The New Frontiers of Circularity: the legislative contribution to accelerate the transition

From the AGEC Law in France, to the Digital Product Passport: Europe at the frontline for sustainable development

Viktoriia Shiriaeva, Presales Specialist of Deda Stealth

The principles of the circular economy, from reusing to repairing and recycling, represent the future of fashion (and beyond) and the most reliable answer for the next generation's well-being. The circular economy, in contrast with the linear model, is a system that aims to reduce waste and trash by reintroducing materials and items back into the production cycle at the end of their life span. The belief behind this model is that every item is born to live multiple lives.

Why is it crucial?

The chart below shows the Overshoot Day i.e., the day of the year when the consumption of all the resources produced by the planet is determined. This parameter has been recorded from the 1970s till 2023.


This year's earth overshoot day has been predicted for next August 2nd. Meaning that on that date it is estimated that we will run out of the resources that our planet can produce in one year, and therefore for the remaining time in 2023 we will be "borrowing" resources on the following year, basically as if we had one and a half planets instead of one.

Traceability and Transparency: the enablers of a circular economy


The circular economy fits into this context as one of the possible solutions to look at, and significant contributions are coming from governments worldwide, especially in the fashion industry. Starting from January 2022, in fact, the obligation to collect textile waste separately has been introduced in Italy, which is a law that will come into effect by 2025 at the European level as well. These initiatives aim to facilitate the reuse and recycling of waste to slowly get to the point where waste is reduced to the bare minimum. Other legislative and regulatory initiatives address the two enabling factors for the circular economy: transparency and traceability.

The AGEC law in France, which was created with the aim of transforming linear economic models into circular economy systems, is applied in several areas of intervention: decreasing the use of plastics, punctually informing consumers, reducing waste in favor of recycling, and making the production chain more transparent and traceable. On the other hand, the "Kreislaufwirtschaft" (German Circular Economy Act) directive focuses mainly on separating and recycling industrial and household waste. Finally, introducing the DPP (Digital Product Passport) will change the management and retrieval of product information, supporting the principle of data economy. 


The European Commission wants to accelerate the circular transition, following up on the goals set by the Green Deal. The DPP will provide information on the composition of products circulating on the European market, to increase the possibilities for reuse or recycling.
According to the new regulation, the product passport will:

1. Ensure that actors along the value chain, including consumers, can access information about the product they are interested in.
2. Improve the traceability of products along the value chain.
3. Facilitate the verification of product compliance by competent authorities.
4. Include the necessary data attributes to enable traceability of all hazardous substances throughout the life cycle of the products involved.


The idea is to provide supply chain players with all the data they need to understand better how to properly dispose of any waste or give new life to products. Probably the DPP could finally highlight the many cases of "False Green Claims," better known as Greenwashing cases, helping consumers orient their purchasing choices, and consistently rewarding those production realities that, with so much commitment and determination, try to embrace circularity and sustainability logics.


Sustainability: a factor to be considered from product conception

There are already virtuous examples to be inspired by. A few months ago, I had the good fortune to visit the production plant of a Tuscan company. It has been quite a source of hope for the transformation of the industry. The company's core business is woolen garment production, but it also devotes part of its activities to textile production. This Tuscan business was born during World War II when there was a need for new garments, but there were not enough raw materials. The special feature, in fact, is that virgin raw materials are not used, but rather the production waste of others or those coming from textile waste, collected and sorted by color and composition.
Wool (as well as some other natural materials) has a strong regenerative capacity. In fact, its fibers are strong and flexible enough to withstand not only years of use but also 100 percent recycling (and multiple times). A unique process was created to destroy the used garment, create a "recipe" of color and mix wool fibers of various shades in order to achieve the desired result of the new yarn. This is certainly an ingenious vision: not only is virgin wool preserved, but the huge amount of water that would normally be needed to dye the yarn is saved.

This logic of circularity, for example, has been applied for years in the furniture industry: starting from the similar need to make maximum use of scarce resources and produce excellent results. Eventually, the scarcity of resources can be an opportunity and sharpen one's genius.


Circularity at risk

The circular economy can only be part of the long-term solution, but attention must be paid to the fact that even if this approach is taking future waste into account, it does not prevent it. The volume of textile waste is huge, although consumers often struggle to perceive it.
Donations of clothing made in the global south, usually do not get to be reused for 3 main reasons:

1. They are not useful clothes in that particular region of the world;
2. The quality of the clothes is low and does not allow reuse;
3. They are too many compared to the demand.

Most textiles used today are not of natural origin. Therefore, they alone can never be disposed of in the environment. At the same time, however, if recycled at the end of its life, it requires the least consumption of resources (compared to production from scratch). In addition, we must always take into account the complexity behind an "organic" production approach, because the cultivation of cotton, a natural fiber, requires very high-water consumption and uses a lot of land. So, while being natural, it does not guarantee zero impact. Furthermore, another aspect concerns synthetic fibers: nowadays, there is no full knowledge of any technique for recycling them, nor for making these fabrics less harmful to the environment (e.g., depolymerization that prevents the release of microplastics).


Whether it is because of high costs, or the difficulty of sourcing low-impact raw materials, circularity is not always easy to implement. Moreover, focusing exclusively on the end-of-life of garments is not enough, because circularity requires a holistic approach that starts upstream in the value chain, that is, to make the product have a second life, and already at the design stage it is necessary to consider this aspect. A product itself can never be called "sustainable" if it is created following a business model that is not. The increase in circularity cannot be directly proportional to the increase in production, but on the contrary, it must make up for the excessive use of the available resources, and at the same time it cannot be an excuse to continue producing as before ("we recycle it later anyway").

Sustainable growth: why collaboration plays a crucial role

One of the 5Ps of the 2030 Agenda goes under the heading "Partnership." Yes, because to realize and enhance the best practices of sustainable development and the green economy in the best possible way, continuous discussion among the various stakeholders in the value chain is necessary.
The new priorities of agility, transparency, traceability, and continuous dialogue are touching various parts of the Supply Chain. This is precisely where the need for a single ecosystem comes from, one that allows the exchange of information, approaches, and inspirations that all lead to the same goal: to build business models in line with the needs of sustainability for the preservation of the planet. 


Deda Stealth, for instance, is part of the Monitor for Circular Fashion, an active, concrete, and diversified community with the values of collaboration and sharing at its core, promoted by SDA Bocconi School of Management in Milan. Participants in the project include brands, manufacturers, suppliers, and standards consultants for industries and technology providers. While there is normally a form of competition among fashion players, overcoming the challenge of climate change requires everyone to work together and share best practices and knowledge.

The "Monitor" complements the classroom plenaries with a traveling itinerary that allows each member to deepen and better understand the realities of other players and share sectoral issues and propose sustainable solutions. In addition to the continuous exchange of information and approaches, there is a concrete attempt to include the practices of traceability and circularity in the companies. Several pilot projects have been implemented in recent years, applying the principles of traceability and circularity and demonstrating that the industry can be transformed. The challenge in the coming years is to make these pilot projects industry-approved.


The urgency of transformation is, by now, clear. The industry needs an evolution of procurement processes and, not least, internal processes as well. We are certainly talking about a complicated and ambitious challenge, but with the support of technological development and digitalization, companies can apply less resource-consuming production models and incorporate traceability and transparency practices to their supply chains.

For additional insights on the topic, we recommend the webinar "Digital Product Passport, Incoming Legislation and the effects on Fashion Supply Chain" (available here).


Viktoriia Shiriaeva Presales Specialist of Deda Stealth