Is renting clothes more environmentally friendly?

H&M started renting services in 2019, caption from article in Forbes

It is often said that you should lease, rent, commercially share or pool things instead of owning them and that this is more circular. It’s called Product-Service-Systems (PSS) and the idea is that this should keep products in use and thereby lower their environmental footprint. Consumers are told to buy a function or access instead of a product. Products are this way turned into services.

A lot of research money, both corporate and public, is put into realizing these ideas in practice. The problem, as I have written about before, is that research already indicates that it is not as simple. As Tukker (2004) writes, the idea that PSS will automatically result in an environmental-economic win-win situation is a myth. In the following, I list some reasons why leasing, renting and pooling might not be more environmentally friendly than owning.

The first issue is transport. When you switch products, for example when participating in a fashion library, you need transport to pick up the new rented items and this transport and its environmental impact may off-set any benefit. Zamani et al (2017) included customer transport into their life-cycle analysis and showed that for clothing libraries transport has a higher climate impact than for example washing. The authors conclude that few customers and keeping the clothing for a long time was the most environmentally friendly. However, this is rarely the idea with such libraries or renting services.

One reason why for example renting is supposed to reduce environmental impact is because access to the product is complicated, which should reduce its use (Tukker, 2004). Renting, leasing and pooling models are most likely to have a positive environmental impact if they reduce consumption (Tunn et al. 2019). Thus because you have to take the detour and arrive within the fashion library’s opening hours you will use the service less and rent fewer new clothes. If companies knew this, however, they might be less inclined to try a PSS model. Moreover, there are many ways, apart from PSS models, to discourage from consumption.

An issue with the above argument, that renting should decrease consumption, is the rebound effect. This means that any leased, shared or rented item has to replace something you would otherwise buy to have a positive environmental impact. In the case of fashion, there is a significant risk that customers both buy what they want and then on top rent clothes or subscribe to a fashion library. Maybe you buy the basic and classic items as you have always done but then also start to rent the fun and trendy items that you never would have bought. In such cases, the rented items increase fashion consumption instead of replacing existing consumption. This is simply an increased environmental impact, there are no savings here.

There is also a risk that you treat the rented or shared items less carefully since they are not yours. Michelini et al. (2017) and Tukker (2004) argue that use-oriented business models can hinder the products from circulating longer due to careless use by the users. In such cases, less responsible user behavior increases environmental impact. The e-scooters on town are a prime example of such reckless treatment of rented products. If users paid the full price and owned the scooter, they might treat it more carefully.

The products best suited for leasing and rental are durable ones, usually sold at high prices, which also makes leasing or renting more appealing to customers who might lack the funds to buy the product (Lacy & Rutqvist, 2015). The issue here is that second hand markets have traditionally been a solution for such situations. Many of us already buy durable, rarely used and pricey items second hand and then, when we don’t need them, pass them on to someone else through second hand markets.

Susanna Alexius och Staffan Furusten addressed this issue well in a recent article in Organisation & Samhälle . Just as second hand markets, sharing or pooling is nothing new. What’s new in the sharing/circular economy debate is that this sharing and pooling should be commercialized. While traditionally you maybe shared clothes, cars, summer houses or tools with friends and acquaintances, what’s new is that you should share your belongings with strangers and that a commercial actor should earn a share every time you do so. And even this is not entirely new, holiday rentals have worked this way for a long time.

In the circular economy and PSS debate, the idea is that the producer should keep ownership of products and sell them to the customer as a service. This provides the producer with incentives to produce long lived, durable and repairable products (although this is yet be proven in practice). The risk here, as Alexius and Furusten note, is that companies will own even more and their customers less. Traditionally, owning has been a form of capital. And isn’t the sharing economy precisely evidence that owning is capital when you can easily rent your house and earn a profit. Thus ownership is in fact not all bad and – in the case of sharing, renting or pooling – someone will own the product that is to be shared.

As I see it, the risk here is that we are simply commercializing something that would take place anyway – the sharing of products we rarely or hardly use. And, at the end of the day, if you cannot recycle the product into new products, is it really circular anyway? In my opinion we should put more focus on turning waste into new products and less attention to the ownership issue.

Last spring, I reviewed a student thesis dealing with the issues of renting and leasing specifically clothing. Frida Oscarson studied the case of technical garments and interviewed representatives within the industry. To learn about what the industry thinks, you can read her findings here.

References

Lacy, P & Rutqvist, J., (2015) Waste to wealth: the circular economy advantage. New York: Palgrave Macmillan. 

Michelini, G., Moraes, R., Cunha, R., Costa, J. & Ometto A., (2017) From linear to circular economy: PSS conducting the transition, Procedia CIRP, vol. 64, pp. 2-6 

Tukker, A., (2004) Eight types of product–service system: eight ways to sustainability? Experiences from SusProNet. Business Strategy and the Environment, vol. 13 (4), pp. 246-260. 

Tunn, V. S. C., Bocken, N. M. P., van den Hende, E. A. & Schoormans, J. P. L., (2019) Business models for sustainable consumption in the circular economy: An expert study. Journal of Cleaner Production, vol. 212, pp. 324-333.

Zamani, B., Sandin, G. and Peters, G., (2017) Life cycle assessment of clothing libraries: can collaborative consumption reduce the environmental impact of fast fashion?. Journal of Cleaner Production, vol. 162, pp. 1368-1375. 

Three myths about the circular economy

A circular, rather than linear, economy may be the solution to many of our environmental problems. A circular turn requires businesses to rethink how their business operations are organized. When striving for circularity, businesses have to take into account where their resources come from and what happens to their products after use, i.e. the end-of-life of products. This is all good. Since the circular economy has become so popular lately, however, we also find some myths within this debate. I’ve found at least three.

  1. Renting or leasing is more circular than owning. Circular companies sell services (or ‘functionality’) rather than products. This is not universally true, as Agrawal, Ferguson, Toktay and Thomas (2012) have shown. Renting or leasing is not automatically more environmentally friendly. Moreover, changing your business to a service instead of selling a product may be costly for the business, as discussed at a workshop for Vinnova-funded research projects in January. Most importantly, whether you own or lease a product says nothing about the circularity of the product itself i.e. if it is recyclable. The electric scooters that people rent are a prime example of this fact.
  2. Companies need a ‘circular business model’ to become circular. To the opposite, in our Vinnova research project, we found that most companies did not change their business model. Instead, they collaborated with others to achieve circularity for some part of their business, to achieve circular packaging or waste flows, for example. In many cases, companies depend on markets for circular materials, what some call ‘open loops’.
  3. Circularity is achieved through technical solutions. We definitely need technical solutions but they also require that customers and consumers behave a certain way, in order to close the loop. For example, when products have been used, they have to be returned somehow to be able to be reused or recycled. Financial incentives, such as deposit-refund systems, are efficient and get customers to return used products, but convenience is equally important and not least learnt social behavior. Thus new technical solutions have to be matched with necessary behavioral change to work. This is quite often overlooked in the circular economy debate.

The latter point is also what Anna Kremel and I study in our new Formas research project in collaboration with Returpack, Kantar SIFO and Ungdomsbarometern (read about it in English here).

Steering businesses towards a circular economy

As I have previously blogged about, the students in my master course ‘measuring sustainability’ at NHH have analysed and proposed indicators that H&M and other fashion companies can use to steer their business towards a circular economy. We are very thankful to H&M and sustainability manager Luisa Book for collaborating with us on this case. The topic is very much of the moment as an increasing number of companies, just like H&M, aim to become circular but then also need appropriate tools to help steer their operations in this direction.

Some of the indicators the students proposed, such as amount of recycled material out of total use of materials, are maybe not new but are crucial when a circular business is the target. Moreover, the number of times a material can be recycled needs to be monitored in order to make sure that recycling is not just a prolonging of a linear path (see Circular Flanders great illustration of this to the left). In an ideal world, materials can be recycled indefinitely.

The students also argued that it is key to keep track of collecting initiatives i.e. when brands collect used or discarded products. How much of what is sold returns to the company for recycling? Moreover, companies need to monitor what happens with collected garments- are they recycled into new garments or in fact only downcycled (used for other less valuable products)?

One reason materials cannot be recycled is because the materials are contaminated for example by chemicals that hinder recycling. The students here proposed to measure the use of such chemicals or substances. By monitoring, the company can also try to minimize such use. To know if the product is made with substances that might hinder recycling, you need proper information about what the garment is made of and how it is made. Here the students proposed that H&M could develop more elaborate tags with information about the item which could help the customer to take care of it and, eventually, facilitate the recycling of the garment.

Another point that is crucial to circular operations is to keep the materials in the processes. In the textile industry, a lot of fabric gets wasted and does not end up in any garment. Consequently, some students suggested to measure the amount of material that ends up in a garments in relation to total amount of materials used. Ideally, all materials used should end up in a garment. Similarly, the students also identified microplastics as a threat because it means that small amounts of plastic fibers continuously leave the circular flow and non-renewable materials are subsequently lost.

Another aspect commonly discussed in the context of circular economy is the slowing of the circle i.e. the prolonging of a product’s life span. Here the students reintroduced the idea of enabling users to repair their clothes, for example by making sure all items come with threads or buttons necessary for repair or providing repair services in stores. The company can track both the use of repair services and number of items that customers could repair themselves.

I hope that H&M and other companies will find the students work helpful. How to measure a circular business is really at the forefront of both practice and research. In fact, two research colleagues and I just last week got financing for a project on circular business practices by Vinnova. That the students managed this task so well and were able to develop these very helpful indicators show, to my mind, that we at University teach students useful and up to date skills. We educate students that can in fact contribute to and improve current business practices.

Sweden to become a ‘circular economy’

The Swedish government is investigating how it can promote a ‘circular economy’.  Now, what is a circular economy? While it is not so well defined, I’d say it’s an ambition to keep materials in a loop. Nature tends to work with cycles (the carbon cycle for example). Businesses, the circular economy proponents say, should mimic such systems. In a circular economy,  waste should become input to new production. In addition, there’s the idea that sharing and renting is better than owning things (I’d like to see some evidence for this).

The Swedish government’s investigation into the circular economy resulted in a 400 pages report, released last week. The report suggests tax deductions for rental, second hand and repair services, which sounds like more of what the Swedish government has already done. Other suggestions are for example to increase access to carpools and to facilitate prevention of waste (the latter is always a good idea).

When I encountered the ‘circular economy’ concept, I was initially a sceptic. It might be an academic instinct to question terms the industry has invented. ‘Isn’t this just a new fancy concept for recycling?’. Lately, however, I have slightly changed my mind. The more I learn about the waste issue the more it seems necessary that companies ‘design out waste’ (as the circular economy proponents put it). We need to have a plan for what happens to the materials and products when they are discarded. We need to make sure that our products are safely recyclable and can potentially be recycled more than once. If the circular economy concept is helpful for businesses (or states!) in order to work on these issues, then that’s more important than the lack of definition.

I also find the circular economy system diagram useful. The ways in which materials circulate are put into a hierarchy where maintaining products (such as mending) is more desirable than recycling. This seems very reasonable.

Now my research area is really the measurement of such initiatives. And, as it happens regularly, I got a really good question from a student some week ago: “How can we measure whether a business is circular?”  While businesses are quite different from nation states, the Swedish government’s report has in fact suggested some indicators for whether a country is ‘circular’. The proposed indicators measure the amount of recycled materials, the use of raw materials and the amount of waste produced. These are standard indicators that companies disclose in their sustainability reports. In a business setting, such indicators are nothing new. However, they might be more difficult to calculate on a national level. The government report suggests no indicators for the sharing, renting or repairing ideas of the circular economy.

Clearly, this is an area that needs some more work. Now if the Swedish government would want some help with measuring their circular economy ambitions, I am here to help 😉

Is more recycling the answer?

We’ve learned that recycling is desirable. It’s the way to a more sustainable society. And in some ways it is. Compared to accumulating trash in landfills, then yes, recycling might be a good idea. Keeping materials in the loop means that we don’t have to produce new resource intensive materials, such as cotton, from scratch. However there are also issues with recycling.

First, toxic materials might result in toxic recycled products. In a recent case, artificial football turf, from recycled car tires, seems to be carcinogenic. Recycling is not desirable if football kids develop cancer as a result.

Second, although something can be recycled once, it does not necessarily mean that it can be recycled twice. So although we produce something by recycled materials, it may not be recyclable a second time. When it is worn out, it still ends up in the landfill or to be burned. Taking one more turn and having a second life is of course better than going directly to trash but it is not a final solution.

Third, recycling requires resources. Recycling processes require energy, the items to be recycled are moved around and transported, there might be environmentally unfriendly chemicals involved (for example in the case of textiles) and it requires money. These resources may be well spent money compared to things ending up in a landfill. However, if we instead reuse what we have and produce less waste, these resources can be saved and spent on other things.

Bea Johnson, of zero waste home, asks the thought provoking question: “What if our municipalities could shift the resources they spend on waste handling to other activities, such as schools and hospitals instead?” She has many relevant points.

Overall, the zero waste movement is doing a pretty good job in educating us on how to reduce our waste. It means fewer things going into our homes, particularly disposables, and fewer items being thrown out. Everyday. If we all did it, it would make a big difference.

Personally, I’m a bit of a late adopter in this area. I’m at this point trying to reduce everyday plastic disposables. I’m also pretty good at the DIY skincare and home cleaning supplies that Lauren Singer suggests. In terms of food packaging, although I’m recycling, I’ve got a long way to go in terms of reducing what comes into my home. On my wish list for this year is to start composting food waste. Many cities have composting schemes that you can subscribe to and in Bergen even certain houses/areas (as in my friend Turid’s case).

On the picture: buying milk directly from the farmer (Lovö Prästgård) using old Kockum milk jars. Buying directly from the farmer, also at farmers market, is a good way to reduce waste.

Are you making effort to reduce your waste? Please share your experiences.