Thibaut Joltreau (EDHEC): "Because it is driven by value rather than volume, the luxury sector can lead the way in circular innovation"

Why are you interested in circularity in the textile sector?

The textile industry is among the most polluting in the world. It puts immense pressure on natural resources: in Europe, textile consumption is estimated to be the third largest source of pressure on water and soil, and the fifth largest in terms of raw material use and greenhouse gas emissions (1).

This fundamental problem has been further exacerbated by the rise of fast fashion: a business model based on low-cost mass production and constant renewal of collections, which accelerates overconsumption and fuels a ‘disposable fashion’ mindset (2).

In response to this situation, public authorities have made this sector a priority in their circular economy policies. In both France (3) and in Europe (4), new regulations have been introduced in recent years to encourage companies to reduce production volumes, extend the life of their products and improve textile recycling. These practices are known as the ‘3 Rs’ of the circular economy: reduce, reuse, recycle.

Against this backdrop, I conducted research with Louise Curran (TBS Education) and Christian Gnekpe (TBS Education) on how these new policies and regulations are reshaping global value chains in the textile industry, as part of the European TWIN SEEDS project (5). Our central question was whether these new rules and incentives can push major companies to rethink their business models and, in doing so, reorganise global clothing production networks. Ultimately, we wanted to understand whether such policies had the potential to genuinely lead to a reduction in the industry’s environmental footprint.

How have these new public policies affected the sector, including luxury?

Circular economy regulations – whether already in force or still being drafted – have led companies to adapt strategically to this new political environment.

In France, the AGEC law of 2020 (6) marked a turning point by prohibiting the destruction of unsold goods. Brands must now find alternative outlets for excess inventory, such as donation, resale, upcycling (transforming items to give them a new use) or material recycling.

At European level, a major reform is also underway: all products placed on the market will soon have to comply with eco-design standards (7). In practical terms, this will mean designing clothes that are more durable, repairable, and recyclable from the outset. The announcement of this new regulatory framework is already encouraging companies to think more broadly about how to embed circularity within their business models and value chains.

However, changes in practice remain limited and vary widely across companies and market segments.

In the mass market, which generates the highest volumes – and thus the most waste – change has so far been confined to small-scale initiatives: a few in-store second-hand or rental schemes, or the use of recycled materials in specific collections. There has been no fundamental shift in the fast fashion business model, which continues to depend on large volumes and rapid product turnover.

At the other end of the spectrum, small local brands committed to ethical and sustainable fashion have often been pioneers, integrating eco-design and short supply chains into their models. But they struggle to scale up in the face of global competition. Some even went out of business during the recent inflationary crisis, when post-COVID sustainable consumption habits could no longer be supported by household purchasing power.

In this landscape, luxury brands occupy a unique position. They are among the few with the financial and organisational resources necessary to implement the requirements of the AGEC law systematically.

And why are luxury brands ahead of others in this context?

For several reasons. Firstly, implementing circular practices involves significant costs. Sorting unsold inventory and organising its reuse or recycling is much more expensive than simply destroying it. But leading luxury brands have the capacity to absorb these additional costs. They also have greater control over their value chains, which makes it easier to integrate new practices.

Secondly, their dependence on image and reputation plays a key role: a scandal linked to the illegal destruction of unsold goods would severely damage a luxury brand’s credibility.

In this context, new practices have emerged, such as the systematic sorting of production waste and the dismantling of unsold items. All major French luxury groups, along with their various houses, have now built detailed datasets on their pre-consumer waste (unsold items and production scraps) and have partnered with specialised startups offering turnkey circular solutions: redirecting unsold goods to appropriate outlets, dismantling products, and providing eco-design consulting.

These efforts are a step forward, but they are not enough to transform the sector as a whole, especially since the quantities handled by the luxury industry are minimal compared to the mass market. In addition, many designers remain attached to using virgin materials, and recycled fibres still pose technical challenges: being shorter, they are often less robust, which conflicts with the quality standards of luxury.

What’s more, these circular initiatives focus on “pre-consumer” waste (unsold items, production scraps), while the real challenge lies in “post-consumer” waste, i.e. end-of-life clothing. However, it is mainly fast fashion that generates these massive volumes of waste, driven by high sales volumes, very low prices, and lower garment quality.

In response, parts of the sector are now calling for the creation of a genuine European textile recycling industry. But for such a model to succeed, several key conditions must be met: large-scale collection, sorting, and dismantling systems; production of recycled textiles that can compete on quality and price; and the establishment of closed-loop recycling networks (textile-to-textile) across Europe. This would also require new technologies for automated waste sorting and strong commercial outlets for recycled materials. 

For now, this economic model has yet to be invented. In truth, the most effective solution is still to slow the relentless pace of new collections, which drives overproduction, and to promote a Made in Europe approach focused on mid-range, higher-quality, longer-lasting clothing. In short, to move away from disposable fashion altogether.

In this respect, the luxury sector can lead by example. It currently has the necessary leeway and resources to lead the way in circular innovation. Because it is driven by value rather than volume, it can demonstrate that quality and circularity can go hand in hand. This could involve, for example, strengthening in-store repair services – a long-standing tradition in luxury that could be expanded to the mass market – or incorporating a growing share of closed-loop recycled textiles into collections, without compromising on quality.

Are the new EU regulations the solution for the more widespread adoption of circular practices in the textile industry, beyond luxury?

The new EU regulations could indeed play a key role in scaling up circular practices across the textile industry. But their impact will depend on the exact criteria adopted and how strictly they are enforced (8). These decisions are subject to complex political negotiations within the EU. And it should be borne in mind that Chinese ultra-fast fashion giants such as SHEIN and Temu could be quicker than European manufacturers to adapt to the new eco-design standards.

If these rules are to make a real difference, they will need to be accompanied by strong industrial policies that support producers already championing more responsible models – eco-design, short supply chains, and local production. This would mean reshoring part of the value chain to Europe. Because to tackle the problem at its root, it is not enough to rely on ever-increasing recycling capacities. The only credible approach is to produce fewer garments, but of higher quality.

Two additional levers are essential to support this transition. The first is shaping consumer demand: giving shoppers clear and comparable information on the environmental impact of their purchases, through measures such as environmental labelling in France (9) or the forthcoming EU digital product passport (10). The second is creating stable demand for sustainable producers, for example by integrating more eco-designed textiles into public procurement, such as hospital uniforms and workwear.

Yet, this is not the path policymakers currently seem to be pursuing.

In France, despite frequent calls for ‘reindustrialisation’, the financial resources allocated to local sustainable fashion producers remain limited. This suggests that textiles are not considered a priority sector to support at a time when global competition is focused primarily on advanced technologies.

At the European level, the picture is similar. Amid a tense geopolitical climate, the environmental agenda has slipped down the list of priorities. The recent Omnibus package even marks a rollback of parts of the Green Deal (11), once seen as a cornerstone of the previous Commission’s agenda.

In this context, one question remains: amid growing trade tensions with China, will the EU have the courage and political will to follow through by turning its eco-design standards into binding rules and imposing stringent environmental requirements on textile imports?

References

(1) "Textiles and the environment: the role of design in Europe’s circular economy", European Environment Agency, 10 February 2025, https://www.eea.europa.eu/en/analysis/publications/textiles-and-the-environment-the-role-of-design-in-europes-circular-economy-1

(2) “Ultra-fast fashion is a disturbing trend undermining efforts to make the whole industry more sustainable”, avril 2024, Taylor Bridges - https://theconversation.com/ultra-fast-fashion-is-a-disturbing-trend-undermining-efforts-to-make-the-whole-industry-more-sustainable-224253

(3) « Bilan de la loi AGEC : l’élan est donné, mais la révolution circulaire reste à construire pour la filière REP TLC », février 2025, Maud Hardy - https://www.lagrandeconversation.com/ecologie/bilan-de-la-loi-agec-lelan-est-donne-mais-la-revolution-circulaire-reste-a-construire-pour-la-filiere-rep-tlc/

(4) “How is the EU making fashion sustainable?” - https://environment.ec.europa.eu/topics/circular-economy/reset-trend/how-eu-making-fashion-sustainable_en

(5) Towards a World Integrated and Socio-economically Balanced European Economic Development Scenario - https://twinseeds.eu/

(6) La loi anti-gaspillage pour une économie circulaire (AGEC) - https://www.ecologie.gouv.fr/loi-anti-gaspillage-economie-circulaire

(7) Ecodesign for Sustainable Products Regulation - https://commission.europa.eu/energy-climate-change-environment/standards-tools-and-labels/products-labelling-rules-and-requirements/ecodesign-sustainable-products-regulation_en

(8) Louise Curran et Thibaut Joltreau, « Déchets textiles : "Seules des normes d’écoconception ambitieuses et des écocontributions élevées changeront la donne" », Le Monde, 2 décembre 2024, https://www.lemonde.fr/idees/article/2024/12/02/dechets-textiles-seules-des-normes-d-ecoconception-ambitieuses-et-des-ecocontributions-elevees-changeront-la-donne_6424791_3232.html

(9) Affichage environnemental sur les vêtements (2024) - https://www.ecologie.gouv.fr/politiques-publiques/affichage-environnemental-vetements

(10) EU's Digital Product Passport: Advancing transparency and sustainability (Sept. 2024) - https://data.europa.eu/en/news-events/news/eus-digital-product-passport-advancing-transparency-and-sustainability

(11) “Global trade is fracturing: here’s why the EU needs the GreenDeal more than ever” (Feb. 2025) - https://theconversation.com/global-trade-is-fracturing-heres-why-the-eu-needs-the-green-deal-more-than-ever-247500