Morgan Stanley
  • At Scale Podcast
  • May 21, 2021

From Trendy to Trash—and Back Again

Hosted by Audrey Choi

Transcript

Annie Gullingsrud: At the time that we designed this material, we weren't thinking about the planet. We didn't think that we had a future to uphold.

We were thinking about design and something being the right solution for what was on the table, a cost effective solution, and for that we made a sacrifice.

Audrey Choi: That design for the future - that was plastic - synthetic materials. Nylon, polyester, and spandex. They are durable and cheap. And they are everywhere…in the jackets we wear. And the socks we slip on our feet. It’s even in the “all-cotton” t-shirt.

Love that your jeans stretch with you? You can thank plastic.

You’re listening to At Scale - A Sustainability podcast from Morgan Stanley.

I’m Audrey Choi, chief sustainability officer and chief marketing officer at Morgan Stanley. On this season of at scale, we’re exploring plastic waste - the surprising places we find it, the innovators working to solve the problem, and what it takes to make real change across communities, industries, and around the globe.

And today, we’re looking in your closet.

Molly Hemstreet: You know, it's amazing when you look around you, almost everything is sewn.

Audrey: Molly Hemstreet is deep in the textile world. She’s the founder of Opportunity Threads, the largest worker-owned, cut-and-sew facility in the united states. Her North Carolina plant makes clothing, quilts and bags.

Molly: You think about the chair you're sitting on. You think about just the furniture in your house, the clothes on your back, the things that carry your items around you. Look at what's in your kitchen and there's so much sewing around. So things that are non-apparel items, but they need and require sewing.

Audrey: Textile manufacturing in the U.S. is a 70-billion dollar industry. And Molly’s facility is surrounded by lots of others churning out more garments and furniture.

Molly: One day I remember I was standing in our plant kind of beating my head against the wall about what am I going to do with all this textile waste.

Audrey: The textile waste Molly’s talking about were the mounds of fabric scraps on the floor of her facility.

Molly: Another producer in the community was also in our plant that day. And he looked at me, he said, you know what, we have the exact same problem. So I think that's where we realized, aha, you know a lot of producers have this problem of textile waste. And so we started to put our minds together and said, you know, we really need to grow a solution here in our community for our textile waste.

Audrey: Here’s the problem. Globally, we buy 80 billion pieces of apparel every year - that’s up 400% from 20 years ago. And just like those fabric scraps, we’re throwing most of it away.

In this country, 85% of the clothing we buy ends up in incinerators or landfills - often within a year or two of it being produced. That’s 82 pounds of textile trash per American every year.

And we lose more than 500 billion dollars of value each year to garments that are thrown away.

But the problem isn’t just that all of these textiles are ending up in landfills. There’s the environment cost of making the synthetic materials in the first place. Nylon, spandex and polyester come from fossil fuels. They’re energy intensive to produce, consume non-renewable resources, and can emit toxic pollution into our environment.

The solutions aren’t simple. One option is to stop making new synthetic textiles entirely. But we also have to think about all the material that’s already out there.  And we can’t reuse or recycle all clothing or fabric scraps - because they’re made out of so many different types of materials, including plastic.

Molly: It's cotton, it's polyesters and it’s more complicated forms, it’s blends, so it’s blends of cotton and polyester and nylon and all types of things. And then it was also really important for us to understand the type of that material so that we could then engineer how we get it back onto our plant floors as an input back into our value chain.

Audrey: That realization molly had standing on the factory floor - that was two years ago. Since then, she started Material Return, a company that collects and sorts textile waste and spins it into new yarn. It’s a circular supply chain that turns textile waste into new raw material.

[Truck starts ignition]

Every day, trucks head out to local manufacturers making fleece jackets or upholstered couches to collect their textile scraps.

Clients are given big cardboard bins called gaylords and each bin is labeled. So as a worker is sewing a shirt made out of polyester, all of the leftover scraps are tossed in the poly bin.

Molly: There is one Gaylord that is all for organic cotton. So we know that all the organic cotton is going into that bucket. that Gaylord. So there's another one that's all fleece. So everything is going into that fleece. There's another one that's T-shirt scraps. There's another one that's cuttings from furniture company scraps.

Audrey: The gaylord comes back to material return where it’s sorted a second time.

[Sound of scraps bailing]

And then the scraps are bailed and shipped off to be ground up into something called shoddy.

Shoddy is the stuff that goes into car interiors or furniture stuffing. And technically that’s downcycling. That’s when a material is recycled into an inferior product.

But Molly wanted to create a true circular supply chain where plastic waste like polyester or nylon would be remanufactured into raw material for a new, high quality product. Like a sock.

So now material return is partnering in take back programs with companies like Smartwool - the people who make turtlenecks, long underwear, and socks. Molly explains that there are a few ways the program works.

Molly: One is bins at the retail space, very creatively designed with a clear sock. Put your sock here. We all have those secret drawers where we've saved all of our socks with holes in them. So here's your opportunity to have your socks take on new life. They're also doing their e-commerce site where you can get a bag that will be sent to you, that will come back to our facility and we'll be able to take back individual socks.

Audrey: Right now, all of the old socks will be made into new dog beds. And Smartwool has announced a goal of making all of their products circular by 2030. That means soon, a sock or turtleneck that you return to the company will be recycled into new socks and turtlenecks for sale in stores.

It’s true circularity.

Molly: This is a place where we can create jobs and create solutions for our communities by reclaiming textiles that normally would just be thrown away and sit in our landfills and allow them to really give new life not only to people, but also to the planet through this circular model.

Audrey: There are a lot of challenges to creating a circular supply chain. As Molly said earlier in the episode, there are so many different types of materials that need to be sorted - nylons, polyesters and cottons. But there’s also the bottom line for her clients. Molly knew this model had to be competitively priced.

Molly: We based our pricing off of what it would call cost them to put the same amount of material in the landfill. So it's not to say our pricing is exactly the same, but with a little bit more, they're able to get a really wonderful story, save a lot, educate their workers, and then have this true story of circularity so that they're able to get product back on the other end as well. And we're trying to speak their language so that we can truly create behavioral change within our industry.

Audrey: And for this to scale up, molly said partnering with brands is essential.

Molly: They have the reach out into people's homes and they have the reach into the retail stores. So they, I think, have the opportunity and the imperative to figure out these solutions. But it does take consumer consciousness on the other side to say, oh, yeah, I'm not just going to toss my sweater, I'm actually going to find a way to bring it back. And so we need to make that easy for brands to partner with their consumers to make the right choices. And that's really what Material Return does as it helps brands and producers and consumers work together to really drive the circular economy, which is going to build an economy that works for all of us.

Audrey: Material return is one solution to tackling plastic waste. Since 2002, synthetics like polyester have surpassed cotton and now account for more than 65-percent of all fibers used in the textile industry.

So if partnering with brands is key to creating a circular supply chain, I was curious to hear what other brands were doing to eliminate plastic waste.

I reached out to Carmen Gama at the clothing brand Eileen Fisher. She’s the design and production manager for its “Renew and Waste No More” programs. I asked Carmen where her interest in sustainability came from.

Carmen Gama: Just the fact that we produce around 100 billion garments a year. Right. We are what, almost eight billion people in this world. So imagine the amount of resources that go into producing that. And right now, we have a buy and dispose mentality.

Audrey: Carmen says Eileen Fisher started their take back program in 2009.

Carmen: You know, Eileen Fisher, they look at every step of the operation in the supply chain to make sure that we are creating a positive impact. But then what about the garments that we are selling? Right. So this whole idea of we want to be responsible for those garments.

Audrey: The company started small. They invited employees to bring in their own pieces of Eileen Fisher clothing and they were resold at a store.

Carmen: And they saw the need, like the customers love that idea of having, like, old second hand, like Eileen Fisher. Right.

Audrey: It was so successful that Eileen Fisher opened the program to its customers.

Carmen: And it doesn't matter the stage of the garment. It can be completely destroyed or it can be like pretty much brand new. We give them a five dollar coupon for every garment that you bring back and then you can redeem that at the store. And we've collected over 1.4 million garments since 2009.

Audrey: It’s an interesting model. A customer buys a new pair of pants for 170-dollars. At some point they grow tired of them or they need a different size, and they return the pants for a 5-dollar credit. Then that customer buys another pair of 170-dollar pants. And Eileen fisher turns around and sells the original pants as a “second life” garment for 50-dollars.

There are lots of online second-hand stores that do the same thing - like Poshmark, Thred Up, and the Real Real. But this is a brand reclaiming its own inventory and reselling it. They’re making a profit twice, even three times, off of the same piece of clothing.

That keeps some clothing out of landfills, where a synthetic shirt can take up to 200 years to degrade. But I was curious about the items they reclaim but are too damaged to resell. Carmen said that’s where Eileen Fisher’s materials present an opportunity.

Carmen: One of the things that allow us to have this program is good quality materials and the simplicity of the design of Eileen Fisher. When I started, we implemented a system where you can basically take apart an inferior garment and create an entirely new one.

This is just one example.

Audrey: Carmen holds up a beautiful black silk kimono. It’s a part of their resewn collection. They deconstruct original Eileen Fisher clothing and make new garments out of them.

Carmen: So this is made from I believe like three pairs of silk pants.

Audrey: Oh, wow. So of the returned or excess items, there's enough consistency in them that you can actually say, OK, we are going to be able to have hundreds of kimonos with that exact pattern and that same color and shape and size.

Carmen: Yes. So there's a lot of repetition in styles because Eileen Fisher has been focusing on the same styles for years. So we get by the thousands, the same pattern with the same fabric. So that allows us for repetition and scalability.

Audrey: Right.

Carmen: I’m not saying that it cannot be achieved without that but it's easier for us to do that.

Audrey: As Carmen said, Eileen Fisher is in an unique position. The brand uses a lot of natural fibers - silks, cottons and linens. But since plastic is in so much of our clothes throughout the fashion industry, I was curious if she’s able to remake clothing that has synthetics like acrylic or nylon?

Carmen: Yes. And actually, I'm wearing one. And I tend to wear it all the time.

Audrey: Carmen is wearing a simple black t-shirt.

Carmen: It's made from two pairs of pants that is like viscose, spandex and nylon, these pants. And this is the bread and butter of Eileen Fisher, these pants. So we have a lot of them.

And, you know, the beauty of this, and my biggest proud moment is we're creating these garments that they don't look like they're made out of garments, you know? Because in the future, I just want it to be a norm. You know, it's just how do you make garments? They're just made out of garments and people just accept it.

Audrey: So Eileen Fisher started out first by reselling their clothing. And then deconstructing returned clothes, and resewing them into new tunics and pants.

[Sound of sowing]

But what about the scale that Molly Hemstreet at material return is doing - taking old material and weaving it into yarn for new fabrics.

And that’s when Carmen holds up a bag made out of felted jeans. And if you’ve forgotten what felting is from your camp days - it’s a way of bonding fibers together with needles. The needles poke through layers of material and essentially lock them together.

Carmen: And when people think about felting, people associate felting with wool or like natural fibers. Right. And this is just cotton with spandex.

Audrey: So how does it work? I mean, the jeans get shredded or do they get pulled into the back into their fibers? How does that work?

Carmen: Yeah, so we deconstruct the jeans. We don't shred anything. We literally just feed them through the machine as they are.

[Sound of felting machine]

Audrey: Picture a big machine that’s about 5 feet wide with rows of needles that pop up and down. Carmen lays out the material pieces and slowly feeds them through the machine.

Carmen: And that's kind of like the design decision, right? It’s kind of building a pizza. Right, you have your base layer and then you have your sauce, which is for us, the sauce will be what holds the fabric together and then the ingredients for us is the design layer. And then once you build that, you're feeding it through the machine, which is a thousand needles. So what the needle does is bonds them because it's like going in and out, in and out. There's no glue, there's no water. It's just friction that bonds these fibers together.

Audrey: Last year, Eileen Fisher partnered with west elm to release a limited edition living room chair and pillows, all made out of their felted jeans. It’s part of their waste no more program. And it’s how the brand creates a third life out of their clothing.

Audrey: As a designer, how much does it change your creative process when you start thinking about reuse of fabrics this way?

Carmen: It's completely a new way. Right. But you need to know the basics in order to break the system, basically. So the inventory really dictates a lot of what you can do, especially for the remanufacturing part. Right. So you have a thousand pairs of jeans. You're like, OK, what can I do with the jeans? And you start like learning about the jeans. So it's all about experimenting.

Audrey: Designers like Carmen who are working to remake garments have to think differently. They don’t have rolls of virgin fabric to design with. So has this changed the way she designs new clothes? Is she already thinking about designing pieces that are easier to remanufacture?

Carmen: No matter what you design, I feel like the key part is like, how are you designing something and how do you embed the second, third and fourth life already into that design? Because that's what designers, we have the power. We have the power to actually make a huge change in the industry with the materials that we use, with the construction that we use, with the shapes, with the trends that we choose to follow. 

Audrey: Carmen is part of group of designers called circular by design. They meet monthly to talk about ways to make manufacturing more circular.

Because there are still a lot of challenges to creating a true circular supply chain with clothing that contains plastic.

Carmen: So how do you start thinking about. OK, it's going to be one hundred percent polyester. Can I recycle polyester at the end of life? Yes. You can recycle polyester at the end of life. Well, maybe spandex. I cannot recycle more than 15 percent of spandex. So how can we bring spandex a little bit lower percentage, you know, so it's like really knowing your materials and then make a choice.

Audrey: So I heard, though, that one of the elements of the clothes that you haven't yet figured out a way to recycle or reuse is the elastic waistband.

Carmen: Yes. We don't know what to do with them. People in the industry help us. Yes.

Audrey: Elastic waistbands are particularly difficult to reuse because they gum up machines.

Carmen: So we are working with a company in Guatemala that has the capacity to recycle our t-shirts that have up to 10 percent spandex and some 15 percent spandex into a new fiber. But they're one of the few ones who can do that.

Audrey: And so what are you doing with them? Is there like a huge box of elastic waistband sitting somewhere in your factory?

Carmen: We joke about that that we have the landfill. I mean, it's not a landfill because it's not going anywhere, but we're just sitting on boxes of waistbands and trims and buttons that we are really hopeful that the industry will invest in these solutions or definitely phase out plastic in our garments.

Audrey: Carmen sees other benefits of their renew program. Brand loyalty. Customers appreciate the transparency. They know where their old clothes are going. And it’s not a landfill. And carmen says it’s also opened up a new market of buyers - people who can’t afford a first life Eileen Fisher sweater are happy to have a remade one.

But I had to ask about the economics. If a brand is telling its customers to buy fewer products and keep them for longer. And when they do buy new clothing, they should consider purchasing remanufactured garments at a lower price. Some might think that sounds like a negative growth pattern.

Carmen: Well, I will say the opposite, you know, and that's a case that I keep saying. It's like Why don't you make more money out of something that you already made money. Right, you already got a profit from these garments. You can make more money out of that. You don't even need to have the expertise to do it. You can go somewhere else that will address that for you and you will make more money out of that.

Audrey: those other partners are companies like material return. And collaboration is something that Eileen Fisher is committed to. The brand has even opened its doors to other designers, because carmen says one brand alone cannot change the amount of waste in the industry.

Carmen: We're doing it at a small scale in comparison to the industry. That's why Eileen is like, hey, Here is how I'm doing it. Come and learn from us. And if you can take it to your corporations and if you can do it on a larger or even bigger scale, you will be able to have a huge impact. And all together have a huge impact. And right now, everything feels so fragmented. So we all have to come together and create those systems together. Collaboration is key, right?

Audrey: Well, again I think that’s fabulous. In many other areas of business, one would normally consider innovation and new techniques a form of competition and potentially a way to win market share. And I think that the approach of this as a collaboration, because we need that systems change, is a really terrific part of the solution.

Carmen: And I truly believe people who talk about being sustainable, but then yet not sharing their resources, not sharing how they're doing it, in my opinion, this is just my humble opinion, they truly don't care for a huge change in the industry because you have to be able to collaborate with people, you have to be able to share your findings if you want to have a bigger impact. So, yeah, transparency's being part of being sustainable.

 

Annie Gullingsrud: The only way to really change the system is to have visibility into it. The only way to solve a problem is to know what the problem is and where things are. Here we are thinking, well, let's design a circular system, but we have no idea where things are.

Audrey: transparency and collaboration are two things annie gullingsrud thinks about a lot. And she believes new technology is a way to connect the dots in the fragmented fashion industry.

Annie is the chief strategy officer for eon, a company that’s designing an innovative digital id for clothing. So instead of a fabric tag that’s sewn into a shirt and mostly tells you how to wash it, the digital id would include all of the fibers in a shirt, the blends, what the buttons and zipper are made out of.

Annie: So there is a physical identifier on a garment.  It could be a QR label. It could also be something like a little NFC chip, you know,. And that physical identifier is its connection to its sort of digital world.

Audrey: Annie says the digital id would connect brands, customers, remanufacturers, recyclers - basically everyone and anyone who comes into contact with a piece of clothing over its life cycle.

Why is this important? My team reached out to Annie and she gave us an example of the lack of transparency that currently dominates the industry.

Annie: So I'm going to make a shirt right. I'm going to make the shirt with all polyester. And I made a recyclable shirt. Now, the problem is, by the time that gets into the customer's hands, they have no idea. And then how long is that customer use phase? Oh, it could be three months. Maybe a year or two. Maybe it’s lost in the closet.

So there's no way for the garment really to identify itself. So how can it do what we really wanted it to do. We're sitting here empowering designers. But designers cannot communicate with resale and recycle partners. They can't. So how do we effectively communicate? We effectively communicate through the commonality that we all share that is the product.

How do we effectively communicate through the product? Well, it has to be digital. It has to be a way that we can get a significant amount of information in a very quick amount of time in the most efficient way.

Audrey: Annie says even if brands are doing the right thing - designing clothing to be more easily recycled or remade - the fact that garments lack the information to identify themselves affects the entire system.

Annie: So how can you really efficiently recycle something or set up efficient systems for recycling if you don't really know what a product is. You're not going to scale any recycling technology.

Audrey: Another benefit of the digital is creating a link between a brand and its customers so brands can reclaim their inventory - just like what Eileen Fisher does with its renew program. But on a bigger scale.

Annie: What that looks like is you scan the QR code with your phone. You can easily see the buyback rate and you can request a shipping label. You print out the shipping label and throw it into a box and it goes back to the brand. They inspect it and you get some sort of discount in your account or an amount of money that goes towards the next purchase or you can get back in cash.

Audrey: And consumers are demanding more transparency. 66-percent of buyers are willing to pay more for sustainable products.

Annie: All the research is saying yes, the customer's intellect is changing and they're aligning their values more closely with the brands themselves. They want to know more about the brands, and they want to know that there's integrity in the brands themselves.

Audrey: And there is a role for plastic in some of our clothes. Like wrinkle-free shirts and comfortable jeans. But Annie envisions a day when more data flows through the lifecycle of a garment.

Annie: So imagine there's all these important points like the recycler, the reseller, the customer, the brand. They're all important in the system and Eon connects those dots and makes that system be able to communicate. So if something is in great condition and it can be resold. It's going to share that information to your reseller and it's going to even share photography assets. Can you imagine that?

So the resellers are now empowered. Oh, great. Now this garment's moving around the system. Where is it now? It's at a recycler. It's finished its journey. And so now it can tell the recycler I am this. So it has the ability to speak.

Audrey: This shift to more transparency goes back to what Carmen Gama at Eileen Fisher and Molly Hemstreet at material return both talked about. In order to create real change across supply chains and within the textile industry, from design to materials, to resale and recycle, there needs to be collaboration. Because no one brand can create change at the scale needed to make a meaningful difference in the way we produce our clothes, remanufacture or reuse garments, or in the plastic waste that ends up in our landfills.

Next time, we discover a new technology that just might disrupt plastic recycling on a massive scale.

Now a customer would walk into a coffee shop, order their coffee just like any other day. But in this case, they would associate themselves with that cup. So you’re essentially checking it out like a library book, and you’re now responsible for that cup. 

Audrey: I’m Audrey Choi, Chief Sustainability Officer and Chief Marketing Officer at Morgan Stanley. You can find out more about what we’re doing to tackle plastic waste at morgan stanley-dot-com  slash  plastic  waste resolution.

Plastic is literally woven into the fabric of our lives; when we discard our clothes, we’re often piling on to the mounting plastic-waste problem. Host Audrey Choi talks to textile designers, manufacturers and recyclers who are trying to change the lifecycle of these essential products.

It's not just the containers our food and drinks come in, or the way our we package our goods for delivery. Even the clothes we wear are contributing to the plastic-waste problem. And while, some may find it easy enough to retire last season’s styles from their closets, so many components of our garments, or their textile inputs, are plastic that the clothes themselves have few good end-of-life options.

Host Audrey Choi talks with Molly Hemstreet of The Industrial Commons, Carmen Gama of Eileen Fisher, and Annie Gulingsrud of the EON Group about how we can change the lifecycle of our clothing products—and help reduce the plastic waste impact of an entire industry.

Morgan Stanley's Institute for Sustainable Investing