The Challenge

The fashion industry accounts for 8–10% of annual global carbon emissions—more than international flights and shipping combined (Leal Filho et al., 2022).

Clothes however, are an everyday essential. Across the world, clothes act as both protection from the elements and a form of expression. Recent decades have seen exponential growth in clothing production due to globalisation, urbanisation, and population growth, with up to 60% of global fibre production destined for clothing (Leal Filho et al., 2022).

Currently, the fashion industry largely operates in a linear model, extracting mostly non-renewable resources to manufacture garments that are frequently worn for a short period of time before being disposed of or incinerated (Circular Economy Month, 2024). Less than half of all used clothing is collected for reuse or recycling, and only one percent is converted into new clothing (European Parliament, 2024).

Furthermore, the textile industry utilises large amounts of natural resources, contributing to environmental degradation. Making one cotton t-shirt requires 2,700 litres of fresh water - enough to satisfy one person’s drinking needs for two and a half years (European Parliament, 2024) - and textile dyeing contributes to about 20% of global clean water pollution (European Parliament, 2024).

A Circular Solution

Rent the Runway (RTR), founded in 2009, is an online platform that allows customers to rent, subscribe, or purchase designer clothing and accessories.

Harvard Business School classmates, Jennifer Hyman and Jennifer Fleiss, founded the company after seeing Hyman’s sister overspend on an expensive dress for a wedding. They envisioned a ‘Closet in the Cloud’ model, filled with designer styles to rent, wear and return for a fraction of the cost.

In 2010 they expanded into designer necklaces, earrings and handbags and launched a plus size category in 2013, before opening a bricks-and-mortar store in New York in 2014. Then in 2016 they launched their monthly subscription model.  

RTR offers three monthly subscription plans that allow users to select at least five items per month from over 10,000 options for a fee. Users may choose to hold on to items for as long as they please or purchase them outright. Items are sold at a significant discounted rate, often exceeding 50% off the original retail price. When each rental is returned, specialists professionally clean them and items are repaired as needed to increase their longevity.

Climate Impact

RTR’s rental-based business model reduces both environmental and social costs associated with new clothing.

On average, renting through their platform consumes 24% less water, 6% less energy, and generates 3% less carbon emissions per garment versus purchasing a new item (RTR, 2025).

Over the past decade, RTR has saved:

• 67 million gallons of water, which could fill approximately 101 Olympic-sized swimming pools.

• 98.6 million kWh of energy, enough to power 12,697 households in a year.

• 44.2 million pounds of CO² emissions, comparable to 47,737 roundtrip flights between Dallas, Texas and Newark, New Jersey (RTR, 2025).

Since 2010, RTR’s rental model has displaced the production of about 1.6 million new garments. As of January 2024, 6.5 million garments were repaired, and 1.4 million decommissioned rental products were diverted from landfill via resale, donation, or recycling with partner organizations.

Replicability

The global clothing industry is valued at USD 1.3 trillion and employs over 400 million people across the value chain (Ellen MacArthur Foundation, 2017). However, clothing underutilisation and the lack of recycling result in an annual value loss of more than USD 500 billion (Ellen MacArthur Foundation, 2017). RTR has developed a circular business model that effectively taps into the underutilised clothing market while decreasing resource consumption, carbon emissions and waste.  

Other examples of companies championing circular textile solutions include:

• The Renewal Workshop (USA) upcycles post-consumer clothing via repair and resale.

• Worn Again Technologies (UK) innovates chemical recycling for fibre-to-fibre garment recovery.

• Stuff4Life (UK) converts end-of-life workwear PPE into new polymer feedstock.

• UsedFULLY (NZ) is pioneering scalable end-of-life textile reuse, including cellulose-based construction materials from textile waste (Circuleire, 2024).