Drivers to implement the circular economy in born-sustainable business models: a case study in the fashion industry

Abstract

PurposeThis study aims to identify the drivers for adopting the circular economy (CE) in a born-sustainable business of the fashion sector.Design/methodology/approachAn exploratory case study was carried out with a unique and relevant case: the only Brazilian company implementing circularity practices defined through a sectoral commitment, the 2020 Circular Fashion System Commitment.FindingsFrom an analysis of the literature, a theoretical scheme composed of internal and external drivers is proposed. In the case studied, there is a prevalence of internal drivers that led the company to implement the CE. Most of the internal drivers described by the literature were identified in this research, except for two: profitability and available technology. Regarding the external drivers, of the 12 listed, only laws and regulations were identified. Thus, the results suggest that internal drivers are more numerous and may be more prominent than external ones for CE adoption in the born-sustainable business.Research limitations/implicationsDue to its exploratory design and unique case study, the research does not allow generalizations, suggesting replication with a larger number of companies and carrying out quantitative research with born-sustainable companies and incumbent companies, for comparison. Considering that there is a difference between companies that decide for sustainable practices and companies that were already born sustainable, it can be questioned if the drivers for implementing CE for both companies are also different.Originality/valueThis study proposes a theoretical scheme that indicates the main internal and external drivers for companies' CE implementation. Developed from a literature review and applied in an empirical case, this scheme is comprehensive and can be adopted to analyze companies of different sizes and industries. Hence, this paper generates new perspectives for CE literature.

A review of entrepreneurship and circular economy research: State of the art and future directions

“…In terms of supply, obstacles are observed regarding inputs required for the CBM (Marino & Pariso, 2021; Ostermann et al, 2021; Rizos et al, 2016). In terms of demand, specifically convincing costumers of the potentials of CE and that recycled products have no inferior quality (Rizos et al, 2016) and selling circular products in the fashion sector, due to the fast fashion trend, are challenges (Ostermann et al, 2021).…”

“…In this sense, interaction with other ecosystem actors is fundamental to CE implementation in SMEs. While the lack of supporting reference points and challenging B2B cooperation (Jaeger & Upadhyay, 2020; Rizos et al, 2016) may be barriers, networks are considered a valuable information source (Ostermann et al, 2021), and the existence of a fertile ecosystem, CE intermediaries for the implementation process, and stakeholder engagement may act as drivers for CE implementation in SMEs (Caldera et al, 2019; Torres‐Guevara et al, 2021). In the case of potentials for industrial symbiosis in SMEs, three groups of problems were identified; namely, organisational management, related to low IT assistance and lack of data reliability; waste management, related to the weak CE waste policy and poor waste‐to‐resource strategies; and resource management, related to low coordination and high centralisation of resources (Rincón‐Moreno et al, 2020).…”

“…Czech entrepreneurs are motivated to implement sustainable solutions mainly when they are involved in export activities or when they are at the beginning of their activities because this is what their customers desire (Šebestová & Sroka, 2020). In the case of a Brazilian born-sustainable in the fashion sector, the search for innovative sustainable practices was noted as the main driver of CE implementation (Ostermann et al, 2021). Holzer et al (2021) found that the key factors for Austrian SMEs are sustainability, resource efficiency, and differentiation.…”

Business Model Innovation for Circular Economy in Fashion Industry: A Startups' Perspective

“…Collaboration in the chain also allows access to resources that companies do not own or have limited, which reduces transaction costs strategically (Talay et al, 2018). The supply chain can be a driver or a barrier to implementing CE (Tura et al, 2019;Ostermann et al, 2021) and play an important role in CE because it dictates the technology (e.g., machinery), processes and, consequently, limitations to new BMs. Considering the fashion industry supply chain as global, long, and complex, with multiple and diverse players (Niinimäki et al, 2020), we argue: Proposition 5.…”

Consumer perceptions and actions related to circular fashion items: Perspectives of young Brazilians on circular economy

“…Figure 3 gives a summary of the objectives of this study according to the numbering proposed in Table 1 , which identified each author and article name. This figure also includes a paper that carried out a case study at a Brazilian fashion company, which is the only company in Brazil that is a signatory to the 2020 Circular Fashion System Commitment ( Ostermann et al, 2021 ).…”