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Commercially-Viable Circular Innovation is Hard—But Not Impossible

How the H&M Foundation is helping to unlock “systems-level change” with compelling narratives, clear value propositions and high impact.
sustainability

Photo credit: Karina Tess // unsplash

Key Insights

  • With textile circularity almost nonexistent, innovation is focused on next-gen fibers, low-energy processes, smarter design and circular business models that extend product lifecycles

  • Early winners of the H&M Foundation’s Global Change Award like Ambercycle and EON gained success by building strong networks, pilot partnerships and systems-level thinking

  • To speed adoption, the industry must de-risk commercialization, by funding pilots, embedding solutions in procurement and amplifying clear climate narratives that resonate with decision-makers

The H&M Foundation’s Global Change Award (GCA) spotlights groundbreaking innovations poised to transform the textile and fashion industry. Annually, this initiative champions early-stage ideas aimed at tackling the industry’s most pressing challenges, from cutting emissions and energy consumption to advancing circularity and sustainable materials.

In 2025, ten winners were selected for their innovations. All were united in a shared mission: decarbonizing the textile and fashion landscape while promoting a just transition for people and communities. The award focuses on four key areas of innovation: responsible production, sustainable materials and processes, mindful consumption and wildcard solutions.

This year’s winners include DecoRpet, a technology that employs a low-temperature process to remove almost all dyes and impurities from polyester, yielding 99.9 percent pure recycled material. The result? High-quality recycling with a 30 percent reduction in energy consumption.

PulpaTronics was awarded for its reusable RFID tags made from carbon-based materials, which eliminate the need for metal and microchips, reducing e-waste without compromising functionality. These tags can be recycled up to seven times, lowering both environmental and economic costs while enabling circular logistics systems.

NYLOOP by CircularFabrics made the cut by extracting high-quality nylon from blended textile waste without breaking down fibers. This innovation eliminates the need for virgin nylon and preserves fiber performance. Its scalable and portable technology could make circular nylon production a global reality.

Each of the winners received a €200,000 grant and access to the exclusive GCA Changemaker Program, which is delivered in partnership with Accenture and KTH Royal Institute of Technology. The yearlong initiative provides participants with innovation coaching, systems thinking tools and leadership development to accelerate their path toward real-world implementation.

“This year’s winners are not just solving problems; they’re rethinking the systems behind them. Their ideas reflect the kind of early-stage innovation we need to unlock system-level change, and remind us that transformation starts with brave, often uncertain steps,” said Annie Lindmark, program director for innovation at the H&M Foundation. Here, Lindmark discusses the importance of the program and what is needed to bring circularity to scale.

HGI: Sustainability — even circularity — spans a broad spectrum of processes and materials. Where is the innovation focused today?

Annie Lindmark: The Circularity Gap Report 2025 shows that only 6.9 percent of global materials are secondary, and textile circularity is almost non-existent at 0.3 percent, highlighting how limited recycled inputs are today. As a result, innovation is currently focused where it can have the most impact: developing powerful data tools to measure and improve circularity and redesigning the fashion supply chain so garments are designed to last, easy to reuse and ready to be recycled from the outset.

Annie Lindmark H&M
Annie Lindmark, H&M Foundation

HGI: What areas of fashion circularity, in particular, are in need of the most innovation?

A.L.: Innovation is urgently needed across the spectrum. We need to reimagine the fibers we rely on and the methods behind them — from low-energy materials and next-gen fibers to improved dyeing, finishing and manufacturing processes. We also need to rethink how things are made — from smarter design and prediction modelling to energy efficiency, on-demand production and zero-waste systems. As well as changing how we use and value fashion — with ideas that extend garment lifecycles, shift how we think about demand, or enable circular business models and recycling.

HGI: In the years since the foundation has hosted the Global Change Award, what are some standout examples of innovations that have scaled and/or gained traction?

A.L.: Some of our earliest winners are now working with global brands in pilot projects or scale-up collaborations. For instance, Ambercycle’s molecular regeneration technology is advancing towards industrial scale with support from Inditex and Zalando. EON’s digital ID technology has been adopted in traceability pilots by luxury brands such as Balenciaga, Chloe and Mulberry. These examples remind us that progress in deep tech and systems change take time, but our philanthropic role allows us to place early bets where commercial capital might hesitate.

[To read program alumni stories, click here.]

HGI: What were some of the key factors or strategies that enabled them to do so?

A.L.: First, it’s important to define what we mean by “success.” For us, it’s progress on three fronts: technology readiness, emissions impact and systems influence. We track concrete milestones, such as securing follow-on investment, completing pilot trials or forming strategic partnerships but we also look beyond the numbers. We ask: Is their work influencing policy? Shifting mindsets? Creating community benefit? Our main goal is systemic return. 

The winners who have reached these milestones tend to share a few common strategies: they understand how the system works, they early on managed to build strong connections with the right actors and networks, and they grow their businesses in ways that are both commercially viable and genuinely sustainable.

“Most high-impact innovations aren’t plug-and-play, they require shifts in supply chain logistics, regulation or even consumer expectations.”

—Annie Lindmark, H&M Foundation

HGI: There doesn’t seem to be any lack of good ideas out there. But are these innovations built to work within the current supply chain infrastructure or is there often a disconnect between the idea and reality?

A.L.: Most high-impact innovations aren’t plug-and-play, they require shifts in supply chain logistics, regulation or even consumer expectations. That’s why we work beyond funding alone: we support narrative building, ecosystem mapping and collaborations with manufacturers, brands and other industry actors to create conditions where these solutions can thrive.

HGI: What are some of the biggest hurdles to adoption?

A.L.: While the challenges vary case by case, there are some common hurdles we see again and again:

  • Challenges in securing the right type of investment, particularly patient, risk-tolerant capital that can support early-stage, high-impact innovations until they reach market readiness.
  • Limited connection to the textile and fashion industry, which can make it hard to navigate its complexity.
  • Lack of a clear fit in the bigger picture; innovators may not fully understand how their solution integrates into existing systems.
  • Difficulty finding the right partnerships and collaborations to move from concept to scale.

And the story matters. A clear narrative is critical, not just about vision, but about emissions reductions, system fit and economic viability. Without that, it’s hard to cut through the noise and win over stakeholders.

HGI: The commercialization phase is very challenging and it seems like there are few brands and retailers willing or able to go down that road with a new innovation. How can the industry support bringing these ideas to market?

A.L.: You’re right, commercialization is one of the toughest stages, and few actors are willing to take the risk of being first. That’s why we work closely with our Global Change Award winners to give them the skills, credibility and network they need to get that crucial first foot in the door.

We believe in the power of storytelling, crafting a compelling climate narrative and value proposition for each innovation that speaks not only to sustainability teams, but also to decision-makers in design, sourcing and finance.

From there, the priority is curating a network of early adopters — brands, suppliers and policymakers willing to pilot, test and showcase innovations in real-world conditions. When these pioneers share their results openly, it lowers perceived risk and speeds up broader adoption. Ultimately, I believe the industry can help much more by de-risking adoption: offering pilot funding, embedding new solutions into procurement pipelines and celebrating first movers so that trying something new becomes a competitive advantage rather than a liability.

HGI: As the foundation talks to the investment community, what are they looking for? Do they have an appetite to invest in innovating in any aspects of the fashion supply chain? If yes, which areas in particular?

A.L.: We work closely with the investment community, particularly those focused on impact, climate solutions and early-stage innovation. We see that there is strong and growing interest in funding innovations across the entire fashion supply chain, from next-generation materials and low-impact manufacturing to advanced recycling, traceability technologies and new business models that extend product life. Investors are increasingly looking for solutions that deliver both measurable climate impact and scalable commercial potential.

Through the Global Change Award, we’re not just funding ideas — we’re backing the people behind them. Because real change in fashion isn’t just about what we wear, it’s about how we work together to build a fairer, net-zero future.

Want to add your voice to the conversation? Email caletha@hgi.io with story tips or insights.

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