Fashion’s Recycling Fix Has a Dark Side, OECD Warns of Hidden Labour and Waste Risks

An OECD report warns that fashion recycling, often promoted as a green solution, is riddled with labour, environmental and governance risks, driven by informality, low wages and unsafe conditions. Without stronger due diligence, better design and accountability, recycling risks shifting harm rather than reducing it.

Recycling has become fashion’s most comforting story. Brands promise old clothes will become new ones, and governments promote circularity as the answer to an industry known for waste and pollution. But a new report from the OECD shows that recycling in the garment and footwear sector is far from the clean solution it is often portrayed to be. Produced by the OECD Centre for Responsible Business Conduct with research support from Due Diligence Design, and funded by the Dutch Ministry of Infrastructure and Water Management and the European Commission, the study reveals that recycling can carry serious social and environmental risks of its own.

Too Much Clothing, Too Little Recycling

The report starts with a basic problem: the fashion industry produces and sells more clothes than recycling systems can handle. Clothing consumption continues to rise, while garments are worn fewer times before being thrown away. Although recycling is growing, it remains small. In 2024, recycled fibres made up less than eight per cent of global fibre production. Even more striking, most recycled fibres do not come from old clothes at all, but from plastic bottles turned into polyester.

Collecting textile waste is another major challenge. In many countries, clothes still end up in mixed household waste, where they become too dirty to recycle. Even when textiles are collected separately, many cannot be reused or recycled because they are damaged, made from mixed fibres, or treated with chemicals. Mechanical recycling weakens fibres, while chemical recycling is expensive and still limited in scale. As a result, much of what is collected is burned, landfilled or downcycled into low-value products.

When Old Clothes Travel the World

A large share of used clothing collected in wealthier countries is exported abroad for sorting, resale, or recycling. While this trade can support reuse markets, the OECD warns it often shifts problems elsewhere. Many exported garments are too damaged or unsuitable to be sold, especially in countries with different climates or consumer needs. In places with weak waste systems, these clothes end up dumped, burned or clogging rivers and wetlands.

At the same time, exporting used textiles reduces the supply of material available for domestic recycling, undercutting investments made at home. The report shows how this global trade creates environmental damage while making it harder to build effective recycling systems anywhere.

The Hidden Workforce Behind Recycling

Behind recycling’s green image is a largely invisible workforce. The OECD estimates that around 80 per cent of recycling jobs worldwide are informal. Sorting and processing textiles is still mostly done by hand, often in small workshops, informal settlements, or open-air sites. The work is commonly carried out by migrant workers, women, ethnic minorities and, in some cases, children.

Working conditions can be harsh. Workers face sharp objects, heavy lifting, unsafe machinery, dust, and chemical exposure. Many work in extreme heat or flooding, made worse by climate change. Chemical risks are especially high when sorting post-consumer clothes, whose chemical history is often unknown. Substances banned today may still be present in older garments, exposing workers without proper protection.

Low pay and insecurity also increase the risk of forced labour and child labour. The report documents cases of recruitment fees, sub-minimum wages and unsafe housing. Children are drawn into waste picking and recycling because families depend on every source of income.

Why Circular Fashion Needs Accountability

Recycling is not automatically responsible. Without proper oversight, it can simply move harm from factories to waste sites. The organisation urges companies to include recycling fully in their due diligence systems. This means looking at how purchasing practices create waste, how design choices affect recyclability, and how business decisions push risks onto informal workers.

Rather than relying on endless audits, the report calls for stronger relationships with key actors such as sorters, recyclers and waste pickers, along with stable commitments to buy responsibly recycled materials. Recycling, the OECD concludes, can only be part of the solution if it improves conditions for people and the environment, not just material flows. Otherwise, the fashion industry may find that its green promises are built on the same old foundations of exploitation, just further out of sight.