Building a Circular Future with Paul Foulkes Arellano
If you’re working in and around the circular economy, footwear, fashion, materials innovations, or radically changing the supply chain so we don’t f—k up our planet, chances are you have heard of Paul Foulkes Arellano. Especially if you are active on Linkedin, podcasts and industry press. Paul has a massive following and a voice that makes people reconsider and change their direction.
As a leading and outspoken voice in the circular economy, his area of expertise extends from footwear and apparel to raw materials, food and beverage. His particular focus is NextGen fibres, biomaterials, and novel material development. As founder of Circuthon he works as a circular economy consultant for global brands and innovative start-ups. He is on the advisory boards of ReStalk, Must Had and the co-author of “Materials & Sustainability: Building a Circular Future” to be published by Routledge in 2024.
With over 30 years of experience in sustainability and future business knowledge, Paul works right across the financial and commercial aspects of a business, aiding the chair and CEO. But the buck doesn’t stop there, he relentlessly supports the next generation, is an activist and aids founders in their efforts to raise venture capital and win grant funding.
Paul runs two non-profit initiatives: The Circular footwear initiative and The Circular Fashion Initiative. He is also a non-executive director at Sparxell, a cellulosic pigments specialist developing the next generation of colours and effects. A busy man indeed on a mission. We met at Mills Fabrica for our talk ‘Circularity in Fashion’. His no-BS talk about the future, legislation, Degrowth and the radical changes needed in the fashion system was music to my ears. I had to find out more.
Paul is generous with his insights, forward with his beliefs, driven by action. He is the type of person you want to reinvent the world with. If you’re into TikTok format 10-second content, this interview won’t be right for you. This is a 10-minute read. And you may want to re-read it again.
Paul Foulkes Arellano: Basically I think if you look at every industry, the fashion system is the most broken. And why is that? Because no one takes responsibility. The brand owners in particular, because they don't own factories, they don't train the factory workers. They're not in charge of health and safety.
The major players in many industries own their own factories. In automotive, in food, in drink, in personal care. All their employees are on payroll, or their employees get pensions. They are responsible for the safety of their employees. Not in the fashion industry. So that allows being loose with salaries, taking no responsibility for health and safety. People can die in a factory and the brand escapes any responsibility for that.
What I've seen brands doing is often when there are issues around machinists being sexually accosted or slave labour wages for example, they often say ‘yeah, but we don't own the factory. We're just one of many brands.’ In the food industry the major players typically invest heavily in their factories to ensure that they are producing high-quality food products in a sustainable and ethical manner.
Fashion brands use a multi-brand outsourcing system as a way of shirking responsibility for anything that might happen, even if they're making the majority of the garments or footwear in that factory. They will say ‘we are not the owners. We are just one of many brands making’ and use that as an excuse.
I can't think of any other industry where that's permissible. And where brands get away with it. I think that really is a massive flaw in the whole system. And the fact is, these fashion brands are so wealthy, so rich … dripping in money.
Brands like Patagonia, talk about the fact that less than half of their staff are getting a living wage, and they talk about less than 50% on a living wage as a positive that just doesn't even begin to compute for me. I would bury my head in shame. If I were Patagonia and the people making my garments, which have made me a billionaire, and then receive a fraction of a living wage. How on earth do you believe that's a positive statement that you put on your website? It just seems like utter madness to me.
Geraldine Wharry: What you're talking about is not revolutionary, owning your factory. Back in the early 2000s, my first designer job was for a brand called Triple Five Soul and it was partially owned by the factory we worked with. So we had this insane advantage because when we would go to China, we would live at the factory, and we would see the conditions of people working there.
And we were able to really innovate because we were such close partners with the factory. And the factory, obviously, as partial owners had a vested interest in the brand being successful. It's not a new model and it's one of the only ways we can also simplify the fashion supply chain.
PFA: When we talk about value, and the meaning of clothing to us, when we're looking at the food industry in particular, we see brands growing massively, where people know who the owner is, where people know who makes things. The wine industry is a great example. People know who the winemakers are. It would be absolutely unthinkable for people in the wine industry to boast about slave labour in a way that the fashion industry literally at shareholder meetings talk about how they've achieved cost efficiencies, and very clearly in the footwear industry. Brands talk about efficiency, but what they mean is they've screwed their suppliers down to tiny wafer-thin margins.
GW: How do we change this? When we're in those shareholder meetings, who speaks up? You know, what do you do? What's your approach? When you hear people talk about efficiency in that undercutting way, how do you confront this?
PFA: I think the only way for change to happen is to be at the top table. You cannot even as an activist shareholder make any difference. They televise shareholder meetings nowadays. You can see people at the Shell shareholder meeting or the BP one, with Greenpeace activists singing songs, about their corruption and their lies. It doesn't change anything. You have to be at the top table: It's the only way for things to happen is for activists to get board seats. That is literally the only way that things can change.
And in other industries, we've seen that happen. So, I've seen in the packaging industry, particularly they're bringing in non-executive directors to sit and speak up for the planet or speak up for nature and the environment . And it makes a huge change to the way those businesses evolve, the decisions that they make and what they do.
And sometimes, it's not about profit, because businesses are about long-term shareholder value. And, if you're going to break the law, or the future laws, then you are going to damage long-term shareholder value. Therefore, it's in the business's interest to have somebody pointing out what environmental legislation is, but also what the consumer Zeitgeist is and how people are moving away from certain brands that don't fit with their belief systems.
I don't think that's happened really in fashion. The brands that sell the most don't really have great belief systems behind them. But I think we are at the point now, where things will change. There is enough talk. And fashion is really under the microscope.
I've noticed that even the fashion journalists who write for either consumer fashion or trade fashion magazines are beginning to ask much more difficult questions to brands. I monitor what fashion journalists and particularly B2B trade journalists are writing about, what they ask, what they determine. I think they're much more switched on. And that is a good thing. And I meet them now at activist events.
GW: There's also a lot more information out there and many brands genuinely want to be perceived at least doing something good. Sometimes they just don't know how, and the fact that we have new communication playbooks like UNEP’s Sustainable Fashion Communication Playbook , more agencies calling out greenwashing or AI tools like unitmode. Marketing teams in fashion and journalists understand they really need to be well informed because otherwise they can experience backlash and spread misinformation.
I see circularity as the future and when we had our initial conversation you talked about new skills and the problems with the way the fashion industry is currently segmented between fashion design, textiles, production, and Merchandising, and that was the opposite of circularity.
I'm curious to know about this because this could be helpful for someone who's looking to map out their future. Where do I want to go next? You know, if it doesn't matter whether I've just graduated or whether I have 30 years of career, but I want to be a part of that.
PFA: I think what is important is the skills that go into the fashion industry, and I think the scariest word might be the word engineer. It doesn't sound very couture. But, one of the interesting things is when engineers work in marketing, they actually think in a very different way. And there are some engineers who've worked in marketing roles, particularly female engineers, who have been incredibly effective in growing the bottom line.
Not all fluff and wishful thinking, but genuinely fact-based decision-making, very data-driven. We're all human but need more rational decisions. And I think what's interesting is when people in the fashion industry go off and retrain either in materials or agroecology.
I get a lot of emails from people asking which masters should I do? From people who are in the midst of their fashion career. One person wrote to me to say, can you check out the curriculum? Is this what I should be doing? And it was a new degree in Italy, International Master in Sustainability and Circular Bioeconomy Management . I read the curriculum and who was teaching and I was like ‘Absolutely this is phenomenal. This is such a good Masters. Absolutely do it. But please report back and tell me how you got on and what you learnt.’ I'm pretty sure that she must be coming to the end of that master's this year.
But genuinely, I think the amount of training that's done in big business is huge. The amount of training that fashion brands give their staff is tiny. So if I look at people who are in the industry, I don't see them going off for a week to do this or that. You know because you're always on the job and you're only ever 12 weeks away from the next collection, or if you're in fast fashion, seven days away from the next collection. Where is the time to teach people to learn proper science, and proper engineering skills?
GW: And that's why we need people to re-engineer the entire business plan because what you're talking about is a reengineering even from the ground up what a business looks like. And about the engineering title. ‘Systems designer’ is a bit too vague, but engineers create a type of supply chain and are able to engineer a type of series of events that work together and lead to a specific outcome. And we need to re-engineer the business so that there is time for training.
I could see how if someday, we curbed the amount of collections and styles being designed and production was decoupled from profit, then design teams, R&D teams, production teams for example would have more time for implementing transparency, working with their suppliers, attending trainings, etc.
PFA: As I speak to you, I think to myself, one collection a year, a big and well thought through collection is enough. Because if you looked at the sales SKU by SKU, people are buying the same things. And we certainly know in footwear that the best-sellers are repeated year after year in the same colour.
Often new marketing people delete from the spreadsheet really good skus that have a strong consumer franchise, and a year later they bring them back and they deliver formidable sales again, because people really believe in that shoe and it comes back. Also, the thing about footwear is that shoes have names. So, every shoe design has a name and shoppers know what things are. In garments there aren't that many names, few descriptive names that stick.
GW: As a former fashion designer, we used to name styles, but at the end consumers would not know about the names we allocated. Unlike footwear.
PFA: If you give something, a special style, a name, you can improve it, you can make it more efficient, over time. One of the huge inefficiencies of the fashion industry is this constant reinvention that people say must happen. And in other industries, you have your top 10 best sellers, and you do variations on those, and you know you carry on.
And to be honest, if you look at outdoor garments for example, they do have names, they sell the same colours year in year out, they don't have that many launches. It is more efficient.
I do question whether the actual maths is being done by anybody, particularly if people are moving from brand to brand and every time there's a bad quarter the CEO gets fired or a new marketing team is brought in. I mean, this is typical of the fashion and footwear industries, just this constant movement of people and ultimately, I think it's why you might say fashion is not a serious business in that sense.
GW: Emerging brands, smaller brands, many of them regularly go bankrupt. They get lauded after their central Saint Martin's collection and then are able to exist for a couple of years and then die off. I mean, we have some amazing designers fall off the grid.
I'm not saying these were sustainable designers, but I'm saying that they just had amazing aesthetics, design ideas in their collections, and they just died off because it's so hard to make a profit in fashion. In some ways the best fashion can offer was never designed to be profitable.
PFA: And getting back to some of those other points we discussed, how do you allow brands to survive under a new system, you know, how can a brand remain viable? So even if I'm working on a social enterprise project, but I said to the entrepreneur, it must be profitable. You can't be sinking money into it because at some point, you'll be fed up of sinking money into it and you'll pull the plug, It needs to be profitable enough to keep going. It needs to generate enough cash to remain viable.
So that really is one of the real needs of the fashion industry. Is for someone to kind of crack that. I know some brands that were thought up during lockdown, they're still not on the market yet. They're still building infrastructure and building systems and recruiting teams. And the question is, will they work? At the moment there's no answer to that, but there are definitely people out there looking to do things, but you need to be a great business person and highly creative. In fashion, this not usually compatible. The great creative directors are not great business people generally.
But what would be great would be to see the kind of Ecotricity of fashion. So if you look at Ecotricity, the electric company is highly profitable and it has allowed the owner to launch other businesses around it. But all done in an ultra eco way and highly successful. So where's the Ecotricity of fashion?
GW: Yes, and I can’t see it right now. But back to when we last spoke, you shared a factoid that I didn't know which is that footwear has more components than a space shuttle.
PFA: Yeah, aerospace Yeah.
GW: What would the Ecotricity do about that?
PFA: So if I look at footwear design there's such a strong argument for 3D-printed footwear. Because there's no waste. There's literally zero waste. And even if there was a gram of waste, the product would go back in the hopper and come through again in the next shoe.
And I look at the Footwearology training center in Barcelona on how they're training the next generation of young footwear designers . And it's about high efficiency, 3D knitting, 3D printing. Virtual fitting.
VivoBarefoot are scanning people's feet. One of the things that stops people wearing garments and footwear is fit. If a shoe tears your foot apart, or it rubs on you as a garment, it stays in your wardrobe. It never comes out. It's a waste of money and resources. So fit is super important.
If you're 3D scanning a foot like Vivobarefoot does, it will be a perfect fit, and you will never want to switch shoes again. There's a company in Germany called Modifox who are making a shoe that has two separate soles, one for indoor and one for outdoor and they slip off and on. You walk into your outdoor sole and it’s highly efficient.
One of the issues with footwear is different terrains. If we want three different terrain outsoles, we reduce the volume, reduce the resources, because actually, the thing that breaks first on footwear is the sole. The sole will crack long before the upper.
In essence what is the ideal business? And this is scary for the fashion brands and footwear brands: longevity. Longevity is the opposite of the fashion industry at the moment. Okay, brands say we are all about longevity. Yet they are still pumping out products. There's more luxury fashion now than there ever was in history in terms of numbers.
GW: There have been speculative innovations around soles that can self-repair themselves like the trainers by Shamees Aden. I was looking into quantum physics and quantum computers and one of the biggest benefits of quantum computing is that we will be able to create revolutionary materials.
When we last spoke, you mentioned that 2024 was probably going to be a catalyst year because there will be legislation coming through and there would be certain climate tipping points that would force people into really embracing circularity. And perhaps the wildcard that we're not factoring in is what's happening with quantum computing. AI and all these other technologies that will enable engineering, materials innovations at scale.
PFA: AI can really help with inventory massively. We are as a society, geared towards overconsumption at the moment and we need to stop. It drives emissions and will drive us to 2.5 plus centigrade temperature.
AI can help with inventory, but I believe we will get to the point where the amount of waste in a typical factory, which when the FDRA audited factories in China, they were able to eliminate substantial amounts of waste through the FDRA's Zero Waste Program not just in materials, but also in packaging, in all kinds of things within the factory setup. They were highly inefficient.
I think if you look at a pharmaceutical factory, run by PhDs, there are fractions of percentages of waste it's because the people doing doing the maths constantly.
GW: So I guess my key takeaways of this conversation is partnering with numbers people, engineers. We need to do carbon accounting, entire lifecycle assessment, reporting lifecycle inventory, looking at data gaps and uncertainty analysis, etc.
PFA: I think in a sense, what needs to happen is that the carbon accounting is built in when you place a garment order. And there's a cap and it will basically go ‘No, you can't, that carbon exceeds our quota. Choose a different style.’ You know, as a buyer, there’s a future built system where the button won't go green, you won’t be able to click to buy unless it hits the carbon targets. The AI will do that for you.
And I think with some other reporting tools that are available like atma.IO from Avery Dennison.
That will all help but ultimately, nothing changes if we keep increasing the number of items. There are no signs anywhere in any of the data that the garment numbers are decreasing, or that the kilos are decreasing, or that the kilos going to landfill are decreasing. There's nothing in the data that shows that any of this circular reuse: Vinted, resale chat has had any impact whatsoever.
GW: And this is really where people feel this is a mindfuck. And I think in fashion we're so blinded by hype. We need to have accountability, but we also need to understand that this is a journey but probably the biggest accountability is we have to be radical with our SKU count. Yeah, that is where the conversation is. That doesn't come in shades of grey.
PFA: Here in the UK, which is in a way not surprising, we've always been a kind of goody two-shoes type country, you know being a B Corp is a way of undoing all the bad stuff. But you can be a B Corp and not improve that much. You just must keep doing a little bit better and you can stay as a B Corp.
What would be interesting would be looking at Degrowth within B Corp certification or looking at literally how is that company reducing not just its emissions. But actually when people say zero waste, you're like, yeah, because you're recycling it, but then it goes to landfill. It's just going through an extra cycle.
But if we could somehow build a true circular certification whereby the numbers decrease and decrease over time. There is more reuse built in, your points system is based on the fact that your footwear is upgraded. What is the length of time before that piece of footwear goes from purchase to dump, that blouse from purchase to dump?
What is that length of time? If a brand is able through its actions to make that length of time longer, even by a few months? I think Veronica Bates Kassatly’s work on Impact per wear, if extrapolated, would show that more wears per garment would reduce annual emissions by megatons.
GW: We could start seeing breakthroughs. The way I look at it is you can’t put your life in the hands of a surgeon or doctor, but then say climate change is not real when all the scientists are backing these facts. You can’t as a brand bang on about climate change, which is science-backed and then not be head-deep in the numbers and carbon accounting.
But to wrap things up, I just wanted to ask you, to end on a hopeful note, but also not what I call synthetic optimism. But I found it was really inspiring what you said about what was happening with the next generation. I'm just curious, on the flip side, what makes you hopeful?
PFA: Yeah, I mean, I get contacted by young entrepreneurs every day. Because of my profile in magazine articles, and podcasts they can see what I'm talking about. And it tends to attract a lot of people doing their master's degrees or people setting up businesses. The other day I got an email from someone who had an Instagram group called Chicks for Climate There are 364,000 signed up to the Instagram account.
You know, most of the people who are graduating or at university just now have a completely different mindset than the boomers. They are much more switched on. Universities are teaching sustainability as part of every course many universities. Edinburgh University Business School has a Centre for Business, Climate Change, and Sustainability that feeds into all different degrees.
So students are graduating and they're starting their first jobs and going ‘this is bullshit’. You know, this is not the way, so they are breaking away. I've never seen so many people trying to set up their own businesses. There are climate tech WhatsApp groups with 600 people in all of them under 30 practically creating carbon accounting businesses or carbon reduction businesses, and none of them are focused, or very few of them are focused on fashion. Compared to other industries. But people are then looking at fashion and go wow, there's $2 trillion of carbon. Let's look at that.
I spend so much time with all sorts of graduates between the age of 21 and 30. Doing career advice, and sometimes if it's really interesting, I'll do a call but it has to be short, or sounds like just tell me what you want and I'll do an email at night-time, but it's almost daily.
It's a constant barrage of questions. And a lot of them go back to university or they switch jobs. They're like, you're right, I'm leaving, I handed in my resignation, I'm doing something different. And people who have worked with me on projects have then moved companies; and taken all that learning into their new company with them.
There are other consultants who are teaching carbon accounting skills and people are moving around and spreading them. And then I see their posts and they're going ‘Yeah, Degrowth is normal’. And that company CEO has signed off on that. And I'm like, wow, so that's where we're at. I think we are getting activists in the workplace. And I would say, you know, all that Greta Thunberg generation, here are their thoughts: ‘How do I do it in my business and make it happen?’
Honestly, I think institutionally disrupted climate transformation is not dissimilar to slavery 200 years ago, shocking though that may sound. People asked ‘How can we live without slaves?’ Slavery is an unspeakable crime against humanity, yet at the time it was normalised. Climate change and overproduction/ overconsumption also prey on indigenous peoples and people in the Global South. I’ve seen what has been happening since I first became a supporter of Survival International decades ago.
When I studied slavery in my Latin American studies at university, it was what inspired me to be an activist. Overconsumption and the resulting climate catastrophes are horrifying - it's a bad thing. It will kill us all. You shouldn't do it. “Stop now, you know, you will be fine.” We are fine without lots of things that were very bad yet we thought were basically impossible to live without. And here we are – still living and breathing.
Interview by Geraldine Wharry