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Transparency, systemic incentives to offset textile waste

December 14th, 2017 / By: / EcoNote

A recent report by Reverse Resources says that an average of 25 percent of resources used to manufacture fabrics and garments is wasted. The company has some ideas on how to reduce that figure.

An article in Raw Materials says that the researchers don’t pin the inefficiency on factories or label it a lack of responsibility on the part of brands. According to the study, the cause of the waste is “a systemic conflict of business interests and lack of data and transparency between stakeholders in global supply chains.”

Currently, comprehensive, accurate data about leftover textiles isn’t being shared because linear pricing schemes used by brands are unwittingly providing an incentive for factories to keep that information quiet. These pricing schemes essentially build in an extra margin for factories to sell leftovers to aftermarkets. Anything not sold is dumped or incinerated.

“Better data from factories would facilitate virtual traceability of resources and enable digital interconnections across the supply chains,” said Ann Runnel, founder of Reverse Resources. “These are crucial for meeting the goals of a circular economy by decoupling economic growth from environmental impacts by resource effectiveness. Material circulation of production leftovers is already established, but it is by default inefficient, corrupt, costly for end-users and out of the control of the stakeholders in the core supply chains.”

The push for circular economies, along with transparency and digitization capabilities, could create a significant business opportunity for factories and brands, the study suggests.

Reverse Resources, which operates globally, is developing software to be used by fabric and garment factories to measure, map and create visibility of scraps and leftover fabrics. In addition, it suggests more action is needed to create a “win-win business case” to address the issues of defining value and integrating leftovers in a clear business model that benefits all stakeholders—including the environment.

Details are available in the full report, “The Undiscovered Business Potential of Production Leftovers Within Global Fashion Supply Chains: Creating a Digitally Enhanced Circular Economy.”