Yet the tides are changing. Awareness around sustainable fashion is growing and consumers are demanding ethical business practices and environmentally conscious products. A recent survey found that 67% of customers consider sustainable materials as part of their purchasing decisions and 63% take a brand’s general approach to sustainability into account.

“Circularity” has become a buzzword and while it represents an important shift in the industry, it is also used in misleading ways. We need brands to go deeper to make holistic changes beyond green marketing and press coverage. For brands to truly make an impact in reducing waste, they need to look at the entire supply chain and life of the garments.

One of the clearest definitions of a circular economy comes from the Ellen MacArthur Foundation:“A circular economy is based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems.” In a circular model, products are designed and developed with the next use case in mind. They should also be sourced and produced with priority given to recyclable materials and ethical practices.

For circular fashion to become truly effective, products need to intentionally be designed to achieve longevity and versatility. From the beginning, designers need to envision how the garments can have as long a life as possible. This will take decisions such as developing a signature, timeless style for the fashion brand and designing for versatility - allowing pieces to be open to being styled in creative ways and easy to wear from day to night. It is also critical to consider seasonless collections, select high-quality environmentally friendly fabrics and offer options for upcycling, recycling or resale at the end of use. Another important point about circularity is that brands and retailers should focus on clothes that are made of fibers that can actually be recycled. For instance, cotton is one of the easiest fabrics to make into a recycled garment.

Thoughtful design is a key pillar for circularity. The intention is not to stifle fashion brands’ creativity, but rather to encourage brands to dream up creative ways to increase the longevity and use of their items.

Traditional manufacturing models in the fashion industry depend on orders with high minimum quantities in order to be cost effective. As production volume increases, costs per unit decrease. This requires a substantial physical footprint to store all products until they’re ready to ship. If demand forecasting is too high, this can create substantial inventory risk and waste. The traditional model leads to 30-40% of overproduction each year. Katla aims to change that. By matching supply with demand, Katla minimizes inventory waste and enables more sustainable practices to be adopted across the entire production and supply chain.

On-demand manufacturing offers an opportunity for fashion businesses to become both more economical and sustainable by reducing their upfront cash needs and minimizing excess inventory. Not only is the traditional fashion system financially wasteful, it is extremely damaging to the environment. In cases where on-demand production is not possible, small batch production is also a step in the right direction to minimize inventory risk and waste. With demand forecasting still difficult to get exactly right, a shift towards on-demand manufacturing allows brands to avoid costly leftover inventory that ends up in landfill at the end of each season - a win for the bottom line and the environment.

While zero-waste manufacturing may seem like a lofty goal, at Katla we are excited to pioneer a new way of doing things for the fashion industry. We think not only about removing waste at the point of production but also how the entire lifecycle of the product will unfold - from the acquisition of raw materials to what happens to a product and its packaging one it’s “consumed” and disposed of by the end customer.

Going forward, the fashion system must embrace a supply chain strategy rooted in greater productivity and shared risk instead of lowest cost. Fashion is a historically insular industry but there are examples worth studying from the electronics, autos and entertainment sectors. Just as the auto industry achieved in the 1980s with quality, the challenge for the fashion industry is to achieve productivity at less cost and risk by focusing on lean manufacturing methods.

Research by Warren H. Hausman and John Thorbeck at Stanford identified the number one problem in fashion as the cost of markdowns, lost sales and working capital from failure to manage inventory risk. They coined the term the “Zara Gap” - the gap in market value between Inditex (owner of Zara) and the rest of the industry. The key factor is not margin or inventory turn, but risk management.

The upcoming generation demands that product value and social values are inseparable. It is up to fashion - the very first globalized industry - to mobilize collective action to ensure that business decisions factor positive social impact in the environment, for animals and for human lives. The future of fashion - and our planet - depend on it.