CLIMATE ACTION WEEK: WRAP believes we need a standardized way to measure circular business models.

To reach their greenhouse gas emissions reduction targets and to transform their businesses, companies are hoping they can increasingly replace revenues from their current business models with revenues from circular business models – that is repair, resale or subscription services. The theory is that these models are better for the climate because they extend the life of garments and replace the need for virgin production. Still, while many companies have experimented with these new models, most report that they are still a minor part of their revenue stream and business strategy. This is because companies implementing these models face a number of challenges, including weak financial incentives and underoptimised infrastructure for reverse logistics, and a lack of consensus on how to measure their climate benefits. Michael invited Merryn Haines-Gadd, Circular Business Model expert from WRAP, a global environmental action NGO, to share WRAP’s learnings and insights from working with UK based companies, and to explain in particular why we need a standardized way to measure whether circular business models offset or displace the purchase of new or virgin clothing.

“Circular business models need to deliver on impact, offer a great customer experience, and be financially viable. We can’t scale them if they don’t work on all three levels.”  

“Displacement is key—are circular models actually replacing new purchases? For secondhand sales, we found about 64.6% of items displace buying new.”  

For more information about this podcast and our guest expert, or to listen to other Climate Action Week 2025 podcast conversations, please visit: https://sustainablefashionacademy.org/stica/climate-action-week-2025/

Learn more about the topic in this webinar from Climate Action Week 2024: https://sustainablefashionacademy.org/stica/climate-action-week-2024/session-404/