Cleaner Logistics and Supply Chain 4 (2022) 100040

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Cleaner Logistics and Supply Chain

journal homepage: www.elsevier.com/locate/clscn

Practical solutions for circular business models in the fashion industry

Voicu D. Dragomir ⇑, Mădălina Dumitru
The Bucharest University of Economic Studies, Bucharest, Romania

A R T I C L E I N F O A B S T R A C T

Handling Editor: Kannan Govindan The purpose of this paper is to provide rich empirical evidence on circularity solutions adopted by the largest
companies in the fast fashion industry. The sustainability reports of six global players were analyzed using a
Keywords: comprehensive circular model of the value chain. This model comprises eleven stages: product design, virgin
Circular business model raw material extraction and processing, textile and material production, manufacturing, auditing and certifica-
Apparel industry tion, packaging and retail, customer use, post-consumer garment collection, recycling fibers and materials,
Fast fashion partnerships, and transparency. The results are reported on five implementation phases: strategies, research
Circular economy
and development, implementation at scale, quantitative indicators, and targets. The analysis shows that major
Value chain
players in this sector created a complex system for reducing their environmental impact while imposing strict
rules in their upstream supply chain. Downstream, these companies educate their customers on the topic of
circularity and promote recycle-or-reuse consumer habits. In addition to offering practical examples of strategy,
product, and process design, the present contribution describes several configurations of circular models as
implemented by large fashion retailers. The results have significant implications for theory, management,
and standard-setting, considering that fast fashion is widely viewed as having a negative impact on the
environment.

1. Introduction
‘Fast fashion is destroying the planet.’ This point is usually made on
news websites like Vox (Nguyen, 2020) or The New York Times
(Schlossberg, 2019), but also in prestigious academic publishing
(Niinimäki et al., 2020). The fashion industry uses significant amounts
of resources and generates pollution and waste (Cai and Choi, 2020).
The fact that clothes are no longer kept and cherished by their owners
(Brydges, 2021) adds to the fashion industry’s environmental impact,
generating large quantities of post‐consumer waste (Dissanayake and
Sinha, 2015). The impact is seen throughout the long value chain of
the industry, from the design stage to the disposal of the product
(Ellen MacArthur Foundation, 2017).
Circularity is one solution that reduces the impact of fast fashion on
the natural environment. The circular economy is a closed‐loop system
(Barbu et al., 2018), in which products are used, reused, and trans-
formed into other types of resources (Gregson et al., 2015). Through
circularity, the environment is protected while the company maintains
profitability (Jia et al., 2020; Winans et al., 2017). The circular econ-
omy considers the entire product life cycle and all stakeholders in the
value chain (Ghisellini et al., 2016). It can be defined as ‘an industrial
system that is restorative or regenerative by intent and design’ (World
Economic Forum, 2014).
The circular economy is presented in an antithesis with the linear
economy. As such, in the circular economy, the focus is on producing
goods that can be reused in the same form or an upcycled/downcycled
form, whereas in the linear economy, the goods are sold, used, and
become waste (Ionaşcu and Ionaşcu, 2018). Although the concept of
‘sustainability’ involves all aspects of the triple bottom line (economic,
environmental, and social), circular economy research focuses on the
environmental dimension (Geissdoerfer et al., 2017). In the fashion
industry, the circular design of a business model primarily involves
transforming used goods into raw materials for another production
cycle. At the same time, resource consumption during the manufactur-
ing process should be reduced to a minimum (Bubicz et al., 2021).
The purpose of this paper is to provide rich empirical evidence on
practical circularity solutions adopted by the largest companies in the
fast fashion industry. The sustainability reports of six global players

Abbreviations: BCI, Better Cotton Initiative; FSC, Forest Stewardship Council; NGO, Non-governmental organization; RDS, Responsible Down Standard; WWF, World Wildlife Fund;
ZDHC, Zero Discharge of Hazardous Chemicals.
⇑ Corresponding author at: 6 Piața Romană, 1st district, Bucharest 010374 Romania.
E-mail addresses: voicu.dragomir@cig.ase.ro (V.D. Dragomir), madalina.dumitru@cig.ase.ro (M. Dumitru).

https://doi.org/10.1016/j.clscn.2022.100040
Received 24 September 2021; Revised 23 January 2022; Accepted 10 March 2022

2772-3909/© 2022 The Author(s). Published by Elsevier Ltd.

This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
V.D. Dragomir, M. Dumitru
were analyzed using a circular value chain model. The data were cat-
egorized into five implementation phases: strategies/guidelines,
research and development, implementation at scale, quantitative indi-
cators, and targets. The research shows that big players in this sector
have created a complex system for reducing their environmental
impact while imposing strict rules in their supply chain. At the same
time, these companies educate their customers on circularity and pro-
mote recycle‐or‐reuse consumer habits. A comparative perspective on
these entities is also provided, regarding how circularity solutions are
implemented in the value chain. The proposed circularity model opens
new avenues of research and has practical implications for fashion
companies and standard‐setters.
2. Literature review and research questions
A business model with attributes of the circular economy implies
‘creating value by exploiting value retained in used products to gener-
ate new offerings’ (Linder and Williander, 2017). A circular model
shifts from a single transaction between actors to multiple transactions
in closed‐loop cycles (Kuzmina et al., 2019). Circularity is focused on
resources, not outputs. Resources can be recovered, recycled, reused,
upcycled, or downcycled (Singh et al., 2019), depending on their phys-
ical properties, available technologies, and consumer demand for these
transformations. However, the first step in any circular model is reduc-
ing resource consumption (Provin et al., 2021) because the basic goal
of circularity is to preserve natural resources and avoid waste genera-
tion (Fernandes et al., 2020). In summary, the implementation of cir-
cularity solutions is an inter‐organizational effort (Allen et al., 2021)
focused on innovation, collaborations with stakeholders, and con-
sumer education.
We propose the following model depicted in Fig. 1. The stages of
the value chain are formulated as processes and adapted from the
literature:
• Product design (Colucci and Vecchi, 2021; Jia et al., 2020)
• Virgin raw material extraction and processing (Bubicz et al., 2021;
Jia et al., 2020)
• Textile and material production (Bubicz et al., 2021; Provin et al.,
2021)
• Product manufacturing (Bubicz et al., 2021; Colucci and Vecchi,
2021)
• Auditing and certification (Bubicz et al., 2021; Todeschini et al.,
2017)
• Packaging, distribution, and retail (Bubicz et al., 2021; Colucci and
Vecchi, 2021)
• Customer use (Bubicz et al., 2021; Colucci and Vecchi, 2021;
Mishra et al., 2021)
• Post‐consumer garment collection (Colucci and Vecchi, 2021; Jia
et al., 2020; Kant Hvass and Pedersen, 2019; Mishra et al., 2021;
Provin et al., 2021)
• Recycling fibers and materials (Colucci and Vecchi, 2021; Kant
Hvass and Pedersen, 2019; Mishra et al., 2021; Provin et al., 2021)
• Collaborations with other organizations (Bubicz et al., 2021; Jia
et al., 2020; Kant Hvass and Pedersen, 2019; Mishra et al., 2021;
Provin et al., 2021)
• Ensuring transparency and traceability (Mishra et al., 2021; Rossi
et al., 2020; Todeschini et al., 2017).
At each stage of the value chain in Fig. 1, circular economy solu-
tions (material and waste reduction, reuse, resell, repair, recycle, redis-
tribute, source certification, and longer product life) are derived from
the literature and included in the model (Centobelli et al., 2020;
Colucci and Vecchi, 2021; Pui‐Yan Ho and Choi, 2012; Hugo et al.,
2
Cleaner Logistics and Supply Chain 4 (2022) 100040
2021; Jia et al., 2020; Kant Hvass and Pedersen, 2019; Mishra et al.,
2021; Provin et al., 2021; Todeschini et al., 2017). Also, the model dif-
ferentiates between material flows (raw material processing, material
production, garment manufacturing, distribution, retail, customer
use, garment collection, and recycling) and information flows (product
design, supplier auditing and certification, collaborations, trans-
parency, and traceability).
The first research question is: Which practical solutions do fashion
retailers adopt in implementing circular business models? The implementa-
tion of circularity principles has been discussed in the literature, but
most papers have a very narrow focus. Wang et al. (2020) analyzed
the introduction of blockchain technology to the fast‐fashion industry
to improve supply chain circularity, limited to the Traceability stage.
Regarding the Collaborations stage, Liu et al. (2020) discussed the
causes and benefits of partnerships between NGOs and multi‐
national fashion merchandisers. Turker and Altuntas (2014) analyzed
the reports of nine fashion companies, revealing that these retailers
focus on supplier compliance with codes of conduct by enforcing mon-
itoring and auditing procedures (the Auditing stage). Grazzini et al.
(2021) drew the connection between ‘sustainable’ attributes in fashion
products and customers’ purchase intentions, specific to the Retail and
Customer use stages. Kant Hvass and Pedersen (2019) presented the
challenges in developing a circular business model in the case of a glo-
bal fashion brand that launched an in‐store product take‐back initia-
tive (the Post‐consumer garment collection stage). Finally, the paper of
Mishra et al. (2021) is the only contribution that included multiple cir-
cularity elements (collaborations, innovation, waste management, cus-
tomer relations, and changing utilization patterns) in the presentation
of an Indian company. Consequently, the present paper fills a research
gap by connecting the value chain stages into a comprehensive circular
economy framework that can be analyzed on a single set of criteria.
The second research question is: Can several companies be compared
in terms of their practical solutions inspired by the circular economy? A
multi‐case study approach has been used before in the dedicated liter-
ature. Arrigo (2020) compared the supplier selection and management
policies of three retailers and their methods for stakeholder engage-
ment, but the focus was not on ‘circularity.’ Bubicz et al. (2021) col-
lected data from sustainability reports to analyze how social
sustainability was managed by six companies (Adidas, Gap, H&M,
Inditex, Nike, and Patagonia) across their supply chain. However,
the topic of circularity was only briefly mentioned, not being the main
interest of this paper. Chan et al. (2020) sought to assess the corporate
social responsibility (CSR) performance of three types of fashion
brands (Nike, H&M, LV). Although H&M’s corporate strategy is
strongly connected to circularity, the paper touched only briefly on
the subject. Two papers on the Italian fashion industry (Da Giau
et al., 2020, Da Giau et al., 2016) addressed the topics of environmen-
tal sustainability and corporate disclosure, but did not even mention
the term ‘circular.’ Mejías et al. (2019) discussed the topic of traceabil-
ity in the value chain for a multi‐case study on four companies (Gap,
H&M, Inditex, and Fast Retailing), but without linking their results
to the circular economy. Finally, Silva et al. (2020) analyzed the use
of marketing channels by three fashion labels (H&M, Mango, Oasis),
but excluded the post‐consumer options and recycling initiatives pro-
moted by these brands. While all these topics (stakeholder engage-
ment, traceability, environmental sustainability, etc.) are major
components of circularity models, none of the authors integrated cir-
cular economy principles into their comparative discussions. There-
fore, the present research addresses the gaps from previous studies
by applying a circular economy model to a comparative multi‐case
design. Our contribution is to offer a tool for assessing the degree of
involvement of fashion companies in promoting circular economy
principles.
V.D. Dragomir, M. Dumitru
Fig. 1. The inputs, stages, and outputs of circularity in the fast fashion industry.
3. Sample selection and methods
The source material is represented by corporate disclosures in the
annual sustainability reports of some of the largest garment retailers
in the world. Corporate sustainability reports are one of the main
instruments of corporate disclosure on sustainability issues and have
been used as primary data in numerous papers (Fifka, 2013). A conve-
nience sample was considered appropriate for maximizing the quantity
and quality of such disclosures related to circularity in the fashion
industry. For the sample selection, two sources were used: the report
‘Vision of a circular economy for fashion,’ published by the Ellen
MacArthur Foundation (2020), and the report published by Fashion
Revolution (2021).
The selection criteria were the following: companies specialized in
fashion retail, that owned at least one brand, operated their stores (or
3
Cleaner Logistics and Supply Chain 4 (2022) 100040
franchises under their brand), were not part of the luxury apparel sec-
tor, and were listed on at least one stock exchange. The following com-
panies were selected from lists compiled in the above reports: H&M
and Inditex (the largest fast fashion retailers in Europe by sales),
OVS (the most transparent fashion company according to Fashion
Revolution), Gap inc. (the largest apparel retailer in the U.S. by sales
in 2020, according to Statista), PVH (the third‐largest apparel retailer
in the U.S.) and VF Corp. (third place in the Transparency Index 2021,
after OVS and H&M). The second‐largest apparel retailer in the U.S.,
Limited Brands, was excluded because it did no longer exist as a single
company in 2021. For a comprehensive international comparison, the
sample of six companies was balanced between half European, half U.
S. companies.
The following documents were downloaded from the companies’
websites and thoroughly analyzed: H&M Group Sustainability
V.D. Dragomir, M. Dumitru
Performance Report (2020), Inditex Group Annual Report (2020), OVS
Sustainability Report (2020), Gap inc. Global Sustainability Report
(2019), PVH Corporate Responsibility Report (2020), VF Corporation
Sustainability & Responsibility Report (2018). When the data were col-
lected (August 2021), these reports were the most recent on the
respective websites. The sampled sustainability reports referred to
one calendar year. Only the European companies from this sample
(H&M, Inditex, and OVS) obtained external assurance for their reports
(Briem and Wald, 2018). However, all reports were prepared following
the GRI (2016) Guidelines.
Environmental initiatives can be disclosed in annual reports, show-
ing the actual actions of the companies and their commitments (Cai
and Choi, 2020). Annual reports are the most read documents pre-
pared by big companies. These reports are available online and include
data satisfying the information needs of various categories of stake-
holders. In the present sample, each selected report contained a section
entitled ‘Circularity,’ but all other sections were checked and coded for
related topics. Relevant keywords were identified and checked in each
report, such as ‘cotton,’ ‘recycling,’ ‘materials,’ ‘circular,’ ‘reuse,’ ‘sup-
pliers,’ ‘consumers.’
Content analysis was the methodology used for extracting relevant
information from corporate sustainability reports (Guthrie et al., 2004;
Neuman, 2014). This deductive technique involved codifying qualita-
tive statements and quantitative data into pre‐defined categories. The
purpose was to derive patterns in the presentation of information. The
unit of analysis included each sentence or line in a table containing a
specific indicator. Categories and text fragments were used to synthe-
size corporate disclosures and compare the prominence of certain
aspects. The frequency of codes indicated the importance of the sub-
ject matter (Krippendorff, 2019). The text fragments were imported
in Nvivo 1.5.1 (version 2020), in which the coding was conducted.
The entire coded material had 19,390 words.
The pilot coding was performed on the H&M report (2020), which
was rich in detail. The coding analysis procedure was applied on two
dimensions: (a) the links of the value chain (enumerated in Section 2)
and (b) the implementation phases, which were derived from the liter-
ature (Barros et al., 2021). The implementation phases are the follow-
ing (with examples from the H&M report, 2020):
• Strategy and guidelines (‘We’ll continue to update our Trans-
parency Strategy’)
• Research and development (‘Saving material with 3D technology’)
• Implementation at scale (‘H&M membership scheme where cus-
tomers earn rewards’)
• Quantitative indicators associated with a certain aspect (‘The num-
ber of stores with recycling systems for main types of store waste’)
• Targets to be attained (‘Reduce packaging across our value chain by
25% by 20250 ).
All items can be measured on a dichotomous ‘yes’ or ‘no’ scale,
quantified as 1 and 0, respectively (Cho and Roberts, 2010). A text
fragment should simultaneously have at least one point for the value
chain and one point for the implementation phase. The coding proce-
dure allows for multiple codes on both dimensions. An example is pro-
vided below:
We achieved our interim 2020 goals: – 100% of our MMC fibers
were sourced from low‐risk suppliers, according to Canopy’s Hot
Button Report (H&M Group Sustainability Performance Report
2020, page 39).
The following codes were attached to this fragment:
• Value chain elements: Textile and material production (1), Ensur-
ing transparency and traceability (1), Auditing and certification
(1), and Collaborations (1).
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Cleaner Logistics and Supply Chain 4 (2022) 100040
• Implementation phases: Strategy and guidelines (1), Implementa-
tion at scale (1), Indicators (1), and Targets (1).
The text fragments and allocated codes are fully available in the
associated dataset (Dragomir and Dumitru, 2021). The number of
coded text fragments was as such: Inditex ( 138), H&M ( 131), VF
Corp. (83), Gap inc. (79), OVS (73), and PVH (57). The reliability of
the coding procedure was ensured by the continuous cross‐checking
between the two authors of the present paper, who are experienced
researchers. We relied on a negotiated intercoder agreement
(Campbell et al., 2013), the procedure through which the coders dis-
cussed and reconciled whatever coding discrepancies they may have
had for the same unit of text. This procedure does not require quantifi-
cation of intercoder reliability. After the initial coding procedure, the
entire database was verified, and short summaries were extracted to
present the most prominent aspects regarding circularity in the value
chain.
In Section 4, each link in the value chain is briefly presented with
relevant examples from the six reports. Deductive (theory‐guided) the-
matic analysis is employed to present the results (Fereday and Muir‐
Cochrane, 2006; Joffe, 2012). A text fragment can have multiple
codes, but the examples are not repeated when discussing each link
in the value chain. At the end of Section 4, the cumulative code fre-
quency is presented for each implementation phase. Also, NVivo was
used to create a word cloud from all report excerpts, highlighting
the most used keywords within the sections dedicated to circularity.
4. Thematic analysis of circularity solutions in the value chain
Circular economy goes beyond simply recycling. This section aims
to answer the first research question: Which practical solutions do fash-
ion retailers adopt in implementing circular business models? The follow-
ing subsections discuss each input, stage, and output of the value
chain on a set of five implementation phases. The elements of the
value chain are presented in the order of primary activities. Company
disclosures are summarized in a coherent framework that highlights
practical solutions in line with circularity principles. References to
the relevant scientific literature are found within each section, high-
lighting the most important aspects of the respective stage.
4.1. Synthesis of circular business models in the fast fashion industry
The presentation hereafter is a synthesis of business models
described by several sample companies (Gap inc., 2019; H&M, 2020;
Inditex, 2020; VF Corp., 2018) and in the literature (Wen et al.,
2019). The main resource of the fashion industry is virgin fiber, but
the circular economy model encourages the input of recycled fibers
(considered an upstream source). Virgin fibers may be independently
certified regarding their provenance. Audits may also be performed
at suppliers of virgin fibers and materials, and some of these audits
are conducted or commissioned by the retailers. Fibers are transferred
to textile and garment manufacturers, which are usually not owned by
the retail chain. Fashion companies control the following business pro-
cesses: designing, packaging, distribution, and retail. Large fashion
retailers collaborate with non‐governmental organizations (NGOs)
and governmental agencies to reduce resource consumption.
The downstream segment of the value chain involves customer use,
product reuse, and textile recovery. If large retailers or other organiza-
tions collect post‐consumer garments and accessories, the recovery
phase can begin. Fibers and materials are reprocessed and integrated
into other products in similar manufacturing processes or different
industries. Finally, all actors in the value chain benefit from the trace-
ability of fibers and materials to check the reusability and recyclability
of textile resources. Traceability is both an input and an output of this
process and a crucial attribute of circular models. Detailed labeling
V.D. Dragomir, M. Dumitru Cleaner Logistics and Supply Chain 4 (2022) 100040

and website disclosures ensure greater transparency for the customer was from sustainable sources. In 2018, VFC purchased all virgin down
and recycling agents in later stages of the product’s life cycle. Sustain- according to the Responsible Down Standard and 36 billion tons of
ability report disclosures (the main source of data for the present BCI‐certified cotton.
research) are also part of the value chain’s transparency output. The Sustainable Apparel Coalition3 works to develop and dissemi-
nate practices for enhanced transparency in the fashion industry
(OVS). This commitment is in line with Canopy’s recommendations4
4.2. Product design
to prohibit the sourcing of forest‐derived materials that would cause
the loss of endangered forests (VFC, Gap, PVH, Inditex, H&M). VFC
The Product design stage is connected to a company’s strategic goals
adopted a policy that encourages the use of recycled and FSC‐
but also to innovation and research efforts. Advances in fibers technol-
certified5 cellulosic fibers and packaging materials. Gap considered a
ogy are the cornerstone of circular design (Dokter et al., 2021). Appa-
holistic set of indicators in evaluating fiber procurement, including bio-
rel designers are expected to focus on selecting materials and
diversity, recyclability, chemistry, land use, and social conditions within
chemicals with the lowest environmental impact and which can be
production.
easily reintegrated into another manufacturing cycle. However, this
Sample companies referred to numerous innovations related to
effort should be doubled by a new perspective that eliminates fabric
materials and fibers. Some examples are acetate fibers partly made
waste from manufacturing processes (Enes and Kipöz, 2020).
from plastic waste (H&M), natural fibers made from low‐value agricul-
Environmental impacts should be estimated and managed in the
tural waste (H&M), bio‐based and biodegradable substitutes for poly-
design stage (Moorhouse and Moorhouse, 2017). The main strategic
urethane foams in clothing (H&M), technologies for turning
goals are designing products with recycled materials, products to be
cellulose‐rich materials into biodegradable and fully circular fibers
repaired or repurposed, and products to be recycled (Gap, VFC). The
(PVH), and research into ionic solutions for the separation of natural
Ellen MacArthur Foundation (2020, 2017) laid out the circular design
components from synthetics (Inditex).
principles that some companies have adopted for their apparel collec-
Raw material extraction and textile production become selling
tions (PVH, H&M). The selection of materials is a core element in a cir-
points if implemented in entire collections, not just in pilot projects.
cular design. It entails using more sustainable fibers (Inditex) and a
Large retailers seek to educate their customers in choosing materials
reduced number of garment components for maximum recyclability
that have a lower environmental impact and can be easily recycled
(OVS).
(Dragomir, 2020). Also, better‐quality materials last longer, thus
Innovation is present from the first sketch (Gap), and designers can
bringing enduring satisfaction to the consumer (Rausch et al., 2021).
receive training in applying circularity principles (Dan and Østergaard,
Researchers have found that the use of recycled polyester, recycled
2021). The focus is on incorporating new fibers and materials of
cotton, and organic cotton can significantly reduce overall environ-
renewable origin that have a lower environmental impact (Inditex).
mental impact like climate change potential, acidification potential,
Waste reduction can be achieved through digital technologies that
and water depletion, particularly in the manufacturing stage
enable the calibration of more efficient production processes (PVH).
(Moazzem et al., 2021a).
Companies use lifecycle assessments (Gap) and external sustainability
Companies reported several indicators relevant to this category.
indices to understand the impact of fabric choices (VFC).
Some examples are the percentage of cotton, viscose, and polyester
From a design perspective, circularity principles are implemented
by source (H&M, OVS, PVH, Gap, VFC), the equivalent number of
at scale when a collection is completed. Several brands developed pro-
PET bottles in the composition of recycled polyester (H&M, Gap),
duct lines for which designers created new materials from waste in col-
the proportion of raw materials from renewable sources (OVS, Indi-
laboration with innovative start‐ups. In the design stage, companies
tex), and the proportion of recycled materials in the packaging used
invested mostly in training for in‐house designers and cross‐
(OVS, Inditex). In relation to their strategies, sample companies have
functional product teams (H&M, Inditex, Gap, VFC). The purpose
set several targets on the sourcing and use of materials and fibers.
was to incorporate circular thinking and design into the product cre-
Some examples are the percentage of materials (cotton, viscose, cellu-
ation process (Gap). However, findings from the literature suggest that
lose, nylon, polyester) from renewable sources by 2030 (H&M, VFC,
product‐level practices focused more on raw materials than design ini-
Inditex, OVS), the percentage of packaging from recycled or sustain-
tiatives (Karaosman et al., 2020).
ably sourced materials by 2030 (H&M), the elimination of wood‐
There are very few indicators associated with the design stage.
derived fibers from ancient and endangered forests (Gap), and the gen-
Companies may report the quantity of fabric saved in creating new
eralized use of international certifications for materials and fibers.
materials (H&M) or the number of employees who have received train-
ing on circularity design (Inditex). One company redesigned its pro-
duct packaging to replace plastic with FSC paper, thus saving 27 4.4. Product manufacturing
tons of plastic (OVS). The most ambitious target in this area is for all
new products and packaging to be designed based on circularity stan- Manufacturing processes in the apparel sector are usually external-
dards (H&M, OVS). Some companies referred to the Global Fashion ized by the major retailers (Wen et al., 2019). Fast fashion companies
Agenda1 and how targets have been met in adopting circular economy have contracts with hundreds of suppliers to which they impose poli-
principles in apparel design (Inditex, Gap, OVS, VFC). cies concerning circularity in manufacturing processes. Therefore, this
stage is strongly connected to Audit and certification (section 4.5). In
this respect, sample companies mentioned their policies regarding
4.3. Virgin raw material extraction and textile production restricted chemical substances (H&M, Inditex, PVH, VFC), production
waste in the supply chain (H&M, PVH), water efficiency (H&M, OVS,
Textile companies have imposed strict policies regarding their sour- Inditex, Gap), dyeing processes (OVS), the use of sustainable raw mate-
cing of materials and fibers (Hansen and Schaltegger, 2016). H&M pur- rials (Gap), and regular factory audits (VFC, Inditex).
chased 100% of committed fiber volumes from organic cotton farming. Reducing environmental impact is relevant, especially when entire
OVS purchased cotton through the Better Cotton Initiative (BCI),2 pro- collections are created and marketed to consumers. Water use appears
moting best practices to improve worldwide cotton‐growing standards. to be a prominent concern in the manufacturing stage (Oliveira Neto
In 2020, more than half of the quantity of cotton purchased by Gap
3
https://apparelcoalition.org/.
1 4
https://www.globalfashionagenda.com/. https://canopyplanet.org/.
2 5
https://bettercotton.org/. https://fsc.org/en.

5
V.D. Dragomir, M. Dumitru
et al., 2021). Circularity principles are also applied to water consump-
tion, reuse, and purification. Advanced manufacturing processes
reduce the quantity of water needed for producing very popular mate-
rials like denim (Zhao et al., 2021). Companies have implemented dif-
ferent solutions to achieve these goals: introducing technologies to
curb water consumption, such as denim wash programs that conserve
water in the laundry stage (Inditex, Gap, OVS, H&M), rainwater har-
vesting systems (H&M, OVS), regular wastewater testing and audits
(VFC, Inditex, H&M), sourcing from Zero Liquid Discharge suppliers
(VFC, Inditex), and monitoring the chemical composition in compli-
ance with international laws (VFC).
Research projects focused on improving manufacturing processes
revolve around several important goals such as reducing shedding
rates in textiles (VFC, H&M), reducing fabric waste with the aid of
3D technology (H&M), using innovative dyeing techniques (OVS,
Gap), chemical security throughout the value chain (Inditex), and
the management of microplastics during manufacturing (H&M). PVH
reported that, in 2020, more than two million Tommy Hilfiger denim
garments were manufactured using lower‐impact finishes. The OVS
report described the case of a Chinese supplier which had a highly
technological facility for recycling plastic bottles into polyester fabrics.
OVS was collaborating with suppliers to renew machinery and pro-
cesses to eliminate potassium permanganate from the production of
denim garments.
Sample companies used several indicators measuring circularity in
manufacturing processes: the proportion of facilities with water‐
efficient equipment (H&M), the percentage of production water being
recycled (H&M), the quantity of water saved, recovered, or reused
(Inditex, Gap, VFC), and the avoidance of restricted chemicals in fin-
ished goods (PVH, Gap). However, the literature documented that
process‐level practices of saving water in the fashion industry are moti-
vated by cost reductions rather than environmental concerns
(Karaosman et al., 2020).
Increasing awareness among textile manufacturers has led to
restricted use or complete elimination of certain harmful chemicals
in processing textile materials to produce consumer‐safe goods
(Gobalakrishnan et al., 2021). Several targets are relevant for tracking
circularity in the manufacturing stage. Some examples refer to remov-
ing restricted chemicals from the supply chain (VFC, H&M), working
toward zero discharge of hazardous chemicals (Gap, PVH), eliminating
single‐use plastics (Gap), increasing the proportion of products made
with water‐saving techniques (Gap, OVS), and reducing the proportion
of water usage compared to a baseline (H&M).
4.5. Auditing and certification
Circularity in the fashion value chain is significantly enhanced by
third‐party certification of supplier practices, in conjunction with
audits conducted by the retailers at supplier facilities (Pui‐Yan Ho
and Choi, 2012). This way, fast fashion companies seek to expand their
control over supply chain processes and monitor the observance of
quality standards (Lueg et al., 2015). For example, H&M mapped the
production processes for printing, dyeing, and washing denim to assess
environmental and social impacts across these areas. Inditex collabo-
rated with BCI to improve chronological documentation in tracking
the movement of goods in the supply chain.
All major retailers adopted strategies and policies concerning their
suppliers (Turker and Altuntas, 2014). The Code of Conduct for suppli-
ers and manufacturers is a valuable instrument to encourage the devel-
opment of safe, innovative, and sustainable fabrics (Jajja et al., 2020).
Sample companies demand their business partners to comply with the
requirements of certain policies such as no sourcing of fur, angora, and
exotic leathers (VFC), no leather from cattle raised in the Amazon
biome (VFC), no products from animals exclusively slaughtered to sell
their leather, feather, and down (Inditex), virgin wool and cashmere
6
Cleaner Logistics and Supply Chain 4 (2022) 100040
only from certified farms (H&M), and exclusive use of materials pro-
duced from trees grown sustainably according to the FSC (OVS, H&M).
One major component of the certification stage is using and com-
pleting the Higg assessment modules, released by the Sustainable
Apparel Coalition. Several modules are applied to the main brand
and supplier factories (H&M, OVS, PVH). The assessment based on
the Higg platform ensures the suppliers’ adherence to the principles
outlined in the company’s Code of Conduct (OVS, VFC, Gap). PVH
used the Higg Index6 to calculate the total impact of each type of raw
material in the company’s portfolio. Auditing of supplier conduct
reduces agency costs related to potentially hidden information
(Nikoofal and Gümüş, 2020).
Most research and development initiatives in this area were
focused on environmental impact. H&M collaborated with WWF to
study water risks across the river basins impacted by the value chain.
OVS collaborated with the University of Padua to quantify the com-
pany’s footprint from a life cycle perspective. Another relevant certifi-
cation is the CDP score7 for water use and discharges in the
manufacturing process (H&M). Several companies have partnered with
the ZDHC8 to improve the management of chemical products and to
comply with chemical restrictions for wastewater (Inditex, Gap, H&M).
Environmental audits are an important part of the relationship with
suppliers, and all sample companies implemented audits of supplier
factories or third‐party verification of compliance. Inditex commis-
sioned independent external auditors to conduct 1,123 audits on sup-
pliers and factories in 2020. OVS obtained the ‘Cradle to Cradle’
certification9 for its industrial model in compliance with principles of
circularity. H&M was included in the Textile Exchange’s 2019 Material
Change Insights Report10 and was in the leading position for using
organic cotton, artificial fibers, and RDS‐certified down.11
Sample companies used several indicators to assess the degree of
implementation of circularity policies in their supply chain. Some
examples are the percentage of suppliers enrolled in the ZDHC Pro-
gram (H&M), the number of supplier declarations in the traceability
management system (Inditex), the number of supplier facilities that
completed the Higg Self‐Assessment questionnaire in 2020 (PVH),
the number of supplier facilities that were verified on their Higg Facil-
ity Environmental data (PVH), and the proportion of materials and fab-
rics from standard‐compliant sources (VFC).
All companies have established targets concerning the certification
of raw materials and industrial processes. These targets and policies
apply to the focal company, as well as to its suppliers. Relevant targets
refer to sustainable cotton (Inditex), eco‐friendly denim finishes (Gap),
verified Higg data for suppliers (PVH, OVS), sustainable cellulose
fibers (Inditex), wool from certified farms (H&M), synthetic fibers
sourced from low‐risk suppliers (H&M, OVS), and leather from certi-
fied tanneries (VFC).
4.6. Packaging, distribution, and retail
Packaging is a stage in the value chain that creates a major environ-
mental impact because of the quantity of waste it generates, either in
stores or in the customer’s home (Caniato et al., 2012; Da Giau et al.,
2016). Several examples of how companies tackled this issue are pre-
sented hereafter. H&M created a set of Circular Product Development
Guidelines to disseminate best practices related to packaging across
the organization. Also, the same company adopted a Circular Packag-
ing Strategy to minimize the use of plastic.
6
https://apparelcoalition.org/the-higg-index/.
7
https://www.cdp.net/en/water.
8
https://www.roadmaptozero.com/post/zdhc-gateway-a-new-online-portal-for-mrsl/.
9
https://www.c2ccertified.org/get-certified/product-certification.
10
https://store.textileexchange.org/product/2019-material-change-insights-report/.
11
https://textileexchange.org/standards/find-certified-company/rds-certified/.
V.D. Dragomir, M. Dumitru
Inditex implemented its ‘Green to Pack’ program to increase the
recycled content of cardboard boxes used to transport garments from
suppliers. The company disclosed the number of cardboard boxes
sourced from certified suppliers in 2019 and 2020. Two other compa-
nies (H&M, PVH) committed to Canopy’s Pack4Good12 initiative to
responsibly source wood‐based packaging. On the other hand, H&M
committed to replacing single‐use plastics with FSC‐certified paper or
removing them altogether. This policy applies to hangers, tagging ele-
ments, or plastic display packaging. Inditex disclosed that it covered
the cost of collecting packaging from consumers and sending it to an
authorized waste management organization.
Sample companies sought innovative solutions for developing
packaging with a smaller environmental footprint and sourced from
recycled materials (Friedrich, 2021). Inditex created a single hanger
to transport garments from suppliers to stores. OVS designed a closed
system of reusing and returning hangers to suppliers to be recycled
when damaged, while Gap implemented a hanger recycling system
at over 100 locations. Similarly, concerning e‐commerce, several com-
panies focused their attention on reducing plastic waste by using poly-
bags made of a high proportion of post‐consumer recycled plastic
(Gap, PVH, OVS). Gap tested a new folding system for packaging
and shipment that would significantly reduce the use of polybags.
Sample companies reported on a set of indicators related to circular
packaging. Some examples are the proportion of recycled packaging
materials of total materials used (H&M), new packaging made of recy-
cled or sustainably sourced materials (H&M, Inditex, PVH), labels and
navets made from recycled materials (Inditex, PVH), packaging reused
(OVS), cartons and cardboard boxes saved (OVS, Inditex), wooden pal-
lets repaired (OVS), use of paper envelopes instead of polybags (Indi-
tex), and the quantity of plastic eliminated overall (Inditex, PVH, Gap).
Related to their strategy on circular packaging solutions, sample
companies have put forward a series of targets: reducing packaging
across the value chain (H&M), designing packaging to be reusable,
recyclable, or compostable (H&M, Inditex), reducing the impact of
packaging on the natural environment (Inditex), eliminating unneces-
sary plastic packaging for customers (Inditex), 100% plastic packaging
recycled in the supply chain (Inditex, H&M), and the elimination of
virgin and single‐use plastics in offices, distribution centers and stores
(PVH, H&M).
4.7. Customer use
Retail (in‐store or online) is where customers are taught about cir-
cular fashion and how they can extend the useful life of their garments.
Consumers are offered a utilitarian motivation for ‘going green,’ i.e.,
choosing recyclable or recycled fibers, checking the source of materi-
als, and returning used garments for recycling (Kumar and Yadav,
2021). For example, OVS created a simple guide called ‘Eco Valore,’
which explains to users the specific environmental impact of each item
of clothing (the amount of water used to produce the item, the CO2
emissions generated by manufacturing, and item recyclability).
Companies can analyze consumer trends by surveying attitudes
towards circular fashion proposals (H&M). Companies are interested
whether customers would resort to repairing their clothes (H&M), ren-
tals (H&M, VFC), second‐hand purchases (H&M), or garment‐
collection services (Inditex, VFC) offered by the respective brands.
The circular economy model expects the consumers to become suppli-
ers and assume a more fluid role in the supply chain (Pal et al., 2019).
The focus on durability goes against the economic model of fast fash-
ion but aligns with the companies’ commitment to reducing their envi-
ronmental impact throughout the value chain. Therefore, companies
insist on maximizing a garment’s useful life by collecting used clothes,
cleaning, repairing, and reselling or renting them (VFC). Similarly,
12
https://canopyplanet.org/campaigns/pack4good/.
7
Cleaner Logistics and Supply Chain 4 (2022) 100040
H&M offers alteration services in several stores in Stockholm, prolong-
ing the useful life of each item.
Previous research shows that the length of garment lifetime is the
most influential factor in determining environmental impacts
(Wiedemann et al., 2020). Consumers have the largest capacity to
influence the circularity of their garments by maximizing an item’s
active lifespan. To maintain garment quality and extend its useful life,
several Inditex brands publish clothing care guides on their websites.
One of the main aspects is water usage for garment cleaning by cus-
tomers. Brands resort to product labeling, catalogs, social media, and
blog posts to inform customers about reducing water use (Gap, Indi-
tex). Less washing also diminishes the microplastic shedding rate
(Inditex, H&M).
4.8. Post-consumer garment collection and recycling
The main goal of circularity is to avoid transfers to landfills and
decrease resource consumption (Moazzem et al., 2021b). However,
implementing circular business models is not possible without input
from customers (Cai et al., 2021). From the evidence presented below,
it appears that large fashion retailers seek to make the participation of
consumers in recycling schemes as convenient as possible. Sorting and
recycling can be enhanced with digital technologies, creating trans-
parency, traceability, and automation (Sandvik and Stubbs, 2019).
Closing the loop means that most stores need to install a clothing
collection point (Inditex). Take‐back and warranty programs are
designed to increase the length of product life and reduce landfill
waste (Kant Hvass and Pedersen, 2019). Gap, VFC, and H&M encour-
age customers to turn in used clothes for shopping credit. Inditex sup-
ported Euratex13 in creating five recycling hubs in Europe to collect,
process, and recover textile waste at a larger scale. Gap joined partner-
ships with research organizations and NGOs to solve technical chal-
lenges in textile recycling, like separating spandex from other fibers in
used garments.
The sample companies have adopted relevant solutions in three
areas: re‐commerce, rental, and reuse. H&M surveyed over 3,000 cus-
tomers from five countries regarding circular fashion models to better
understand consumer attitudes, from buying pre‐owned clothes to
repairing clothing items. Especially for more expensive garments like
outdoor apparel, rental is a solution for maximizing product utility
and increasing product lifespan (VFC). Companies seek to adopt circu-
larity principles for the distribution and retail stages of the value chain
(VFC, OVS). Such an example is a program called ‘Tommy for Life’
from PVH, where the company takes back items from consumers and
cleans, repairs, and resells these items, keeping products in use. PVH
launched a clothing take‐back pilot program to learn how to repurpose
post‐consumer products. Such a program can offer product repair,
resale, downcycling, or chemical recycling opportunities.
The recycling of post‐consumer textiles is firstly a technological
challenge (Liu et al., 2019). PVH joined a large‐scale study led by
H&M and IKEA to research how existing chemical standards can be
applied to the recycling of post‐consumer textiles. Inditex launched a
seed fund in collaboration with the Massachusetts Institute of Technol-
ogy (MIT) to drive research in textile recycling techniques and create
new fibers with low‐impact technologies.
Several companies reported launching collections made partially or
entirely with recycled fibers and materials. H&M launched several col-
lections using post‐consumer recycled cashmere, polyester, or cotton.
For example, H&M launched a collection using Circulose,14 an artificial
fiber from recycled cotton waste. In 2020, OVS produced around two
million garments from more sustainable cellulose, and 100% of fleece
was made using recycled polyester. In the same year, Inditex launched
13
https://euratex.eu/.
14
https://circulo.se/.
V.D. Dragomir, M. Dumitru
products made with 14 thousand tons of recycled materials, increasing
90% over 2019. Also, Inditex launched a denim collection from reman-
ufactured old stock items, and several Inditex brands sold garments com-
posed of recycled materials, such as recycled polyamide, carpets, or
production samples. At PVH, more than 50% of their swimwear products
are made from recycled materials, and Gap launched a collection of
organic cotton finished with fully recycled thread.
The most relevant indicators in this area are the quantity of recy-
cled or sustainably sourced cotton used in products (H&M), recycled
or other sustainably sourced materials for commercial goods (H&M,
OVS, VFC), the quantity of garments produced using recycled materi-
als (OVS), garments collected in stores (H&M), the quantity of clothing
averted from landfill (VFC), the quantity of apparel recycled by con-
sumers (Inditex, H&M) or to be used again by consumers (VFC), collab-
orations with NGOs for sorting and reuse of post‐consumer apparel
(Inditex), and the proportion of stores and distribution centers with
recycling systems in place (H&M).
Sample companies have established targets relevant to their recycle
and reuse policies. Some examples are increasing the percentage of
recycled polyester and nylon in commercial products (VFC, PVH),
the percentage of recycled cotton (Gap, PVH, H&M), the percentantage
of stores with used clothing collection points (Inditex), and the number
of used clothing collection boxes in stores (OVS, VFC).
4.9. Collaborations with other organizations
Cross‐sector collaborations are mostly relevant in the strategy and
innovation phases of the business cycle (Mishra et al., 2021). Collabo-
rations provide new ideas or technologies and access to consumers
willing to participate in recycling schemes. Collaborative projects
aim to disseminate best practices in the field of circularity and acceler-
ate the shift to cleaner production processes (Colucci and Vecchi,
2021). Thus, apparel companies can engage in corporate activism to
set agendas and support a preferred social change (Corvellec and
Stål, 2019).
The most effective collaboration is the participation in the ‘Make
Fashion Circular’ initiative of the Ellen MacArthur Foundation15 (Indi-
tex, H&M, Gap, PVH). Several companies also collaborate with the Sus-
tainable Apparel Coalition16 in their mission to support environmental
impact reduction by selecting eco‐friendly materials (VFC, OVS). Accel-
erating Circularity17 was a collaborative project of industry players aim-
ing to boost circularity (Inditex, Gap, VFC). The goal of this project
was to research, map, manage, and report on the development and per-
formance of circular supply chains.
Sample companies collaborated with numerous institutions, uni-
versities, and start‐ups to develop new fibers and technologies, digital-
ization processes, and impact measurement projects (Todeschini et al.,
2017). Inditex supported a research program with the University of
Catalonia to develop filters for domestic washing machines. H&M
worked with the start‐up Fairbrics18 to develop the world’s first
carbon‐negative polyester. OVS worked with Aquafil19 to retrieve 75
tons of fishing nets and transform them into recycled polyamide mate-
rial. In 2020, Inditex invested USD 3.5 million to support research in tex-
tile recycling, according to their commitment to the Global Fashion
Agenda.20 The same company signed an agreement with MIT on USD
1 million funding for sustainability research.
Most collaborations are focused on the resale, reuse, and recycling
of garments (Mishra et al., 2021). VFC’s Timberland brand partnered
with several NGOs to collect, donate, reuse, and recycle clothes in
15
https://www.ellenmacarthurfoundation.org/.
16
https://apparelcoalition.org/.
17
https://www.acceleratingcircularity.org/.
18
https://fairbrics.co/company/.
19
https://www.aquafil.com/.
20
https://www.globalfashionagenda.com/.
8
Cleaner Logistics and Supply Chain 4 (2022) 100040
the UK and the US. Inditex allocated EUR 7 million to a large‐scale pro-
gram of collecting and processing used textiles in collaboration with
Moda Re21 by Caritas in Spain. H&M enabled customers to purchase
renewed garments through their COS Restore chain, collaborating with
the start‐up The Renewal Workshop.22 In China, H&M offered a sub-
scription to rent clothes in partnership with the market‐leading platform
Ycloset.23
There were different methods used for assessing the success of col-
laborations, such as quantitatively assessing the garment collection
and reuse initiatives. H&M worked with I:CO24 to collect, reuse, or
recycle 18 thousand tons of garments in 2020. In collaboration with Car-
itas, Inditex collected 62 thousand tons starting with 2015. VFC part-
nered with TRAID25 to divert 2.5 thousand tons of clothes away from
landfills and incineration per year in the UK. Inter‐industry alliances
are relevant for future developments, such as using recycled yarn to cre-
ate new collections (OVS).
4.10. Ensuring transparency and traceability
Supply chain transparency is critical for the circular economy
(Karaosman et al., 2020). The most important strategic aspect in this
area is the adoption of the Higg Product Tools,26 which enable lifecycle
assessments and informed choices on more sustainable products and
materials (H&M, OVS, Inditex). Downstream, these tools allow cus-
tomers to see information about materials, factory locations, environ-
mental impact, and recycling options for each item (H&M, OVS). A
company can use labeling, catalogs, social media, vlogs, and blog posts
to share information about a product’s environmental footprint (Gap).
Large retailers use external instruments, social media, and tradi-
tional disclosure media to increase the transparency of their value
chain and build brand reputation. Transparency in the supply chain
is advertised by brand websites that provide information on the origin,
impact, and characteristics of materials in their collections (Inditex).
Several companies use the Higg Index to assess and compare sustain-
ability performance across the entire supply chain (Gardetti, 2015).
Thus, major retailers can do business with suppliers that share their
data on the Higg Index platform (OVS).
Several companies have created proprietary standards that are
flagged on the label of certain product lines. For example, Inditex pro-
moted their ‘Join Life’ standard and manufactured 38% of units under
this label in 2020. The respective standard ensures the certification of
organic cotton, feather/down, wool, and viscose. Inditex has also
developed a ‘Join Life’ manual for suppliers in relation to the classifi-
cation of raw materials and wet processes.
Transparency can be increased throughout the supply chain using
instruments such as blockchain technology (Agrawal et al., 2021;
Wang et al., 2020) in pilot studies with innovative start‐ups (H&M).
Inditex created a digital platform that integrated all phases of the pro-
duct’s life cycle, using an in‐house Traceability Management System.
This system was intended for suppliers and company teams (Inditex).
Increased traceability ensures the provision of information to stake-
holders regarding the certification of fibers (Inditex), water use per
product (Inditex), CO2 emissions generated by manufacturing (OVS),
name and location of suppliers (OVS, H&M), and compliance with
industry standards on the sourcing of raw materials (H&M). Traceabil-
ity maps reveal the product’s origins (raw materials and manufactur-
ing) and discuss end‐of‐life options for reduced impact (VFC).
Sample companies considered extending and publishing their supply
chain maps (VFC) to ensure that the most purchased products are com-
21
https://www.caritas.es/economia_solidaria/moda-re/.
22
https://renewalworkshop.com/.
23
https://www.ellenmacarthurfoundation.org/case-studies/a-closet-in-the-cloud.
24
https://www.ico-spirit.com/en/.
25
https://www.traid.org.uk/.
26
https://apparelcoalition.org/higg-product-tools/.
V.D. Dragomir, M. Dumitru Cleaner Logistics and Supply Chain 4 (2022) 100040

Fig. 2. The word cloud generated by NVivo from the analyzed text fragments.

Fig. 3. The coding frequency of implementation phases for the entire sample.

Fig. 4. The coding frequency of circularity solutions at each value chain stage for the entire sample.

9
V.D. Dragomir, M. Dumitru
Fig. 5. Circularity prominence in the value chain of Inditex.
pletely circular (PVH). Also, H&M is aligned with the disclosure stan-
dard proposed by the Transparency Pledge,27 a coalition of human
rights and labor rights organizations that set minimum requirements
for supply chain disclosure in the garment and footwear industry.
4.11. A summary of the results
The results offer a comprehensive view of how the fast fashion
industry tackles environmental problems such as resource consump-
tion and waste. Circularity is a viable solution, and the six companies
have proven that they have developed numerous tools supporting cir-
cular business models. The circular economy goes beyond the 3Rs (re-
duce, reuse, and recycle), integrating the upstream and downstream
stages into a coherent framework for action. A sustainable business
model in the fast fashion industry starts with the design stage, which
relies on technological innovation and collaborations. Chemical pro-
cesses at manufacturing plants are constantly monitored by retailers,
ensuring that they follow stringent international standards. Certifica-
tions and audits play an important role in supply chain management
by offering information on the sustainability of raw materials (such
as cotton) and natural resources such as water. Consumers also play
a major role in this equation because their actions and attitudes fuel
the reuse‐and‐recycle phase of the circular model. Reducing plastic
waste, especially regarding packaging solutions, is one of the foremost
concerns of any retailer. The post‐consumer stage provides material
inputs for garment manufacturing.
27
https://transparencypledge.org/.
10
Cleaner Logistics and Supply Chain 4 (2022) 100040
The word cloud generated by the NVivo software is presented in
Fig. 2. The word cloud suggests that the term ‘sustainable’ is used as
a synonym of ‘circular’ in the annual reports of sample companies.
From the presentation of results, it is apparent that the analyzed text
fragments do not refer to sustainability, defined as ‘the balanced inte-
gration of economic performance, social inclusiveness, and environ-
mental resilience’ (Geissdoerfer et al., 2017, p. 766). The confusion
between sustainability and circularity is explained by the fact that sam-
ple companies consider the circular economy as a condition for sus-
tainability, thus referring directly to the goal of their strategies and
solutions.
Implementation at scale is the most frequently found code attached
to corporate disclosures. This result shows that most companies
adopted a pragmatic approach to circularity, focusing on large‐scale
projects that impacted their operations and consumer attitudes (see
Fig. 3). However, sample companies were more reluctant to announce
circularity Targets that may create an implicit obligation to reach a cer-
tain indicator linked to circularity performance. Quantitative Indicators
and Targets are considered ‘hard disclosures’ (Clarkson et al., 2008), by
contrast with Strategy and guidelines, which are ‘soft disclosures.’
The coding frequency of circularity solutions for each stage in the
value chain is presented in Fig. 4. Text fragments referring to Collabo-
rations were the most frequent for the entire sample, indicating that
circular models are successful only if they are backed up by inter‐
organizational efforts in a win–win strategy. In circular models, stages
like Recycling fibers and materials, Textile and material production, and
Product manufacturing are considered upstream. These stages have sig-
nificant prominence in the corporate disclosures of sample companies.
However, Post‐consumer garment collection, Customer use, and Ensuring
V.D. Dragomir, M. Dumitru
transparency and traceability are still underdeveloped. These stages are
considered downstream in relation to the focal company (the retailer).
Although relevant solutions fall under the retailer’s control, sample
companies have not sufficiently addressed these downstream stages
(e.g., garment collection in stores or raw material traceability). Sur-
prisingly, circular Product design has attracted relatively little attention
from managers, although this aspect is prominently featured in the lit-
erature (Goldsworthy et al., 2018).
5. Comparative analysis of circularity prominence in the value
chain
This section aims to answer the second research question: Can sev-
eral companies be compared in terms of their practical solutions inspired by
the circular economy? For this purpose, six diagrams are presented in
Figs. 5 – 10. Each diagram has the same structure as the value chain
in Fig. 1. The stages are presented as squares of various dimensions,
proportional to the number of text fragments inscribed within each
square. These diagrams show the prominence of each stage and the
configuration of the entire value chain in terms of circularity. In the
lower‐left corner of each diagram, the implementation phases
extracted from text fragments were statistically summarized. The cir-
cularity diagrams provide visual clues for understanding the similari-
ties and differences between sample companies regarding circularity
prominence at every stage and within the value chain.
Fig. 6. Circularity prominence in H&M’s value chain.
11
Cleaner Logistics and Supply Chain 4 (2022) 100040
Inditex is one of the most successful companies in the textile indus-
try. Its degree of internationalization is positively related to opera-
tional efficiency and investments in employee skills (de Jorge
Moreno and Carrasco, 2016). From the point of view of sales, the level
of internationalization, and the quality of its products, Inditex is sim-
ilar to H&M and Gap (de Jorge Moreno and Carrasco, 2016). The
incorporation of circular economy principles into the strategy of Indi-
tex has been previously highlighted in the literature (Esbeih et al.,
2021). In the present analysis, Inditex has the largest number of text
fragments dedicated to circularity in its annual report (Inditex,
2020). The prominence of circularity elements at each stage of the
value chain is highlighted in Fig. 5. The company chose to emphasize
external contributions to its circularity efforts so that Collaborations
and Auditing and certification are two of the most prominent categories.
The stages under the group’s direct control – Product manufacturing and
Packaging, distribution, and retail – occupied the second and third place,
respectively, in a hierarchy of prominence from a circularity perspec-
tive. The upstream stages of the value chain (Textile and material pro-
duction, Virgin raw materials, and Recycling fibers) were discussed with
less emphasis than the stages under the company’s direct control.
Finally, Post‐consumer garment collection, Customer use, and Product
design received the least attention in this circular economy model. Sup-
porting the findings in the literature (Esbeih et al., 2021), the results
indicate that Inditex is focused on the Implementation of circularity
measures, adopting a pragmatic and measurable approach. Overall,
V.D. Dragomir, M. Dumitru
Fig. 7. Circularity prominence in the value chain of VF Corp.
Inditex has drawn the connection between its strong international
presence (Orcao and Pérez, 2014) and the circular economy principles,
thus creating a case study of best practices in this sector.
H&M is a company whose business model received significant
attention in the literature (Giertz‐Mårtenson, 2012). One paper
described the design practices at H&M and their orientation toward
sustainability in ‘present’ and ‘future’ scenarios (Earley et al., 2016).
H&M was also one of the first global fashion retailers to implement
sustainability measures in their value chain (Shen, 2014). The current
analysis highlights which aspects of the circular economy are most sig-
nificant for H&M’s strategy (see Fig. 6). In conjunction with the Collab-
orations stage, the Packaging, distribution, and retail stage has the most
prominent contribution to the circular economy. The upstream seg-
ments of the value chain – Recycling fibers and materials, Textile and
material production, and Manufacturing – have a moderate contribution
to circularity. In contrast to the literature (Earley et al., 2016), H&M’s
sustainability report (H&M, 2020) does not offer many details on cir-
cular Product design or Customer use. Like Inditex, H&M focused on
implemented projects and initiatives, mostly linked to the packaging
and retail stage. Research initiatives were mostly connected to the
Recycling fibers and materials aspect. The Auditing and certification stage
was significantly less prominent than in the case of Inditex, but H&M is
heavily relying on the Post‐consumer garment collection and Recycling
stages. Also, H&M included more quantitative Indicators than Inditex
and any other firm in this sample. These results indicate that the brand
relies on ‘hard disclosures’ (Clarkson et al., 2008), comparable and
verifiable.
12
Cleaner Logistics and Supply Chain 4 (2022) 100040
VF Corp. has been mentioned in the literature for its circularity pro-
grams (Guo et al., 2020). The company’s Post‐consumer garment collec-
tion initiatives are included in the annual sustainability report (VF
Corp., 2018), but the most prominent circularity aspect is Auditing
and certification (see Fig. 7). All the other stages of the value chain
received moderate importance from the circular economy perspective,
with Customer use and Transparency being the least discussed. Most text
fragments in the report of VF Corp. were formulated as commitments
and strategic options (Strategy) linked to external certification of sup-
plier activities. In contrast to Inditex, participation in international cir-
cularity forums and cross‐industry initiatives (Collaborations) are much
less prominent.
Gap inc. has been discussed as a case study in the previous litera-
ture for its corporate social responsibility (CSR) initiatives (Lee and
Lee, 2018). CSR activities include improving factory working condi-
tions, building stronger communities, and protecting the environment.
The presence of circular economy solutions throughout the company’s
value chain (see Fig. 8) was almost equally distributed for the
upstream side (Raw material extraction, Textile production, Manufactur-
ing, Packaging, distribution, and retail) but insignificant for the down-
stream side (Customer use, Post‐consumer garment collection, and
Transparency). As in the case of Inditex, circularity solutions were most
prominent in the Collaborations stage. Surprisingly, Gap emphasized
the circular Product design aspect more than Inditex or H&M. However,
disclosed solutions were presented mostly as commitments rather than
implemented.
V.D. Dragomir, M. Dumitru
Fig. 8. Circularity prominence in Gap’s value chain.
OVS has not been discussed in the scientific literature, but several
contributions refer to the Italian fashion industry. For example,
Colucci and Vecchi (2021) provided insights into the emerging circu-
lar economy practices implemented by four Italian fashion companies.
Despite experimenting with circularity solutions, large companies are
more oriented towards the ‘traditional’ (i.e., linear) paradigm. OVS –
the largest fast fashion company in Italy – focused on the upstream
part of its value chain (Textile and material production and Recycling
fibers and materials). At the same time, the downstream stages received
less attention (Packaging, distribution, and retail, Consumer use, and Post‐
consumer garment collection). Circularity solutions were also more
prominent in the Auditing and certification stage but almost insignificant
in the Product design stage (see Fig. 9). Unlike VF Corp., OVS has a
more pragmatic approach to circularity, in that most of its solutions
were implemented at scale and quantitatively evaluated. Unlike Indi-
tex and H&M, OVS did not significantly rely on Collaborations to imple-
ment its circularity solutions.
PVH has been previously analyzed in the literature regarding its
relationship with Bangladeshi suppliers (Hasan et al., 2021) and in
the context of smart retailing (Pantano and Dennis, 2019). These con-
tributions illustrated operational and strategic elements such as contin-
uous improvement programs, customer service, the certification of
suppliers, warranty policies, in‐store technologies, and brand reputa-
tion. In line with the findings of Hasan et al. (2021), the present study
confirms that the Auditing and certification stage, mostly related to sup-
pliers, is the most prominent in terms of circularity (see Fig. 10). Virgin
raw material extraction and Recycling fibers and materials were the
upstream stages that received a significant share of attention from
the company’s management, similar to Inditex and Gap. Collaborations
13
Cleaner Logistics and Supply Chain 4 (2022) 100040
and Packaging, distribution, and retail were equally mentioned in the
company’s responsibility report (PVH, 2020). In adopting circular
economy principles, the least importance was given to Product design,
Customer use, and Post‐consumer garment collection. From the point of
view of implementation, PVH disclosed practical and measurable
results more than targets and commitments.
The comparative results show that each company has a different
approach to circularity in the value chain. While Inditex and H&M
relied heavily on Collaborations to achieve their circularity goals, other
companies like OVS, PVH, and VF Corp. were more oriented towards
Auditing and certification in their value chain. Relying on Auditing and
certification takes the pressure off the retailer and externalizes the
implementation of circular economy principles. In this respect, OVS,
PVH, and VF Corp. have very similar circularity models embedded
in their value chain, with a significant focus on the ‘starting triangle:’
Raw material extraction and processing, Textile and material production,
and Audit and certification. Conversely, Inditex and H&M are more
focused on manufacturing, distribution, and retail capabilities. Gap
inc. was the only company whose approach to circularity was more
balanced across the value chain, albeit its implementation of circular-
ity principles did not have the same scale as H&M and Inditex. The
Consumer use stage was almost neglected in all circularity models,
while the Transparency and traceability stage was significantly devel-
oped only by Inditex. Most reports only briefly mentioned the Product
design stage, suggesting that the sample companies have not truly inte-
grated circularity principles into their strategy. In the present sample,
PVH, Inditex, H&M, and OVS had the highest frequency for the Imple-
mentation phase, while VF Corp. and Gap favored mentioning commit-
ments and strategic choices.
V.D. Dragomir, M. Dumitru
Fig. 9. Circularity prominence in the value chain of OVS.
6. Conclusions
A brief presentation of the main contributions. A circular business
model implies redesigning strategies, products, and processes
(Kuzmina et al., 2019). This concept radically departs from the linear
model of transferring post‐consumer goods to the landfill or incinera-
tor (Stål and Corvellec, 2018). Sample companies have proven that
they can be engaged in the circular economy, defined as ‘an economic
model wherein planning, resourcing, procurement, production, and
reprocessing are designed and managed, as both process and output,
to maximize ecosystem functioning and human well‐being’ (Murray
et al., 2017). A complete circularity model is presented theoretically
and described through practical examples and solutions that encom-
pass strategies, product development, and process design from the
reports of six large retailers. Detailed lists of indicators and circularity
targets are linked to each stage of the value chain, emphasizing the
importance of quantitative and comparable disclosures. The promi-
nence of circularity solutions in the sample companies’ value chain
was investigated from a comparative perspective. Implications for the-
ory, management, and standard‐setting are highlighted below. Future
avenues of research are also presented for each of the following topics.
Implications for theory. The comparative results indicate that there is
no one model of circularity in the textile industry. Moreover, there are
different configurations of the circular economy as implemented by
large fashion retailers. The comparative case study analysis does not
allow for generalizations. It appears that H&M and Inditex have a
specific type of configuration of the value chain in terms of circularity,
with a focus on retail and collaborations. Conversely, other sample
companies are focusing on the upstream segment of their value chain.
These ‘flavors’ of circularity could generate further theoretical insights
14
Cleaner Logistics and Supply Chain 4 (2022) 100040
because circular economy solutions are intrinsically linked to other
characteristics of the company’s business models. While supply chain
configurations appear to be unique to each retailer (Orcao and
Pérez, 2014), the circular economy is strongly linked to the coordina-
tion of global production networks. Future theoretical developments
could be built on these results. Classifying circular business models
in the fashion industry would be a valuable research endeavor.
Implications for managers. The findings of the present paper are rel-
evant for the management of fashion retailers and any other actor in
this value chain. The strategies, policies, implementations, and indica-
tors collected from sample companies could become a good practice
handbook for the industry. Moreover, circularity – or lack thereof –
in the fast fashion industry has become a major point of interest for
mainstream media. Investigations have shown that not all disclosures
should be taken at face value. In a documentary (DW, 2021), investiga-
tive reporters showed that brands like H&M and Zara do not disclose
the percentage of recycled textiles going into their ‘sustainable’ collec-
tions. Moreover, the reporters argued that the value chain is not circu-
lar because used textiles are rarely converted into new garments.
Therefore, global brands should listen to stakeholder concerns and
increase the transparency and traceability of fibers and materials as
the first step towards strengthening their circularity models. Collabo-
rative consumption (Zamani et al., 2017) is one of the solutions for
increasing garment service life instead of downcycling or incineration
of used textiles (Paras et al., 2019). Future research could address
alternatives to the current business model of fast fashion companies
through the qualitative investigation of stakeholders’ opinions on this
matter.
Implications for standard‐setters. The Global Reporting Initiative
Guidelines (GRI, 2020) do not offer sufficient depth to circularity dis-
V.D. Dragomir, M. Dumitru
Fig. 10. Circularity prominence in the value chain of PVH.
closures. The standard ‘GRI 306: Waste’ requires the disclosure of cir-
cularity measures under the heading ‘Disclosure 306–2: Management
of significant waste‐related impacts.’ These disclosures are classified
into (1) input material choices and product design, (2) collaboration
in the supply chain and business model innovation, and (3) end‐of‐
life interventions. However, all the required information can be con-
sidered ‘soft disclosure’ because it refers to policies, guidelines, design,
collaborations, process descriptions, or management systems. An
updated version of the standard could consider introducing quantita-
tive indicators that are explicitly linked to circularity. The present
paper extracted a large palette of indicators related to every stage of
the value chain, which can be included under a special disclosure
heading. This approach would enable the assessment and comparabil-
ity of circularity improvements in the textile industry. Future research
could propose a set of indicators for a more objective assessment of
circularity.
Limitations of the present research. Case studies are adequate for this
type of research which underscores the differences between compa-
nies. However, the research design does not show what companies
are doing against what they should be doing. There is no clear bench-
mark of best circularity practice or a clear and quantitative target that
could be attained. While the credibility of their disclosures cannot be
questioned per se, there are many loopholes in such disclosures (DW,
2021). A qualitative design like the one in the present paper cannot
assess whether the mentioned circularity solutions are impactful or
sustainable. Therefore, the major limitation of the present study –
and all studies with a single data source – is the difficulty of reaching
15
Cleaner Logistics and Supply Chain 4 (2022) 100040
an objective appraisal of the phenomena under investigation. While
standards or benchmarks could be useful instruments for evaluating
the real impact of some circularity solutions, the researchers would
still be left to deal with the vagueness of corporate disclosures. What
happens to used garments after being collected from consumers is
not fully transparent. Future case studies and other qualitative designs
should also consider a triangulation of multiple sources regarding the
companies’ circularity solutions.
Authors participated equally in the research and article
preparation.
Funding
This research did not receive any specific grant from funding agen-
cies in the public, commercial, or not‐for‐profit sectors.
Declaration of Competing Interest
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influ-
ence the work reported in this paper.
Acknowledgement
We are grateful to Professor Kannan Govindan for his kind support
and the three reviewers for their valuable advice and
recommendations.
V.D. Dragomir, M. Dumitru Cleaner Logistics and Supply Chain 4 (2022) 100040

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