Materials matter.
From forming the foundation of a garment to translating a brand’s ethos, there is no fashion without fabric. This is (arguably) why materials account for 92 percent of the industry’s total emissions—considering the extraction, processing and production of fibers—according to the World Resources Institute.
As the global landscape shifts—considering climate change, geopolitical dynamics disrupting supply chains, and perennially changing regulations—materials are starting to really matter.
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But brands are largely unprepared. More than 80 percent of companies who claim sustainable sourcing, per Boston Consulting Group (BCG) research, do not have all six material categories covered. Those categories are cotton, polyester, nylon, manmade cellulosic fibers (MMCFs), leather and wool.
Granted, the industry has embraced “preferred materials,” aka regenerative cotton and bottle-to-textile recycled polyester. But there are better options on the table, according to BCG.
The consulting firm teamed with Fashion for Good on an executive guide exploring those better options: next-generation materials.
The guide explores the challenges faced by the industry when scaling next-generation materials, focusing on demand, cost and capital levers, ultimately advocating for next-gen fibers’ ability to speed up the textile sector’s transition to smarter material solutions.
“Embracing these materials is becoming a business imperative, driven by tightening regulations in Europe and beyond, shifting consumer demands, and rapid technological advances,” the guide reads. “With demand for these materials projected to outpace supply by 2030, the need for collective industry action is today more urgent than ever.”
The 32-page report “serves as a blueprint” for industry players as they address the financial, technical and operational barriers to scaling—the first barrier—next-gen solutions.
To back up a bit, the industry is facing “mounting challenges” as it relates to conventional materials. This is because of climate change, as severe weather events hinder natural fibers from growing in capacities (and price points) needed. It’s also because of geopolitical turbulence; recent trade route disruptions alone are reason enough for diversified sourcing strategies, per the report. Tightening regulations aside, commodity competition is on the horizon. The European Union, for one, mandated plastic bottles must contain at least 30 percent recycled content by 2030, up from the previously 25 percent threshold.
“This creates a competitive landscape for PET resources, particularly as these materials are also in demand for recycling and reuse in other industries, such as textiles,” the guide reads. “Transitioning from PET bottles to alternative raw materials within the textile sector could help reduce the pressure on PET demand.”
Regardless, the partners said, next-gen materials can address essentially all these pain points. Which is relevant, considering there’s the potential for nearly 13 million tons of next-gen materials to hit the market by 2030—representing about 8 percent of the total fiber market.
“Although a vast improvement from today’s almost 1 percent of the total fiber market, this progress will be barely sufficient to meet the industry’s broader needs,” the guide reads. “Without a strong, coordinated effort, access to these materials will remain limited to some brands, benefiting only a small fraction of the market while leaving the majority struggling to pivot.”
The guide argues that this coordinated effort means “activating” three key levers: demand, which signals stabilized markets, attracts investments and builds out the foundation for scaling; cost, which can be engineered and optimized to unlock economics of scale; and capital, which would see the strategic financing aligned to each phase of adoption.
“Our 2030 materials target is designed to drive widespread adoption and reduce barriers for the company by setting targets for next-gen materials, including materials which are third-party preferred or certified,” Jeffrey Hogue, chief sustainability officer for Levi Strauss & Co., said. “We’re also working collectively with other brands to further drive demand and cost levers to bend the adoption curve. We do this because we know that high quality and durable materials are core to our brand and the future of our industry.”
This requires a synchronized effort across the value chain, per the report. The industry is “highly fragmented,” with many individual brands lacking the resources needed to drive meaningful change—all the more reason, according to the guide, for this synchronization.
“Our approach to next-gen materials focuses on strategic target setting, product development support, market making and investments,” said Javier Losada Montero, Inditex’s chief sustainability officer. “Through our collaboration with next-gen innovators, we have come to appreciate that scaling these solutions is an iterative process.”
BCG and Fashion for Good defined demand as essential to scaling—think offtake agreements, commercial agreements or letters of intent. These efforts “align cross-functional teams with measurable targets while offering brands strategic benefits.” Inditex’s $73 million offtake agreement with Ambercycle and H&M Group’s $600 million, seven-year agreement with Syre are strong examples of how demand fosters collaboration—and, in turn, capital.
“Strategic innovation, deep collaboration across the supply chain and transition financing are vital to achieving our goals,” said Dorte Rye Olsen, Bestseller’s head of sustainability. “Building on our centralized financing model for organic cotton, we are now exploring similar approaches to scale next-generation materials and establish a new competitive parity.”
Aggregating demand is also essential, per the guide, when considering optimization and consolidation.
“We view our support for the Fiber Club as vital to scale-up next-gen materials and tackle the systemic challenges facing our industry,” Pascal Brun, vice president of sustainability and D&I at Zalando, said. “Such partnerships bring us closer to achieving a more circular future for fashion.”
The second lever—cost—considers coordinating sourcing and access to low-cost inputs. Brands can (and should) work together to aggregate waste streams for recycled goods to collectively work toward more feedstocks for recycled materials.
“Building strong relationships with our supply chain partners is crucial for achieving lasting and efficient sustainability progress,” Sigrid Buehrle, senior vice president of sustainability and ESG for Adidas, said. “Our successful journey to convert nearly 100 percent of our polyester volume to recycled polyester—primarily from PET bottles—by 2024 demonstrates the power of such collaborations. This experience has also empowered us to pledge that by 2030, 10 percent of our total recycled polyester volume will transition from bottles to textile waste feedstock.”
The last lever—capital—considers the cost of scaling next-gen innovations. While this includes the basics—such as providing demand signals and cost support—brands can also speed up scaling through direct equity investments or corporate venture capital funds.
“Scaling next-gen materials requires a unified, strategic approach focused on three critical levers: demand, cost and capital,” per the report. “By bending the cost curve, the industry can unlock broader market access to next-gen materials and create a pathway to a sustainable and competitive future.”
