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European Union is Tightening its Grip on Fast Fashion

Image by KM NEHA from Pixabay

On 30th March 2022, the EU Commission proposed a new green deal to make sustainable products the norm, boost the EU’s circular business models, and empower customers for a green transition (1, 2). The Commission also presented a new proposal to make textiles more repairable, durable, recyclable, and reusable to address fast fashion, textile waste, and the destruction of unsold textiles. It looks to ensure that textile production happens in full respect of social rights.

As announced in the Circular Economic Action Plan, the Commission proposes new rules to make all physical goods in the EU more environmentally friendly, circular, and energy-efficient throughout their whole lifecycle, from design to repurposing and end-of-life (3).

The third proposal aims to boost the internal market for construction goods and ensure that the regulatory framework is in place to deliver the EU’s sustainable and climate objectives.

In addition, the package also includes a proposal on rules to empower people in the green transition. It aims to make customers more informed about the environmental sustainability of purchasing things and ensure their protection against greenwashing.

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EU’s Strategy Against Fast Fashion

Under the new rules, the EU proposed that clothes, smartphones, and furniture sold in Europe need to be longer-lasting and easier to repair. And these rules target products at every stage of use, including recycling, repair, and design.

The initiative can give a significant boost to the sustainable textile market.

The strategy will crack down on businesses misleading customers with greenwashing or false environmental claims. Manufacturers will have to ensure that their clothes are hard-wearing and eco-friendly. And they will have to inform their customers about how to reuse, recycle or repair their clothes.

According to Ioana Popescu of an environmental NGO, the Environmental Coalition on Standards (4), the rules aim to bring in long-lasting products that could be used multiple times instead of being worn a few times and then thrown away.

“The commission designed the rules to halt fast fashion by introducing this strategy on how textiles can be used in the European market,” she pointed out.

Estimates suggest that at the moment, less than 1% of all clothing across the globe is recycled (5).

The European Environment Agency highlights that clothes in Europe have the fourth-highest impact on our climate and environment, exceeded only by transport, housing, and food (6).

For every person in the European Union, textile consumption needs nine cubic meters of water, 400 sq m of land, and 391 kg of raw materials, and it causes a carbon footprint of over 270 kg,

Tamara Cincik, from Fashion Roundtable, the think tank for the fashion industry, said that the new strategy could pave the way for future legislation outside of the European Union.

The European Parliament and the Council are evaluating these proposals at the moment.

With these proposals, the Commission presents the tools to move to a truly circular economy. It can help the EU decouple energy and resource dependencies, become more resilient to external shocks, and respect people’s and nature’s health.

Last year alone, existing ecodesign requirements helped EU customers save over 120 million EUR. The rules also led to a 10% less annual energy consumption. These new proposals will make it easier to repair or recycle products and track concerning substances throughout the supply chain.

Also, these proposals carry measures to end the destruction of unsold fashion goods, expand green public procurement, and offer incentives for sustainable products.

These rules, once implemented, will force fast fashion companies like Shein, Zara, and H&M to shift away from business models favoring overconsumption. To meet the EU’s demands, fashion and textile manufacturers must adapt to a circular business model by 2030.

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Why is Fast Fashion a Trouble?

As we mentioned, the textile industry has the fourth-highest impact on the environment. And the current business model of the industry only focuses on supply efficiency and increasing their manufacturing speed for higher profit margins, even at the cost of the environment and everything else.

In the early 2000s, the term fast fashion was coined in the fashion industry to characterize the rapid turnover of designs from the runway to current fashion trends. Retailers attempted to boost profits by focusing on key supply chain factors, focusing on increased production speed at a cheap cost (7).

The concept revolutionized the industry dynamics with a quick reaction mentality, resulting in enhanced prediction accuracy due to the shortened period and the ability to provide a quick turnover of inventory for big retailers.

Clothing collections are designed around the newest fashion trends displayed during summer and autumn fashion shows in New York, Paris, and Milan as part of this approach, giving customers high-end styles at an affordable price.

Although fast fashion has been dubbed the “biggest disrupter in the commercial industry today,” it has benefited consumers significantly, revolutionizing the market by emphasizing simplicity, convenience, accessibility, and affordability and trying to have a beneficial impact on businesses.

Zara is the undisputed fast fashion trendsetter in quickly introducing new outfits, designs, and concepts in its stores. Many in the fashion retail business have taken notice of their financial performance. Zara’s overall global sales in 2015 were 19.7 billion USD, beating out Gap, Primark, and Abercrombie & Fitch and exceeding their 2014 sales by 8%.

Fast fashion is also called disposable fashion because of the huge quantity of garbage it generates.

Consumers quickly discard products and move on to the next trend since they understand and accept the inferior quality of the apparel in exchange for lower prices. Although this is nothing new in the fashion industry, as there have always been trends that result in a significant surplus, the amount of pollution produced by fast fashion has escalated at an alarming rate.

Moreover, many of these fast fashion brands rely on low-cost labor and use polyester, which is a major source of microplastic pollution in our oceans (8). Fashion companies currently account for about 10% of human carbon emissions, and that figure is anticipated to rise to 26% by 2050 if current trends continue (9).

environmental concerns of fast fashion
Source: American Apparel and Footwear Association, International Trade Commission, the United States Department of Commerce Textiles and Apparel Office, and the Council for Textile Recycling, Image:

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Staying Relevant

While some clothes stores have reported poor financial results (typically asserting supply chain issues) (10), others, such as H&M, Zara, and Uniqlo, have begun to expand beyond pre-pandemic levels. It is happening at a time when digital disruptors like Shein have been gaining traction over the last year.

Throughout 2021, several fast fashion retailers noted improving results. Inditex, the parent firm of Zara, disclosed in September that sales in Q2 had surpassed pre-pandemic levels, increasing 7% from the previous year. Then, in the next quarter, revenues increased by 10% on a constant currency basis than in 2019.

H&M’s recent results were also very good. While it was unable to beat pre-pandemic revenues in the second quarter, the brand claimed in December that its 2021 sales from September to November were the same as those of 2021.

Meanwhile, Shein, a Chinese fast fashion startup, surpassed Amazon in total shopping app downloads last year and has been expected to reach a valuation of 100 billion USD soon (11).

Because these brands dominate the entire fashion industry, they are not motivated to modify their behavior until new standards are established.

The EU’s requirements will compel businesses to prioritize reusability in product design and material choices. They would also prohibit the destruction of unsold products, as 85% of all clothing ends up in landfills each year.

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Moving Forward

One of the proposal’s main goals is eliminating clothing shipments to landfills altogether by 2030. Also, companies will be required to include labels on each item that details how it may be recycled or reused.

Reports suggest that these new rules will enforce the mandatory minimum use of recycled fibers (12).

In response, H&M has stated that circular economy ideas will be incorporated into its business strategy (13). Meanwhile, Zara has promised that by 2025, it will make all of its clothes from sustainable materials (14).

However, the industry’s rapid growth may outweigh these safeguards. Since 2000, the amount of garments manufactured each year has doubled, reaching 100 billion garments per year (15).

Nonetheless, even though The transition brought about by these new standards may halt production and reduce profit margins in the near run, it will secure long-term sustainability and viability.