Circular Economy Collaboration & Co-Creation

Report:
Reverse Logistics Integral to Accelerating Circular Fashion

Current, fragmented approaches to fashion circularity are failing to achieve commercial viability and scale. Deeper collaboration with logistics partners can streamline operations and aid compliance with tightening regulatory requirements.

Published 7 months ago | About a 3 minute read

Image: Julia M Cameron

Global Fashion Agenda (GFA) — a non-profit organization that fosters industry collaboration on sustainability in fashion to accelerate impact — has released a report that outlines how fashion brands, retailers, value chain partners and logistics providers can leverage reverse logistics to cultivate an effective and holistic circular fashion system.

Written with support from GFA’s Insight Partner, global logistics leader Maersk, Reverse Logistics for Circular Fashion Systems combines extensive research and input from renowned experts from stakeholders including Circle Economy Foundation, Ellen MacArthur Foundation (EMF), H&M Group, Nike, PUMA Group, Target and VF Corporation. It highlights the critical role of logistics in supporting fashion companies to adopt more circular systems by managing the reverse flow of materials and products from end users, and returning them back into the system for resale, remaking or recycling — extending their lifecycle, maximizing value and minimizing waste.

As EMF highlighted in a recent report, effectively reining in global fashion and textile waste will require a combination of holistic extended producer responsibility (EPR) policies that work across global governments, dedicated funding, and unprecedented industry action and collaboration. And as EPR legislation around various material streams takes hold in Europe, the UK, Asia and parts of the US, companies are urged to rethink their sourcing and design strategies — emphasizing regionalization and circularity. 45 percent of brands surveyed by Global Fashion Agenda and the United Nations Environment Program earlier this year reported that they have set targets to derive at least 10 percent of their revenue from circular business models by 2040.

Despite the potential, the fashion industry lacks a comprehensive system for circularity; current, fragmented approaches — often, limited by geography — are failing to achieve commercial viability and scale. Deeper collaboration with logistics partners can support more streamlined operations, while aiding compliance with tightening regulatory requirements and in demonstrating positive environmental impacts.

“Logistics is an integral part of any successful circular system,” says Kaisa Tikk, Head of Commercial Sustainability at Maersk. “Circularity requires both fashion companies and their logistics providers to rethink the setup of linear supply chains. Collaborating with logistics providers will provide fashion companies guidance on how logistics can help enhance fashion supply chains’ transition to circularity and avoid logistics being a road blocker during implementation of circular systems.”

To guide stakeholders, the publication outlines essential elements for implementing effective reverse logistics, including:

Network design: Expanding reverse logistics beyond consumer returns to capture and valorize post-industrial textile waste flows and unsold goods.
Financial ownership: Establishing clear financial models to define roles, responsibilities and profit-sharing — enhancing collaboration and investment.
Boosting collection volumes: Developing infrastructure for efficient collection and processing of textile waste — essential for scaling solutions and reducing recycled fiber costs.

"Global Fashion Agenda’s new report on reverse logistics is a crucial guide for the fashion industry, offering clear strategies for embracing circular systems that not only enhance business operations but also harness the opportunities of used textiles,” says GFA CEO Federica Marchionni. “I strongly encourage leaders to engage deeply with their logistics partners, use innovative technologies and adopt a comprehensive approach to circularity. By doing so, we can collectively extend the lifecycle of products, reduce waste and create substantial economic value."

This landmark report is a call to action for the entire fashion industry to embrace reverse logistics to establish a truly holistic and highly effective circular fashion system. Fashion brands, retailers, manufacturers, logistics providers and textile recyclers are invited to join Global Fashion Agenda and Maersk in collectively advancing the necessary strategies and infrastructure.