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“Monitor for Circular Fashion” publishes first circularity report results

YarnsandFibers News Bureau 2021-10-19 08:50:04 – Italy

The SDA Bocconi Sustainability Lab's Monitor for Circular Fashion, powered by Enel X, has released its first report on industry macro-trends and how companies can apply circular economy principles throughout their supply chains, with the goal of providing a precise and dynamic representation of the circular economy's status in the Italian fashion industry.

The Monitor for Circular Fashion collaborated with 14 Italian fashion companies from upstream to downstream in the supply chain, including ingredient brands, brands & retailers, and service providers, as well as a KPIs Committee of specialist advisors in measuring circularity.

The group of companies was chosen because they are leaders in the Italian fashion sector when it comes to sustainability and circularity. They conducted a study of the potential and difficulties of circularity with the goal of identifying and implementing new concrete and measurable solutions.

The study was based on two integrated methodologies. Through desk and field assessments with surveys, one-on-one interviews with companies in the Monitor for Circular Fashion, and ideas from the KPIs Committee, SDA Bocconi developed a methodology targeted at identifying specific drivers and KPIs in the fashion sector. The following issues were investigated during the analysis: the impact of Covid-19 on the fashion industry's value chain; key EU regulations supporting the transition to circular production and consumption patterns; circular activities and circular business models in the fashion sector, as well as key KPIs; the role of technologies as circularity enablers; and identification of the main trade-offs, challenges, and opportunities of circularity.

Enel X makes available a unique technique based on value chain analysis conducted with the Monitor for Circular Fashion's enterprises via questionnaires, interviews, and field inspections, with the goal of determining the level of circular maturity in both corporate and energy aspects. Accredia is now in the accreditation phase of a methodology that intends to become a market standard and is capable of directing firms from all sectors down a concrete path of electrification and decarbonization. Over 60 KPIs categorized as "Corporate" and "Energy" determine each company's level of circularity, allowing for the creation of a precise and customized roadmap with existing solutions that are able right away to accelerate the circular transition.

Despite the challenges posed by the pandemic, 13 out of 14 companies have confirmed or increased their efforts in sustainability in the previous year and a half, deferring certain goals or adding new ones, according to the analysis. The survey revealed that companies have focused their efforts primarily on design for circularity, or the creation of products with a high potential for circularity due to the use of sustainable materials such as recycled, bio-based, or products made with innovative technologies that allow for resource conservation. Furthermore, companies confirm an ever-growing interest in co-creation and on-demand with the purpose of optimizing resources and enhancing production flexibility.

Solutions targeted towards circularity in the post-sale phases, such as garment repair and maintenance services, take-back programs, and the trade-in of second-hand clothing, are still in the early stages of development. In terms of energy use, it was also discovered that few organizations still purchase electricity from renewable sources for their plants or have mechanisms in place to monitor and improve their consumption efficiency. In terms of electric mobility, it appears that, despite the enormous potential of the entire sector, there has yet to be a true transition process toward this technology.

Finally, electric mobility and energy efficiency, both of which are readily available technology, should be seen as one of the first stages toward corporate circularity and decarbonization, assisting in the achievement of environmental goals in the short term.

The Monitor for Circular Fashion Report 2021 concludes with a Managerial Agenda outlining concrete and prioritized actions to be taken to improve the circularity performance of each company and the entire sector, beginning with circularity measurement and the participation of "end users" - no longer "consumers" - in circularity initiatives.

Companies have selected boosting the level of traceability and transparency of fashion value chains, resolving circular fashion trade-offs, and enhancing circularity pilot projects as priority sectors initiatives. Policymakers' support is critical, particularly for improving garbage collection, accelerating industrial symbiosis, and developing clear end-of-waste criteria across Europe.

The companies involved in the Monitor for Circular Fashion Report 2021 agree that in order to implement a strategic approach to sustainability and circularity, they must start with data and measurement of circularity, in the belief that traceability and transparency are critical tools against greenwashing.

Francesca Romana Rinaldi, Lead Monitor for Circular Fashion SDA Bocconi School of Management, said that the report is the first output of a multi-stakeholder path launched within the SDA Bocconi Sustainability Lab's Monitor for Circular Fashion, where collaboration between companies in the fashion pipeline and technology providers makes it easier to face the still open challenges of circularity, such as high costs, the availability of technology and infrastructure, cultural barriers, and regulatory gaps, as confirmed by the research conducted. The Circular Fashion Roadmap's prospects for circularity, particularly those related to corporate reputation and end-user loyalty, are critical in guiding business managers' decisions.

Nicola Tagliafierro, Head of Global Sustainability at Enel X, said that presenting the results of the first fashion supply chain circularity Report in Italy is a source of great satisfaction. It represents the result of Enel X's commitment to developing services and solutions in the field of sustainability, essential values of the company's business strategy.

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