They called themselves the Fashion Pact. In 2019, a group of luxury brands, retailers, suppliers and manufacturers gathered at the G7 Summit in Biarritz, France to trumpet a joint commitment “to a nature-positive, net-zero future.” The initiative grew from 32 initial signatories to some 160 brands today, representing nearly a third of the global fashion and textile industry in volume. So how far have they, and other apparel producers, come since then in creating “circular” supply chains?

According to Kearney’s 2025 Circular Fashion Report, or CFX, progress has been slow. Only about 4% of surveyed brands have achieved “extensive” implementation of circularity initiatives. As the report’s authors put it, the effort “has gained ground, but not depth.”

Nora Kleinewillinghoefer, a Kearney partner and lead author of the report, defines circularity as encompassing the end-to-end fashion supply chain, including suppliers, manufacturers, maintenance services and engagement with customers — all toward the goal of promoting recycling and reuse, and minimizing waste, through a product’s full lifecycle.

For its fifth edition, the CFX surveyed 246 apparel brands across 18 countries and five core product categories — fashion, sports, outdoor, underwear and lingerie, and footwear. It ranked each on a 1-to-10 scale with year-over-year comparisons, while also identifying the top performers and strongest improvers.

The report found 70% of brands landing in the “moderate” zone — an indication that the concept of circularity has at least entered the mainstream, if not become a flood. But the relatively small number of brands reaching the “extensive” level of implementation highlighted “a significant conversion gap” between aspiration and action, according to Kearney.

The leading category in achieving circularity in the 2025 CFX was outdoor wear — not a surprise, given that sustainability and proximity to nature are woven into the brand identity of companies such as Patagonia and Arc’teryx. Their products tend to be hardier in construction, with longer lifespans and a thriving resale market. Weakest among the surveyed producers was fast fashion, with its emphasis on speed of production, constant shifts in style, easy disposability and low price point.

Those relatively disappointing results come at a time when some companies appear to be backing off from earlier commitments to forging sustainable supply chains. But Kleinewillinghoefer thinks they might instead be reflective of a lack of long-term vision. “For many,” she says, “the shift is not something that happens quickly.” To be successful, circularity needs to involve multiple partners involved in material design, development and finished production.

The “moderate” performers might have launched a pilot program or two, without giving thought to extending them from product inception all the way to the end consumer. The effort to integrate those partners at scale has to be cross-functional in nature, stresses Kleinewillinghoefer. “It doesn’t just sit in the sustainability team.”

The best results come from brands that are making circularity part of their very identity. Chanel, for one, has created a separate entity, called Nevold, to develop recycled materials at scale. And its Chanel & Moi service focuses on caring for and repairing existing pieces.

Strong circularity efforts are reaching back to the earliest stages of product development. Nike is making shoes without glue, so that they can be more easily disassembled, and their contents recycled.

Kleinewillinghoefer even sees fast-fashion producers as stepping up, albeit at a slower pace than the higher-end brands. “They’re not immune to regulatory changes, particularly in Europe,” she notes. (The 2025 CFX finds European brands posting a “significant” gain of 0.4 points since 2024, a response to the region’s increasingly stringent regulations on product sustainability and producer responsibility.)

A slowing economy offers further incentive to consumers and producers alike to do more with existing materials, and extend product lifecycles. But companies won’t succeed in achieving circularity if the effort lives within functional silos. Having a corporate “center of excellence” overseeing the initiative, for example, isn’t a bad move, but until circularity efforts are applied systematically and across the organization, “these become point solutions.”

Kleinewillinghoefer hopes Kearney’s annual CFX report will help to move the needle on future efforts at supply chain circularity. “We’ve had brands proactively reach out to us to make sure we were aware of the breadth of their efforts,” she says. And spreading the message can help. Companies that make up the “moderate” category “sometimes just get stuck. They want to be inspired, see what others other doing.”

Despite the mostly underwhelming news delivered by the 2025 CFX, Kleinewillinghoefer views the 2019 Fashion Pact as more than a case of industry-wide virtue signaling. “What I am really excited about,” she says, “is more brands shifting out of proof-of-concept into more system-wide improvements.”

A lot more progress needs to be made, she acknowledges. “But there are fantastic examples in the market of brands that are doing this well, and doing the right thing, in spite of any headwinds they might have in this space.”