Invoking a circular clothing industry in Amsterdam: Public- and private sector dynamics

Program: Human Geography: Governance for Sustainability

Student: Julie Zwinkels (12734055)

Supervisor: Dhr. Dr. D.L. Arnold

Second reader: Mw. Dr. Ir. C.J.M. Karsten

Date: 12-6-2020

Word count: 21.777

Invoking a circular clothing

industry in Amsterdam

Public- and private sector dynamics

2

Preface

The master thesis project “Invoking a circular clothing industry in Amsterdam” is written for the master program Human Geography: Governance for Sustainability at the University of Amsterdam. The research effectively took place from February 2020 till the end of June 2020. By completing this master thesis project I intent to complete the master program. By this I hope to become a ‘geographer’ by the end of the academic year.

Hereby, I would like to express my appreciation for the supervision I got from Dennis Arnold while writing my thesis. The critical but constructive feedback enabled me to improve the level of my research and writing. Besides that, I would like to thank the respondents to this research, who I thank for the insight and elaborated answers they gave me during interviews.

The process of writing a master thesis was harder than I initially expected. A little while after the start of the research, the corona crisis commenced, and the University of Amsterdam and the Netherlands were in lockdown. This challenged me to adjust my expectations for the research process, where I was to write my thesis from my student home and interviews were to be conducted online.

This leads me to thank my roommates, Imke van der Valk and Yuki Gassler for supporting and inspiring me throughout this project. Where my roommates and friends became my colleagues during the corona crisis, I got more support and help than I could wish for.

Julie Zwinkels

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Abstract

The linear clothing industry is causing climate change and over-exploits resources. Therefore, the clothing industry ought to change its business model to circular by 2050, as committed to by the city of Amsterdam. The Circular City, being a new paradigm of circularity, corresponds to ‘new governance’ on environmental issues. Subsequently, the rescaling of governance causes a decentralization of the state. Simultaneously, environmental governance increasingly incorporates non-state actors in decision making.

Where the Circular City is a new research paradigm, increasing stakeholder dynamics through ‘new governance’; the research functions to fill a gap in scientific knowledge. Beyond that, the research, being a case study of Amsterdam, functions to evaluate a specific locality in its ability to invoke circularity at the urban scale. The increased public-private dynamics is the central subject of this research, as they influence circularity in the clothing industry. Hence, the main question of this research reads: “How are public- and private sector stakeholders promoting or inhibiting a circular clothing industry in Amsterdam?”

In order to answer this question, a stakeholder analysis is performed to capture the drivers, barriers, and dynamics between public sector stakeholders, i.e., governmental stakeholders, and private sector stakeholders, i.e., clothing sector stakeholders in the locality of Amsterdam. Hereby, the contextual and societal factors influencing the enablement of a circular clothing industry in Amsterdam are analyzed. Based on desk research and interviews with stakeholders, the research finds several barriers and opportunities for circularity in the clothing industry.

First, financial obstacles are found to inhibit circularity for clothing sector stakeholders. Besides that, regulative measures supporting circularity are lacking on the national and urban scale. Urban circularity specifically faces challenges related to scale and boundaries, as operations and waste streams are international of character. Moreover, the urban scale quantity (scale) is insufficient to establish significant power to enable circularity. On the other hand, citizens and clothing sector stakeholder engagement bring opportunities for Amsterdam. Engagement can foster support and innovation for circularity. However, coordination and alignment between stakeholders must be facilitated in order to evoke circularity.

All in all, whereas the targets and strategy for a Circular Amsterdam are established, directions, and implications for the clothing sector stakeholders remain unclear. This implies a role for governmental bodies to encourage circularity through regulative measures. Besides that, stakeholder partnership should be fostered, having the ability to establish alignment, targets, and subsequent societal change.

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Table of Content

1.2 Aims and research questions ...7

1.3 Structure ...9

2. Theoretical framework ... 10

2.1 ‘Take-make-waste’ business models ... 10

2.2 Circular business models ... 11

2.2.1 Clothing industry circularity... 12

2.2.2 The R-ladder of waste management... 13

2.2.3 Drivers for a circular clothing industry ... 14

2.3 Governance for circularity ... 15

2.3.1 Decentralizing circularity ... 16

2.3.2 Scaling environmental governance outwards ... 18

3. Setting the scene: The Amsterdam case ... 21

3.1 Enabling circularity of clothing in Amsterdam ... 21

3.2 Governmental stakeholders ... 23

3.3 Clothing sector stakeholders ... 25

3.4 Secondary stakeholders... 26

4. Methodology & data ... 28

4.1 Research strategy and design ... 28

4.2 Method ... 29

4.2.1 Desk research... 29

4.2.2 Interviews ... 30

4.3 Operationalization ... 31

4.4 Data analysis ... 34

4.5 Validity, ethics, and limitations ... 35

5. Results ... 37

5.1 Drivers for a circular clothing industry ... 37

5.1.1 Competitive advantage ... 38

5.1.2 Government ... 39

5.1.3 Governance ... 40

5.1.4 Corporate responsibility ... 42

5

5.2.1 Value creation through partnerships in the clothing sector ... 43

5.2.2 Clothing sector partnerships for circularity ... 45

5.2.3 Engagement in multi-sector partnerships ... 46

5.3 Realizing a CE on the urban scale ... 48

5.3.1 Policy levers to a circular Amsterdam ... 48

5.3.2 Limits and opportunities on the urban scale ... 52

6. Conclusion & Discussion ... 54

6.1 Conclusion ... 54 6.2 Discussion ... 55 References ... 58 Appendix I ... 62 Appendix II ... 63 Appendix III ... 64

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1. Introduction

The face of the clothing industry has changed over the past decades, from durable and hand-me-down goods to cheap and disposable goods (Anguelov, 2015). The linear business model, conceptualized as fast fashion and based on the steps ‘take-make-waste’, encourages overconsumption and generates excessive amounts of waste (House of Commons, 2019). Post-consumer textile waste has been estimated to be the fastest-growing waste product globally (Macchion et al., 2017) and is identified as the main problem of the clothing industry (Anguelov & Roth, 2017). Post-consumer textile waste is often burned, thereby emitting CO2, and contributing to climate change. Besides that, as resources are finite, the clothing industry causes depletion of land and exploitation of resources (Franco, 2019). Hence, it is recognized that the linear model in the clothing industry is not sustainable.

The circular economy (CE) offers a possible alternative where economic growth and sustainability can remain incoherence. The CE is restorative and regenerative by intention and design (Lewandowski, 2016; Ellen MacArthur Foundation, 2013). Hence, waste is treated as resources, tackling the issues related to pollution and resources in the clothing industry. Moreover, it is expected that the CE enables a harmonious society based on sustainable development (Ghisellini, Cialani & Ulgiati, 2016). The CE has gained worldwide popularity (Ghisellini et al., 2016; Franco, 2017), being adopted by governmental bodies, e.g., the European Union (EU), the Netherlands, and Amsterdam, as an objective for 2050 (Gemeente Amsterdam, 2020a). The Ellen MacArthur Foundation (EMF), which is primarily focused on circularity of industries, launched a Circular City package for urban policy makers in 2016 (Marin & De Meulder, 2018). This relatively new paradigm of the CE has been implemented in the city of Amsterdam. This implies the clothing industry in Amsterdam ought to change its business from linear to circular by 2050, which comes with many challenges. The public- and private sector stakeholders, i.e. governmental stakeholders across various scales, and clothing sector stakeholders, i.e. brands and retailers, together have the ability to enable circularity in the clothing industry in Amsterdam. Governmental stakeholders aim to facilitate in order to foster circularity in the clothing industry, for instance, through financial support and partnerships (Gemeente Amsterdam, 2020a). Besides that, numerous clothing brands and retailers in Amsterdam are known for their circular performance, for instance, by re-commerce business models and design for circularity (Gemeente Amsterdam, 2019). However, enabling circularity seems a far-reaching objective, as only one percent of the global supply chain of clothing currently operates in a closed loop (CirkelWaarde et al., 2020; House of Commons, 2019).

1.1

Gap in knowledge

Since the Circular City is a relatively new and understudied paradigm (Marin & De Meulder, 2018), there is still a gap in the literature on the barriers and opportunities of circularity on the urban scale specifically. Challenges of reusing and recycling clothing remain understudied (Birtwistle & Moore, 2007; Hawley, 2006), which possibly inhibits the realization of a Circular City.

7 Besides that, environmental geographers detect a rescaling of governance on environmental issues. Subsequently, issues are rescaled upwards, to higher governmental bodies, downwards, to urban scale and regions, or outwards, to include non-state actors (Bulkeley, 2005; Reed & Bruyneel, 2010). The ‘new governance’ links horizontal (across spaces) and vertical (across scales) stakeholders in governance (Reed & Bruyneel, 2010), thereby increasing stakeholder dynamics. Coe (2012) highlights the value of understanding the horizontal embeddedness of production networks in a particular locality and considers the institutional context of high essence. Evoking circularity at the urban scale corresponds to the notion of rescaling governance downwards and subsequently affecting horizontal and vertical dynamics between stakeholders.

Moving from linear to circular systems enlarges processes, for example, by the need to establish new systems of waste management. In order to effectively realize a CE and thereby closing loops, collaboration and partnerships between stakeholders are key. Hence, circularity fosters the development of partnerships (de Brito, Carbone & Blanquart, 2008). The value of stakeholder engagement for improving sustainability management is recognized (Hörisch et al., 2014) in order to co-create significant value and tackle complex social issues (Austin & Seintanidi, 2012b; Gray & Stites, 2013). Effective partnership between stakeholders is thus recognized as essential (Macchion et al., 2017; Hörisch, Freeman & Schaltegger, 2014). This brings a challenge to the stakeholders in finding alignment and synchronize ideas. Studies found that businesses concentrated in a geographical area cooperate for innovation, whereas they might compete on a global scale (Chang & Chen, 2004). The stakeholder dynamics on circularity in the clothing industry in Amsterdam remain understudied, whilst acknowledged as essential in empowering circularity. In this sense, studying a specific locality in its context and stakeholder dynamics in the institutional paradigm of the Circular City contributes to the outlined gap in knowledge.

1.2

Aims and research questions

Amsterdam, being subject to the institutional context of the Netherlands and EU, has committed to building a Circular City by 2050 and has recently launched its circular strategy as one of the first cities worldwide (Gemeente Amsterdam, 2020a). This makes Amsterdam an interesting case for analyzation of their strategy along with the definitions of a Circular City as defined by the Ellen MacArthur Foundation (EMF) (2019). Besides that, Amsterdam accommodates many innovative clothing brands and retailers and has been named an ‘innovation hub’ for circular business models (Gemeente Amsterdam, 2019; Dutch Circular Textile Valley, n.d.). Moreover, clothing has been selected as one of the main focus points of the CE in the municipality. For instance, Amsterdam aims to become a frontrunner in textile recycling (Gemeente Amsterdam, 2019), which has the potential to induce circularity of clothing. Therefore, this locality lends itself to research drivers, barriers, and dynamics between public- and private sector stakeholders involved in enabling a CE. Hence, the research functions to exchange perspectives based on which alignment can be found in order to stimulate circularity.

8 Besides that, as Circular Cities are a new research paradigm, the research contributes to the scientific debate on Circular Cities and provides societal relevance in sharing best practices and lessons learned from the case of Amsterdam (Prendeville, Cherim & Bocken, 2018; Ellen MacArthur Foundation, 2019).

The public- and private sector dynamics in the upcoming circular clothing industry in Amsterdam are the subject of interest. Following from the gap in knowledge and research aims, the main question of this research is:

How are public- and private sector stakeholders promoting or inhibiting a circular clothing industry in Amsterdam?

The main question is answered through the performance of extensive desk research into the subject and interviews with stakeholders to the case study of Amsterdam. The public sector stakeholders to this matter are the governmental bodies shaping the institutional context, i.e., the EU, the national government of the Netherlands, and the municipality of Amsterdam (from now on referred to as governmental stakeholders). The private sector stakeholders to this matter are the businesses in the clothing sector, i.e., the brands and retailers (from now on referred to as clothing sector stakeholders). These clothing sector stakeholders are subdivided into Small and Medium Enterprises (SMEs) and Large Enterprises. Where circularity is a specific and complex topic for the clothing industry, the focus is placed on those clothing sector stakeholders willing and/or commenced to invoke circularity in the clothing industry. The public- and private sector stakeholders are considered the primary stakeholders in this research. However, the influence of secondary stakeholders is acknowledged as well, i.e., post-consumer textile collectors, processors, and recyclers (from now on referred to as recyclers), knowledge institutes, societal organizations, and consumers. When referred to post-consumer clothing waste, either collected, processed, or recycled, the term textiles will be used. Besides that, the clothing industry, as opposed to the textile industry, is the main focus of this research.

The main question is divided into three sub-questions, which combined will result in a comprehensive understanding of the elements posed in the main question.

• What are the drivers influencing and pressuring the public- and private sector stakeholders to enable a circular clothing industry in Amsterdam?

• How do stakeholders engage with each other in networks or partnerships in order to enable a circular clothing industry in Amsterdam?

• What are the barriers and opportunities to the realization of a circular clothing industry at the Amsterdam urban scale?

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1.3

Structure

This thesis is structured as follows. First, the theoretical framework elaborates on the concepts and theories used in this research. Subsequently, the stakeholders are introduced in the chapter ‘Setting the scene: The Amsterdam case.’ Thereafter, methodology and data elaborate on research methods, operationalization, and frameworks used in order to analyze the data. Furthermore, results are discussed, elaborating on ‘Drivers for circularity,’ ‘Stakeholder engagement,’ and ‘Realizing a CE on the urban scale.’ Finally, a conclusion and discussion provide an answer to the posed research question and discusses implications, limitations, and recommendations for future research.

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2. Theoretical framework

This chapter explains the concepts and theories used in this research. The theoretical framework provides insight into the central concepts to this research. It functions to build a narrative of environmental issues faced in the clothing industry. Besides, it elaborates on a proposed new economic system, the CE, and how this would work for the clothing industry. Thereafter, governance for circularity is studied more carefully. Herein, environmental issues are studied through the lens of environmental geography. It is recognized that ‘new governance’ is induced to tackle environmental issues, increasingly decentralizing and incorporating non-state actors in governance. Partnerships between the stakeholders are found to be an essential element for the establishment of a CE.

2.1

‘Take-make-waste’ business models

The pollution associated with the clothing industry is pushing planetary boundaries as defined by Rockstöm et al. (2009), causing irreversible climate change. This is the first time in history that humans have caused damage to the ecosystem resulting in climate change, loss in biodiversity, land-use change, and crossing regular nitrogen and phosphorus levels (Franco, 2017; Rockström et al., 2009). The clothing and textile industry is one of the most polluting industries worldwide, where the industry emits 1.2 billion tons of CO2 per year, more than all international flights and maritime shipping combined (House of Commons, 2019; Ellen MacArthur Foundation, 2017). Moreover, resources are being overexploited. The dependency on scarce resources increases risks through price volatility and restrictions in supply (Franco, 2017). The production of clothing demands high shares of water and contributes to 20% of industries global water pollution, e.g., in the dyeing process (House of Commons, 2019). Where the production of cotton requires intensive irrigation, the producing regions are facing severe droughts and less output. The current business model operated in, a linear business model, stimulates the ‘take-make-waste’ course of business, resulting in pushing and damaging the environment. Continuing pollution, causing climate change and scarcity of resources, make the clothing industry unsustainable (Ghisellini et al., 2015; Franco, 2017).

‘Fast fashion’ is the concept to describe the practices in the fashion industry since the 1980s. It is associated with increased amounts of collections per year, low prices, and quick turnaround (House of Commons, 2019; Anguelov, 2015). Subsequently, overconsumption is stimulated by the fast fashion industry because clothing is treated as a disposable good. The industry is dominated by a few multinational suppliers overpowering the supply chain. This gives them the opportunity to attain short lead times for a low price due to economies of scale (Gardetti & Torres, 2017; Anguelov, 2015). The concept of ‘brand proliferation’ is used to describe this increasing globalization of brands and product lines (Anguelov, 2015). The multinational brands and retailers attain a name and identity in the global clothing industry, increasing their power position (Anguelov, 2015). The ability to produce high volumes in a global network has made suppliers compete over prices. This ‘race to the bottom’ is

11 associated with lower prices, while compensating costs in quality and production processes, eventually resulting in social and environmental consequences. Even though the environmental issues continue to grow, such as severe water pollution and outstripping CO2 emissions, linear business models associated with fast fashion continue to overpower the industry (Anguelov, 2015).

2.2

Circular business models

The concept of ‘circularity’ has been widely adopted by the public- and private sector in order to mitigate pollution and relieve pressures on natural resources while stimulating growth. The origin of the concept of ‘circular economy’ (CE) started with the regenerative design school of thought in the 1970s, followed by the schools of thought performance economy, cradle-to-cradle, and the industrial ecology (Ellen MacArthur Foundation, 2013; Braungart, McDonough & Bollinger, 2007). The CE is defined by the EMF in 2013 as “an industrial system that is restorative or regenerative by intention and design” (Lewandowski, 2016, p. 5). The CE model is regulated through the laws of nature, underlining that materials are nutrients, either for nature or for the development of new products (Ghisellini et al., 2016). Various definitions underline the fact that a CE is a production system designed based on interconnected and closed loop cycles to enhance the optimization of resources. Where the clothing industry usually operates in a linear model, which is characterized by the steps ‘take – make – waste’ (House of Commons, 2019; Bocken, de Pauw, Bakker & van der Grinten, 2016; Franco, 2017; Ellen MacArthur Foundation, 2013), the CE aims to close material loops, whilst keeping the material value at the utility level (Bocken, Olivetti, Cullen, Potting & Lifset, 2017).

In establishing a closed loop, the technological and biological loops are considered. Biological loops are considered for resources that can be reintroduced in the biosphere and apply to products of consumption (Bocken et al., 2016; Braungart et al., 2007). Regarding clothing, this entails, e.g., cotton or water, as these are natural resources used in the production process. Technological loops refer to the materials and products which can be continuously reused, which is the case for products of service. Products of service should be handled from ‘cradle-to-cradle,’ which is one of the fundamental concepts of a CE (Braungart et al., 2007). The term ‘cradle-to-cradle’ is applicable when materials are kept at the highest utility level in closing loops (Braungart et al., 2007). Instead of downcycling, where product value is lost, products are upcycled, adding value to the product after initial usage (Lewandowski, 2016). In this way, the value of the material and resources is taken into account. Moreover, the environmental impact of production and usage is integrated into the calculation of value (Bocken et al., 2017). The technological loops are closed through repairing, reusing, refurbishing, and recycling (Bocken et al., 2017).

In optimizing sustainable production, the distinction is made between efficiency and eco-effectiveness (Braungart et al., 2007; Ellen MacArthur Foundation, 2013). Eco-efficient systems operate following linear material flows while minimizing velocity, toxicity, and volume of material flow. It aims

12 to ‘do things the right way.’ This decreases waste, with the ultimate goal to reach zero-waste. However, as growth results in increased resource use, eco-efficiency cannot sustain growth, making environmental- and economic objectives not to align (Braungart et al., 2007). Subsequently, eco-efficiency is not able to change the system at the core. Eco-effectiveness does have this ability. It aims to ‘do the right things.’ It is modeled on the idea that the output material of one product can be the input material of the other, and hereby upcycles products continuously. This makes the concept of waste non-existent (Braungart et al., 2007). Where eco-efficiency minimizes the material flow from cradle-to-grave, eco-effectiveness designs from cradle-to-cradle (Ellen MacArthur Foundation, 2013), by this, eco-effectiveness takes a holistic and system approach, integrating circularity at the core of business.

2.2.1 Clothing industry circularity

Enabling a CE is changing the entire operating system of the supply chain (Ellen MacArthur Foundation, 2013). It is characterized by reversed supply chain logistics, which relates to reusing and recycling after or during product usage. Besides closing the loop, strategies to reduce resource use may focus on prolonging the lifetime of products. By repairing through introducing a service loop and designing for durability, the resource loop is slowed down. There are multiple business model strategies for slowing down or closing material loops. Bocken et al. (2016, p. 313) elaborate on six distinctive strategies, which are presented in table 1, and can be applied by the clothing sector. The CE has a need for a functional service, in which producers retain the ownership of their products. The products can then be sold as a service (Ellen MacArthur Foundation, 2013). A take-back system is required to enable this. The business model can be changed from an ownership payment to a leasing, hiring or usage payment strategy. This is called a ‘product-as-a-service’ business model (Retail Innovation Platform, 2020).

Table 1

Business model innovations to slow and close resource loops

Business model strategy Circularity Definition Access and performance

model

Slowing down resource loops

Providing the capability or services to satisfy user needs without needing to own physical products

Extending product value Exploiting the residual value of products – from manufacture, to consumers, and then back to manufacturing – or collection of products between distinct business entities

Classic long life model Business models focused on delivering long-product life, supported by design for durability and repair for instance

Encourage sufficiency Solutions that actively seek to reduce end-user consumption through principles such as durability, upgradability, service, warranties and reparability and a non-consumerist approach to marketing and sales (e.g., no sales commissions)

Extending resource value

Closing resource loops

Exploiting the residual value of resources: collection and sourcing of otherwise “wasted” materials or resources to turn these into new forms of value

Industrial symbiosis A process-orientated solution, concerned with using residual outputs from one process as feedstock for another process, which benefits from geographical proximity of businesses

Note. Adapted from “Product design and business model strategies for a circular economy.” By Bocken, N. M., De

13 The EMF launched a specific CE development program for the textile and specifically clothing sector. The new textile economy has four underlying ambitions, i.e., (1) phasing out substances of concern and microfiber release, (2) increase clothing utilization, (3) radically improve recycling, and (4) effective use of resources and renewable inputs (Ellen MacArthur Foundation, 2017). The first three ambitions are related to circular design. Improving design for circularity prolongs durability and enhances opportunities for reusing and recycling. Where traditional measures taken in the clothing industry are aimed at reducing negative impacts, the CE needs a system-level change. The EMF recognizes that efforts are taken in the clothing industry; however, being fragmented and small-scaled (Ellen MacArthur Foundation, 2017). Moreover, the appliance of the CE framework in the clothing industry mostly results in waste management strategies for businesses (Ghisellini et al., 2016). Hence, measures taken are considered eco-efficient as opposed to eco-effective.

2.2.2 The R-ladder of waste management

Circular business models correspond and align with circular waste management strategies. Waste in the clothing industry is created in the supply chain-, consumer use- and end-of-use phase. A strategy of waste management is developed to help reconsider the value of products based on ten steps, presented in figure 1 (Gemeente Amsterdam, 2020a). It builds on the notion of keeping materials at its highest utility level. The three upper steps, i.e., refuse, reconsider, and reduce, relate to change product design and usage. The four following steps, i.e., reuse, repair, refurbish, and remanufacture, relate to the using phase of products. In the final three steps of a product’s life cycle, materials will be repurposed, recycled or recovered; where after they can be reintroduced in other products or in the biosphere.

Figure 1. Circular R-ladder. Adapted from “Amsterdam circulair

2020-2025 Strategie” by Gemeente Amsterdam, 2020, p.12.

The first four steps, i.e., refuse, reconsider, and reduce, apply to the supply chain phase. These steps change consumption and relieve pressures on resources. The steps imply to consume less and more consciously. Related to the supply chain phase, materials and substance use can be refused, reconsidered, and reduced. During the supply chain phase, 35% of all materials used end up as waste (MUDjeans,

14 2019), which is created through, e.g., cutting and excessive stock (Common Objective, 2018). Research underlines that the design for recyclability and recycling in design lacks, and should be encouraged. The fact that virgin fibers remain cheaper than recycled fibers creates an obstacle for enabling a CE in the clothing industry (Platform Circulair Textiel, 2017). Moreover, products should be designed so that they can be recycled, removing obstacles as blends in materials (Ecopreneur.eu, 2019).

The steps reuse, repair, refurbish, and remanufacture shape the using phase of products. The lifetime of products increase by following these four steps. These steps require additional service loops when provided by the clothing retailers or brands, as previously discussed. Hence, product-as-a-service business models are encouraged. When reusing, repairing, or refurbishing clothing items, the original product function is kept with the possibility for minor replacements or repairment of components (Ekström & Salomonson, 2014; Ellen MacArthur Foundation, 2013). Upcycling reuses materials, when they are either damaged, discarded, or unwanted, into new clothing items. When items are upcycled, value is added (Lewandowski, 2016) as both quality and functionality are upgraded (Ellen MacArthur Foundation, 2013). These steps evoke a change in the conception of clothing as disposable goods towards durable products (Ellen MacArthur Foundation, 2017).

With the final three steps, materials are repurposed, recycled, or recovered. Subsequently, the materials are reintroduced in new products or in the biosphere. Recycling is defined as “recovering resources out of disposed products or by-products” (Lewandowski, 2016, p.9). Whereas with reusing, the original functionality of the product is kept, recycling recovers the resources dismantling the product. Most textiles can be recycled completely (Milieucentraal, n.d.). There are two mainstream options for recycling, i.e., mechanical- and chemical recycling. Mechanical recycling is the recovering of textiles to the point where it can be rewoven into new products. Chemical recycling brings the fibers back to the original chemical forms, allowing them to be rewoven (Ernst & Young, 2015). Critical scholars question the ability to keep resource utility at the highest level, where it is estimated to lose 20% of materials while recycling and 40% while processing (Bocken et al., 2017). Therefore, the recycling business faces major challenges for inducing circularity. Moreover, the presence of blends in fibers is underlined to inhibits qualitative recycling (Ecopreneur.eu, 2019). Hence, disposed clothing is downcycled, which means that as the product is recycled, functionality and quality is partly lost (Ellen MacArthur Foundation, 2013). Subsequently, the most common recycling purpose of clothing is into cleaning cloths, isolation, and mattress stuffing (Butler, 2018).

2.2.3 Drivers for a circular clothing industry

As described in the above, it is evident that obtaining circularity in the clothing industry is a far-reaching objective. Scholars extend on the drivers for circularity that may evoke circular practice. De Brito et al. (2008) highlight three distinctive drivers for sustainability for the private sector, i.e., corporate responsibility (CR), competitive advantage, and legislation.

15 Firstly, CR can be a driver for sustainability. CR measures are taken when social and environmental concerns are integrated into business strategy and operations (de Brito et al., 2008). Both brands and retailers in the clothing industry increasingly adopt policy on sustainability (Kozlowski et al., 2012). It is argued that circularity should be integrated at the core of business (Braungart et al., 2007), advocating for a holistic approach (Hörisch et al., 2014). However, a framework and guidelines to integrate sustainable practice and to measure performance are lacking (Kozlowski et al., 2012; De Brito et al., 2008). Moreover, the initiatives taken can be (seen as) ‘greenwashing,’ which is labeling activities as ‘green,’ without adhering to criteria of sustainability (Bick et al., 2018). Hence, challenges arise in establishing to what extent the clothing industry is intrinsically motivated for circularity.

Secondly, competitive advantage is found to be a driver for sustainability management. Competitive advantage can be interpreted in various ways. De Brito et al. (2008) view competitive advantage as a way to reach targeted customers. According to Porter (1985), there are two forms of competitive advantage, i.e., cost leadership and differentiation. Firstly, cost leadership refers to the improvements in costs causing a competitive advantage. As underlined by the EMF, expenses on raw materials decrease when circularity is induced (Ellen MacArthur Foundation, 2013), which drives circularity from a cost leadership perspective. On the other hand, establishing circularity requires investments to enable closure of material loops. Therefore, it is doubted whether inducing circularity is driven by cost leadership considerations. Secondly, company differentiation refers to delivering a product with higher benefits than the rest of the market, attracting consumers. Hence, circularity can be stimulated from a marketing perspective in order to differentiate from competitors.

Finally, legislation can force businesses to reduce negative environmental impact (De Brito et al., 2008). Where private companies follow economic incentives, which continue to support linear ‘take-make-waste’ models, the government ought to intervene to protect the public interest. The importance of policy that evokes sustainability is underlined in literature (Altenburg & Pegels, 2012; Gunningham, 2009). There is a role reserved for the authority to deploy ‘Extended Producer Responsibility’ (EPR) on textiles (Braungart et al., 2007). EPR comprises that producers hold responsibility for the policy, execution, payment, gathering, and recycling of their market products (KplusV, 2018). The market for the recycled goods produced is the responsibility of the producer as well. The producers are considered to be the manufacturers and importers or distributors (i.e., brands and retailers to this research). Subsequently, EPR encourages the closure of resource loops and thus circularity (KplusV, 2018). The Netherlands have the intention to implement EPR on textiles (Retail Innovation Platform, 2020).

2.3

Governance for circularity

Environmental governance is defined as the “set of regulatory processes, mechanisms, and organizations through which political actors influence environmental actions and outcomes.” (Lemos & Argawal, 2006, p. 298). In this definition, governance includes actions of the state and non-state stakeholders such as businesses and non-governmental organizations. Stakeholders in this research are defined as “any

16 group or individual who can affect or is affected by the achievement of the organization’s objectives” (Freeman, 2010, p.25). Hence, governance can be seen as a continuum of systems, including stakeholders that govern (Bulkeley, 2005). Environmental geographers identify a new realm of governance building on consensus formation, rescaling governance and polycentrism, referred to as ‘new governance’ (Bulkeley, 2005; Reed & Bruyneel, 2010; Gunningham, 2009).

Enabling governance for circularity depends upon factors that evoke innovation on sustainable development. The Systems of Innovation approach recognizes “all important economic, social, political, organizational, and other factors that influence the development, diffusion, and use of innovations” (Edquist, 2001, p.2) embedded in an institutional context (Urmetzer & Pyka, 2019). The Systems of Innovation approach recognizes the need to incorporate contextual, geographical factors when analyzing a specific case (Chang & Chen, 2004). Hence, the approach acknowledges complex, innovative processes beyond classic demand-pull models. Cultural factors, on the national scale, are found to influence innovation and are explicitly recognized to influence sustainable development. The formation of- and adherence to sustainability values are essential herein (Urmetzer & Pyka, 2019). On the urban and regional scale, the value of informal relationships linking stakeholders, and collective learning processes are recognized to induce innovation. Besides that, a technological transfer through economic competence, clusters and networks, institutional infrastructure, and development blocks fosters innovation according to the Systems of Innovation approach (Chang & Chen, 2004).

Due to the fact that environmental issues cross boundaries, environmental issues are often rescaled upwards to the international and transboundary scale, downwards to the urban and regional scale, and outwards to non-state actors (Reed & Bruyneel, 2010). However, whilst rescaling governance, the role of the state authority is questioned. Simultaneously, numerous governmental bodies proclaimed to establish circularity by 2050, e.g., the EU, the Netherlands, and Amsterdam. This insinuates that whilst environmental issues do cross urban-, national- and international boundaries, environmental policy remains existent within those boundaries as well. This corresponds to the notion of Gunningham that “heterarchy (…) can only succeed in the shadow of hierarchy” (2009; p. 162), and presence of a governmental body is essential in order to define guidance, evoke participation and enforce capability on environmental issues (Gunningham, 2009; Altenburg & Pegels, 2012). Moreover, where the private sector follows economic objectives, the public sector (i.e. governmental bodies) hold a role to protect the public interest, such as taking on environmental issues (Lemos & Agrawal, 2006).

2.3.1 Decentralizing circularity

Rescaling governance downwards causes a decentralization of state authority. Decentralization of government follows several principles, i.e. (1) increased efficiency due to competition amongst subnational units, (2) increased participation and accountability due to connectivity on a local scale and (3) increased time- and place-specific knowledge to be incorporated in policymaking (Lemos & Agrawal, 2006). Subsequently, decentralized initiatives to invoke circularity ought to increase efficiency

17 and success. The rescaling of governance to the urban scale brought a Circular City framework as developed by the EMF (Marin & De Meulder, 2018). The vision behind the CE in cities is that in 2050, two-thirds of the entire world population will live in urban areas. Due to the fact that urban places consume over 75% of natural resources, and on top of that produce over half of the global waste, significant change can be invoked by establishing circularity in cities (Ellen MacArthur Foundation, 2019). Moreover, as the proximity within cities is dense, this can aid partnering to close resource loops (Prendeville et al., 2018).

In order to build a Circular City, three urban systems are considered of essence, i.e., products, mobility, and buildings (Ellen MacArthur Foundation, 2019). In this research, the urban system of interest is products, as this relates to the clothing industry. It is underlined that governments hold a role in building Circular Cities as they manage the funds and systems on, e.g., waste management, public buildings, and infrastructure. By enabling circularity, cities can design out waste and pollution, keep materials utilized and valuable, regenerate natural systems (Ellen MacArthur Foundation, 2019). The urban policy levers are presented in table 2, i.e. (1) legislation and regulation, (2) financial support and fiscal measures, (3) urban planning, asset management, and public procurement, (4) convening and partnering, awareness-raising and capacity building to engage others and (5) developing roadmaps and strategies to share vision (Ellen MacArthur Foundation, 2019) and function as a guideline for implementing a Circular City program.

Table 2

Circular City policy levers

Main lever Urban policy lever Regulation Legislation

Regulation Economic incentives Financial support

Fiscal measures Urban management Urban Planning

Asset Management Public Procurement Engagement Convening and partnering

Awareness-raising Capacity building Vision Roadmaps and Strategies Adapted from “City Governments and their role in enabling a Circular Economy”, by Ellen MacArthur Foundation, 2019, p.5.

However, the CE on the urban scale is criticized for remaining vague in definition whilst implementation by governmental bodies has commenced. More specifically, Circular Cities have gained popularity, while impact or applicability has not been proven (Prendeville et al., 2018). Literature points out that in circular policy programs, circularity and sustainability are often conflated, resulting in a lack of direction

18 towards circularity in cities (Marin & De Meulder, 2018). Besides that, the integration of cultural and social factors enabling inclusive development lacks in plans to establish a circular city (Prendeville et al., 2018). The decentralization of environmental issues has thus remained understudied in the Circular City paradigm while implying to evoke systems change affecting citizens and industry.

2.3.2 Scaling environmental governance outwards

Besides the trend to decentralize environmental issues, non-state actors are increasingly incorporated in environmental governance, working across a variety of scales and spaces (Bulkeley, 2005; Reed & Bruyneel, 2010; Gunningham, 2009). This corresponds to the new realm of governance on environmental issues, including non-state actors, builds on the notion that capabilities of multiple stakeholders are required, in order to address the facets and interdependencies of environmental issues and establish a scale for impact (Lemos & Agrawal, 2006). Subsequently, transnational networks arise, operating across a variety of scales and spaces simultaneously, and hereby increasing stakeholder dynamics (Bulkeley, 2005). Scholars found that these dynamics insinuate the establishment of networks (Möller & Rajala, 2007) and/or partnerships (Lemos & Agrawal, 2006). As argued by the Systems of Innovation approach, these networks induce technological transfer, stimulating sustainable development (Urmetzer & Pyka, 2019). In order to analyze the dynamics and collaboration, both networks and partnerships are introduced.

Networks for circularity

The network perspective presumes that stakeholders are embedded in a network wherein they are interconnected, providing opportunities and challenges on their actions (Möller & Rajala, 2007). Networks are characterized by being borderless and self-organizing, which is often incorporated in various definitions of networks. However, scholars recognize that networks can also be created with intention, which is called ‘strategic networks’ (Möller & Rajala, 2007). In accordance with ‘new governance,’ the networks of influence are horizontal as opposed to vertical, wherein competing stakeholders form coalitions (Reed & Bruyneel, 2010). Based on these networks, technological transfer and development can be fostered (Xie, Fang & Zeng, 2016), which is defined as innovation networks (Möller & Rajala, 2007). These innovative networks enhance sustainable development based on the Systems of Innovation approach.

Partnerships for circularity

Partnership for environmental governance is found amongst stakeholders in the public sector, private sector, and societal organizations (Lemos & Agrawal, 2006). Multi-sector partnerships arise when at least two of the entities public sector, private sector or/and societal organizations “enter into alliance to achieve a common practical purpose, pool core competencies, and share risks, responsibilities, resources, costs and benefits” (Gray & Stites, 2013, p. 17). These stakeholders fulfill distinctive needs in partnership, where the state has authority, the market exchanges basic human incentives, and the community holds time- and place-specific knowledge (Lemos & Agrawal, 2006). Hence, ‘new

19 governance’ is induced based on alignment between stakeholders resulting in public-private partnerships, co-management, or/and private-social partnerships, visualized in figure 2 (Lemos & Agrawal, 2006, p. 310). Partnership formation consists of multiple stages, i.e., selection, design and operations, and institutionalization (Austin & Seintanidi, 2012b). When partnerships are institutionalized, the structure, programs, and processes are accepted, and strategy and values are aligned. Some scholars argue that in reality, formation process stages overlap and interact (McCann, 1983). Austin & Seintanidi (2012b) argue that partnership selection forms a bridge in formation and implementation.

Figure 2 Mechanisms and strategies of environmental governance. Adapted from

“Environmental Governance” by Lemos, M.C. & Agrawal, A., 2006, p.310.

Partnerships between stakeholders to enhance CR are increasingly occurring and recognized as vital for the achievement of economic and social objectives (Gray & Stites, 2013; Austin & Seintanidi, 2012a; Reed, 2008). However, when analyzing partnerships between stakeholders, scholars tend to disagree on their purposes or aims behind this. The stakeholder approach recognizes the moral presuppositions in partnerships and its dynamics, stating that business and ethics cannot remain separate (Freeman, 1994; Hörisch et al., 2014; Austin & Seintanidi, 2012a). Stakeholder theory enlarges the scope of organizations in the sense that it takes on societal and environmental matters (Hörisch et al., 2014). The fit between sustainability management and stakeholder theory is recognized, as businesses operate to serve both societal and economic objectives (Hörisch et al., 2014). However, the separation thesis is widely adopted by scholars (Freeman, 1994), stating that private sector stakeholders ought to follow economic goals as opposed to social ones (Gunningham, 2009).

Increased value creation

Both networks and partnerships ought to create additional value. Whereas the literature on value creation through partnership is extensive (Austin & Seintaini, 2012a; Austin & Seintanidi, 2012b; Gray & Stites, 2013; AccountAbility, 2015), the literature on value creation in networks is acknowledged to be limited (Jaakkola & Hakanen, 2013). The different levels of value creation through partnerships are defined as (1) associational value, (2) transferred resource value, (3) interaction value, and (4) synergistic value

Public sector Private sector Societal organizations Public-Private partnership Private-social partnership Co-management

20 (Austin & Seintanidi, 2012b). The value creation through networks is defined as (1) exchange-, (2) co-produce- and (3) co-create value (Lusch, Vargo & Tanniru, 2010), which corresponds to the value creation levels of partnerships number 2, 3 and 4. The value creation is related to the motivation of stakeholders to engage, which differs per stakeholder. For the private sector, the associational value that follows from a engagement with a partner might play a role and can be associated with ‘greenwashing’ (Austin & Seintanidi, 2012a; Austin & Seintanidi, 2012b; Gray & Stites, 2013). Transferred value occurs when a benefit is derived from a resource of the partner or network. Interaction value creation is obtained from working together, for instance, through knowledge creation. Finally, synergistic value is created when stakeholders together co-create more value than separately.

When a social problem is closely linked to the organizational values and alignment is found with the partners, the potential to create value is greater (Austin & Seintanidi, 2012a; Urmetzer & Pyka, 2019). Coordination and alignment are thus essential. When well aligned, partnerships and networks are viewed as a means to value creation beneficial for all stakeholders involved. Beyond the organizational level, partnering can have social-, economic- or environmental value, resulting in positive outcomes for the environment and people external to organizations, e.g., limited pollution, (Austin & Seintanidi, 2012a) which would be the aim of environmental governance (Lemos & Agrawal, 2006). However, networks are criticized for lacking managerial coordination (Möller & Rajala, 2007), which inhibits value creation. Moreover, where strong ties with stakeholders induce value creation, open-ended, and weaker network ties inhibits value creation (Xie et al., 2016). It is therefore suggested that the coordination and management of a network are of high essence in ensuring value creation (Xie et al., 2016).

Stakeholder engagement stage

Building on the value creation levels, stage of stakeholder engagement can be determined. When deep relationships between stakeholders are obtained, intensive partnering will co-create increased value. It must be noted that these stages are studied for partnerships whilst being assumed to apply to networks. Whereas networks can be less institutionalized being non-hierarchical and self-coordinated (Möller & Rajala, 2007), partnerships are institutionalized (Gray & Stites, 2013), possibly changing perspectives for the stakeholders, which influences engagement. As studied in relation to partnerships, the first three stages are philanthropic, transactional, integrative (Gray & Stites, 2013), where after a transformational stage is added by Austin & Seintanidi (2012a). The first stage, philanthropic, is a transfer from a private sector entity to a societal organization. In transactional partnerships, where both stakeholders exchange resources, alignment can create synergistic value. The third stage reaching integrative partnership is characterized by a synchronic fit between organizations as vision and values are shared. The fourth stage, the transformational stage, goes even further in value creation reaching beyond the organizational level (Austin & Seintanidi, 2012a).

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3. Setting the scene: The Amsterdam case

In this chapter, the case study will be introduced. The selected case to be researched is Amsterdam. First, circular initiatives in Amsterdam are introduced. Second, the post-consumer textile waste streams within the locality will be elaborated. Third, the stakeholders to evoke circularity of clothing in Amsterdam are introduced, as subdivided into primary stakeholders, i.e., governmental stakeholders and clothing sector stakeholders, and secondary stakeholders, i.e., recyclers, knowledge institutes, societal organizations, and consumers.

Amsterdam is selected as a case for this research for various reasons. Amsterdam proclaims to be a frontrunner in enabling a Circular City (Circle Economy & Gemeente Amsterdam, 2019). In 2015, Amsterdam was the first to explore the CE within the city borders. Two years later, Amsterdam won the World Smart City Award for its CE program. With this award, the innovative character of the city’s sustainable urban development is recognized (Amsterdam Smart City, 2017). Furthermore, the innovative character of the city is embedded in their motto, i.e., ‘learning by doing’ (Gemeente Amsterdam, 2020a; Amsterdam Smart City, 2017). It is acknowledged that Amsterdam attracts clothing sector businesses as it accommodates a variety of influential brands and retailers, e.g., PVH, G-Star, and Scotch & Soda. Amsterdam is especially known for denim and is named the Denim capital of the world (Gemeente Amsterdam, 2019). The innovative character of the clothing sector in Amsterdam is recognized by the Dutch Circular Textile Valley (DCTV), being one of the four Dutch innovation hubs for sustainable clothing (Van Veldhoven – van der Meer, 2019; DCTV, n.d.). Moreover, the municipality has granted the initiative to enable a sustainable textiles and clothing movement in Amsterdam (Gemeente Amsterdam, 2019). More practically, the city participates in the Reflow project, wherein Amsterdam discovers the urban metabolism of textile waste streams in enabling a CE (Reflow, n.d.).

3.1

Enabling circularity of clothing in Amsterdam

In order to enable circularity of clothing, material loops should be closed, and waste should be handled according to the R-ladder. This brings challenges for clothing waste management. In the Netherlands, disposed clothing is currently seen as waste and to be handled by the municipality. In Amsterdam, 13.6kg textiles per capita were disposed of via the municipality’s waste disposal in 2019. Of this 13.6 kg per capita, 3.6kg ended up in the recycle bin (i.e. 26%) and 10kg ended up in municipal waste (i.e. 74%) (Gemeente Amsterdam, 2020b). The 10kg per capita, disposed in municipal waste, is burned, emitting CO2 into the atmosphere. The other 3.6kg per capita is handled by the recycler, for which the authority is currently given to Sympany. Where data on the urban scale is lacking, the Metropool Regio Amsterdam (MRA) elaborated on data for the year 2018 in the region, which is presented in figure 2 (De Bruin, Boels & Oldenhof, 2018, p.7). The region reused, repaired, and refurbished 54% of the collected textiles, of which 13% was handled in the Netherlands and the rest was sent abroad. Furthermore, the region remanufactured, repurposed, and recycled 29% of collected textiles. Besides

22

100%

that, 10% of collected textiles were burned, and 7% remained is unknown (De Bruin et al., 2018). As the reused, repaired, refurbished, remanufactured, repurposed, and recycled items are operationalized as circular, a total of 5.5% of disposed textiles was circular, 60.3% was burned, and the remaining 34.2% was unknown, as this percentage was sent to foreign countries (De Bruin et al., 2018).

Figure 3 Textile waste management in the MRA. Adapted from “Onderzoek naar de organisatie van de herkomst, inzameling

en verwerking van de grondstoffen Textiel, Plastic en Luiers” by De Bruin, P., Boels, M. & Oldenhof, R., 2018, p. 7.

In order to establish circularity, the post-consumer textile collection, procession and recycling have to be in line with the R-ladder. As the municipality is responsible for textile waste management, the municipality faces challenges in bringing circularity to a higher level. Moreover, governmental stakeholders have the ability to deploy regulations to enforce circular practices in the clothing industry. Besides that, the clothing sector stakeholders hold responsibility for the waste created throughout the supply chain, estimated to be 35% of all materials used (MUDjeans, 2019). Furthermore, clothing sector stakeholders have the ability to improve the design for circularity and implement new business models, e.g., lease- or subscription models, inducing circularity. As highlighted in chapter 2, enabling circularity requires collaboration between stakeholders. Therefore, the public- and private sector dynamics, i.e., governmental- and clothing sector stakeholder dynamics, are essential for the establishment of a circular clothing industry. The key stakeholders related to the subject of circularity in the clothing industry in Amsterdam, defined as the primary stakeholders in this research, are the governmental stakeholders, i.e., the EU, the Netherlands, and the municipality of Amsterdam, and clothing sector stakeholders, i.e., brands and retailers. Besides that, the influence of secondary stakeholder is recognized in enabling circularity, i.e., recyclers, knowledge institutes, societal organizations, and consumers. An overview of the stakeholders researched is presented in figure 4.

Post-consumer textiles Collected (35%) Reuse Repair Refurbish 54% Remanufacture Repurpose Recycle 29% Recover (Burning) 10% Unknown 7% Municipal waste (57%) Recover (Burning) Unknown (8%)

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3.2

Governmental stakeholders

The governmental stakeholders shape the institutional context of this research, i.e., the EU, the Netherlands, and the municipality of Amsterdam. The governmental stakeholders have all committed to becoming circular in 2050. The governmental stakeholders can deploy regulation, legislation, and incentivize through, e.g., awareness-creation and facilitating in partnerships, in order to evoke circularity in the clothing industry.

The European Union

In 2014, the initial circular package of the EU was released (European Parliament, 2014). As stated in the briefing, resource productivity should be increased, and waste should be seen as a resource. Regarding textiles, the EU can support circularity in the clothing industry through (1) innovation of policies, supporting research programs, tax deductions and technological development, (2) economic incentives, e.g., EPR and taxation to push circular demand, (3) regulation, e.g., establishing a traceability and transparency framework, (4) trade policies, e.g., enabling trade of recyclable materials and goods and (5) foster voluntary action, e.g., supporting covenants and stakeholder partnerships (Ecopreneur.eu, 2019). Two examples of EU support to enable a circular textile industry are the European Clothing Action Plan (ECAP) and legislation on post-consumer textile waste management. For instance, the EU

Primary stakeholders

Clothing

sector

stakeholders

Governmental

stakeholders

Circular clothing

in Amsterdam

24 Parliament voted to include textiles in the municipal waste recycling objective of 65% by 2030 (Watson, Aare, Trzepacz & Petersen, 2018).

The Netherlands

The Dutch government launched a program called ‘the Netherlands Circular in 2050’. The aim is to reduce the use of virgin materials by 50% in 2030 and to become 100% circular in 2050 (Rijksoverheid, 2016). The development of the transition agenda for consumption goods ensured guidelines for the clothing industry, where the R-ladder was presented, new business models were elaborated on and EPR for textiles was introduced. The Netherlands have challenged themselves to become a global frontrunner in sustainable clothing and textiles, committing themselves to support the establishment of a well-organized recycling system in order to enhance circularity (SER, 2017). Therefore, the Ministry of Infrastructure and Water management developed a policy program on circular clothing and textiles in force from 2020 to 2025 (Rijksoverheid, 2020). The targets for 2025 are, e.g., an average of 25% post-consumer recycled content in new clothing and textile products and a total of 30% of all resources, materials and products on the market will be recycled (if reuse in not possible) (Rijksoverheid, 2020). These targets are to stimulate and enhance clothing recycling. Hence, circularity in accordance with the R-ladder is stimulated.

The municipality of Amsterdam

In April 2020, Amsterdam released its strategy for achieving a CE on the urban scale, which of power from 2020 to 2025 (Gemeente Amsterdam, 2020a). Amsterdam developed a strategy to remain inside the planetary boundaries as defined by Röckstrom et al. (Circle Economy & Gemeente Amsterdam, 2019). It is recognized that a systems change needs to be invoked, necessitating a holistic approach (Circle Economy & Gemeente Amsterdam, 2019). Amsterdam aims to stop waste and spillage, keeping resource utility at its highest value. Their preliminary goal in 2030 is to half the amount of primary resources used, and the final goal is to achieve circularity in 2050 (Gemeente Amsterdam, 2020a). In striving towards circularity, the municipality has the authority to deploy a range of stimulants, i.e. (1) legislation, (2) governance, (3) regulation, (4) direct financial support, (5) fiscal frameworks, (6) economic frameworks, (7) knowledge, advice, and education, (8) collaboration platforms and infrastructure (Circle Economy & Gemeente Amsterdam, 2019).

Regarding the clothing industry, the municipality sets the objective to become a frontrunner in sustainable clothing and textiles (Gemeente Amsterdam, 2019). Consumption goods, e.g., clothing, is one of the three priority chains of the municipality. There are three ambitions established in the circular strategy, i.e. (1) the municipality takes an exemplary role and consumes less, (2) economic use of products and materials and (3) disposal and revaluation of products (Gemeente Amsterdam, 2020a). Moreover, there are five established action points within the municipality. First, products with a high turnover rate are discouraged, and sustainable products are encouraged. Second, upcycling is stimulated. Third, longevity and shared use of products is encouraged. Fourth, repair centers are expanded and

25 empowered. Fifth, standardized products to enhance repairing, recycling, and reusing are stimulated (Circle Economy & Gemeente Amsterdam, 2019). The municipality facilitates the realization of circularity in the clothing industry through transferring knowledge, induce partnerships, facilitate infrastructure, deploy regulation, and provide economic incentives (Circle Economy & Gemeente Amsterdam, 2019).

3.3

Clothing sector stakeholders

The clothing sector stakeholders are operationalized as those producers bringing the clothing items to the market in Amsterdam, i.e., brands and retailers. Brands are those businesses holding a “name, term, sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of the competition” (Wood, 2000, p.664). The company thus markets its name as a brand. Retail is defined as “any business that directs its marketing efforts towards satisfying the final consumer based upon the organization of selling goods and services as a means of distribution.” (Gilbert, 1999, p. 6). Thus whereas brands design the clothes, sometimes selling them in an own-brand retail store, retailers sell an assortment of clothing brands. Besides that, retailers can produce products under their private label, which is, for instance, the case for Zara (Inditex) and Hema (Gilbert, 1999). There is a divide to be made between SMEs and large enterprises. SMEs are defined as those enterprises with up to 250 employees, whereas large enterprises are those with over 250 employees (European Commission, n.d.). Regarding SMEs, ‘Het Faire Oosten’ and ‘De Geiten Wollen Winkel’ are retailers and ‘Kings of Indigo,’ and ‘Reblend’ are examples of brands located in Amsterdam, and actively communicating about sustainability. Regarding large enterprises, ‘Hema’ and ‘Zeeman’ are retailers, and ‘G-star’ and ‘PVH’ are (managing a portfolio of) brands accommodated in Amsterdam.

As elaborated, implementing a circular business model would be to adjust the whole supply chain from linear to circular, requiring major adjustments at the core of business. Even though clothing brands and retailers increasingly adopt policy on sustainability (Kozlowski et al., 2012), integration at the core of business is lacking (Kozlowski et al., 2012; De Brito et al., 2008). Whereas the SMEs are viewed as intrinsically motivated for sustainability, large enterprises are mostly viewed as the polluters in the industry (KplusV, 2020). Moreover, the large enterprises may experience issues with proclamations of ‘greenwashing’ while attempting to innovate (KplusV, 2020). It is underlined that specifically retailers hold power over the industry, due to economies of scale and growing sophistication through multi-channel operations, i.e., selling products through a variety of multi-channels and private labels (Gardetti & Torres, 2017; Gilbert, 1999; Geyskens, 2018). Therefore, retailers hold a strong relationship with manufacturers and are seen as the gatekeepers towards consumers (Gilbert, 1999; Retail Innovation Platform, 2020). This position offers retailers significant potential in driving the CE (Retail Innovation Platform, 2020). However, it is debated whether clothing retailers actively participate in transitioning towards circularity (Retail Innovation Platform, 2020).

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3.4

Secondary stakeholders

Besides the primary stakeholders, i.e., governmental- and clothing sector stakeholder, to the case study, there are secondary stakeholders influencing circularity in the clothing industry in Amsterdam. The secondary stakeholders studied are recyclers, knowledge institutes, societal organizations, and consumers.

Recyclers

Clothing and textile collection, processing, and recycling stakeholders (recyclers) are responsible for the waste management of post-consumer textile waste. Handling textile waste in accordance with the R-ladder of waste induces circularity, keeping value at the highest utility level. Therefore, circularity is inextricably connected to and dependent on the waste management system. In Amsterdam, Sympany currently has the authority to collect clothing, which is a non-profit organization. Sympany collects clothing in neighborhoods by placing recycle bins and via door to door collections. Sorters of post-consumer textile waste, such as Wieland Textiles, can intervene in the process of sorting the clothes based on color, material, or structure (Wieland Textiles, n.d.). Subsequently, there are multiple channels via which the clothing can be redistributed. Most part of the collected clothing in the MRA is reused, repaired, or refurbished, either in the Netherlands or abroad (De Bruin et al., 2018). The business model currently followed by recyclers is based on selling clothes to traders, which subsequently contributes to financing development projects in developing countries (Sympany, n.d.). Besides that, the 29% of the collected clothing and textiles was remanufactured, repurposed, or recycled within the MRA in 2018 (De Bruin et al., 2018). The recycling business model is mostly focused on downcycling. However, Sympany aims to stimulate upcycling, which induces circularity (Sympany, n.d.).

Nonetheless, it must be noted that Sympany yearly contributes €4 million to governmental income for placing the recycle bins (Kropman & van Leeuwen, 2016), which is possible due to the fact that the sales and recycling of collected clothes currently is a profitable business. However, the business model is criticized for being non-transparent and unsustainable. The transparency is an issue regarding the allocation of clothing, where intentions and destinations are non-transparent. Furthermore, the export of clothing conflicts with circular principles when circularity is not enforces by the receiving locality. In that case, exporting causes material loops to remain open-ended. Besides that, the current business model ought to fail in time, as the market for second-hand clothing in foreign countries is closing (CirkelWaarde et al., 2020), as the local clothing industry suffers when second-hand clothing is dumped for prices local suppliers cannot compete with (Hawley, 2006).

Knowledge institutes

Knowledge institutes, advisors and consultancy agencies (referred to as knowledge institutes) contribute by sharing knowledge on circularity and hereby encourage governmental- and clothing sector stakeholders for circularity. These organizations perform research that contributes to the knowledge on circularity in the clothing industry. The contribution in knowledge can be directed at various