For fashion executives, the circular economy has often lived in a familiar box: sustainability strategy, ESG reporting, maybe a pilot resale program or a recycled materials target. Today, that framing is outdated. For companies willing to embrace it, circularity can provide direct and indirect value such as resource security, reduced volatility and business models that forge closer relationships with end consumers.
Through this lens, it’s clear that circularity is quickly becoming less about impact messaging and more about business resilience. On a recent Ellen MacArthur Foundation podcast episode, Julia Binder and Manuel Braun, co-authors of the book “The Circular Business Revolution,” shared insights into what’s at stake, how circularity addresses these issues and how companies that adopt this mindset are already pulling ahead of those that don’t.
Their message: the global economy is changing faster than most companies’ supply chains were built to handle.
“What we’re witnessing right now is that these disruptions are less and less episodic. They become structural,” said Binder, who serves as a Professor of Business Transformation & Director of the Center for Sustainable and Inclusive Business at the IMD Business School.
For fashion, that matters. The industry has spent decades optimizing for a linear, globalized model: source where costs are lowest, manufacture at scale, ship across continents, sell through quickly and move on to the next season. That model still powers much of the market, but its weaknesses are becoming harder to ignore.
Trade tensions, tariffs, war, raw material volatility, climate risk and resource constraints are no longer occasional interruptions. They are part of the operating environment.
How Priorities Have Shifted
Binder said the big shift is that trust, “the biggest currency in a globalized economy,” is breaking down in real time. When companies can no longer rely on open access to materials, stable trade routes or predictable partners, they need to rethink how and where value is created.
That is where circularity enters the boardroom.
“Circularity is not a sustainability niche conversation anymore,” Binder said. “It’s a key to a resilient and strategic business that wants to continue producing and selling their products.”
Braun, who serves as managing director of circular business solutions company Onsight, put it another way: economic power is moving back to the physical world.
After years of software-led growth, he said, the scarce assets now are “hardware, infrastructure, energy supply, energy systems, materials, manufacturing capacity.” For fashion, that translates directly into fabric availability, fiber security, logistics access, repair networks, resale systems and the ability to recover value from products already in the market.
In other words, resources are no longer just inputs. They are strategic assets.
But the current model, built on highly fragmented global supply chains, makes circularity difficult to execute. If a company has tens of thousands of suppliers spread across the world, closing material loops becomes almost impossible.
“We need to have smaller supply chains, less fragmented,” Binder said. “In a completely globalized, fragmented economy, the potential of circularity is very difficult to realize because then it’s not traceable, not trackable.”
That point should resonate with apparel leaders working through traceability, compliance and product data requirements. Circularity depends on visibility. Without knowing where materials come from, where products go and how they can be recovered, brands cannot turn circular models into scalable business systems.
Building Better, Together
Braun sees partnership as one of the most important opportunities. Circularity, he said, is not something most companies can execute alone.
“When it comes to material collection, recovery and all of this, that’s often something where you cannot do it all by yourself,” he said. “You need to find smart ways to partner up as an industry.”
For fashion, resale, repair, take-back, fiber-to-fiber recycling and product authentication all require cooperation across brands, recyclers, logistics providers, technology platforms and suppliers.
The companies that win, Braun argued, will be those that build ecosystems—not just products.
He pointed to Hilti, the tool manufacturer, as an outside-in example. The company shifted from selling power tools to running fleets of tools as a service. The lesson for fashion is not that every brand should follow suit, but that circularity can create closer, longer-term customer relationships.
Binder made a similar point. Too often, she said, sustainable innovation has asked consumers to accept a trade-off: pay more, get less performance or accept inconvenience in exchange for a lower-impact product.
The more advanced companies are moving beyond that.
“What we’re seeing with the more advanced companies now in circularity is that they actually use it to create better-performing products,” Binder said.
That idea is especially relevant for fashion executives trying to make circularity commercially meaningful. Resale can become a loyalty engine. Repair can extend customer relationships. Rental or subscription models can generate recurring revenue. Refurbishment can open new price points and new customer segments.
Braun said companies need to look beyond short-term margin comparisons and consider broader value drivers.
“Yes, there are direct value pools like revenue drivers, cost-saving opportunities,” he said. “But it’s also very critical to look at indirect value drivers.”
Those indirect drivers include loyalty, supply chain resilience, customer retention, risk reduction and reduced exposure to volatile virgin material markets.
He gave the example of a Nordic packaging company that acquired a recycler to secure part of its raw material supply. The company did not do this only for sustainability reasons. It wanted more control over input costs and less exposure to market volatility, which pays off in a time when disruption like the closure of the Strait of Hormuz pushes virgin input prices higher than recycled.
For fashion, the same logic could apply to recycled cotton, polyester, nylon, wool, leather alternatives or resale inventory. Circularity can become a hedge against uncertainty.
The Business Case Is Bigger Than Margin
That is why Binder believes executives need to move the conversation from “impact case” to “business case.”
The traditional circularity language—reduce, reuse, recycle—still matters, she said. But it often feels disconnected from what business leaders worry about each day.
Instead, Binder frames circularity through two lenses: “license to operate” and “license to innovate.”
The first is about managing risk: regulation, supply chain disruption, resource access and compliance. The second is about creating new value: better products, deeper customer relationships, diversified revenue streams and stronger competitive positioning.
For fashion companies, both are becoming urgent. Regulations are shifting. Supply chain risks are rising. Consumers are more comfortable with resale and repair. At the same time, margin pressure remains intense.
Braun said the CFO conversation has to start earlier.
“Let’s talk about numbers earlier,” he said. “It always helps to understand the unit economics early on.”
That means circular projects cannot sit in the brand purpose deck. They need financial modeling, operational ownership and cross-functional buy-in from design, sourcing, finance, logistics and merchandising.
Design is especially important. Braun noted that many circular initiatives struggle because product decisions are locked before circular requirements are considered. Once materials, trims or construction choices are finalized, repairability, recyclability and recovery become much harder.
“There’s a long way to go to really scale circular by design,” he said.
Scaling is the core challenge. Binder said circularity does not scale like software, where a prototype can simply be expanded. Circular models require upstream and downstream coordination, infrastructure, partners and long-term commitments.
“We need to think much more in ecosystems,” she said. “It’s not just me and my little company or even my big multinational company.”
Her advice for executives is practical: start by mapping dependencies and opportunities. Which materials are most vulnerable? Which supply chains are most exposed? Where could circular models reduce risk or create advantage?
“If you don’t know where you have the biggest vulnerabilities, if you don’t know where you have the biggest dependencies, if you don’t know where you have maybe hidden risks, you can also not capture the value from doing it differently,” Binder said.
Then elevate the conversation. Circularity cannot be left only to sustainability teams. It needs the CFO, supply chain leaders, product teams and commercial leadership at the table.
Braun’s recommendation was equally clear: take a long-term view.
“For many material flows, it’s not a technical challenge,” he said. “We can recover that material. We know how to refurbish products. We know how to reuse them. We have good engineers.”
The harder part is commitment: offtake agreements, investment, partnerships and the patience to build systems that can scale.
For fashion executives, the message is direct. Circularity is no longer just about doing less harm. It is becoming a way to secure materials, manage volatility, build customer loyalty and protect future growth.
The brands that understand this shift early will not treat circularity as a side project. They will treat it as business infrastructure.
