1. Introduction

The fashion industry, a key player in the global economy, significantly impacts both economic development and environmental sustainability. As consumption levels rise, the industry’s growing scale exacerbates issues of resource waste and environmental pollution. The production of textiles and clothing consumes substantial amounts of water, energy, and raw materials, often leading to irreversible environmental damage[1]. Moreover, it is the second-largest polluting sector globally, trailing only the oil industry, with significant chemical pollution and carbon emissions. Waste management is another critical issue, as millions of tons of discarded clothing are either sent to landfills or incinerated annually, further compounding resource waste and environmental harm[1]. The traditional linear economic model, involving resource extraction, use, and disposal, is inadequate for sustainable development. In response, the circular economy concept has emerged as a promising solution. This model aims to maximize resource use and minimize waste through reuse and regeneration. It applies throughout the fashion industry's value chain, from design and production to consumption and recycling, with efforts such as using renewable materials, efficient processes, promoting second-hand transactions, and establishing comprehensive recycling systems[2].

Motivated by the urgent need to address the fashion industry's environmental impact and the limitations of traditional waste management practices, this study aims to evaluate the effectiveness of circular economy practices. By assessing how these practices impact resource waste reduction and environmental pollution, the study seeks to provide insights into the potential for sustainable transformation within the industry. Also, the research will involve a detailed analysis of case studies from fashion companies that have adopted circular economy practices, examining their strategies for resource management, waste reduction, and recycling, and evaluating the outcomes and effectiveness of these practices.

2. Overview of the Development of Circular Economy

2.1. Theoretical Basis of Circular Economy

The theoretical basis of the circular economy originates from ecology and systems engineering, emphasizing sustainable development through efficient resource utilization and recycling. Its core idea is to integrate economic activities with natural ecosystems, reducing environmental impact via closed-loop material and energy flows[2]. Circular economy not only focuses on resource conservation and waste reduction during production but also pays attention to each stage of the product life cycle—from design and manufacturing to consumption and recycling—to achieve optimal resource allocation and minimal waste. The concept of the circular economy can be traced back to mid-20th century industrial ecology and environmental economics. Industrial ecology proposed establishing an "industrial ecosystem" by simulating natural ecosystem cycles to reuse waste and circulate resources[2]. The theoretical basis of the circular economy emphasizes system thinking and overall optimization, promoting efficient resource utilization and sustainable development through the coordination of economic activities and natural ecosystems. Its core concept is to extend resource life cycles and reduce waste and pollution through recycling and regeneration, thereby achieving economic, environmental, and social benefits.

2.2. Main Models of Circular Economy

The concept of the circular economy is illustrated in Figure 1, depicting a typical linear production process on the central axis, representing the sequence of production, consumption, and waste as a single process. The arrows around this axis indicate the circular possibilities for products, including reuse, recycling, and upcycling of resources, residual waste, and other materials[3].

Figure 1: Concept of circular economy principle

The main models of the circular economy include resource conservation, resource reuse, and resource recycling. The Resource Conservation Model minimizes resource consumption and waste generation by optimizing production processes and improving resource utilization efficiency through high-efficiency, low-pollution production technologies, green design, and reduced energy and raw material consumption. The Resource Reuse Model reduces the demand for new resources by extending product service life and facilitating multiple uses, promoting second-hand transactions, rental services, repair and upgrade services, and designing reusable and easily disassembled products. The Resource Recycling Model focuses on re-entering the production process through waste recycling and regeneration, forming a closed-loop resource flow system by establishing comprehensive waste recycling systems, developing circular economy industrial chains through enterprise collaboration, and promoting technologies that improve recycling rates and regeneration quality [4]. These circular economy models achieve efficient resource utilization and minimize environmental burdens, helping to reduce production costs and resource waste, diminish environmental pollution, and enhance corporate social responsibility, thus providing robust support for sustainable development.

3. Application of Circular Economy in the Fashion Industry

3.1. Design and Production Stage

In the design and production stage, the circular economy emphasizes reducing resource consumption and environmental pollution through innovative design and green production technology. Designers need to consider the entire life cycle of products early in development, including the selection of renewable materials and designs that are easy to disassemble and recycle[5]. Using environmentally friendly materials such as biodegradable fibers and organic cotton can reduce dependence on natural resources and environmental damage. Modular design is also an effective method to extend product life through detachable and interchangeable components, facilitating repair and reuse. In production, the circular economy encourages clean production technologies and processes to minimize waste and pollutants. This includes using low-energy and low-emission production equipment, optimizing production processes, and improving resource utilization efficiency. The use of non-toxic dyes and environmentally friendly chemicals is crucial in green production, reducing harmful emissions and protecting the ecological environment. Green supply chain management is also promoted, requiring suppliers and partners to adhere to environmental protection and sustainable development principles, thus building a green production system. By implementing innovative design and clean production technology, the circular economy in the design and production stage reduces resource waste and environmental pollution, enhances product value and market competitiveness, and promotes the fashion industry's transformation towards sustainable development.

3.2. Consumption and Use Stage

In the consumption and use stage, the circular economy's core concept is to extend the service life of products and reduce the demand for new resources. Promoting second-hand transactions and rental services is key to achieving this goal. Through the second-hand market, consumers can buy and sell used clothing, facilitating reuse. Rental services provide short-term use options, especially for special occasion clothing such as wedding dresses and evening gowns[3]. Promoting green consumption concepts and education is also essential. Through publicity and education, consumers are guided to choose environmentally friendly and sustainable fashion products, enhancing their environmental awareness and responsibility. Encouraging consumers to buy durable, high-quality products reduces frequent replacements and waste. Providing product maintenance and care services, such as repair and cleaning, also extends product life.

Brands and companies can further engage consumers in the circular economy by implementing trade-in and recycling programs. Brands like H&M and Patagonia encourage consumers to return used clothing for recycling through old clothing recycling programs, reducing waste generation, building an environmentally friendly image, and improving consumer loyalty. In the consumption and use stage, the circular economy effectively extends product life, reduces resource waste, and promotes sustainable fashion industry development by encouraging second-hand transactions, rental services, and green consumption concepts [6].

3.3. Recycling and Regeneration Stage

In the recycling and regeneration stage, the circular economy emphasizes establishing a comprehensive recycling system and technology, achieving closed-loop resource circulation through waste product recycling. Recycling waste clothing and textiles is a key component in applying the circular economy in the fashion industry. Establishing a broad recycling network, including community recycling points and store recycling stations, facilitates consumer participation in recycling[7]. Advanced recycling technologies and processes are fundamental to achieving recycling. Mechanical recycling technology can crush waste textiles into fibers and weave them into new fabrics; chemical recycling technology decomposes waste materials into original components through chemical treatment, processing them into new fibers and materials. These technologies handle large amounts of waste while ensuring the quality and performance of recycled materials[7].

Enterprises can achieve efficient resource use by establishing a circular economy industrial chain through cooperation. For example, fashion brands can collaborate with recycling companies to collect and process waste clothing into new raw materials. Some brands use recycled materials directly in new product manufacturing through innovative design, creating unique environmentally friendly fashion. Policy and regulatory support is also crucial in promoting recycling and regeneration. Governments can encourage waste recycling and reuse by formulating incentives and normative standards. Tax exemptions, subsidy policies, and waste recycling regulations can motivate enterprises and consumers to actively participate in the circular economy. The circular economy practice in the recycling and regeneration stage effectively achieves resource recycling and promotes the sustainable development of the fashion industry by establishing a sound recycling system and applying advanced recycling technologies.

4. Fashion industry case study on circular economy

Patagonia's adoption of circular economy principles profoundly impacts environmental sustainability, economic viability, and social responsibility. By extensively incorporating renewable materials such as organic cotton, recycled polyester, and wool into its products, Patagonia significantly reduces reliance on virgin resources, preserving natural ecosystems and decreasing its carbon footprint. The "Worn Wear" project, which offers repair services and facilitates second-hand transactions, extends product lifecycles, minimizes textile waste, and promotes recycling. This initiative also opens new revenue streams and attracts environmentally conscious consumers, enhancing brand reputation and market reach[8]. Patagonia's focus on durable, long-lasting products lowers production costs over time and differentiates the brand in a crowded market. By engaging consumers in sustainable practices and creating job opportunities within the repair and recycling processes, Patagonia fosters a community of responsible consumers and contributes to local economic development. Additionally, the company's commitment to sustainable innovation and collaboration drives industry standards and regulatory influence, inspiring broader cultural shifts towards sustainability. Patagonia's alignment with its mission of environmental stewardship strengthens brand authenticity and trustworthiness, positioning it as a leader in sustainable fashion and setting a powerful example for the industry[8].

Another important example is H&M’s circular fashion project. As one of the world’s largest fashion retailers, H&M actively promotes the recycling and reuse of clothing through this initiative. Recycling bins are set up in stores globally, encouraging consumers to bring in old clothes for recycling. Once collected, these garments are sorted, processed, and the materials are reused to make new clothes, significantly reducing the amount of textile waste that ends up in landfills and incinerators, thus alleviating environmental pollution and conserving natural resources. In addition to recycling, H&M has launched the "Conscious Collection," featuring items made from organic cotton, recycled polyester, and other sustainably sourced materials. This collection demonstrates that fashion can be both stylish and environmentally friendly, promoting the concept of a circular economy. The Conscious Collection not only provides a tangible product line that embodies sustainability but also serves as a marketing tool to raise consumer awareness and shift purchasing behavior towards more sustainable options. Through the "Conscious Action" program, H&M improves sustainable practices in the value chain each year, with the goal of using 100% recycled or sustainably sourced materials by 2030[9].

H&M's commitment to circular fashion extends beyond collection and recycling. The company continuously invests in collaborative research and technological innovation to improve the recycling rate and quality of discarded textiles. For example, H&M works with organizations such as the Ellen MacArthur Foundation and the Global Fashion Agenda to develop new recycling technologies and sustainable practices. These partnerships enable H&M to remain at the forefront of sustainable fashion innovation, setting industry standards and influencing other retailers to adopt similar practices.

The success of brands like Patagonia and H&M in implementing the circular economy lies in the collaborative efforts of the entire industry chain and active consumer participation. Patagonia ensures the sustainability of raw materials by working with suppliers and extends product life through repair services and second-hand trading platforms. H&M has established a global recycling bin network and collaborates with technology companies to increase the recycling rate of textiles. The active participation of consumers, driven by increased environmental awareness and responsibility, is also crucial. Brands promote circular economy principles through education and encourage consumers to recycle old clothes and buy eco-friendly products. However, achieving a comprehensive circular economy model faces several challenges. Technically, recycling and reuse technology for waste textiles needs improvement, as recycled fibers often have inferior performance and quality compared to virgin fibers, limiting their use in high-end fashion. Economically, the initial investment in the circular economy model is substantial, covering technology R&D, equipment transformation, and market promotion, leading to high costs for companies. Additionally, cultivating consumers' environmental awareness and changing behavioral habits takes time, making it difficult to achieve large-scale market effects quickly. Policy and regulatory support also needs strengthening, with governments playing a role in incentivizing and standardizing participation in the circular economy, promoting technological innovation, and supporting market expansion. The successful experiences of Patagonia and H&M provide valuable insights for the sustainable development of the fashion industry, but overcoming technical and economic challenges will require the combined efforts of governments, businesses, and consumers.

5. Suggestion

To further promote the development of the circular economy in the fashion industry, a multifaceted approach involving government policies, corporate investments, and consumer engagement is essential. Governments should introduce incentive policies and regulations to encourage the adoption of circular economy models by enterprises. Tax exemptions, subsidies, and green procurement systems can motivate companies to invest in green production technologies and recycling systems. Establishing standards and specifications for waste recycling and reuse will help standardize and normalize industry practices. Enterprises must increase their investment in research and development to enhance recycling technologies and improve the quality of recycled textiles. Advancements in mechanical and chemical recycling technologies are needed to boost the performance and application scope of recycled materials. Promoting intelligent manufacturing and green design can optimize production processes and increase resource utilization efficiency. Market promotion and consumer education are critical to enhancing public environmental awareness and participation in the circular economy. Through educational campaigns and promotional activities, green consumption concepts and the culture of circular economy can be popularized. Brands can foster consumer loyalty and environmental consciousness by offering trade-in, repair, and leasing services. Collaboration across the industrial chain is also vital. Brand enterprises should work closely with suppliers, recycling companies, and technology firms to build a comprehensive recycling and reuse system, ensuring a closed-loop cycle of resources. Information sharing and technological collaboration can improve the overall efficiency and sustainable development capabilities of the industrial chain.

6. Conclusion

In conclusion, this paper offers a comprehensive analysis of the circular economy's application within the fashion industry, highlighting its potential to address the sector's significant environmental impact. The fashion industry’s excessive resource consumption and waste generation necessitate a shift towards circular economy principles, which focus on resource efficiency, waste reduction, and recycling. The case studies of Patagonia and H&M exemplify the tangible benefits of these practices. Patagonia’s use of renewable materials and its "Worn Wear" program effectively extend product life cycles and minimize waste. Similarly, H&M’s global recycling initiatives and "Conscious Collection" illustrate how recycled and sustainable materials can meet consumer expectations and environmental objectives.

However, achieving a fully circular economy faces several challenges, including technological limitations, substantial initial investments, and the need for enhanced policy support. Progress in recycling technology, increased corporate investment, and consumer education are crucial for overcoming these barriers. Government incentives, such as tax breaks and subsidies, can further promote the adoption of sustainable practices. Additionally, fostering industry-wide cooperation and developing standardized recycling processes are essential for creating an effective closed-loop system that manages resources efficiently and reduces environmental impact. This study does have limitations, as it relies on just two case studies, which may not fully represent the global diversity of the fashion industry. Future research should broaden its scope to include additional cases and enterprise research to provide a more comprehensive understanding of circular economy practices across different regions and contexts.