Finance
What We Can Learn From Renewcell’s Financial Struggles
Renewcell 1 plant, November 2022.
Ordinarily, I subscribe to the belief that in sustainability discussions, opinions are redundant; we should lean on the science. But, yesterday a conflation of both was enlisted in an outcry for answers as to why Renewcell, fashionâs leading textile-to-textile recycling technology, had filed for bankruptcy. The science (and resulting technology) is solid; the route to profitability less so. And itâs the latter that really matters.
Yes, Renewcellâs advanced textile recycling process worksâI saw it with my own eyes at the inaugural launch in Sweden of their first (and now painfully numbered) Renewcell 1. But I wondered, from inception, how a facility in Sweden could help fashion brandsâRenewcellâs target customerâto solve the problem they seemed to care about most: recycling post-consumer waste. âOld jeans turned into new jeansâ was effectively the technologyâs strap line, and a fair one in terms of the companyâs ambition and technical potential. But the reality was that their advanced chemical recycling processâlike all others of its kindârequires a highly specific waste input (at least 95% cotton, at the time I visited Renewcell 1); a need best met by post-industrial (off-cut waste) on factory floors in manufacturing countries, not discarded clothes from consumers.
Renewcell 1, onsite waste awaiting processing.
My (curiosity-led and objective) question to Renewcell, Circ, Infinited Fiber and other similar technologies has always been: âsince you require homogenous waste of a specific composition and quality, and in large and consistent volumesâconditions currently best met by post-industrial waste streamsâwhy are your technologies in Europe and the U.S. where those needs cannot be met?â And, âwhy arenât you in the textile supply chain in Asia, alongside the factories who can provide your waste input, and purchase your recycled output?â Why, I still wonder, is the hopes of textile-to-textile recycling hinged on fashion brands in the Global North with other priorities, who procure products from the supply chain in the Global South? Why isnât the advancement of textile technologies being integrated into the supply-chain, since brands procure and sell finished goods, not fibres?
The answers have often been a combination of these: âthe investors are investing here [in the global north]â; âthe brands are here, so weâre hereâ, or âwe can achieve our lowest carbon footprint here due to renewable energyâ. Sweden offers abundant renewable energy, and that was certainly a factor for Renewcell. However, last week I revealed that Indiaâs rapid transition to renewable energy will soon answer that need, but I guess we may never know if the overall business case for Renewcell stacks up there.
And here we come to the central challenge I observe with advanced chemical recycling technologies setting up shop outside of manufacturing hubs and outside of readily available feedstock reserves: absent infrastructure and supply chain integration. Itâs a fact that the majority of the worldâs textiles and clothes are made in Asia. Around half of all textiles are made in China. Itâs also a fact that consumption in the Global Northâs mature fashion markets is stagnating (as examined astutely by researcher Lutz Walter). Conversely, markets in Asia are set for rapid growth in step with the expanding middle class, particular China and India. India is the most promising hope for textile circularity, but this success depends on the viability for each stakeholder along that supply chain. This requirement for a âbusiness caseâ has been somewhat ignored in the commentary following Renewcellâs bankruptcy filing, where the financial faltering was reportedly due to âa lack of orders from brandsâ. This reluctance to place orders points to the absence of a business case for Renewcellâs recycled âCirculoseâ fibers in the competitive and price-driven textile supply chain.
Sheets of Renewcell’s recycled textile ‘Circulose’ dissolving pulp, ready to ship from Sweden to … [+]
Renewcellâs business model placed the onus on brands to order its recycled âCirculoseâ dissolving pulp, which is much like pieces of cardboard that are shipped to textile spinners in Asia, rehydrated to release the fibers and then mixed with other fibers like cotton. The combined fibers are then spun into yarns, before being sent to textile mills to be made into fabrics. Relying on brands to prioritise this manner of materials sourcing is about as far removed from their business expertise and motivations as you can get; precious few brands buy any fibers at allâmost donât even know where their fabrics are made, let alone their origin of the fibers that went into them. Instead, brands typically rely on their nearest (tier 1) garment manufacturers to source textiles on their behalf, and to handle all the costings to make the economies of scale and unit pricing work, on the brandâs behalf.
Consider this: a brand facing todayâs tough economic outlook can either commit far in advance to sourcing a more expensive (but lower environmental impact) ingredient for future spinning into textiles in a volatile market, or, they can continue to ask their garment suppliers to source the ready-made cheaper equivalent in final textile form at the time they need it. The mistake here is to assume that if the science and tech stacks up, and the output is of high quality and low impact, it will succeed off the back of brandsâ commitment and storytelling to consumers. In fact, a business case for buying the fiber must exist, and one that isnât at odds with brandsâ upholding their fiduciary duty to maximise profits for shareholders; the absence of orders for Renewcellâs Circulose indicates that this business case does not currently exist. And this is not only a shame and a sadness for the brilliant Renewcell team members, but also its supply chainâthe factories and waste handlers in Bangladesh, Turkey and Kenya, who had agreements to sell and ship their waste to Renewcell, but now must search for another market for it, hurting their livelihoods.
Where there is an existing supply chainâend-to-endâthere is infrastructure and operational data to evaluate the business case for textile-to-textile recycling technologies, without relying on sustainability storytelling, and hoping that planetary good will will trump economics and profit maximisation. Currently, without environmental imperatives driving decision-making, the only other ones are financial. A new, low impact material cannot rely on realignment of corporate morality in order to compete with, or displace, incumbentsâthis harsh truth is critical.
Renewcell 1 commercial recycling facility, Sweden. November 2022.
Experts in countries like India and Bangladesh who are sourcing fibers, spinning yarns, knitting and weaving fabrics and making garments at fixed unit prices in fluctuating markets, on behalf of brands, are likely best placed to evaluate and integrate new recycling technologies. There is already a well established mechanical textile recycling supply chain in Indiaâs, for example, and the business case for building out advanced chemical recycling beyond this would be evaluated and demonstrated as a function of demand, volumes, technical feasibility, Capex and projected revenues within the textile economy that exists. This seems a logical next step for advanced recycling of textiles (and one I will evaluate in my next article).
Hopefully the next phases of textile-to-textile to recycling will be catalysed in the heart of the supply chain in Asia, where recent waste analysis by Fashion for Good and Canopy, and the establishment of Indiaâs Re-START Alliance, shows hope for expansion of a viable circular textiles economy.
Experienced fintech executive has a track record of delivering transformation and innovation
Wolters Kluwer, a global leader in information solutions, software, and services for professionals, has named Lisa Nelson as Chief Executive Officer of its Financial & Corporate Compliance (FCC) division, effective March 31.
Nelson has more than 25 years’ experience in financial services data analytics and fintech businesses, most recently at Equifax, where she was President, International, leading a $1.4 billion business across 24 countries. Prior to Equifax, she held executive leadership and product management roles at FICO (Fair Isaac Corporation) and at FIS (Fidelity Information Services). Her experience ranges from market strategy, product management and sales to regulatory compliance and business operations. Throughout her career, Nelson has driven transformation and growth by advancing cloud technology and product innovation.
“We are delighted to welcome Lisa Nelson to Wolters Kluwer as the new CEO of our Financial & Corporate Compliance division,” said Nancy McKinstry, Chief Executive Officer and Chair of the Executive Board for Wolters Kluwer. “Lisa is a seasoned executive with a track record of success. In her new role, she will drive growth in FCC’s expert solutions and services, working side by side with our customers to support their needs in maintaining compliance with ever-changing regulatory requirements.”
“I am excited to be joining the talented team at Wolters Kluwer Financial & Corporate Compliance and to further build on the division’s extraordinary record of achievement and innovation,” said Nelson. “I look forward to deepening our client and partner collaborations, leveraging the combined strengths of human expertise and leading technologies to help customers streamline their operations, automate workflows, manage risk, and optimize key processes, effectively enabling them to better meet their business and regulatory compliance needs.”
Reporting to Nelson will be Cathy Wolfe, Executive Vice President and General Manager of FCC Legal Services (CT Corporation), Atul Dubey, recently named Executive Vice President and General Manager of FCC Compliance Solutions, and Dean Sonderegger, recently appointed Senior Vice President and General Manager of Finance, Risk & Regulatory Reporting. FCC Compliance Solutions and Finance, Risk & Reporting serve the financial services industry.
Wolters Kluwer Financial & Corporate Compliance provides financial institutions, corporations, small businesses, and law firms with solutions to help meet regulatory and legal obligations, improve efficiency, and produce better business outcomes.
Bitcoin and other cryptocurrencies have been back in the spotlight, after soaring on the back of Donald Trump’s election, then plummeting back down again before getting another boost when the president fleshed out some details about a proposed US crypto reserve.
The risk of dramatic ups and downs in the market are well known, and investors shouldn’t get into it without realising they could lose everything.
However, it’s not the only risk to be aware of – because even if you make money on crypto, you could be felled by tax.
Read more: How to save money when you’re single
If you earned the crypto through work, or made it by mining it, then you could be in the frame for income tax. But if you bought it, the tax to worry about is capital gains tax (CGT).
You’ll need to work out what gain you’ve made. You can pool the cost of the coins you’re selling (assuming they are the same type of coins), considering what you paid for each of them, and then working out an average cost per coin.
Then you can work out the gain by subtracting that from the selling price. It means you need to be certain about what you paid for the coins and how much they have gained in value since then.
Read more: How to negotiate house prices
You then need to either pay the capital gains tax immediately, using the real time service, or complete a self-assessment tax return at the end of the tax year.
You might not have to pay tax on all of the gain. If some of the coins you’re disposing of have lost value, you can offset the loss against any gains, but you need to report the loss to HMRC in order to do so.
You can also often subtract the transaction fees – which can be substantial when you sell crypto.
All this means you need to keep good records – including the date of disposal, the pooled costs before and after you disposed of them, the number of tokens you have left, and the value of them. You also need to hang onto bank statements and wallet addresses, because HMRC might ask to see any of these things if they carry out a check on your accounts.
Don’t assume your wallet will be the only record you need, because this isn’t necessarily stored for long. The exchange may not even exist when HMRC comes calling.
To some people this may sound like a real faff, and they may wonder whether they need to bother at all, so it’s worth knowing that HMRC works with the major exchanges and can access your customer information and transaction data.
The autumn budget last year also revealed HMRC would be keeping a closer eye on digital assets. Worldwide crypto activity from the start of 2026 will be reported automatically to the taxman – with the first reports hitting at the end of May 2027.
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