Implementing circular economy in the textile and clothing industry

This research reveals the current state of the circular economy (CE), challenges and opportunities of implementing CE and interventions that could facilitate effective implementation of CE in the textile and clothing (TC) industry. The study uses a survey method within 114 TC companies based in Bangladesh, Vietnam and India revealing the correlation of CE fields of action (take, make, distribute, use and recover) with sustainability (economic, environmental and social) performance. The lack of financial, technological and human resources along with management's reluctance and end-user's indifference to sustainability is the biggest challenge for CE implementation. The research further derives that the TC firms are unable to eradicate the challenges to CE implementation without a holistic approach that involves the collective effort from the industry, host government's incentives, their buyers and above all the conscience of the end-users. Finally, the study reveals that the collaborative efforts, knowledge sharing in sustainability management across the value chain and marketisation of the waste recycling, among others, are a few actions the stakeholders of the TC industry must adopt for implementing CE successfully.     

Assessing people-driven factors for circular economy practices in small and medium-sized enterprise supply chains: Business strategies and environmental perspectives

Globalisation and technological advancements have increased the pressure on small businesses to increase their productivity and to gain competitive advantages. That pressure has been placed on the resources available, resulting in increased environmental degradation as a result of the traditional linear model of make-use-dispose. Circular economy (CE) practices offer the opportunity for sustainable production based on the reuse-remanufacture and recycling of resources for small and medium-sized enterprises (SMEs) to increase their sustainability, resulting in enhanced performance levels in terms of business strategies and environmental perspectives. But in academic literature, the role of people-driven factors (PDFs) in the adoption of CE practices in the supply chains (SCs) of SMEs is limited. Therefore, to fill this literature gap, this research looks at analysing PDFs for the implementation of CE in the SMEs in developing countries in two phases. PDFs are identified from an extensive literature review; a DEMATEL technique is then employed to understand the significant influence of each factor in the adoption of CE practices in SCs by dividing them into cause–effect groups. The findings show that PDFs such as training and knowledge sharing, employee participation, leadership and management plus strategic alignment are considered to be the most important significant factors in the adoption. The findings of this study will help industrial managers to understand the significance of the role of PDFs for enhancing business strategies; these findings can reduce the negative environmental impact in the adoption of CE practices in the SCs of SMEs.     

The transition from linear economy to circular economy for sustainability among SMEs: A study on prospects,impediments, and prerequisites

The circular economy (CE) is a more holistic approach that advocates towards extracting the value from the waste and reaching sustainability goals. The objective of the present study is to highlight the prospects, impediments, and prerequisites while transiting from the linear economy (LE) to CE of SMEs. The study gathers information on prospects, impediments, and prerequisites for the transition of LE to a CE from recent studies . A semi-structured interview questionnaire was prepared, and a survey was conducted on representatives of six SMEs . Further, six caselets were developed to understand the prospects, impediments, and prerequisites based on the findings of the interview and previous information gained from existing literature . The major prospects favoring transition from LE to CE found in the study are significance of 3R (reduce and reuse and recycling) approach, CE leads to competitive advantage, recycling attracts consumers in few cases, CE helps in achieving sustainability goals and reuse of materials are significant in resource conservation. There are certain impediments found such as issues associated with awareness, recyclability issues, financial challenges, and weak management vision of SMEs towards CE implementation. Other resource-based impediments were found related to trained employees, lack of experience. Whereas, consumer acceptability is also a major concern towards implementing CE. The findings of the study suggest major prerequisites towards CE implementations such as strong “management will,” innovation, technology up-gradation, training to employees, motivation, and appropriate guidelines. Government pressure to implement CE cannot be an effective step towards the transition of LE to CE.     

Circular economy in corporate sustainability reporting: A review of organisational approaches

A growing commitment from companies to implement circular economy (CE) strategies demands the development of guidelines for consistent related external communication. The fields of non-financial reporting and sustainability are well established with numerous available international reporting frameworks and approaches; however, there is still an absence of standardised reporting principles and procedures for publishing progress on circularity. In this context, this article aims to explore how companies could include CE within their corporate sustainability reports, through an academic literature review and content analysis of existent reporting approaches. Results showed a clear disconnection between CE and sustainability reporting literature. Overall, only a few of the revised reporting approaches explicitly mention CE, and the guidance given to companies is very general, inconsistent and places the responsibility of selecting performance assessment approaches on the companies. The analysis contributes to identifying opportunities for transparent external communication of CE issues, as well as exploring the challenges and limitations.     

Why SMEs invest in environmental measures: sustainability evidence from small and medium‐sized printing firms

Why do SMEs invest in environmental measures? From the literature we know that most SMEs are rather slow in adopting these sustainable measures, but then the following question arises: why are other SMEs fast in this respect? From our research, it becomes clear that improving the working conditions is the most important reason why these fast‐going SMEs invest in environmental measures, as this probably improves their employees' motivation and performance. This explanation connects ‘planet’ and ‘people’ with each other, and does not exclude ‘profit’, which completes the traditional sustainability circle. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

Sustainable development of small‐ and medium‐sized enterprises in the European Union: A taxonomy of circular economy practices

This paper focuses on the implementation of circular economy (CE) practices in small‐ and medium‐sized firms in all 28 European Union (EU) countries. The analyses take into account the hierarchical nature of the collected data as firms are nested within EU countries, that is, the heterogeneity between different types of firms and countries according to practices and attitudes towards CE. The multilevel latent class model identifies groups of firms and groups of EU countries that are homogeneous in terms of CE, that is, how the homogeneous groups of small‐ and medium‐sized enterprises (SMEs) are distributed across the groups of EU countries. These results, together with the fact that firms with similar CE attitudes and practices have different demographic and business profiles across groups of countries, shed further light on the topic of green behavior in the EU with implications for businesses' environmental policies. Moreover, indications emerge that European policies favoring the implementation of CE practices should be targeted at least for subgroups of European countries, considering the different composition by typology of SMEs operating in their territories and that, at the same time, policies should be defined within each group of countries to account for the specific features of each of the four classes of SMEs.     

Understanding the effect of market orientation on circular economy practices: The mediating role of closed-loop orientation in German SMEs

The implementation of circular economy (CE) practices is considered a key driver towards sustainable development of firms. Earlier studies point to the general strategic approach of market orientation as an antecedent to CE practice implementation. Still, insights are limited as the mechanisms underlying this relationship remain unclear. Based on a sample of 121 German small and medium-sized enterprises (SME), we empirically examine how the strategic approach of closed-loop orientation mediates the relationship between market orientation and the implementation of three types of CE practices. Using structural equation modelling, we find that while market orientation is positively related to all three types of CE practices, closed-loop orientation mediates these relationships for only two. Our study extends CE literature by suggesting that market orientation is translated into closed-loop orientation to spur CE practice implementation. We also offer a differentiated understanding of CE practice implementation in the context of German SMEs.     

Sustainability and legitimacy theory: The case of sustainable social and environmental practices of small and medium-sized enterprises

The aim of this paper is to identify and gain insights into small and medium-sized enterprises' (SMEs) rationales (why) for engaging in sustainable social and environmental practices (SEPs) that influence social and environmental policy and sustainability changes. Specifically, we depart from the predominately quantitative-orientated SEPs literature by conducting in-depth interviews and analysis of owners and managers of SMEs in the United Kingdom within a legitimacy theoretical framework. Our findings from a comprehensive number of interviewees show that SMEs employ a complex mix of both symbolic and substantive SEPs with the aim of enhancing the legitimacy and sustainability of their operations. The results emphasise the strengths of social engagement, reputation and image, environmental embeddedness, industry differentiation and education facilitators. In particular, the paper shows that legitimating strategies can have a dual purpose of being symbolic in nature but also inferring a substantive legitimacy claim. Evidence of SMEs maintaining their legitimacy position stretches further via either a moral and/or a pragmatic standpoint.     

Sustainability performance analysis of small and medium sized enterprises: Criteria,methods and framework

Small and medium sized enterprises (SMEs) play an important role in any economy as they contribute to GDP and employment. However, sustainability (right combination of economic, environmental and social) of SMEs is a major concern as they prioritize economic performance over environmental and social to remain competitive. Majority of prior researches on SMEs' sustainability either look at the impact of a few limited enablers (e.g. lean, green, innovation etc.) on sustainability performance or the effect of pressures and barriers on the sustainability performance. There is a clear gap of a holistic and robust framework for sustainability performance analysis in order to measure and improve sustainability performance. This research bridges this knowledge gap by addressing two research questions – what practice and performance criteria are being considered for sustainability performance analysis in a broad environmental, economic and social context, how are they related, and what methods are being used to derive the relationship between sustainability practices and performance. These research questions are addressed through a systematic literature review of 58 papers, published between 2005 and 2018 in leading journals. First, an objective content analysis is undertaken in order to identify sustainability practices and performance criteria along with their frequency of usage in prior research. Second, the correlation among the variables is studied. Third, the methods for analyzing the relationships of the criteria are identified. Finally, a framework for analysing correlation of SMEs’ sustainability practices and performance in order to measure and improve performance using statistical modeling approach is proposed.     

Could lean practices and process innovation enhance supply chain sustainability of small and medium‐sized enterprises?

Small and medium‐sized enterprises (SMEs) adopt lean practices (LP) to reduce waste across their organisational value chain, which helps achieve sustainability. Process innovation (PI) has also been applied through cleaner production, environmental management system, ecodesign, and so on to address both customers' needs and legislations by policymakers. Although prior studies reveal the effect of sustainable practices, LP, and PI on sustainable performance separately, less is known on the integrated effect of them on sustainability performance. Moreover, studies on mediating effect of LP and PI on sustainability performance are scant. This is significant as LP and PI are considered to be the enablers for achieving sustainability performance. This research addresses this knowledge gap. The research first theorises a model integrating these four major constructs (sustainability practices, LP, PI, and sustainability performance) through hypotheses development. Subsequently, using structural equation modelling, it is tested whether each of sustainability practices, LP, and PI effect sustainability performances. Additionally, mediating effect of LP and PI between sustainability practices and performances is derived. The study uses data from 119 SMEs within manufacturing industries in the Midlands, United Kingdom. Further, a few case studies have been undertaken to validate the findings from quantitative analysis. The overall results show that although sustainability practices, LP, and PI help achieve sustainability performance of SMEs supply chain through efficiency and responsiveness respectively, the mediating effect LP is more compared with PI. Moreover, SMEs adopt LP when they are economy focused and implement PI when they are pressurised by customers and/or policymakers.     

Sustainable tourism in Greek islands: the integration of activity‐based environmental management with a destination environmental scorecard based on the adaptive resource management paradigm

Tourism is a major industry that can lead to economic gains as well as to degraded environment and social infrastructure. Tourism has the potential to destroy the available common environmental resources through overuse and poor management practices, as limited information disclosure and poor monitoring of actions encourage the perpetuation and extension of environmental problems. Based on the adaptive resource management paradigm for addressing problems related to the use of the commons, this paper suggests a methodology for the development of a management tool that can provide island hotels with a continuous flow of timely, relevant, accurate and objective information on the environmental impact of critical corporate activities. The tool, named the destination environmental scorecard (DES), draws on activity‐based management concepts and can help local hotel SMEs measure and compare their performance against certain standards and thus conduct operations in a responsible and measurable way to the benefit of both business financial performance and regional sustainability. The paper presents the DES operational characteristics and the potential benefits from its implementation. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.     

An analysis of environmental sustainability in small & medium‐sized enterprises: Patterns and trends

One of the greatest challenges facing the world today is climate change. The need to consistently advance with environmentally sustainable practices in today's businesses is crucial, and businesses are demanded to be more environmentally sustainable every day. This study conducts an analysis of the literature on small and medium‐sized enterprises' (SMEs) environmental sustainability by carefully examining 122 studies from 58 journals published from 2013 to 2019. We investigate the trends in drivers and barriers of sustainability adoption to inform both SMEs managers and policymakers. Our results also classify the reviewed studies on the basis of their methodologies and show the distribution of studies across industry sectors and locations in order to set directions for future research on sustainability practices of SMEs.     

Eco‐innovation and firm growth in the circular economy: Evidence from European small‐ and medium‐sized enterprises

As the circular economy (CE) concept gains growing popularity among consumers and producers, small‐ and medium‐sized enterprises (SMEs) increasingly look for ways to reorganize their offering and operations to integrate into the CE. This study examines the impact of (a) circular eco‐innovations and (b) external funding available for CE activities on the growth of European SMEs using a data set of 5,100 SMEs across 28 European countries in 2016. Findings reveal that a significant threshold investment (i.e., higher than 10% of revenues) into circular eco‐innovations is required for SMEs to benefit from investing into the CE. Moreover, the majority of circular eco‐innovations fail to boost the growth rates of SMEs, with the exception of investments into eco‐design innovations. Although traditional forms of debt and grant finance targeted to CE activities are found to have no or negative impact on the growth of SMEs, equity finance (i.e., angel and venture capital investments) contributes positively to their growth. The study offers insights into the lower levels of SME engagement in the CE as well as policy implications for improving engagement.     

Mapping circular economy activities in the European Union: Patterns of implementation and their correlates in small and medium‐sized enterprises

With the European Commission looking for ways to incentivize the adoption of circular economy (CE) activities by small and medium‐sized enterprises (SMEs) in the European Union (EU), further insights into the implementation of CE activities across member states are needed. We analyse a European Commission survey conducted in 2016 among approximately 11,000 firms in EU‐28 member states in order to throw light on the conditions in which SMEs engage in five specific CE activities. In contrast to previous studies arguing that CE activities are independent of each other, we present novel findings demonstrating that seven patterns of engagement in CE can be identified in which activities are systematically interdependent. Further, we show that these patterns are associated with the organizational properties of SMEs and are differentially distributed among EU member states and industrial sectors. The interdependency of activities forms a hierarchy in which waste minimization is the most likely activity to be implemented in SMEs, followed, in descending order of likelihood, by replanning of energy use, redesigning products and services, and finally using renewable energy and replanning water usage. The findings have theoretical, managerial, and policy implications for the adoption of interdependent CE activities.     

Responsible Innovation Toward Sustainable Development in Small and Medium‐Sized Enterprises: a Resource Perspective

What resources do small enterprises need to develop responsible innovations that enhance sustainable development? Does lack of resources prevent innovation toward sustainability in small and medium‐sized enterprises (SMEs) or can innovations be created with scarce resources? This study investigates environmentally and socially responsible innovations of SMEs from a resource perspective, based on empirical data from 13 Nordic SMEs. The findings indicate that SMEs can create responsible innovations with very different resource combinations. The most common resource combination comprises equity, research and development cooperation, networks, industry knowledge and reputation. Except for financial capital in the form of equity, which appears a necessary condition for responsible innovation from SMEs, resource needs vary between technological and business model innovations. Creating business model innovations appears to be possible with scarce resources, at the very least with equity and social capital. Environmental technology innovations call for more abundant resource combinations. In particular industry knowledge appears to be a key resource for such innovations. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Close the loop: Evidence on the implementation of the circular economy from the Italian fashion industry

Fashion is widely considered as one of the most polluting and destructive industries to the environment and is a resource-intensive industry in which opportunities to reduce environmental impacts abound. By relying on an exploratory approach, this paper features an investigation into the circular economy (CE) practices of four purposefully selected Italian fashion companies. The study endorses the overlooked perspective of the product lifecycle (vis-à-vis the business model perspective), consistent with the key principles of the CE, to provide a comprehensive picture of CE practices implemented. This study engages with the current debate on the relationship between the concepts of sustainability and CE, supporting the idea that there is a beneficial relation between the two. The analysis shows the emergence of categories of CE-related practices as well as CE implementation challenges. The study also provides granular insights into the nature of these challenges that hinder the implementation of CE and demonstrates how they can be turned into sources of competitive advantage. Drawing on this emblematic evidence, we develop a set of theoretical and managerial implications.     

Systemic circular business model application at the company,supply chain and society levels—A view into circular economy native and adopter companies

This study contributes to the conceptualization of a sustainable circular business model (CBM), the application of the circular economy (CE) by companies. The study utilized a three-level framework adapted from the CE literature with company (micro), supply chain (meso) and society (macro) levels. This multiple-case study in the textile industry included two types of companies operating in the CE: companies founded on the sustainable principles of a CE (natives) and companies transitioning to a CE from the linear economy (adopters). The findings show that the adopters emphasized long-term economic sustainability on a company level and implemented CE elements to varying degrees on all three levels. The natives pursued business decisions from environmental and social sustainability standpoints, and the three levels were integral in their systemic approach to a CE. The study highlights two key claims: established operational structures and economic volition hindered adopters in their systemic CE implementation, and an integral part of the CBM for natives was a proactive approach towards the society level.     

Applying the reduce,reuse, and recycle principle in the hospitality sector: Its antecedents and performance implications

Although the literature on eco-friendly strategies followed by firms is abundant, the focus on the reduce, reuse, and recycle (3Rs) policies as the cornerstone of environmental sustainability is scarce. This study examines the 3Rs environmental strategy among 143 large organizations in the hospitality industry. We use the resource-based view (RBV) of the firm theory to test the strategy's determinants and its impact on business performance on a suggested conceptualization level. As hypothesized, green corporate governance and environmental management systems, along with slack financial resources, were found to positively influence the adoption of a 3Rs environmental strategy. In turn, the implementation of the latter leads to superior business performance, measured in terms of operating profits and Tobin's Q. The study has several implications on a theoretical, managerial, and public policy level where intriguing directions for future research are provided.     

Circular economy,the transition of an incumbent focal firm: How to successfully reconcile environmental and economic sustainability?

Circular economy (CE) has garnered increasing attention in political circles and practitioner literature thanks to its potential to overcome the harmful consequences of linear patterns of growth. Nonetheless, the adoption of sustainable practices entails a holistic approach requiring businesses to make significant changes to their production, technologies and stakeholder management. These challenges resulted in limited progress in terms of the practical implementation of CE. This paper addresses the need for more literature focused on the pragmatic aspects of applying this paradigm to incumbent firms. The author presents the journey that Lucart S.p.A., a major European tissue paper manufacturer, has undertaken between 2014 and 2020 to apply CE principles to its practices. Insights from the transformation process, reconstructed through interviews with the firm's management and environmental impact data, suggest that to succeed it takes innovating (plants, products and marketing strategies) and setting up supply chains that reconcile environmental and economic sustainability.     

Improving the Sustainable Development of Firms: The Role of Employees

Stakeholders have been found to be an important driver of organizations' sustainable development. In particular, customers, governments and non‐governmental organizations push firms towards sustainability. But to what extent is sustainability really and deeply embedded within an organization's structures and processes? And what is the role of an important, but frequently neglected, stakeholder group for successful sustainability implementation: employees? The objective of this research is to better understand the impact that organizational change for sustainability has on firm performance. Also, this study seeks to understand how the consideration of employees into the process of organizational change for sustainability moderates the organizational change and performance relationship. Using data from 92 German companies from the manufacturing and services sector, the study finds that the structural implementation of sustainability is positively related to firm performance and that employee integration moderates this relationship to some extent. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment.