The core concept of circular economy is, that products are regarded as a temporary stage of a material.

In the current linear economy model, textile companies are seen as producing and marketing products. By adding the life-cycle perspective, a shift happens: Companies are defined as services, that need material for a given period of time and turn it into products. These products have a specific life-time. Following this perspective, the specific material flow that is managed by one company, becomes one part of a much bigger material-flow puzzle.

The production-stage is followed by a waste-stage or “end-of-useful-life”-stage, which is very typical for the current linear economy thinking. In a circular economy, that waste would be regarded a “raw-material”, and the circle would continue from there. Within the circular economy model, the goal is not to produce products, but to manage/operate material, and to operate the material within loops that become increasingly circular. To achieve circularity, a basic distinction is required between two kinds of loops:

1. Organic material can be recycled through a composting circle, and can be used for materials such as cotton or wool and any organic matter such as starches, natural oils and plants etc.
2. Technical materials require technical recycling and examples are glass, metals, or polyester.

When applied to the textile sector, the bigger picture includes many more options to increase material-efficiency besides those two standard circles. For example cotton and wool can be recycled which usually increases material efficiency compared to composting -  for example when natural fibres are not turned into viscose or casein fibres, but are re-used as fibre material. The circular economy concept goes as far as to include “alternative business models” in particular those that are now collected under the title of “sharing economy” and are models, where materials and products are not “owned” but leased, rented, borrowed or shared instead.

Using the circular perspective makes it possible to identify further efficiency gains within the supply chain, that would be overlooked with a linear economy perspective. It is particularly interesting for actors who operate within tight markets, and especially for those who do already maintain stable long-term partnerships with suppliers and clients. When looking at a concrete business, circular economy may seem theoretical and far away from the daily challenges at first, but it turns out to be a truly holistic approach that will help to prioritise and select measures wisely, i.e. according to their overall financial impact and according to their impact and contribution to the more general transition of the whole sector to a circular economy. It can also help to frame all the engagement nicely and help to convey the activities, priorities and steps in a comprehensible way.

You chose and design your loops, but you will definitely need to collaborate with partners who do manage the other half or further pieces of your loops. You might need to elaborate contracts that allow you and your partners to share investments, gains and risks within the partnership, and you may wish to fix the partnerships longer-term for both shared risk and security of investment.