Meet the company behind Amazon, Costco and H&M’s sustainability initiatives

Meet the company behind Amazon, Costco and H&M’s sustainability initiatives

The majority of consumers value sustainability when it comes to cracking up their wallets. As we collectively engage in more conversations about the environment and our future with it, many major companies are looking for ways to appeal to Earth-conscious consumers by reducing their carbon footprint.

This consumer ideology has a lot to say about the textile industry, which accounts for an estimated 10% of carbon emissions worldwide. In the United States, getting rid of our old clothes adds about 81.5 pounds of clothing per person per year. The majority of it ends up in landfill.

But recycling clothes is not so simple, for example, recycling aluminum cans. In the age of green washing, it’s hard to know if the things you put in the effort to recycle really make a difference because most of the things we use are made up of so many materials. Clothes are no exception.

Some companies are quietly working behind the scenes to do something about the waste the textile industry creates. One of these is Paragon Textiles, a textile recycler founded in 1992 that purchases surplus inventory, returned and damaged inventory, and sends wearable products to small business owners in developing countries.

How Paragon helps big companies

Over the past two years, Corporate Social Responsibility Director Kay Litwin has been expanding Paragon Textiles’ business into the world of major retail. Thanks to her initiative, the company now buys redundant and return items from huge brands like Amazon (AMZN) Costco (cost) J.C. Penney (JCPNQ) and H&M (HNNMY) Loose stock that can be destroyed or disposed of.

Through its subsidiary Samiyatex, Paragon is redistributing millions of pounds of excess thrift store inventory from stores like Goodwill (a longtime Samiyatex customer). The wearable items are sent to warehouses in Chile and Angola, Africa, where they are sorted by a crew of coordinators. There, entrepreneurs from developing communities sort through inventory, shopping for items to sell in their own stores back home.

Of the millions of pounds of clothing and footwear that have been donated, wearable items make up about 75% of what the company buys. Another 20% is non-wearable, but will be sent to the Rag House in Los Angeles, where it will be used to make tech textile products for film production. The remaining fabric with good threads is sent to a partner in India who will break the thread. Perhaps 1% of the clothes will be left in the garbage.

There is another branch of the company aptly called the Fundraising Corporation (TFC). Suppose an organization in your area is trying to raise money. This organization can hold a shoe campaign, pooling valuable resources to develop communities that need it. TFC will then purchase all of these shoes, giving the organization money for their next project and directing the shoes where they want to go.

Sometimes stylists stumble across discarded clothes that are actually a great fashion find. These items go to L.A. Vintage, a company that sells vintage, designer, and boutique clothing in bulk. The 42,000-square-foot warehouse is available to independently owned vintage goods sellers, who can come by hand to pick their bulk order items or have a special order shipped to them.

Litwin tells TheStreet that connecting with these giants and promoting this innovative new form of recycling is not always easy. It’s a game of insistence – it means reaching out to companies by any means possible, like social media or LinkedIn. But as Kay and her team bring more retailers into the fold, they get paid to facilitate positive change in the world.

Donation vs Investment Models

What makes this business model so unique is its status as a for-profit company. Apparel recycling seems to fall into the 501(c)(3) realm. Litwin told TheStreet that the company’s intent is to invest in these communities rather than make donations.

Donations may be well-intentioned, but without a sense of thought, they can be very problematic. For example, donations often aren’t sorted by curators of clothing at Paragon Textile, which means that donations can sometimes be wearables. Also, floods of donations can upend an already weak community economy — meaning that when donations run out, the infrastructure to continue providing goods and services has dried up.

Instead, Paragon Textiles provides these entrepreneurs, who are mostly women, with small loans to buy their first bundle of clothes. This creates opportunities for people to start their own storefronts and work their way toward sustainable financial independence.

The method seems to work great. According to Litwin, the company has a 100% recovery rate on these loans. It is also an investment in the natural resources of these communities, as no new product is actually created.

As more companies begin to adopt a more environmentally friendly attitude, more innovative ways will be developed to reuse and recycle goods as well. For now, Litwin tells TheStreet that she’s looking forward to more companies joining Paragon Textiles’ profit model. In a world ready to normalize sustainability, finding green practices will be an ever-evolving project.

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