THE EFFECT OF TRADE-OFFS
CIRCULAR ECONOMY STRATEGIES AND THEIR HIDDEN ENVIRONMENTAL IMPACTS
As the world edges closer to its planetary boundaries, embracing a circular economy (CE) is widely recognised as a critical shift away from the wasteful, linear “take-make-dispose” model that has long driven the global textile industry. Circular economy strategies aim to close resource loops, minimise waste, and foster a system where products and materials are reused, repaired, and recycled for as long as possible. With powerful policy frameworks like the European Green Deal, the EU Waste Framework Directive (WFD), and guidance from the Science Based Targets initiative (SBTi) setting increasingly ambitious targets, circularity now stands at the forefront of sustainable development and climate action (Ellen MacArthur Foundation, 2021).
Yet, as highlighted by Anastasia Katzou’s recent presentation during a TexScale project webinar, the road to circularity is more nuanced than it first appears. While many circular economy practices offer substantial environmental benefits, they can sometimes produce unexpected negative impacts—so-called environmental trade-offs (Katzou 2024; Bocken et al., 2016). For example, the ongoing shift from traditional animal leather to innovative vegan alternatives, such as mushroom-based leather, often results in lower greenhouse gas emissions and avoids the environmental harm of livestock farming. However, these newer materials can be much more water-intensive, increasing the risk of water resource depletion (Jones et al., 2020). Thus, a well-meaning switch in materials can simply shift the burden from one environmental hotspot to another.
Do you want to read more about the upcoming EU laws and regulations? Read our article about key updates for SMEs in 2025.
BALANCING THE PILLARS OF SUSTAINABILITY
To understand the complexity of these trade-offs within circular fashion and textile systems, it is essential to examine their impacts across the three pillars of sustainability: environmental, social, and economic. The dominant conversation around circularity often prioritises environmental outcomes, particularly greenhouse gas reduction. However, the textile sector, frequently spotlighted in current EU policy and scientific research, demonstrates that the story is far more complex. In addition to their climate impacts, textile products are responsible for substantial land use, intensive water consumption, high material intensity, hazardous chemical processing, and environmental contamination (UNEP, 2020; Sandin & Peters, 2018).
Trade-offs occur when an improvement in one area inadvertently creates harm in another. For instance, transitioning to bio-based or recycled materials may reduce carbon footprints, yet often increase water or land use, or shift social risks onto producer communities (Roos et al., 2016; Textiles 2030, 2023). As Katzou notes, a holistic approach, ‘balancing all conflicts among the three dimensions’, is key to truly sustainable, long-lasting change across the textile value chain.
THE RIPPLE EFFECTS OF CIRCULAR STRATEGIES
The Science Based Targets Network (SBTN) takes a comprehensive approach to environmental impacts, broadening the framework to include categories such as climate, land, freshwater, oceans, and biodiversity. Circular strategies in the textile and manufacturing sectors—such as product reuse, fibre recycling, or innovative material sourcing—can variably affect these categories, sometimes with unintended consequences (SBTN, 2023).
For example, cotton is frequently celebrated as a ‘natural’ alternative to polyester, but its cultivation is extraordinarily water-intensive and can drive biodiversity loss and soil degradation (Chapagain et al., 2006; WWF, 2021). In contrast, polyester fibres, while derived from fossil fuels and presenting long-term pollution risks through microplastics and non-biodegradability, use less water and land per kilogram produced (Shen et al., 2020). Depending on the circular strategy employed, be it recycling, reuse, re-manufacture, or upcycling, trade-offs may manifest as increased water demand, hazardous chemical use, greater waste generation, or impacts on worker welfare (Sandin et al., 2019).
Even renewable or “nontoxic” materials are not without risk. Certain bioplastics, for example, can lead to resource depletion and even worsen ozone layer depletion through their extraction and processing (Yates & Barlow, 2013). Similarly, repair and refurbishment extend product life, but if these practices require significant water or energy, or rely on complex global supply chains, the environmental savings may be less than anticipated (Faraca et al., 2019).
PRACTICAL RECOMMENDATIONS FOR BRANDS
How can brands and manufacturers manage and minimise these hidden environmental trade-offs in their circular economy efforts?
Map your supply chain: Gain visibility of the source of your raw materials and understand resource intensity at every production stage (Katzou, 2024).
Conduct robust Life Cycle Assessments (LCA): Analyse impacts beyond carbon, including water use, land impacts, hazardous substances, and ecological consequences.
Leverage practical tools: Katzou developed the “Environmental Trade-off Assistant,” an Excel-based decision tool that allows businesses to evaluate potential trade-offs across environmental categories when adopting new circular strategies.
Engage stakeholders: Dialogue with suppliers, downstream partners, and even consumers helps identify and resolve unseen impacts, especially important for SMEs adjusting to shifting EU regulations.
Monitor Legislation: Stay up to date with new EU requirements—such as mandatory textile waste collection (WFD), Extended Producer Responsibility (EPR), Eco-design regulations, and the Green Claims Directive. Incorporate these trends and anticipated policies into corporate strategies to ensure both compliance and competitive advantage (European Parliament, 2024; McKinsey, 2022).
Circular economy strategies are essential for reducing the textile industry’s environmental footprint and moving towards sustainable prosperity. However, as Katzou’s research and real-world case studies make clear, circularity is no magic bullet. Trade-offs, across carbon, water, land, biodiversity, economics, and society, are inherent and must be actively managed.
With the right tools, data-driven insight, and a holistic, balanced approach to sustainability, textile brands can limit negative impacts and unlock the true potential of a circular transition. By anticipating and addressing environmental trade-offs, industry leaders can chart a more sustainable, future-proof path, crucial for remaining competitive within an evolving legislative and consumer landscape.
// ROOS MULDER - DEVELOPMENT ENGINEER
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