These 3 big circular economy stories of 2018 offer hope for 2019
This article is drawn from the Circular Weekly newsletter from GreenBiz, running Fridays.
It’s been quite a year for the circular economy, which has started to move from the margins to the mainstream, and stakeholders representing each link of the value chain are not only taking note but taking action. At least a little bit.
It’s impossible to avoid bad news these days. But the progress I’ve seen on circularity in 2018 leaves me on a hopeful note. So, before we jump into a new year, let’s revisit three of my favorite circular economy stories from the year.
1. Big companies began to align on and commit to confronting plastics pollution. Public awareness of — and outrage against — plastics pollution grew significantly in 2018, quickly elevating the conversation around single-use plastics on a global scale. And that was just the start. (If you need a refresher on the fundamentals of the war on plastics, I encourage you to revisit Joel Makower’s two-part series on the global plastics problem and potential solutions.)
In November, more than 275 brands, retailers, recyclers, governments and NGOs announced a shared vision to close the loop on plastics pollution and made tangible, time-bound commitments to ground aspiration in action. Signatories of the New Plastics Economy Global Commitment — collectively responsible for producing 20 percent of all plastic packaging globally — formally endorsed the Ellen MacArthur Foundation’s framework of a circular economy for plastics.
Time will tell if and how signatories achieve these ambitious goals, as well as what will happen if they don’t meet the 2025 target. Still, the global commitment offers a welcome, promising vision for eliminating plastic waste and transforming an aspirational circular economy for plastics into a functioning, closed-loop system.
2. Apparel brands experimented with recommerce. In October, the world's largest online thrift store, thredUP, announced a program to partner with apparel companies on its secondhand retail platform. While nothing is inherently new about selling used clothes, the announcement highlights a growing trend within the apparel industry: turning to third-party recommerce partners to tap into secondary markets.
Resale apparel — a $20 billion industry — is projected to grow 15 percent annually over the next five years, significantly outpacing traditional retail, with only 2 percent projected annual growth, according to thredUp's 2018 Resale Report.
Third parties offer brands the logistics, renewal, repair and recommerce expertise to quickly ramp up resale models at scale, unlocking a low-risk, high-reward market for their goods and offering a straightforward path into a more circular business model. Given that secondhand clothing sales exist regardless of whether brands approve, the opportunity is obvious: Brands can make a margin on selling the same garment multiple times while maintaining brand and quality control.
Yerdle Recommerce’s "white label" service for companies such as Eileen Fisher, Patagonia and REI; The Renewal Workshop’s partnership with North Face, prAna and icebreaker; and The RealReal’s collaboration with Stella McCartney are just a few examples that picked up speed in 2018.
While only a handful of companies embrace recommerce so far, given the significant environmental impact of fashion in general, and fast fashion in particular, the environmental implications of even an incremental increase in apparel reuse would be significant.
3. Repair inched towards commercial viability. Product repair and life extension is a bit of an ugly stepsister for circularity in consumer electronics. While independent repair is common within categories such as home appliance and automobiles, it is actively thwarted in some consumer electronics segments.
It’s no secret that manufacturers have an incentive to push new products rather than prolonging the life of existing ones. Some OEMs have more innocent approaches such as upgrade programs, complex product design or proprietary repair tools. Others employ more aggressive tactics such as criminalizing and voiding warranties when unauthorized individuals make repairs, and more questionably, actively lobbying against legislation that might increase product reparability. But some companies are beginning to rethink this linear model.
In October, telecommunications company Motorola began selling replacement parts, tools and instructions directly to customers for all of its recent phones. In a partnership with iFixit, a wiki-based site that teaches people how to fix almost anything, Motorola’s new repair product line was seen as a big win for the "right to repair" movement that asserts companies should be legally obligated to offer the tools, parts, schematics and diagnostics necessary to fix things that customers own. While customers may buy products with less frequency, Motorola is betting that increased repair options will build brand loyalty.