Close to two-thirds of brands are behind on their 2030 decarbonisation goals.

18% of fashion executives consider sustainability to be a top 3 risk to growth in 2025, down from 29% in 2024. Yet apparel consumption is projected to continue to grow. And demand for sustainable materials will also grow compounded by environmental and societal factors. So where are we heading? 

Where are the opportunities?

First let’s define next-gen materials. These are novel and innovative fibers and materials with improved environmental impacts. These are materials that have currently not been widely adopted. Examples include materials sourced from next-gen textile chemical recycling for example recycled polyester or lab grown cotton.

4 dynamics that favour more supply

First is climate change. Increased humidity in Pakistan led to a 30 year low in cotton production as well as a decline in cotton quality. Drought in Australia is projected to lead to a 30% reduction in wool production levels per drought.

Second is geopolitical turbulence. The impact of the Ukraine war and recent re-introductions of tariffs have demonstrated that global supply chains are sensitive to these shocks – diversified supply chains with more resilient materials less prone to geo and environmental factors underscore the need.

Third is tightening regulations requiring companies to have better traceability and more material that is recycled. We have seen this in the Netherlands,  in France and with the EU signalling that more regulation is coming with potential financial penalties with its EU Strategy for Sustainable and Circular Textiles.

And finally the fourth dynamic is competition for natural resources. Recycled PET is in demand with consumer and packaging industries requiring companies to incorporate into their packaging. This has a knock on effect in fashion taking the availability of PET. BCG and the Fashion for Good estimate that 8% of the fiber market by 2030 will be next-gen.

Capital & Scale Challenges

There are formidable challenges that counter this. This material development requires significant capital:  Swedish textle recycler Renewcell went into liquidation in February 2024 (and has since re-emerged). Bolt on that was making a leather alterantive, Mylo, in partnership with Stella McCartney, has paused production.

Do these not go far enough quickly enough to deliver more widespread adoption and critical mass? Is the answer bigger and bolder bets from global mass market brands? Rather than luxury colabs or startups not corporate capital backed?

Inditex is leaning in. In October 2024, it announced a €50m fund to invest in textile innovation to be deployed by Mundi Ventures. Its set a bold target to achieve 25% of its material as next-gen by 2030.  In 2023, it announced a partnership with Ambercycle to help scale its recycled polyester with a commitment to purchase 70% of Ambercycle’s production providing Ambercyle with commercial support.  H&M has announced a 7 year deal with Syre worth $600m, a new venture to scale textile to textile polyester recycling and provide a firm commitment to meet the needs to H&Ms recycled polyester.

Recent history suggests that progress and widespread adoption will come from these big bold bets if you look at recent successes in material adoption like Spandex. It took Nike and Adidas coupled with a fitness boom and competition to bring prices down from $40/kg in the early 1980’s to $10/kg by the early 2000’s. This looks analogous to the consumer mindset shift to sustainability we’ve seen coupled with the bets being placed on textile recycling of polyester.

The next 2-3 years will determine if this is more substantive and real reflected in the labels that we see on or clothing.