular economy opportunities. The city commissioned an international consortium -- Shifting Paradigms, Circle Economy, Centre for Sustainable Production and Consumption (CSPC), FABRICations and Emerging Markets Sustainability Dialogues (EMSD) -- to map resource consumption. The analysis produced new cross-sectoral circular economy strategies to achieve the city’s sustainable development ambitions.
This resource metabolism scan comes as Almaty achieves impressive economic growth, re-establishing its position as an exporter of agricultural commodities. An important station on the Belt and Road Initiative, China’s development plan to improve trans-continental cooperation, Almaty sees connectivity with Asia, Europe and other regions as key to growing international trade. At the same time, the government is opening new channels for public participation in urban planning decisions, to meet the needs of its citizens.
"This project helps strengthen international cooperation and share positive experiences, as well as fostering a dialogue between all stakeholders to achieve the principles of sustainable development".
B.K. Baibek, Mayor of Almaty City
The consortium worked intensely with local governments and industry players, to ensure the metabolism scan highlights circular strategies which take full account of cultural, socio-economic and geographic factors.
In agriculture, the most promising circular economy opportunities lie in diverting organic residues away from landfill and processing them into soil enhancers or organic fertilisers. Regional ambitions for agricultural output will require investment in soil quality. Applying processed organic residues on land can reduce the application of synthetic fertilisers, while also improving water retention, soil life and resilience to erosion.
Local industries already collect and recycle a significant share of mineral and metal residues. Improved connectivity to foreign markets through the Belt and Road Initiative can support the extension of manufacturing capacity with remanufacturing, whereby used products or components are refurbished as new; for example, car parts, furniture and construction elements. New service models can support this approach by incentivising companies to produce products that last, allowing suppliers to retain ownership and run take-back schemes to cycle products to second or even third users in different market segments.
“During the project it was encouraging to see the amount of traction on the ground, from grassroots initiatives to large government programmes. Since 40% of the carbon footprint of the city can be addressed with circular economy strategies, it is important to scale these initiatives.“
Jelmer Hoogzaad, Shifting Paradigms
Circular strategies in the construction sector are based on passive design and adjusting the design to replacing new, carbon-intensive construction materials with materials of secondary or renewable origin. This starts with design. Merely considering energy and resource use in the design phase of a building can bring down energy use with more than half. Design can also open opportunities for the use of secondary and renewable construction materials, potentially turning the construction sector into a net sink of CO2.
"It is encouraging to see the circular economy gaining momentum outside of Europe and recognised as a tangible tool for transition. It provides a change agenda to transform from an economy of depletion to an economy of opportunities that works for all people."
Harald Friedl, CEO Circle Economy
By showcasing also what is already happening in the city, the circular prospect becomes more comprehensible. Artist impressions in the report aim to make the circular future tangible, connect it with socio-economic challenges and show how circular initiatives can make Almaty an even more pleasant place to live.
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