T RANSFORMATIONAL C HALLENGES

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environmental expert described the visibility of sustainability and circularity efforts as the following:

“[It is important] to have a high-level support and a very visible commitment. […]

We recently had a new Chief Executive and she has been very visible in her support for sustainability and has really challenged people to quantify their contribution, their making to sustainability in their departments and in their roles”

This quote illustrates the interviewees’ perception of both the vast influence the leaders have on the change, as well as the commitment that is needed from the leaders, hence, how the different aspects of leadership as a catalyst are interconnected.

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Mapping all the resources that went into the old products to improve them and adhere to the C2C requirements; having to develop new materials; finding the right manufactures; scaling the

production; and, simultaneously, fitting the products to the consumers’ sustainable expectations as well as their intrinsic expectations for the particular product. Moreover, the interviewees

described struggling to develop systems that embraced the closed loop nature of circular economy as well as engaging the clients in a new role as users. An example of this struggle was presented by a director of strategy and innovation:

“[…] we have to figure out ‘okay it is recyclable; how can the raw material supplier of the yarn take back the fabric? Does it need to be different shipping methods? Does it need to be separated?’ All of these things go logistically into it. And then how do we get it back from the customers? That has proven to be the biggest problem and one of the reasons why – although we have a take-back program – none of our fabricators or customers actually take advantage of it”

The product developments are among the reasons that the 11 out of 12 interviewees stated that circularity requires investments. A CEO summed it up by stating:

“When I do lectures, then I say that it requires time. It requires resources. It requires passionate people, and then it requires financing. So, it really is a long-term

investment. Well, a lot of companies think ‘when we start this, we’ll get there in 3-6 months.’ No, you don’t. This, this is a long-term investment”

Put differently, the companies had to invest financially in the research and development and had to invest both their time and energy in a long-term project that also included new infrastructure and branding.

In addition to the companies having to invest and commit to product development, almost all the interviewees described that circularity requires continuous improvement. This challenge was both related to the C2C requirement of continuously improving to sustain their certificate level, and companies described that whenever they advanced in the process, a new challenge would arise.

One interviewee explained: “This is something that we carry on, our ambition, like sustainability is a process of continuous improvement, so we just have to keep pushing the boundaries and explore the possibilities”.

Similarly, the interviewees described that they were continuously confronted with challenges whenever they had advanced. A sustainability expert said: “You think you are solving one problem and then you run into another barrier”. Such challenges could be due to issues with replacing essential but environmentally damaging ingredients in the products, e.g., designing a

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product that is made entirely from recycled plastics and then being confronted with the issue of the microplastics that this product and production still contain. Another example could be

designing a product that enables the resources to be recycled and lacking the proper infrastructure to get it back. Accordingly, these challenges were not only challenges arising within the company but were also caused by the need to engage external actors in the circular vision and process.

External Demands

One of the challenges that the employees mentioned during the interviews was the fact that circularity needs responsible citizens. A little more than half of the interviewees referred to how the customer also needs to be informed, educated, and involved to play an active part and achieve a closed loop, so the organizations can reuse and recycle material. A sustainability expert summed it up:

“[…] people who are involved should be considered responsible citizens, rather than consumers. So I think those are the biggest challenges and the solution of course is we have to work together like never before, if we want to move the circularity forward. […] if the customer doesn’t return their garment into the system where we can extract the value and reuse the value, then it is a bit hard to keep circularity going”

This shows how the customer or consumer was perceived as playing an essential role in reintegrating the products back into the market and ensuring full circularity.

Closely linked to the need for responsible citizens is the need for systemic infrastructure. Three fourths of all the interviewees perceived a form of systemic infrastructure as essential for

circularity to be successful. Apart from the often-mentioned implementation of different forms of take-back systems, the interviewees made other suggestions, such as involving the B2B customers and incentivizing taking back materials through, e.g., deposit systems, involving the governments and implementing legislation, and setting up internal systems such as recycling waste. One interviewee elaborated on the need for a systemic infrastructure:

“You know we need to have systemic change, in terms of setting up the networks […]

that will help out the other part of the circularity, which is having take-back programs that are not only one brand driven but maybe that are municipal driven and people you know being involved”

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The quote further underlines the connection the interviewee makes between the infrastructure, best-practice-sharing, and the collaboration mentioned both in the Transformational Drivers and External Demands sections.

Another external demand that was perceived as a challenge was the fact that circularity presents requirements for the suppliers. All interviewees pointed out the importance of working with the supply chain to successfully change the business model to a circular one. Implementing circularity affects the organizations’ suppliers, as they, too, have to produce their supplies in a circular way, in order for the organizations to document their circularity efforts and receive the C2C

certification. Two thirds of the interviewees experienced challenges while transforming through the requirements that were upon their suppliers. The challenges included convincing the suppliers to adopt a circular approach, to be transparent regarding their recipes, and to invest in their facilities. Furthermore, the interviewees described challenges related to receiving needed documents or information from the suppliers as the communication between the suppliers and focal company had proven difficult and time-consuming. An interviewee described the issues as the following:

“[…] with some of our suppliers, it’s hard to get them convinced in going towards the circular model instead of a linear model. […] Some of them are more conservative and we have a harder time getting them on board, and in the end, we do need to have everybody on board”

Lastly, closely connected to the requirements of the suppliers, the interviewees generally

perceived the C2C certification requiring a lot of documentation as one of the main challenges to becoming circular and implementing circular products. As mentioned in the Methodology chapter, the organizations need to document every ingredient of the product but also of their facilities. Two thirds of the interviewees talked about the challenge of gathering the data both internally and externally. The gathering of data was described as both time-consuming and as a “headache”. An environmental specialist summed up the effort of documentation: “I think the biggest challenges first and foremost is data – so obtaining data on materials can be quite challenging because quite often the businesses we deal with and the suppliers we deal with aren’t quite aware of why we need this information”. The environmental specialist continued to explain why obtaining the data was quite challenging:

“In business, sharing information is not often the way things are done and so there’s quite a lot of time and energy spent in talking to suppliers and reassuring them that we’re not trying to steal their magic formula and that we’re not trying to share it with

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the competition but that we’re trying to use the safest and most sustainable materials we can”

Again, the environmental specialist described how different topics are interconnected, such as sharing information, collaborating with the competitors, and working closely with the strategic partners, as mentioned in the previous sections.