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Blog: Five Ways Innovation Policies Can Accelerate Circular Fashion

Blog: Five ways innovation policies can accelerate circular fashion

Brussels, 14 January 2020.

By Josefine Koehler, Policy Advisor at

In the second in our series of blogs about the fashion industry, Josefine Koehler, Policy Advisor at, outlines how innovation policies can transform the sector.

The fashion sector significantly contributes to global environmental and social impacts. According to a recent report by the European Environmental Agency, the texile sector, of which apparel is the largest part, ranks high in several impact categories. It ranks fourth in raw material and water use, second in land use, fifth in green house gas emissions and contributes and estimated 20% to global water pollution. It therefore needs to be a priority industry for fast interventions.1

European policymakers can make this happen through strong policies that accelerate and mainstream circular fashion. As our Circular Fashion Advocacy report2 shows, these should be based on five pillars.

Innovation is the first.

Innovation policies can accelerate circular business in the fashion industry. They can not only help but are in fact indispensable for the transition to a low-carbon circular economy. Effective ones will accelerate the new regime and destabilise the old one, fostering a better response to social and environmental challenges.

For the textile sector, they could, for instance, result in the invention of a fibre that is durable and 100% recyclable. Or the broad introduction of software that accurately predicts consumer trends and reduces waste upfront.

Indeed, a circular fashion economy will provide benefits for businesses, society, and the environment.

Here are five ways innovation policies can make that happen – with the support of policymakers, green businesses and campaigners.

1. Innovation improves value chains.

In a globalised world and evolving economy, innovation is key to staying competitive. It needs to be a fundamental component of businesses‘ DNA, internalised in their daily operations and entire business model. For industries with a long and global supply chain, such as textiles, innovation policies bring new ideas that improve and facilitate complex procedures and processes. These can positively affect outcomes, products and services. For example, a digital system like blockchain can support transparency across the whole supply chain.

2. Innovation policies help well-established ideas and well-performing businesses get better access to funding.

Lack of access to funding is a major bottleneck for innovation and growth for many green small and medium-sized enterprises (SMEs) and start-ups. Defining programmes with subsidies for research and technological development (the Horizon Europe and LIFE Programme, for example), SME support, bank loans for green SMEs and investment tax reductions, innovation policies give these businesses necessary financial support and direction2 .

3. Drawing attention and resources to the most pressing themes through policy would accelerate innovation.

Policies should support the fashion industry to focus on finding solutions to two urgent problems. The first is the need for new recycling technologies. Around 60 to 70% of synthetic and natural fibres are used in the production of clothes. If they are recycled at all, most are only downcycled. This is because their production process means they can’t be used for textile processing into high quality products.

We also need to solve the problem of microplastic release. A massive 63% of materials used in the fashion industry production process release microplastics when they‘re washed. These enter the biosphere, accumulate and cause huge issues in our oceans.

Innovation policies should also promote government support that targets innovative solutions, such as calculating the environmental impact of fashion products. A user-friendly tool should calculate this as part of a fashion product‘s design process, ideally using the Sustainable Apparel Coalition’s Higg Index3 . This could be a suite of tools that allows businesses to accurately measure and score a company or product’s sustainability performance.

4. We need policies that considers the impact of the transition to a circular fashion economy.

Innovation policies could support research into the economic and social costs of the transition to a circular fashion economy between now and 2050. For example, replacing cotton with a new type of environmentally-friendly fibre over night could bring job losses for economies reliant on manufacturing, like Bangladesh. The transition to a circular economy requires accompanying measures to avoid social conflicts, poverty and social unrest.

Also, training programmes for those providing finance for the fashion industry are needed in order to provide the necessary background and means to evaluate the risks and opportunities of circular business models. This would allow the finance sector to shift financial incentives and support the institutionalisation of valuing natural capital, which includes resources like soil, air, water and all living things.

5. Providing bigger budgets for innovation programmes that support circular fashion will accelerate the pace of change.

Partnerships between innovative brands, retailers and suppliers to create transformative technology that helps the fashion industry move towards a circular economy need funding. They will help to put common design and material selection standards into practice. To make this happen, the EU should launch calls for these kind of partnerships between innovators and frontrunner companies.

Read’s Circular Fashion Advocacy report to find out more about how strong circular economy policies will transform the sector.



European Environmental Agency (2019). Textiles in Europe’s circular economy. Retrieved from:

2 Ecopreneur (2019). Circular Fashion Advocacy – A Strategy towards a Circular Fashion Industry in Europe. Report. Available at:

3 Sustainable Apparel Coalition (2016). The High Index. Available at:

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