Entrepreneurial Dynamics and Sustainability Integration in Born-Sustainable Fashion Startups: A Framework for Innovative Business Models

Abstract

Environmental and social issues are increasingly being highlighted as a problem in the global fashion industry, which is characterized by heavy resource extraction, waste production, carbon emissions, overexploitation of products, lack of transparency across the supply chain, and exploitation of labour. In response, “fashion for the better” has become a business and ethics value. In this context born-sustainable fashion startups are a unique category of companies since they incorporate sustainability in their business model, identity and mission from the very beginning, rather than later as an activity of compliance or fashion branding. This paper presents an analysis of the approaches born-sustainable fashion startups are taking to sustainability within their business model and how they are trying to overcome the problem of scalability, complexity of operation, sustainability's economic viability and competitiveness. This study employs a qualitative research design based on literature review, where the data sources are secondary data which consist of academic articles, industry reports, sustainability publications and policy related documents. Twenty-two documents were hand selected for analysis using themed analysis with the assistance of NVivo. Seven main themes were identified: Entrepreneurial Dynamics, Sustainability Drivers, Digital Technologies, Circular Economy Practices, Barriers to Sustainability, Business Model Innovation and Integrated Sustainability. The findings reveal that founder motivation and leadership orientation is key to the development of sustainability-oriented business models. The operational efficiency, transparency of the supply chain and engagement of consumers are enhanced by digital technologies, including artificial intelligence, blockchain and digital platforms. Mechanistic approaches to waste reduction and resource efficiency such as recycling, upcycling, repair, resale, reuse and extension of product life cycle offer ways to practice the circular economy. The study also revealed that the start-ups do encounter the following hurdles: Limited funds, high sustainable material costs, large number of regulations and certification requirements, and consumer price sensitivity. The study shows that integration of sustainability is a multi-dimensional process, which needs to be aligned with entrepreneurial leadership, digital innovation, principles of circular economy, and business model innovation.