California’s recent passage of SB-707, the Responsible Textile Recovery Act of 2024, marks a significant step toward addressing the environmental and societal impact of textile waste. As the first law of its kind in the United States, SB-707 requires fashion retailers and manufacturers to implement programs for the collection and recycling of used clothing, effectively mandating end-of-life planning for garments. This legislation echoes broader mega trends in sustainability, circular economy principles, and the intersection of environmental responsibility, with perhaps surprising parallels to Lean Portfolio Management practices(LPM), most notably in the context of Horizons One and Zero within SAFe LPM.

The Intersection of SB-707 and Horizons One and Zero in SAFe LPM

Horizon One in SAFe LPM represents the state where solutions deliver more value than the cost of the current investment. These are the initiatives that sustain and enhance the business, providing the means for the business to invest in the other horizons. 

Horizon Zero reflects the investments needed to decommission deployed solutions, freeing up budget and resources for more promising opportunities in other horizons.

SB-707 connects directly to both horizons by compelling organizations affected by SB-707 to rethink their operations: Horizon One investments will need to implement new compliance efforts, while Horizon Zero investments may involve phasing out unsustainable or inefficient practices and systems.

For example, consider the operational implications of SB-707. A retailer like Zara or Patagonia might invest in reverse logistics, waste management systems, or partnerships with recycling firms. These initiatives, while initially compliance-driven, can evolve into strategic differentiators. Simultaneously, Horizon Zero investments could involve retiring legacy production processes that rely on unsustainable materials, paving the way for more innovative and sustainable approaches.

Beyond Compliance: Exploring the Mega Trend of Circular Economies

SB-707’s focus on textile recovery is part of a broader mega trend: the shift toward circular economies. Traditional linear models of production and consumption (“take-make-dispose”) are being replaced with circular models that prioritize resource efficiency, waste minimization, and lifecycle planning. Companies leading this transition recognize that sustainability is not merely a regulatory checkbox but a business imperative with tangible benefits such as cost savings, brand enhancement, and risk mitigation.
I’m proud that this approach aligns with Applied Frameworks core mission of helping organizations design sustainably profitable solutions.

Yet, this shift raises important questions and unknowns. One critical area is technology’s role in enabling circularity. From the technologies used for tracking materials to AI for optimizing supply chains, technology is a critical enabler. Beyond software, companies must also grapple with complexities around material science, such as developing textiles that are easier to recycle or that integrate biodegradable components.

The Emerging Complexity of E-Textiles

An intriguing unknown that SB-707 doesn’t appear to explicitly address is the growing prevalence of e-textiles—garments embedded with electronic components for functionalities like health monitoring, fitness tracking, or even communication. These “smart clothes” are rapidly moving from niche to mainstream markets, yet their end-of-life management presents significant challenges. How do we responsibly recycle or dispose of a shirt with a built-in sensor or a jacket with integrated heating elements? Traditional recycling processes are not equipped to handle these materials, and the integration of electronics and textiles complicates the separation and recovery processes.

Moreover, the inclusion of electronics introduces additional regulatory considerations. In California and beyond, electronic waste is governed by separate rules. Does SB-707 need to evolve to account for this hybrid category of waste? Should manufacturers of e-textiles fall under both textile and electronics recycling mandates? These are questions that policymakers, businesses, and technologists must urgently address.

Strategic Implications for Businesses

For businesses, SB-707 creates both challenges and opportunities. Compliance requires investments in infrastructure, training, and partnerships, which is why we feature compliance as a first-class element in the Profit Stream™ canvas. The act also provides a chance to innovate. Companies that proactively embrace textile recovery can position themselves as leaders in sustainability, enhancing brand value and customer loyalty.

My take is that businesses affected by this law must adopt a strategic approach to textile recovery. Here are some key considerations:

• Data-Driven Decision Making: Use data to identify where textile waste is generated, track consumer behavior, and optimize collection systems. Advanced analytics can help companies prioritize high-impact initiatives and measure their progress.
• Collaboration Across Ecosystems: Textile recovery requires collaboration between manufacturers, retailers, recyclers, and even consumers. Businesses should explore partnerships to create scalable and efficient systems.
• Innovation in Materials and Design: Investing in sustainable materials and designing products for easier recycling or upcycling can reduce the cost and complexity of compliance while enhancing sustainability credentials.
• Consumer Engagement: Engage consumers as active participants in the circular economy. Incentive programs, educational campaigns, and transparent communication can drive behavior change and build trust.

I am especially hopeful that as companies comply with SB-707 they will naturally apply more circular economy principles for all locales in which they do business, dramatically strengthening the positive impact intended by this unique legislation. 

Unknowns and Opportunities

As we implement SB-707, several unknowns remain. Here are a few:

• Technological Gaps: How quickly can recycling technologies evolve to handle the diversity of textiles, especially with the rise of e-textiles?
• Behavioral Challenges: Will consumers participate in recycling programs at scale, or will incentives and penalties be required to drive compliance?
• Economic Viability: Can businesses make textile recovery economically viable, or will it remain a cost center? Are there opportunities to monetize recovered materials?
• Global Implications: Will California’s legislation inspire similar laws in other states or countries, creating a patchwork of regulations or a unified standard?

These unknowns underscore the need for agility and innovation—qualities that investments in Horizons One and Zero often support. By leveraging SAFe principles, organizations can align their textile recovery efforts with broader portfolio objectives, ensuring that compliance initiatives also deliver customer and business value.

Looking Ahead: The Role of Leadership and Policy

While SB-707 is a step in the right direction, the road ahead is long and complex. Policymakers must remain adaptive, updating legislation to address emerging challenges like e-textiles and cross-industry collaboration. Business leaders, meanwhile, must view compliance not as a burden but as a springboard for innovation and differentiation.

The Responsible Textile Recovery Act serves as a reminder that sustainability is a shared responsibility. By aligning regulatory requirements with strategic goals, we can create systems that not only reduce waste but also deliver meaningful value to consumers, businesses, and the planet.

As someone who has contributed to SAFe, I see SB-707 as a call to action for all of us to rethink how we design, produce, and manage the lifecycle of all products, not just textiles. Whether you’re a policymaker, a business leader, or a technologist, there’s a role for you in shaping the future of sustainable solutions.  

Far beyond the impact to the textile industry, California’s bold step forward challenges us to consider not just what is, but what could be. In the spirit of some of SAFe’s core tenets, let’s embrace systems thinking, align around clear objectives, and commit to investing in Horizon Zero. The future of sustainability depends on it. 

 If you’d like to learn more about how Applied Frameworks and our partners help companies take advantage of regulatory opportunities and address Horizon 0 challenges, please reach out to us to set up a time to talk.