Transition to the Circular Economy in the Fashion Industry: The Case of the Inditex Family Business

Abstract

Society is increasingly concerned about aspects of work related to sustainability. This leads organizations to reflect on the economic, environmental, and social problems that affect both current and future generations. When companies identify an environmental problem, they try to respond to it through changes in their environmental policies, aiming at the transition towards sustainability. In this context, the circular economy appears as a regenerative industrial system that replaces the concept of “end of life” with that of “restoration”. It is oriented to the use of renewable energies, eliminating the use of toxic chemicals, which are harmful to reuse. The theory of socio-emotional wealth describes the behavior patterns of family businesses in response to the environmental changes that occur and the reasons derived from the family character that make them move towards the circular economy model. This article studies the case of the Spanish textile manufacturing and distribution multinational Inditex, analyzing the information collected in its environmental balances in the period 2013–2018. The analysis allows us to observe the speed of Inditex’s transition to the circular economy. For this, transition speed indicators were formed in each of the dimensions of the circular economy model. The results of the study indicate areas in which the company is moving faster and those in which more effort is needed. Finally, a collection of good practices related to the CE used by Inditex is provided.