Retail businesses selling clothing and fashion products, should focus on creating cross-functional teams involving design, supply chain, marketing and legal, and make the shift a core business priority, if they are serious about transitioning to a circular model.
A new guide developed by BSI explores how small and medium fashion and clothing businesses can embrace circularity, by taking action in areas including design, supplier engagement, compliance and setting clear goals and targets. As forthcoming EU regulations reshape the sector, and with further policy developments expected in the UK, businesses are being encouraged to embed circular practices into their operations. Major retailers are increasingly embracing circular models1, but for SMEs the upfront investment can feel prohibitive. Yet with regulatory requirements reshaping business in the EU and beyond, and with BSI research showing that 62% of people globally think the design of consumer goods should prioritise future reuse, repurpose, and recycling even if this increases costs, there is a clear commercial imperative.
The Circularity Playbook for SMEs sets out practical steps to plan, implement and scale circularity, in light of the sector’s significant environmental footprint. Estimates suggest global fashion and textiles2 is responsible for 2–8% of global greenhouse gas emissions, while production is resource intensive, consuming around 215 trillion liters of water each year3.
The BSI guide advises that, at the outset, companies define what circularity means to their operations, using this to determine where charge is needed, whether that is designing for longevity and repair, or focusing downstream by trialling resale or rental models. Small steps, like publishing repair instructions, adopting modular design principles to simplify repair and disassembly, or standardizing components such as zips or buttons, can have an outsize impact.
The guide urges businesses to align performance measures with sustainability outcomes, and embrace metrics such as profit per product lifespan, customer retention through repair/resale, or material efficiency and waste reduction. Recognizing the complexity of modern supply chains, it highlights that embedding circularity first requires companies to map Tier 1 suppliers and main material sources, then identify gaps in data. Suppliers should be engaged early on circularity goals, with clear expectations set around what environmental and sourcing information from suppliers is requested.
It also addresses the increasingly complex regulatory context. This includes the EU Digital Product Passport regulations. From 2027, DPPs – product-specific data records that act as a digital identity for a product throughout its lifecycle – will be a requirement for manufacturers selling in Europe in priority sectors (fashion and clothing will be included in the requirement to have DPPs from 2029 according to EC Directorate DG GROW). Alongside this, from September the EU Directive on Empowering Consumers for the Green Transition, will prohibit misleading environmental claims and unsubstantiated sustainability labels.
Supporting compliance, businesses are encouraged to keep evidence to support environmental or ethical claims, make supporting product data accessible through websites, QR codes or similar, and avoid making claims about a product’s sustainability ” without verification. They can also begin collecting lifecycle data on materials, sourcing and repair options, and take steps to review packaging use and align it with recyclability and circular-design expectations.
The guide also sets out how standards can be utilised to transform ambition into action, including BS 8001:2017, a framework that guides organizations on how to apply circular economy principles and is currently under revision (BS 8001L2027), and the ISO 59000 series, which covers the circular transition.
Sara Walton, sector lead, sustainability, BSI said: “Every company in the fashion and retail sector, no matter the size, has the opportunity to transition to a circular model. This is not just good for the environment, but can also drive resilience, create new revenue streams and drive long‑term value, especially as regulation and consumer scrutiny increase.
What’s critical is that circularity is not considered just a side sustainability project, but becomes a core business strategy, with input from a cross-functional team involving everyone from design to supply chain partners, marketing and legal. Every business will have its own considerations, but whether it is rethinking design principles or pivoting to rental models, now is the moment to start the transition from a linear to a circular model. Standards are a vital support here, because they provide a shared language, practical methods and recognized benchmarks to help businesses implement circularity, measure progress and communicate results with confidence.”
Professor Martin Charter Director of The Centre for Sustainable Design, University for the Creative Arts said: “Circularity is not only about compliance, it is a strategic approach to building resilience, strengthening supply chains and differentiating in a competitive market. Businesses that design for durability, offer repair or resale services and communicate transparently are better positioned to respond to these changes and capture new sources of value. In a fast‑changing landscape, circularity provides a practical pathway for SMEs to respond to regulation, to innovate and to create long‑term value, for their business and for society.”
Access the Circularity Playbook for Fashion SMEs here.
