What is circular economy and how fashion businesses can profit from it

​What makes the world go round these days? Circularity is a topic long discussed at fashion summits, trade shows and “closing the loop” is a term that brings more and more value to brands all over the world. Some may think it’s a trend, so they just go with it, invest a little for the sake of greenwashing and think they gain bigger market share. Others, however, genuinely believe that this is the future and they actually make it work. The difference between the two is that the latter can understand the benefits from it.
But what are these circular advantages and how can you as a designer or consumer make use out of them? Here are just a few to get you started.
First is first, a circular economy is a new economic model that offers a balanced industrial ecosystem, one that mimics natural ecosystems.  As opposed to the current linear economy (take-make-use-dispose), it aims to radically limit the extraction of raw materials and the production of waste. It does this by increasing product life and recovering and reusing as many of the products and materials as possible, in a systemic way, over and over again. 
According to the World Economic Forum “The economic benefit of transitioning to this new economic model is estimated to be worth more than one trillion dollar in material savings”. Because we design our business following circularity, we get to reuse the raw material instead of buying new one. Furthermore, if we add services that go with our products, such as maintenance or reuse (for example we rent instead of selling the clothes) we save on precious resources while still having earnings and without flooding the market with new products, thus protecting the ecosystem; not to mention the big value it brings to the consumer!
Transitioning to a circular economy has also an immense positive impact on our ecosystem. The Intergovernmental Panel on Climate Change (IPCC) acknowledges that human activities increasingly influence the Earth’s climate. Global warming is not assumed, it is a fact and the fashion industry is one of the biggest contributors to this problem, being very water, energy and land intensive. Either as a designer or a consumer, you are a direct contributor to this effect. By transforming what we now consider waste into valuable material, we can further ensure the security of our environment and natural resources.
 
We have always linked growth to cheap available resources, but these are becoming more and scarce as we have already exceeded three of the nine planetary boundaries; “We estimate that humanity has already transgressed three planetary boundaries: for climate change, rate of biodiversity loss, and changes to the global nitrogen cycle” confirms the research “Planetary Boundaries: Exploring the Safe Operating Space for Humanity”. This is where innovation, technology and new business models come together to emphasize that we have moved away from this dependency of resources trough product life extension, reusability, repair, or focusing more on services than products.  
The gain is loud and clear: we get to emphasize a products economic value while offering increased customer value and better care to our planet.