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Renewcell's Tricia Carey on how to build a circular economy for apparel
146 Plays1 year ago
What's the deal with circular apparel? Can companies overcome their incentives to produce and sell more cheap clothing and truly embrace circularity? Can AI really be used for good? Which Innovation Matters host has met Jerry Seinfeld? All this and more as the hosts are joined by Renewcell's CCO to dig into sustainable apparel and the future of the industry.
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Transcript
Introduction and Seinfeld Anecdotes
00:00:11
Speaker
It's the podcast about sustainable innovation and also Seinfeld sometimes when we talk about it anyway. I'm Anthony. I'm a senior director at Lux Research. I'm joined by my co-hosts, Mike and Karthik. Mike, how are you doing? How are things in New York, the home of Jerry Seinfeld? Doing well. Haven't seen him recently.
00:00:37
Speaker
ran into Jerry at a cafe in the Upper East Side once. Really? When was this? Yeah, like 2002 or something like that. So like peak, peak Seinfeld fame era. Yeah. Wow. So we're talking about this because
00:00:52
Speaker
I learned that Karthik is a big fan of big. Have you seen the whole series, Karthik? Like, what's fucked me? Four times. Four times. Is this like a is this like a streaming error thing when you got into it like later? Or is this like it was always running when you were a kid? Like, what was the experience with Seinfeld? I need to know. So I got into Seinfeld because of my friend's dad and he was talking about why, you know, Seinfeld is observational comedy and it's still relevant to our times.
00:01:22
Speaker
So I thought, why not jump in? And then I just got hooked because so many things that they do, it's funny and relevant because I see myself doing those funny things in my life. So just got hooked to it. Bang. Nothing is more funny and relevant to Seinfeld than AI, of
AI and Government Regulation
00:01:40
Speaker
course. Have you seen the AI Seinfeld? Did you, did you hear about this whole thing? I haven't actually seen this. Okay. So like, basically they fed all these episodes.
00:01:52
Speaker
of Seinfeld into an AI, and they tried to have him make an AI-produced Seinfeld. Basically it's these really low-res, 3D models of the characters, and they'll come out and talk to each other in this AI-generated voice.
00:02:07
Speaker
But it broke down really quickly. It was kind of mini-famous, or there was a sort of viral sensation to it. But first of all, they had to take it off the air because it just started saying slurs over and over and over again. That's kind of what it devolves into, which is really weird. A little too much Michael Richard and then a tiny while. The Kramer experience on the side felt, I think. But then now they put it back up, but it's sort of just broken down. And the characters are just staring at each other and not saying anything.
00:02:37
Speaker
I think this is all on Twitch. I think you can go back and watch it. But it is exactly this type of low quality Seinfeld content that Dark Brandon
00:02:47
Speaker
our president, the United States, well, my and Mike's president of the United States of America has has put his foot down to decide to protect us against because the first piece of news we wanted to touch on was the October 30th. So we're recording this on November 2nd, October 30th. We had the executive order on safe, secure and trustworthy artificial intelligence, which is an executive order. And it's basically a sort of a grab bag of
00:03:18
Speaker
directions to agencies, executive policy, standards, basically telling agencies, telling the various elements of the executive part of the US government to
00:03:34
Speaker
get some rules in place around what is good with AI, what's not okay. And there's a bunch of different elements to it. Mike, you're the one who flagged this up. I have my opinions on it and there's some stuff I want to highlight, but I'm curious for your reaction to this before I get into my feelings on it.
00:03:53
Speaker
Yeah, I mean, like you said, it's a bit of a grab bag. And I think most of the stuff that's in here is sensible as far as it goes. I think some of the things will be controversial within the tech industry requiring developers of AI systems to share certain safety test results and things with the
00:04:17
Speaker
with the government and privacy protection, trying to put some guidelines or structures in place to prevent algorithmic discrimination with AI, things like that. I don't think anything that's in here is going to be ultimately all of that
00:04:38
Speaker
that consequential I think you know but it's it was more interesting to to me because it shows the government is you know we're kind of relatively quickly by as these things go uh starting to to try to stake out some stands and some positions and start to regulate some of these um you know these AI type of system I mean obviously AI has been you know going on and commercially relevant for a while but I think a lot of this is in response to the
00:05:08
Speaker
the launch of chat GPT and these, you know, that have really catapulted it into, into the public eye much more dramatically.
00:05:15
Speaker
Yeah, I think that's right. I mean, I do think there's something to be said for how they are moving relatively quickly here. And, you know, that's better than something like crypto, where it was really pretty well after the fact, and you had multiple kind of big crypto booms, including like the big crypto boom, before the US government really clarified its position on stuff. And that was
00:05:43
Speaker
ultimately harmful to a lot of US investors, right, harmful to a lot of people who got scammed or just bought cryptocurrency because they thought it was safe or they gave their
00:05:55
Speaker
they gave their money to one of those institutions that was like, yeah, we are a hundred percent backed by the federal government. Don't worry about it. We're just like a bank. And then they're like, disclaimer. No, we're not. But the the AI. There are some specific things I want to call out in the AI sort of order. The first one is this idea required developers, the most powerful AI systems to share safety results and other critical information with the US government.
00:06:23
Speaker
This is not an aberration in terms of the U.S. government's relationship with Silicon Valley, right? Silicon Valley has very much been a U.S. and particularly like a defense funded industry, right? Like they funded the initial development from the 50s, right? Like from the 50s, like the U.S. government was the main funder of the early Silicon technologies. They were the early funder of a lot of the advanced computing technologies to the 80s.
00:06:51
Speaker
And there's this very deep relationship between social networks and all of that stuff, all tech companies. You've got not just the obvious ones like Palantir, which is like, we're doing evil stuff for the CIA. That's our tagline. But every one of these companies, we found that out with Edward Snowden and all this stuff.
00:07:13
Speaker
That's not a surprise, right? And it's undeniably the case that this is continuing to happen with AI, right? This is just a very deep, there's just a very deep relationship between Silicon Valley developers, tech developers, and, you know, the Department of Defense. Like, that's just how it works. The exact nature of what that relationship is right now, who knows? I mean, someone knows, not sharing it with us.
00:07:38
Speaker
But this idea, oh, there's going to be some moderate protests or whatever from Silicon Valley people over there. They're like, oh, we really, we don't want to work with the government or we need to make sure that we're doing freedom stuff and whatever objection they have. The reality is the US government will access and direct the development of these AI technologies because that's how Silicon Valley works, basically.
00:08:03
Speaker
Um, and we will figure out what that means in probably about eight to 10 years, uh, which is maybe not the ideal way of, of doing business, but is definitely the case. Yeah. I mean, for me, uh, it was interesting you brought up the, uh, the freedom aspect because that's what was running through my mind. I mean, would developers go out and say, Oh, you're restricting our ability to code and make these beautiful things that can help us achieve beautiful things. Um, but of course, I mean, when I was just going through the fact sheet as well, I was checking, you know, things like,
00:08:32
Speaker
protecting people from information shared with content like deep fake and stuff. So I think I can see some positives there, but I don't know how the developer community would react to this. AI is not my field, so I really cannot comment on that. Oh, sure. I mean, I think there was always reasonable arguments to be made and reasonable arguments that the US government does make in order to access these systems, whether it's ensuring that data is used responsibly or ensuring that
00:09:02
Speaker
the outputs are used responsibly. But ultimately, we already know the CIA is using AI to screen a ton of data. This has been reported.
00:09:18
Speaker
And that's ultimately what the US government wants. It wants to use these tools, and it wants to have priority access to the use of these tools. All this other stuff about protecting Americans is very much a secondary concern. Historically, I think that's been the case, and I don't particularly see a different pattern unfolding here. One interesting thing that did jump out was pretty high up in this list of priorities is protect against the risks of using AI to engineer dangerous biological materials.
00:09:48
Speaker
by developing strong new standards for biological synthesis screening. Agencies that fund life science projects will have to establish these standards, blah, blah, blah. Basically, we don't want to develop tools to make it really easy for anyone to genetically engineer or otherwise develop a biological weapon or accidentally develop something that's like COVID too, COVID 20.
00:10:15
Speaker
And that's interesting because I think this is a place where the techniques and the technologies that are used to develop like the good microbes are not in any meaningful sense different from the techniques and approaches that you could use to develop
00:10:31
Speaker
the bad microbes. So it's one of those places where I'm not really sure, like, you're going to have to restrict who uses the technology and how much more so than like, and like, who can access the technology, much more so than the technology itself, I feel, because it's just such a big question, like, or a big thorny issue of like, well, you know, if you can invent any microbe or any biological compound you want, like,
00:11:01
Speaker
that capability is just A, very easy to use maliciously, and B, very difficult to write a program that detects bad microbes. You know what I mean? That could be a lot of different things. It could be anything. It could be a microbe that disrupts food production. It's like, oh, this just kills corn crops or whatever. That would be hugely disastrous. And it's like, how do you detect against all the possibilities for malfeasance? So there's just going to be a lot of restrictions on who can access that technology, I feel like.
00:11:31
Speaker
Which, I don't know, Mike, I mean, I feel like that could slow development of a lot of this type of stuff. Yeah, I mean, I guess I feel like this is not that different than the situation with, you know, I mean, over the last 20, 30 years, right, we've developed an increasingly powerful set of, you know, various biological techniques and CRISPR and gene editing and all of these, these sort of things, which all could in principle
00:11:58
Speaker
be used to create bad things just as they're being used to create good things. AI is just another tool in that kit or an accelerant to a lot of those type of tools. But the tools have been around for a while. We haven't had, unless you believe some conspiracy theories about COVID-19, any really major incidences of
00:12:24
Speaker
engineered microbes or other organisms being unleashed in a really harmful way. But also it hasn't, the restrictions that are in place to try to prevent abuses of the existing tools we have.
00:12:45
Speaker
I don't know that that's really slowed down biological research that dramatically either. So I think it's good they're putting this, it's a good idea to put this sort of stuff in place. There's no way it's ever going to be 100% effective, but I don't know. It also may not be, hopefully it won't be that consequential on either side.
00:13:10
Speaker
For me, the implementation part is what I see quite challenging. I mean, how do you define the protocols to say this is right and this is wrong? I mean, during a discussion we can say, okay, yeah, this is right and this is wrong, but there will definitely be gray areas that will be difficult to implement from a protocol standpoint or in the form of a code for an AI. So I'm not sure how that's really going to happen.
00:13:36
Speaker
Yeah, there's definitely implementation, John. I think kind of the more interesting discussion about all this is, you know, what's not in here, right? One of the other things that we were talking about in Slack this week is
00:13:50
Speaker
this article about how an AI company in Finland is using prisoners to basically help train their LLM, which they have to do. And they're getting paid like a buck 50 an hour to do it, this kind of click work.
00:14:12
Speaker
Which is kind of interesting like they have to do that in Finland because not that many people out like basically nobody outside of Finland speaks Finnish In the US we don't have that probably lots of people all around the world speak English so we can you know the US AI companies get armies of people in you know Kenya or the Philippines or other other places where there's
00:14:33
Speaker
lots of other places where those English speakers can do that sort of work. Also, exploited people like, like, yeah, yeah, yeah. And can you are being exploited? They're being paid way below minimum wage.
00:14:45
Speaker
Yeah, I mean, arguably even more so than the Finnish prisoners. Yeah, at least the Finnish prisoners are in the Finnish prison. And there's also, you know, there's all sorts of inputs or questions around, you know, artists who are concerned about the, or writers who are concerned about AI being, you know, their work being used without their permission to train AIs and that could end up displacing that, like, none of those issues around the training of these models. And I think a lot of the notable legal and ethical issues
00:15:14
Speaker
around that are are addressed at all in here as far as I can see. Yeah, and like the stuff that's in there is pretty weak on like advancing. There's like a section advancing equity and civil rights. And what is in there is not ideal.
00:15:32
Speaker
For example, there's a section on ensuring fairness throughout the criminal justice system by developing best practices on the use of AI in sentencing, parole, and probation. And like, I don't know if you know this about prosecutors in the United States, but the thing about them is that they break the rules constantly, right?
00:15:48
Speaker
This is extremely well-documented. They don't follow guidelines. We can't get them to turn over Brady material, exculpatory evidence in any sort of consistent way. And so this idea, like, hey, yeah, we're going to develop best practices for these people to use AI.
00:16:06
Speaker
dog, they're not going to follow the best practices. They already don't follow the law. Like, what makes you think they're going to follow the best practices? And it's like a very similar, there's another section where it's like, provide clear guidance to landlords, federal benefits programs, and federal contractors.
00:16:22
Speaker
to keep AI algorithms from being used to exacerbate discrimination. It's like, okay, like landlords, are you kidding me? Landlords, again, notorious for consistently breaking the law, like constantly breaking the law in regards to tenants rights, in regards to discrimination, in regards to
00:16:43
Speaker
you know, any of these other factors and like they can do that because there aren't real meaningful consequences or the consequences have to be brought by people who like
00:16:52
Speaker
are discriminated against, but it's hard to sue people when you're homeless. That's challenging, right? And so this idea like, okay, we're going to develop guidelines for landlords. It's like, okay, they're just not going to follow the guidelines. This is already a failed... This is just a failed approach from the start to the idea of how this can protect equity or how this can protect civil rights. The baseline approach doesn't work here. And so you say, oh, well, in response to AI, we need to
00:17:22
Speaker
develop these rules for AI, it's like, well, no. That's just missing the point entirely, right? Well, the thing that is going to potentially give, I mean, it's not going to help the land, make landlords follow guidelines or whatever, but the thing that does, the last section of this, which in some ways is probably the most significant is about
00:17:44
Speaker
Well, it's titled Ensuring and Responsible and Effective Government Use of AI. But, you know, kind of back to the point Anthony made at the beginning, right, government is going to be a huge customer for a lot of these these AI companies and that federal contracting process, the desire to win these big deals with, you know, Department of Defense, as you mentioned, but any department like this can be
00:18:07
Speaker
not just in defense, there's going to be a lot of big government contracts for AI and other types of systems used in all sorts of ways across all sorts of agencies. As it's been with government IT contracts in the past, definitely something that will give the government some leverage over
00:18:28
Speaker
over companies developing these systems, because especially, you know, the Googles and Microsofts and Amazons of the world are definitely going to want to get big federal contracts. And so that will give those type of organizations, you know, reason to follow some of the guidelines and requirements within here.
00:18:48
Speaker
The thing that's going to happen and the thing that AI is going to do in this context is it's just going to give cover for people to do the stuff they already wanted to do, right? So, hey, we want to do, we want to achieve some outcome and we don't want to have to justify or the justifications for that.
00:19:06
Speaker
are politically difficult or whatever, there's a problem with justifying what we want to do. What we're going to do is we're going to develop an AI tool that gives us the outcome we want, and then we're going to say we're doing it because the AI said it was right.
00:19:19
Speaker
You know, like if we want to be tough on crime, for example, but we don't want to, you know, that's politically unpopular because like everyone knows the war on drugs has failed or whatever. All we have to do is say we're going to use an AI to do fair sentencing. And it just so happens that the AI gives 10 year sentences for drug crimes instead of like five year sentences. You know, that's all that's all this is going to be used for in a, I think a pretty meaningful way, especially when it comes to government.
00:19:48
Speaker
But also when it comes to corporations as well, right? Like we want to spend as little money as possible on hiring. There's this established pool of really good candidates. We could hire diverse candidates, but it's a ton more work. We don't want to do that. Like we just are going to have the AI do it. And then, you know, that's just going to get us the candidates we want.
00:20:06
Speaker
We can just say, hey, the AI told us to do this. There's no real recognition of that. A lot of this assumes AI works or assumes people are just going to use AI in good faith and assumes they're going to follow the rules. It's like, oh, these are not good assumptions. There's better and worse. This isn't the worst set of AI proposals or regulations we've seen.
00:20:32
Speaker
Carnegie Institute thing where it was completely missing the point of AI and all this stuff. We're going to have a diverse board to make sure that AI decisions are made responsibly. You look at the board and the first member is like the president of Rand Corp or whatever. It's like, okay, stop.
00:20:52
Speaker
But it's just frustrating and challenging because you can see where a lot of the stuff is walking down the path that social media walked down with relation to the government and all this stuff. And it's like, yeah, we're just going to do that again with presumably the same negative consequences or worse. Just frustrating to see.
00:21:13
Speaker
Yeah, I mean, but with AI, with any of these technologies, they're all going to reflect the pathologies or the virtues of the society that decides to create and deploy them. AI is not going to solve discrimination regardless of what type of guidelines the government
00:21:37
Speaker
uh puts out you know it's it's going to reflect the features of society as as it exists uh for the most part rather than changing them yeah and i think that's not something you'll probably hear from people developing ai who seem to think that ai will change society but it's very much the case um okay i think we're ready to move on from ai i think i've said everything i want to say
00:22:02
Speaker
Mike, you flagged up this Toyota solid state article in the FT.
Battery Technology Innovations
00:22:11
Speaker
I mean, Toyota has been saying they're going to do solid state for a long time.
00:22:17
Speaker
They haven't done any solid state battery stuff yet, per se, or have not commercialized this. Every now and then we get these articles, which is like, oh man, this solid state stuff is really crazy. Like check this shit out. Toyota could be like totally killing it in the future.
00:22:34
Speaker
Is something different about this article? Is this another one of these articles? What's going on? Yeah, it's just another one of these articles. It seems to be a part of the PR strategy for Toyota. I'm sure that there are people there that are working on it and doing very good research, and I'm sure they're making progress, but when they're getting a hard time, when they are
00:22:57
Speaker
being given a hard time about, you know, the fact that they're running behind other automakers and in terms of rolling out electric vehicles, they're like, Oh, wait, but you know, there's been a breakthrough on this solid state stuff. And it never really doesn't really say what the breakthrough is, you know, and it hasn't translated.
00:23:13
Speaker
And this announcement is not like, oh, and we're breaking ground on a Gigafactory, or we're opening a Gigafactory next week. It's like, oh, no, we had a breakthrough in the manufacturing process, and it'll be cool. As always, I would appreciate a little less credulous reporting on this. It's like quickly. But the NFT article is better than that. This NFT article is OK on that front. There is a quote.
00:23:41
Speaker
It's better than some. There is a quote in here where they're like, solid state technology is not without skeptics. And then they have some guy who's like, the existing set of solutions is just completely fine. We don't need this at all. And then they just sort of move back to like, oh wow, they say these breakthroughs are happening. And sort of just totally gloss over that.
00:24:08
Speaker
With Toyota specifically, aren't they also looking at hydrogen fuel cell vehicles in the Mirai? Yeah, they're still committed to fuel cells. This is a company who has really missed the boat. This is a company that had the first and most successful electric vehicle essentially of all time, which is the Prius, hybrid electric vehicle, but fundamentally
00:24:30
Speaker
an electric vehicle and built on that success by doing absolutely nothing, right? And worse than doing nothing, like completely squandering any effort by screwing around with hydrogen fuel cells and not releasing full electric vehicles like
00:24:47
Speaker
Yeah, I mean, they've even were kind of slow on the PHEVs, right? Because that's Toyota's argument. And they could, you know, there's a, it's like, okay, we should really be doing PHEVs now, because for most people, that does mean they do all electric and you don't need as big a battery to preserve some of these resource issues. And, you know, I kind of get that, but they also didn't really execute on even on that part of it that well.
00:25:09
Speaker
In the article, they do state that one of their partnerships is for a sulfide-based electrolyte which can achieve commercialization within the next five years. Of course, in the article, they're talking about commercialization by 2027. I don't follow the solid-state battery space much, so I really don't know if that's the actual commercialization timeline, or like you said, if it's just a PR stunt to get their stock prices up. I really don't know.
00:25:38
Speaker
Now that said, a couple days after this article came out, they did announce an actual $14 billion investment in a real battery factory in North Carolina. Not a solid-state battery factory, but with incumbent lithium ion technology.
00:25:57
Speaker
So they are getting into gear on this and the new leadership and new regime there does seem to be really committing to making this transition, but it's just they are behind the game relative to a lot of these other manufacturers which have pretty extensive EV lineups right now. And their track record is quite questionable, which really doesn't help.
00:26:22
Speaker
Yeah, we published a big report on Solid State recently, our updated roadmap. And if you look at it, like, Toyota is not really even a player in that roadmap right now. And that's just because there's just not a lot of evidence that the stuff they're working on, is that valuable? Well, I guess I should say that they're not credibly ahead of any of like the startups or any of the like, small players who are
00:26:47
Speaker
making these same very similar sort of claims about timeline and scale up and everything else. Right. And in a lot of ways, they're behind some of the most credible startups who are already putting solid state batteries into like very small applications as far as I understand. So it's just not something that, you know, should be taken that seriously, I guess. I mean, maybe we'll be wrong and they'll build a gigafactory. But I feel like it's one of those things where
00:27:16
Speaker
There's just still enough time. Like, like if you're worried about this disrupting your business, it's like, you will, you will know before this disrupts your business. Like you will have ample evidence and time to respond. Speaking of the winds of change, which is just not what we were speaking of at all. It's a terrible transition. Karthik, you had flagged up more wind powered
00:27:43
Speaker
large scale marine shipping. That's what the world needs. Yeah.
Wind-Powered Shipping
00:27:49
Speaker
Airbus, they're going to be working with Edward Louis Dreyfus to develop these Fletner rotors. They're just large vertical cylinders that'll rotate when the wind blows. They're going to use these rotors to power their ships, to transport their aircraft components across the United States and Europe.
00:28:08
Speaker
Um, so this is not the, it's not a standalone solution. Um, so what they're planning to do is they want to use this alongside a dual engine system that, um, so one of the engine runs on maritime diesel, the other one runs on email. Um, and they're going to use this rotor as and when they can to assist the other two systems in decarbonizing shipping. Um, and I think their roadmap also is 2028 or 2027 something along those lines.
00:28:36
Speaker
Sorry, so they will enter service 2026, so about three years out. So how much of this is the e-methanol part versus the wind turbine part? Because it seems to me like that's also a pretty big element of how they're going to decarbonize their shipping vessels, but I'm curious for your details. The wind turbines are definitely the bigger part of the making it look cool.
00:29:00
Speaker
It looks pretty wild. That's correct. But decarbonization. Yeah, of course. I mean, for me, the interesting aspect with any vertical system, and I mean, I'm sure Airbus knows their aerodynamics more than I do. I mean, they are aircraft manufacturers, but I personally speaking, I don't know how a vertical cylindrical rotor is going to be efficient with wind.
00:29:27
Speaker
and how that's going to generate the lift to propel. I genuinely do not. Or maybe they have just provided a very basic explanation of how it works on the press release and there is something more intricate to it. But I wouldn't expect this to be as efficient, which means at the end of the day, your emethanol fuel cell is what is going to be doing the heavy lifting in terms of decarbonizing that ship.
00:29:50
Speaker
There's one important detail about this announcement that we have to highlight before we close the podcast, and that is the provenance of this particular invention, right? Karthik, I'll let you take this one, but there's an important connection here, right? I mean, what I would say is closing the loop with Seinfeld, because it's Eduard Louis-Dreyfus who is closely linked to Julia Louis-Dreyfus from Seinfeld who will be designing these flatnut rotors.
00:30:20
Speaker
I mean, it's maybe not as impressive as running like the J. Peterwin calendar, right? That's the calendar. Yeah. The publishing business that she was part of. Publishing business, right? Yeah. But this is Julia Lewis-GAFE's actual grandfather, right? Or great-grandfather who founded the company. Great-grandfather founded the company, yes. Wow. So it all comes full circle. It all gets wrapped up.
Textile Sustainability and Circularity
00:30:59
Speaker
and possibly sort of controversial in the consumer facing area is this idea of textile sustainability and apparel sustainability. I think this is something that in the last few years has really emerged as something that consumers are beginning to be a lot more aware about. They're beginning to demand a lot more in the way of solutions. But they're also in various ways trying to hold companies accountable for the textile waste and the sort of sustainability impacts of textiles.
00:31:30
Speaker
And so over the last few years, it's something that we at Lux have been covering a lot more frequently. But it's tough. Textiles and apparel, as we're going to learn, are a really, really challenging area. Well, perhaps one of the most challenging areas or objects to try and recycle. But to discuss all this with us, we've got Tricia Carey, the chief commercial officer of Renew Cell, which is a textile recycling company, I believe based in Sweden.
00:31:58
Speaker
And she's with us on the podcast today. Tricia, how are you doing? Doing well. Thanks, Anthony, for having me today. We are super delighted to have you on the podcast. Can you start by talking about textile and apparel recycling for our audience who may not be completely familiar with the technology, how it works, and what is different or what renew cell in particular is really trying to bring to textile and apparel recycling? Sure. Sure, Anthony.
00:32:29
Speaker
When you think about it, I think we all have these experiences where we're cleaning out our closet, we put it in a bag and we send it away, wherever away is, not really knowing where it's going to. Well, over the years, those textiles have been piling up in landfills and our rate of consumption continues to increase as consumers, especially here in the United States. And when we look at that, this mounting pile of textile waste needs a solution.
00:32:56
Speaker
And as we see within the apparel industry and the textile industry, the need for circularity, as well as what's happening in other industries, right? And we look at circular cities and how we can reduce our waste, not only reducing our waste, but where we can also lower our carbon footprint in conjunction with that. So textiles now are being recycled at a rate of less than 1%. Some textiles get recycled and they've been downcycled into rags, maybe filler for dog beds or
00:33:26
Speaker
insulation, but they have not been used to upcycle in a large way. So, in comes Renew Cell. 10 years ago, the company was founded. And in 2020, we came out publicly listed company on the NASDAQ in Sweden. And since then, we've been building from our lab scale to pilot to now we have the first industrial scale textile recycling facility where we take cotton waste
00:33:55
Speaker
We take the cotton-rich textile waste and we take that cotton cellulose and we're able to take that molecule and put it into a dissolving pulp, which is then used to make new fibers. So as we look at the transformation that the textile industry is going through, we need to have collectors, sorters, preprocessors, and recyclers like ourselves in order to close the loop and make textile recycling happen within a closed loop.
00:34:25
Speaker
So you said something interesting there, which is that textiles are recycled at about a 1% rate. And that's obviously a lot lower than something like metal. Aluminum and steel are both in the 70 to 75% rate. And even for general plastics, I think the overall plastic recycling rate is something like 7%. And something like plastic bottles is maybe like 25%. What is it about textiles that is driving that recycling rate
00:34:55
Speaker
down to such a low, low level, even way lower than some of the things we have big problems with already. What's causing that? Yeah. Well, I think what's happened over the years is that it was easier just to keep producing, right? And the fashion industry, when I first came into the industry in the mid 1990s, and I was buying fabric at that time, I was buying fabrics that were $10 a yard for a middle market brand.
00:35:24
Speaker
Now you see that price has gone down to $2.50, $3 a yard for fabrics. So you see this huge consumption, and we all know it. We're buying more and more clothes. And so over time, there wasn't really a need for it. It was cheaper to just keep producing virgin than to try to figure out solutions to this problem.
00:35:47
Speaker
And that's where now this, we could call it the decade of innovation, where we're looking at solutions to circularity and where we can start to recycle. There's always been mechanical recycling that's been done through the years. And mechanical recycling is more like if you think of a food processor where you put the textiles in and it shreds it up, but then you have shorter staple fibers, which impact the strength. So how do we get back to this point where we have long lasting garments
00:36:17
Speaker
those that have quality and there's value in the garments. And this is something that, you know, we've switched into this mode of fast fashion and, you know, you have a garment where at once it's, you know, for
00:36:30
Speaker
Some younger people, it's their Instagram shot, and then they move on. Very important stuff. Right? So we see that over the years, this shift in the mentality of how everyone looks at consuming more rather than establishing value. And if you look more, and I think it's a mindset change that we need to have as consumers,
00:36:53
Speaker
Look at the value of the cost per use. You know, that that's really where it comes in instead of just buying something, wearing it once and throwing it away. So, you know, there's over 100 billion garments that are produced every year.
00:37:08
Speaker
and 92 million tons ends up in landfills. I mean, it's staggering the number of what. And you think about it, I don't know if you've ever done this, when you go in, when you're shopping in the mall and you see yourself, where does all this go? Where do all these clothes really end up? You know, the racks are filled and you go, you know, Christmas time, holiday time, and you see stacks and stacks of, of piled high, of knit tops and sweaters. And you're like, where, who's wearing all of this?
00:37:37
Speaker
You know, there's about 20 to 30% of clothes that aren't even sold. Where do they go? And this is the problem that the industry is facing. We've been operating on this model of make more, make more, and we need to look at how we can actually bring circularity in a way that still can bring a value to the clothing.
00:38:00
Speaker
So one of the real challenges, I think, with this space is just the collection and the sorting of waste. You've got a pair of ripped blue jeans. You can't just drop them in your curbside recycling container. So for a new cell, where is the waste that you're using coming from? Is it a lot of post-industrial? Is it a lot of
00:38:22
Speaker
You know, as you were saying, sort of like overstock garments that were just never sold in stores, or do you really get a lot of post-consumer stuff as well?
00:38:32
Speaker
Yeah, Mike, you're right. I mean, the collection and sorting, and this is a whole new system that needs to be started. And you can't just take a linear model and just turn it into a circle. It doesn't work that way. You have new players that are now involved. And so every new cell, our facility is in Sweden. It's about three and a half hours north of Stockholm. It is on a former site that in the facility, the overall site is still a paper mill.
00:39:00
Speaker
But the area that we have was no longer being used, so we were able to recycle the building, recycle a lot of the equipment, and even bring back some workers. So it's excellent that we're able to give new jobs to workers who have the expertise in manufacturing pulp. Our site in Sweden is run on 100% renewable energy, and we are actually building it up to 60,000 tons in our first ramp up, and then we'll get to 120,000 tons, which is still
00:39:30
Speaker
small in the scheme of total fibers that are produced every year. So where we are getting our textile feedstock, we're getting a lot of it from Turkey, some from Bangladesh. We really are sourcing globally. We've been using a lot of post-industrial textile waste. So we look at specifications that are 95% cotton right now.
00:39:54
Speaker
So we can manage some synthetics. Denim is not an issue. We can handle indigo. We can remove the indigo dyes as part of our production process. And we've been starting to feed in some post-consumer waste as well. So ultimately, we know that we need to provide a solution for post-consumer waste. And Europe is much further ahead than the United States when it comes to legislation related to EPR, extended producer responsibility.
00:40:23
Speaker
It's a part of the European Green Deal and this has been under review really for the past two years and we're starting to see that in 2025 some of the regulation will start to come into play. EPR in the United States is not really coming on as strong. We do have some states, I would say between New York with the New York Fashion Act and then California with SB 707.
00:40:50
Speaker
But I think many people are aware that in November of last year, in 2022, that Massachusetts passed regulation that you could not throw away textiles in your regular garbage, that you have to take it to a special, you have to take it to the right disposal place. And I think this is great. But we have to be sure that any regulation that comes in, it needs to be monitored and enforced.
00:41:17
Speaker
And I see this as a next step. It's not good enough to just have that regulation, but you have to really enforce it. And you have to be able to provide the right systems for consumers to be able to recycle properly. I think we all know and we're quite familiar and have grown up now with recycling of plastic and paper and metal. And we'll have to get into that same process for textiles.
00:41:44
Speaker
I can tell you that as a Massachusetts resident, I don't think those new laws are being fully adopted for us just yet. Did you know about it though? I didn't know about it, but I am probably a more than average educated consumer on this type of issue. It's at least parsing my job to know about it. Hey Tricia, I wanted to ask you, you brought this up earlier during this conversation about fast fashion. Now, I'm not a
00:42:13
Speaker
big fan of fast fashion myself personally. I like having my clothes last long enough. And you also mentioned about Inditex and the recent announcement Renusel had with Inditex. And Inditex is well known for its fast fashion brands like Zara, which is part of the Inditex group. So what are you seeing from the textile industry in terms of these companies finding the right balance? Are they thinking about, let's say in the long run,
00:42:42
Speaker
You know, we're going to still produce fast fashion goods because that's what the consumer wants. And then we recycle it and keep producing more fast fashion goods. Or is the industry shifting towards long lasting goods and moving away from that fast fashion trend? What are you seeing? Yeah. I think for companies now that they're setting strategies, so they're setting the right goals, you know, it does become that you have to reset the consumer. You have to reset then how you're manufacturing as well.
00:43:11
Speaker
And I do see that there's many of the larger brands that are setting goals and coming up with a roadmap. The challenge that I see in the industry is when goals are just put out there, but there's no plan on how they're going to achieve them. In the case of Inditex, yes, last week they announced that they would take, they would purchase the first 2000 tons of fiber using viscose made with circulars.
00:43:36
Speaker
They saw this as their commitment. They also have commitments to many other innovators within the space for recycling polyester and also recycling of cotton and polyester textiles together. So I see Inditex as really leading in this and the fact that they're not just making these commitments, they're also investing in a lot of companies. They're not an investor in Renusel, but we were very pleased with their recent announcement
00:44:03
Speaker
And this is a signal for the industry on that others need to take this course as well. On this fast fashion topic, I think one of the accusations that often gets leveled is these types of things are only greenwashing or that, you know, they're going to buy 2,000 tons here, 5,000 tons there, but they produce, you know, millions of tons of material. And this is certainly not exclusive to the fashion industry. You see this, you know, every company from ExxonMobil, AP InVev, you know, they've all had this sort of
00:44:33
Speaker
Oh, you can, you can do the small scale stuff, but it doesn't really matter. And I'm just curious in your mind, if there's a tipping point there, where do things make that transition from being really meaningfully impactful or where, where does that come here and how should we evaluate, you know, other brands or other groups in this space and evaluate their commitment? You talk about some people have these goals, but no plan. That's one element clearly, but, um,
00:45:03
Speaker
Yeah. I'm just curious as to when you see these other announcements or other activities in the space happening, you know, what makes you really stop and think, okay, this is something serious or real versus maybe something that's just a bit more for the press. Yeah. Well, I think over the years, because I've been involved in textile circularity for quite some time, I've also started to switch to put myself in the shoes of the buyer, you know, so if you are a brand or retailer.
00:45:29
Speaker
What's your concerns? What is stopping you from making any of these changes? A lot of it is around the scalability. You want to have access to materials. This is a very big challenge for any of these large companies. Of course, they're based on, they need to increase their sales, their revenue, but they also have to be profitable within doing that. So the accessibility to materials is key for many of these
00:45:55
Speaker
for many brands in order to make that switch. So not just setting that goal, but they want to know that if they're going to start working with a material that's circular or that one that has a lower environmental impact, that it's not just a niche player. And that's very big within the strategy that we have at Renew Cell, where we're all about scaling. I would say the second is around quality. So quality is key for these retailers and brands. They know they have to still have that quality garment
00:46:24
Speaker
They can't have a compromise. We worked with Levi's on the 501. They need to make sure that it's still meeting their specifications for the 501. No one wants to have their denim that's falling apart and certainly Levi's has very high standards on that. And third, it would be around value. So value relating to cost, price, but also looking at
00:46:50
Speaker
the value over all the environmental impact and that value that a new material can bring. The complexities around switching to a circular model are so tremendous, you know, because it's just not an easy task just to kind of now change. And as I was saying in the beginning, you know, where you have new players now, collectors, sorters, preprocessors, recyclers that are all a part
00:47:14
Speaker
that before it was much easier to take virgin materials and just keep pumping them in. So this is a fundamental shift that our industry is going through. And it's really quite exciting because I feel like now at this point in my career, there's a lot that I can participate and support in making this change. And being every new cell, that's our purpose. We want to bring that change about. So it's a good segue. You kind of mentioned, you know,
00:47:40
Speaker
you've been in this industry for a long time. And I'm curious as to how maybe the industry perspective on issues of sustainability or circularity has evolved. And in particular, it is, as you mentioned, a lot more complex in addition to being more expensive. And I think there's this, often we see this as focus on cost. It's like, oh, well, this is 20% more expensive
00:48:06
Speaker
And so if we put in like a 20% tax or any PR or whatever, we can like get adoption. It's like, well, actually it's 20% more expensive, but also it requires a lot of skills that people don't have. And that's not necessarily a money issue. You know, the money is a problem, but it's not the only problem. So I'm just curious as to how, you know, that perception within the industry has really changed or how those conversations have changed. And if this is something that, and how you, I guess in your own journey came to renew sell and say, Hey, this is the,
00:48:36
Speaker
the next chapter of my career that I want to really engage with. Yeah. So I've been involved in textiles my whole career. So I started in the mid-1990s, so approaching almost 30 years of being in the industry. And there was no concern in the beginning. In the 90s, there was no concern at all really about the environment.
00:48:57
Speaker
I would say it didn't really pick up until around 2015 or so, and now it's accelerated so much during the pandemic. I think there was another level of awareness that came out of sourcing and the challenges for sourcing that happened during the pandemic. Realizing, when I first started, there was still a very strong domestic industry here in the United States. In fact, that was my first job was at a domestic textile company.
00:49:25
Speaker
And the shifts that happened then around 2000 when China opened up and everyone started moving to China and then it was always chasing the lowest cost producing country. Then there came the realization of what are we doing to the environment and you started to have I remember when Patagonia came out with these footprint chronicles and they would actually track a garment back and take you through the journey.
00:49:48
Speaker
that it took just to make that one garment and how it might be fiber that was coming from US cotton and it could be then spun in Indonesia and then produced in China and then finished somewhere else and then coming back to the United States. And I think that started to give consumers an understanding of just the complexity of the long value chains that existed. Then I see that the next part came on, especially after Rana Plaza around the social side,
00:50:17
Speaker
of the apparel industry. And now we're finally at this convergence of planet people coming together and looking at how the difference can be made. And so last week I was at the annual textile exchange conference. Textile exchange is an NGO that supports responsible textile development, looking a lot across standards. And there were 1,400 people at this conference. Now, when I used to attend this conference,
00:50:45
Speaker
10 years ago, we were lucky that we had 400 people in a room. I remember there was one conference in New York that we couldn't even get enough people to attend. It wasn't paying off. And that was only 10 years ago. So the change that's happening in the industry. But I think a part of it is the challenge that apparel, it's still an art. You know, manufacturing is still an art and a craft. And that's what we need to bring back more into the industry.
00:51:14
Speaker
So it's just become too mass in the way everything's being done and we have to bring back the art and craft around what's being produced. And using that, you know, apparel is an expression of ourselves. So in my professional journey, being in textiles, and I've worked a lot in the manmade cellulosic fiber space, which is viscose, modal, licell, and I've worked at lensing for almost 25 years.
00:51:43
Speaker
who are the producer of 10 cell, lie a cell. And there I started to get more involved in understanding around the circularity of textiles. And I always looked at what renew cell was doing from a distance and thought, you know, it was really an interesting way. I saw their success in bringing the technology within the pilot lines. And then when I received, you know, and had some discussions around
00:52:11
Speaker
that they needed a commercial officer to lead their industrial line. Then I thought, well, this is really a match for the challenge that I'm looking for in my next move, as well as the fact that I could make a difference and really participate in the change in this transformation that the industry needs. So I've been involved in textile circularity. It was around 2015 when I started working on some projects.
00:52:39
Speaker
at lensing and then continued with that further. And so my experience in working with global brands as well as value chains in order to bring new materials to market is really where I'm building off of a lot of that experience as now we are looking at bringing Circulose, which is our brand name for the dissolving pulp that we make at Renew Cell and bringing Circulose to market and working with our fiber producer customers.
00:53:09
Speaker
One of the other things that Anthony mentioned, also, and you kind of alluded to in there as well, is the different skill sets, right? You're bringing a whole bunch of different types of players in here. The industry has to worry more about, you know, social responsibility as well as sustainability and environmental impact.
00:53:28
Speaker
Yeah, dealing with different types of partners, impacts of regulations are probably becoming more significant in terms of EPR schemes and all of that. So either for you directly, I renew so just how you see that affecting the industry. Is that kind of bringing different types of people in? Is it needing to think about different types of skill sets or ways of training the people who have that long industry experience?
00:53:54
Speaker
How is that shaping the workforce and the organizations within the industry? I think within circularity, we see that new people are entering. As I look at other innovators within the space, because there's a lot of collaboration that happens within the innovators. In innovators, I mean those who are bringing new materials and those who are looking at bringing circularity or lower impact materials to market.
00:54:23
Speaker
And you see now chemists, you see people who were coming from other industries that still understand the environmental impact. I see though what's necessary and what we've been building the commercial team at RenewSell around is really those who have strong relationships in the market.
00:54:43
Speaker
Because more than anything, it's not companies who do business together, it's people who do business together. And that's what's key in gaining the trust and the understanding around launching a new product like Circulose is that you need to have that background and know. It's interesting, in the textile and fashion industry, there's no Wikipedia, there's no one website to go to that says, how do you make a t-shirt? It doesn't exist. It still is very much that art and craft that I was talking about
00:55:13
Speaker
that you kind of have to hunt around. And so you have to have those regional relationships that exist, knowing the key suppliers, knowing those. And when it comes down to it, it's really, we're doing a lot of matchmaking, matchmaking of people who would work well together. It's not just about a company offering.
00:55:34
Speaker
I wanted to also ask you Tricia about the early adopters of circulars from a consumer aspect. I mean, obviously, when people look at these labels, the first thing that comes to their mind is, oh, this is a premium product. It's too expensive. I don't think it's worth paying that much. And I've heard a lot of people say that to me for not just textiles, but for even organic foods that you find stocked up in the supermarket, for example.
00:56:00
Speaker
because it's 50 cents more expensive. Especially in price sensitive markets like Asia, what do you see as a trend in terms of early adoption? And maybe which, I'm guessing Europe and the West is farther ahead in terms of early adoption of these technologies from a consumer aspect. Yeah. So for Circulos, we had a range of brands that worked with us from our pilot line. So H&M being one and H&M is our largest shareholder as well. I should mention that.
00:56:30
Speaker
And being based in Sweden, there's a lot of connections there. So H&M, Zara had done a capsule collection. Levi's introduced Circulos in the 501 in 2022. So that's been almost two years now. We also had PVH with Tommy Hilfiger and Calvin Klein. And then we also had some more sustainable oriented brands like Goni, Pangaea, Philippa K, Triarchy.
00:56:58
Speaker
So we through our introduction from the pilot line, these are some of the early adopters of circulars. But I think globally, when we look at early adopters, it's those who really have the ability to develop those materials. And, you know, I see the trend where at first was starting within the sustainable innovation department, where you might have that capsule collection, but now moving into mainline products.
00:57:26
Speaker
So, and that's how we're going to make the impact. We need to be in regular programs. We need to be accessible across all price points. And what we've been working on at RenewSell for the past four months is building out what we call our supplier network. So it's our circular supplier network where we are working with yarn spinners, knitters, weavers, and denim producers to kind of fill up
00:57:50
Speaker
the whole network. I'm trying to look at this from a circle rather than say supply chain because we can't look at it as a supply chain anymore. So that materials are readily accessible to designers. A designer doesn't look at a piece of pulp and say, that's really exciting to me. They need to see it in fabrics and in garments. So part of my most recent trip was to be at a denim trade show in Amsterdam, which is the leading denim trade show called King Pens.
00:58:17
Speaker
And here we have more than 20 denim producers who have products denim that's made with circulars. And about 10 of them had concept stories behind it where they build out, okay, this is a theme. This is a way that it could look at retail. And so that's what we're doing to bring this to market and to get those early adopters on board, but they need to see it to understand how it works. Looking a bit more into the future,
00:58:46
Speaker
you pointed out that textiles have gone a lot cheaper, right? And that these companies have these pretty strong incentives they need to grow. And both those things particularly are tough in the context of fast fashion and needing to move away from this idea of disposable clothing and just generally overselling clothing at a high level. So I guess I'm just curious as to like,
00:59:13
Speaker
How do you see us getting to a point where we are beginning to just sell clothes in a more responsible way? Is it going to be regulation? Is it going to be a consumer change? Is it going to be a change somehow in the organization of the companies? How do we get from where we are now, which is kind of all the way at one end of the spectrum, it feels like, to something that's closer to the other end of the spectrum? Yeah.
00:59:38
Speaker
It's almost like how do we even get to this spot to begin with, right? And now you're right, we have to swing back the other way. I think when we look at what technology can do, where we look at platforms now for resale and rental that didn't exist before that make it very easy. I mean, it used to be if you wanted to buy used clothing, it was Salvation Army or a garage sale, right? Now you have
01:00:04
Speaker
you know, the real, real and amazing platforms that make it very easy for you to buy secondhand rental that that exists. But also, you know, where can technology help us to and retailers and brands to not be producing over producing by 30 percent? Where can we produce more on demand? Where can we have better analytics to be able to produce what is actually needed by consumers?
01:00:34
Speaker
whether that's sourcing closer to home. You know, we've gotten so much in a society of, I order it on Amazon, it's in my doorstep within hours or the next day, the latest, right? We almost have to get a bit out of that mentality. But I think it's going to take a huge consumer shift. I see younger people now, the Gen Z, which I have two at home, or close to home,
01:01:01
Speaker
Um, that, you know, again, our questioning their purchases and our learning more about the brands that they're buying from, you know, I can't expect consumers to know what I know around circularity. There's, there's no way I spend all day long talking about this. So how do we make it so simple for consumers to understand
01:01:22
Speaker
and kind of give them these choices. Is it a number? Is it almost like the ingredient label that you have on buying food that you know, whether it's all of the ingredients? And that's, I think, the same way we're going to have to approach things within the apparel industry, too, is we have to make it very clear, without the greenwashing, that happens way too often on kind of a red, yellow, green light,
01:01:51
Speaker
on what's good to produce. But if the products that are highly impactful on the environment are never produced to begin with, then the consumer doesn't even need to have that choice. And I have this discussion a lot within working with various brands. They're like, well, if we can just produce the best product that's available, then the consumer is already off to a better start. But the consumer trusts, whether it's a Patagonia or those brands that are just their ethos is all about
01:02:21
Speaker
lower environmental impact and high social standards. But it's going to have to be a whole cultural shift, one that I think we're on our way towards. I do think challenges that existed during the pandemic and using social media as one way of making that change. Well, I darned my socks for the first time over the weekend. Good for you, Anthony.
01:02:50
Speaker
Who taught you how to sew? Was it your mom, or did you learn it in school? My mom was a big sewer when I was a kid, but she didn't really teach me how to sew. I'm mostly self-taught. But I mean, I do think there is, like, to your point about the culture, like, there is a growing movement of just, like, there's a lot of trendy Instagram accounts now that are about, like, hey, like, here's how to darn your socks, which is, in a way, where we are at with
01:03:20
Speaker
clothes and our relationship to clothes is kind of a really huge aberration from almost, you know, three, 4,000 years of human history, right? Like, clothes repair, keeping clothes in service for as long as possible has been the mode really up to the 50s, maybe the 60s, you know, maybe the 30s, if you want to make that argument. But I mean,
01:03:44
Speaker
It's really a very, like the last 70 years of human history, 100 years of human history have we seen this change. So we're still sort of grappling with it in a pretty meaningful way. Yeah. Well, yeah, no, it's much easier for some people just to throw it away, in that way.
01:04:01
Speaker
No one knows where it goes. I was really impressed. I was shopping in Europe and at the checkout counter, there was a whole mending display. So whether it was a pre-threaded needle
01:04:16
Speaker
or if it was iron-on tape in case your hem had come undone. And I'm like, well, this is exactly the direction that we need to go in. And a store was smart enough to figure out, well, we could put this together at the checkout and have it as another way to service. I don't think they're losing sales over doing that. I think it's actually a really wise move.
01:04:41
Speaker
Yeah. I think that it strikes an important point, which is you kind of have to make it easy for people. Like if something is going to be widespread, it has to be, there has to be infrastructure to support it and it has to be easy for people to do. Um, so that's, that's really great to see. I haven't seen that in the U S here. I think we're still a little bit more in our, in our fixed in our ways when it comes to throwing out gloves.
01:05:06
Speaker
Well, Tricia, I just wanted to thank you so much for jumping on the podcast and talking to us. I thought this was really a great conversation. I got to flex my gardening skills. So that's what's going to do. That's what's going to count for me as far as I'm concerned. Any last words or thoughts you want to share with our audience? Thank you for having me today. I think most of all for the audience is do some research.
01:05:30
Speaker
Check out the changes that are happening. Really look at the labels that are in your clothes. Read what you see online in the product description page. If you want to know more about RenewSell and about Circulos, you can find us on LinkedIn or on Instagram. Happy to provide more information. If you want to follow some of our launches, you can check that out on our Instagram account. Or if you want to reach out to me, I'm on LinkedIn.
01:05:58
Speaker
Thank you. Thank you very much. Innovation Matters is a production of Lux Research, the leading sustainable innovation research and advisory firm. You can follow this podcast on Apple Music, Spotify or wherever you get your podcasts. If you want more, check out www.luxresearchinc.com slash blog for all the latest news, opinions and articles.