→Sector guidance -Fashion and Textile V2.0 of contentsTable Conclusion109 The circular advantage:Strategic opportunities in thefashion and textile value chain0701. Annexes110 CTI: Glossary112 A circular fashionand textile value chain1002. Sector Guidance for Fashion and TextilesThe CircularTransition Indicators1403. Part 2Recommendations accordingto value chain positions6706. A step-by-step guide tocircularity performancemeasurement and management1704. Part 3Diving Deeper7907. Foreword This guide is a deep dive into fashion and textiles,building on the first version, to support the sector’s valuechain with specificities. We have updated it throughextensive consultations with stakeholders across thefull value chain, for which we’d like to thank everyoneinvolved. Business as usual is no longer an option. To remaincompetitive and resilient, companies must integratesustainability into their core strategies, ensuring thatclimate, nature and equity drive value creation. →A refined quantitative assessment for circulardesign;→Guidance on transitioning to regenerative inflow;→A new approach to assessing the social impact ofcircular business models. Sector Guidance for Fashion and TextilesOperationalizing circularity is a key priority for thefashion and textile sector, moving from ambitionto measurable action. However, despite growingmomentum, entrenched linear financial systems andsupply chain models along with insufficient regulatoryframeworks to enable and reward circular businessmodels are hindering the transition to a circulareconomy. The lack of standardized metrics andtransparency around circular performance limit theability of investors and businesses to identify and scalecredible solutions. Collaboration to align on a commonmethodology to enable the building of the business casefor circularity is at the core of this guide. We call on leaders throughout the fashion andtextile value chain to act on this guidance toaccelerate the adoption of circular businessmodels, enable data-driven decisions and valuechain accountability, and align on a commonvision and harmonized methodology to drive theinvestments needed to scale a circular future. The CTI methodology is the methodological foundationfor performance measurement and management of theWBCSD and UNEP/OPN’s Global Circularity Protocolfor business, a unified global framework for target-setting, measuring, reporting and disclosing progress onresource efficiency and circularity. This CTI Sector Guidance for Fashion and Textiles v2.0provides practical guidance on how to implementcircular resource use. Companies that adopt itaccelerate their impact on existing and future circularstrategies. The guidance supports value chain actors inembedding circular performance measurement into theirdecision-making across products, processes, operationsand key performance indicators. The time to act is now. The Circular Transitions Indicators (CTI) are a sector-agnostic framework developed by WBCSD and provenacross industry sectors and leading sustainabilitycompanies globally. CTI provides a circular performancemeasurement framework to align circular strategies withdecarbonization pathways. It helps companies evaluaterisks, identify effective actions to enhance circularityand understand the impact of their circularity strategieson their sustainability goals. Diane Holdorf Executive Vice President, WBCSD The key updates include: Jeannie Renne-Malone →How to use CTI when preparing for regulatorycompliance;→Customized guidance for indicators, circular designprinciples and data collection according to the valuechain stakeholder; Vice President Sustainability, VF Corporation Carlo Giardinetti Sustainability Strategy Lead, Deloitte Switzerland In collaboration with: Thank you to the companies and organizations that contributed to the development of this guide: Grant funding provided by: ExecutiveSummary Amid mounting regulatory, environmental and consumerpressures, the fashion and textile value chain has anunprecedented opportunity to move beyond outdatedgrowth models and lead with innovative, agile businessstrategies that create long-term value by enhancingbrand resilience, strengthening stakeholder trust,decarbonizing and driving sustained profitability. scale circular business by answering questions like: →How circular is the company, facility or product group?→What is the impact of increased circularityperformance on the carbon footprint?→How can the company identify and prioritize the useof regeneratively sourced materials?→What is the best way to apply and prioritize circulardesign strategies?→How can the company evaluate circular businessmodel risks and opportunities?→How can it set a roadmap for improvement? What's new →Practical guidance in the implementationof the Circular Transition Indicators (CTI),supporting the reporting of CorporateSustainability Reporting Directive (CSRD) –European Sustainability Reporting Standards(ESRS) E5; Circular