Asian garment makers call for more help from brands to adapt as Europe calls time on fast fashion

An employee arranges bobbins at a textile plant in Haian county, Jiangsu province, China. REUTERS Acquire Licensing Rights

August 21 - Among the biggest seismic shifts set to transform the global textile industry in coming years is the new European Union Strategy for Sustainable and Circular Textiles.

First proposed in May 2022, the framework was formally passed in the European Parliament this June. “It’s a masterplan that describes what it would take to get Europe to become sustainable in textiles,” explains EU parliament member Pernille Weiss, who is a shadow rapporteur of the new strategy.

The framework proposes that by 2030, all companies selling textiles – clothes, mattresses, car upholsteries, and the like – will have to meet certain standards in order to sell their wares to customers in the EU. This includes making sure products are durable, free from hazardous substances, and comprise mainly recyclable fibres. Human rights must also be protected at all stages along the supply chain, and manufacturers will now be responsible for the waste their products generate, with a ban on destroying unsold or returned textiles.

The strategy remains non-binding for now, but the next steps are “to recast and update current directives and regulations so that they echo what we have suggested in the strategy”, in addition to creating new ones, says Weiss. She and her colleagues are currently studying up to eight such legislative acts, including the textile labelling regulation and Waste Framework Directive, with “the first wave of the new lawmaking processes” expected after the EU elections next summer.

The changes will have a resounding impact throughout Asia, whose manufacturers supply more than 70% of the EU’s textiles. “The new strategy is a big deal,” says Sheng Lu, an associate professor of fashion and apparel studies at the University of Delaware in the U.S. “If Asian companies want to sell their products in Europe in the future, they have to comply with many components of the strategy.”

A spokesperson for H&M, one of Europe’s largest fashion retailers, said the company welcomed the EU’s new move. “The way fashion is produced and consumed needs to change, this is an undeniable truth,” they said. “We support efforts that aim at driving progress towards a more sustainable fashion industry.”

Ramatex, which produces clothes for brands such as Nike, is investigating how to produce clothing that doesn’t shed microfibres. REUTERS/Brian Snyder Acquire Licensing Rights

The Swedish giant sources from 1,183 tier 1 factories, employing 1.3 million people, most of them women. It says it is working with its 605 product suppliers, located mainly in China and Bangladesh, to enact changes that will bring imports in line with the new strategy.

This includes initiatives such as the Fashion Climate Fund, which supports suppliers in transitioning towards renewable energy, improving efficiency and scaling sustainable practices. The firm also supplies funding, via the Green Fashion Initiative, to factories looking to invest in new technologies and processes to reduce their reliance on fossil fuels. Additionally, it launched the Sustainable Supplier Facility initiative for other brands to co-invest in projects that support apparel suppliers in their decarbonisation journey.

“There is a critical need for collaboration between brands buying from Asian manufacturers and the manufacturers themselves,” said H&M.

Still, textile-exporting countries are aware that the clock is ticking. “Sustainability has become the topmost priority for Europe, one of the most important export markets for Indian garments,” says Naren Goenka, chairman of India’s Apparel Export Promotion Council. The country exported $4.8 billion worth of textiles to the EU in the first 10 months of 2022 alone.

“It’s high time for India to gear up – sustainability is no more a choice for us,” he says.

Some firms in the country have already been making strides in this direction. For instance, Chetna Organic, a farming co-op in Yavatmal, west India, has been growing cotton organically without the use of synthetic chemicals or pesticides since 2004. Today, it comprises more than 15,000 farming families.

Garment workers stitch shirts at a textile factory of Texport Industries in Hindupur town in the southern state of Andhra Pradesh, India. REUTERS/Samuel Rajkumar Acquire Licensing Rights

In Sri Lanka, garment producer Hirdaramani Group has achieved net-zero carbon emissions across its manufacturing division, and is now working towards slashing its water consumption by 50% while upping its use of sustainable raw materials to 80% by 2025.

Singapore-based Ramatex, which manufactures sportswear in factories across Asia for brands such as Nike and Under Armour, has been part of a research programme convened by the non-profit Forum for the Future investigating how to produce clothing that doesn’t shed microfibres.

In Taiwan, meanwhile, textile producer Yee Chain is working with its sportswear clients to figure out how to reduce fabric waste in the footwear manufacturing process, which can see up to two million out of the 48 million pairs of shoes it produces annually being destroyed.

“Obviously the production needs to be better,” says Yee Chain’s sustainability manager Martin Su. “There’s a lot of things that can be done in a less polluting way or one that uses less resources and power.”

Unfortunately, these firms are the exception rather than the rule. “There are some glimmers on the horizon, manufacturers who have invested in new technology and are doing well,” says Nicole van der Elst Desai, a Singapore-based textile innovation expert who consults for Forum for the Future. “But I think for the majority, we see that they have not been exposed that much and have been doing business as usual.”

A key roadblock in the path to meeting the new European Union standards is having sufficient knowledge and know-how, she says. “Producers first have to understand how they can contribute proactively to reducing the impact of the industry.”

An employee works in a shoe factory in Nantou, Taiwan. Yee Chain, a Taiwanese footwear manufacturer, is working on reducing fabric waste. REUTERS/Ann Wang Acquire Licensing Rights

This includes discerning which raw materials are sustainable and suitable for use, how to source them and set up supply chains; what kind of machinery is needed for processing them into fabrics; how to scale; and, finally, how to dispose of textiles appropriately at their end-of-life. On top of this, producers will have to digitalise certain aspects of their operations, such as improving information capture systems to meet the new supply-chain transparency requirements.

Lu at the University of Delaware says transitioning to a circular business model will require both technical and financial advice, as well as legal support “to interpret the new regulations”, he adds.

And that points to another big challenge – finding the financial wherewithal to do so. According to one 2020 estimate from Fashion for Good and Boston Consulting Group, transforming the $2 trillion industry would require $20 billion to $30 billion of funding every year. A quarter of this is to support raw materials innovation and improvements, a third for overhauling sourcing, processing and manufacturing processes, and 20% for handling textile waste.

There has been some funding on offer from the Green Climate Fund, the United Nations-backed fund aimed at helping developing nations take climate action. Since 2020 It has provided nearly $350 million in loans to help textile and ready-made garment manufactures in Bangladesh adopt energy-efficient technologies such as solar panels.

Bangladesh’s textile sector also receives funding from the International Finance Corporation’s Advisory Partnership for Cleaner Textile (PaCT) programme. Since its initiation 10 years ago, PaCT has introduced innovations that have helped nearly 340 factories cut their annual fresh water consumption and wastewater discharge.

But the Fashion for Good report points out that fashion companies should themselves be developing and commercialising innovation in circular solutions. At the moment research and development for the fashion industry is extremely low, at less than 1% of sales.

An H&M store at Tsim Sha Tsui shopping district in Hong Kong, China. The fashion chain partnered with the Hong Kong Research Institute of Textiles and Apparel to develop technology capable of separating cotton and polyester blended textiles. REUTERS/Tyrone Siu Acquire Licensing Rights

“This creates a situation in which players in the supply chain are often asked to bear the risk, costs and effort of innovating, with little guarantee that they will be in a position to capitalise on their investment,” the report said.

One company that has been investing in supporting a more circular textile model in Asia is H&M. In 2016, it partnered with the Hong Kong Research Institute of Textiles and Apparel (HKRITA) to develop the Green Machine, a technology capable of separating cotton and polyester blended textiles, commonly found in many clothing types, at scale without any quality loss – a world first. The award-winning process makes use of heat, water, pressure and a biodegradable “green” chemical for separation, recovering more than 98% of polyester fibres in under two hours.

In 2020, Indonesia’s largest textile manufacturer Kahatex began using the Green Machine, and a year later, Turkey-based ISKO, the world’s biggest denim producer followed suit. “The system is being scaled up in Indonesia and Turkey, with plans for multiple systems in different locations,” says HKRITA chief executive Edwin Keh, who adds that Cambodia is another possible location.

But Keh points out that using recyclable or sustainably sourced materials is much more costly than polyester, the synthetic fibre derived mainly from petroleum that’s found in more than half the world’s textiles. Incorporating sustainable materials into new textiles at scale can drive up costs for Asian manufacturers, which in turn, can decrease their competitive edge.

“Why are people outsourcing in the first place? It’s because they want the cheapest possible product into the EU,” he says.

Keh believes EU retailers might instead turn to nearshoring or onshoring relocating supply chains closer to final markets. “So, places like Turkey or any of the eastern European countries, which are not the cheapest but are EU-esque, will be a lot easier for suppliers to deal with.”

Lu agrees. “Asian suppliers are very good at making cheap products in large quantities. But in the new era where we’re talking about slow fashion, consumers may want fewer products in smaller quantities but using more sustainable materials, which means Asian countries might not be the ideal place to source products anymore.”

This article is part of the latest issue of The Ethical Corporation magazine, which is about sustainable fashion. You can download the digital pdf for free here

Sandy Ong is an independent science and technology journalist based in Singapore. She hasalso written for The Atlantic, Wired UK, Newsweek, New Scientist, Undark, Science, Nature, IEEESpectrum, Nikkei Asia and [email protected]