Environment sustainability

Circular-Economy Pact Signed by Leading Fashion Brands to Cut Textile Waste

Leading Fashion Houses Seal Binding Circular-Economy Pact to Halve Textile Waste by 2032

Chanel, Kering, Inditex and 28 other companies commit US $1.2 billion to scale fiber-to-fiber recycling, regenerative cotton and digital product passports in the sector’s most comprehensive waste-reduction accord.

Global fashion giants responsible for more than 32 % of worldwide garment sales formally signed the Textile Circularity Accord (TCA) today, pledging to cut post-consumer textile waste at least 50 % below 2022 levels within seven years and to achieve net-zero fashion waste by 2040.

The 31 signatories—ranging from luxury conglomerates Kering and Chanel to high-street heavyweights Inditex, H&M Group and Fast Retailing—will unlock a joint US $1.2 billion catalytic fund, managed by the Ellen MacArthur Foundation, to commercialize fiber-to-fiber recycling, scale regenerative agriculture and roll out digital product passports that track garments from raw fiber to resale.

“Waste is a design flaw,” said François-Henri Pinault, Chairman and CEO of Kering, who spearheaded the negotiations. “For the first time competitors have agreed on common collection, sorting and recycling specifications that will turn yesterday’s T-shirt into tomorrow’s luxury jacket—at planetary scale.”

The accord arrives as the industry confronts mounting evidence of its environmental footprint: every second the equivalent of one garbage truck of textiles is landfilled or burned, according to the UN Environment Programme, while less than 1 % of clothing is currently recycled into new garments. If delivered, TCA targets would prevent an estimated 18 million tonnes of fabric from becoming waste by 2032—equivalent to the annual CO₂ emissions of Germany.

Recent pilot data from the Fashion Pact’s Unlock Programme shows that switching to regenerative cotton alone can slash embedded emissions by 30 % and water use by 20 % compared with conventional farming, findings that underpinned the pact’s science-based waste ceiling.

Under the agreement, brands must:

source at least 50 % of polyester and cotton through certified circular or regenerative streams by 2028;
design all new collections for durability, repair and disassembly starting Fall/Winter 2026;
finance extended-producer-responsibility (EPR) schemes that fund nationwide take-back systems in every market where they operate.

A third-party auditor, SGS, will verify annual progress; failure to meet interim milestones will trigger mandatory financial penalties earmarked for further recycling infrastructure.

“Our customers don’t see competitors—they see one industry that needs to clean up,” said Hélène Valade, Environmental Development Director at Chanel. “The TCA creates a level playing field where circularity is the default, not a marketing edge.”

Market analysts at McKinsey & Company estimate the circular fashion economy could represent a US $700 billion revenue pool by 2030, driven by resale, rental, repair and recycling. The pact’s standardization push is expected to lower logistics costs for recyclers by up to 25 %, accelerating commercial viability.

About the Textile Circularity Accord

The TCA is a binding, CEO-level agreement convened by the Fashion Pact, the Ellen MacArthur Foundation and the UN Climate Change Secretariat’s Fashion for Global Climate Action initiative. Membership is open to all companies with gross annual apparel/footwear revenue above US $1 billion that commit to third-party verified waste-reduction targets.