The annual event of the Monitor for Circular Fashion, the research observatory affiliated with the SDA Bocconi Sustainability Lab and powered by Enel X, was successfully held for the third consecutive year at SDA Bocconi School of Management. This multi-stakeholder event saw the active participation of key industry players, including the European Commission, EURATEX, and the 26 member companies of the Monitor for Circular Fashion.
In 2023, the Observatory expanded its scope, collaborating with 26 partner companies to present three innovative pilot projects using an open innovation approach. These initiatives, led by TOD's Group, Ferragamo, and Vivienne Westwood, complemented the seven projects already launched in 2022. These pilot projects were aimed at evaluating more than 40 circularity Key Performance Indicators (KPIs) identified by the SDA Bocconi research team. They fostered sustainable and circular methodologies within ingredient brands, brands, retailers, and service providers in the textile, clothing, leather, and footwear sectors.
Furthermore, the partner companies of the Monitor for Circular Fashion unveiled an updated version of the Circular Fashion Manifesto for the third consecutive year. This Manifesto underlines their commitment to enhanced transparency and traceability throughout the supply chain. In its latest iteration, released on September 19, 2023, and available on the SDA Bocconi website (www.sdabocconi.it/circularfashion), this commitment has been expanded to include eight actions inspired by the European Commission's Textile Transition Pathway, a strategy aimed at accelerating sustainable practices in the textile sector. The Manifesto was subsequently presented to UNECE and the European Commission DG GROW.
The event on the 11th October commenced with the release of SDA Bocconi's annual report, which outlined key industry actions inspired by the Textile Transition Pathway and provided updates on best practices for circularity. According to the report, the primary benefit of circularity lies in the improvement of brand reputation, followed by the creation of new business opportunities and the enhancement of consumer loyalty. Companies identified concerns such as cost, technology availability, and infrastructure availability as the primary obstacles to circularity. Key trade-offs included increased operational complexity, volume availability, higher costs, and qualitative challenges.
Following the research presentation, there was an in-depth analysis of governance for sustainability and circularity. The discussion revolved around the results of surveys and co-creation workshops conducted with the partner companies of the Monitor for Circular Fashion. Statistically significant quantitative analyses revealed that board size, CEO duality, and the inclusion of sustainability incentives in executive remuneration correlated positively with sustainability performance. The co-creation workshops also delved into topics like the role of family businesses driven by missions extending beyond economic performance, the significance of board diversity, and the participation of board members from different generations, genders, and cultural backgrounds in balancing diverse priorities within companies.
In the afternoon, the event continued with a discussion on textile waste management and extended producer responsibility (EPR). The 2023 Report explored various opportunities and challenges related to the implementation of an EPR system, drawing insights from 15 European experts engaged in the textile waste pipeline and innovation.
Survey results and insights from co-creation workshops shed light on the plans of 15 partner companies within the Monitor's supply chain to optimize pre- and post-consumer waste management. Strategies to reduce and optimize pre-consumer waste included increasing internal reuse, initiating upcycling projects, and leveraging Industry 4.0 technologies. For post-consumer waste, partnerships with experienced waste management and upcycling operators, as well as consortium memberships for EPR, remained predominant.
The event also featured discussions on the Digital Product Passport, with input from Michele Galatola, Senior Policy Officer of the European Commission DG GROW, and service providers. It included panels on engaging new generations in circularity and sustainability issues in fashion, adapting sustainability policies for small and medium-sized enterprises, and a round table featuring three startups from the 10 finalists of the C-Factor program by the Monitor for Circular Fashion SDA Bocconi in collaboration with Must Had.
The survey, titled "Circular Fashion Survey on New Generations" conducted by PwC and SDA Bocconi School of Management for the Monitor for Circular Fashion Report 2023, revealed that among the new generations, millennials are particularly sensitive to greenwashing. A staggering 59% indicated that they would no longer support brands that exaggerate their environmental contributions. Regarding the Digital Product Passport, respondents considered environmental impact, product composition, and authentication, along with user-generated content, as crucial information to include. The main advantages associated with the Digital Product Passport were increased trust and loyalty, better-informed decision-making, and combating counterfeit products on resale platforms.
For access to the full research report, please visit www.sdabocconi.it/circularfashion
SDA Bocconi School of Management