Funded by the European Union. Views and opinions expressed are however those of the author(s) onlyand do not necessarily reflect those of the European Union or European Innovation Council and SMEs
Executive Agency. Neither the European Union nor the granting authority can be held responsible for them.

1© 2021 EU-Japan Centre for Industrial Cooperation
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ABOUT THE EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATIONThe EU-Japan Centre for Industrial Cooperation is a unique venture between the European
Commission (Directorate-General for Internal Market, Entrepreneurship and SMEs, DG GROW) andthe Japanese government (Ministry of Economy, Trade and Industry, METI). It aims to promote all forms
of industrial, trade and investment cooperation between the European Union (EU) and Japan. It also
aims to improve EU and Japanese companies’ competitiveness and cooperation by facilitatingexchanges of experience and know-how between EU and Japanese businesses. The EU-Japan Centre
for Industrial Cooperation has its head office in Tokyo and an office in Brussels. This report has been
conducted as part of the MINERVA Market & Policy Intelligence Programme of the EU- Japan Centre
for Industrial Cooperation.
ABOUT THE AUTHOR
Mayu Imanishi is a freelance consultant. She has experience as an IT lead and PMO for system
integration, market research and HR transformation in the private sector. She has a degree inenvironmental engineering from Hokkaido University and worked in environmental impact assessment
under the EU-JAPAN Centre's Vulcanus Programme. The author can be reached via Linkedin. or byemail at pmayuu@googlemail.com
DISCLAIMER
This report does not constitute legal or investment advice. The information contained in this reportreflects the views of the author and not necessarily the views of the EU-Japan Centre for Industrial
Cooperation, the views of the European Commission or the Japanese authorities. While utmost care
was taken to check and translate all information used in this study, the author and the EU-Japan Centre
for Industrial Cooperation may not be held responsible for any errors that might appear. Reproductionof all the contents of the report is authorised for non-commercial purposes, provided that the name of
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consent of the EU-Japan Centre for Industrial Cooperation is obtained.

2

PREREQUISITE
This report covers the circulation in the fashion and textile industry. However, even textiles it focuses
on clothing textiles and does not cover the circulation of footwear or industrial materials. The report also
excludes the circulation of plastic products related to purchasing. For more general information on
Japan's circular economy, including other areas, we recommend referring to the following documentsfrom the same MINERVA report.
JAPAN'S CIRCULARITY ~ A Panorama of Japanese Policy, Innovation, Technology and Industry
Contributions Towards Achieving the Paris Agreement.

3

Executive Summary
Circularity in the fashion and textile industry is one of the world's most important and growing topics,
and Japan is no exception.
This report aims to provide an overview of Japan’s current state in the fashion and textile industry,summarising market trends, historical background and private sector circularity initiatives and start-ups.
Focusing particularly on the circularity initiatives of local textile-related SMEs, the report presents thepotential of specific circularity models according to climate and history as well as the reforms neededto achieve a circular society in Japan. Based on these findings, the report suggests potential
opportunities for European companies to enter the Japanese market.
The decline of Japanese textile companies, the monopoly of some global companies and thedelay in adopting CE
The apparel and textile market are currently experiencing stagnation due to a declining population, anageing workforce and the COVID-19 pandemic. Clothing supply chains have become increasingly
complex, extending globally in search of cheap labour after years of mass production and consumption.
Only a few global private companies, such as Fast Retailing, dominate the market by offering highvalue-added products at low prices. However, these companies are also lagging behind the circular
economy trend and are facing demands to address environmental and human rights issues. Without
specific government legislation on textile recycling, individual and corporate recycling initiatives are lessbinding force compared to other developed countries.
On the other hand, the fabric processing industry, with its artisanal subcontractors concentrated in rural
areas, is in decline due to the fast fashion wave. However, some segments, such as the high-end
brands business in Europe, still remain competitive. The reuse and sharing market in Japan align with
Global trends and shows growth. However, many people still have a strong attitude towards usedproducts due to the impact of COVID-19, necessitating a change in consumer perceptions. Japan has
made limited progress in the recycling and recovery phase due to the prevalence of incinerators.
Nevertheless, some companies are encouraging chemical recycling technologies and expanding theiroperations overseas.
Japan's circularity potential in local textile industries
This report presents circularity trends in several regions and highlights the potential of Japan's own
circular fashion by leveraging the existing textile industry and traditional crafts. It is necessary toconsider the region as an ecosystem that involves the public, private and academic sectors through thetextile industry rather than relying solely on individual company initiatives within the supply chain. By
branding textile products that make use of local characteristics and history, and creating a cycle thatfacilitates natural regeneration, Japan can draw inspiration from the ancient system of Sampo Yoshi,

4which refers to the principle of conducting business in a way that benefits not only oneself but also theother party and society as a whole.
Furthermore, by establishing an autonomous and decentralised network system that connects thecycles created by each region’s unique characteristics, it will be possible to propose business models
that consider environmental impact and human rights not only for the local region but also for revitalizing
declining regions in Japan, as well as the regions of the Global South where the economy is projected
to grow.
Potential for EU-Japan industrial cooperation
Future challenges in realizing circularity in Japan include revitalising the garment circulation technology,
fostering the start-up community and establishing equal partnerships with multinational companies. This
research proposes four points of collaboration between Japan and Europe to address these challenges.
Firstly, exchanging information between the European Circular Economy Cluster, the Circular Fashion
Ecosystem, and local company clusters to foster new regional economies. Secondly, introducing asystem to educate individuals on circular fashion with whole ecosystem design, one of Europe's
strengths. Thirdly, fostering cooperation with European high-end brands to expand the market for local
textile companies. The fourth point of collaboration is the entry or joint development of recycling andcollection technologies and solutions from European start-ups into the Japanese market. The aim is tocreate opportunities for EU-Japan industrial cooperation based on the four perspectives outlined above,to accelerate the circular textile society in Europe and Japan, as well as to develop and co-createbusinesses that prioritize environmental impact and human rights in the Global South, where theeconomy is experiencing significant growing.

5

List of Pictures
PICTURE 1: Structure of this report research ............................................................................ 13
PICTURE 2 : What is Circular Economy？................................................................................. 15
PICTURE 3: Percentage reduction in CO2 emissions due to the CE ......................................... 16
PICTURE 4：Decoupling ............................................................................................................ 17
PICTURE 5: Trajectory of Environmentally Responsible Design................................................ 19
PICTURE 6: Interaction of Circular Economy & Regenerative Life Model .................................. 20
PICTURE 7: Environmental impact of textile products during their life cycle .............................. 23
PICTURE 8: Textile Circularity in Edo Period ............................................................................ 26
PICTURE 9: Manufactured textile product shipment value in Japan .......................................... 29
PICTURE 10: Textile Industry scale .......................................................................................... 29
PICTURE 11:Trade defects ....................................................................................................... 31
PICTURE 12: Fabric Exports in each country ............................................................................ 32
PICTURE 13:Domestic clothing market ..................................................................................... 33
PICTURE 14: Fashion clothes supply and demand balance ...................................................... 33
PICTURE 15: Total export use of clothing ................................................................................. 34
PICTURE 16:Profit structure in apparel ..................................................................................... 35
PICTURE 17: Market size and e-commerce ratio in the fashion industry ................................... 37
PICTURE 18: Reuse Market Size in Japan ............................................................................... 40
PICTURE 19: Market scale 2020 in each Reuse Channel(bil yen) ............................................. 41
PICTURE 20: Fashion Reuse Market Size Trends and Forecasts ............................................. 41
PICTURE 21: Used Clothes Market in the US ........................................................................... 42
PICTURE 22: Sharing Goods (including Clothes) market size in Japan..................................... 43
PICTURE 23 Material Flow ........................................................................................................ 47
PICTURE 24: Interest in Sustainable Fashion ........................................................................... 49
PICTURE 25: Attitude to buying second-hand clothes ............................................................... 49
PICTURE 26: Important buying points for clothes ...................................................................... 50
PICTURE 27: Places for buying clothes .................................................................................... 50
PICTURE 28：Environmental initiative by sales volume of the company .................................... 51
PICTURE 29: Researches presented by METI, MOE, CAA ....................................................... 53
PICTURE 30: The Circular Fashion Ecosystem and Four Strategies ......................................... 55
PICTURE 31: Circulars in the cultural sphere that promote consumer awareness Change ....... 57
PICTURE 32：Weaving machine in Shimokawa Orimono (site visit) .......................................... 60
PICTURE 33:MADEBY tour visit................................................................................................ 61
PICTURE 34:The Regenerative Circularity by Kyoya Dyeing Shop ........................................... 63
PICTURE 35:The Golden Circle by Simon Sinek ....................................................................... 64
PICTURE 36:Circular Fashion Ventures in Japan ..................................................................... 67
PICTURE 37：Automatic Separators for used-clothes ................................................................ 74

6
PICTURE 38: 15 minutes city in Paris ....................................................................................... 84
PICTURE 39:Circular Fashion Start-ups in Europe.................................................................... 86
PICTURE 40: Direction, Strategy, and Actions for Japanese Circular Fashion .......................... 90

List of Tables
Table 1:Top10 Apparel Retailers FY2019 ....................................................................................................36
Table 2: Companies in each supply chain in their strengths and challenges ..........................38
Table 3: The Way of Recycling in Japan.......................................................................................................44
Table 4:The number of incineration plants...................................................................................................48
Table 5:Circular Fashion Start-ups in Europe ............................................................................................86
Table 6：List of projects for circular fashion .................................................................................................88

List of Abbreviations
EU

European Union

SPA

Speciality store retailer of Private label Apparel

SKU

Stock keeping Unit

RPF

Refuse Paper and Plastic Fuel

METI

Ministry of Economy, Trade and Industry of Japan

CAA

Consumer Affairs Agency

MOE

Ministry of Environment

NEDO

New Energy and Industrial Technology Development Organization

IPF

Institute of Positive Fashion

IFPEN

IFP Energies nouvelleeOEM

Original Equipment Manufacturing

3Rs

Reduce, Reuse and Recycle

ESG

Environmental, Social and Governance

GHGs

Greenhouse Gases

PET

Polyethylene terephthalate

SPA

Speciality store retailer of Private label ApparelNGO

Non-governmental organisation

SDGs

Sustainable Development Goals

UNFCCC

United Nations Framework Convention on Climate Change

7

Table of Contents
Executive Summary.................................................................................................................................................... 3
Introduction ................................................................................................................................................................... 10
Chapter 1: Why is Circular Fashion Important?...................................................................................... 14
1.1

What is the Circular Economy?.................................................................................................................... 14

1.1.1 What is the circular economy? ..................................................................................................................................................... 14
1.1.2 Background............................................................................................................................................................................................. 15
1.1.3 Key Points of Realisation ................................................................................................................................................................ 17

1.2 Circular Economy in the Fashion and Textile Industry ......................................................................... 20
1.3 Why the Japanese Fashion and Textile Industry Should Adopt a Circular Economy
Strategy .................................................................................................................................................................................. 21

Chapter 2 The Current Situation and Characteristics in the Japanese Fashion Industry............................................................................................................................................................................................... 25
2.1 Japanese Culture and Textile History ............................................................................................................ 25
2.2 Production, Manufacturing, Trade, Sales and Distribution................................................................. 28
2.2.1 Production and Manufacturing ..................................................................................................................................................... 28
2.2.2 Trade .......................................................................................................................................................................................................... 30
2.2.3 Structure and Issues of the Japanese textile industry ..................................................................................................... 32
2.2.4 Chemical fibres market..................................................................................................................................................................... 35
2.2.5 Apparel markets ................................................................................................................................................................................... 35
2.2.6 Structure and Issues of the Japanese textile industry ..................................................................................................... 37

2.3 Reuse markets ............................................................................................................................................................ 38
2.4 Sharing services ........................................................................................................................................................ 42
2.5 Current status of collection and recycling .................................................................................................. 43
2.6 Environmental awareness .................................................................................................................................... 46
2.6.1 Environmental Impact on the fashion industry ..................................................................................................................... 46
2.6.2 Consumer Trends in Japan............................................................................................................................................................ 48
2.6.3 SME Awareness and Response ................................................................................................................................................. 51

2.7 Government Actions ................................................................................................................................................ 52

Chapter 3 Japan's Circularity Potential in Fashion & Textile ......................................................... 54
3.1 The Potential of Japanese circular fashion ................................................................................................. 54

8
3.2 Designing circular ecosystems new regional economic zones ....................................................... 55
3.2.1 Fukuoka Prefecture, Yame City Building a new economic zone linking local living ........................................ 56
3.2.2 Supply chain integration of textile-related companies within a 20km radius of Fukui Prefecture, Fukui
City and Sabae City ........................................................................................................................................................................................ 60

3.3 Circular from the natural behaviour of plants and animals circular design .............................. 61
3.3.1 Ichinoseki, Iwate Kyoya Dyeing Shop

Branding the life cycle circulation ......................................................... 61

3.3.2 Okinawa Food Reborn Circular with non-pasturing parts and make global development ......................... 63

3.4 Circular design with open Network to encourage autonomy and new economic zones .... 64
3.4.1 Autonomous decentralised networking system across regions for textile ............................................................ 65
3.4.2 Kyoto: Edonomy practices with increased craftsman autonomy ............................................................................... 65
3.4.3 Smiles Co., Ltd; Pass the Baton Market ................................................................................................................................. 65

3.5 New technologies needed in the ecosystem .............................................................................................. 67
3.5.1 Start-ups, ventures and technology ........................................................................................................................................... 67
3.5.2 Technical Studies ................................................................................................................................................................................ 73

3.6 Collaborate case with existing companies .................................................................................................. 74
3.6.1 Patagonia................................................................................................................................................................................................. 74
3.6.2 Toray Industries, Inc. ......................................................................................................................................................................... 77
3.6.3 First retailing........................................................................................................................................................................................... 78
3.6.4 Adastria Inc. ........................................................................................................................................................................................... 79

3.7 Circular fashion organisations........................................................................................................................... 80

Chapter 4 European Legal and Public Movement and Trend and Strength ........................... 81
4.1 Government .................................................................................................................................................................. 81
4.1.1 Legal system .......................................................................................................................................................................................... 81
4.1.2 Clusters ..................................................................................................................................................................................................... 82
4.1.3 Community development ................................................................................................................................................................ 83

4.2 Enterprise and Technology .................................................................................................................................. 84
4.2.1 Large companies and high-brand movements .................................................................................................................... 84
4.2.2 Start-up ..................................................................................................................................................................................................... 85
4.2.3 Technological developments ......................................................................................................................................................... 88

4.3 Certification schemes ............................................................................................................................................. 88
4.4 Education....................................................................................................................................................................... 89

Chapter 5 Direction for Japanese Circularity and Opportunities EU-Japan SMEs ........... 90
5.1 Future focus areas for circularity with a Japanese character ........................................................... 90
5.2 Challenges and Opportunities for cooperation in Japan ..................................................................... 92

95.2.1 Reference: Collaboration between Inoue Ribbon and Apple Inc ............................................................................... 94

Conclusion..................................................................................................................................................................... 96

10

Introduction
The world's population is now 8 billion, and India’ population has surpassed China's this year, 2023.
While technologies such as AI and robotics are advancing, the developing world is still dominated bylabour-intensive industries. Japan has also gone through a period of time when it was a developing
country. This was a period of continuous population growth and industrial development. The textile
industry achieved significant growth during this period of rapid economic growth. However, Japan is
now in a mature phase, where the population has started to decline, GDP growth has been stagnant,and the system that boosts national power through mass production with the help of the workforce isvery far from being in place. Everyone is aware of this discrepancy, yet it has been a grossly neglectedissue. There have been efforts to correct the system's bias by relocating production to cheap labour
locations abroad, but that exploits the labour and resources of developing countries and fails to focus
on real issues. The export of waste to other countries in the name of reuse and recycling only serves
to shift and hide the problems that every country should face. It is time to end the existing system.
Japan's apparel industry is at a turning point. While the domestic apparel sales market has shrunk from15 trillion yen in 1991 during the bubble to 8 trillion yen in 2020, the outbreak of COVID-19 has further
caused sales to fall. The industry is declining, with domestic and overseas operations shrinking andfewer people being involved. To capture the growing offshore marketplace, many companies require
guidance about what to do next, whether inbound or cross-border e-commerce.
Since the post-war period, when there was nothing, and through rapid economic growth, people havetied their happiness to consuming goods. They habitually think of being happy by having more
expensive things than others. This relates to an economic structure in that fast fashion has profoundlychanged. While fast fashion has granted people of all wealth and age groups the freedom to wear theclothes they want, it has also led to unintentional and inferior exploitation. Fast fashion has replicateda linear business system of that over-exploits natural and human resources through production,
consumption and disposal. This linear system puts pressure on the earth's resources, pollutes thenatural environment, and profoundly impacts the ecosystem. Thanks to the energy revolution andadvances in mechanisation, industrialisation and technology, the world has become seamlessly
connected, allowing people to rapidly and affordably access the latest clothing trends from around theworld. At the same time, how many of us do realise that the more convenient and inexpensive ourclothes become, the less tangible they are? There has been a complete lost sight of the fact thatcreating a system that allows some countries to produce clothes cheaply is not just about the result oftechnological advancements but also reflects a disregard for global environment and human rights
issues, both domestically and internationally. The act of ending something means the disappearanceof the industries, companies, services and products involved, often accompanied by forces of resistance.
It is necessary to give new meaning to the developed technologies.

11
The concept of circularity, the theme of this issue, derives from the EU's Green Deal circular economy
strategy, which is an excellent approach to creating a relationship that develops the economy without
damaging the environment. It aims to secure economy benefits for businesses without compromising
the global environment1.
The key to achieving this lies in the history of the textile industry in Japan. The textile industry, which
has existed in Japan since ancient times and has been deeply rooted in the land, establishing various
services through connections with people. Edo merchants relied on natural resources for most of theirgoods and energy, encompassing food, clothing and shelter, recycling and reusing. It was a completely
circular society, where food was grown, and waste was used as fertiliser for local farms. Clothing was
produced, spun and designed to last as long as possible. It was repaired, used for secondary andtertiary purposes and eventually biodegraded.
Unravelling this history reveals the reasons behind our current situation and provides insights into
achieving happiness. It was during this period that the fusion with Western culture began, followed bya period of scarcity during the war, then post-war reconstruction, the development of manufacturing
technology towards mass production overseas, the low-price wave of fast fashion during the bubble
period, and finally, the present time, which is the result of several external factors. Despite thesechanges, there are still companies in Japan that remain ingrained in the land. They value a culture inharmony with the climate and the environment, and even in the face of mechanisation and mass
production, they have continued to grow, passing on valuable skills that should be preserved. Taking
inspiration from their example, this research will explore the future they are aiming for and the paths
they can take to create new business models.
There are many areas where Japan and the EU can collaborate in developing this approach. First ofall, Japan needs to create its own self-sustaining recycling society. EU countries and Japan haverelatively close structures with mature domestic markets and share common challenges arising frompast difficulties, such as limited land and dependence on other countries due to lack of undergroundresources. By drawing up a roadmap and taking measures step by step that align with the EU’s
approach, we can create a situation where we can co-create with each other. This collaboration canthen build on the strengths and compensate for the weaknesses of both the EU and Japan, establishinga foundation for the realisation of a global recycling society.
2. Research objectives
This research will explore the current state of the circular economy in the Japanese fashion and textile
industry, unravel the Japanese culture and history, analyse the trends of the European circular economy,
and explore the direction for realising a unique circular society that fits with Japanese culture and habits.
For companies, this report can give new suggestions regarding the idea of circularity, which has been
considered as business as usual or a cost, and it will propose new business opportunities. Additionally,1

https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en

12
It will examine the strengths of Japan and the EU in achieving a circular society in Europe and Japanand explore the key factors necessary cooperation between the EU and Japan.
3. Target reader
The study sets out a vision and identifies concrete cooperation opportunities for the transition to acircular society for small and medium-sized enterprises (SMEs) in Japan and the EU. SMEs, which
account for 99% of all enterprises, are crucial in transitioning from a linear economy to a circular
economy (CE)2. Currently, many SMEs still face challenges in initiating the CE transition due to costand human resource issues. However, in the fashion industry, 90% of the environmental impact is fromraw material sourcing to production, so there is no doubt that the transformation efforts and businesscase tips from SMEs, including OEMs, will be a step towards the overall CE and its realisation. This
report aims to clarify the steps towards CE transition and enable them to take concrete action.
4. Structure of this report research
The report consists of five chapters.
1. Introduces the current state of the circular economy in the fashion industry and highlights theneed for circular fashion.
2. Describes the current situation, characteristics and challenges of the Japanese fashion industry.
3. Explains the potential of circular fashion in Japan through various case studies.
4. Considers the trends and directions of circular fashion in the EU.
5. The final chapter lists the directions and focus areas of circular fashion that Japan should
prioritize, discusses the challenges it faces and suggests opportunities for cooperation with the
EU to complement these challenges.

2

Adoption of circular economy practices in small and medium-sized enterprises: Evidence from
Europe at https://www.sciencedirect.com/science/article/pii/S0925527322000895#bib57

13
PICTURE 1: Structure of this report research

5. Methodology
The report is based on desk research and more than 20 interviews with stakeholders from SMEs tolarge multinationals, government officials, clusters and public and private sector stakeholders in Japanand the EU.

14

Chapter 1: Why is Circular Fashion Important?
1.1 What is the Circular Economy?
1.1.1 What is the circular economy?
The circular economy (CE) is a business model that tackles social issues such as biodiversity loss, theclimate crisis and the depletion of natural resources. The most important concept is not to continuously
producing new products but to maximize the value derived from current resources. It involves keeping
the matter within the economy as long as possible through consumption activities such as design, digitalsolutions and non-ownership services. Newly created products aim to minimise resource consumption,
waste generation, etc., replacing the current linear economic system of Take – Make - Waste.
For companies, embracing the circular economy represents a new approach of doing business bycreating more value with fewer resources. It isa sustainable choice for the planet and an opportunity tomeet changing customer needs, reduce costs and minimise risks. According to a report published by
the Finnish institute Sitra in December 2022, the potential economic benefits for the EU market brought
about by CE are estimated as follows.3- EUR 3.7 trillion in value created by 2030
- 700 000 new jobs created by 2030
- 75% increase in product lifecycle value- 7 times increase in business revenues.

3

https://www.sitra.fi/app/uploads/2022/12/sitra_sustainable_growth_with_circular_economy_business_models.pdf

15
PICTURE 2: What is Circular Economy？

1.1.2 Background
When discussing about the importance of CE, it is necessary to explain the concept of Carbon Neutrality(CN). The promotion of the CE strategy, mainly by the EU and others, is closely related to the Paris
Agreement of 2015, which agreed on a pathway to CN, and the Glasgow COP26 of 2021, whichemphasized the goal of achieving CN by 2050. To achieve CN, countries need to set targets in stagesin accordance with their own situation. This requires significant social changes and industrial
restructuring, such as the introduction of renewable energies and the acceleration of electrification. In
Europe, the CE is not solely reliant on energy transformation; it also involves increasing resource
efficiency through recycling and reuse, as well as decoupling (*) between economic growth andenvironmental protection. The CE strategy is positioned as a part of the European Green Deal. The
Ellen MacArthur Foundation report estimates that, adopting the CE strategy in five key sectors (steel,aluminium, cement, plastics, and food). could result in an annual reduction of 9.3 billion tonnes of CO2
emissions in 2050, which is 45% of the 2050 CN target, it is essential to implement CE to achieve theglobally agreed CN targets.4*Decoupling.
The UN argues that since the Earth's resources are finite and therefore stresses the importance ofimproving resource efficiency. The goal is to decouple human well-being and economic activity from4https://ellenmacarthurfoundation.org/completing-the-picture

16
the acceleration of economic activity and its impact on the environment, as well as the increasing
scarcity of resources5.
PICTURE 3: Percentage reduction in CO2 emissions due to the CE5https://wedocs.unep.org/handle/20.500.11822/9816;jsessionid=480347D0C53F4341CAAAF5795F
E1AEFA

17
PICTURE 4：Decoupling

1.1.3 Key Points of Realisation
Circular economy: three guiding principles
The Ellen MacArthur Foundation, established in 2010 as a UK-based private, not-for-profit organisation,
dedicated to accelerate the transition to a circular economy, offers three guiding principles for achieving
a circular economy.
1. Design out waste and pollution
2. Use products and materials in use
3. Regenerate natural systems’The Butterfly Diagram, developed by the Ellen MacArthur Foundation, is an economic model basedon the original Cradle to Cradle concept (Michael Braungart, William McDonough, 2002), which
identifies two types of cycles: biological and technological. The technological process involves therecovery and restoration of products, components and materials through reuse, repair, refurbishment
and recycling. The biological cycle, on the other hand, returns organic materials (e.g., food, cotton,wood) to the soil system through processes such as anaerobic digestion and composting, supporting
ecosystem regeneration and the provision of renewable resources. The key is to design separate cycles
without mixing biological and industrial materials, and to start small. The focus is not about creating
innovations but reconstructing the system by drawing inspiration from ancient practices.

18
REGENERATIVE LIFE MODELS concept.
The third principle, regenerative, refers to the idea of regenerating the global environment while allowing
the ecosystem as a whole to thrive. Regeneration means that humans and nature are not separate andthat all forms of life can grow in a cycle, whereas sustainability focuses on actions to reduce negative
impacts on the planet and refers to 'less bad' (zeroing out the negative). On the other hand, regenerationrefers to "more good" (creating a positive). This includes humans being part of the earth system andthriving with the earth. (PICTURE 4)
The concept of CE is an alternative to linear economic models and their impact on the global ecosystemand the efficiency of resource inputs to ensure economic efficiency. Still, it is only a "less bad" (zeroingout the negative) action. In recent years, there have been arguments for the need to revise the modelin its approach due to the separation of humans and nature. The social and human aspects are notdiscussed enough.
Therefore, the regenerative approach, which has gained significant attention, refers to system reformby integrating humans into the circular system as part of an ecosystem with different values and new
belief systems rather than as mere users of the economy and services. The aim is for people to thrivewith the planet and to have a sense of connectedness with nature. The concept of the Circular Humansphere is also discussed in relation to this topic. (PICTURE 5)
The concept of system dynamics, as proposed in Thinking in Systems published by Donella Meadows's
famous book “Limits of Growth”, also helps capture the concept of CE. In a major system transformation,
there can quickly be a reversal with unforeseen consequences if only partial optimisation exists.
Suppose there is an imbalance between the stocks that remain in circulation and the flows in and outof circulation, in which case various forces can work to keep the stocks in a desirable state, such asresilience and more excellent self-organisation, to return to the original state. If exploitation matches
the rate at which the resource is regenerated, it will be stable. However, if it is over-exploited throughtechnological efficiency, the dynamics will fluctuate greatly. In other words, focusing solely on the details
can be misleading.
It is necessary to understand the system as a whole, taking into account the elements, relationships
and objectives of each subsystem, identifying structures that influence potential behaviours, observing
how the system moves over a long period, and recognizing the conditions that drive these behaviours.
CE can only succeed if those involved discuss it and agree on new and broader goals.
Digital technology is essential in driving the transition to a circular economy as it enables the capture,
management and utilization of data in a rapid feedback cycle.

19
PICTURE 5: Trajectory of Environmentally Responsible Design

20
PICTURE 6: Interaction of Circular Economy & Regenerative Life Model

1.2 Circular Economy in the Fashion and Textile Industry
Various countries have set out roadmaps and targets for the circular economy, but it is important toemphasize the inclusion of textiles. This is because the return on investment for transitioning to acircular economy has been estimated to be lower compared to other sectors such as the construction,
food and automotive industries. However, the European Commission has identified textiles and clothing
as one of the sectors with high resource consumption, significant carbon emissions, and limited
recycling potential. As part of its Circular Economy 2020 Action Plan6, the EU Textile Strategy has beendeveloped, and actions are currently being developed in public hearings and task forces.
When looking at CE in the textile industry, it is essential to acknowledge that the manufacturing phaserepresents the most resource-, energy- and labour-intensive phase. Despite the high environmental
impact of the extraction and manufacturing process, there used to be limited economic incentives forrecycling. The key for clothing lies in establishing a durable technological cycle. There are initiatives to6https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en

21make the material biologically recyclable, such as through composting, but this leads to the disposal of
substantial resources invested during production and a loss of value. Furthermore, clothing itself
contains few soil-building nutrients and does not contribute to the regeneration of the planet. In otherwords, the priority is to keep the product in use for as long as possible, with the order being < recycle< reuse < repair and remanufacture.
1.3 Why the Japanese Fashion and Textile Industry Should Adopt a Circular Economy Strategy
So why must the Japanese fashion and textile industry transition to a circular economy? When looking
at CE policies worldwide, the reasons for adopting CE differ depending on the country. CE policy ismainly focuses on improving waste management and the associated business opportunities, including
existing waste management and promoting the recovery of raw materials in the manufacturing process7.
For the EU, CE is expected to build a more sustainable and less resource-dependent economy,
significantly reducing dependence on raw material imports. However, on the supply side, this could
significantly impact relations and development in the Global South. It is hoped that by supporting not
only their own countries and the EU but also developing countries, including the Global South, countries
can achieve their sustainability goals and the world as a whole can move in a carbon-positive direction.
Europe sees global agendas such as CE as 'good intentions’ and 'opportunities'. It has been active inrule-making, including lobbying. The following four points summarise the reasons why Japan should
adapt to CE, with reference to the reasons for CE adoption in other countries.
- Risk-aversion and economic development potential of resource constraints.
Situation:
Japan's textile industry relies heavily on resource-rich countries, mainly China, for raw materials andenergy resources. The war in Ukraine and the expansion of COVID-19 have led to an increase in global
resource demand, thereby increasing Japan’s economic vulnerability. To solve this problem, Japan
must use its knowledge and expertise to increase domestic resource recycling and reduce imports.
Reason:By adopting more efficient production technologies, developing recovery and recycling technologies
Japan can achieve resource sustainability. This shift will not only reduce its dependence on international
markets, but also increase its competitiveness with emerging economies.
In addition, Japan has recognized the importance of resources since its isolationist period, and utilising
this culture heritage and technology will create new business opportunities. Transforming theknowledge and technology of the circular economy, rooted in Japan's rural areas, into businesses candrive employment and regional development in rural areas. Furthermore, exporting Japan's own
technologies to other countries can also lead to sustainable development and market expansion.8

78

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https://www.jpmac.or.jp/img/relation/pdf/2021pdf-full.pdf

22- Growing environmental issues and ESG investment at home and abroad
Situation:
The fashion industry is considered the second most polluting industry in the world, and the production
and consumption of textiles have a significant impact on the environment. The environmental impact ofthe production stage includes the cultivation and production of natural fibres, which is affected by theuse of land, water, fertilisers and pesticides, and the production of synthetic fibres, which has an evengreater environmental impact due to the use of energy and chemical raw materials. Manufacturing
products in the fashion industry involves the use of energy, water, and a wide range of chemicals (e.g.,dyes and finishes), contributing to pollution. For example, according to the United Nations Conference
on Trade and Development (UNCTAD), the average amount of water needed to produce a pair of jeans
is approximately 7,500 litres, equivalent to seven years of drinking water for one person. The fashionindustry consumes 93 billion cubic metres of resources annually, using enough water to meet the needsof 5 million people.9
During distribution and retailing, energy and resources are consumed through CO2 emissions duringtransport and the high use of packaging waste. In addition, a significant amount of textile products thatremain unsold end up being disposed as waste. During the use and maintenance phase, such as
washing, drying and ironing, electricity, water and detergents are used, and chemicals and microfibres
are released into urban wastewater. Finally, after use, textiles are either collected, sorted, reused,recycled, or incinerated, which also consumes large amounts of energy and emits greenhouse gases.
Reason:As a result of these environmental pressures, society, including investors, is demanding greater
environmental performance. For example, the Ellen MacArthur Foundation, the World Economic Forum,and global companies have established a global network, such as the Circular Business Initiative incollaboration with the United Nations Environment Programme and others, are working to accelerate
the drive towards a circular economy. In addition, there is a growing trend in ESG investment: According
to GSIA research, global ESG investment balances increased from $22,839 billion in 2016 to $35,301
billion in 2020, with further growth expected in the future. The Green Deal Industrial Plan aims tofacilitate investments in circular businesses by increasing the competitiveness of the climate techindustry. Although the amount of ESG investment in Japan is small compared to overseas, companies
that fail to take environmental measures and disclose information may face challenges in raising funds
and ensure long-term survival.10

910

https://www.unic.or.jp/news_press/features_backgrounders/32952/
https://ec.europa.eu/commission/presscorner/detail/en/IP_23_510

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PICTURE 7: Environmental impact of textile products during their life cycle

Source; Textiles and the Environment The Role of Design in Europe's circular economy from theEuropean Environment Agency- Growing human rights concerns
Situation:
Ethical issues in the fashion industry have become prominent in recent years. In the 1990s, labour
issues started to emerge in some companies, and in 2013, the Rana Plaza collapse in Bangladesh
highlighted the tragic consequences of exploiting workers who were subjected to low wages and poor
working conditions in garment factories. In 2021, the EU and US successfully sanctioned companies
engaged in business with factories in China's Xinjiang Uygur Autonomous Region, where there areconcerns about the employment of workers from the region. Japanese companies such as Fast
Retailing and MUJI were also sanctioned, highlighting the need for global companies to monitor andcontinue to audit for human rights abuses such as forced and child labour, in all transactions along their
supply chains.
Reason:In February 2023, Asako Okai, the director of crisis management at UNDP, told Japanese companies,
including those in the textile industry, that falling behind international ethical standards poses a risk to
conducting business in the global market. She urged companies to implement stronger human rights
mechanisms in their supply chains. In Japan, the government issued Guidelines on Respecting Human
Rights in Responsible Supply Chains in September 2022, providing guidance for companies toformulate human rights policies, conduct due diligence, and take remedial actions to address any

24violations. However, concrete measures are still under consideration. Enhanced transparency andcareful management of the entire supply chain are prerequisites for fair business practices in theinternational community.11- Developments in digital technology
Situation:
An essential aspect of CE implementation is the importance of development and promotion ofdigitalisation technologies. Digital technologies are expected to enable more efficient processing anduse of environmental impacts and labour in the value chain by managing and monitoring them,potentially reducing costs and increasing productivity.
Reason:The accumulation of data allows business models to expand from simply selling goods to providing
services using goods. Furthermore, such data can be used to build a new economic infrastructure forregions and societies to survive and develop, contributing to the sustainable growth of society as awhole.

11https://d-arch.ide.go.jp/je_archive/society/wp_unu_jpn80.html

25

Chapter 2 The Current Situation and Characteristics in theJapanese Fashion Industry
2.1 Japanese Culture and Textile History
Producers, not consumers of clothing, food and shelter12
Before the industrialisation of synthetic fibres in the early 20th century, everything was made fromnatural fibres. In villages throughout Japan, one could witness the whole process of extracting fibres
from bark and grass in the surrounding mountains, growing hemp, cotton and silkworms, spinning theminto yarn, weaving them and dyeing them to the desired colour. The cultivation of cotton and sericulture
were arduous tasks that required time and effort at every stage. As a result, people developed strong
attachments to the clothes they had spent time crafted themselves and did not want to waste them. In
addition, dyed and woven products from different parts of Japan, which could only be produced under
the local climatic conditions, had a rare value and were regarded as precious and expensive. Old
clothes and fabrics also had a commodity value. They were transported to markets across Japan basedon demand, and people waited for the opportunity to acquire them. they were not merely consumers
but active participants in the production process.
Thorough circulation system because it is a valuable resource.13
During the 17th century, the spread of cotton led to the emergence of second-hand clothing merchants
and traders began to flourish in Osaka and Edo. These merchants collected old clothes and fabrics
from all over the region and transported to all parts of Japan. The demand for such items wasparticularly high in Tohoku, where the land was too cold and too thin for cotton cultivation. Rags, suchas those used in” Sakiori” （rip weaving）, where waste fabric is torn into strips, reformed into cords andwoven together, had commercial value. In fact, it was more important and valuable than food. Clothalso served as a cash crop, allowing individuals to earn a living. People devised ways to become selfsufficient in producing textiles from odds and ends and discarded threads from the production process.
The idea of 'Mottainai', similar to today's concept of circularity, began to take root in the region. In eachregion, clothing was not considered as waste but was carefully reused and recycled.
The thought behind cutting
Modern everyday clothes in Japan are cut and sewn into three-dimensional shapes that conform to thehuman body. Kimonos, on the other hand, is cut in a straight line and worn on the body. When untied,they return to a single piece of fabric. This unique characteristic is considered a gift from nature, as it
ensures the life within the material is not wasted in the slightest. The cloth is designed to be used

12

Natural fabrics -- beautiful Japanese fabrics --. Published 2018/06

13

https://d-arch.ide.go.jp/je_archive/society/wp_unu_jpn80.html

26
repeatedly from the moment it is cut. Once a kimono has fulfilled its purpose, the fabric is repurposed
into various items. For instance, rags from adult clothing are recycled and re-made into children's
clothes, then transformed into aprons and nappies, and ultimately used until the rags can be returnedto the soil as fertiliser. Throughout the process, the wishes and prayers of those who wore the kimonosare believed to be incorporated into the next creation. For example, the Hyakutoku Kimono in Kanazawa,a children's kimono made from scraps of kimono sewn together, is meant to encourage children to growstrong and healthy by harnessing the collective energy of many healthy individuals. Traditional
costumes from different regions of Japan are filled with these wishes, and there was also a custom ofworshipping clothes as Monogami (object gods). Within Japanese culture, the role of clothing was toaccompany such experiences by fostering a sense of community connection as individuals grow,dressing appropriately for age-related milestones, annual events and festivals. This cultural practicecontinued until the period before textile industrialisation began.
PICTURE 8: Textile Circularity in Edo Period

Source; NIHONBASHI MODEL Promotion Committee
The industrious revolution and craftsmanship in the Edo Period 14
During the Edo period in Japan, there was a significant increase in the rural population which resulted
in a dramatic decline in the number of livestock- a phenomenon known as the 'Industrious Revolution'compared to the Industrial Revolution in Western Europe. It is generally assumed that an increase inpopulation would lead to increased production and an expansion of livestock. However, the exact
opposite happened. At the time, rural communities lacked the capital to invest in large quantities of
productive assets such as livestock. In addition, keeping livestock required fodder from pastures and14

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27
other sources, which was seen as inefficient from the perspective of using arable land in land-scarcecountry like Japan. The rational option was for people to increase the marginal productivity of the landthrough family labour and hard work.
Concurrently, the textile industry developed along with agriculture. To acquire the high skills required
for skilled manufacturing, time, labour, and industriousness were essential. Rural communities acrossthe country started producing raw materials like cotton, and eventually, cottage industries proliferated
where farmers processed the raw materials into finished products that were then distributed. There wasalso the development of the home industry, where traders loaned materials to farmers who spun andwove them and subsequently purchased the finished products in bulk. This framework forms the basisof the fashion and textile industry today. Depending on the climate and lifestyle of the industrial area,
Japanese textile manufacturing technology, which was born out of the diligence of the Japanese people,
varied and encompassed diverse practices including silk weaving, cotton weaving, and linen weaving,enriching the lives of the people.
“Ko” communities and their links to economic activities.
In the Edo period, the term 'Ko' referred to the formation of various business associations. Traditionally,craftsmen in the building industry formed trade associations under the name 'Something-Ko'. With thedevelopment of the economy, various communities were formed, such as 'Tanomoshi ko', which wasformed among the general population for mutual financial support. Over time, more and more people
joined more than one Ko, and the Ko became interconnected and spread throughout the country. New
business opportunities and often excellent business models were created when Ko and Ko, with someautonomous economic activity, came together. From Edo's small, closed economy, divided into
hundreds of fiefdoms, all of Japan was connected by Ko, and business spread with these connections.

28

PICTURE 9:Network Society in Edo

2.2 Production, Manufacturing, Trade, Sales and Distribution
2.2.1 Production and Manufacturing
The Japanese apparel and textile industry emerged as a crucial export industry during the Second
World War and rapid economic growth in Japan. At that time, the industry was dominated by developingcountry-style industries that relied on cheap labour and competed internationally based on costadvantage. The value of textile exports grew significantly. However, in the 1990s, the bursting of
economic bubble led to a decline in the luxury brand apparel market, while fast fashion gained popularity.
Japanese global brand UNIQLO products became a huge hit, and foreign brands such as Zara andH&M also arrived in Japan. This led to the fast-fashion boom in the late 2000s.
While the number of employees and enterprises increased, so did labour productivity. The number of
employees peaked in the 1960s and the number of enterprises reached its peak in the 1970s; However,since the burst of the economic bubble in 1991, the number of enterprises and employees have declined
sharply and continues due to the market slowdown.

29
PICTURE 10: Manufactured textile product shipment value in Japan

Source; Ministry of Economy, Trade and Industry First Subcommittee on Textile Industry 2021, Nov
PICTURE 11: Textile Industry scale

30

Source; Ministry of Economy, Trade and Industry First Subcommittee on Textile Industry 2021, Nov

2.2.2 Trade
ImportDuring Japan’s period of high economic growth, Textile imports and exports experienced an increaseas the Japanese exchange rate stabilised after the 1985 Plaza Accord. However, the rapid appreciationof the yen made the Japanese industry less competitive, and the trade balance became negative（PICTURE 11）. The majority of imports in the textile sector were clothing. The import penetration rate
for clothing in Japan is particularly high, at 97.9%. This heavy reliance on imports is because many
Japanese clothing companies have moved their production bases to overseas countries with lower
labour costs and importing processed products. Japan also imports 100% of its wool and cotton, with
China and Southeast Asia serving as the main import partners.
ExportJapan exports clothing and textiles, with a total value of JPY 990.2 billion in 2018. Fabrics account for
the largest share at 31%. The main export destinations are China, East Asia and the Middle East.
Japanese fabrics are highly advanced in terms of technology, and the exported fabrics carry a high31
value and are internationally competitive. In fact, Japan exports more fabric articles than EU countries
and the USA.1516
PICTURE 12:Trade defects

Source; Ministry of Economy, Trade and Industry First Subcommittee on Textile Industry 2021, Nov

1516

https://www.jtia.or.jp/toukei/toukei.htm
https://www.jpmac.or.jp/img/relation/pdf/2021pdf-full.pdf

32
PICTURE 13: Fabric Exports in each country

Source; Ministry of Economy, Trade and Industry First Subcommittee on Textile Industry 2021, Nov
2.2.3 Structure and Issues of the Japanese textile industry
In 2020, Japan's apparel sales were 8.6 trillion yen, representing a 20% decrease from the previous
year due to COVID-19 (PICTURE 13). On the other hand, the number of domestic garments supplied
increased to 3.57 billion, which is 1.5 times higher than in 1990. This indicated an oversupply situationin the market where the domestic procurement volume was 2.8 billion items, while the consumption
volume was 1.36 billion (PICTURE 14). In contrast, in 1990, the figures show a circulation of 1.19 billion
items and 1.15 billion items were sold. This is thought to be due to the expansion of the SPA (Speciality
store retailer of Private label Apparel) business model in Japan, a term coined in 1986 by the chairmanof US worldwide clothing retailer to describe his company's business model, which vertically integrates
everything from product planning to production and distribution. Retailers order months ahead of theseason and buy large quantities of material, so they can't adjust supply and demand according to trends
and climate predictions. Various sizes and colours are produced in large quantities, products on shop
shelves remain unsold, discount sales and overseas exports have become the norm, and exports ofused clothing overseas continue to increase. That is why exports of used clothing overseas continue toincrease.171819

17https://c-fine.jp/magazine/sustainability/
https://www.wwdjapan.com/articles/990986
19
https://www.meti.go.jp/shingikai/mono_info_service/textile_industry/pdf/001_07_00.pdf
18

33
The market survey conducted by Full Kaiten Corporation on the profit structure of apparel companies
from April to June 2020 reveals that only 20% of all SKUs generate 80% of the total gross profit fromsales. This means that the remaining 80% of SKUs do not generate any profit. Such an inefficientbusiness model when the profit of the company and the impact on the environment are taken into
account.
PICTURE 14:Domestic clothing market

Source: Towards 2030 Prospects for the textile industry from METI First Subcommittee
on Textile Industry 2022, May
PICTURE 15: Fashion clothes supply and demand balance

34
Source: Kojima Fashion Marketing Co. Research 2020/620

PICTURE 16: Export Used Clothes

Source: Kojima Fashion Marketing Co. Research 2020/621

20
21

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http://www.fcn.co.jp/thesis/gendai200625/

35

PICTURE 17:Profit structure in apparel

Source; Market survey conducted by Full Kaiten Corporation 2022/922
2.2.4 Chemical fibres market
Chinese textile manufacturers are growing rapidly, accounting for over 50% of global textile production.
The majority of polyester and nylon, which are the two largest synthetic fibres, are produced in China.
In Japan, the leading synthetic fibre producers are Toray, Teijin Frontier, and Asahi Kasei. Toray
develops all three major Japanese synthetic fibres (nylon, polyester and acrylic). In recent years, Toray
has been focusing on creating additional value by developing an integrated supply chain business,processing fibre materials, including textiles, sewing, and yarn. The company is working with global
retailers, such as UNIQLO to expand sales and develop new textile technologies for innovative
materials, establishing a competitive position globally.
2.2.5 Apparel markets

22

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When analysing the clothing market by distribution channel, department stores (DpS) and
GMS/supermarkets have experienced a decline in market share, while speciality stores (SpS) and thesize of e-commerce have increased. Most of the market share is dominated by a small number of large
retailers, led by Fast Retailing with its UNIQLO and GU brands. Other clothing retailers include Adastria,
Ryohin Keikaku (MUJI) and World. On the other hand, there are challenges faced by low-cost retailchains such as Shimamura, which specifically target the shrinking Japanese domestic market. These
retailers are in danger of disappearing, and their sales are declining. In contrast, Fast Retailing isfocusing on expanding its presence in the overseas market rather than the shrinking Japanese market.
They have begun to cater to the strong overseas demand for CE. As the apparel market in Japan
continues to shrink, global companies will be forced to strengthen their CE initiatives, while apparelcompanies competing in the Japanese domestic market will be weeded out.
The e-commerce market for the apparel industry is growing steadily: reaching a value of 2.2 trillion yen
by 2020. E-commerce now accounts for 19.4% of the market (*), indicating that buying clothes online
has become the norm for many consumers. In the apparel e-commerce retail sector, ZOZO Corporation
has consistently increased its sales and profits. The company is also continuously evolving, introducing
new features to its WEAR online coordination application, which has led to the creation of a new C-toC retailing market. Emphasizing the role of technology is the key to our market expansion strategy.
*EC conversion rate: refers to the proportion of all consumer purchases made via e-commerce (EC).
Table 1:Top10 Apparel Retailers FY2019

37
PICTURE 18: Market size and e-commerce ratio in the fashion industry

2.2.6 Structure and Issues of the Japanese textile industry
The textile industry has a multi-stage supply chain with many subcontractors, ranging from theproduction of synthetic fibres to the manufacturing of garments. Each stage, the production of raw yarn
and fabrics, dyeing and sorting, sewing, etc. has its own division of labour. Trading companies act as
the link between domestic and overseas production centres, effectively organising and coordinating the
supply chain. However, this complex structure between trading firms creates a lack of transparency,
weakening the links between the garment and domestic manufacturing firms. In addition, due to risinglabour costs in Japan and the expansion of SPAs, manufacturing companies are moving production
overseas. As a result, certain regions in Japan are experiencing a decline and disappearance of thesewing, dyeing and processing industries, posing a risk of supply chain disruption. Manufacturing
companies are concentrated in certain production areas, and most rely on outsourced production
instead of developing their own products, so the challenge is to become "self-sufficient" in terms ofdeveloping and selling their products.

38
Table 2: Companies in each supply chain in their strengths and challenges
Supply Chain

Main enterprises

Strength

Challenge

Upstream

Mainly large

Technological development

Diversified and textile[Synthetic

companies (e.g.,capabilities (e.g., development

businesses' revenue streams

textileToray, Teijin,

and expansion of carbon fibre

are non-clothing

manufacturing

Toyobo)and new materials andand spinningapplications, development ofindustry]materials derived from nonfossil raw materials)

Middle stream

Focus on small

Processing technology,

Expansion and[Dyeing andand medium-coordination (with material

independence into non-processing

sized

manufacturers and otherclothing (own productindustry,

enterprises,

process companies),

development and sales)

textiletextilecooperation with different fields

industry].

production areas(e.g., with the automotive andthroughout

electronics industries),Japan

technology transfer (humanresources development).

Downstream

SMEs[sewing,

Ability to disseminate fashion

Strengthening international

information (brand power)

competitiveness, addressing

manufacturing,

environmental issues andapparel].

human rights.

Other [trading

Mainly large

Ability to disseminate fashion

Strengthening international

companies,

companies (e.g.,

information (brand strength,competitiveness, addressing

SPAs].

Itochu, Uniqlo)

international expansion),environmental issues anddegree of responsiveness tohuman rights.

environmental protection andconsumer safety (recycling,false labelling, measuresagainst hazardous substances)
Source; Ministry of Economy, Trade and Industry First Subcommittee on Textile Industry 2021, Nov
2.3 Reuse markets
The reuse market in Japan is growing despite the challenges posed by the COVID-19 pandemic andeconomic environment, reaching 2.7 trillion yen in 2021 and is expected to reach 3.5 trillion yen by2025. 23

23

This growth can be attributed to the increasing awareness among consumers about thehttps://www.recycle-tsushin.com/news/detail_7557.php

39
importance of protecting their livelihoods, as many things tend to become more expensive due to theweak yen and high resource prices. In particular, customer-to-customer (CtoC) transactions via flea
market apps are growing rapidly and are expected to account for 44% of CtoC transactions by 2020.
Society's environmental awareness and 'appreciation of things' are also on the rise, with Mercari as adriving force. According to the 'Consumer behaviour of users and non-users of flea market apps in
2022', 53.0% of respondents said that they had no objection to purchasing second-hand goods.24
The reuse market for fashion products was 720 billion yen in 2019 and is expected to grow to 990 billion
yen by 2022.25
Overseas, resale platforms for used clothing, especially online, are expected to drive market growth,boosting the overall global result.26
In 2021, the top five companies in the reuse industry recorded impressive sales of 168.4 billion yen,showing a significant year-on-year increase of 26.0%.

from GEO Holdings, which mainly operates ashop purchase business; Mercari, a C-to-C online trading company, achieved sales of 147 billion yen,marking a growth of 38.5%; Comehyo experienced sales of 71.1 yen billion, an increase of 40.2%; andValuence HD with a sales growth of 38.5%, reached 52.5 billion yen. However, store-based reusecompanies, known as recycle shops, such as GEO, have a business model of buying items at low
prices and selling them at even lower prices. On the other hand, online CtoC transactions, such as
Mercari, are believed to be relatively high in terms of legitimate prices. Online platforms have enabled
the sale of durable and valuable items, regardless of their age, do not drop in price and enter into
secondary and tertiary distribution. This system breaks away from the linear system where one person
consumes and disposes of things, but a system where a product is passed on to multiple consumers
who can continue to use it and maintain its circularity over a longer period.
One of the future challenges is the establishment of a robust product tracking system. Manufacturers
currently have no incentive to produce durable products now because the secondary and tertiary
distribution profits do not flow back to them. A system needs to be set up where profits are properly
allocated through the subsequent secondary and tertiary distribution value chain back to the productmanufacturing side, where the cycle may be prolonged.
MERCARI (MERCARI Corporation)
The service was launched in 2013, and has since provided Japan's largest C-to-C marketplace whereusers can list and sell items to each other. According to the 2022 Sustainability Report, the app has
prevented approximately 59,000 tonnes of clothing waste in Japan and the US, which in turn, hasresulted in an estimated avoidance of approximately 1.4 million tonnes of CO2 emissions. As

24https://about.mercari.com/press/news/articles/20220816_consumersurvey/(https://www.yano.co.jp/press-release/show/press_id/2395)
26
https://www.jetro.go.jp/biz/areareports/special/2022/0201/0a57c90175aa4216.html
25

40
competitors, Rakuten Inc. operates "Rakuma" and Yahoo Japan Corporation launched the Paypay flea
market in 2019, each with around 5 million monthly active users.
Valuence Japan.
The company primarily focuses on the reuse of branded goods and other products in Japan. It has 119
shops in Japan and 23 shops in 16 foreign countries. In January 2022, it became a member of the Ellen
MacArthur Foundation Network, and in May 2021, the company introduced a proprietary measurement
tool that utilises LCA methods to assess its environmental impact. It will report on its contribution toenvironmental footprint reduction, as well as the amount of carbon dioxide, water and energy used by
the products it handles. This information is disclosed as the “Resale Impact”. The company also
highlights the amount of contribution to the reduction of carbon dioxide emissions and water use isstated on the product tags in its shops. Furthermore, In October 2022, the company joined 'The Fashion
Pact'. Additionally, Isetan Mitsukoshi launched the 'I'm green' initiative, a long-established department
store, uses the external sales channel to provide a service whereby brand clothing, bags, watches,
jewellery, antiques and works of art that are lying in the wardrobe are received at the shop andconnected to reuse and recycling.
PICTURE 19: Reuse Market Size in Japan
Trillion yen

41
PICTURE 20: Market scale 2020 in each Reuse Channel(bil yen)

PICTURE 21: Fashion Reuse Market Size Trends and Forecasts

42

PICTURE 22: Used Clothes Market in the US

2.4 Sharing services
The Japanese market for goods (including clothing) sharing services is expected to grow to around 3.3
trillion yen by 2032 as technologies such as AI-based styling services develop, and logistics systems
become more efficient. This growth will enable consumers to rent clothes that match their outfits andalign with current trends easily. This sharing service is expected to reach 3 trillion yen. Such sharing
services are increasingly in demand, especially among the younger generation, as they offer benefits
such as environmental protection, efficient use of resources and money savings. Japan has several
clothing-sharing services, ranging from those aimed at the average user to luxury brand rentals.
However, many people may feel uncomfortable lending their clothes to others or sharing the same
clothes with others. Especially after the COVID-19 pandemic, people are worried and averse to infection,and the challenge is how to overcome such attitudes in the future.

43
PICTURE 23: Sharing Goods (including Clothes) market size in Japan

2.5 Current status of collection and recycling
The integration of waste collection into everyday life and the efficient operation of sorting facilities has
been subjects of trial and error in many countries. This is also the case in Japan: I:COLLECT, a German
company that is part of the SOEX Group, a global textile and footwear recycler with operations in 90
countries and used clothing and footwear collection operations in 63 countries, has been operating inJapan since 2013. However, successful collaborations with local companies have been limited. The
Japanese system of collecting and sorting clothes differs from the Western culture of donation, and itis necessary to understand the historical background of a used textile business. In addition, instead ofsimply exporting sorted waste, which is called reuse in many countries, there is a need to promotesecondary distribution, material and chemical recycling in Japan. This shift is crucial, considering the
expanded definition of the Basel Convention.27rather than being pushed abroad.
Japan has a long history of circular textiles, with a particular type of trader specialising in used textiles.
The main method is cascading, where textiles are reused in other products, but at a lower quality level.
The path from collection to reuse is complex and varied, with collection carried out by municipalities
and SMEs, along with sorting and other tasks carried out manually.

27

http://tmsj.or.jp/labo/recycle/data/01.pdf

44
Material recycling of recovered textiles can be divided into three categories of use: reselling usedclothing (Reuse), remanufacturing as used clothing using the material (Remake), and remanufacturingwith Hanmo technology* (Recycle). While the proper proportions are not measured, based on interviews
with companies, it is estimated that the respective sorting rates are around 60% for used clothing, 20%
for used fabrics and 1.5% for wool waste, with the remainder being disposed of. Used clothing is finely
sorted and mainly exported to South East Asia. The waste from used clothing is converted into fibre
and sold to the Japanese manufacturing industry (mainly the automotive industry). Hanmo technology
can be applied to various products, including cotton and wool, and is currently converted into automotive
interior materials, home insulation, felt and cushioning materials. Other products, limited to uniforms,
are pelletised and sometimes re-commodified as buttons and fasteners.
JEPLAN is at the forefront technology for polyester chemical recycling, while Toray leads in nylon
chemical recycling. As for the chemical recycling of polyester, about 9% of all recovered clothing isconverted into recycled polyester. The remainder is reused, recycled as a material for automotive
interiors, or used as thermal energy materials. depending on the characteristics of the fibres, Recycling
rates are not increasing because very few garments are made from a single polyester material, withmost made from mixed fibres. The challenges for the future are to develop efficient methods to recover
single materials and to develop technologies to enable the chemical recycling of mixed fibres. Toray
and Refineverse have developed technologies for recycled polyester.
*Hanmo is the technology for recycling old fibres back into fibre.
Table 3: The Way of Recycling in Japantechniquereclaimedaffiliatedgoods

organisation

Summary.
The rags with the highest commercial value are re-used as
second-hand clothing both domestically and internationally.

secondhand
clothing
material

Used clothing As sorting is manual and a labour-intensive industry,
distributors

countries with low labour costs are the main competitors.

and late textile Profitability is high compared to material recycling.
traders<Issues> Wetting and soiling in collection and domestic
clothing emissions do not match the demand for clothing inrecyclingdeveloping countries.

waste(cloth)Waste

Selected clothing, such as T-shirts, underwear, Y-shirts,

manufacturer

etc., are recycled as waste cloths (rags for the domestic

and late textile manufacturing industry)
trading＜ Issues ＞

company

domestic manufacturing industry.

Dependent on the utilisation rate of the45

Textile products are converted back into cotton or hair-like
Anti-wool

single fibres using needle-like tools and used as textile raw

counterfeit manufacturing materials. The fibres are recycled into automobile interior
paper

and anti-wool materials, house insulation, felt, cushioning materials, etc.

money

trading<Issues> Mostly used for automobile interior materials andcompanies

dependent on the business conditions of the automobile
industry.

chemicalrecycling

Textilerawmaterials

Collect clothing and, after sorting, produce high-quality
JEPLANchemically recycled fibres

Toray＜ Issue ＞

Chemical recycling with mixed materials,

collection of clothing made of recyclable materials
Municipal

thermal recovery

processing

Energy materials

facilities, etc.
Source; METI, Asian circular economy model Research projects 202028
In 2022, Patagonia chose as a partner with Nakano Ltd, a well-established supplier of used textiles, tocollect and sort T-shirts made from Patagonia's infinitely recyclable fibre, Infinna, in a horizontal
recycling operation. Nakano Corporation uses its existing network to efficiently collect the fibres andhas a consistent system of human sorting, recycling and bridging to recycling.29
Nakano Ltd.
Established in 1934 and has a turnover of 3.8 billion yen. It operates as a textile collecting and sorting
company. The main business is the production and sale of recycled waste cloth, military gloves, as wellas the wholesale of various industrial subsidiary materials, safety equipment and protective gear. The
collected used clothing is exported abroad and converted into rags, woollen, felt, military gloves, etc.
Historical background of old textile traders.
In the Edo period, the concept of resource reuse took root in everyday life. Used fibres from clothing
and fabrics were bought and sold for sewing. In the Meiji Era (1868-1912), the demand for used cottonand linen fibres as raw materials for paper mills increased, which led to the emergence of the resource
recovery industry began to trade in used clothing, fabrics and waste fibres.
Clothing was treated differently from other products such as plastics, food and building materials andwas a viable business for old textile merchants. Rags in particular were a major export in the pre-war
period. Overseas, rags are made from lint obtained from cotton spinning. However, in Japan, before
the development of the Western spinning industry there was no lint, so old fibres were cut into usable

28

https://www.meti.go.jp/meti_lib/report/2020FY/000271.pdf

29

https://www.wwdjapan.com/articles/1447938

46
sizes and transformed into high-quality cotton rags. Eventually, this traditional collection systembecame unprofitable as an era of mass production and mass consumption began. The rationalisationof production methods, technological innovation and falling raw material prices led to a surplus ofmaterial. In addition, the rapid diversification of textile types has become an obstacle to recovery andrecycling. The introduction of synthetic and chemical fibres, and the use of blended fibres rather thansingle fibres, made it difficult to produce high-quality rags but had to be converted into cheap
consumables such as mops and gloves by means of hair removal, making the labour-intensive andarduous process of sorting and converting into down-cycled products an unprofitable business.
2.6 Environmental awareness2.6.1 Environmental Impact on the fashion industry
According to the Ministry of the Environment, Japan's annual water consumption is 8.3 billion cubic
metres and carbon emissions are 90,000 kilotons. It is estimated that each clothing item emits 25.5 kgof CO2 and uses 2,300 litres of water resources. The clothing industry also generates 45,000 million
tonnes of scrap fabric, wood and other waste materials.30
Material flows show that more than 780,000 tonnes of textiles are disposed of annually in Japan. Among
this, 65% (512,000 tonnes) is incinerated and landfilled. Approximately 19% (154,000 tonnes) is reused
domestically, 15% (123,000 tonnes) is sent for recycling and 5% (40,000 tonnes) is exported abroad.
Although some of this is chemically recycled back into textiles, this accounts for less than 1% of the
global total. Other statistics show that more than 70% of household clothing is incinerated. This is partly
due to the high number of incineration plants in Japan. According to data released by the Ministry of
the Environment in March 2021, there are 1067 waste incineration facilities in Japan. This is an orderof magnitude higher than in other countries: according to OECD data from 2008, more than half of theworld's incinerators are in Japan. This is because Japan is a small country and the construction of waste
incineration facilities was promoted on a national scale at a time when mass production and massconsumption were beginning during the era of rapid economic growth. It is also shown that Japan's
general waste disposal business will cost 2,088.5 billion yen (in 2019), and now that 60 years havepassed since the era of high economic growth, local authorities need to consider the ageing ofincineration systems and what they can do to promote recycling rather than installing new incinerators.
It is crucial to raise awareness within the community and encourage sustainable waste management
practices.

30

h ttps://www.env.go.jp/policy/sustainable_fashion/

47
PICTURE 24 Material Flow

Source: First study group on textile resource recycling systems from NEDO31

31

https://www.meti.go.jp/policy/mono_info_service/mono/fiber/pdf/23012005.pdf

48

Table 4:The number of incineration plants

2.6.2 Consumer Trends in Japan
According to a survey by the Ministry of the Environment, 59% (3+1+4+54%) of people are interested
in sustainable fashion, including those who are taking action, and more than half are aware of andconcerned about the environmental impact and social issues associated with the fashion industry.
However, a report on consumer attitudes by the Consumer Affairs Agency indicates that the mostimportant consideration when buying clothes is the price (79.1%), followed by design (70%) and comfort(49.9%), suggesting that environmental awareness is not linked to the purchasing decisions.
The survey further reveals that 53.9% of clothes are bought from fast fashion brand shops, 47% fromgeneral retail shops and 40.6% from online shopping. Only a small percentage of consumers, 7.8% buy
from flea markets, 6.6% from second-hand shops and 6.6% from recycling shops, with a very low
percentage of 0.8% using sharing services. Many people still want to buy clothes after they haveactually seen them in a shop, and 51.9% have a negative perception or dislike of second-hand clothes.
The future challenge will be overcoming these attitudes towards wearing second-hand clothes andsharing them with others. In addition, consumers are still sceptical about sustainability commitmentsfrom manufacturers and brands. There is uncertainty about whether companies claiming to be

49
ecological are environmentally conscious, so it is necessary to develop appropriate certification
schemes for Greenwashing (*).3233(*) Greenwashing refers to things that appear to be environmentally friendly when they are not,misleading environmentally conscious consumers.
PICTURE 25: Interest in Sustainable Fashion

PICTURE 26: Attitude to buying second-hand clothes

32

Available at:https://www.caa.go.jp/policies/policy/consumer_education/public_awareness/ethical/investigation/assets/consu
mer_education_cms202_ 211013_01.pdf
33
https://www.tr.mufg.jp/shisan-ken/pdf/kinnyuu_literacy_20.pdf

50
PICTURE 27: Important buying points for clothes

PICTURE 28: Places for buying clothes

51
2.6.3 SME Awareness and Response
In recent years, terms such as SDGs and sustainability have gained popularity through the media, andcompanies have started to recognise and drive initiatives. However, at the moment, companies still see
environmental issues and climate change as a cost, rather than new business opportunity. According
to Ministry of the Environment data, the smaller the company, the less likely it is to be actively engaged
in environmental initiatives.
The Ministry of the Environment has published the Decarbonisation Management Handbook for SME34
Businesses, which outlines the steps for developing a plan to promote carbon neutrality initiatives for
SMEs. As circularity initiatives seem to contradict carbon neutrality goals, it is advisable to integrate
circularity measures with decarbonization efforts and provide new government guidance.
PICTURE 29：Environmental initiative by sales volume of the company

34

https://www.env.go.jp/earth/SMEs_handbook.pdf

52
2.7 Government Actions
In Japan, the Circular Economy Vision was published in 1999, ahead of the rest of the world. The
perception of environmental problems shifted from being limited to certain areas of Japan to anationwide concern due to rapid economic development. At that time, the remaining lifespan of a landfill
was a pressuring issue, with 8.5 years for general waste and 3.0 years for industrial waste. The
recycling rate for general waste was 10% and that for industrial waste was around 40%. The main
objective of this vision was to increase recycling and reduce waste generation to prolong the life oflandfills. it was a response to a problem that had arisen and was seen as a cos, rather than creating
new business,
Times have changed dramatically since then, and the government's Circular Economy Vision 2020 has
redefined the concept as a shift towards a circular economy for the purpose of economic activity.
However, no clear vision or roadmap has yet been developed, aside from acknowledging the need toaddress the textile sector.

There is also an explicit reference to reducing the amount of waste exported

in the name of supply and support to developing countries, which is currently defined as reuse.
The Ministry of the Environment, the Ministry of Trade and Industry, and the Ministry of Consumer
Protection are all working on the issue of environmental pollution in the fashion industry and are
publishing reports under the term 'sustainable fashion'. In addition, a joint discussion and informationexchange forum between the three ministries started on 20 January 2023.
Ministry of Economy, Trade and Industry: Emerging State of Fashion Report- Ministry of Economy, Trade and Industry (METI): Report on the Future of Fashion- Ministry of the Environment（MOE）: SUSTAINABLE FASHION- Consumer Affairs Agency（CAA）; Promoting sustainable fashion habits.

53
PICTURE 30: Researches presented by METI, MOE, CAA

History of circular legislation textile-related
The Waste Management and Public Cleaning Act of 1970 was a law to promote the sorted collection
and recycling of materials, but it did not cover clothing. This was due to the existence of second-hand
textile traders and an established system of secondary distribution and cascade recycling was in place
as a business. However, the business of second-hand textile traders declined as the trend towards
mass production and the diversification of products such as synthetics made their business unprofitable.
To address this situation, the government needs to develop resource recovery strategy for clothing,establish standards and certification, and implement action plans. It is also necessary to consider not
only legislation aimed at controlling, but also legislation aimed at promoting textile recycling.35

35

https://www.meti.go.jp/meti_lib/report/2020FY/000271.pdf

54

Chapter 3 Japan's Circularity Potential in Fashion & Textile
3.1 The Potential of Japanese circular fashion
In recent years, there has been a growing awareness of existing business systems' negativeenvironmental and social impacts. Brands and retailers have begun to address these issues individuallyand collectively within their supply chains. But the focus has often been on improving production
techniques' efficiency and reducing the environmental footprint of materials. Few companies havedirectly addressed fundamental system issues such as the durability of clothing, the number of cycles
and recycling rates.
There are four main circular strategies: closing the Loop; slowing down the Loop; reducing Resource
consumption; the regenerating Through Circulation (Regenerative Life Model). Implementing thesestrategies require new skills at every stage of the supply chain, including sourcing, product design,
manufacturing, sales, customer service, secondary distribution, recovery and recycling. Such
implementation requires significant investment and time and consideration of transition costs.
Implementing a circular business model is easier in environments that allow for continuous
experimentation and small-scale innovation, such as start-ups and internal start-ups, when compared
to large companies with established business structures in an existing linear society.
In addition, making systemic changes or transform a company’s business model is a challenging
endeavour. It is difficult for any single company to comprehensively implement the four strategies
mentioned above. Transformation requires the creation of an ecosystem, and the key to success is
continuous cross-sector collaboration, which should extend beyond peers, suppliers and customers toinclude local authorities and research institutions. This is the most important prerequisite for scaling up
circular business models.
Here, creating an ecosystem around circularity in the local textile industry is proposed as a possibility
for Japan's own circular fashion. The potential regions and companies will be presented from thefollowing three points of view.
1. Circular design as a new economic zone for the rural areas of Japan
2. Circular design that integrates natural activities of plants and animals
3. Circular design with an open network to encourage autonomy and new economic zones
The first example is a whole town that is beginning to move towards establishing itself as a circular
ecosystem, and the second example highlights a company that is creating authentic circularity througha comprehensive four-pronged strategy by unravelling traditional textile technology and history. And
thirdly, there is a call to action to expand and replicate such economic zone and enterprises.

55
PICTURE 31: The Circular Fashion Ecosystem and Four Strategies

Circular Fashion Ecosystem of Circular Fashion Ecosystem Blueprint report (Ellen Macarthur
Foundation) modified by the author
3.2 Designing circular ecosystems new regional economic zones
When considering the principles of circularity, it is necessary to design a holistic system that does notproduce services and products of material circulation fitting in the first place but rather regenerates theplanet without waste. Successful companies in the EU circular economy have the ability tocollaboratively redesign production and distribution networks.
For example, the well-known Dutch company Mad Jeans, which offers a monthly leasing model forjeans, has established production, repair and redistribution sites in neighbouring Spain and Tunisia.
When considering the circularity of textiles, one of the key strategies is 'slowing down the loop', which
involves extending the flow in the loop by repairing and maintaining the product and designing a systemthat allows this to be done within easy reach of the local area. The system is designed to accommodate
such activities in inaccessible locations. Additionally, the company prioritizes local profitability and user
friendliness, offering free shipping for returns and repairs within the EU.
Metsä Fibre, one of the world's largest pulp producers in Finland, also produces a range of biomaterials
from wood chips and bark. The company's products are designed to be reusable and recyclable, anymaterial that cannot be used in its original form is converted into energy, making the company 151%
energy self-sufficient. This achievement not only eliminates the reliance on fossil fuels, but also plays
a positive role in providing energy to the community. When using resources, a whole system has been

56
created to ensure that any surplus is effectively used by the company itself, neighbouring commmunities,
and other industries.
3.2.1 Fukuoka Prefecture, Yame City Building a new economic zone linking local living
In the Chikugo region, traditional crafts are centred on Kurume Gasuri (*), a unique textile that combines
dyeing and weaving techniques. There is a movement to establish a new regional economic zone basedon circularity that connects culture to the world through the cooperation of traditional weaving anddyeing factories, local cultural trading companies that bridge consumers and culture, as well as the
town of Hirokawa and other public, and private and academic organisations.
What is Kurume Gasuri?
This cotton fabric has been woven in the Kurume region of southern Fukuoka Prefecture for more than
200 years since the Edo period. The term “Kasuri” refers to a weaving technique where pre-dyedthreads are used in the warp, weft or both to create a pattern. Patterns and designs are expressed bydyeing the threads before weaving. The fabric is then woven using a traditional loom, employing
different techniques to create different types of patterns and designs, such as plain or striped patterns
and vertical or horizontal patterns.
Formation of local ecosystems to keep products in use for longer
Regional cultural trading company Unagi no Nedoko36 selects and sells household goods and clothing
made using traditional techniques, and plans and develops original products. It currently works withapproximately 227 craftsmen and 52 textile-related companies, mainly in Kyushu. They research on
local culture and history, create product stories through dialogue with craftsmen, and brand and market
their products to meet the needs of modern customers.
Many SMEs textile companies concentrated in rural areas have world-class technological capabilities,
and such companies have managers who refine their skills with a craftsmanship spirit. However, mostof them tend to focus solely on their technical expertise, lacking familiarity with marketing and sales
strategies, and have not thought of establishing themselves as a brand. In addition, the role of branding
to the consumer is essentially played by the retailer of the final product. In contrast, craftsmanshipsometimes plays a behind-the-scenes role in supporting the value of the product. Unagi no Nedoko
highlights craftsmanship by incorporating it into their branding strategy, and ensuring equitable sharingof associated benefits.
Their flagship product, the modern “Monpe” featuring Kurume Gasuri, has gained tremendous
popularity that sales have increased more than 30 times in the 10 years since the company was foundedin 2012, continuously growing for 10 consecutive fiscal years. Originally, Monpe was renowned as postwar agricultural work clothing. However, they have been adapted to suit modern times by incorporating
various patterns and colours while retaining their traditional function which aims to minimise waste by36

https://unagino-nedoko.net/

57
making full use of fabric width. The company provides paid repair services at sewing factories in Kurume
and in the neighbouring prefecture of Saga. Besides, it also collaborates with local traditional weavers
such as Banshu (Hyogo), Enshu (Shizuoka), Bingofushiori (Hiroshima), and Haebaruhanaori (Okinawa).
The project is developed in different regions, showcasing their unique textiles and culture. They also
sell patterns for consumers who wish to create Monpe themselves.
In addition, the Fukushima area of Yame City, Fukuoka Prefecture, is a castle town designated as a
traditional building preservation area where a townscape preservation movement is active. It hasformed an ecosystem to build businesses throughout the region, such as an inn that offers hands-on
tourism and craft experiences there, and many sympathetic experiences designed to help consumers
use products longer.
PICTURE 32: Circulars in the cultural sphere that promote consumer awareness change

The potential for global expansion with IPs in the new economic sphere.
Kasuri, also known as ikat, is a textile technique originated in India around the 7th-8th century andspread to Southeast Asia and Europe. By the 15th-16th century, it spread to Latin America, where it isstill woven today in Mexico and Guatemala. In Japan, it was introduced to Okinawa in the late Edo
period (14th-15th century), where it developed its own unique Kasuri weaving style; it later spread tothe mainland in the 18th century and became popular among the upper classes. However, by the early
19th century it had become accessible to the general public as Kurume cotton weave.
While the technique is used worldwide, the textiles woven in each region differ in colour, pattern andpurpose, and are produced differently due to their diversity and indigeneity. If the format that constitutes
circulation in the local economy of the Kurume Gasuri production area can be extended, to other Kasuri
production areas around the world, it could lead to the expansion of an autonomous, decentralised,textile-centred circular economy.

58
Clothes made in direct connection with history/land/culture and people enhance people's wellbeing.
Shimokawa Orimono is a Kurume Gasuri weaver founded in 1948. The company has received many
invitations to participate in exhibitions in Paris, France, Italy and other countries. Designers from abroad
have also shown interest and visited their factory. They have also established business relationships
with top European brands. Mr. Shimokawa, who is the manager of Shimokawa Orimono, has been open
to accepting outsiders in Japan and overseas, such as local cultural trading companies, private dealersand designers who are attracted to Kurume Gasuri, and has attracted many people and created acommunity to promote Kurume Gasuri.
Dr Tarben-Shahar, an advocate of well-being, emphasizes the importance of maintaining acomprehensive sense of the five elements of 'SPIRE' to foster well-being. This stands for Spiritual,
Physical, Intellectual, Relational and Emotional. When people gather around Mr.Shimokawa and “Unagi
no Nedoko”, they have to opportunity to learn about the history and spirituality of Yame through the
Kusuri. Additionally, they can directly experience the manual labour of weaving and interact with local
people. This contributes to the consumer's own well-being.
Fashion is a powerful tool for consumer self-expression and behaviour change because of its influenceon culture and society. It encompasses innovation, creativity, culture and self-expression and is uniqueamong other commodities in terms of its impact on society. Consumers feel and learn through theirexperiences, verbalise and share their insights through others, and then use clothing as a means to
express themselves and shape their identity. Clothing, as a platform of these interactions, has great
potential to contribute to people’s state of well-being.
I believe that the basis of circularity lies in people's involvement in textiles, as a traditional local industry,
which will change their awareness, leading to an increased the number of individuals who have theagency to choose their own happiness.
Why making an increase in well-being people leads to the way to a circular society?
An interview with a freelance fashion editor unravels the link between circularity and well-being.
＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊
Recently, there has been an increase in the number of products claiming to be aligned with the SDGs,
ethical and sustainable. As media professionals, we often use these catchy buzzwords. However, it isundeniable that the words have taken on their own life. How many people understand the meaning ofsuch buzzwords and their relevance to their own experience? I guess few people seriously consider
and choose such products.
The difficulty is that goods aimed at benefitting the planet and human rights are often expensive. As aconsumer, no matter how durable or made of natural materials, I would choose a cheaper UNIQLO Tshirt over an identical white one. Even if you are ethically and sustainably educated, the choice is difficult.
What is needed is a holistic approach. You must realise it's not a simple choice between good and badfor the environment. We should ask ourselves: Do I really need it? Why do I need it? Do I require so

59much of it? Is this the right product for me? This mindset encourages continuous self-confrontation andintrospection in the process of simply choosing and buying things. If you go through this process, youwill not consume unnecessarily. This leads to a society where more and more people obtain only what
they genuinely need where they need it, generating a positive cycle.
What does it mean to value things and value oneself? It is not something that can be merely
contemplated in one’s mind. You have to personally immerse into and feel it with your body and yourexperience. It depends on how many people can take those steps.
In my case, it started with the realization that I couldn’t handle raising my children alone. After facing
myself incessantly, I stopped trying to do it alone. I recognised my weakness early on and created acommunity who could support each other in raising our children. The members who gathered all faced
similar challenges, so we offered assistance to each other. And the feeling of spiritual connection andsecurity naturally allowed me to expand my perspective and encompass the well-being of the planet aswell.
＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊
Regardless of how circular a system is well-designed, as long as the ones making the choices arepeople, the well-being of people is a vital part of the circular system. People's choices are diverse,
autonomous and, essentially life fulfilling is a prerequisite for circularity.

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PICTURE 33：Weaving machine in Shimokawa Orimono (site visit)

3.2.2 Supply chain integration of textile-related companies within a 20km radius of Fukui
Prefecture, Fukui City and Sabae City
MADE BY is an initiative that aims to use Fukui's network of textile-related companies to create
manufacturing that can be completed in a compact area within a 20 km radius. Now six companies
involved in sewing, textile weaving, printing and dyeing are taking part, offering tours of production
areas and designer matching. Fukui has a long history of silk textiles and a concentration of textilerelated companies that have developed their own unique skills and high-quality Japanese technologythat can be used globally. In the past, these companies operated independently, but the shortage ofmasks during the COVID-19 disaster brought them together to collaborate on manufacturing anddelivering masks. At present, the main activities of MADE BY include creating businesses andopportunities such as upcycling products made from pre-consumer waste through matching designers
and factory tours. However, the future vision is to establish a series of complete production, sales andrepair facilities within the Fukui region, and to create a new economic zone based on high-quality, lowimpact circular fashion.

61
PICTURE 34:MADEBY tour visit

3.3 Circular from the natural behaviour of plants and animals’ circular design
As mentioned in 2.1, Culture and History of Textiles, the circulation system of the Edo period before thedevelopment of the textile industry, not only encompassed the management of goods but alsoestablished a sense of circularity, where clothing was closely tied to local events and festivals, fostering
a feeling of community connection. In this section, you will find examples of textiles based on thistraditional way of using textiles but which have been taken up by the Japanese market with new ideas
and in line with modern needs.
3.3.1 Ichinoseki, Iwate Kyoya Dyeing Shop Branding the life cycle circulation
Kyoya Dye Shop37 , based in Iwate Prefecture, is a dyeing company that has been in business for 100
years. The company handles everything from design to dyeing, sewing and sales. They have createda circular system from the waste generated in harmony of nature and incorporated traditional culture
into their branded products. Their own brand en•nichi38 includes kappo-gi (aprons for cooking), whichhave been worn in Japan since ancient times, and Sarubakama (sarubakama/sappakama), a stray coatfrom the Tohoku region. By looking back at history and culture and developing products that integrate
their essence and spirituality into modern life, they contribute to the creation of new local cultural
economies, which greatly impact other sectors and sub-systems. that can be created by
Yamanoitadaki,an everyday tool inspired by the local 'Deer Dance' festival, was created to solve a local
problem. In recent years, crop damage caused by deer and other animals has amounted to more than
400 million yen per year, and even when hunted, more than 90% of the approximately 26,000 captured
animals were discarded, resulting in a shrinking number of hide processors and stitchers. To combat
this issue, the company began to produce and sell products made from deer skins that had been treatedfor vermin for helping to repurpose the resources and reduce waste.
The Deer Dance is a festival to express gratitude and make offerings to deer, which were a valuable
source of food in the Tohoku region,. By branding the story of this traditional culture and appealing to a3738

https://kyo-ya.net/localwear_iwate/https://ennichi.jp/

62
sensory value, it resonates to many people and strengthens the connection to sales. Distributing thesales generated by this cycle evenly throughout the value chain not only revitalises those involved in
the production of the products, but also reduces pests, increases agricultural income, and contributes
to cultural preservation by donating 3% of sales to traditional performing arts. In addition, the continuous
organisation of cultural and production events for users has led to an increased involvement andmigration. The products are also a gateway for users to learn about the cycle of life, experience theJapanese spirituality and embrace the beliefs that all things, including people, things, animals andnature, are equal and circulate energy, leading to an increase in the number of people who are awareof sustainability.
User interface for long-lasting use through craftmanship that uses old-fashioned wisdom.
All products from Kyoya Dye shop have a 'Permanent Repair' service. Stitch repairs are also available
for torn and punctured items, which are embellished by applying fabric. Clothes tags are made using'Sakiori', which involves tearing waste fabrics from clothes cuttings, reforming it into a cord and weaving
the torn cloth back together. Iwate has historically been characterized by cold weather and scarcity ofresources, where cotton was precious because it did not grow in the area, leading to a culture ofcherishing and prolonging the lifespan of clothing. Practices such as ‘Sashiko’ and ‘Sakiori’ are uniqueto the Tōhoku culture, which originated in the Edo period, and represent the wisdom of taking care ofclothing until the end of its life. Because the system is designed from the culture, it is an interface thatis easy for consumers to use, and Kyoya Dyeing Shop products are loved by many people in the Tohoku
region.
In-house products with an identity are the beginning of Circular Design.
The fact that dye company brings its products to life through storytelling and manages the entire supply
chain internally, production, sales and collection - offers clues to regenerative circular design that go
beyond the focus on materials alone. By making connections with their own company or withneighbouring businesses, they facilitate the creation of a “slowing down the loop” business model. With
their own products, they can design entry points for users to keep wearing their products for a long time.
At the same time, they can create new business opportunities for sewing companies.
In the Edo period, there were highly skilled sewers called "Omonoshi" who mended and sized kimonos,
and there were repair shops that provided services for long-lasting use of geta, sandals and pottery.
Besides, fashion is a tool that touches people's values and emotions and drives the economy. The factthat a product's identity is rooted in the region, drawing upon its historical significance and looking at
the region as a whole, forms a broad temporal and spatial axis, making it a circular product that touches
people's sensibilities and creates a sense of circulation.
Having a distinct identity is an advantage when working with global companies, as it aligns with theregenerative fashion that foreign high-end brands are working on.

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PICTURE 35:The Regenerative Circularity by Kyoya Dyeing Shop

3.3.2 Okinawa Food Reborn Circular with non-pasturing parts and make global development
This project aims to develop technology for extracting natural fibres from inedible parts such as
pineapple leaves and banana stems, which are typically discarded in large quantities. The project also
focuses on establishing a mechanism that allows profits generated from this technology to be returnedto the farmers who produce these fibres. The company has focused on and improved machinery used
for extracting fibre from leaves, a technology that has existed since ancient time. Through theirendeavours, they have succeeded in developing a compact machine that ensures high production
efficiency and improved fibre quality. This advancement not only reduces transport costs and CO2
emissions for the collection and production of fibre resources, but also enables cost savings by locatingmachines closer to the plantation. This solution addresses the challenges faced by sustainable fibres,such as the use of resins made from edible sources and the high levels of CO2 emissions during the
manufacturing process. The business model is unique in that the machinery is loaned to local farmers
free of charge, with payment based on the weight of the fibre. This regenerative approach aims toincrease farmers' incomes while producing fibre with a low environmental impact. The project is not
limited to Okinawa, but is expanding to East Asia where there is a higher demand for fibre in October
2022 a partnership was announced with the Taiwan Textile Association (TTTA), which brings together
215 Taiwanese textile companies, and in November 2022 with INDUK KUD, an agricultural organisationin Indonesia, the world's fourth largest pineapple producer. KUD, Food Ribbon and the Natural Fibre

64
Circulation International Association (NICO) have signed a Memorandum of Understanding, where theproject will now be promoted under the leadership of national government agencies. In addition to the
production of fiber, the company also runs a business that uses residues from the fibre extraction
process to make biodegradable products such as straws and cutlery. They also operate a businesscalled Soil and Vegetables Ltd, which sells vegetables grown from these products to be used as soil
amendments in cafes. The company is also developing a traceability system for machinery.
3.4 Circular design with open Network to encourage autonomy and new economic zones
The examples so far suggest the need for more local textile companies to create a circular ecosystemwith a new economic zone in the region centred on textiles.
Simon Sinek explains that what people and organisations need to succeed is not just the WHAT and
the HOW, but an understanding of the WHY, the underlying purpose and beliefs about their actions andactivities. The rural textile industry often remains a subcontractor to garment companies, and while theyhone their technical skills, the premise of circular fashion is to clarify their WHY (philosophy) and thenuse their skills to create products that are aligned with their WHY, HOW and WHAT and rooted in theirthoughts and community.
Such a reason cannot be created alone. it requires connecting and learning from people who arepractising in the region. The following list includes initiatives aimed at facilitating collaboration andpartnerships between communities.
PICTURE 36:The Golden Circle by Simon Sinek

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3.4.1 Autonomous decentralised networking system across regions for textile
The Textile Production Area Network is a community of practitioners from all over Japan who cometogether to address the challenges faced by manufacturing production areas and share the possibilities
of a new future in 'monozukuri（manufacturing）'. It has been held in Tokyo, Fukuoka, Aichi, Kyoto,
Okinawa, Hachioji, etc. The main participants are also practitioners in Iwate, Saitama, Toyama, Fukui,
Okayama and other regions who run textile industries and are dealing with their own unique challenges.
By fostering cross-industry and cross-regional exchanges that go beyond the framework of existing
unions within the same industry or region, the network creates opportunities to find new leads and cocreation possibilities for issues that cannot be considered solely within a single region or company. Thisinitiative has resulted in the joint development of products through regional links, such as thecollaboration between the Japanese workwear of the Kyoya Dyeing Shop SAPPAKAMA in Iwate andthe traditional craft of Nagoya Kuromonzukizome Dyeing in Aichi. In the future, the network aims toextend this to problem solving and global networking. It is expected that autonomous and decentralisedorganisational communities within each region will contribute to the emergence of circular designs.39
3.4.2 Kyoto: Edonomy practices with increased craftsman autonomy
DESIGN WEEK KYOTO40 aims to open up Kyoto's manufacturing scene and generate new ideas andproducts through interactions with visitors from home and abroad. The representative, Mr Kitabayashi,
is an advocate of a circular society and economy. He aims to promote globally the goods and products
rooted in the nature and climate of the region in Kyoto, and realise a sustainable society. They develop
sales channels for local industries, provide business coordination, and organise cultural exchange
events, community activities, tours and seminars. Their aim is to familiarise consumers with traditional
crafts and to promote exchanges between holders in order to create new creative opportunities. The
initiative also provides training and support to traditional artisans in areas such as branding, marketing
and PR. By working to increase the autonomy of artisans, this initiative aims to achieve the sixth
industrialisation of traditional crafts and circular initiatives that open up new business opportunities suchas repair and reuse.
*Edonomy.
Edonomy is a term coined from Edo (Edo) + economy. In the Edo period, the concept of recycling andreuse was prevalent, emphasizing the avoidance of waste. It refers to the idea and approach of learningfrom the wisdom and ingenuity of the people of the Edo period and integrating the latest technology
with natural mechanisms as a means to avoid global crises.
3.4.3 Smiles Co., Ltd; Pass the Baton Market
Launched in 2019, PASS THE BATON MARKET is a real market held in Tokyo that rethinks
consumption patterns by focusing on dead stock, substandard products and traditional crafts that are39
40

https://www.makuake.com/project/sappakama/
https://designweek-kyoto.com/

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often overlooked in commercial outlets and secondary distribution channels. More than 50 brands takepart each time, including domestic and foreign brands and traditional crafts. Over the two days, morethan 5,000 people visited the market. In 2022, to the market shifted its focus towards traditional crafts
and launched a project with the Association for the Promotion of Traditional Craft Industries. In aninterview, I spoke with Mr Nozaki, President of Smiles Co., Ltd, the founder of Pass the Button Market,
about the challenges of the craftsmanship business in Japan and tips for success.
Q: What are the challenges of reuse and re-commerce in Japan?
Creating new business channels for re-sale and re-commerce.
Nowadays, sellers are disposing of their stock because producers believe that items with minor
scratches or dirt can only be dols at a discount or not at all. Consumers, on the other hand, tend tohesitate in purchasing such products with imperfections. There is an invisible hierarchy between the
manufacturer and the consumer. What we are trying to do is to bridge the information asymmetry.
Q: Why did you start working with traditional crafts?
To highlight what already exists rather than create something new.
Craftspeople who are passionate about their work often have difficulty communicating and selling theappeal of their products. This prevents the proper conveyance of the good quality of their products. Thisis also an opportunity for artisans with technical skills to be on the ground to connect with modern needs.
What we do is accompany each craftsman and carry out a thorough branding, including visuals, VMD,
PR and information dissemination. Our aim is to enhance their ability to communicate with visitors andguide them towards purchase without changing the product itself. And such garments cannot be madein large quantities and are therefore not suitable for existing mass-oriented commercial channels. We
believe that we can expand the circulation with a social impact by trading at a fair price through thepeer-to-peer exchange at venues such as the Pass the Baton Market. Consumers, on the other hand,
have the opportunity to reconsider the value of traditional crafts, not as an art or something distant, but
as a form of beauty for use in their own lives today. Moreover, this causes new businesses to emerge
from interaction with craftsmanship in different regions. For example, MARUGO, which manufacturesand sells tabi shoes in Okayama, teamed up with ITONAMI, a denim manufacturer in Okayama, todevelop denim tabi shoes.
Creating a place to touch people's wealth
People's buying motivations are created by extrinsic factors such as the environment. For example,
when you enjoy a bowl of ordinary soup in Kyoto, the taste is not solely influenced by the flavour itself,
but also by unconscious perceptions such as the association with the location of "Kyoto”, and thelonging for a sense of luxury, and the belief that tasting food in that particular setting is an extraordinary
experience. Pass the Baton Market aims to create exceptional moments and unique stories in such
limited places and times. The essence of human wealth comes from being superfluous. Fashion, for67
example, falls into this category of superfluous, which is why we can create touchpoints that evokes asense of wealth.
Products with stories give you meaning in each person differently. If you know the background of how
things are made, you want to tell someone, and it also allows you to continue to be attached to things.
It enriches the mind of the person who bought it above all.
3.5 New technologies needed in the ecosystem
3.5.1 Start-ups, ventures and technology
In order to create a major business shift towards a circular society, it is important to partner with startups that have the potential to make a significant impact. This section highlights various start-ups andventures that are developing advanced technologies for circular fashion. The list includes companies inthe early stages of development as well as larger companies that have raised significant funding.
The government and local authorities need to invest in these technology companies and create a large
ecosystem in Japan, including companies in existing businesses. It is important to note that the list issolely at the discretion of the author and without prejudice. Systems for recycling and reusing disposalof non-performing inventory because they are apart from the essence of circularity.
PICTURE 37:Circular Fashion Ventures in Japan<frame>A. Design & Procurement: sourcing in a more sustainable way, responsible and transparent supply
chain design
B. Materials: developing durable, low resource-consuming materials.
C. Manufacturing: using recyclable materials and waste as raw materials, implementing intelligent
operation to reduce waste generation, tracking of product emissions

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D. Retail: using recyclable materials in shops and during transport, optimisation of shop inventories andlot sizes, tracking of garments using RFID and other identification technologies.
E. Transparency: tracking product emissions and environmental impact
F. Cloth Rental: introducing a new business model for garment rental
G. Second-Hand Platform: implementing new business models such as re-commerce, rental and repair;effective waste utilisation and second-life business models: improved recycling technology: efficient
supply-demand matching
H. Recycling: matching supply and demand for efficient recycling; improving recycling technology<Company case study>a. Sitateru Corporation, a sourcing support platform for order-based production and distribution.
This company operates a sourcing service that connects registered designers, brands, companies ande-commerce businesses with factories and suppliers in the cloud. It provides a one-stop shop for orders,
production and sales, offering a 'zero inventory' garment sales mechanism. It enables all kinds of people,
not just specific companies and designers, to create products. Its main business is an e-commerce
packaging service that integrates order taking, production and delivery; it also offers information
management for garment companies throughout the production, sales and delivery process; as well asa digitised support service for communication with various suppliers. It currently works with about 1,600
sewing factories, fabric manufacturers, etc., mainly in Japan, and about 22,700 brands and companies
are registered with it. (As of March 2022) In February 2021, a sewing-free space suit was planned anddeveloped as a JAXA project and adopted as a daily necessity to be worn on the International Space
Station (ISS).
b. Spiber: Development of synthetic biomaterials
This university-initiated project has established mass production technology for Brewed Protein, aprotein material produced through the artificial synthesis of structural proteins. The main raw material
is a structural protein produced by microbial fermentation of plant resources, which is attracting attention
as a material that does not use depleted petroleum-based resources and requires little energy in the
production process.
In recent years, research has also progressed towards the mass production of cellulose fromagricultural residues and waste, such as sugar cane pomace (bagasse) and corn stalks and leaves.
These resources serve as a resource instead of 'food' alternatives such as sugar from pressed sugar
cane and corn starch. Also, research is being conducted to convert old clothing into sugar and use it asa resource. This requires further development, as the technology for saccharification from mixedmaterials is not yet established and is affected by dyes and other chemicals.
Through the fermentation and cultivation of various microorganisms, the company can provide products
containing 'engineered' protein gene sequences, which will lead to the conversion of all garments,
including secondary materials, into bred protein, facilitating their recycling process. In January 2023, a

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mass-production factory in Thailand began operations, increasing the number of mass-produced
products by several hundred times compared to previous domestic production levels. The site iscurrently powered by coal, however there are plans to develop a green infrastructure using renewableenergy in the future. In addition, in partnership with Archer Daniels Midland Company (ADM), a major
grain processor in the US, the company is building a mass production facility in the US, expected to be
operational by 2023.
d. synflux Ltd: Development of a design system to minimise waste in cutting
A university-launched company that develops fashion design software and provide support for circulargarment design and manufacturing. Additionally, it operates a virtual fashion platform business. Usingmachine learning, 3D simulation and algorithmic design, the company is developing andcommercialising [Algorithmic Couture], a design system to minimise material waste during garment
production. This innovative system draws inspiration from the straight cut of the kimono. It hasdeveloped projects and demonstrations with brands and research institutions. In November 2022, it
launched a joint project with Goldwyn Inc. called SYN-GRID, which won a special prize at the Global
Change Awards organised by the H&M Foundation.
e. CFCL 3D computerised knitting x WHOLEGARMENT design to reduce waste.
This luxury fashion brand is affiliated with a clothing manufacturer. Founded in 2021 by an independent
designer who previously worked with the world-renowned ISSEI MIYAKE, which creates clothes froma single piece of fabric. The brand uses 3D computer knitting technology. Approximately 60% of its
collection is produced using SHIMA SEIKI's WHOLEGARMENT machines, which eliminate the needfor sewing process and waste. The brand is committed to transparency and sustainability, CO2
emissions are clearly displayed on all products' websites, and information is provided to consumers.
In its latest collection, the company prioritizes the use of sustainable materials, with approximately 73%
recycled yarn (recycled polyester) made from plastic bottles certified to the Global Recycled Standard(GRS). In July 2022, the company became the first Japanese apparel brand to obtain B-Corporation,
an international certification system for environmentally conscious companies with high public interest.
f. SUSTENA TECH K.K.: Development of waterless dyeing technology.
This project, initiated by Fukui University, aims to develop and put into practice a supercritical dyeing
process technology that uses carbon dioxide (CO2) instead of water for the dyeing process.
Supercritical dyeing involved dyeing textiles in a pressurized vessel using high temperatures andpressures with carbon dioxide. The key advantage of this technology is that it minimizes its water usage,
eliminating the generation of wastewater and reducing environmental impact. It also reduces theamount of water used in the process, streamlines the number of processes involved and significantly
decreases energy consumption. NEDO adopted the project in June 2022 and is being promoted forpractical application with the participation of the Kyoto Institute of Technology, the Fukui Industrial

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Technology Centre and 10 textile industry companies. The project will significantly reduce the dyeing
industry's environmental impact in Japan and abroad. In addition, the utilization of electron beamirradiation technology makes it possible to produce highly durable products while minimizing the amountof chemicals used.
g. hap Ltd: Development of multifunctional additive materials using photocatalytic technology
The company is focused on the development of COVEROSS® range of eco-friendly multifunctional
materials and garments, as well as its growth of brand business and garment OEM/ODM.
COVEROSS® is the world's first technology that uses unique photocatalytic technology, allowing forthe incorporation of functions such as antibacterial/odour control, antiviral and water repellence tosynthetic and natural fibres without compromising comfort and design. Several joint industry-university
research projects are underway in collaboration with the Faculty of Textiles at Shinshu University.
A major fashion brand, in partnership with JEPAN, a recovery and recycling company, have launcheda circular fashion product brand using chemically recycled materials (30%) and incorporates Coverosstechnology.
In addition to the Japanese market, hap is a member of telaketju, a Finnish environmental organisation
promoting the circular economy, and will open a development and sales base in Helsinki in 2019. Other
collaborations include FinCERRES, a Finnish research institute for cellulose-related research anddevelopment, and Synbio Power HOUSE, which researches synthetic biology.
h. FULL KAITEN Corporation: Development of an inventory management system for retailers
The company develops cloud services to solve the inventory problems faced by retail companies.
Through the utilization of cloud-based data, AI-powered system automatically analyses sales andinventory status and proposes measures to reduce excess inventory, optimise purchasing, and increase
gross margins for both e-commerce and brick-and-mortar stores. The system currently analyses
inventories for small and medium-sized retailers. Still, the company’s long-term goals to extend its reachto include trading companies and wholesalers, building a platform for optimising distribution volumes
across companies and countries throughout the supply chain.
i. Updater Corporation: visualising the environmental impact of renewable energy suppliers
The company started a business to visualise financial transactions with producers in the production
process of products by applying blockchain technology developed in the electricity sector. In 2022, thecompany developed and marketed a product that discloses the cost of cashmere goats at every stageof the process, starting from raw wool extraction to online sales. This enables buyers to have thevisibility into the product's cost structure. The aim is to establish verifiable proof of raw materials, proofof production in the factory, analysis of defects and, above all, to create a system that allows theappropriate distribution of profits to the 1003 companies involved.

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j. ECOMMIT Inc. Development of collection and recycling infrastructure through datavisualisation
With a nationwide collection and distribution network, along with its expertise in sorting and a re-salenetwork, the company is building an efficient infrastructure to manage the entire collection, sorting andredistribution process. It has seven national distribution centres and works with more than 30
municipalities, managing around 1,300 collection points nationwide.
To enhance transparency, the company has implemented a traceability system that uses digitaltechnology to visualise its own collection and sorting processes. This system allows the reuse andrecycling percentages of collected garments to be monitored on a store-by-store and weight basis. The
status of garments can be easily tracked from the initial stage to final destination, and this information
can be conveniently accessed using a smartphone. The system also allows for clear visibility of the
reduction in carbon emissions.
In March 2022, they launched Wear to Fashion, a textile collection in cooperation with Itochu
Corporation. This service collects and sorts textile products from companies and communities for the
purpose of reusing and recycling. Recyclable polyester products are used as raw materials for RENU
(Recycled Polyester Material RENU), a service provided by ITOCHU that uses used clothing and fabricgenerated in the production process as raw materials. Collection bins have been placed in various
locations, facilitating convenient drop-offs for individuals while they shop or commute to work or school.
They also work with local authorities in Kagoshima, Kyoto, Saga, and other prefectures. As of December
2022, nearly 3,000 stores have been equipped with collection boxes to facilitate expansion. In the future,
the company envisions using its own collection and sorting expertise to expand its reach into the Asian
region (Thailand and Singapore) to create an infrastructure model for collection and recycling near
manufacturing plants. Enhancing sorting technology remains a key challenge in achieving this objective.
k. JEMS Corporation, using blockchain to visualise CO2 emissions in the supply chain
The company specializes in providing IT solutions for waste management. It has launched a textile
traceability service in partnership with BPLab, a recycling platform for recovery and reclamation, from
1 September 2022. This service, known as Circular Navi, employs blockchain technology to visualise
CO2 emissions across the supply chain, facilitating information disclosure and communication between
companies on product information.
l. AirCloset Inc: Fashion rental service provider and platform
The company provides one of the largest clothing rental services for women in Japan, with the service
launched in February 2015. The service targets working women in their 20s to 40s and offers a monthly
fee for 3-5 items of clothing, depending on the chosen plan. The rented clothing is returned unwashed.
ShareCloset, a subsidiary of the company, collects unwanted clothes, repairs, cleans, and then rents
them out. In 2022, the company plans to expand its business by adding an AI personalised shop
function, which is developed in-house, using the data accumulated from its operations.

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Optimising its own logistics system with RFID tags and becoming a platformer
The company has been managing its warehouses, with the exception of cleaning, as it requires
assistance in implementing shared services with its existing logistics system. This is because fashion
rental services involve a return flow, which is not typically accommodated in the conventional one-way
process of delivering foods in garment logistics system. It is essential to build a logistics system thatconsiders the circulation of returned clothes, including their maintenance, inspection, storage anddelivery to the next user. Since the company has been founded, it has recognised the challenges ofachieving such a circulatory logistics system with existing systems, and has set up a dedicated team tocreate and strengthen the foundations for warehouse management and logistics systems other thandry cleaning.
Besides, in 2019, as RFID technology advanced and the number of items handled by the company
increased, it decided to invest in and implement RFID tags. This implementation has resulted in a 12%
reduction in workload and logistics operating costs. By simply applying the tags and registering theinitial data when new garments arrive, the subsequent human workload of visual checks and attaching
and removing bags and tags is eliminated. Looking ahead, the company aims to transform this
implementation into a platform for further expansion and horizontal development.
s. State of Mind Inc: online matchmaking service with refurbishment and repair tradespeople.
This company operates the crowdsourcing service 'nutte', which allows users to request sewing workfrom professional craftspeople. The service provides customers with the opportunity to engage withapproximately 1,000 registered sewing craftspeople, not only for sewing clothes to be sold as products,
but also for miscellaneous goods, remakes, and more. Additionally, the service allows customers torequest the 're-dyeing' of their clothes either online or in-store, where clothes with sentimental values
can be 're-dyed' to be 'worn again'.
o. JEPLAN, INC. Advanced chemical recycling technology that encompasses the supply chain
to achieve circularity
Established in 2007, with a sale approx. 700 million yen (2020), JEPLAN plans and manages projects
related to recycling and recovery. The company develops chemical recycling technologies, and, startingfrom 2020, establishes a recycling-oriented supply chain that manufactures and sells products using
recycled materials. One of their notable technologies is BRING, which breaks down polyester at themolecular level and converts it into recycled resin, enabling 'fiber to fiber recycling' of clothing (recycling
efficiency of around 96%). As of 2021, JEPLAN has partnered with more than 2,000 brands andcompanies in its collection business, with an annual collection volume of 500 tonnes. The company
sorts the collected products and reuse clean products, while cotton products are recycled for various
application, including car interiors. Single polyester materials are then processed into private-label

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products. The challenge for the future is to develop chemical recycling technology for composite
materials and expand it globally.
In September 2020, the company formed a business alliance with the French research institute IFP
Energies nouvelles (IFPEN - www.ifpen.fr) and the French chemical plant construction company Axens(www.axens.net/) to develop a recycling system in France. Together, they collaborated on technology
development and build a recovery system adapted to French consumer culture.
p. Refinverse Group Inc.
Founded in 2003, this company recovers and recycles materials using chemical recycling technology.
It has also developed its own mass-production technology for advanced separation and removal offoreign substances from nylon airbags, as well as material recycling for high-quality nylon resin. In
collaboration with Toray Industries, the company produces recycled nylon pellets from recovered nylon
waste from fishing nets and airbag manufacturing process. These recycled materials are then converted
into raw materials for automotive parts, building materials, textiles and other products. This processcontributed to a reduction of approximately 82% in CO2 emissions by compared to virgin nylon
production. The company has provided the technology licence to Toyota Tsusho and in April 2023, theywould start a recycling business at an airbag manufacturing plant in Vietnam. They will also work withlocal Toyota Group companies to recover materials and develop applications for recycled raw materials,
to achieve a circular economy in the automotive textile sector. As technological development
progresses, the production of low-carbon airbags that reduce CO2 emissions by around 80% will
become possible.
3.5.2 Technical Studies
The following three fibre-to-fibre studies are underway at NEDO (including planned):▪ Conducted research on "Research and development of recycling processes for plant-based fibre
resources".
▪ Establish the "Resource Recycling System Resilience Demonstration Project for Resource Autonomy"
in FY2022. Develop technologies for material and chemical recycling of various textiles and blends.
▪They plan to develop technologies such as automatic separators for used clothing in the future.

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PICTURE 38：Automatic Separators for used-clothes

Source: Progress of initiatives on sustainable fashion material from METI 2022/Dec
3.6 Collaborate case with existing companies
Collaboration initiatives with existing large companies in the fashion and textile industry are being
presented. Large companies are investing money and developing advanced technologies to staycompetitive on the global stage. However, they have not broken away from the existing business modelwith a logistics system that spans across foreign countries. It seems that these companies are notfunctioning as a system to distribute wealth or recover resources. To illustrate this point, let’s firstconsider the case of Patagonia. Patagonia is a world-renowned company known for its commitment to
the global environment. Rather than operating solely as a large corporation, they work with different
stakeholders, both large and small, to build a circular system through consistent purpose management.
Other notable examples include Fast Retailing, a major Japanese clothing retailer; Toray Industries,
which engages in various business overseas; and Adastria, a domestic clothing company considereda leader of its field.
3.6.1 Patagonia
On the 15th of September 2022, a piece of news deeply touched many people. The founder, Yvon
Chouinard, announced his decision to donate all of his shares in the company to an environmental
charity. Yvon's powerful statement, 'The Earth is our only shareholder', made us question the purposeof business in the realm of capitalism.
Patagonia founded in 1973, is an outdoor gear company that conducts its business with a strong
environmental and social responsibility. Rather than “Circualar Ecnomy” to describe their approach,75
they prefer to use "Circularity & Responsibility”. This term encompasses the multitude of cycles involvedin their operations, including materials. “Responsibility” refers to minimizing pollution as creators andcaretakers of the planet. “Circularity” extends beyond material cycles, focusing on creating cycles that
benefit future generations and the planet. This approach aligns with the ideas of Circularity andRegenerative in this research. During an interview, I asked Mr Shino, Sustainable Brand Manager at
Patagonia, about the potential of circular fashion in Japan and sought advice on how to succeed as a
circular business.
Q. What is Patagonia Japan working on?
Responsibility - responsibility for what we produce
We have set goals to completely eliminate the use of virgin fibres derived from petroleum-based raw
materials by 2025. Furthermore, by 2040, we aim to achieve net-zero energy in the development,
production, and sale of our products, as well as in the creation of new materials. Today, 94% of our
products are made from recycled materials. In addition, the environmental impact of each product's
extraction and manufacturing processes is presented to consumers in an environmental balance sheet.
This figure serves as a criterion in the development of new products. In addition, we have established
two repair centres in Japan, available both in-store and online. We also offer a mobile repair service
called the "worn wear surf tour" specifically for surf equipment, with repair vans to prolong the lifespanof our products.
In July 2022, the company launched a T-shirt made from Infinna, a recycled fibre developed in Finland.
While the development of recycled textile materials is quite common, the reality is that only a few fibres
are recovered and reused, even if the material itself is recycled. This is due to the fragmented natureof the material’s development, marketing, collection and recycling. Patagonia's approach is innovativein that it is a retailer that works with each operator in the supply chain to create a holistic product cycle.
The development and recycling of recycled fibre are entrusted to Infinited Fiber Company, the collectionis handled by Nakano Ltd, a Japanese company specialized in local collection system, while Patagonia
is responsible for the sale and remanufacturing of the product. Each of these companies leverages its
strengths and expertise to form a cohesive supply chain that completes the product cycle.
Circularity - regenerating the earth, people and culture (4th Regenerative Life Model)
For cotton, the company supports more than 2,200 cotton farmers in India who practice regenerative
organic farming. In 2022, they will launch the first certified regenerative cotton products.
Another well-known initiative is '1% for the planet', where the company donates 1% of its sales toenvironmental organisations. More recently, the company has collaborated with Bereo to produce andsell down jackets, made from discarded fishing nets. In addition, 1% of the sales from these jackets are
donated to marine conservation. In the future, we plan to extend this to other coastal regions in SouthAmerica.

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Furthermore, solar panels were installed on farmland in Sosa City, Chiba, as part of the transition to
renewable energy in our stores. This not only generating energy, but also brings secondary and tertiary
benefits to the local community and the environment through organic farming. The operation is
outsourced to a local citizens' group, which regularly organises events involving the local community.
This has increased the understanding of the surrounding public and the awareness of environmental
issues among related businesses.
Q: What do you think is important for the Japanese fashion industry?
Localisation is Japan's strength.
We must develop localisation methods "rooted in Japanese values and products". Some products wereused daily before the advent of convenient plastics and synthetics, even if they are now considered as
traditional crafts because of the decline in craftsmen and production volumes. For example, hemp
products are said to have been an essential material for Shinto rituals in the Takachiho area of Miyazaki
and played a role in supporting the local economy. Unfortunately, due to various historical distortions,hemp cultivation has ceased. We believe that reusing such products linked to the original culture will
help us move away from existing products with a high environmental impact. And we sincerely hopethat traditional Japanese textiles and craftsmanship will be passed down to the next generation.
Q: Do you have any tips for Circularity's success in Japan?
MORE VALUE WITH FEWER RESOURCES
When developing a new product, we take into consideration how to generate profit by reducing thevolume sold, allowing us to derive multiple profits from a single product. One way to achieve this is byredefining the product's value, using easily recyclable materials, and exploring possibilities for
expansion into other regions.
Let me provide an example of recycling down jackets from discarded fishing nets. We focus ondeveloping chemical recycling rather than material recycling because fabric lasts longer. Hence, wehave generously shared Patagonia's know-how and technology with Breo, the material developer.
NetPlus materials are now used in 150 Patagonia products. By leveraging chemicals of high quality, we
can recycle our products, add value and create a wealth-sharing mechanism with various stakeholders(fishermen and recyclers). Netplus products not only reduce environmental impact, but also contributeto the regeneration of communities and improve people's well-being as their production increases.
Currently, the raw materials are sourced from Chile. Still, we are actively establishing future supply
chains in South American countries, Central America and along the coasts of North America, and it may
be possible to introduce the same system in Japan. The project has been under development since2014, and it has proven to be a worthwhile investment in terms of the benefits offered by recycled fishing
net fibre in many parts of the world. In other words, it is essential to understand the whole system when
designing materials and products and to consider the challenges that may arise during the recovery
and recycling phase to anticipate the next cycle and the one after that.

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Transparency leads to fair sharing and trust.
Quantifying complex supply chains not only provides a decision axis for manufacturing products but
also helps to identify areas for improvement and their impact. It can also provide evidence of fair andequitable wealth distribution and helps to secure the trust of consumers and partner companies.
However, the cost of implementation will pose a challenge for many SMEs.
Open sourcing and initiatives
Initiatives that significantly change existing systems, such as the circular economy and circularity, mustencourage innovation across the industry. Regardless of concerns about external confidentiality, we
are opening up our green business processes to the public. Rather than each company working
independently, companies need to share information and work together to make this happen. While
many companies are reluctant to share information due to competition, taking the initiative to openly
share information can lead to development of strong relationships and a shared commitment to creating
a better world for all business involved. Above all, we have proven that profits will follow if you do theright thing.
Author's observations
The reason why Patagonia is loved is the consistency between Being and Doing.
Everything Patagonia does is consistent. Our mission is "We're in business to save the planet we callhome," and business is a means to that end. The Patagonia brand also changes how people think andbehave through the products and how we sell them.
Today, the look and quality of clothing are mainly indistinguishable as technological advances, thedifferentiation lies in the story. Like Patagonia, having an unwavering mission, vision, purpose, andbehaviours that align with them are crucial to driving interest in the brand, which ultimately leads tosales. However, it is more than just increasing sales, it is about attracting and engaging people inPatagonia's culture and values and gradually changing consumer attitudes.
The Patagonia case study provides excellent insights for small and medium-sized businesses.
3.6.2 Toray Industries, Inc.
The fibre business of Toray is projected to will generate sales of 836.2 billion yen in 2021. In addition
to the yarn business, Toray is actively expanding overseas and diversifying its business. The strategic
partnership alliance with UNIQLO in 2006 has been a key factor in the success of Toray’s fibre business.
In March 2023, Toray partnered with the Refinverse Group, a recycling company, to sell chemicallyrecycled textile products in Japan, using recycled resin from recovered fishing nets as raw material andutilising its proprietary depolymerisation and repolymerisation technology. The company aims toachieve sales of approximately 800 million yen in 2023 and 1.2 billion yen in 2025.

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In addition, Toray has launched the &+® (and plus) brand, a recycled fibre made from collected PET
bottles and sold in cooperation with SEVEN-ELEVEN JAPAN CO., LTD and other companies. Using aunique traceability system, &+® garments are made from raw fibre materials with a special additive asa footprint to enable detection and issue of a recycling certificate. Regarding information transparency,
the tags can only be traced back to the point of sale. Still, Toray's development of tracking throughadditives in raw materials has the potential to be extended to many more areas in the future.
3.6.3 First retailing
A global company that operates several brands worldwide, including UNIQLO, GU, and Theory. It sells
high-quality clothing at reasonable prices through an integrated process from sourcing to planning,production and sales. It ranks as the third-highest in sales among global apparel manufacturing andretailing companies.
The Group's core business, Uniqlo, has approximately 2,200 stores in 22 countries and regions, withsales of approximately 1.9 trillion yen (end of August 2019). Using sustainable materials is being
researched and developed by Toray, with a policy to switch to eco-friendly materials for 50% of all
products by FY2030 (5% in 2022). GU generates sales of approximately 240 billion yen. It has 416
stores in Japan and 35 in Greater China, including Hong Kong and Taiwan (as of end-May 2022). It will
also open its first shop in New York in October 2022 and aims to expand globally.
Closed the loops: material for fibre-to-fibre through chemical recycling.
In October 2022, they collaborated with Toray, which has "chemical recycling" technology, which
involves chemically decomposing nylon fibre scraps and fishing nets to their raw material stage. This
collaboration succeeded in making the "side fabric" used for the jacket surface from 100% recycled
nylon for the first time. For the reuse of the padding, a device developed by Toray separates downfeathers and fabrics by airflow after the product has been cut. The collection of down jackets started instores in September 2019, and a total of 1 million garments have been collected by April 2022. Amongthe collected items, those in good condition can be reused for, for example, by being sent to refugee
camps without recycling. Garments that cannot be worn are converted into solid recovered fuel (SRF*),
which is used in special boilers at large paper companies.
They have also developed technology to recycle plastic bottles into polyester fibres for use in fleece,
underwear and other clothing. However, polyester fibres are easy to recycle because PET bottles arereadily available in large quantities and contain few contaminants, keeping prices low, while nylon isconsidered difficult to recycle. Patagonia and others are working on this at high prices, not for themasses. The big impact for Uniqlo, which has a large share of the clothing market, is significantly
reducing the use of virgin materials made from fossil fuels, reducing carbon emissions.
Slowing down the loops: Developing a durable reuse and repair service.

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The UNIQLO repair service will be launched in Germany in August 2021 in partnership with the Berliner
Stadtmission, a local NGO. In September 2022, the UNIQLO Regent Street store in London, UK, beganoffering advanced services using the traditional Japanese embroidery technique of “Sashiko”, in
addition to the repair service. This collaboration is carried out with Studio Masachuka, a London-based
pattern and sewing studio, with price starting from £10 (approx. 1,650 yen). There are plans to expand
this service to other countries and regions.
In October 2022, a trial of RE.UNIQLO STUDIO, a customisation service for garment repairs andremakes, was launched in a suburb of Tokyo, Japan. However, during the trial, there was little repair
service for man-made fabrics, and the embroidery service was mechanised and restricted. The
impression was that the demand for this service was not high in Japan, as the shop was located in thesuburbs, more than an hour from Tokyo Station, compared to shops opened in upscale areas in othercountries. The trial is scheduled to continue until March 2023.
Less Resources Use: Becoming an information manufacturing retailer
UNIQLO is transforming its business format into an "information manufacturing retailer", a new industry
that turns information into products. It uses digital technology to improve inventory management fromproduction to distribution and reduce overproduction to reduce waste throughout the supply chain instores. Since 2018, Uniqlo has been attaching RFID tags to all of its products, enabling optimal
inventory management and improving the efficiency of shop operations, such as unmanned checkouts.
Starting from 2023, supply chain information will be disclosed for each product. By 2025, information
about the country where each product was sewn, and the country of origin of raw materials will also be
sorted and gradually disclosed. They also plan to disclose information on the country of manufacturing
and the country of origin of raw materials for each product in 2025. For cotton, they are actively
undertaking initiatives such as identifying spinning mills and visiting mills to verify working environment
and ensure the accuracy of traceability information.
3.6.4 Adastria Inc.
A chain of casual clothing stores, founded in 1953, operates over 30 brands and approximately 1,400
stores in Japan and abroad. It has a turnover of approximately 183.8 billion yen and 5,701 full-time staff.
The company is committed to using sustainable materials and promoting recycling. BY FY2020, It has
achieved zero incineration of unsold stock, collected 27,072 garments (approx. 9 tonnes) and reduced
the number of shopping bags by a cumulative total of 4.49 million. The e-commerce-only brand, o0u,
uses the Higg Index MSI (Materials Sustainability Index) to calculate a score for each product bymultiplying detailed factors such as raw material usage, blend ratio, processing and manufacturingmethods. The company discloses the amount of CO₂ emissions and water consumption for eachproduct. It also offered a sharing service for children's clothing, but the business failed to take off andended in 2021.

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3.7 Circular fashion organisations
Several organisations in Japan promote circular fashion. The following are some of the most important
examples of action.
Japan Sustainable Fashion Alliance41 (JSFA)
Launched in August 2021, the Alliance aims to become carbon neutral by 2050 and achieve zero
fashion losses by implementing optimal production, purchase and recycling practices.
As of April 2022, the Alliance has 44 members, consisting of fashion and textile companies, along withpublic partners as the Ministry of Economy, Trade and Industry, the Ministry of the Environment andthe Consumer Affairs Agency. Although each stakeholder seemed to be exchanging information, little
movement was observed thus far.
Japan Apparel and Fashion Industry Council (JAFIC)
JAFIC is an association of Japanese apparel manufacturers established in 1979 to promote the sounddevelopment of the Japanese apparel industry. In 1985, the certification system "J∞QUALITY" wascreated by the Japan Fashion Industry Council, and was later transferred to JAFIC when the two
associations were merged. I. The J∞QUALITY website has a feature called FACTORY ∞ SEARCH,
which allows users to search for more than 500 factories nationwide by keyword and match designers.
The website also offers a designer matching service. The site is available in English, Chinese, Korean
and Japanese.
To facilitate systemic change of circular economy, it is crucial to foster a paradigm shift and view it asa new business opportunity rather than a mere cost. This report Emphasizes the importance ofconnecting civil society and business for a circular economy.

41

https://jsfa.info/

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Chapter 4 European Legal and Public Movement and Trend andStrength
Compared to Japan's circularity, EU countries have a more advanced legal system, and companies(large companies, SMEs and start-ups) are becoming more active in this field. In this context,
collaborations between major brands and Japanese textile suppliers are also emerging.
4.1 Government
4.1.1 Legal system
The EU adopted its first Circular Economy Action Plan in 2015. With the EU's recent work and plans,particularly the new Circular Economy Action Plan, more legislation is expected to support the transition
to a circular economy in the coming years. Below are listed three key pieces of legislation.
Design: Proposed regulations on eco-design for sustainable products.
Mar 2022: Additional legislation extending the Eco-design Directive requires companies to clarify theenvironmental footprint of their products and assess and improve their sustainability performance.
Companies will need to create a common understanding and invest in the development and collectionof data during the product development phase and throughout the supply chain to ensure thecompetitiveness and superior environmental performance of their products.
Repair: legislative and non-legislative measures to create a new 'right to repair'.
A resolution on a more sustainable single market for businesses and consumers was adopted in
November 2020. The resolution aims to promote a repair culture among consumers and extend the
product life cycle by providing sufficient information and services (such as extended warranties, spareparts guarantee, and repair and maintenance information) to make product repair systematic, costeffective and attractive for consumers.
Businesses must be prepared to provide consumers with information on the availability of spare parts,
repair services, product durability and services at the point of purchase.
Recycling: Revised waste shipment rules.
In November 2021, a proposal will be made to revise the efficient system for recycling waste as aresource. The proposal includes restrictions on waste exports to non-OECD countries, and theestablishment of a monitoring system for OECD countries. If any OECD country causes environmental
problems, their waste export privileges will be suspended. Companies are required to sure the integrityof receiving facilities when exporting waste. At the same time, the EU is promoting the circulation of

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waste within its member states, aiming to move away from reliance on virgin materials from abroad andadopting a more integrated approach within the EU.
Reference: Basel Convention Flow.
The Basel Convention on the Transboundary Movement of Hazardous Wastes and their Disposal,
which regulates the international movement of wastes, was adopted in 1989 under the auspices of
UNEP (United Nations Environment Programme) and has 188 Parties as of February 2023. (Japanjoined in 1993). The Convention initially covered lead-acid batteries, waste oils and pharmaceuticals.
However, in 2019, plastic waste became a new regulatory target. Consequently, large quantities ofplastic waste that were previously exported could no longer be sent out, and countries that were slow
to respond faces severe consequence.
Textiles are currently not regulated under the Basel Convention. Still, with the revision of EU legislationand the trend in other Asian countries towards imposing restrictions on waste imports and otherenvironment-related legislation, it is essential for the global community to establish unified waste
management regulations. By then, Japan must develop a comprehensive circulation and management
audit system for used textiles, which are currently exported overseas under the pretext of recycling inJapan or within Asia.
In response to the global need for waste management regulations, countries are also developing theirown legislation.
France: Jan 2022, Circular economy law applies to textiles obligations to reduce waste, recycle
resources and provide information to consumers.
The Netherlands: 2023 Jan Extended producers’ responsibility for clothing production to collect, recycle
and reuse disposal of their products.
Sweden: January 2024: Extended producer responsibility Obligation to register producer responsibility
organisations for textile waste management.
4.1.2 Clusters
Transitioning to a recycling society involves a complex mix of related stakeholders and issues. In theEU, clusters play a vital role in connecting various organisations and facilitating information exchange.
However, Japanese organisations are currently fragmented in many aspects, such as business,
research and funding, and there is a lack of people and organisations to act as a link between them.
Role of clusters.
There are at least 250 green clusters in Europe, and these clusters play an important role in facilitating
the transition of SMEs to a circular society within the EU. They collaborate and build bridges between
research institutions and companies, provide SMEs with up-to-date information, disseminate
knowledge and raise awareness through events and workshops. The clusters fulfil five essential roles:
1.

Bridging research and business.

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2.

Supporting the translation of EU and national CE policies into strategies.

3.

Helping to raise funds for CE.

4.

Linking alignment with the SDGs and other holistic societal issues.

5.

Bridging public policy and procurement support.

4.1.3 Community development
Instead of relying on a centralised approach of the past, there is a shift towards autonomous, anddecentralised medium-scale urban development. There are many points of reference that cities inJapan's textile cluster industries can draw on in their urban planning based on the circularity of textiles.
London/Leeds, UK.
Many initiatives are currently underway in the UK to drive the fashion industry towards a circular
economy. In November 2022, the Institute of Positive Fashion (IPF) published a progress report on its
work to build a Circular Fashion Ecosystem (CFE) in the country. Through the lens of Kate Raworth's
Doughnut Economics model, the report examines the implementation of a CFE in the autonomous cities
of London and Leeds. It aims to foster collaborative opportunities for among stakeholders, assess thecurrent situation and conduct demonstration experiments.
Paris, France 15-minute city
The city is promoting the concept of “15-minute city” as a strategy to combat air pollution and climatechange. The aim is to create a city where all essential functions such as work, food, entertainment,parks, housing and clinics are within 15-minute reach by walking, cycling or public transport, thereby
improving the quality of life while simultaneously reducing the air and noise pollution caused by thesevere traffic congestion that has plagued the city for years. By implementing this concept, the city
aspires to make a positive impact on the global environment.
Similar ideas are gaining traction in other parts of the world, as evidenced by the '20-Minute
Neighbourhoods' in Portland, USA, Melbourne, Australia, and '20-Minute Towns & a 45-Minute City' in
Singapore. These approaches recognize the potential of small-scale urban development to have apositive impact on both environmental sustainability and people's health.

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PICTURE 39: 15 minutes city in Paris

Source: world economic forum “The surprising stickiness of the “15-minute city”42
4.2 Enterprise and Technology
4.2.1 Large companies and high-brand movements
Many fashion companies focusing on circularity see the cycle as a flow that goes beyond the material
cycle and are increasing their collaboration with global artisans on an equal footing. As the demand fortransparency in supply chains grows due to concerns about human rights and environmental issues,
the Japanese textile industry has the opportunity to showcase its technical capabilities, which can now
play a subcontracting role for high-brands.
LVMH.
During the visit to Japan in May 2022, Chairman and CEO had the opportunity to meet with Chief
Cabinet Secretary Matsuno, and discussed the proposal to strengthen cooperation with the Japanesefashion and art industry.
1. State the specific name of the place of origin in the product description section when using textiles
made in Japan, highlighting Japan's exceptional craftsmanship to international audiences.

42

https://www.weforum.org/agenda/2022/03/15-minute-city-stickiness/

85
2. Cooperate with Japanese companies, especially small and medium-sized enterprises (SMEs) withhigh craftsmanship, and contribute to the success of these companies and craftsmen
3. Encourage greater partnership with young Japanese artists and craftsmen.
Richemont.
Chloé has launched its Women Forward for a fairer future statement, partnered with the World Fair
Trade Federation. In line with this initiative, the company has also collaborated with design label Mifuko
on a range of handbags hand-woven by artisans in Kenya. By collaborating with Mifuko and working
with artisans in Kenya, Chloé aims to highlight the importance of global craftsmanship and artisanal
skills, as well as the value of preserving traditional techniques.
Kering.
The company has announced a CE-focused strategy for its business, including improved productdesign, manufacturing and use, accelerated transition to regenerative agriculture and extended productlife. As part of its craftsmanship collaboration with Japan, a product collaboration was unveiled withHOSOO, a long-established Nishijin textile company, a traditional craft in Kyoto in December 2022.43
The company is also active in talent development, partnering with the London College of Fashion tolaunch a public online course (MOOC) in 2021 and an innovative education programme on fashion andsustainability called Fashion Values.
H&M.
In collaboration with HKRITA (Hong Kong Research and Development Centre for Textiles and Apparel),a recycling technology has been developed for mixed fibres of cotton and polyester, which werepreviously considered difficult to separate. Ehime University and Shinshu University in Japan were also
involved in the development of this technology and its successful practical application. The organisation
also supports start-ups that address a range of social issues, and its Global Change Award provides
the winner with a €1 million grant and a year's participation in the Innovation Accelerator Programme.
4.2.2 Start-up
Below is a list of circular fashion start-ups marketing in the EU. Compared to Japan, start-ups in the EU
are active in all sectors. In particular, in EU countries where the second-hand culture is well established,
the second-Hand platform and clothing rental sectors are prevalent. In Japan, where oversupply andopaque supply chains are concerns, areas such as manufacturing, transparency and retailing will beneeded. There is also potential for cooperation in the highly technical field of recycling.

43

https://www.japanartscraft.com/en/76140/

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PICTURE 40:Circular Fashion Start-Ups in Europe

Source; Munich Venture Partners
Table 5:Circular Fashion Start-ups in Europe
Type

Company
UpmadeDesign&Procurement

What theｙ do
Development of software to easily and quickly create upcycled
products from garment scraps

Material

Platform for fashion brands and suppliers to search for

Exchangeenvironmentally friendly materials and supply chains

Circular.fas

Provision of a software platform to support circular fashion

hion

designMycoTEX
Materials
Spinnova

Development of mycelium leather and fully automatedproduction of bio-fabricated materials
Development of new textile materials using wood andagricultural waste

Country
Estonia

SwedenGermany

Netherland

FinlandTechnology to reduce water consumption in dyeing of denim
Jeanologia

products, new model apps for on-demand production,

Manufactdevelopment of tools to measure the sustainability of denimuring

QR tags to measure and display the traceability of the
Farly madeenvironmental impact of the production and distribution of
products

Spain

France87
We aReDevelopment of dyeing technologies that do not consume

Spin Dyewater when mixed with recycled polyester materials

SwedenBuilding blockchain applications to trace the life of products
Luksofrom production to distribution and verify their authenticity withGermany

regard to fashion and art.
Transparency

Platforms that use blockchain technology to track information
retracedon environmental impact, human rights, working conditions,

Germany

etc. in the sourcing and manufacture of products.
Development and production of smart textile products, using
Tailorlux

sensor technology to capture data on temperature, humidity,

Germanyetc.
RetailScircula
Dress You
Can
Fjong

ClothesRentalItaly

Rental service for organic, ethical and sustainable fashion
brandsclosetcloset and provide styling suggestions

GibbonTravel destination fashion rental platform

dressing
Comn

SellpyPlatforms

Rental services for dresses and other party fashions

Provision of applications that automatically scan clothes in the

vide-

hand

Netherlands

Hack yourTale Me

Second-Fashion retail data analysis platform

Provides rental services for maternity and children's fashion
brandsPlatform for the sale of second-hand luxury fashion items
Sales platform for sustainable fashion items made fromrecycled materials.
Sales platform for second-hand items. Visualisation of each
item's carbon footprint and water usage.

NorwayNorwayBelgium
Belgium

FranceGermany

SwedenRepamera

Online service for garment repair and cleaning

SwedenVintedSales platform for second-hand clothing and accessories

Lithuania

momox
MadchenFlohmarket
RebelleVesiaire
Collcective

Platforms for buying and selling second-hand books and usedclothing
Flea market applications for women
Online second-hand shops for luxury brand clothing, bags andaccessories
Online second-hand shop for luxury fashion

Germany

Austria

Germany

France88
Online fashion marketplace for second-hand clothing with AI

ZADAA

technology-based offers

Australia

Development of chemical recycling technology to convert mixed
Re:newcell

fibres from used clothing and other textile waste into renewablecellulose fibre Circulose® pulp. Used in clothing, household

Swedenproducts, medical equipment, automotive parts, etc.

Recycling

Development of high-quality, renewable, natural resource
Infinited

cellulose fibre Infinna™ from old clothes and waste fromfiber

production processes. Used for textile to textile, non-textile andFinlandother applications.

4.2.3 Technological developments
As a national project, there are three circular fashion-related technology developments in circular
fashion-related technology. Textile-to-textile recycling and sorting technology have great potential forcooperation with Japan to promote technological innovation on both sides.
Table 6：List of projects for circular fashion
Name

CountryTime

Budget.

Belgium (24companies
CISUTAC

Project Overview
Repair and dismantling, sorting for reusefrom Netherlands,

2022-

Germany, Italy and2026

9.2 M€.

others)and recycling, fibre-to-fibre circularapparel design for polyester and cotton
fibre garments
Demonstration of the separate collection

Germany (10companies
T-REX

from France, theNetherlands and Fen)

20222025.

of garment waste from households and
8.4 M€.

its conversion into desired raw materials,
involving players from across the value
chain.

Belgium (17companies
SCIRT

from Germany, France
and Switzerland)

Demonstration of an integrated textile-to20212024

9.2 M€.

textile recycling system for used textiles(natural, synthetic and blends) by all
players in the textile industry value chain.

4.3 Certification schemes
Bcorp
B Corp, the international corporate certification from the USA, is an international certification system forsocially and environmentally responsible companies in the public interest. It was launched in 2007, withthe 'B' standing for 'benefit'. The aim of the system is to recognise companies that benefit not only their

89
management, shareholders and employees, but also their business partners, customers, the global
environment, local communities and all other stakeholders. The certification is awarded to companies
that conduct their business in an environmentally and socially responsible manner and meet strict
criteria such as transparency. In Japan, B Corp certification helps distinguish between companies thathave high SDG goals but take no action and those that claim to be socially responsible throughsuperficial acts of greenwashing. There are currently over 6,000 companies with B Corp certification,
including Patagonia and Chloe in the fashion sector. In Japan, CFCL will be certified in July 2022. While
ISO remains the mainstream certification for businesses, B Corp certification can help build trust whencollaborating with EU companies.
4.4 Education
a. Higher education
In the 2022 ranking of the world's fashion schools, EU countries have notable placements.

The

University of Aalt in Finland rankssixth, and the Politecnico di Milano inItaly ranksninth. The ranking isbased on the opinions of 40,000 students, 50,000 professionals and 30,000 business people fromaround the world. Many of the top-ranked universities offer opportunities to study businessfundamentals and entrepreneurship outside of fashion design, such as production management,
marketing, management and entrepreneurship. In Japan, Bunka Fashion College holds the 10th position,
but there are few opportunities to study business or the latest technology-related subjects, where thecurriculum particularly focuses on beauty and luxury design.
b. Facilities
Fashion for GoodThis facility, which opened in Amsterdam in 2018, showcases numerous initiatives of the fashionindustry for the future. In particular, it is recognized as an 'ethical fashion museum' due to its display ofenvironmentally, socially and labour-friendly initiatives from the fashion industry and apparel
manufacturing companies. The facility features various exhibitors including global companies such as
Adidas as well as start-ups.

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Chapter 5 Direction for Japanese Circularity and Opportunities
EU-Japan SMEs
So far, through several case studies, the report shows the current situation and challenges of theJapanese fashion and textile industry. It explores the history and culture of textiles in Japan andpresents the potential for a unique approach to achieving circular society. it suggests that the richheritage and the craftmanship, cultivated in harmony with the local history, climate and culture, holds
valuable clues for creating an ecosystem of circulation and regeneration in local textile-related
agglomerations. The concept of circularity requires a system thinking approach that goes beyond
improving resource productivity and recycling rates. It emphasizes the importance of considering thewell-being of people, the utilization of global resources and the preservation of diverse cultures within
the whole system over time and across sectors. While the regions covered in this report provide
glimpses of a circularity ecosystem, they still face the challenge of building and strengthening theircapacity to build circularity businesses. At present, there are many obstacles to overcome in terms ofthe number of domestic start-ups, the speed of technology development, the commitment of large
companies and government action.
This chapter outlines the key focus areas and challenges in realising a circular ecosystem with a focus
on local SMEs and suggests opportunities for collaboration with the EU to achieve these goals.
5.1 Future focus areas for circularity with a Japanese character
In order to accelerate the transition to a circular economy in the Japanese market, the following priority
areas could be addressed
PICTURE 41: Direction, Strategy, and Actions for Japanese Circular Fashion

91<Direction>
STEP1 Establish new regional economic zones and regional circular economy systems.
STEP2 Develop infrastructure systems overseas (CFE, recycling and recovery technologies, recycled
textile materials).
＜Strategy＞
STEP 1: In-branding strategy of local textile companies (*) + Strengthening of regional autonomous
decentralised networks of textile production areas.
Develop solutions for the recycling of garments using digital technology.
STEP 2: Establish recycling and recovery technologies
Develop and market recycled textile materials that can be produced overseas.
The *”in-brand” strategy stands for Ingredient Branding, which was advocated by Kotler, the father ofmarketing, as a branding strategy for companies dealing with materials. The key to success lies inworking with multinational companies and using retail channels. One example of this strategy is GoreTex.
As a business direction, this report proposes the establishment of Circular Fashion Ecosystems (CFEs)
in local industrial clusters with Japanese textile craftsmanship and the development of these CFEs as
intellectual property for business development abroad.
To achieve this, the first step is to establish a local CFE. The Institute of Positive Fashion (IPF) reportfrom the UK highlights that the CFE framework should be introduced in cities with diverse characteristics.
From this point of view, an in-brand strategy is proposed as a STEP 1 strategy to highlight the uniquecharacteristics of the textile industry in each region. At present, the regional textile industry primarily
operates as a subcontracting business, with few companies having their own brands (2.2.4). However,the case of Kyoya Dyer, which successfully created a cycle with a natural living system as a brandstrategy based on local festivals and historical backgrounds (3.3.1), suggests that leveraging brandpower to enhance competitiveness through an in-brand strategy that deeply explores the characteristics
of each Japanese region and combines them with textile craft skills. This direction of utilizing brandpower is a suitable approach for improving competitiveness. In addition, we believe that instead of eachregion improving its competitive advantage independently, it is possible to create a city development
system that is tailored to the unique characteristic of each region. This can be achieved by strengthening
the region-wide autonomous decentralised networking system, collaborating with textile production
areas in Japan and abroad, sharing information on initiatives, and creating a mechanism to stimulate
business expansion. By doing so, we can foster the creation of a distinctive urban development systemfor each region. In addition to the development of new businesses focusing on repair and remaking by
textile companies, it is essential to develop solutions for the recycling and reuse of clothing throughdigital technology. The implementation of digital technology for re-use and sharing, the optimisation of

92
collection infrastructures and the promotion of grassroots movements by citizens are all essential
elements that need to be developed.
STEP 2 proposes the development of infrastructure overseas. Rather than focusing on scaling up in
Japan, where the population is declining, it is necessary to explore opportunities for expansion overseas.
While cross-border e-commerce and digital sales of goods to overseas markets are proposed,
circularity requires a system design that minimizes waste generation. Of course, there are costs andenvironmental impacts associated with the transportation of goods, and there is a need to promotesmall-scale circularity with a focus on regeneration, emphasizing the sourcing and manufacturing ofgoods at a local level. The overseas expansion strategy pursued by EU companies in terms of circular
economy is in the direction of "selling intellectual property" (selling licences and transferring skills) rather
than "selling goods". It would be appropriate to apply this idea to Southeast Asia, where Japan isseeking to expand its market presence. Three Japanese infrastructure technologies that can be
employed overseas are CEF, recycling and recovery technology, and recycled textile materials.
However, they need to be established in their respective countries before deploying them abroad, as
the caveat for development in third country markets is that localization in alignment with the local culture
Is crucial. Business models that have been successful in Japan and the EU may require adaption tosuit local consumer lifestyles, local climates and cultures.
5.2 Challenges and Opportunities for Cooperation in Japan
In order to implement the business directions and strategies outlined in 5.1, this research identify
several gaps in Japan’s current situation as challenges. The following four challenges have been
identified as opportunities for collaboration between the EU and Japan to realise a Japan-specificcircular fashion ecosystem.
PICTURE 42：Opportunities for EU-Japan Collaboration<Challenges >93
1. Information exchange on CFEs
2. Training of CFEs
3. Market development for local textile enterprises
4. Improving technology and solutions for garment circularity<Opportunities for cooperation>.
1. Information exchange on CFE→Information sharing with the European Circular Economy Cluster
To invite local authorities engaged in circular city planning in their regional clusters and small areas toJapan, which aims to exchange information on forming new regional economies based on circular
fashion.
In the past, France and Japan exchanged information about sustainable actions. Looking ahead, it will
be necessary to establish continuous communication in addition to the exchange of information.
Reference: Franco-Japanese symposium to be held in March 2022 by the Consumer Affairs
Agency/Ministry of Economy, Trade and Industry and the Embassy of France in Japan.
International trends and future developments in a sustainable fashion. 44
2. Training of CEF→Introduction of European Circular Fashion Design Education
There is a demand for human resources and organisations capable of designing the blueprint for thecircular fashion ecosystem and connect different stakeholders and sectors. As Europe is focusing on
circular design and ecosystem design education, there is an opportunity to develop similar educational
content in Japan.
3. Market development of regional textile companies→Cooperate between European high brands and Japanese regional textile companies
In order to implement an in-brand strategy for local textile companies, it is crucial to find value in brands
that are in line with the local Japanese culture and climate, as well as to collaborate with high-end
brands that are developing in the mass market. In the past, there have been some collaborations, such
as LVMH and HOSO, which show respect for Japanese craftsmanship. However, the key aspect is tobuild an equitable relationship. Additionally, government agencies should intervene to facilitate suchco-creation relationships. For reference, a case study of collaboration between the Japanese small andmedium textile industry and Apple is described in section 5.2.1.
4-1. Improving technology and solutions for garment circularity

44

https://www.caa.go.jp/notice/entry/027694/

94→European start-ups entering the Japanese market
Compared to Japan, Europe has a more active start-up market with many companies venturing into
various fields. Furthermore, in line with the European Textile Strategy, it is expected that the number of
Climate Tech start-ups will increase in the future. Japan has a potential to enter the transparency
disclosure and second-hand market. In the past, JETRO and Business Finland (the commercial sectionof the Finnish Embassy) have conducted business matching between start-ups from different countries.
Such exchanges between start-ups should also be promoted.
4-2. Improving technology and solutions for garment circularity→Joint development of collection and recycling technologies
It would be effective to jointly develop recycling technology, which is being actively developed in Japanand Europe, as well as automated sorting technology for collection.45
5.2.1 Reference: Collaboration between Inoue Ribbon and Apple Inc
Inoue Ribbon Industry, located in Echizen City, Fukui Prefecture, is a 75-year-old narrow woven fabricmanufacturer with about 150 employees.46 The company produces two types of bands, Alpine Loopand Trail Loop, which are designed to have high water and shock resistance to contemplate the latest
Apple Watch model released in the autumn of 2022. Through a collaborative effort with Apple, thecompany has successfully created products that are well-designed, strong and durable, driven by ashared passion for craftsmanship, workmanship and the exchange of problem-solving skills between
the two companies. This research shows an interview with Mr Inoue, the Director, who shares theinsights and tips for the success of this collaboration.47
Appropriate data management and iterative improvement
The strength of the Japanese textile industry lies in the spirit of challenge and the craftsmanship ofcontinuous effort. Continuous improvement always requires data management. When high quality is
demanded, instead of giving up, they analyse the data and continuously improve their skills and offer
suggestions for improvements. Although it took two and a half years, the success achieved results fromboth companies' perseverance and continuous improvements. When dealing with industrial materials,
more detailed data management is required. However, implementing a large-scale system is
unnecessary, when a small and medium-sized company can adopt its own approach. Enhancing data
management can also lead to the next business opportunity.
Rapid development capability based on demonstration experiments.

45

https://prtimes.jp/main/html/rd/p/000000006.000050747.html
https://www.telala.com/
47
https://www.elle.com/jp/decor/decor-interior-design/a42290914/apple-watch-ultra-with-tim-cook20221220/
46

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Inoue Ribbon’s other strength lies in their ability to rapidly develop and create products, showing themfor discussion. They have a keen eye for identifying areas for improvement, even in a short period oftime. Additionally, they are involved in creating a part of Apple’s products packaging. When tasked withcreating a 100% recyclable package instead of the usual nylon, Inoue Ribbon suggested using machine
weaving techniques to produce strong paper handles that met the required specifications.
Open sourcing technology
Many textile companies are reluctant to share their skills and information. However, from theperspective of the textile industry as a whole, they are more interested in developing together than incompeting with each other, leading to co-creation. This approach aligns with the Japanese culture ofvaluing human relationships and building trust in business. The collaboration with Inoue Ribbon andApple also led to the creation of improved products and opportunities for the next business by sharing
quality control technology. The textile industry will be revolutionised if more companies like this are
established.

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Conclusion.
The regions hold the potential for Japanese circular fashion.
This report shows some directions in which the Japanese circular fashion should be heading,emphasizing the potential found in local areas in Japan, and of the abundance of craftsmanship thatcan be harnessed for circulation. The cases shown in Chapter 3 of forming new economic zones that
use the knowledge and wisdom of traditional circulation in each region are a step towards real circularitythat values the existing culture and skills. Bottom-up approaches, even on a small-scale, created inlocal communities are sustainable. Furthermore, local actions are more likely to involve stakeholders,
including citizens, and form an essential ecosystem. As Japan faces a declining birth-rate and ashrinking population and still has a concentrated system where the population and business are stillconcentrated in Tokyo, solutions locally that encourage autonomous decentralisation from the old large
scale could not only fill the domestic gap but could be a leading future model for a shrinking society.
However, Japan still only has the seeds. The seeds need to be watered and nurtured. It is necessary
for the help of EU countries and companies forming CFEs ahead of us. In particular, there must be
more education and human resources for CFE designers in Japan and a need for more technology andinnovation to revitalise the region.
Opportunities for EU SMEs
Europe and Japan have a lot in common concerning population, resources and limited land size. Making
them well-suited for collaboration in promoting the autonomous, decentralised, small-scale system ofcircular fashion and textiles.
As mentioned above, there is an urgent need to train designers for CFE in Japan. This would not be
possible without the support of European companies. Partnerships and joint ventures are good options
for developing and horizontal application of recycling and recovery technologies and recyclable textiles
developed jointly in Europe and Japan. EU companies will likely have to overcome various challenges,
such as Japanese culture and old habits, language and cultural barriers, local regulations and building
trust, which will take time and patience. It will also be essential to have the support of organisations
such as the EU-Japan Centre for Industrial Cooperation, which acts as a bridge between Europe andJapan, to gain the ability to deal with such barriers. Above all, realising a new economic zone locally forcircularity through cooperation between Europe and Japan will bring new values to countries with future
economic development and will undoubtedly significantly contribute to global environmental issues.
Fashion can play a role in improving well-being.
In 2006, I had the opportunity to do an internship as an environmental consultant in the UK, focusing
on impact assessments through the EU-Japan Centre for Industrial Cooperation. As a student, I wanted
to see the differences between Japan and Europe, which were considered environmentally advanced.
There, I was responsible for investigating the potential water and air pollution surrounding a new plant

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and assessing its impact on the ecosystem. I wrote an environmental impact report that the pollution
levels did not exceed EU standards. I also spent weekends visiting renewable energy and waste
facilities in different countries.
The discomfort I felt at the time was the gap between top-down government policy and the need formore awareness of those involved about what they were building and consuming. Seventeen years on,
climate change and waste issues have become more serious, and more companies and individuals
have developed a sense of urgency and are taking environmental issues seriously. However, the textile
sector needs to be more developed than other industries.
Circularity cannot be achieved by solely creating a system. The system will only become useless if thepeople who use the system do not cultivate tangibly caring values relationships with things
simultaneously. It is necessary to reform the system on people's values.
Clothing is a tool that not only protects the body but also embodies who you are. Instead of a linear life
cycle where everyone likes the same thing and throws it away when it goes out of fashion, it is a step
towards a recycling-oriented society where everyone recognises their way of being and shares it withothers, saying "This is what you like and this is what I like". Fashion is more about 'feeling with the body'than understanding the head. The more people are happy when clothes touch their skin, and they canfeel and experience the local climate and comfort, the more people will rebuild their relationship withthings. Fashion enriches the senses and is an excellent way of creating a natural cycle that connects
people and systems. Because of its underdevelopment, urgent legislation and a behaviour change
beyond existing corporate values are expected.

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Acknowledgements
I would like to express my sincere gratitude to the EU-Japan Centre for Industrial Cooperation forallowing me to conduct this research under the MINERVA Policy & Market Intelligence Programme. I
am particularly grateful to Mr Manuel Hubert, EU-side Managing Director; Mr Yasuo Tanabe, Japanside Managing Director; Mr Philippe de Taxis du Poët, former EU-side Managing Director; and Mr
Fabrizio Mura, Team Leader (EEN Japan, GNSS Asia and Space.Japan), for their invaluable guidance.
I would also like to extend my thanks to Ms Kaya Enoki and all the staff of the EU-Japan Centre forIndustrial Cooperation for their continued support and warm welcome. Furthermore, I would like toexpress my gratitude to my colleagues at the EU-Japan Centre who generously dedicated their time tosupport this study and showed great teamwork and kindness. In addition, I am thankful for the great
help and advice provided by Prof. Yasuhiro Ota, Yasuhiro Kobayashi, Jun Ueta, Aya Shiraishi, Asako
Suzuki, Mari Kozawa, Sumiyo Hori and Makoto Yoshida.
I am incredibly grateful to all the government officials, company executives, academics andorganisations interviewed who kindly dedicated their time to share their experiences and thoughts on
this research topic. Special thanks to individuals such as Prof, Daijiro Mizuno, Prof. Hiroshi Uyama,
Isao Kitabayashi, Kenji Shino, Kyouzou Shimogawa, Madoka Koga, Aki Nishida, Yuri Kobayashi,
Tadayuki Nakamura, Junpei Hachiya, Masato Yamaguchi, Toyoaki Inoue, Teruyuki Kawano, Daiki
Yoshii, Kouichi Miyashita, Feilang Tseng, Ayumi Matsuzaka, Masayuki Terai, Rie Hayashi, Kaori
Nakagawa, Hiroki Omura, Yui Nakamura, Shintaro Ban, Yoshiyuki Ikegami, Izumi Oku, Rie Ito and
GARELLICK Mikael. This report would not have been possible without their contribution. Finally, I
would like to express my heartfelt gratitude to my family for their unwavering moral support and warm
encouragement throughout this research endeavour.