Fashion Searches For a New Climate Solution

Hello, and Happy Friday!

This is Shayeza Walid, BoF’s sustainability reporter, writing to you from London, which is in the thick of Fashion Week.

While my colleagues will be bringing you coverage from the event, known for its spotlight on emerging and forward-looking design talent, I’m looking forward in a different way to fashion’s climate future and the solutions that will get the industry up to pace in dealing with our heating planet.

Last week, the Apparel Impact Institute released a new research report that spelled out why the financial implications of global warming are becoming increasingly unignorable for fashion. The most glaring conclusion: If climate inaction persists, there will be a 34 percent drop in the industry’s profits by 2030.

That would be a major hit, and some may view that figure with scepticism. But the fact remains that costs are going up, with hot spots including higher carbon prices, rising raw-material costs and more expensive energy, leading to greater operating costs.

The finding begs the question of how effective the climate solutions already in place will be in achieving meaningful decarbonisation. In sustainable industry coalition Cascale‘s most recent State of the Industry report, the non-profit noted that fashion was behind on decarbonisation as per 2025 goals, with coal still accounting for 40 percent of manufacturing and renewable energy uptake stalled.

Most of the industry’s efforts are understandably focused on not creating emissions to begin with. But this week, Coach-owner Tapestry took up a project that tackles the problem from another angle, announcing a 10-year commitment with carbon removal company Climeworks. We’ll get to that and more.

In this edition:

• Carbon capture offers a largely unexplored path for fashion to tackle emissions, but it’s a controversial topic for a variety of reasons.
• There’s new hope for textile-to-textile recycling efforts, and this time around could be different.
• The EU will soon ban big companies from destroying unsold clothes, but it’s not a perfect solution.

As always, send us your thoughts, tips, feedback and questions.

Tapestry’s Bet on Carbon Capture

Broadly speaking, carbon removal refers to technologies or nature-based solutions that extract carbon dioxide from the atmosphere and store it long-term, and it’s already in use in industries like steel and cement manufacturing.

For its part, Tapestry isn’t betting on building carbon capture technology to directly remove emissions from its operations or supply chain, but purchasing removals from Climeworks to offset existing emissions at scale. In theory, the approach allows companies to balance out emissions that are difficult to eliminate. A common criticism of carbon capture, however, is that it becomes an excuse not to do the work of producing fewer emissions.

While the technology is largely contested for its efficacy and outcomes, Tapestry’s move is significant enough to think about whether sequestering carbon is a worthwhile investment — especially if the industry is to make swifter progress on reducing emissions. It could offer another basket to put fashion’s decarbonisation bets into.

But, Does it Make Sense?

Where we stand right now, carbon removal is not a widely considered solution in the apparel and footwear industries.

This is largely because, unlike in heavy industries, in fashion brands have few direct ways to pull carbon out of their own operations.The closest parallel sits upstream, in agriculture, where regenerative farming practices can store carbon in soil and reduce emissions tied to fibre production. While some companies, including The North Face and its parent, VF Corporation, have experimented with carbon credits linked to these programmes, their real-world impact remains difficult to measure. As such, it’s unclear how the technology leads to tangible and structural emissions cuts versus. being an offset.

Offsetting and reduction may need to work in tandem for the industry to see real progress in decarbonising. For now, bringing down emissions remains a challenge when even tested, high-impact solutions, like the innovative industrial heat pumps used by Epic Group, which supplies retailers like Walmart and Uniqlo, struggle to scale due to a lack of funding and challenges building universal fixes.

As Epic Group’s head of sustainability, Vidhura Ralapanawe, told me in December, “You cannot create a global solution. What we need is a global framework that enables very localised solutions, because the grid, the infrastructure, the economics, even the climate risks are different everywhere.”

But while the value of carbon capture may still be debated, other tested technologies, namely textile recycling, are making headway in pushing fashion to be cleaner and greener.

Renewed Energy in Recycling

The momentum for textile-to-textile recycling has gone through peaks and troughs over the last few years.

In its early phase, the space was driven by the promise of technological breakthroughs. But the sector soon ran into a familiar fashion problem: Supply outpaced demand.

Despite brand commitments and strong technical performance, Swedish pioneer Renewcell struggled to secure the long-term uptake needed to support its capital-intensive plant and ultimately filed for bankruptcy in 2024. For the wider materials industry, the collapse became a cautionary tale about scaling innovation before markets are ready to absorb it.

The past year has seen a reset. Renewcell emerged from administration rebranded as Circulose, peers like Circ and Reju have moved closer to commercial rollout and Syre has secured long-term commitments from Nike.

This week, Circulose announced it is reopening its Swedish facility, two years after shutting it down. Just days later, Circ announced that it’s expanding its commercial reach with a new batch of long-term brand partners, which include Madewell, Reformation and C&A.

Altogether it seems the innovative materials sector appears to be entering a more disciplined phase — one focused less on technological proof and more on commercial execution.

So, Should We Be Optimistic?

The key difference for recyclers this time around is that they are trying to lock in demand before scaling production.

Circulose, the company formerly known as Renewcell, is restarting its Swedish plant only after securing long-term commitments from 11 brands and restructuring how its material moves through the supply chain.

Instead of relying on downstream adoption, it has negotiated pricing structures with viscose producers in advance and introduced a split model that separates pulp costs from licensing and service fees — an attempt to prevent mark-ups from compounding as the material travels through the value chain.

Circ is taking a similarly pragmatic approach. Its new Fiber Club initiative pools demand across multiple brands while coordinating suppliers from pulp to yarn, lowering order thresholds and helping companies integrate recycled fibres into existing production systems.

As Circ’s chief executive Peter Majeranowski told me, “For innovative materials to have an impact, you really have to match demand with production and know how to incorporate the product into brand supply chains.”

Ultimately, both companies’ strategies reflect a lesson learned from Renewcell’s initial collapse: that innovation and short-term brand guarantees alone aren’t enough. Recycling can scale only if the economics, partnerships and supply-chain infrastructure also do so.

Of course, there are still risks. Cost pressures, uneven policy signals, tight sustainability budgets and softening of rules in the EU continue to shape brand appetite for new materials.

Given this environment, real scale remains an open question. Innovative fibres still account for only a fraction of the market, and translating innovation into widespread commercial adoption will take time, coordination and sustained demand.

So, for now, while the material startups may be better coordinated and organised, whether that will translate into durable growth isn’t guaranteed. And while I am wary of making this Lunar New Year pun, this means that at this point, the industry, especially those pushing for a more sustainable one, will still have to hold their horses on the commercial success of these next-gen materials.

The EU’s Ban on Destroying Unsold Fashion

Starting July 19, 2026, big fashion brands will no longer be able to destroy their unsold items in the EU, the European Commission announced last week.

Under the new measures, which fall under the bloc’s Ecodesign for Sustainable Products Regulation (ESPR), companies will be prohibited from discarding or incinerating unsold clothing, footwear and accessories, with limited exemptions for safety risks or damaged goods, a condition that will require oversight from national authorities. Medium-sized firms will need to comply by 2030.

With the move, the bloc is addressing what is a largely opaque but common practice in the industry — destroying unsold inventory to protect prices and brand equity. In turn, they create significant environmental waste, which has tended to remain largely hidden from public reporting or scrutiny.

Beginning in 2027, large companies will also have to report how much unsold stock they discard, with standardised disclosures expanding to mid-sized firms by 2030.

While the European Commission did not say what penalties will be for companies found violating the ban, the move notably addresses a sizeable environmental footprint. EU estimates suggest 4 percent to 9 percent of textiles are destroyed before ever being worn, generating roughly 5.6 million tonnes of carbon emissions annually.

Commission officials said the policy is meant to steer companies toward resale, reuse, donation, remanufacturing and better inventory management — part of a broader push to shift the industry toward circular business models.

Is It the Perfect Solution?

The simple answer is no. Excess inventory has long functioned as a hidden buffer in fashion’s business model, allowing companies to overproduce, maximise sales and quietly eliminate what doesn’t move. One piece of legislation can’t easily remake the way fashion brands operate.

”Unsold stock is not an accident. It is a business model,” wrote Muchaneta ten Napel, CEO of fashion policy research consultancy Shape Innovate and a lecturer at the London College of Fashion, in a LinkedIn post. “When the EU says that 4–9% of textiles are destroyed before ever being worn, I don’t hear ‘waste problem.’ I hear ‘overproduction problem wearing a sustainability costume.’”

That said, some positive change is warranted.

The regulation could accelerate investment in circular practices like resale and upcycling as companies search for alternatives to write-offs, and pressure them to get their demand forecasting, supply chains and pricing strategies right the first time (which wouldn’t be bad for profits, either)..

Ultimately, how brands approach the regulation, paired with the European Parliament’s finalisation of Extended Producer Responsibility (EPR) schemes that will require fashion brands to cover the full cost of their waste in the bloc, will determine the new measures’ efficacy in dealing with waste in the region.

What Else You Need To Know:

• Resale Consolidation: EBay will acquire peer-to-peer secondhand fashion platform Depop from Etsy for $1.2 billion in cash, it said on Wednesday. The news marks a major consolidation of the resale market, and for the e-commerce giant, a new push to carve out more space in the fashion category and gain a critical foothold with younger shoppers. [Business of Fashion]
• EU Investigates Shein’s Addictive Design: The Chinese e-commerce giant is now under formal investigation in line with the bloc’s strict Digital Services Act over illegal products and concerns about the platform’s potentially addictive design. [Business of Fashion]
• The US’ Big Climate Pullback: In its latest “climate change is a con job” move, last week the US EPA, under the Trump Administration, revoked the scientific finding that rising greenhouse gases endanger human health and the environment. The decision ends the federal government’s legal authority to control and regulate planet-heating pollution. [The New York Times]
• Demand for Wool Workout Clothes on the ‘Right’: The consumer base for cotton and wool activewear is growing. BoF’s Jessica Kwon unpacks how the rising demand these products is being driven by politically right-leaning consumers in the US, joining progressives in worrying about the health effects of polyester and other synthetics. [Business of Fashion]