Are sustainable fashion SMEs ready for circularity? The current state and vision of sustainable SMEs in the fashion system

Sammanfattning: The fashion industry is a significant contributor to global environmental and social issues. But as a system, it is composed of different stakeholders that can work together to make a change. One of those actors involved are small fashion labels, which according to the European Commission, account for more than 90% of the workforce and produce almost 60% of the value within the textile industry (2017). Small firms cannot be treated just as smaller versions of their larger counterparts. Thus, tailored policies addressing their specific needs and the specific sector in which they operate, should be implemented in order to facilitate their shift towards more sustainable and circular business models. The aim of this thesis is to improve our understanding on issues related to the current and potential practices of small enterprises to close their material loop. Through the analysis of 60 websites, which sustainable design strategies SMEs are implementing in the EU-28 are investigated. The results showed that nowadays sustainable labels are still focusing on eco- efficient principles, mainly materials selection, and are not considering all the phases of the lifecycle of their products. In accordance with this finding, the coding of 18 interviews with European-based brands revealed that the main challenges that these enterprises face when implementing sustainability innovation, are related to availability of sustainable materials, high minimum orders quantities, commercial relationships with suppliers, and consumers yet not properly-aware. Moreover, due to the industry in which they operate, when adopting green practices, they cannot compromise on style or aesthetic qualities of their products. Whereas the main driver mentioned by all the interviewees seem to be personal commitment. Moreover, because the current discussion in Europe focuses on circular economy, it is essential to investigate the perception of sustainable labels on this topic, because it should not be taken for granted that they will automatically move towards circularity. Indeed, this research revealed that they perceive circularity as a concept not yet applicable for their businesses, and this is justifiable by the fact that currently there is not a circular fashion system in place and recycling technologies are not industrially developed yet.