At Ragtrader Live in Melbourne this week, Seamless project director Danielle Kent outlined the key details of the newly launched clothing stewardship scheme - which can be found on the Australian Fashion Council website. The below questions were asked by audience members and answered by Kent.
For background: Seamless is a scheme designed to sign on businesses (or “stewards”) that will then fund the scheme with a 4-cent per garment levy, which can then be reduced to 3 cents per garment for stewards putting more sustainable clothing on the market (or eco-modulation). Funds raised by Seamless will be put towards circular design principles, circular business models, closing-the-loop initiatives and citizen behaviour change.
We know retailers are doing it tough at the moment with reduced profits and, in some cases, redundancies. Are there any tax breaks or subsidies available to them in getting on board and funding Seamless?
I've got two points to answer that: what's in my control and what's out of my control in terms of Seamless and how I can control the ins and outs. I would really recommend for brands to think about Seamless as an investment in new revenue streams. It is a chance to innovate and research, and we know that brands are facing that issue. And this is an opportunity in looking at the circular business models.
There is a real value offering of being a Seamless member. It increases your internal capacity. You could potentially have access to industry wide resources or circularity experts on a club level that you couldn't afford at an individual level. So there's a real return on investment there.
The second thing is that when we set out the roadmap for clothing circularity, we were very explicit that Seamless isn't the silver bullet. We can't do this on our own. We need policy, infrastructure, skills and technology enabling Seamless to really make it through to circularity by 2030.
How can international brands, especially those operating via eCommerce, get involved?
Any brand is welcome to join, any international brand is eligible to join Seamless, and we have been talking to, throughout the project, the big international brands that we all know. But we are highly aware of the Shein's and the Temu's and that is a little bit outside our radar. But we are starting with what we have. And that's why the regulation conversation is so important. If we get it right in a voluntary environment - set the foundation and really demonstrate the success of Seamless - with a regulated scheme that may come in in a few years, it'll just sweep up I suppose all of those brands that haven't been part of it.
For those garments that are made here [in Australia], they are already sustainable because people only make what they can afford and produce smaller quantities anyway. So why should those small companies and the owners of them be charged a surcharge with that levy?
It's a really good point, and that's where criteria like the eco-modulation really should be considered by brands when it comes to defining that. Things like locally made would become eligible for eco-modulation. There is an opportunity there. But because a unit is a unit is a unit, it has an end of life, it all has to go through the system no matter where it's made.
The problem seems to be overproduction. So by making locally, you don't have to make as much as what you do offshore. Can that benefit you in a way to reduce landfill?
So sadly, I disagree with the premise that if we make locally, we don't make as much. But what I would say is that we have identified local manufacturing as a really critical part of the Seamless environment, the whole textile environment. In the report, we also identify having a local manufacturing representative in the governance scheme. So we will always have the voice of local manufacturing. It's a bit tricky of a situation right now, because whilst Seamless doesn't have a board or a CEO, it's not ready yet to be making those sorts of decisions. But what we have put forward in the report is the recommendation to have the right voices at the table so that we can represent the full spectrum of what we need to when it comes to implementation.
Being able to make fewer products also means that that's a sustainable action. The challenge often, particularly when brands are starting out or small brands is that they go to a manufacturer, the manufacturer says sorry, but the minimum is 100 of that item - that's an unsustainable issue for the business in general, and anyone who's managing brands as they grow is always having an issue with minimum. So I think the question really then becomes: what incentives will be given to local manufacturers in order for them to facilitate a profitable business whereby they can make smaller minimums to facilitate brands being more sustainable by not producing excess product?
At this point, the incentive lies in the eco-modulation component. So that's definitely where we see that incentivizing lever. And we would, you know, define the eligibility for that, because we do want to reward people to be doing the right thing. And whilst it might be about recyclability, which would also be about circular business models and local manufacturing.
You said “a unit is a unit is a unit”. So just as a test case: if I was spending a lot more money on organic cotton for my garments instead of virgin polyester, is that really a unit to compare?
Well, that would be one of the eco-modulation eligibility criteria. So it still needs to move through a system whereby it would be reused or repaired and then collected and then sorted, and then what component of it can be recycled again. So it would still need to go through the system in that way.
I've had a brand for 20 years in Australia that manufactures proudly in Brisbane, and I also work with two factories in China. It's never been an easy trade, everyone knows. This sounds a lot like administrative burden on those of us who run small to medium enterprises. How on earth are we going to report on all of this stuff. And we have to pay staff members to do all of this; we need extra income. Does the scheme take into consideration the small and medium businesses that may not have as much financial leverage as larger companies?
It's really important that we consider this the whole way through. We're really conscious of the small to medium enterprise voice through the design and the development scheme, and continue that voice in the governance arrangements of the organisation going through, so that we are very conscious of the administrative burden. The principle is to keep it as simple as possible, which we have in terms of the scheme as we've proposed it. But that is something that we will be conscious of moving forward, because it will happen on both sides - the administrative burden will be on both sides - so we want to just try and, wherever possible, keep it simple. And having that voice of small to medium enterprise at all levels of the organisation - from organisational and operational governance - will ensure that it's always in the forefront of our minds.
Can you talk more about the transition phase and how you plan to take it from a pilot project to an established one?
In our transition phase, we have a circularity expert on the transition advisory group, very focused on circularity. It is an opportunity for Seamless to show how circularity can really be applied across the product stewardship scheme and other schemes should be aspiring for that. And that will continue through all of our governance mechanisms as well. But we really have been quite thorough and are currently drafting and finalising the constitution so that it's not just about stewards, there's a real mix across the supply chain, but also independent. That's why this phase is so critical to really get those good foundations down so that we can start to operate in a really quick way.