Organizational Governance Circular Economy

UK Gov Proposes Tax, Other Incentives to Help End Throwaway Fashion

The Environmental Audit Committee is calling on the UK government to make fashion retailers take responsibility for the waste they create.

Published 5 years ago | About a 5 minute read

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In a new report, Fixing Fashion, the Environmental Audit Committee (EAC) calls on the UK government to make fashion retailers take responsibility for the waste they create — suggesting, among other measures, a 1p producer responsibility charge on each item of clothing that could pay for better clothing collection and recycling.

In June 2018, the EAC launched an inquiry into the sustainability of the fashion industry, surveying 16 leading UK fashion retailers on what, if anything, they are doing to reduce the environmental and social impact of the clothes and shoes they sell. Within the report are key recommendations that the EAC hopes parliament will pass into law. As the EAC states in the report, “The fashion industry has marked its own homework for too long.”

The report outlines key recommendations for Parliament that cover not only waste, but also the importance of education, and improving human rights and other responsible supply chain practices:

Mandatory environmental targets for fashion retailers with a turnover above £36 million;
An Extended Producer Responsibility (EPR) scheme to reduce textile waste with a one-penny charge per garment on producers;
The scheme should reward fashion companies that design products with lower environmental impacts and penalize those that do not — using the tax system to shift the balance of incentives in favor of reuse, repair and recycling to support responsible producers.
The Government should follow Sweden's lead and reduce VAT on repair services.
Lessons on designing, creating, mending and repairing clothes should be part of school curricula
The Government should publish a publicly accessible list of retailers required to release a modern slavery statement. This should be supported by an appropriate penalty for those companies who fail to report and comply with the Modern Slavery Act.
The fashion industry must come together to set out a blueprint for a net zero emissions world, reducing their carbon consumption back to 1990 levels.

Environmental Audit Committee Chair Mary Creagh MP comments below:

Sustainable clothing: “voluntary approach has failed”

The report warns that although some parts of the fashion industry are making progress in reducing their carbon and water consumption, these improvements have been outweighed by the increased volumes of clothing being sold. It concludes that a voluntary approach to improving the sustainability of the fashion industry is failing, with just 10 fashion retailers signed up to reduce their water, waste and carbon footprints.

It recommends that compliance with WRAP’s Sustainability Clothing Action Plan targets should be made mandatory for all retailers with a turnover of more than £36 million as a ‘license to practice.’

It is also recommended that Government work with retailers to increase use of digital supply chain technology for better traceability.

New economic models for fashion

The MPs say that we need new economic models for fashion that are based on reducing the material consumption associated with growth. To drive improvements, the Government should reform taxation to reward fashion companies that design products with lower environmental impacts.

This could include extending the proposed tax on virgin plastics to synthetic textile products to stimulate the market for recycled fibers in the UK. The Committee also wants the new EPR scheme to accelerate government and industry research into the environmental performance of different materials and measures to reduce microfiber pollution.

The report also calls on Ministers to explore how they can support new sharing economy models such as hiring, swapping or subscription clothes services.

Government must act to end throwaway fashion

Increasing a garment’s lifetime is one of the most effective means of reducing its environmental footprint. Around 300,000 tonnes of clothing ends up in household bins every year with around 80% of this incinerated and 20% sent to landfill.

A charge of one penny per garment producers as part of a new EPR scheme could raise £35 million for investment in better clothing collection and recycling in the UK. The Committee is also calling on the Government to ban incineration or landfilling of unsold stock that can be reused or recycled.

Ending labor exploitation

While many clothing brands are produced in Asian countries with low labor costs and weak environmental governance, there has been a recently growth in garment manufacturing in the UK, as brands and retailers seek to respond faster to consumer demand. Unsurprisingly, manufacturers are under pressure from retailers to produce garments at unrealistically low prices — as a result, the EAC heard evidence that sub-minimum wage issues are widespread in Leicester’s garment factories.

The report calls for changes to the Modern Slavery Act and Companies Act to increase transparency, and require large fashion brands and retailers to perform due diligence checks across their supply chains to ensure their products are produced without forced or child labor.

In a statement, Fashion Revolution — a key contributor to the report — said it welcomes the EAC’s findings:

“We too want to see a thriving fashion industry in the UK that employs people, inspires creativity and contributes to sustainable livelihoods in the UK and around the world, and we believe that brands and retailers have an obligation to address the fundamental business model,” said Policy Director Sarah Ditty. “We believe that the fashion industry in the United Kingdom and globally needs far-reaching systemic change in order to tackle poverty, inequality and environmental degradation, and greater transparency is the first crucial step towards solving its human rights and environmental crises. We hope to see the policymakers and citizens across the UK work hard to make sure that these recommendations are adopted into policy.”

While agreeing that the proposed tax is a “good first step,” Becky Willan, Managing Director of brand purpose consultancy Given, adds: “A tax initiative like this does put well-placed pressure on fashion brands, but the challenges of making the industry truly sustainable are so much broader and more complex than simply recycling, [which] does little to address the throwaway culture that exists at the heart of 'fast fashion. Consumer behaviour and attitudes also need to be transformed — to reverse the trend of overconsumption, we need to unlock a much bigger culture shift.”