Economic Impacts of Resource Efficient Business Models in Textiles

1st March 2013

This report analyses take-back for re-sale schemesleasing and refurbishment and extended product lifetimes using four example products, across a number of sectors.

Key findings
This study indicates a large majority (68%) have an interest in owning pre-owned clothing but further efforts would be required to change behaviour
Profits could exceed £500 million for the basic model and circa £650 million for the enhanced durability scenario.

Overview

Overview

This report analyses a selection of Resource Efficient Business Models (REBMs) in four key product sectors (white goods, clothing, electronics and furniture), to assess their potential impacts on the UK economy. The formulation and macro-economic assessment of these models naturally involves making assumptions which are clearly explained in the report. Radical examples were purposefully modelled to demonstrate the “maximum impact” scenario. This is to help policymakers and delivery bodies understand the consequences of these models becoming successful.

Methodology

In broad terms, the project has operated a two-phase methodology, with Ricardo-AEA leading the first phase, and Cambridge Econometrics leading the second phase.

Phase 1

The first phase involved the identification and analysis of relevant REBMs to take forward to the second phase of the project.

Phase 2

The second phase of the project involved running the detailed scenarios (developed during phase one) in the MDM-E3 model to investigate the potential macroeconomic consequences to the UK economy of greater prevalence of resource efficient business models. The Cambridge Multisectoral Dynamic Model, EnergyEnvironment-Economy (MDM-E3) is a computer model of the UK economy maintained by CE as a tool for forecasting and scenario analysis.

Results

Results

The conclusions for the model described in this report show that clothing take-back could offer significant profits for retailers:

  • Profits (taken account of logistics, laundry, cost of repairs and staff costs) could exceed £500 million for the basic model and circa £650 million for the enhanced durability scenario.
  • Profits that are not gained through displacing the sale of new clothing range from circa £138 million for the basic clothing take-back scheme and circa £149 million for the enhanced durability scenario. Therefore, the clothing take-scheme should result in greater profits overall for retailers.
  • Compared to the other REBMs, clothing take-back schemes generate slightly higher macroeconomic impacts for the UK economy.
  • Clothing take-back has the potential to generate significant profits for retailers, increased tonnages of good quality clothing for reuse by charities in the UK and help reduce the UK’s clothing footprint by extending the useful life of clothing

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Documents

Documents

Want to find out more? You can find further information on resource efficient business models using the following links:

Resource efficient business models in Sustainable Textiles >>
REBus website >>
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Where next?

Want to know more about resource efficient business models in sustainable electricals? Take a look at our reports, guides, tools and case studies for further information:

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