New Study Challenges Circular Fashion’s Sustainability Potential

Apr 01, 2025

The devil’s in the details: Researchers assert circular fashion’s economic andenvironmental benefits have been grossly overstated, and more clarity and duediligence are critical.

A new study reveals that circular fashion (CF) – the practice ofrecycling, reselling and renting clothing to reduce waste – might not be thesustainable solution it’s purported to be.

While the concept is promising, a newstudy from LoughboroughUniversity London’s Institute for CreativeFuturesuncovers major flaws in how circular fashion is being implemented and discussed.

Despite widespread assertions that CF can recover over $500 billion in lostvalue annually throughresale,rental andrecycling,the research reveals a $460 billion miscalculation that casts doubt on theseprojections.

Published in the journal Frontiers in Sustainability, The Emperor’s OldClothesevaluated 20 key reports from grey literature (non-academic industrypublications) – from organizations including the Business of Fashion,Circle Economy, the Ellen MacArthur Foundation, the InternationalLabour Organization, PwC, UNEP and more. It found that CF concepts arepoorly defined, disconnected from academic economic theory, and ultimately servethe interests of dominant fashion brands rather than consumers or workers.

The Emperor’s Old Clothes echoes a 2021 study in which a team of British andSwedish researchers warned the definition of a circular economy is unclear andlackssubstance.As principal author HervéCorvellec pointedout: “Criticism of the circular economy does not challenge the concept ofcircularity. Rather, it is a case of how the supposed benefits are based oninconsistencies, an incomplete picture, hidden assumptions, agendas and unclearconsequences.”

The Loughborough study digs further into these points and cautions industryplayers and policymakers from pinning too much hope on the potential forcircular models to address fashion’s sustainability issues without further duediligence.

“The fashion industry faces many sustainability challenges which it is,unfortunately, not tackling successfully,” says lead author Dr TaliaHussain, a visiting scholar atLoughborough. “At every stage and every scale, we observe problems. From waterand land use, to chemicals, fossilfibers,laborabuse,overproduction and ultimately textilewaste.

“Our paper shows that that the circular fashion solution, which has beenembraced by governments and industry, does not stand up to the slightestscrutiny,” she adds. “The authors of a flagship circular fashionreporthave added $460 billion they should have subtracted.Overproduction,which anyone can see in the never-ending sales on the high street, is notaddressed.”

Addressing overproduction in fashion is a central mission of the OrFoundation — whose “SpeakVolumes” campaign aims tofoster greater transparency within the fashion industry by encouraging brands topublicly disclose their production volumes by item. As Or founder LizRickettsexplained in a recentpost:“Given that the industry currently recycles less than 1 percent of clothing intonew clothing, we question how emerging recycling solutions alone can possiblycatch up — the investments made by brands in fiber-to-fiber recyclingtechnologies will be futile if not paired with transparency on currentproduction volumes and a concerted effort to reduce the production of new itemsmade from virgin materials.”

The Loughborough team says the CF literature reviewed ignores overproduction byfocusing on changing consumer behavior while overlooking the fashion industry'sroutine disposal ofunsoldandreturnedstock — which weakens CF’s ability to address the root causes of waste.

In 2024, the Ellen MacArthur Foundation launched The Fashion Remodelinitiative— which brings together high-street and high-end fashion brands and otherindustry players to identify solutions and opportunities to begin decouplingrevenue from the production of new garments — but the industry is still largelyfueled by the conventional model of churning out new clothes.

Flawed economic assumptions: Circular business models (CBMs) includingresale and rental generate lower profit margins than new product sales. IfCBMs successfully reduce new production, fashion revenues will shrink —contradicting CF’s economic promises. If they merely supplement newproduction, environmental benefits will be negligible.

Misguided policy recommendations: Reports rely on business jargon andinconsistent definitions of ‘value chain,’ leading to superficial policyprescriptions that fail to address systemic issues.

Labor concerns overlooked: The shift to lower-margin circular models isunlikely to improve wages or working conditions for garment workers, themajority of whom live in the GlobalSouth.Instead, it may lead to even more precarious employment in sorting andrecycling of secondhand clothing.

Industry-controlled sustainability discourse: Consulting firms such asMcKinsey and global leadership organizations shape CF policy withoutrigorous scrutiny, reinforcing the power of dominant fashion brands whilesidelining alternative models such asdegrowthandsufficiency.

The research warns that CF, in its current form, is built on unrealisticprojections and industry rhetoric rather than substantive economic andenvironmental solutions. By prioritizing corporate interests and maintaining thestatus quo, CF risks creating new problems instead of solving existing ones.

The study urges academics, policymakers and industry stakeholders to criticallyreassess CF narratives and explore alternative approaches that prioritizesystemic change over profitability. Future sustainability efforts must begrounded in robust empirical research rather than unexamined advocacy.

“The failure to address the elephant of overproduction demonstrates theconcept’s opposing alignment to degrowth or sufficiency approaches which demandthe end of unnecessary production,” the authors conclude. “A new fashionparadigm is needed; however, we argue that CF should be understood as oneproposal among many that have not been promoted, funded, supported or yetdeveloped to meet that need.”

Published Apr 1, 2025 8am EDT / 5am PDT / 1pm BST / 2pm CEST