A Circular Fashion Future: Navigating SB707 and Embracing the Shift with Solutions

SB 707: Landmark Legislation

While we are celebrating California’s SB 707 (Responsible Textile Recovery Act) as a necessary step toward closing the loop, many producers express concern over the costs and logistical challenges. The requirement for collection, sorting, and recycling infrastructure is a major expense, particularly for smaller brands. But this bill isn’t just about compliance - it’s an opportunity to reimagine business models that have relied on outdated practices and challenge the damage that fast fashion has caused.

While the initial costs for collection and recycling may be daunting, brands that proactively adopt circular strategies will benefit from lower long-term production costs by reusing materials, reduced reliance on new resources, and enhanced brand loyalty from sustainability-conscious consumers. Those who innovate early stand to lead the industry as models of resilience and environmental stewardship. As the secondhand and upcycled markets grow rapidly, now is the perfect time to assess your brand's approach to closing the loop in circularity. The status quo is being challenged, and that’s a healthy disruption!

What is a PRO and Why It Matters

A PRO (Producer Responsibility Organization) is a third-party entity made up of textile, apparel, and environmental leaders, tasked with developing programs that comply with Extended Producer Responsibility (EPR) regulations. They are responsible for establishing goals for management and collection process, recycling, or disposal of products at the end of their lifecycle. By July 1, 2030, the PRO will roll out programs once approved by CalRecycle.

According to Fibershed, the PRO’s impact will extend far beyond California, serving as a model for nationwide efforts to mitigate fast fashion’s environmental harm. Non-compliance with SB707 could result in significant fines, up to $50,000 per day, far outweighing the investments needed for sustainability.

Why Haven’t Producers Fully Embraced Sustainability?

The answer is simple: margins, margins, margins! Businesses must answer to investors and board members to show bottom-line profits and year over year increases; sustainability becomes less of a priority as the cost sheet adds up. In order to satisfy demands from consumers and pressure from the market, there was rise in greenwashing from within the whole supply chain. It didn’t take long for consumers & advocacy groups to become savvy. The penalties for non-compliance should serve as a wake-up call to establish genuine sustainable efforts.

Secondhand Market Growth: An Unstoppable Force

According to ThredUp’s 2024 resale report, 62% of retail executives stated that their customers are already buying secondhand fashion. Resale is growing 15X faster than the broader retail clothing sector, and by 2031, 20% of the clothing purchases will be thrifted. With the rise of Gen Z and Millennials leading the charge, who prioritize sustainability, brands that fail to pivot will be left behind.

On average, consumers planned to purchase 7% less apparel at full price in 2024 than they did in 2023. Additionally, 55% of consumers indicated that if the economy doesn’t improve, they’ll spend a higher proportion of their apparel budget on secondhand items. (image credit below: ThreadUp 2024 Resale Report)

Nearshoring: A Strategy for Circularity

Nearshoring is not just a sustainable solution but a business advantage. By sourcing and recycling closer to home, brands can cut transportation costs, speed up production, and ensure quicker response times to market changes. Partnering with US based partners, there is an opportunity to reduce environmental impact while staying agile in a competitive, fast-changing fashion market. Higher demand on sustainable resources can bring prices down as well as help the US economy and job creation albeit eventually.

Creative Solutions to Offset Costs

In today’s challenging economic climate, the costs of SB 707 may seem daunting. But this is where creativity and collaboration come in. Brands that embrace circularity and partner with recyclers stand to gain from the growing sustainability market.

Here are a few strategic partnerships to explore:

Take-Backs:

• Trashie.io: Provides take-back bags for consumers, offering instant rewards through their Trashie Cash program, incentivizing customers to return used garments. If you're like me, I had too much fun playing with the pointer on their site.
• Retold Recycling: Offers a subscription based recycling program through mail-back bags for both individuals and businesses, plus incentives for customers who recycle with their brand partners.

Garment Collection:

• CheckSammy: Provides nationwide, on-demand textile recycling solutions with ESG reporting and over 25,000 recycling facilities. Their services can help businesses reduce textile waste while adhering to SB 707. Public & B2B Programs.
• Looptworks: Specializes in upcycling and textile waste reduction by turning excess materials into new products, reducing the need for virgin resources. allowing businesses to repurpose textile waste. Only B2B Programs.

Fiber Innovation:

• Evrnu - Seattle, WA
• Circ - Danville, VA
• Ambercyle - LA, CA Head Office / Indonesia Factory
• Ravelfuture - Seattle, WATake Back Programs:

Next Steps: Embrace the Shift with Solutions

Here are some actionable strategies for retailers and brands to stay ahead of SB 707:

1. Identify Partners: Brands can start by evaluating their supply chains and identifying areas where nearshoring or recycling partnerships can be integrated.
2. Mobilize Internal Task Force: This team would focus on circular economy initiatives and begin setting aside budgets for compliance with SB 707 as well as evaluate operational costs.
3. Embrace Resale: Launch branded resale platforms or partner with secondhand marketplaces to capture the growing eco-conscious customer base.
4. Incorporate Upcycling: Offer upcycled collections or services that turn old clothes into something new. Partner with influencer, artist, or celebrity to create capsule collections. Sponsor events where customers can customize clothing - this could tie into an education theme (below).
5. Educate Consumers: Build brand loyalty by helping consumers understand the environmental benefits of recycling and upcycling.
6. Incentivize Take-Back Programs: Encourage consumers to trade in old garments for store discounts or rewards, driving participation in take-back initiatives.
7. Marketing: Authenticity rules! Create emotional connection through storytelling. Seek influencer where parasocial relationships are valuable and align with your brand.

Brands like Patagonia’s ‘Worn Wear’, Levi’s ‘Buy-Back’, Madewell ‘Forever’, and The North Face ‘Clothes the Loop’ have seen significant consumer engagement and loyalty through their resale and recycling programs, demonstrating that sustainability can drive profitability. By aligning with consumer values, these companies have maintained strong brand equity, even amidst economic challenges."

Conclusion: A Circular Fashion Future

SB 707 is a necessary step in creating a circular fashion industry and it starts with us in California. While there are cost implications, the long-term benefits of sustainability, consumer engagement, and reduced waste make it a worthwhile investment. The future of fashion is circular, and those brands that embrace creativity, collaboration, and nearshoring will lead the way—not just in California, but as models for the rest of the country. We can do this - together!

I'd love to hear your thoughts, insights, ideas, and especially from the critics.

Sources:

• ThredUp 2024 Resale Report
• Cross-Border Commerce Europe
• CheckSammy
• EkoLinq
• DLA Piper
• Ellen MacArthur Foundation
• McKinsey & Company: 2024
• Global Fashion Agenda