This thesis investigates how companies in the Danish fashion industry works strategically with implementing circular economy and sustainability to a higher degree. The fashion industry is among the most resource- and energy-intensive sectors in the world and many resources are lost due to low usage and recycling rate of the finished garments. The Danish industry has in recent years created strategies and ambitions towards becoming global leaders on sustainable fashion, but the actual results have yet to manifest themselves.
The thesis applies a conceptual framework of circular economy and business models to the textile-related case, in order to understand how and why companies might be motivated to implement the circular economy. The sources of empirical data are the interviews with three Danish fashion com-panies: Wood Wood, By Malene Birger and Better World Fashion. Other sources include the com-panies’ available material on their sustainability strategies, expert interviews and the available body of literature on the subject.
The different initiatives were tabulated according to five circular economy strategies (Slow, Nar-row, Close, Regenerate and Inform) and three business areas (Materials, Product chain and Busi-ness models). This analysis indicated that the companies mainly emphasize adherence to ecolabels and certifications on social issues and harmful substances. Following that is the use of recycled and recyclable fabrics in their collections, though there are differences between the shares of recycled content from 15% to 98%. The most applied circular business models are Products as a Service and takeback schemes. It is also clear the newer companies are being created with circularity and sus-tainable values in mind, and they are generally doing better in these regards. The more consolidat-ed companies are currently trying out circular approaches but are still at the early stages.
The Danish fashion industry would benefit social, environmental and financial sustainability if they were to implement the circular economy into their business models. Barriers for doing so are lack of management buy-in and financial prioritizing, absence of a regulatory framework that promotes circular decision making and a systemic lock-in towards a linear and fast fashion business model.
Sustainability has been a widely discussed topic in the Danish fashion industry in recent years. The outbreak of COVID-19 and the subsequent financial crisis might pose a window of opportunity for companies to invest in disruptive innovation and start reshaping the way they currently conduct their business. Being more aligned with the values of sustainability and circularity is thought to improve the customer perception of a company and can become a crucial part of securing the com-pany’s survival in a future market which is still unknown.