The fashion industry is facing one of its greatest challenges: how to transform a linear production system into a truly circular one. Every year, millions of tons of textile waste are generated during garment manufacturing, yet much of it remains invisible within fragmented supply chains and informal waste management systems.
Ann Runnel, Founder and CEO of Reverse Resources, has been working to change that reality. What began as an academic exploration into the economics of sustainability during her master’s studies evolved into a pioneering digital platform that tracks textile waste and connects it with recycling solutions. Today, Reverse Resources collaborates with some of the world’s largest fashion brands to bring transparency, efficiency, and circularity to textile production waste.
In this conversation with Fashion Business Journal, Ann Runnel reflects on the moment that shaped her mission during her first visit to Bangladesh following the Rana Plaza tragedy, the systemic barriers preventing circularity at scale, and why recycling must work alongside reuse to create a sustainable fashion ecosystem.
FBJ : What inspired you to start Reverse Resources, and how has your vision evolved since the company’s founding?
Ann Runnel: The idea for Reverse Resources began during my master’s studies in economics in Estonia around 2012. At the time, I was researching why some companies integrate sustainability into their core business strategy while others treat it mainly as a marketing initiative. I became interested in understanding the economic drivers behind sustainability and whether it could truly function as a viable business model.
While working on my thesis, I collaborated with an upcycling fashion designer who used leftover textile fabrics as feedstock for capsule collections. Through that project, I had the opportunity to visit Bangladesh as part of a documentary team. Coincidentally, my first trip took place shortly after the Rana Plaza collapse.
That experience had a profound impact on me. I was shocked by the scale of textile waste generated in the manufacturing process. It quickly became clear that individual designers using leftover materials could not solve the problem at scale. The economist in me began asking deeper questions: How can the fashion industry treat textile waste as a valuable resource? And how can we create economic incentives so that waste becomes more valuable than virgin materials?
Bangladesh, with its enormous volume of cotton production waste, presented a compelling case for exploring textile recycling opportunities. Initially, Reverse Resources was envisioned as a marketplace for unused fabrics, allowing upcycling designers to access deadstock materials. However, we soon realized that deadstock fabrics already had an existing market among smaller manufacturers.
The more complex challenge was managing cutting scraps and production waste. Receiving the Global Change Award from the H&M Foundation gave us crucial early support and validation when funding was difficult to secure. Collaboration with H&M also allowed us to access factories and test our early ideas.
Over time, our focus evolved toward solving the problem of cutting waste through a digital platform. We recognized that the industry lacked reliable data about waste—how much exists, where it is located, what materials it contains, and how it could be connected to recyclers.
Reverse Resources therefore developed a digital approach to track textile waste flows and connect manufacturers with recycling solutions, turning waste into a traceable and valuable resource.
FBJ : What are the biggest systemic barriers currently preventing the fashion industry from adopting circular practices at scale?
Ann Runnel: The biggest challenge is the systemic complexity of the global fashion industry. The supply chain spans multiple countries, companies, and processes, making it difficult to implement coordinated circular solutions.
From an early age, our education systems train us to think in silos—chemistry, physics, mathematics—each treated as a separate discipline. The same siloed thinking appears in industries as well: companies focus on their own operations rather than the system as a whole.
However, circular economy requires exactly the opposite approach. To create a truly circular system, we must consider how textile fibers move through the entire value chain and how they can circulate repeatedly through reuse and recycling.
If these elements are not connected, the system does not become circular—it becomes a downward spiral where materials are downcycled, incinerated, or lost. One of the biggest challenges is therefore helping the industry understand the broader system and align around a shared vision.
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For example, Reverse Resources has worked on improving the “first-mile” problem—ensuring that cutting waste is properly segregated at factory level by fiber composition and color. This allows recyclers to process the material more efficiently.
However, supply-side improvements alone are not enough. If brands only order recycled materials under limited conditions—such as only white cotton—the demand side remains too narrow. As a result, supply and demand do not balance.
Circular systems often resemble a “chicken-and-egg” situation: which comes first, supply or demand? Managing this interconnected system is difficult, but it is also the opportunity. Our role at Reverse Resources has been to break this complexity into smaller steps and make the system more transparent and manageable.
FBJ : Can you share a concrete example where Reverse Resources helped brands or manufacturers improve their circular performance?
Ann Runnel: Today we work with 18 major fashion corporations. H&M was our first partner, and since then we have collaborated with brands such as Lacoste, Lululemon, and Marks & Spencer, among many others.
Rather than focusing on a single brand example, it is more relevant to explain the broader challenge we solve for the industry. Most brands approach the problem from two main angles.
The first is regulatory compliance. With new regulations emerging in Europe—particularly around Extended Producer Responsibility—brands are expected to take greater responsibility not only for post-consumer waste but also for production waste. Brands want to ensure that manufacturing waste is not sent to landfill or incineration but instead reused or recycled.
Our platform helps create transparency around how much waste is generated, what materials it contains, and how it is managed. This enables brands to track recycling rates and make more responsible waste management decisions.
The second angle is more strategic. Some brands are exploring how production waste can become a valuable feedstock for future production. In other words, they want to close the loop by turning textile waste back into fibers, yarns, and fabrics.
At the same time, new textile-to-textile recycling companies—such as Renewcell (now Circulose), Syre, Ambercycle, and Circ—are entering the market. These companies require large volumes of consistent textile waste as feedstock.
However, the waste trading market has traditionally been informal and fragmented, with limited transparency. Recyclers struggle to guarantee supply volumes or material composition, which makes it difficult to secure financing for new recycling plants.
Reverse Resources addresses this problem by creating reliable data, market transparency, and efficient logistics. We help move waste directly from the cutting table to recyclers through optimized routes, while maintaining quality and traceability.
In essence, we standardize processes, reduce waste management costs, and increase material quality—creating a business case that benefits brands, recyclers, and waste handlers alike.
FBJ : You have implemented programs in markets such as Bangladesh and India. What key challenges and opportunities have you observed in these manufacturing hubs?
Ann Runnel: One of the key similarities across countries is the strong presence of an informal waste management sector. This is not unique to Bangladesh or India—it is a global characteristic of linear economic systems.
In a linear economy, waste is considered a cost that must simply be removed. This often creates conditions where transparency is low and corruption can emerge, as businesses try to minimize costs by hiding waste streams.
In contrast, the circular economy changes this dynamic. When waste becomes a valuable resource, it enters the formal economy. Materials gain monetary value, and businesses benefit more from transparency than from concealment.
This shift creates an opportunity to formalize waste management systems and integrate them into the global supply chain. In many ways, circular economy helps transform waste management from a hidden cost into a legitimate and profitable industry.
Across different countries, we observe variations in how the same problem manifests. By working in multiple manufacturing hubs, we can compare these variations and develop scalable solutions that address the underlying economic structure of the problem rather than country-specific symptoms.
FBJ : Recycling is often presented as the primary solution to fashion waste. In your view, is recycling enough, or should the industry focus more on reducing production and consumption?
Ann Runnel: Human behavior naturally gravitates toward abundance. People enjoy having choices in how they dress and express themselves. It is therefore unrealistic to expect that the solution lies simply in telling consumers to stop buying clothes.
Instead, we should focus on enabling abundance through smarter systems. Reuse and second-hand markets allow garments to circulate between different users. When one person no longer wants an item, someone else may find excitement in wearing it.
This shift toward resale and redistribution is already gaining momentum. However, even in a reuse-driven system, waste will still exist. Clothes eventually wear out or become damaged.
That is why recycling must be part of the circular model. Without recycling, waste remains a cost with no economic solution. Recycling transforms that cost into value by allowing fibers to re-enter the production cycle.
For me, circular economy is fundamentally about maximizing the value extracted from a single resource. The key question becomes: how many times can we generate economic value from the same fiber?
Organizations such as the OECD describe this concept as “decoupling.” Traditionally, economic growth has been closely linked with increased resource consumption. In a circular economy, however, economic value can continue to grow while resource use declines.
In other words, we can generate more economic activity from the same materials through reuse, resale, and recycling. This is the true promise of circular economy: creating more value while using fewer natural resources.
