Ellen MacArthur Foundation | Circular Business Models {Report}

Ellen MacArthur Foundation, Circular Business Models: Redefining Growth for a Thriving Fashion Industry 

Circular business models represent a significant opportunity for new and better growth in the fashion industry. This study examines how businesses can seize the full economic and environmental opportunity and highlights those already taking steps to do so.  

In 2017, the Ellen MacArthur Foundation launched the landmark report A new textiles economy: redesigning fashion’s future. It identified the linear ‘take-make waste’ model – with one rubbish truck load of textiles being landfilled or incinerated every second – as the root cause of many of the environmental challenges in the fashion industry. The report presented the circular economy as both a solution to these challenges and a significant economic opportunity.  

The circular economy is a systems solution framework that tackles global challenges including climate change, biodiversity loss, waste, and pollution. It has three principles, all driven by design: eliminate waste and pollution, circulate products and materials, and regenerate nature. It is a bigger idea that goes beyond treating the symptoms of the current economy to tackle the root causes of global challenges, while providing opportunities for better growth that benefit businesses, people, and the environment.  

Over the last three years, working collaboratively with more than one hundred organisations from across the fashion value chain, the Ellen MacArthur Foundation has set out a vision for a circular economy for fashion and established projects including The Jeans Redesign to work towards making it a reality. The circular economy is now firmly on the agenda for businesses, governments, academia, and wider society and is increasingly recognised as the way to ensure the fashion industry thrives in future.  

This increased awareness and first steps towards a circular economy for fashion, whilst encouraging, are only the beginning. The linear operating model still dominates how fashion is designed, produced, and enjoyed. Material innovation and recycling are important elements of the solution, but they alone cannot create a thriving fashion industry. In a circular economy for fashion, clothes are used more, made to be made again, and made from safe and recycled or renewable inputs. To make this vision a reality, circular business models, one of the crucial elements of a circular economy for fashion, must become mainstream in the industry.  

This study confirms the significant economic and environmental potential of circular business models. It provides an overview of the potential of models that have grown significantly (resale, rental, repair and remaking) as well as, crucially, outlining the key actions that businesses, supported by policymakers, can take to capture their full potential. While this study does not address them directly, the social implications of a circular economy transition are vital to consider; academia and organisations including BSR and Circular Apparel Innovation Factory (CAIF) have already begun to do so. 

Access the Circular Business Models: Redefining Growth for a Thriving Fashion Industry Report HERE