The Search for a Business Case for Sustainability Continues

Sustainability is good business, advocates like to say. Yet, recent events like this week’s bankruptcy filing of Renewcell, a leading textile-to-textile recycling company, open the door to some reconsideration.

Two of the big movements that have consistently drawn a lot of attention and funding in the apparel space have been addressing textile-to-textile recycling solutions and innovations for new materials.

In the materials space, new materials like biofabricated spider silk or mushroom-based leather alternatives and bio-engineered beauty ingredients have attracted billions of dollars. Similarly, if the number of press releases for new bio-based materials were a good proxy for the progress of sustainable fashion, the industry would pass with flying colors. And as I had written in a previous blog post, there are reasons to push forward on these innovations: Fashion will need lower-impact materials to meet growing demands from consumers, regulators and investors to cut the industry’s environmental impact.

I feel a spark of excitement whenever I learn about a new creative and courageous innovator and investor leading efforts to develop alternatives. Yet, attempts to scale far-out concepts into market-ready solutions have struggled. Just like press releases for new ideas had been on the rise for the past decade, we now see increasing articles about pauses in investments and bankruptcy filings in the space.

Take Pangaia, one of the hottest start-ups during the pandemic that spun out the material innovation incubator Future Tech Labs in 2019. They saw explosive growth and were backed by the likes of Leonardo DiCaprio. Since then, the company has struggled to sustain momentum – and is still waiting to prove out its broader vision to sell climate-friendly material innovations to the rest of the apparel industry. You can get more background on their $50M reported net loss last year here.

Swedish textile recycler Renewcell files for bankruptcy

In the textile-to-textile recycling space, Renwecell long seemed like the most promising one to reach genuine commercial scale. They had financial backing from the H&M Group and BNP Paribas, as well as brand partners including Inditex, Levi’s and Ganni. Now, the company is filing for bankruptcy. What happened? In essence, they ran into a problem from both the supply and demand side.

On the supply side, their operations relied on a consistent influx of feedstock – used textiles – to recycle into new fiber. These needed to come in predictable and high-enough volumes at an affordable price to produce cost-competitive outputs for brands. Further, these solutions require a specific waste input (in the case of Renewcell at least 95% cotton). 

On the demand side, it became even more complex: Renewcell’s output is not a final fabric, but only a recycled ‘Circulose’ dissolving pulp, resembling pieces of cardboard. These pieces would then be shipped from their factory in Sweden to textile spinners (typically) in Asia, to be rehydrated and released and mixed with other fibers. The combined fibers would then be spun into yarns, before being sent to textile mills to be turned into fabrics. 

The vast majority of apparel brands are not typically involved in all these steps, but rely on their manufacturer to source the fabrics on their behalf. That is, for the model to work, you needed brands to get very deeply involved in their supply chain across multiple continents – and then commit far in advance to using this (more expensive) ingredient. What is more, these commitments had widespread impacts on their suppliers, who operate within a traditional system focused on economies of scale and low costs and were not used to the new input material. 

What are our two cents about it at Svaki Dan?

Our longer term vision relies on progress in the textile-to-textile recycling space, as we are hoping to scale our Swap model. For now, progress in the space remains slower than we’d been hoping – and we continue to rely on mechanical recycling solutions. We are therefore closely tracking the progress of some of the most promising players that remain in the field, with Circ and Infinited Fiber.

In the meantime, our immediate focus remains on selecting the most sustainable materials to achieve superior comfort in our products. This holds for both the 100% American-grown Supima cotton for our T-shirts, as well as Tencel Lyocell for our underwear. You can learn more about both of these on our website on the respective product pages and our materials page.

Founder and CEO, Svaki Dan

Credit: Images by Alexander Donka


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