Australian Fashion Council (AFC) CEO Leila Naja Hibri and the AFC's National Clothing Product Stewardship Scheme (NCPSS) project director Danielle Kent discuss how the NCPSS will drive Australia towards a circular fashion economy by 2030.
What have been the key steps in building the NCPSS?
Danielle: The consortium produced two key reports, which are available on our website, that really tell the story around what is the volume of clothing coming into Australia. So this data report that we released, for the first time, it was able to put a baseline down for 2019, to understand how much clothing is coming into Australia, and then what are the pathways in which those clothes start to move through sale usage, and then into donation and reuse, and into landfill. And that gave us a couple of key numbers. What we know is that every year, approximately 1.5 billion items of clothing are coming onto the market in Australia. And also, the statistic around the amount of clothing going into Australian landfill is around 200,000 tonne.
The other thing we did was a global scan. So we looked at what's happening around the world in terms of schemes, but also what are the initiatives happening in Australia.
The second stage was then working with the supply chain and the industry in Australia to design the scheme. It was really important that that was a co design process. We had extensive consultation for the time that we had to do it, so we felt really confident when it came to finalizing the scheme that we really had input and thought out different perspectives along the value chain.
It's been really critical that we've been working extra close with what we call a reference group, which is like a cross section of the supply chain from a whole range of organizations that we would consider to be real thought leaders or strong in this area already. And they have been helping us navigate through, but also advocating and providing that strategic direction.
What are the next steps going forward?
Danielle: I think that what sets this piece of work apart from other excellent initiatives is this is a plan. It isn't just a report. We activated a plan alongside it which is really important, and part of that is a roadmap. But the other part is this transition plan really starts to identify what the next 12 months of work will be. And we've been hearing about it in terms of the establishment of the Product Stewardship Organization (PSO). So that'll be a separate entity that needs to be established and formed that doesn't exist right now. And there's a whole section in governance that we have in the scheme report around that. But then we need to start doing some core operations.
So that organization does need to start working with foundation members, to really drive the priorities and the early setup of the scheme. And then as it moves to fully operational by July 1, 2024, the organization should be ready to administer the scheme in that per-contribution funding model that we've put forward. There is a lot of work that has to be done.
Speaking on the foundation scheme members, have there been any recruits so far?
Danielle: We have been working with brands, we are in conversation with brands, and we expect that they know and see the benefits of the opportunity. Leila talked about it as the golden ticket, because, really, it's so transformative. And I know that Australian brands want to lead in this space.
How many members are you expecting throughout the campaign to join up?
Danielle: We would like 10. It's realistic.
There are four key pillars of the scheme, including design for cicrularity. What will it involve?
Danielle: We will work with the stewards in a really tailored way. So working to the different brands own strategies, but looking at what are the best practices in circular design principles. So building on work that has already been done here and overseas. I know that there are initiatives that are happening individually, but what we heard through codesign is when it comes to circular design and circular design guidelines, we need consistency and standards and understanding what the definitions are - so shared definitions. And that's what the PSO would do so that those circularity guidelines are understood across the industry.
The design principles will encourage greater durability, recyclability, using preferred fibers and recycled content, but also really importantly, minimizing waste in the manufacturing and designing process.
Are there other solutions you're seeing in this space at the moment?
Leila: Yes, there are companies that are doing fibre-to-fibre applications. For example, one company's full model is around working with fibres that are useful for a circular model. And prospective brands are taking up things like rental, reuse, and repair. So you've got areas around circular design, areas around business models, and, where they can, looking at that closing the loop piece.
What will the second pillar - circular business models - involve?
Danielle: A portion of the funds will go into pilot projects, really understanding what is the potential in this area. I know a lot of lot of brands in the industry are very interested in understanding how they can start to introduce these sorts of circular business models into their own businesses. And they are also happening separately.
Glam Corner is a really good example of that rental, they’ve set themselves up in that core business model. But other clothing brands would ask, How do we have a repair or a rental or a made-to-order or subscription model? The opportunities for the scheme is to pilot in a safe environment, where we can de-risk some of those risks, and quickly learn what worked and what not, and then move it out into a more scalable environment.
For the third pillar, closing the material loop, how will the scheme operate here?
Danielle: This is one of the key new features that the scheme will be offering that doesn't exist at the moment. We've purposefully looked at ways in which we would fund the improved collection and sorting part of the value chain, which we know right now is a market failure. We need better sorting and collection, but not necessarily wearables - we've got a really vibrant charity and reuse sector - its the unwearables.
It's not suitable to go to a charity, so what do I do with it? That's what we need a national solution for. A big part of it will be focusing on improving our collection and sorting for the wearables and the unwearables. And that's, as you can imagine, highly manual, but there's a whole lot of funding that would go towards that.
Would this tie into driving local manufacturing as well?
Danielle: I mean, it's always related. It's not just about improved sorting and collection, it's also about working with the recycling sector to help introduce new capacity. Because right now, there is no textile recycling industry, other than BlockTexx who are doing a fantastic job, but they're not in a position today to deal with the volume. So, how do we use the scheme to fund that R&D approach? What's the new technology? Where's the investment? How do we unlock the opportunity to look at more scale recycling solutions?
With companies aiming for growth year-on-year, will a circular business model and closing the gap model disrupt that? Will fashion brands have to suffice with just enough profit?
Leila: It's not about having enough profit or sufficing the amount of profit, it's actually about changing the business model to look at profit margins rather than sales margins. It's about quality rather than quantity, affordability rather than that being cheap. So really transforming, like you said, the whole business model, really looking at the industry, and trying to work with companies. This is the aim of the AFC: to guide the transformation of our industry to a socially, environmentally and economically prosperous circular economy by 2030 and to net zero by 2050.
When we talk about that, what we mean is that we're not just gonna go in there and say to brands, 'make less money, makes less clothes, and just go ahead and do it.' No, we will work with brands, and that's part of the work of the Product Stewardship Acheme, but it's also part of what the Australian Fashion Council will be working on.
We have four pillars of our own from an AFC perspective. They're policy pillars that we're focused on, that will help brands move from the current - in my opinion, an old model of where the fashion industry sits - and move it to industry 4.0. So moving from that whole industrial revolution model of making more and more and creating more items, and chasing that growth, to a model where you are actually becoming more efficient to working in new and different ways to get a great profit margin at the end of the day, and also take care of people and planet at the same time.
On the fourth pillar, changing consumer behaviour; with rising living costs and the reported higher costs of moving towards sustainability, will a circular fashion model cater to those consumers who may not have as much disposable income and still want new items?
Leila: Absolutely. But again, we go back to transformation: what are we going to do to move away from the way we do things now? And to ensure that what people are able to access at the moment is available - which is affordable quality product? I don't think anyone says that everybody needs $2 tshirts on a day to day basis. That's not what is lacking. Before fashion more or less democratised fashion, what was left lacking was accessibility to good quality design at affordable prices.
I believe with the new business models that are in place - and if we close the loop, if we rightshore, if we engage with innovation and technology that makes us more competitive, and makes products less expensive, if we have a lot less waste (let's say we make to order using technology in the future) - all of these things will create efficiencies that will make products more affordable and accessible to everyone. So the point of a circular economy is not to make product less accessible, it's to make better products more accessible.
What are the key challenges ahead for the national clothing product stewardship scheme?
Leila: I think there are lots of challenges. Our ambition is large, it is deep, it is wide. But it is, in our opinion, achievable as long as the industry collaborate together with key stakeholders. For example, charitable recycling sector, which is already part of the consortium, and other key stakeholders, like innovation and technology institute's like universities and experts - and of course, very importantly, local, state and federal governments. If we don't do that, the challenge will be amplified.
The current business model is not sustainable across three areas: economically, socially and environmentally. We are seeing that lots of brands are going under, unfortunately. Sales margins are declining, the pressure is on developing countries to reduce their costs, going to manmade materials that are corrosive. And so how do we move away from that and have a much longer view of what we need to achieve and transform as an industry, and really disrupt ourselves instead of being disrupted, or to be disrupted, by government or by even consumer.
We're saying enough is enough.