corporate social responsibility in the fashion...
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Corporate Social Responsibility in
the Fashion Industry Challenges for Swedish Entrepreneurs
Master thesis within Managing in a Global Context
Authors: Annemiek Rian Kooi
Frauke Dietrich
Tutor: Anna Blombäck
Jönköping May 8, 2015
Acknowledgments
We would like to thank our supervisor Anna Blombäck for her great support and guidance
during the process of developing our master thesis. Further we would like to thank our fel-
low students for their constructive feedback during the seminars.
The completion of this thesis would not have been possible without the contribution of all
involved entrepreneurs. We would like to thank them for their time as well as the trust and
interest shown in our thesis.
Master Thesis in Managing in a Global Context
Title: Corporate Social Responsibility in the Fashion Industry – Challenges for Swedish Entrepreneurs
Author: Annemiek Rian Kooi
Frauke Dietrich
Tutor: Anna Blombäck
Date: 2015-05-08
Subject terms: Corporate Social Responsibility, fashion industry, Swedish entre-preneurs
Abstract
Background: Nowadays companies are facing an increased need to adopt Corporate Social Responsibility (CSR) in their business strategy. This pressure is especially high in industries which cause a great environmental impact and are also highly exposed to the public. Recent scandals raised ethical discussions in the fashion industry, which demonstrates the need for more CSR in this sector. In response to these developments of ethical concern in the fashion industry, several entrepreneurial companies have entered the market with an alternative sustainable approach.
Problem: CSR and its chances are widely discussed in the existing literature. However, its challenges, especially those that entrepreneurs are facing, have so far been neglected. But due to their innovative power, entrepreneurs could drive the fashion industry into a more sustainable direction. Therefore, this thesis aims to explore whether entrepreneurs in Sweden with a sustainable orientation perceive particular challenges with regard to their CSR activities. By finding out what specific challenges Swedish entrepreneurs are facing, it will be revealed what needs to be done in order to ease the path for sustainable entrepreneurs in the fash-ion industry.
Method: In order to answer the research question a qualitative study was conducted using a narrative inspired approach. Hence, five Swedish entrepreneurs were interviewed that are active in the fashion industry with a sustainable business orientation. The researchers aimed to investigate the stories of the interviewed entrepreneurs in order to find out if they are facing any challenges regarding CSR with their sustainable business approach. The interviews were conducted both by telephone and email.
Conclusion: It was identified that the entrepreneurs were facing different kinds of challenges regarding the size of the business, financial resources, the awareness of the need for CSR, supplier selection and a lack of institutionalisation. Furthermore a model was developed which demonstrates the interrelations of challenges and which also shows the positive influences that an increased institutionalisation in the fashion industry would have. It was noticed that the fashion industry is currently undergoing a transformation towards more CSR and this thesis shall serve as a contribution towards a more sustainable fashion industry.
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Table of Contents
1 Introduction .......................................................................... 1
1.1 Background ................................................................................... 1 1.2 Problem discussion ....................................................................... 2 1.3 Outline ........................................................................................... 3
2 Theoretical Framework ........................................................ 4
2.1 Corporate Social Responsibility .................................................... 4
2.1.1 The need for Corporate Social Responsibility ..................... 4 2.1.2 Defining Corporate Social Responsibility ............................ 4 2.1.3 Corporate Social Responsibility vs. Sustainability .............. 5
2.1.4 Chances and challenges of Corporate Social Responsibility ................................................................................ 6 2.1.5 Sustainability in Sweden ..................................................... 7
2.2 Fashion Industry ............................................................................ 8
2.2.1 Supply chains and market conditions ................................. 8 2.2.2 Corporate Social Responsibility in the fashion industry .......................................................................................... 9 2.2.3 Institutionalisation of Corporate Social Responsibility .............................................................................. 11
2.3 Sustainable entrepreneurship in the fashion industry .................. 12 2.3.1 Entrepreneurs in the fashion industry ............................... 12
2.3.2 Sustainable entrepreneurs ................................................ 13
2.4 Summary ..................................................................................... 14
3 Methodology ....................................................................... 15
3.1 Research design ......................................................................... 15
3.1.1 Qualitative study ............................................................... 15 3.1.2 Narrative analysis ............................................................. 15
3.2 Data collection ............................................................................. 16 3.2.1 Choice of entrepreneurs ................................................... 16 3.2.2 Interview settings .............................................................. 17
3.2.3 Interview method .............................................................. 18 3.3 Data analysis ............................................................................... 18
3.4 Limitations: Trustworthiness ........................................................ 19
4 Empirical Studies ............................................................... 21
4.1 Just Africa ................................................................................... 21 4.1.1 Company presentation ...................................................... 21 4.1.2 Interview findings .............................................................. 21
4.2 Uma Bazaar ................................................................................ 23
4.2.1 Company presentation ...................................................... 23 4.2.2 Interview findings .............................................................. 23
4.3 ELSA AND ME ............................................................................ 25 4.3.1 Company presentation ...................................................... 25 4.3.2 Interview findings .............................................................. 25
4.4 Nerdy by Nerds ........................................................................... 27
4.4.1 Company presentation ...................................................... 27
4.4.2 Interview findings .............................................................. 27
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4.5 Mini Rodini .................................................................................. 29 4.5.1 Company presentation ...................................................... 29 4.5.2 Interview findings .............................................................. 29
5 Analysis & Results ............................................................. 31
5.1 Types of challenges .................................................................... 31 5.1.1 Size of the business .......................................................... 31
5.1.2 Financial resources ........................................................... 31 5.1.3 Awareness of the need for Corporate Social Responsibility .............................................................................. 32 5.1.4 Supplier selection ............................................................. 32 5.1.5 Institutionalisation ............................................................. 33
5.2 Interrelations of challenges ......................................................... 34
6 Conclusion .......................................................................... 37
7 Discussion .......................................................................... 38
7.1 Authors reflections ....................................................................... 38 7.2 Suggestions for further research ................................................. 38
List of References .................................................................... 40
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Figures Figure I: Interrelations of challenges: Current status ....................................................... 34
Figure II: Interrelations of challenges: Towards institutionalisation .............................. 35
Tables Table I: Participants of this study .......................................................................................... 17
Appendix Appendix 1: Email interview questions ................................................................................ 48
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1Introduction
1.1 Background
Clothing has always been a basic human need (Schaltegger & Hansen, 2013). Even though the purpose of fulfilling this basic need remains unchanged, fashion trends itself change constantly. Sustainability on the contrary has to do with a long-term perspective. Since the production and use of fashion cause a significant amount of waste, one would assume that fashion constraints sustainability. Despite this contradiction, fashion should not inevitably lead to a conflict with ethical principles as stated by Gardetti and Torres (2013).
The pressure on ethical principles is especially high in industries which cause a great envi-ronmental impact and high visibility in the public perception (Seuring, Sarkis, Muller & Rao, 2008). Recent scandals like the breakdown of a fashion manufactory in Bangladesh in April 2013 raised ethical discussions and demonstrated that the fashion industry is highly exposed to the public (Caniato, Caridi, Crippa & Moretto, 2012). Fashion companies are not only held responsible for environmental and social problems they cause themselves, but also for those created by their suppliers (Koplin, 2005). As explained by Caniato et al. (2012), companies in the fashion industry make use of suppliers located across the world by sourcing raw materials like fibres and leather from distant locations and by subcontracting diverse production activities like dyeing, cutting and sewing to different external partners. Another ethical concern they mention, which arises in connection with the fashion produc-tion, is its high environmental impact. Intensive use is made of chemical products and natural resources during the production process, especially in the phases of dyeing, drying and finishing (De Brito, Carbone & Blanquart, 2008). Fashion companies often have their goods produced in low-labour-cost countries from where they need to be shipped to con-sumers in Europe and the US, which results in further environmental impacts due to the transportation process (Abecassis-Moedas, 2006; Borghesi and Vercelli, 2003). Schaltegger and Hansen (2013) state as a reason for this outsourcing of parts of the clothing produc-tion processes the pursuit of comparative cost advantage due to the high price pressure which the fashion industry has been facing for the last few decades. They further state that this development is accompanied by ethical problems with suppliers concerning working conditions and environmental pollution.
As response to these recent developments of ethical concern in the fashion industry, a number of entrepreneurial companies have entered the market with an alternative value creation approach, which aims to cause less of the above mentioned impacts on environ-ment and society (Schaltegger & Hansen, 2013). These new kind of entrepreneurs usually show a high level of environmental and social performance, which attracts consumers who are particularly concerned about sustainability and ethical issues (Hockerts & Wüstenhagen, 2010). According to Schumpeter (1987), a sustainable entrepreneur sees unsustainable con-ditions as reasons for creating new and more sustainable products and services. However, sustainability-oriented innovations do not only include products, services and production processes, but can also become focus of the core business and revenue model and there-fore it represents a central element of the company’s role in shaping society (Hansen, Große-Dunker & Reichwald, 2009). During the first decade of the 21st century, an increas-ing number of young entrepreneurs considered sustainable fashion as the foundation for their business and not a new selling point (The Guardian, 2013).
As stated by Schaltegger and Hansen (2013), a sustainable orientation can create competi-tive advantages for entrepreneurs, like value generation through healthy products. The in-
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troduction of organic textiles for example can represent additional customer benefits, when there is a high level of health awareness among customers. Also, entrepreneurs who act ethically can avoid the reputational risk of scandals which accompany conventional fashion production procedures. The increasing importance of sustainable development therefore creates new opportunities for businesses but can also represent challenges for the entrepre-neurs that can be caused by for example costly sustainable actions (Hockerts & Wüstenha-gen, 2010). Especially since there have always been tensions in businesses between ethics and profits, private gain and public good, capitalism and moral beliefs, it is of relevance to investigate both in the chances as well as the challenges embedded in ethical behaviour (Vyakarnam, Bailey, Myers & Burnett, 1997).
1.2 Problem discussion
In the recent literature and also in business practices, much attention has been paid to the need for sustainable development (Brundtland, 1987), while the focus is traditionally laid on larger firms and their sustainable activities. However, due to the innovative power of entrepreneurship, newly established businesses have got the potential to work as the engine of sustainable development which can lead into a more sustainable future and thus should not be neglected in the literature anymore (Pacheco, Dean & Payne, 2010). What differen-tiates sustainable entrepreneurs from other start-up companies is their distinct value-based approach and their intention to generate social and environmental changes in society (Hockerts & Wüstenhagen, 2010). In this thesis these kind of entrepreneurs are referred to as sustainable entrepreneurs. Moreover, in this context entrepreneurs are considered as newly established companies. Entrepreneurial activities in already existing companies are not considered. Furthermore, due to their status as newcomers, entrepreneurial companies are more credible when claiming to be part of the solution rather than the problems, which are caused by the incumbents and their larger impacts on the environment (Hockerts, 2006). As a result, entrepreneurial companies are more likely to engage in sustainable en-trepreneurship than market incumbents as stated by Hockerts and Wüstenhagen (2010). This trend to focus on sustainability-related entrepreneurs is perhaps an adequate counter-trend towards the focus on large firms in existing literature on ethical behaviour and sus-tainable activities.
Despite the growing interest and enthusiasm about the positive impacts that entrepreneurs can create on sustainable development, Pacheco et al. (2010) remark that they may also be facing challenges and limitations in this approach. They state that even though sustainable business models can contribute to the collective benefit of the society, entrepreneurs them-selves may face disadvantages through acting ethically, especially if their competitors do not dedicate themselves to these high ethical standards. Also, pursuing a sustainable orientation is likely to be more difficult due to the smaller size and newcomer status of entrepreneurial companies. These might entail limited resources, a smaller network, less economies of scale and possibly less experience then well-established companies can profit from. This other side of the coin, the challenges and also the efforts and struggles to behave ethically, are usually neglected in existing research.
As stated above, the fashion industry is particularly of interest in this matter due to its large impact on society and sustainability. Also, in this industry an outspoken sustainable orienta-tion is especially relevant because of the high public visibility of the industry’s actors and their conduct with regard to sustainability. One country, which is leading in sustainability approaches in the fashion industry, is Sweden since one of the pioneers in sustainable fash-ion originates from here (The Swedish Institute, 2013). This is why Swedish entrepreneurs
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in the fashion industry will be in the focus of this thesis.
This thesis aims to explore whether entrepreneurs in Sweden with a sustainable orientation perceive particular challenges with regard to their CSR activities. By finding out what spe-cific challenges Swedish entrepreneurs are facing, it will be revealed what needs to be done in order to ease the path for sustainable entrepreneurs in the fashion industry. Finally, this research might help to drive the fashion industry into a more sustainable direction by tell-ing the stories of Swedish entrepreneurs so that followers can learn from their challenges. The research is focussed on entrepreneurs which are active in the fashion industry as de-signers and retailers. In order to elaborate on these issues, interviews following a narrative inspired approach with Swedish entrepreneurs will be conducted to find out what their ex-periences are in having a sustainable orientation in the fashion industry and if they are fac-ing any challenges.
1.3 Outline
Chapter 1 Introduction: In this chapter the background of ethical behaviour among entrepreneurs is presented and the special relevance of the fashion industry in this context is highlighted. It is followed by the problem discussion, which leads to the research question and the purpose of the thesis.
Chapter 2 Theoretical framework: This chapter provides the theoretical background of ethical behaviour in the fashion industry as well as information on sustainable entrepreneurship. These theories are based on prior literature studies.
Chapter 3 Methodology: The third chapter presents the method which has been used to collect data for this research. Moreover, the selection of interview partners is presented, and a description has been given how the interviews were prepared and conducted. Eventually the methods used for data analysis are described.
Chapter 4 Empirical studies: In this chapter, first the respective companies are described and thereafter the findings derived from the empirical research are presented. The results of the interviews are presented separately for every entrepreneur.
Chapter 5 Analysis and results: Within this chapter, the interviews are ana-lysed. Moreover, possible connections between the outcomes of the interviews are made. Conclusions were drawn based on in- terpretations of the outcomes.
Chapter 6 Conclusion: In chapter six the results of the research are pre- sented, which are utilised to answer the stated problem question in the introduction.
Chapter 7 Discussion: The last chapter of this master thesis includes the au-thors’ reflection about the thesis as well as limitations of the con-ducted research. Moreover, future research directions are addressed.
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2 Theoretical Framework
2.1 Corporate Social Responsibility
2.1.1 The need for Corporate Social Responsibility
One of the greatest challenges which all businesses are facing today is the need to develop a business model that includes ethical leadership, sustainability and social responsibility with-out sacrificing profitability, revenue-growth and other measures of financial performance (Fry & Slocum, 2008; Stubbs, 2010).
Whereas in earlier times this way of business performance was only an option, it is now a must for companies to act in a socially responsible manner and to combine financial aims with caring about the environment, their employees and the local community. In order to ensure that businesses align with these rules of conduct, different international institutions have even set certain guidelines and standards during the last years as explained by Cramer (2006). Certain companies, however, go beyond what is legally required by them and en-gage in socially responsible activities not only due to rules and regulations, but also for purely ethical reasons, because it is “the right thing to do” or for instrumental reasons, be-cause it enhances their business profitability (Heal, 2010; Garriga & Melé, 2004).
Nowadays, Cramer (2006) remarks that a company cannot afford anymore to be publicly criticised due to poor working conditions, the violation of human rights or damages of the environment. Such scandals can have a major impact on the company’s image and can in-fluence the company’s perception of both external and internal stakeholders. Cramer (2006) concludes that this could result in the loss of customers and decreasing sales figures as well as the refusal of collaboration of suppliers and it could also influence the employ-ees’ loyalty. Some companies have taken this new responsibility as an opportunity and pre-sent themselves now as socially responsible actors. They make use of their socially respon-sible performance by increasing their market share, achieving cost advantages and motivat-ing their staff etc.
The ambition of combining the original financial business goals and also considering the needs of the environment and the company’s stakeholders is Corporate Social Responsibil-ity (CSR) (Cramer, 2006). This concept will be further defined in the following chapter.
2.1.2 Defining Corporate Social Responsibility
CSR is a term which has been defined in various ways in the existing literature. These varia-tions originate from the different assumptions about what CSR implies, which varies from minor legal and economic obligations to broader responsibilities to the wider society (Ja-mali, 2008). In this thesis the view of Cramer (2006) of CSR is adopted: Companies that adopt CSR in their business practice look ahead and determine for themselves which measures of social and environmental importance they are willing and able to take. They take account for what society asks of them and choose measures which match with their own business strategy and vision. However, the entrepreneurs which are looked at in this thesis are marked by showing a more proactive approach when it comes to their CSR ac-tivities. They do not only act sustainably to an extend that is asked for by society, but their CSR performance goes beyond these expectations. Another aspect of CSR is the open communication of the company’s business practices with internal and external stake-holders.
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As stated by Cramer (2006), socially responsible companies aim to find a balance between people (social well-being), planet (ecological quality) and profit (economic prosperity):
People in this context refers to both internal and external social policies. The internal so-cial policy involves the nature of employment, such as: labour and management relation-ships, health and safety, training and education as well as diversity. The external social pol-icy includes three different categories:
1. Humans rights, such as non-discrimination, freedom of association and collective bargaining, forced labour, child labour, disciplinary practices and indigenous rights.
2. Society, which includes competing and pricing, bribery and corruption and com-munity activities.
3. Product responsibility, which means consumer health and safety, advertising as well as the respect of personal privacy.
Planet represents the environmental impact which the company’s production activities leave. This includes the use of scarce goods, like fuel, water or other raw materials and also the environmental impact of the supply chain, such as the transportation of goods.
Profit in the widest sense means the company’s contribution to economic prosperity, both in a direct and indirect way. The direct impact resembles the money flow between a com-pany and its key stakeholders and also the economic impact of the company on these stakeholders. The indirect impact means the side effects of the company’s activities due to innovation and its contribution to the gross domestic product or national competitiveness.
Cramer (2006) further states that the actions a company takes with regard to these three aspects, people, plant and profit, are dependent on the company’s strategy and vision. However, the view of the outside world also plays a major role for the company’s CSR ac-tivities. Since issues such as human rights and caring for the environment are experienced differently in a global context, tensions about how the company’s actions are perceived might come up. Cramer (2006) explains that CSR does not only concern large and multina-tional companies, but is also increasingly considered by smaller companies due to the eco-nomic globalisation. Within this global network, even small companies are more and more held accountable for their actions and their supply chains. Acting in a socially responsible manner is also of importance with regard to the supply chains, which the company oper-ates in, especially if these are international relations. Companies need to consider how their supply chains can be organised in a responsible way and also who is involved in it. These questions play a role both in large and smaller companies due to the increasing internation-alisation of supply chains.
2.1.3 Corporate Social Responsibility vs. Sustainability
The concept of “doing well by doing good’’ by integrating economically relevant social and environmental issues into the company’s strategy is not only the meaning of CSR, but also resembles common definitions of a sustainable orientation (Ionescu-Somers, 2010). While some researchers restrict the term sustainability to environmental issues, others even use it as a synonym for CSR (Bansal & DesJardine, 2014).
According to James (2001) sustainable development is defined in three pillars, which cover the same topics as Cramer’s definition of CSR. The first pillar consists of “economic de-velopment”, which means the generation of wealth and is equivalent to the above stated “profit”. The pillar “environmental protection” demonstrates, just as the “planet” perspec-tive, the avoidance of environmental damage. Lastly, the third pillar “social inclusion” re-
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sembles the “people” perspective, as its aim is to avoid gross inequalities of wealth, health and life chances. Also the European Commission interprets CSR as “a corporate contribu-tion to sustainable development” (Kleine & Von Hauff, 2009).
Given these common definitions of CSR and a sustainable orientation as stated above, these two terms are used synonymously within this thesis and cover both the social, the en-vironmental and the economic perspective.
2.1.4 Chances and challenges of Corporate Social Responsibility
When it comes to implementing measures of CSR in the company, it is of importance to evaluate the costs and benefits that these measures have for the company. This is of special relevance in view of the seemingly incompatible tensions between ethics and profit, private gain and the public good (Vyakarnam, Bailey, Myers & Burnett, 1997). Companies have to consider, if the often costly implementation of their sustainable orientation pays off in the end or if acting in a socially responsible way even increases sales and if there is no trade-off at all. The question is, if there necessarily needs to be a conflict between private gain and public good.
The common belief is that maximising the company’s profit does not lead to social good (Heal, 2010). This raises the question on the other hand, if achieving the social good leads to an increased profit, even though this can imply a significant consumption of the com-pany’s resources, as stated above. However, sustainability should not oppose the financial performance of the company; social and environmental goals should rather be set in addi-tion and with the aim to reach all goals together (Nita & Stefea, 2014). In the following, ways how companies can find business value in measures of CSR are discussed.
Thorpe and Prakash-Mani (2003) name as one major opportunity of adopting CSR in the company’s strategy cost savings by the reduction of the company’s environmental impact. Enhancing environmental improvements can have an immediate impact on the company’s financial performance. These savings can be generated directly by for example using less energy and materials. Thorpe and Prakash-Mani (2003) further state that another way of cost cutting are lower pollution costs in form of charges for waste handling and disposal or fines which the company needs to bear for breaking environmental regulations. Also, a re-organisation of the production processes and material flows can lead to a higher productiv-ity if for example waste volumes and the necessary labour and machine use of waste han-dling are reduced. However, Hart and Ahuja (1996) state on the contrary that in some cases a reduction of the environmental impact can only be achieved by the installation of new production systems or equipment. This often goes hand in hand with a consumption of major financial resources of the company and the question is if and when these costs will be made up for by the energy savings or increased productivity.
Another opportunity of reducing costs and increasing productivity is a responsible Human Resources Management, since this has positive impacts on the employee motivation, reten-tion and recruiting (Marin, Ruiz & Rubio, 2009). Treating employees well by implementing measures such as fair loans, a safe and clean working environment and health and educa-tional measures can enhance the employees’ motivation and productivity. Moreover, com-panies safe costs for recruitment and the training of new employees if they alter their at-tractiveness as an employer for existing employees (Thorpe & Prakash-Mani, 2003). Thorpe and Prakash-Mani (2003) further explain that companies can also increase their turnover and profit from public relations benefits by helping to develop local economies
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and supporting local communities with measures such as local recruitment and local pro-duction.
CSR activities have a major impact on the company’s reputation in the eyes of consumers and regulators, which is an intangible asset, that can help the company to increase sales and attract both business partners as well as employees (Heal, 2010; Thorpe & Prakash-Mani, 2003). Even though the measurement of reputation is not as precisely possible as for other aspects of the company’s success, previous studies have shown that CSR leads to reputa-tional gains, of which the strongest component is the improvement of environmental proc-esses. The positive influence of the company’s sustainable orientation on the consumer be-haviour can be demonstrated by an example as stated by Heal (2010): Experimenters in a department store in Manhattan used two competing ranges of towels. Both were produced of organic cotton in developing countries under fair trade conditions. Despite their exem-plary degree of social responsibility, it was not labelled on the towel packages in the store. The experimenters labelled one of the towel ranges as sustainably produced products. The effects on sale of the labelled product were dramatic and sales rose over those of the com-petitors. Even when the price of the labelled products was increased by 10 %, sales contin-ued to rise. Only when the price was raised by 20 %, sales started to drop to the original level. The example demonstrates that consumers clearly favour sustainable products and are even willing to accept higher prices to a certain extent. Therefore, the sustainable orien-tation of a company can and should be used in marketing their products.
Despite the above stated opportunities, which are provided by acting in a socially responsi-ble way, sustainability does not automatically imply an increased business success as Thorpe and Prakash-Mani (2003) explain. It can contribute to the company’s success, but it can naturally not compensate a poor business practice or poor decisions with regard to marketing, production, finance or the like. Every CSR activity must be evaluated in terms of costs and benefits just like other business activities. The authors explain that it can also be the case, that minimal requirements with regard to sustainability can be the maximal ef-fort which the company is willing and able to include in its strategy. But the more CSR is integrated into the business management and its processes, the better chances and limita-tions will be understood and managed.
In existing research the portrayed companies and their efforts with regard to CSR are gen-erally large and established companies (Nybakk & Panwar, 2015), which possess enough re-sources in any kind to adapt measures of CSR. The above mentioned chances and chal-lenges therefore do not consider the company’s size or status of establishment. However, the prerequisites for entrepreneurs are quite different from those of large firms, since they generally possess less (financial) resources, produce in smaller quantities and therefore ex-perience less economies of scale, possess a smaller network of stakeholders and experience less public perception, only to name a few differences. This raises the question, which role CSR plays for entrepreneurs and newly established businesses and in how far these can benefit from engaging in business in a responsible way. Before further explaining the role of CSR for entrepreneurs, sustainability will be addressed on a nationwide level for Sweden.
2.1.5 Sustainability in Sweden
As early as at the end of the 19th century, Sweden was one of the countries that developed several philosophies regarding sustainability according to Sweden’s Ministry of the Envi-ronment (2002). In the second half of the 20th century, the striving for social and eco-nomic development made place for an striving for ecologically sustainable development. Until today, Sweden’s national sustainable development strategy is based on a broad ap-
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proach and contains social, economic and environmental priorities (Ministry of the Envi-ronment, 2002). Over the years, Sweden has carried out several methods to accomplish the country’s sustainable strategy. For example, more than 99 % of all household waste is recy-cled (The Swedish Institute, 2014). As they stated, Sweden has gone through a recycling revolution in the last decades, due to the fact that in 1975 only 38 % of household waste was recycled. Not surprisingly, Sweden has been voted the most sustainable country in the world in 2013 (Environmental Leader, 2013).
Also with regard to the fashion industry, Sweden undertook several steps to contribute to sustainability. In 2008 the Sustainable Fashion Academy (SFA) was founded in Sweden in response to the complex sustainability changes that the industry is facing nowadays. Know-ing that the apparel industry is very influential and that it can lead the way to a sustainable society, SFA’s vision is to help create happier people, stronger communities and a resilient planet. Therefore, SFA aims to enhance industry innovations that help realise their goal by providing knowledge and tools to leaders and entrepreneurs at different levels within the fashion industry. The founding member of SFA is H&M, supported by other leading Swedish fashion retailers like Lindex, KappAhl or Filippa K (The Sustainable Fashion Academy, 2015).
Another initiative that demonstrates that Sweden contributes to a more sustainable fashion industry is the introduction of a new research programme, joined by people from both the business sector and research community, is called Mistra Future Fashion (MISTRA, 2010). This programme’s aim is to contribute to a more sustainable society and give the Swedish fashion industry greater competitiveness and sustainable skills. Furthermore, innovative so-lutions to solve the challenges faced by the fashion industry and the society have been en-couraged. According to MISTRA (2010), fashion is becoming a cohesive programme that focuses on the following four areas: changing markets and business models, design proc-esses and innovative materials, sustainable consumption and consumer behaviour and lastly policy instruments. Moreover, the programme wants to show an industry that is facing big global and environmental challenges but is simultaneously highly creative and innovative.
Outside the fashion capitals, such as Paris, London or New York, the Swedish fashion in-dustry has developed into a more and more competitive export industry in the recent years according to Hauge, Malmberg and Power (2009). Due to the fact that Sweden is a high-cost location, outsourcing to low-cost countries plays an important role in the Swedish fashion industry, which is known to be knowledge-based and innovation-focused. There-fore, the creation of value and profitability originates from innovative designs, brand value, efficient marketing channels as well as logistics and distribution for fashion firms in Swe-den.
2.2 Fashion Industry
2.2.1 Supply chains and market conditions
Traditionally, a distinction has been made between the fashion industry, which produces high fashion, and the apparel industry, which makes ordinary clothes or mass fashion (Ma-jor, 2013). However, by the 1970s this distinction has faded. When one refers to fashion industry in this thesis, no distinction will be made between the original meaning of the fashion industry and apparel industry and thus these terms are used equivalently.
The fashion industry is an industry exposed to several challenges, since it is characterised by short product life cycles, unpredictable demand, huge varieties in products and long and
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inflexible supply chains. Therefore, an efficient supply chain management can mean the difference between either success or failure (Sen, 2008). For a long time, the fashion indus-try has reached the attention of researchers in the field of operations and supply chain management (Lowson, King & Hunter, 1999; Christopher, Lowson & Peck, 2004; Bruce, Daly & Towers, 2004), due to increasing complexity and dynamics (Brun & Castelli, 2008). Especially on the retail side the competition is strong (Newman & Cullen, 2002). For ex-ample, the scale and power of major retail buyers, the nature of sourcing and supply chain decisions which are more global in nature have contributed to this complexity (Brun & Castelli, 2008). Due to rapid changes within the fashion market, the success or failure of a company is largely based on the organisation’s flexibility and responsiveness (Christopher et al., 2004). The road towards competitiveness passes through the management of the en-tire supply chain network and thus competitive sustainable advantages through low cost or high differentiation are only reached by managing the interconnections among the actors within the supply chain (Schnetzler, Sennheiser & Schonsleben, 2007).
The supply chain of the fashion industry consists of several production segments, which were demonstrated by Sen (2008): At the top of the supply chain, fibre and yarn are pro-duced by fibre producers using natural or synthetic materials. In the second segment of the chain, fibre production takes place: raw fibres are spun, woven or knitted into fabric. The third segment of the fashion supply chain consists of the apparel manufacturers of indus-trial textile products. These manufacturers start with the design of the garment to be made. Pattern components are made from the designs, which then are used to cut the fabric. The cut fabric will then be assembled into garments, which will be labelled and shipped. Sen (2008) explains that of all segments within the fashion supply chain, the apparel segment is the most labour-intensive and fragmented. The last segment of the fashion supply chain are the retailers, who offer the apparel and other textile products to the customers. Sen (2008) also mentions that a strategic question every apparel producer asks itself is where to carry out the manufacturing operations. According to Sen (2008), many fashion producers decide on lower-cost off-shore production in for example Asia and Latin America. If the order lead time is long, retailers need to order high quantities in advance of the season’s start when little is known about customer demand (Sen, 2008). The lead time for Asian produc-tion for example can be up to several months and depends on the specific product and the place where the product is produced (Hauge, 2007).
The necessity for lower production costs and shorter lead times is driven by the ongoing trend in the industry towards a distinction between slow fashion and fast fashion. Whereas fast fashion has been characterised by the transformation of trendy design into products that can be purchased by the masses and enables through-away articles (Sull & Turconi, 2008), slow fashion encompasses slow production and consumption (Jung & Jin, 2014). Due to the strong globalisation and the increased international competition that comes along with it, companies in the fast fashion industry want to guarantee low prices, even though this requires decreasing production costs and pressure on the manufacturers. Many developing economies aim to get their share of the world’s fashion markets, even if this means lower wages and poor working conditions (Turker & Altantas, 2014). This devel-opment raises the questions to what extent fashion retailers are able to control their supply chains and guarantee sustainability.
2.2.2 Corporate Social Responsibility in the fashion industry
Over the past decade, CSR and ethical behaviour started to matter in the fashion industry (Emberley, 1998; Moisander & Personen, 2002). Sustainable development and CSR have increasingly been incorporated in governmental policy and corporate strategy (De Brito,
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Carbone & Meunier Blanquart, 2008). Companies have realised that affordable and trend-sensitive fashion, while at the same time being highly profitable, also raises ethical issues (Aspers & Skov, 2006). Due to the given characteristics of the supply chain and some specific trends the fashion industry is particularly sensitive to CSR in various ways. A high environmental impact is generated through the production process, which is marked by the intense use of chemical products and also natural resources as De Brito et al. (2008) explain. To state an example, the production of an average cotton-shirt leads to the consumption of about 2,700 litres of water (WWF, 2015). Especially the use of fibres and wool requires big amounts of water and pesticides. Synthetic fibres on the other hand are generated from non-renewable re-sources and its production requires a considerable amount of energy (Myers & Stolton, 1999). These factors are not only harmful for the environment, but the use of chemicals can also have an influence on the consumer’s health.
The search for lower production costs has furthermore led to a significant relocation of production sites to developing countries (Bonacich, Cheng, Chinchilla, Hamilton & Ong, 1994). Around 70 % of the clothes that have been imported to the EU originate from de-veloping countries (Laudal, 2010). According to De Brito et al. (2008) it has even led to the disappearance of traditional European industry, like the spinning and weaving, which led to a loss of employment in the European fashion industry. In developing countries however, low-skilled workers could easily be employed in this industry, but they are facing poor working conditions (Rosen, 2003). These poor working conditions are even enhanced by the constant price pressure that the industry is facing and that is passed on through the dif-ferent production stages as described above.
Another impact globalisation has on sustainability are the increased transport distances, which is the reason why the fashion industry accounts for 4 % of the worldwide exports (World Trade Organization, 2008). Goods need to be shipped all over the world until they have undergone all production stages, which entails an immense consumption of fossil-fuels. Due to different trends in the fashion industry, short product life-cycles and the im-portance of responsiveness, which lead to smaller quantities of deliveries and shorter deliv-ery times, this impact on transportation has even increased (De Brito et al., 2008).
Obviously, companies are aware of their responsibility to society: they have recognised the importance of their supply chain partners in managing the environment (Vachon, 2007; Bai & Sarkis, 2010). Consumers and the society ask for a greater level of responsibility and transparency in the way products are produced, distributed and sourced (MacCarthy & Jayarathne, 2012). Public pressure on companies to act responsibly increases both socially and environmentally (McKinsey, 2008). Therefore, fashion companies increasingly focus on sustainability and have the aim to ensure sound working and production conditions through their supply chains. Increased attention to sustainability has been caused by eco-nomic, social and environmental problems in developing countries (Turker & Altantas, 2014). As they stated, the tension in the exchange of resources between developing and de-veloped countries lies at the heart of sustainable activities.
The upcoming globalisation entails more trade-offs for the industry: the global network of retailers, wholesalers, agents, contractors and sub-contractors makes the fashion supply chain extremely complex and difficult to control (Emmelhainz & Adams, 1999; Giesen, 2008; MISTRA, 2010). According to Langhelle, Blindheim, Laudal, Blomgren and Fitjar (2009), the fashion industry is questionably known for having supply chains that are diffi-cult to keep track of. The longer the supply chain is, the harder it will be for the retailer to
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ensure and take responsibility that all production processes are in line with their CSR stan-dards.
Due to the outsourcing of processes to developing countries across the world, fashion brands and retailers are at risk of losing track of the channels in their fashion supply chain. Transparency and traceability could provide another way to large-scale sustainability, which allows the consumer to easily see where their fashion is really from and compare the sus-tainability of different brands (The Guardian, 2013). In order to enhance the desirable visi-bility of their sustainable orientation, fashion retailers start focusing on eco-labels and other sustainable approaches. Fashion companies are aware of the critical eye of the public upon their activities, and thus they can benefit from this critical overview by carrying out new strategies as eco-labels and standards, environmental and social audits, partnering, commu-nities of practice, fair trade and clean transport modes (De Brito et al., 2008). Several com-panies have introduced a variety of initiatives in order to deal with the negative social and environmental impact of fashion, for example by promoting fair trade cotton, launching traceability programmes in the supply chain and introducing labelling schemes for envi-ronmentally friendly laundry and drying (DEFRA, 2010). Other ways of ensuring ethical conduct are labels that commit to minimum labour standards and fashion made from recy-cled material (Domeisen, 2006).
2.2.3 Institutionalisation of Corporate Social Responsibility
Institutional pressures play a critical role in explaining the establishment of CSR in organi-sations facing social and environmental demands from a variety of stakeholders, like gov-ernment authorities, industry organisations and non-governmental organisations (Bitzer & Glasbergen, 2010; Campbell, 2007; Hoffman, 2001; Joyner & Payne, 2002; Matten & Moon, 2008; Quazi, 2003; Wright, Smith & Wright, 2007). Institutional pressures are de-fined as social, legal and cultural forces outside the organisation that exert influence on how the companies perceive the environment and how they eventually determine strategic actions (Menguc, Auh & Ozanne, 2010). Furthermore, many new labels, certifications, guidelines and multi-stakeholder initiatives have also contributed to an infrastructure of CSR that puts pressure on organisations to address the impact of their activities on society (Waddock, 2008).
For entrepreneurs, this trend towards an institutionalisation of sustainability may entail both chances but also disadvantages. On the one hand, it might bring the advantage that competitors are now forced to engage in CSR activities. On the other hand, a sustainable orientation in certain aspects of the business can result in higher costs for e. g. cleaner pro-duction methods, which can be a challenge for an entrepreneur who does not possess the same amount of resources as a large and well-established company has. An institutionalisa-tion of sustainability could also be realised by granting entrepreneurs loans and subsidies when they start their business with a sustainable approach. This could serve as an incentive to increase CSR in the industry.
Since the world is facing the devastating impact of climate change and an increasing atten-tion towards corporate sustainability develops, the world needs innovators that lead the way towards more sustainable solutions (United Nations Global Compact, 2012). Accord-ing to the United Nations (UN) Global Compact, the fashion industry has the potential to be such an innovator, working proactively to address critical social, environmental and ethical challenges on a global scale. The UN Global Compact is a strategic policy initiative for companies that are committed to aligning their operations and strategies with ten prin-ciples which are universally accepted in the area of human rights, environment, labour and
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anti-corruption. In order to make the fashion industry a leading innovator on sustainability, the UN and the Nordic Initiative Clean and Ethical have combined forces in order to en-sure that the fashion industry will be the first-ever sector-specific initiative under the UN Global Compact (Pedersen & Gwozdz, 2014). The Nordic Initiative Clean and Ethical (NICE) is a joint venture by the fashion industry in the Nordic countries, which is led by the Nordic Fashion Association and targets the global fashion community. The main goal of the Nordic Initiative Clean and Ethical is raising awareness and promoting business practices which are sustainable and responsible, as stated in the UN Global Compact (2012). The strong alliance between the fashion industry (which is represented by the net-work organisation Danish Fashion Institute with its Nordic partners) and the UN enables one the of largest industries in the world to move towards a more sustainable future (United Nations Global Compact, 2012).
Another organisation which is driving the change towards a more responsible treatment of human and labour rights, also in the fashion industry, is the International Labour Organiza-tion (ILO). The aim of ILO (2015) is the promotion of social justice and internationally recognised human and labour rights. They help to enhance the establishment of decent work and working conditions, thereby contributing to lasting peace, prosperity and pro-gress for working and business people. In Bangladesh, the breakdown of a garment factory in April 2013 led to a range of local institutionalisation in this industry as demonstrated by Miller (2014). After the breakdown of the garment factory, several mainly European retail chains changed their approach of purchasing products which were produced under unsafe working conditions and signed a legally-binding agreement, the so-called Accord on Fire and Building Safety, in order to enhance the work safety in the manufactories.
2.3 Sustainable entrepreneurship in the fashion industry
2.3.1 Entrepreneurs in the fashion industry
The fashion industry is a dynamic and demanding sector that is marked by a high level of competition. Therefore the existing literature on entrepreneurship assumes that entrepre-neurs in the fashion industry need a high level of innovativeness in order to create a com-petitive advantage, as stated by Ünay and Zehir (2012). They remark that innovation is a continuous and nearly infinite process in the fashion industry, since the market is always in need for new products. This gradual process is also applicable to the start-up of a new fash-ion business according to Mills (2011). Often entrepreneurs who have just started their business generate their first sales to friends and family and so their business only evolves slowly over time from this point. This is due to the fact that the advertisement and promo-tion of their clothes takes time, money and a certain set of skills. Also, the beginning of a newly started business is commonly marked by a lack of visibility of the designers or retail-ers and their labels. Entrepreneurs often invest their usually scarce resources rather in the creation of design or purchasing materials and equipment and they possess a less developed network than established firms in the industry.
According to Ünay and Zehir (2012) the innovative perspective of entrepreneuring in the fashion industry can be classified into the “product innovation” and the “business opera-tions” dimension. Product innovation is related to creating a strong brand and innovative and competitive products. Future trends in the fashion industry are more and more focus-sing on the benefits of smart clothing solutions from technological, human and competi-tion perspectives. Also at the Swedish School of Textile at the University of Borås re-searchers are working on smart textiles, where the main focus is to explore and develop
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new expressions, new materials and constructions in textile design (University of Borås, 2012). Such cases of knowledge-intensive innovations, as Ünay and Zehir (2012) mention, include for example bio-monitoring clothing that supervises the wearer’s bodily functions. The innovation of such smart clothes have the power to evoke worldwide trends, methods and strategies. The second dimension, business operations, is concerned with innovative processes within the company, like marketing techniques, but also the management of the supply chain. Integrating CSR activities into the business operations and making the busi-ness more sustainable is another way of innovation. By recognising this opportunity, entre-preneurs in the fashion industry can find their niche and innovative business model which makes them unique and serves as their competitive advantage.
2.3.2 Sustainable entrepreneurs
The term entrepreneurship is marked by a wide range of existing definitions in the litera-ture. One aspect of its definition, which is of relevance within this thesis is the creation of a new enterprise as stated by Low and MacMillan (1988). In contrast to entrepreneurial proc-esses, which take place in already existing companies through for example new product in-novations, the entrepreneurs examined in this thesis are the founders of their own busi-nesses. Shane (2003) mentions another facet, which is the discovery of opportunity. Ac-cording to his definition, entrepreneurship means to discover, evaluate and exploit oppor-tunities with the purpose of introducing new goods and services, processes or a whole new market. The recognition of new opportunities can also be applied to the inclusion of CSR in the companies’ strategy and is therefore of relevance for understanding of entrepreneur-ship in this thesis.
While most of the existing literature on sustainability and CSR is focused on existing busi-nesses, a significant element of moving towards a sustainable future is the establishment of businesses by entrepreneurs, which adopt a sustainable orientation right from the founda-tion of the company (Walley & Taylor, 2002). These entrepreneurs who engage in CSR ac-tivities shall in the following be called “sustainable entrepreneurs”, as this term is widely used in the existing literature. Within this thesis, the definition of sustainable entrepreneurs as stated by Cohen and Winn (2007) is adopted. They characterise a sustainable entrepre-neur as seeking to understand how opportunities can be discovered, created and exploited to bring into existence future goods and services, while at the same time considering eco-nomic, social and environmental consequences. This also corresponds to Schumpeter’s (1987) approach of a sustainable entrepreneur seeing unsustainable conditions as occasions of creating new products and services. These entrepreneurs are motivated by their own personal values and the intention to cause social and environmental changes in the society (Schaltegger & Hansen 2013; Hockerts & Wüstenhagen, 2010). According to Hockerts and Wüstenhagen (2010) sustainable entrepreneurs even have the power of initiating the trans-formation of an entire industry into a more sustainable state and they observed that more and more sustainable businesses are founded, when an industry is under increasing pressure of adopting a sustainable orientation. These entrepreneurs are therefore often seen as the engines of sustainable development due to their innovative power and ability of discover-ing of opportunities (Pacheco et al., 2010). Within this thesis, the studied entrepreneurs do not necessarily follow a complete sustainable approach in every aspect of their business. However, all of them engage in certain CSR activities and can therefore share valuable ex-periences with their sustainable orientation and regarding challenges they perceive while adopting and following this orientation.
While ethical standards and a socially responsible orientation should be obtained in any
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kind of organisation, entrepreneurs have a higher tendency of adopting these. This is due to the fact that different dynamics are established within businesses, depending on if it is in the hands of one person which is guided by his or her beliefs, or if a company is run by managers who do not own the business and therefore have less personal influence (Vya-karnam et al., 1997). As argued by Buchholz and Rosenthal (2005), entrepreneurship and an ethical orientation are closely connected, since successful entrepreneurship requires skills such as imagination, creativity, novelty and sensibility, which are also considered as relevant for ethical decision-making.
Despite their innovative and positive standing in the sustainable development of industries, sustainable entrepreneurs are also facing challenges and limitations in their CSR activities. Even though they attract a number of customers who care about sustainability issues, these entrepreneurs often fail to reach a broader mass market as explained by Hockerts and Wüstenhagen (2010). Sometimes they do not even have the intention to grow and rather remain a niche in their industry. The authors explain that this decision can be made upon the idealistic reason to keep their high environmental and social standards or to prevent bigger incumbents, who could easily outspend the entrepreneurs in their CSR activities from entering their niche. A challenge sustainable entrepreneurs may also face is that a sus-tainable business model may serve a collective benefit but can become an obstacle for the entrepreneurs themselves, when they have to bear costs for their CSR activities which are not borne by their competitors (Pacheco et al., 2010). This pursuit of a sustainable orienta-tion can also become a drawback when the entrepreneur becomes obsessed with one sus-tainable issue and invests the limited resources into optimising only one social or environ-mental issue (Hockerts & Wüstenhagen, 2010).
2.4 Summary
As displayed in the previous chapters, the fashion industry is underlying several influences that have increased the need for CSR. Supply chains are becoming more and more complex due to the ongoing globalisation and an increased price pressure. This all does not only have an impact on society, but also on the environment. Recent incidents have led to more institutionalisation of CSR within the fashion industry, but it is still a long way to go until all companies will have to include CSR in their business activities. All these latest develop-ments in the fashion industry show that nowadays CSR activities in the fashion industry have become inevitable. However, not all companies have adopted a sustainable orientation yet. As explained above, the innovative power of entrepreneurs can provide an opportunity to be the changing force in the fashion industry towards more CSR.
The chances of a sustainable orientation have been thoroughly discussed in the existing lit-erature and it is without doubt that not only the environment and society can benefit from a sustainable orientation of companies in the fashion industry, but also the businesses themselves. Few research however is available on the challenges that companies are facing when they adopt a sustainable approach with their business. Further examination can there-fore help to reveal if entrepreneurs in Sweden with a sustainable approach are facing any challenges. By investigating entrepreneurs’ stories and their experiences, the thesis can help new entrepreneurs that want to start their business with a sustainable orientation to be bet-ter prepared for this kind business approach. Also, it may serve to drive the fashion indus-try into a more sustainable direction.
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3 Methodology
3.1 Research design
3.1.1 Qualitative study
The study is of exploratory nature and it aims to find out what is happening in the fashion industry in Sweden with regard to CSR, to seek new insights in this topic and to assess the phenomenon of CSR in the fashion industry in a new light. Furthermore the thesis intends to also find out why something is happening and to gain an understanding of the meanings that humans attach to certain events (Saunders, Lewis & Thornhill, 2009). An exploratory research was compared to the activities of a traveller or explorer by Adams and Schvane-veldt (1991) due to this investigative character. The advantage of a qualitative research is the flexibility and adaptability to a change of direction in case new results of data appear and new insights occur (Saunders, Lewis & Thornhill, 2009). Within this thesis an interpre-tivist view on reality is adopted. As Saunders et al. (2009) state, this implies that reality is socially constructed and subjective. Social phenomena are created from the perceptions and consequent actions of social actors, which were explored within this thesis. When conduct-ing a research the most crucial step is to decide on the research methods that are used for the study. The thesis aims to investigate the challenges that Swedish sustainable entrepre-neurs are facing in the fashion industry. Therefore, the experiences of Swedish entrepre-neurs were analysed. To do so, a qualitative research approach was chosen to capture the stories of the entrepreneurs, since a qualitative study gives the opportunity to explore a subject in a manner that is very close to reality (Robson, 2002). The reality here means the subjective experiences of the entrepreneurs following their sustainable business approach.
3.1.2 Narrative analysis
As Fisher (1987) remarks, life is experienced and interpreted through a series of ongoing narratives, which contain conflicts and characters and consist of beginnings, middles and ends. The language that is produced during interview can be taken as stories, which display interpretations of certain aspects in the world, which occur in a specific time and are shaped by history, culture and character (Fisher, 1995). Narratives are a qualitative research approach, which has in recent times been used to enhance our understanding of entrepre-neurial processes and experiences (Steyaert & Hjorth, 2003).
This thesis is inspired by a narrative approach, which means that the stories behind the en-trepreneurs were investigated in order to gain in-depth insights into the topic of CSR in the fashion industry. The entrepreneurs were asked regarding their experiences in having a sus-tainable orientation in the fashion industry in order to find out if they are facing any chal-lenges with their sustainable approach. Through the structure and the conceptual content of the entrepreneurs’ stories, their sense of reality was revealed, showing who they think they are and their notions of purposeful activity (O’Connor, 2002). By capturing their nar-ratives, the writers of the thesis did not only gain access to the chronology of actions the entrepreneurs took, but also the context in which they occurred and their reasons for en-gaging in them, as well as the sense which was made of the resultant experiences (Søder-berg, 2006). Entrepreneurs as smaller players in this large industry might be facing different challenges than larger companies when they aim to include CSR into their business model, which makes them an interesting subject to explore. Therefore the thesis intends to re-search the movement in the fashion industry towards a more sustainable approach from the point of view of these businesspeople. To investigate the topic profoundly and to learn
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more about their experiences, different case studies of Swedish entrepreneurs were con-ducted.
According to Coffey and Atkinson (1996), a narrative can be broadly defined as an account of an experience which is told in a sequenced way. It indicates a flow of events, which all together are of significance for the storyteller and are supposed to transmit a meaning to the researcher. Understanding and meaning are thereby conveyed through analysing data in their originally told form rather than fragmenting them through developed codes or catego-ries as explained by Saunders et al. (2009). However, it is still possible to further group nar-ratives. It was also stated by Clandinin and Connelly (2000), that experiences are the key when it comes to narrative inquiries, highlighting the meaning of continuity, which comes up when experiences grow out of other experiences and so forth. This means the creation of a coherent story from the collected interview-data. A narrative therefore allows to main-tain the participants’ engagement, events, actions they took and consequences that followed within the narrative flow while at the same time considering the social and organisational context within the events took place (Saunders et al., 2009). This implies that the partici-pants’ stories and the ways in which they tell these with their subjective interpretations is based on the constructions of the social world in which they live, which must be taken into account when analysing the interviews. The data of narratives is usually collected through semi- or unstructured interviews and the participant are encouraged to tell their story in their own way, explaining why it took the form it did, while leaving them free from any structured set of questions (Mills, 2011). The requirements for accuracy are often consid-ered as less important than the experiences that are told, what they symbolise and how they display particular issues of for example organisational politics, culture and change (Gabriel & Griffiths, 2004).
3.2 Data collection
3.2.1 Choice of entrepreneurs
In the fashion industry, Sweden has been leading in sustainable approaches. One of the pioneers of sustainable fashion in Sweden is Gudrun Sjödén, who launched her company Gudrun Sjödén in 1976 (The Swedish Institute, 2013). Gudrun Sjödén’s business idea was to produce colourful home textiles and clothes in natural materials and thus environmental thinking was part of all collections she made. More generally, sustainable fashion is impor-tant to many fashion designers in Sweden (The Swedish Institute, 2013). Due to the fact that sustainability has been considered by many fashion designers in Sweden, the focus of this research is both Swedish entrepreneurs that have started their fashion production with a sustainable approach and Swedish entrepreneurs who retail sustainable fashion.
The selection of participants was of purposive nature, meaning that the judgement of the writers of the thesis had been used to select the cases that make up the sample (Saunders et al., 2009). This way it could be ensured that the participants could contribute to the fulfil-ment of the purpose of the thesis. Since this research focuses on the challenges faced by Swedish entrepreneurs, both entrepreneurs having a sustainable production approach with regard to fashion as well as those who retail sustainable fashion, research has been done about potential Swedish entrepreneurs. Several sources have been consulted in order to se-lect applicable candidates for this research, for example the Swedish Entreprenör magazine, contacts established with entrepreneurs during previous courses have been exploited, and the internet was used to find suiting participants. While searching for candidates, several criteria were taken into consideration. One criteria was the sustainable focus of the com-pany, for example the use of natural materials, recycled materials, the durable quality of
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clothes and the focus on good working conditions. As mentioned before, in this thesis en-trepreneurs are considered as newly established companies. According to Hauge (2007), fashion companies which are considered as relative newcomers to the market, range from having two till fifteen years in the business. Therefore, the timeframe that was considered as relevant for this research with regard to the existence of the fashion business, has been defined from zero till fifteen years. These criteria have led to the selection of several entre-preneurs wherein the below mentioned companies have participated.
Table I: Participants of this study
Name of interviewee
Company Type of business
Year of foundation
Number of employees
Date Interview method
Selection cri-teria
Lotta Spykman
Just Africa Retailer 2001 3 01.04.2015 Email Fair trade
Elisabeth Gudmundson
Uma Bazaar
Retailer 2005 4 01.04.2015 Telephone Organic mate-rials, fair trade
Maja Svensson
ELSA AND ME
Designer 2012 3 06.04.2015 Telephone Sustainable cotton, work-ing conditions
Klara Gardtman
Mini Rodini Retailer 2006 51 28.04.2015 Email Sustainable materials
Peter Arneryd Nerdy by Nerds
Designer 2011 5 10.04.2015 Telephone Social aspect, durable mate-rial
3.2.2 Interview settings
In order to align with the exploratory purpose of this research, the execution of face-to-face interviews was intended. However, face-to-face interviews turned out not to be feasi-ble due to time and location restrictions. In an exploratory study, in-depth interviews can be a useful tool to find out what is happening and to understand the context (Saunders et al., 2009). As they state, in unstructured interviews there is no predetermined list of ques-tions to work through during the interview, although one needs to have an idea about which aspect you want to explore. Moreover, the interviewee gets the opportunity to talk freely about events, behaviour and beliefs in relation to the topic area. Therefore, this un-structured interview setting corresponds perfectly with the narrative inspired approach of this research. As face-to-face interviews turned out not to be feasible, it was decided to fo-cus on telephone interviews, where email interviews have been considered sufficient in case participants could not arrange a telephone interview. As stated by Carr and Worth (2001), phone interviews permit researchers to take notes discretely, whereby conversations could take place more naturally. Moreover, “qualitative telephone data have been judged to be rich, vivid, detailed, and of high quality’’ as defined by Novik (2008, p. 393).
As mentioned before, in some cases participants took part in email interviews, due to time limitations. Here, the participants received a full range of interview questions, where only questions applicable to their business have been answered. As stated by Morgan and Sy-mon (2004), email communication may last for some weeks since there is a delay between a question being asked and the question being answered. As they state, this can be advanta-geous as it allows both the interviewer and interviewee to reflect on the questions and re-
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sponses before the actual response is given. In both cases where email interviews were conducted, repeated interaction between the writers of this thesis and the interviewees took place in order to further elaborate on certain topics. However, conducting email interviews does not entirely comply with the narrative approach of the study. The questions asked in the email interview were formulated openly in a way that encouraged the interviewees to write freely and extensively about their CSR activities. Also, the emails contained a wide range of questions to ensure that all necessary information was provided by the participants and no possibly important aspect of their story was left out. Moreover, the interviewers got back to the participants with further questions to ask for more details and explanations. This way the contradiction between email interviews and the narrative approach of the study could be minimised. In order to avoid data quality issues while conducting in-depth interviews, the participants were provided with information (Saunders et al., 2009) concern-ing the context and the aim of the research.
3.2.3 Interview method
The primary method to collect data in narrative approaches is through in-depth interviews (Saunders et al., 2009). As they state, as part of the interview process it is likely that partici-pants will provide accounts that at least in part take the form of narratives or stories. Within this research, unstructured in-depth interviews were conducted. In order to align with the narrative inspired approach, the participants were encouraged to tell their story in their own way, unhindered by a structured set of questions (Mills, 2011). The interviewers primarily asked questions to gain clarification, elaborated on the answers and asked for rea-sons when these were not told by the interviewee. This way, the interviewers were able to better interpret the experiences told by the interviewee and made sense of what has was said. Since the core focus in this research was to find out if Swedish entrepreneurs are fac-ing challenges with their sustainable orientation, some guiding was necessary. When it turned out that the interview got stuck and the interviewee did not know what he or she was expected to tell, triggers, that means guiding questions, were provided. It turned out that some of the interviewees needed more triggers in order to tell their stories, whereas others needed fewer. Therefore, the interviewers’ contribution to the narrative varied be-tween interviews according to the amount of triggers necessary to solicit the narrative (Mills, 2011). During the first interviews, the interviewers opened the interview by specifi-cally asking for the challenges that the entrepreneur was facing with regard to the CSR ac-tivities. It turned out however, that the interview findings were more informative and de-tailed when the interviewers asked more openly for the CSR approach of the company. This way the interviewee spoke more freely about their sustainable business approach and it was easier for them to come up with the challenges that they are facing. During all inter-views, both interviewers were present in order to decrease the possibility that some infor-mation might be missed out. On average, the interviews lasted for 60 minutes.
3.3 Data analysis
In order to guarantee the quality of the data collection, the interviews were recorded. In advance, all interviewees were asked whether they would feel comfortable if the interview would be recorded or not. As stated by Saunders et al. (2009), it is beneficial to audio-record an interview and make notes as it progresses. Moreover, they state that audio-recording, making notes as well as compiling a full record of the interview directly or soon after it has taken place are all means to control bias and produce reliable data. Saunders et al. (2009) state that analytical cohesion in a narrative account may involve the researcher in (re)constructing the story from the parts that emerge from conducting a number of in-
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depth interviews. Also, the researcher needs to decide about what to take out, what to include and how to connect the parts of the account.
According to Miles, Huberman and Saldana (2014), codes are labels that assign symbolic meaning to the descriptive information composed during a research, i.e. coding is analysis. As suggested by Saunders et al. (2009), colour-coding was used in this thesis as first step in the analysis process in order to categorise different perspectives of the interviewees’ answers. This way, the writers of this thesis were able to analyse the narratives as complete accounts and find different analytical themes without fragmenting. Within this research, the purpose was to find out if and what challenges Swedish entrepreneurs are facing in the context of CSR in the fashion industry. Therefore, the outcomes were analysed with regard to the research question of this study. By coding the different perspectives of the interviewees interpretively, the risk of an unstructured analysis of the qualitative data was avoided. When analysing qualitative data, researchers can run the risk of analysing it in an unstructured way when no clear method or approach for the analysis is used. This way important information might not be considered or utilised because they were not recognised within an unsystematic approach. To avoid this risk and as suggested by Mello (2002), the writers of this thesis compared related parts of different narratives to understand contrasting perspectives between informants and also to identify similarities of the interviewees’ experiences. Related parts were compared in order to find interconnections between the different stories told by participants. Eventually, several themes were identified as main outcomes of the research, respectively size of the business, financials, awareness of the need for CSR, supplier selection and institutionalisation. Also, quotations of the interviewees were added in the thesis since they were considered as vital and vivid elements of the narrative inspired approach of the study. The results of the analysed interviews were matched with existing literature in this field in order to draw parallels to previous studies.
3.4 Limitations: Trustworthiness
According to Given and Saumure (2008), trustworthiness provides qualitative researchers with a set of tools by which they can illustrate the worth of their research outside the boundaries of quantitative parameters. The authors further state that trustworthiness can be thought of as the ways in which qualitative researchers ensure that credibility, transfer-ability, dependability, and confirmability are evident in their research. Firstly, credibility can be referred to as how congruent the findings are with reality (Merriam, 1998). Secondly, she explains transferability as the extent to which the findings of one research can be applied to other situations. However, due to the fact that qualitative research basically entails only a small amount of participants, it must be seen as a context which can be applied to similar situations. Replicating qualitative, non-standardised research appears therefore unrealistic and unfeasible. Thirdly, dependability refers to the precise description of the processes, so that future researchers can repeat the work (Shenton, 2004). Lastly, confirmability can be understood as the steps taken to ensure as far as possible that the research findings are the results of the experiences of the participants and not those of the researchers (Shenton, 2004).
Within this research, several steps were taken in order to guarantee the trustworthiness of the interviews. First of all, all interviews were planned carefully in order to demonstrate credibility towards the interviewees and to obtain their confidence. Before the interviews took place, in-depth knowledge about the research topic was acquired as well as informa-tion about the participant and its company including their CSR activities. Also, all questions
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were phrased clearly and easily to understand while avoiding the usage of complex theoreti-cal concepts (Saunders et al., 2009). Furthermore, all interviews were audio-recorded, pro-vided that the participants agreed on it and notes were taken during the interviews. By making notes and recording the interviews, the writers of this thesis minimised the risk of misinterpretation and misunderstanding of the interview data since the interviewers could listen to the recorded interview several times. In addition, by audio-recording the inter-views, the researchers had the opportunity to discuss about the data and to talk about the way they interpret it. All interviews conducted for this research have been completed in English. None of the interviews was translated, which increased the credibility of the inter-views and decreased biased interpretations and the risk that themes explained by the inter-viewees could not be translated accurately. On the other hand, neither the interviewers not the interviewees are native speakers in English, which could possibly lead to misunder-standings and communication problems. To ensure however, that the confirmability of this study is guaranteed, summarising and testing the understanding was conducted. This way, the researchers summarised an explanation given by the interviewee and allowed the par-ticipant to tell whether the summary given was adequate and where necessary additional in-formation could be given or the understanding could be corrected. Testing understanding of what has been said can be a useful tool to avoid a biased or incomplete interpretation (Saunders et al., 2009).
Especially when using a narrative approach as in this thesis, which includes semi- or un-structured interviews, reliability might be limited, since the data reflect the reality at the moment it was collected, which may be subject to change (Marshall & Rossman, 1999). Saunders et al. (2009) counter that the advantage of non-standardised interviews however, lays in the flexibility which offers the possibility to explore the complexity of a topic. Fur-thermore, the analysed and evaluated data was sent to the interviewees prior to the publica-tion within the thesis to prevent that their answers were misinterpreted and to increase trustworthiness. This allowed the participants to add any further comments and tested the understanding of the writers of this thesis about what has been said during the interview. Eventually two out of the five interviewed entrepreneurs reviewed the findings of the in-terview.
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4 Empirical Studies
4.1 Just Africa
In this section the findings from the interview with Lotta Spykman1, former manager and now owner of the shop, which was conducted via email on March 31, 2015 is presented.
4.1.1 Company presentation
Just Africa was initially founded in 2001 in Stockholm. The shop was founded by a small foundation called “Burkina Fasostiftelsen” on the initiative of a Swedish woman who had spent a large part of her childhood and youth in Burkina Faso and who had many contacts with artisans and entrepreneurs in the country. It consists of both a shop and a gallery and wants to share ideas, inspiration and impressions from the African continent. Not only ap-parel, but also jewellery, crafted goods, cosmetics, living accessories and food is sold in the shop. The idea behind the company is to highlight brands and designers from Africa to broaden their market opportunities and show contemporary design and fashion of good quality and with a unique expression that inspire Sweden to be more colourful. Many prod-ucts are purchased from artisans and small business owners in Burkina Faso or Tanzania. Some goods, mainly food, is purchased via Swedish and European fair trade importers (Just Africa, 2015).
4.1.2 Interview findings
CSR activities
Just Africa engages in CSR in various kinds of ways. The company deals with both Fairtrade certified producers and small family businesses and purchases their goods based on good quality, good working conditions and preferably innovative recyclable materials. On their website, Just Africa presents the ten principles for Fairtrade as stated by the World Fair Trade Organization (Just Africa, 2015). They are actively working to know the track of the supply chain as much as possible and also aim to build up long-term relation-ships with their producers and encourage the local development of new products. By com-ing back to the same suppliers, Just Africa tries to make it easier for them to plan their economy and business if they have regular orders coming in. The company often purchases goods from marginalized groups that have no access to large markets. Just Africa further ensures that the purchasing prices include a salary scale based on the living wage rate in the producing country. They try to use boat transports as much as possible as well as minimis-ing packaging materials to reduce their carbon footprints.
Motives
It has been clear from the beginning that Just Africa would be started with a sustainable approach: “It is our whole business idea, without it we would not exist.” For Just Africa this busi-ness approach of including CSR in their business strategy is the only imaginable way of running the shop: “It is the only way I can think of doing business. If I knew my profit came from ex-ploiting other people and the environment, I could not stay in business. It is a moral question and a ques-tion of how you look at the world and your own responsibilities in this world.” Incidents like the break-down of the fashion manufactory in Bangladesh in 2013 mean a proof to her as what an
1 All quotes in the interview findings were stated by the respective interviewed entrepreneurs.
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unsustainable way of performing business leads to and that the actions of these companies who produce under low-cost conditions need to be questioned.
Market, supply chain and competition
Just Africa serves a broad range of customers, but those who repeatedly buy in and support Just Africa, appreciate that they make a difference by shopping in their shop instead of large chains. For Lotta it is difficult to estimate if their sustainable orientation shows in the prices of their products. She states that it is harder to cover the transport than the actual cost of the product. The possibilities to keeping track of the supply chain varies between different producers and the kind of products. Just Africa aims “to know as much as possible and always ask questions about the origin of the material the producers use”. But since they also sell a lot of hand crafted goods, it is not always possible to track every piece of the handmade goods, like certain pearls in jewelleries or the manufacturers of specific fabrics. Just Africa even manages to visit some of their suppliers. Those, who they cannot visit, they keep track on through for example the World Fair Trade Organization or other institutions, organisations or people whom they trust and “who can certify the seriousness of the producer and that they have good working conditions”.
Institutionalisation
When it comes to rules and regulations with regard to sustainability, Just Africa dedicates themselves to the principles of the World Fair Trade Organization. It is not compulsory of course, but they see it as “good practice”. For Lotta it would mean a gain for the fashion in-dustry, if there were more regulations and if more companies were forced to act in a re-sponsible way. Just Africa does not receive any grants or subsidies for their outspoken sus-tainable approach of doing business.
Chances
To Lotta, it is not an advantage to act in a socially responsible way, but it represents the whole business idea and reason for the existence of Just Africa. Their outspoken responsi-ble approach of doing business is perceived as positive by a wide range of stakeholders: “I think our suppliers see us as trustworthy and transparent. And I know we are well respected within e.g. the fair trade world in Sweden.” For their employees, their CSR activities are an “important part of why they want to work” for Just Africa.
Challenges
For Just Africa it is a challenge to visualise being a fair trade company in the shop as they “want customers to chose the products because of the quality and design in the first place”. To brand the shop better so that CSR is more visible is something they are currently working on. As far as costs are concerned, transporting the goods from Africa is a major cost factor of the products sold. However, Lotta explains that being a small shop in Sweden is a challenge, regardless of their CSR activities: “Running small shops in Sweden is not a lucrative business, for no shops, CSR or not.” For her, their approach pays off “in good reputation and happy clients”, but not in large profits.
Tensions
In Lotta’s opinion, all business should be made in a socially responsible way: “In a way you could say that CSR companies should be the norm and the companies without an active CSR agenda should be ‘marked’”, instead of doing it the other way around as today and only marking those companies with a fair trade approach. In comparison to larger companies, Lotta sees
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the advantage that small companies who are very close to their suppliers and “it is easier to keep track on the supply chain”. As a big company however, Lotta states that due to their in-creased resources, they “you should be able to take the full control of the complete supply chain as you can make orders big enough to seek the producer of every component of your final product”. Larger com-panies can also more easily economise when it comes to the transport of the product, since this is a crucial part of the final price which the customer needs to pay. Larger quantities could also make a difference with regard to the carbon foot print of the complete supply chain from producer to consumer.
4.2 Uma Bazaar
In this section the findings from the interview with Elisabeth Gudmanson, founder of the company, which was conducted via telephone on April 2, 2015 is presented.
4.2.1 Company presentation
Uma Bazaar was founded in 2005 by Elisabeth in Malmö, Sweden, with the aim of sup-porting both producers from developing countries as well as offering a job training in the shop for people with long-term exclusion from the working life, to give them an opportu-nity to get back into employment. The idea for the store came up after meetings at the World Social Forum in India in 2004. Today Uma Bazaar is one of Skåne’s shops with the widest range of “ekoreko” design, which implies organic materials and fair conditions in the manufactories. Their range of products consists of mostly jeans, other clothing and footwear as well as clothing for children made of organic materials. The products are pur-chased from suppliers around the world and mixed with the sustainable design from local producers (Uma Bazaar, 2015).
4.2.2 Interview findings
CSR activities
Elisabeth got inspired to found Uma Bazaar during her work for the World Social Forum in India, where she realised that “there is a gap in the market” for fair trade shops in Sweden, since here the sustainable products offered targeted more elderly women. Also, Elisabeth has a background in working with homeless people who sell newspapers, which is why she wanted to combine a fair trade job with offering jobs for homeless people. Therefore, sev-eral of the employees at Uma Bazaar used to be formerly unemployed for a longer period of time. Uma Bazaar aims to offer a sustainable alternative with products that are organic and recycled, since they are aware that our current lifestyle based on growth and excessive consumption is not sustainable. This implies that materials like cotton, hemp and bamboo were grown without chemical pesticides and fertilisers and dyed in environmentally friendly ways. Furthermore Uma Bazaar offers a return system for jeans. If customers buy a new pair of jeans, they receive a 20 % discount (10 % for non-organic jeans), if they in return bring back an old pair of jeans that they do not use anymore.
Motives
As Elisabeth explains, she could not have imagined starting a company without a sustain-able approach, even though she is aware that this would have been a lot easier, if all prod-ucts could be sourced from a wider range of suppliers for example. The main driver is the advancing globalisation and the overproduction and overconsumption of goods that comes along with it. She wants to make a difference with her shop and sees that “the awareness is ris-ing” for sustainability within society. “It’s all about being one step ahead.”, Elisabeth says.
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Market, supply chain and competition
Uma Bazaar purchase their goods that were produced in countries all over the world such as Peru, Bolivia, Bangladesh, India, Nepal, China as well as Turkey, Tunisia, Poland and other Baltic countries. All suppliers that the company uses are being monitored and certi-fied in order to ensure that they produce under socially responsible conditions and that all garments are sustainable. Also, Uma Bazaar tries to show the person behind the garment which is producing the goods to raise the awareness that it is actually a human being who manufactures the garments instead of machines, because “when you have met the people and un-derstand what they are doing, you cannot go back.”
Institutionalisation
As far as the institutionalisation of Corporate Social Responsibility is concerned, Elisabeth believes that in Sweden “the government cannot do anything” about increasing the transparency in the fashion industry. She rather states that the European rules and standards with regard to the production process should be expanded to the rest of the world. Furthermore Elisa-beth explains that often people in low-cost countries are not aware that their land is poi-soned from the chemicals that are used in the production process, but the problem is that it is difficult for Sweden to change these production processes in a different country. How-ever, by now at least the transparency of the supply chain has increased, which makes it easier to track it. “When we started, no one was transparent and saying we use this and that factory be-cause of competition.”, Elisabeth explains. What is a local institutional problem for small busi-nesses in Sweden is the fact that no credits are given out by the banks anymore. For the sustainable fashion industry this means a big problem, since organic cotton generally needs to be paid in advance to the farmer, which is almost impossible without any credits: “If we don’t get credits, we cannot buy ahead, because there is no money”. Another problem, Elisabeth no-ticed, that could be solved by appropriate regulations is that more and more shops are opened in Sweden, especially in Malmö where Uma Bazaar is located. However, the num-ber of inhabitants does not increase, which leads to an even greater overproduction and overconsumption of goods and also an increased competition among the existing fashion companies. Elisabeth also explains that, whereas in other industries “the awareness of bananas, coffee, tea, chemicals is rising” when it comes to sustainable production and organic ingredients, this awareness is still missing among society and politics when it comes to fashion: “What about the clothes we wear?”.
Chances
Elisabeth wants Uma Bazaar to “show the way” and be a “best practice example” for sustainable fashion. She constantly asks herself “what do consumers want in the future?” and tries to react to it. For the people who work at Uma Bazaar, the socially responsible approach is even the reason for their employment in this company, since they want to make a change in the world.
Challenges
In the beginning of running the business, Elisabeth had to face some difficulties with their suppliers. It happened that they delivered pieces of clothes with different colours, and “non of them matched”. The suppliers had different priorities, as “their main goal was social, taking care of people”. Therefore Elisabeth first had to teach them that for the European market it is also about the look of the garments. What nowadays makes running the business difficult is that “it is really hard to be a small shop” – which however is a challenge regardless of the com-pany’s sustainable approach. Due to the limited financial resources of smaller businesses, it
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is more difficult for them to be competitive and to for example reach a popular location of their shop in the city. She claims that “for small brands it is nearly impossible to grow”. Elisabeth consciously wants Uma Bazaar to be a profit limited company, which means that they do not give out profit to their shareholders. This contributes to the unprofitability of the busi-ness. What also challenges Elisabeth is her entrepreneurial thinking. With the awareness for sustainability slowly rising and more and more sustainable businesses coming up, she asks herself “Are we needed?” or if she should rather start something new and more important.
Tensions
What Elisabeth considers as a problem in the fashion industry is its “greenwashing”. More and more larger fashion companies portray their CSR activities, even though only rarely their whole business approach is sustainable. These big fashion chains have got the re-sources and knowhow to actively promote and market their CSR activities and the society is not aware that in fact their production procedures are anything but sustainable. Elisabeth mentions the example of H&M which was awarded as sustainable fashion brand and which at the same time sponsors the sustainable lifestyle edition of The Guardian, even though the fast fashion company is known to be not very sustainable in the sourcing of their gar-ments. For Elisabeth it is this “fast fashion and the overproduction and overconsumption”, which is enhanced by the low-cost production of these companies, which are the main problems that the fashion industry is facing.
4.3 ELSA AND ME
In this section the findings from the interview with Maja Svensson, founder of the com-pany, which was conducted via telephone on April 6, 2015 is presented.
4.3.1 Company presentation
The company ELSA AND ME was founded by Maja Svensson in 2012 and is now located in New York, USA. Maja designs elegant dresses, inspired by her grandma Elsa. Her vision is to empower women to feel confident at work and at other occasions by wearing her garments. The made-to-order dresses, which can be customised to fit any shape, are made of organic cotton fabric. The garments are produced in Nairobi, Kenya, by ELSA AND ME’s production partner Panâh, which is specialised in luxury apparel and where ethical and environmental standards play an important role (ELSA AND ME, 2015).
4.3.2 Interview findings
CSR activities
When Maja founded her company ELSA AND ME in 2012, she first had her dresses pro-duced in New York for three years. For her it was easy to visit the factory and she could check the quality of the dresses. However, she found out that the production industry in New York is very competitive and she also faced quality problems with her dresses. These developments made her decide to look for a new manufacturer and accidentally she met the partner of the fashion production house Panâh, based in Nairobi, in New York. They offered her samples and the quality of the garments turned out to be better. Although Maja has not yet visited the factory in Nairobi herself, she trusts the founders when it comes to their commitment to ethical production conditions. The dresses produced in Nairobi are all made of organic cotton. Within the fashion production house in Nairobi, the people are wealthy and experience good working conditions. The employees get “ethical employment op-portunities’’, fair wages and the manufactory offers meals. “That´s probably what´s most important
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in the end, that the people that are working with your products have a fair situation’’, Maja explained. People are hired that are skilled in tailoring but also trainings and education do happen within the plant. It is furthermore important to Maja that to the extent possible recycled paper products or other sustainable materials are used for labelling and marketing.
Motives
Maja knew already a long time that she wanted to start her own business. She felt that when she would start a business, she “felt responsibility for bringing a new product to the market’’ and asked herself “how I can produce this in a good way?’’. It was important for her to know where she got the fabric from and where it has been produced. Also, she recognised the trend towards more sustainable fashion. Maja believes that “organic cotton will be the conven-tional cotton’’ in the future. When she decided to start her company in dresses, she wanted to find materials that are better, since she believes in a better future.
Market, supply chain and competition
Since the focus of ELSA AND ME is the production of dresses for business women, Maja told that her customers are women who are educated and want a dress that lasts and fits. Her customers like sustainability as a bonus, this gives added value to the dress. However, quality and durability plays a more important role to them as sustainability. For Maja it is hard to grasp whether there is a difference between the Swedish, where 50 % of the sales is realised, and the American market regarding the perception and importance of sustainabil-ity. In New York people are very aware of sustainability and Maja believes that New York, especially Brooklyn, is similar to Sweden with regard to values. When it comes to suppliers, the fashion production house in Nairobi is the only manufacturer ELSA AND ME is working with. In October Maja is planning to visit the plant.
Institutionalisation
Maja explained that with regard to institutionalisation, in the USA people are more free, there is less institutionalisation in general. However, there do exist restrictions for example with regard to the dyeing of fabrics since they may not include any heavy metals. Maja thinks “there will be more restrictions in the future’’. However, everything with regard to laws and regulations will come to Europe first Maja believes.
Chances
What Maja considered as an advantage of being an entrepreneur in the fashion industry is, that if you build up your business from scratch, you can include CSR more easily. She con-siders it as more difficult to change an existing non-sustainable culture than to start with this approach right away. “When you are a small business I think that you have an advantage in that you don’t have a huge volume already set up and you don’t have a system already set up’’, she explained.
Challenges
Maja explains that “as a small business it is always a challenge of cash flow’’, which is a difficulty regardless of the company’s sustainable approach. An advantage is however, that the real-ized sales are direct sales, which means that people are paying upfront. Moreover, the ques-tion of volume is a challenge for the company. “Volume is always a challenge for a small busi-ness’’, Maya explained. If there is more volume, the company can become more effective and the production can take place more cost efficiently. Maja explained that the fashion in-dustry is hugely competitive, with “low barriers to entry’’ and facing a tough competition. She told that it is important to find a niche which her custom made dresses are for her. An-
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other challenge Maja has been talking about is the fact that “the fashion industry is not sustain-able yet’’, which is why the term sustainability is not appropriate for this industry. “The term sustainability maybe entails so much more than a company in the fashion industry can reach.’’, Maja con-tinued. Also, organic cotton cannot easily be sourced, it is difficult to find fabric that is eas-ily and flexibly accessible. “There are not a lot of sustainable materials out there’’, Maja explained. There are high expectations on the fabric, not only to be sustainable but also with regard to high quality and durability.
4.4 Nerdy by Nerds
In this section the findings from the interview with Peter Arneryd, one of the founders of the company, which was conducted via telephone on April 10, 2015 is presented.
4.4.1 Company presentation
In 2011, three friends called Adrian, Oscar, and Peter came up with the idea to start their own brand of jeans. When they started the business, none of them could sew. So they de-constructed their favourite pairs of jeans, by unpicking the seams and studying the con-struction. In the end, they have been able to design a model that lived up to their own high standards and expectations. Their tailors and seamstresses are able to handcraft jeans that fulfil their vision, right in front of the customers’ eyes. In their stores, they want the people to be able to see, hear, smell and take part in the process. Each pair of jeans is unique and traceable so that people can easily tell when and where they were made (Nerdy by Nerds, 2015).
4.4.2 Interview findings
CSR activities
Peter, one of the founders of Nerdy by Nerds, explained that the company engages in CSR in three different ways. First of all, he told that the materials are sustainable, the jeans are made of organic cotton, the brand guarantees a durable quality and when the jeans are dyed, natural colouring is used. With regard the supply of denim, Nerdy by Nerds works with different companies. One company is located in Turkey, they mostly supply the stretch denim and easy colour denim. Another supplier which is more frequently used is situated in Japan, this smaller company has a sustainable approach when it comes to the materials and dyeing. Nerdy by Nerds is working with suppliers that stand for the same values as the company with regard to social and environmental responsibility. The second aspect of sustainability Peter mentioned is the social aspect of sustainability: the tailors of Nerdy by Nerds are mostly people that live in Rosengård, a part of Malmö which is marked by a high unemployment rate. This is “our way of helping to create jobs’’, Peter explained. The last aspect of sustainability Peter mentioned is educating customers. Nerdy by Nerds offers services about for example how to take care of the jeans or how to wash the jeans so that they last longer. Moreover, if customers get a hole in the jeans they can come to the store and have it repaired.
Motives
In 2011, Peter and his friends realised that regardless of the price (cheap or expensive) all jeans had quite the same quality. What they all were missing was the high quality of jeans and a really good service. As Peter said, “if we want to do the best jeans we need to learn to do the best jeans’’ and thus they had to learn how to sew a pair of jeans from scratch. They realised that it could be an opportunity to check if there are people with no job that can help sew-
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ing the jeans. This is how the company started in Sweden and gave their contribution to social responsibility, although this has not been the intention from the beginning, but the entrepreneurs grew into it.
Market, supply chain and competition
The whole concept in general is appreciated by the customers. In general the customers of Nerdy by Nerds want a tailored made jeans and the sustainable approach is a bonus. Peter said that everything together made that people want to buy the jeans of Nerdy by Nerds. The company is mainly working together with suppliers from Turkey and Japan for the denim supply. The Japanese supplier has everything certified when it comes to sustainabil-ity, for example if the product is ecological or not, which kind of colour the product has etc. As Peter explained, these suppliers “stand for the values we are standing for’’.
Institutionalisation
Peter explains that the whole fashion industry wants more sustainability, but that a lot of companies do not know how to make it happen. He suggests that large companies should “introduce “sustainability tags” so that customers could chose if they want a higher price for a more sustain-able product or not.” In the food industry the trend towards more sustainability is already emerging and small companies are growing a lot since the last ten years, a lot more prod-ucts are organic. Peter believes this is also “where the clothing industry will be in the future’’. He is motivated to continue with Nerdy by Nerds, as they see that the customers and media pay much more attention to sustainability.
Chances
Peter believes that sustainable fashion is going to be bigger and bigger in future. For exam-ple, at the University of Borås they started to work with paper instead of cotton when pro-ducing apparel. Peter believes that this is a trend for the future because in 10, 15 or 20 years cotton will be a luxury material. Things will change if the customers do not want to have large clothing companies anymore and move to the local places for their clothes.
Challenges
The main challenge Nerdy by Nerds is facing is that they are a small factory that cannot produce as much as they want. They do not have so many employees, which is the reason they can only produce 5 or 6 pairs of jeans a day. The question they are asking themselves is how they can grow this micro factory into a slightly bigger business. Since the company is doing everything itself, they are going through a learning process. “We cannot look at other factories because we are so small. We have our own way of creating a production line’’. This can at the same time be seen as a strength Peter explained. Moreover, they need to teach the tailors their standards of sewing the jeans. With regard to the issue if it is harder for smaller com-panies to be sustainable, Peter answered both yes and no. “As a small company, you have more control over everything that is sustainability’’, like the supply chain, the material and the working conditions. On the other hand, a challenge they are dealing with is money, since it is much more expensive to operate sustainably. Much of the denim needs to be bought in big quan-tities which can be a big problem for smaller companies. For companies like H&M and Åhlens which possess more resources for example this is much easier.
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4.5 Mini Rodini
In this section the findings from the interview with Klara Gardtman, Purchaser and CSR Coordinator, which was conducted via email on April 28, 2015 is presented.
4.5.1 Company presentation
Mini Rodini is a Swedish brand for children’s clothing and was established in 2006 by illus-trator and artist Cassandra Rhodin in Stockholm. It is Mini Rodini’s aim to provide gar-ments that combine colourful, playful designs which appeal to children with an extraordi-nary quality of the garments. It is of importance to the company that the clothes are not only fun to look at and to wear for the children, but they should also be produced in a way that is environmental friendly and the people who work with the product. The concept of offering parents to buy better products for their children both in terms of design and social responsibility, has proven to be very successful. Today Mini Rodini is one of Scandinavia's fastest growing brands for children (Mini Rodini, 2015).
4.5.2 Interview findings
CSR activities
Sustainability is a prerequisite for Mini Rodini. Their CSR activities therefore do not only include products from organic and recycled materials, but it also includes taking responsi-bility for the environment, employees, customers and everyone that is involved in creating the products. The company therefore tries to demonstrate this in all organisational pro-cesses, like designing the garments, selecting materials and suppliers and the transportation of the products. Mini Rodini’s garments are produced of 95 % sustainable materials, which means materials that have less impact on the environment and on people from the devel-opment of raw materials to the various stages of production to the final product as well as the user impact. This also implies that all products are designed to last longer, thereby de-creasing the environmental impact through waste. Furthermore the brand tries to reduce the use of chemicals in the production process as far as possible. Mini Rodini also tries to optimize the packaging of products with regard to sustainability and only uses boat and truck transportation if possible.
Motives
Mini Rodini want to offer their customers the best product possible on the market without compromising neither durability, quality, design nor the working conditions in the produc-ing countries. The social, ethical and environmental responsibility is taken very seriously at Mini Rodini and their vision is to really make difference. Klara explains that what drives her business to live this CSR approach is “to be a pioneer and inspiration in CSR issues in the big global textile industry, for others to follow.” That is why social responsibility will always be the core of the brand and their focus while they continue to grow.
Market, supply chain and competition
Mini Rodini choose their production countries and factories carefully with a focus on building long-term relationships that benefit all parties. Part of the supplier relationship is explaining and demonstrating why Mini Rodini’s CSR approach is that important for them. This also includes social inspections, since Mini Rodini is aware that the processes in the fashion industry are very labour intensive and they want to ensure that fair and safe work-ing environment are guaranteed at the production sites. To ensure the sustainability of the materials and processes, they make use of several different labels and standards covering
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both materials, production and those who work with their products. Mini Rodini has now also gathered their CSR work in a Sustainability Report, which gives partners and custom-ers the opportunity to see how the company is engaging in CSR.
Chances
For Klara, the chances of an outspoken sustainable orientation do not only affect her own business. The advantage of this business approach is mainly and most importantly the posi-tive impact for the producers of the products: “This is the place that needs the most important im-provements. Strengthening people is key to be able to develop all kinds of future social and environmental is-sues long term.”
Challenges
A problem in the sustainable fashion industry is that there are many ways to classify a product as “sustainable” or “organic”, but nothing universal or generally applicable. Many of Mini Rodini’s competitors choose to call products sustainable when they contain as little as 5 % sustainable or organic materials, whereas Mini Rodini only makes use of this label for products that consist of at least 80-90 % of sustainable materials. This fact makes it dif-ficult for brands to stand out with their sustainability, if a wide range of products can be called sustainable, no matter what their degree of organic materials is. Another challenge that Mini Rodini is facing is “to map the whole supply chain including all its details and have it 100 % transparent”. The tracking of the supply also requires a continuous updating, “as it is not only complex and very long, but also quickly changes when a company like ours grows and expands in a very fast pace.” Running a business sustainable also leads to increased costs for example the Fairtrade sustainable cotton, Klara explains, since they “want the salaries and working conditions furthest back in the supply chain, the farming, to be improved.” But it is not only the material itself which is more expensive, but also additional certifications, networking groups, chemical tests, social audits, which implies extra visits of the suppliers: “We do more of these activities than we actually need, because we want to have a safe and fair business.” However, with the retail prices the business is able to compensate these additional costs for CSR. Including CSR in your business practice also requires creativity and open-mindedness, Klara states. They have implemented “a routine with up cycling” and use stock fabrics to create new products out of them, without having to order new fabrics. To sum it up, including CSR in the business “is mainly about integrating all costs to the business in a fair and honest way, but also about being smart in how to actually do it.”
Institutionalisation
The challenge as mentioned above, that there is no universal classification for the label “sustainable” or “organic” is also a question of the institutionalisation of sustainability in the fashion industry. If there were clear guidelines for when a garment can be claimed as sustainable, it would prevent the greenwashing of the fashion industry. It would also make it easier for companies that emphasise a high degree of sustainability in their materials to stand out of their competitors. Klara also explains that any kind of regulation with regard to CSR “would also have to be realistic for brands in all kinds of set ups and sizes.”
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5 Analysis & Results
5.1 Types of challenges
5.1.1 Size of the business
What is both an advantage as well as a challenge for the interviewed entrepreneurs was the size of the company. Compared to big fashion chains like H&M, it easier for smaller com-panies to keep track of their supply chain and to ensure that all production stages are in line with their CSR approach. As it was already noted by Langhelle et al. (2009), the supply chains in the fashion industry are difficult to keep track of. The interviewees all paid great attention to their supply chain and selected their purchasing channels carefully. Due to their limited amount of suppliers, it is easier for them to track the suppliers’ business activi-ties and CSR commitment. However, as smaller players, they possess less resources, espe-cially in financial terms. This can become problematic, since operating sustainably entails higher costs for fair wages and more durable materials of high quality. The impact of fi-nances on the company’s perception of challenges will be discussed in the following chap-ter. Nevertheless, several interviewees addressed that it is also an advantage for them to en-gage in CSR from the beginning due to the small size of their business. Maja from ELSA AND ME explained that an advantage of building up your business from scratch is that you can include CSR more easily. This aligns with what Walley and Taylor (2002) state about the establishment of businesses by entrepreneurs which adopt a sustainable orienta-tion right from the foundation of the company.
When it comes to the entrepreneurs’ sustainable business approach it also turned out as a challenge that smaller companies are less exposed to publicity. As it was explained by Caniato et al. (2012), fashion companies are more and more discussed with regard to ethics and the public perception is high due to recent incidents like the breakdown of a fashion manufactory in Bangladesh. Whereas for large companies this public pressure can be a challenge since it forces them to operate more responsibly, for sustainable entrepreneurs this could be a chance to stand out with their sustainable orientation. However, as Thorpe and Prakash-Mani (2003) state, the external sustainability drivers for smaller companies tend to be weaker because they are less likely to be under public pressure. As it was ex-plained by Lotta from Just Africa, it is a challenge for her to make clear to the public that they are running a socially responsible fair trade company, because they do not actively promote their sustainable approach and therefore people do not necessarily know about their CSR activities. Large companies on the contrary, can make use of their CSR activities as a marketing tool, since they on the one hand have got the resources for such marketing measures. On the other hand their sustainable approach is then more on display among so-ciety and customers and therefore more noticed by the public.
5.1.2 Financial resources
What contributes to the financial difficulties that several entrepreneurs are facing is the fact that they are not granted any credits. This is of particular relevance in the sustainable fash-ion industry, since organic cotton usually needs to be paid in advance, as Elisabeth from Uma Bazaar explained during the interview. Without any credits, this is barely possible for small businesses with a limited amount of financial resources. As it was also stated by Thorpe and Prakash-Mani (2003), the access to capital is a critical aspect in small busi-nesses that are run by entrepreneurs and therefore even small changes in sales and costs can be problematic. The prepayment of the organic cotton can be seen as the only financial
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challenge that the interviewed entrepreneurs encountered. All of the entrepreneurs agreed, that mainly they were facing financial difficulties apart from their sustainable approach. It is more the fact of being a small enterprise in Sweden, where the living costs are high for businesses, which makes it difficult for entrepreneurs to be profitable. Financial reasons can therefore not in all cases be seen as an obstacles of operating sustainably in the fashion industry, since this is a matter of size and other factors, but not of CSR.
5.1.3 Awareness of the need for Corporate Social Responsibility
The perception of awareness of sustainability in the fashion industry among consumers dif-fered between the interviewed entrepreneurs. While some see that the consciousness for more CSR in the industry is coming up, others are still missing the awareness of the society. Whereas the interviewed entrepreneurs noticed that in other industries, like the coffee in-dustry, the awareness for more sustainability is already high, the fashion industry is still be-hind when it comes to the consciousness of consumers. But it is not only society that still needs to realize the importance of CSR, but also politics, which is displayed in a lack of rules and regulations for CSR in the fashion industry in Sweden. Partially, sustainable en-trepreneurs therefore need to break new ground in the fashion industry with their sustain-able business practices.
One of the interviewees noticed, that nowadays more and more sustainable shops are com-ing up in the fashion industry in Sweden. Despite the positive impact that a more sustain-able fashion industry would have, for her this raises the question if their shop is still needed, when CSR becomes more and more present. This way of thinking can be ex-plained by the entrepreneurial spirit of the interviewed business people. Entrepreneurs of-ten feel the need to start something new, which made them start the business with a sus-tainable approach in the first place. All entrepreneurs interviewed for this research dis-played an entrepreneurial spirit, and started their business in order to bridge a gap in the market. Peter from Nerdy by Nerds for example, could never find a jeans with a high qual-ity and a long durability. It is the discovery, evaluation and exploitation of opportunities which makes entrepreneurs want to introduce new goods and services or processes (Shane, 2003). When sustainable fashion companies become mainstream however, their business will not stand out anymore with their CSR activities and their CSR approach cannot be considered as a niche and unique business opportunity anymore. In this case a tension could be noticed between the urge for more CSR and the urge to realize entrepreneurial ideas.
5.1.4 Supplier selection
The selection of suitable suppliers is another challenge that some of the interviewed entre-preneurs were facing. As for the interviewees the quality of the garments plays a huge role, finding the right fabric, that is easily accessible is not always easy. Since they want their clothes to last, and in doing so work against the overconsumption and waste amount in the fashion industry, they have high expectations on the garments, especially on its durability. Elisabeth from Uma Bazaar explained furthermore, that even after having found a suitable supplier, the challenge was not over yet. The sustainable supplier they had chosen laid a big emphasis on CSR, however, the look of the products was not satisfactory for the European market. Elisabeth therefore first had to educate the supplier about the standards which they have for their fashion.
Another difficulty when finding a supplier is once again the size of the business, since for some suppliers it is only possible to order bigger quantities, which can be a problem for
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smaller companies if they have less customers. This prerequisite also limits the amount of suppliers that the entrepreneurs can make use of.
5.1.5 Institutionalisation
As it was noticed by Mini Rodini, the undefined labelling of organic products is a challenge for sustainably operating companies. Since there is no universal classification for the label “sustainable” or “organic”, it is harder for companies that thoroughly follow a sustainable approach to stand out with their products. As stated by De Brito et al. (2008) fashion com-panies are aware of the public’s attention to their activities and thus they start with new strategies as eco-labels. Customers cannot know if the product they purchase is made of for example 10 % or 90 % organic cotton, because both can be claimed to be organic, even though this characteristic can make a difference in quality and price. Clear regulations for the classification of organic products would be a gain for truly sustainable fashion compa-nies, as it would prevent the greenwashing of the fashion industry and the misuse of eco-labels.
Overall the interviewed entrepreneurs noticed that businesses in Sweden are not subject to any conditions when it comes to sustainability. This is possibly due to the fact that the en-trepreneurs are not producing the garments themselves, but are only designers and retailers. As explained above, regulations regarding more CSR have started to form for the produc-tion processes in the fashion industry. All of the interviewees would welcome it, if CSR was further institutionalised in the Swedish fashion industry. However, the awareness for sus-tainability does not seem to be missing only among the customers, but also in politics, as Elisabeth from Uma Bazaar explained. In the free economy in Europe, it could be difficult to make these changes through laws etc. One entrepreneur therefore suggested that it would be a bigger gain for the industry, if the European standards for working conditions and the like would be transferred to the rest of the world, instead of further improving the standards in Sweden.
Another entrepreneur suggested the introduction of “sustainability tags” for clothing, so that consumers would be aware that the garment was made sustainably and that way they could consciously chose to purchase a socially responsible item. This remark has got the same intention as diverse fashion companies agreed on at a roundtable debate, hosted by The Guardian (The Guardian, 2013). They came to the conclusion that due to the persua-sive power of the fashion industry, they could educate the customers towards more sus-tainability. However they fear that marking a piece of garment as “organic” or “sustain-able” could let it appear less fashionable for some customer group. They therefore sug-gested to highlight the social aspect of CSR more than the environmental one and featuring the garment with the story where it comes from and thereby creating an emotional re-sponse from the customer. This concept again matches with the business practices of the interviewed entrepreneurs, as for example Nerdy by Nerds have got the clothes produced right in front of the eye of the customer.
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5.2 Interrelations of challenges
Based on the aforementioned findings a model was developed to demonstrate how the different challenges are interrelated at the current state.
Figure I: Interrelations of challenges: Current status
The model contains the five types of challenges (size of the business, financial resources, awareness of CSR, supplier selection and institutionalisation), as identified above. The lack of institutionalisation and the size of the business were identified as the most critical ones, since they negatively influence several other challenges.
One of the main challenges that was stated by the interviewed entrepreneurs is the lack of institutionalisation of CSR in the fashion industry. The absence of rules consequently has a negative influence on other challenges and even intensifies the difficulties which shows the significant impact of institutionalisation. The importance of institutionalisation of CSR was also highlighted by Bitzer and Glasbergen (2010), Campbell (2007), Hoffman (2001), Joy-ner and Payne (2002), Matten and Moon (2008), Quazi (2003) as well as Wright, Smith and Wright (2007) since it plays a critical role in the establishment of CSR in organisations. Due to the lack of institutionalisation there is only little awareness among society about the need for CSR. Also, there are no regulations in place regarding the classification of organic materials, which makes the labelling inconsistent and it is hard for truly sustainable companies to compete with their materials. The lack of institutionalisation was further criticised by the entrepreneurs since they are not granted any credits, which increases their financial difficulties. This makes the sourcing of organic cotton hard for the entrepreneurs since this usually has to be paid in advance.
The second major challenge that the entrepreneurs are facing is the size of their business. The fact that organic cotton needs to be purchased in big quantities displays a difficulty for smaller companies. A small business size usually also entails a limited amount of financial resources, as found out during the study. This fact further diminishes the ability to fulfil prepayments for materials. Possessing less financial resources limits the business in being
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able to market their sustainable business approach. On the other hand the interviewed entrepreneurs are facing less publicity which is due to the missing awareness of CSR in the industry as well as the size of the business and lower name recognition. This interconnection also aligns with what was stated by Mills (2011), since the advertisement and promotion of the entrepreneurs’ businesses require financial resources and the limited resources are commonly used for other purposes first. Furthermore it was stated that newly started businesses are usually facing a lack of visibility in the beginning.
As described, various challenges originate from the small size of the business. However, this is a fact that is inevitably linked to a small entrepreneurial company and can therefore not be changed easily. In some cases the size of the business might not even be favourable to change and the company is meant to be small on purpose, as it was also stated by Hockerts and Wüstenhagen (2010). But an increasing degree of institutionalisation, as wished for by the interviewed entrepreneurs, could help companies to grow and overcome the challenges that are connected to it, as shown in the second model:
Figure II: Interrelations of challenges: Towards institutionalisation
If CSR was more institutionalised in the fashion industry by rules and regulations, the awareness of the need for CSR would rise. This could for example be achieved by the introduction of “sustainability tags” of organic materials. Companies could label organic products with certain tags to make the customer aware of its sustainability and possibly even justify a higher price. Also, it would be a gain for the industry if there was a clear classification of organic materials which would clarify the labelling of sustainable products. Moreover, it would be a great support, if sustainable entrepreneurs would get financial aid like loans or subsidies for their businesses to overcome the challenge of their limited financial resources. This would further enable them to market their sustainable business approach better. The public perception would not only be increased by more promotion opportunities but also by the enhanced awareness of CSR among society. An increased
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awareness of CSR would despite all the positive influences however cause another challenge for sustainable entrepreneurs. If CSR was more widely spread in the industry, there would be less entrepreneurial opportunities with an outspoken sustainable orientation. Nevertheless the positive influences of an increased institutionalisation would outweigh the impact of this new challenge.
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6 Conclusion
The research conducted within this thesis could demonstrate that Swedish entrepreneurs in the fashion industry with a sustainable business orientation are facing challenges when it comes to their CSR activities. Through pointing out these challenges the businesses are fac-ing, the thesis can serve as a help for entrepreneurs who want to start their business with a sustainable approach. It also showed however, that not all challenges which the entrepre-neurs encounter are due to their CSR activities. Mostly the financial difficulties arose due to the size of the business and the Swedish economy. Therefore, it was not only CSR that lim-ited the companies’ financial performance. This fact in combination with the before men-tioned increasing need for more sustainability in the fashion industry shall serve as an im-pulse for the industry towards more socially responsible business practices.
As it was explained by the interviewed entrepreneurs, there is a trend in the fashion indus-try noticeable towards more CSR. In order to increase this awareness, the following chal-lenges still need to be overcome: More awareness and intervention from the government is necessary in order to further institutionalise CSR all over the world. Sustainability needs to be better labelled and defined to prevent greenwashing and it may also be more visible and actively promoted by both large and smaller companies. The positive effects that an ad-vanced institutionalisation would have for the industry was demonstrated in the model showing the interrelations of challenges, which the writers of this thesis developed. Even though all interviewed entrepreneurs would consider it as a gain for the fashion industry, if the institutionalisation of CSR would be further realised and more companies would be forced to act sustainably, this would mean that their sustainable business approach would no longer be a niche, but would become mainstream. This tension can possibly be ex-plained by the entrepreneurs’ true belief in their CSR activities and in their belief in a bet-ter, more sustainable fashion industry, even though this would mean more competition and less unique features for them.
The traceability of the supply chain is a challenge that is already overcome by the inter-viewed entrepreneurs, however, this still needs to be accomplished on a large scale in the fashion industry. What could further help to increase the CSR support in the fashion indus-try is the sharing of experiences and best practices, what this thesis is aiming to contribute to. As it was also stated by Schaltegger and Hansen (2013), an overall sustainability in the fashion industry may never be fully achieved. However, the process of including CSR into the business activities should be seen as a visionary orientation and the transformation of the fashion industry shall be characterised by continuous improvement processes. As it was noticed by some of the interviewees, the fashion industry is currently undergoing this trans-formation towards more CSR and this thesis shall serve as a contribution towards a more sustainable fashion industry.
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7 Discussion
7.1 Authors reflections
By creating the model of interrelations of challenges that Swedish entrepreneurs in the fashion industry are facing, the authors were able to demonstrate how high the impact of an increased institutionalisation of CSR could be compared to the current status. The in-troduction of more rules and regulations for an enhanced CSR would also have an impact on major other connected challenges and could ease the path towards more sustainability.
But the findings of this thesis are not only of interest for the fashion industry. Raising the awareness of CSR on a governmental level and thereby creating more consciousness among society, would also be a gain for other industries. As stated before, the awareness in for example the coffee or banana industry is already quite far developed. However, other sectors are still lacking sustainability, like the packaging industry. This sector is still marked by a high creation of waste, usage of unsustainable materials and increasing deforestation. By pointing out this deficiency in the thesis, the researchers hope to raise the awareness for more CSR across different industries.
During the development of the thesis, the authors realised that a lot about CSR has not yet been researched when it comes to entrepreneurs with a sustainable orientation. This made it difficult for the authors to narrow down the purpose of the thesis, since a wide range of topics opened up, the further the literature study continued. Eventually, it was agreed on to explore the challenges which Swedish entrepreneurs are facing with their sustainable busi-ness operations. The interview findings are a lot broader than only this research question, since various aspects of the entrepreneurs’ experiences turned out to be of interest. How-ever, this broad approach of the topic in the end worked well with the narrative inspired research of this thesis, since it enabled the possibility to explore the topic CSR for entre-preneurs in depth and to gain extensive insights into their CSR activities.
The authors would also like to point out the limitations of this study. Only a limited num-ber of entrepreneurs were interviewed within this thesis. Therefore it is likely, that other companies are facing different challenges and have different experiences with their sustain-able orientation as those presented here. Also, it is therefore difficult to draw conclusions for the whole fashion industry in Sweden. Further studies with a wider range of interview-ees could explore this topic in more depth.
During the data collection phase of the study, the researchers got a lot of positive reactions from potential entrepreneurs they approached. However, in the end it turned out that not all of them could live up to the expectations and did not reply anymore. Therefore, the re-searchers learned it is important to always make a follow-up call quite soon after sending out the invitation emails and take the lead in own hands. In the end the researchers have been able to conduct a sufficient amount of interviews and thus they have been able to ful-fil this study appropriately. Nevertheless, it would have been of great value to conduct more interviews.
7.2 Suggestions for further research
During the execution of the thesis several different approaches to further elaborate on the topic have come up. The study could be conducted in a different country in order to see differences in the CSR approach in different cultures and conditions. Sweden was chosen due to the high CSR awareness of the country and the importance of the fashion industry.
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It would be interesting to see however, if businesses in other countries, possibly even coun-tries with less CSR awareness, are facing different challenges. It would especially be of in-terest to see the other side of the coin and examine, how the producers and other partners in the supply chain are dealing with CSR and what challenges they are facing. The views and experiences of the institutions, which are drivers for more CSR in the fashion industry, like MISTRA and The Nordic Initiative Clean and Ethical would also enable valuable in-sights into the topic.
Within this thesis the interviewees all have pointed out that more institutionalisation of CSR would be appreciated in the industry. So far, no adequate rules and regulations exist and no subsidies have been made available for sustainable start-ups. Therefore, another re-search suggestion is to further elaborate on how institutionalisation can be implemented on a nation-wide level and how the government can give a strong impulse to a sustainable fashion industry.
Based on this thesis, it can be stated that all separate entrepreneurs give their own contribu-tion to sustainability and influence the fashion industry. However, it is hard to give an an-swer to the question if the fashion industry is welcoming this change or not. Therefore, a future research suggestion is to investigate in the sustainable orientation of entrepreneurs from the fashion industry perspective. This way, a more comprehensive conclusion can be given about the impact sustainable entrepreneurs realise with their sustainable orientation.
It will also be of interest to see how the CSR awareness will develop over time, since all in-terviewed entrepreneurs predicted that it will be of greater importance in the future. Re-sources will become more and more scarce and the pressure of fashion companies to act in a socially responsible way is growing. It can therefore be the case, that the challenges, which the entrepreneurs are now facing in their niche of the sustainable orientation will change or vanish over time, if more and more companies adopt a sustainable orientation.
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Appendix 1: Email interview questions
Interview Questions Master Thesis
Corporate Social Responsibility in the Fashion Industry Challenges for Swedish Entrepreneurs
Prerequisites: Corporate Social Responsibility (CSR) activities include business practices that display responsibility towards people (that is society, local communities, employees and other stakeholders) as well as the planet (that is the environmental impact of business prac-tices).
CSR activities
In what ways does your company act in a sustainable/socially responsible way? Es-
pecially with regard to:
o Sourcing of your products
o Production and working conditions
o Transportation, packaging and waste management
o Treatment of employees/Human Resources management
Are there other ways in which your company contributes positively to the envi-
ronment or the society?
Motives
What are your motives for your outspoken sustainable way of performing your
business?
How do you perceive the pressure of the society? Especially in the context of re-
cent incidents like the breakdown of the fashion manufactory in Bangladesh in
2013?
Have you ever thought about building up your business without these CSR activi-
ties or has it always been clear for you to operate in a socially responsible way?
Would it have been easier for you to start a business with less sustainable focus?
Market, supply chain and competition
Who are your customers?
o Broad range of customers or mostly ‘green’ customers?
o Does your sustainable orientation show in the prices of your products?
Who are your biggest competitors?
o Do you see big chains as H&M and Zara for example as competitors?
How many channels exist in your supply chain?
o Can you keep easily track of all processes?
o Do you visit the production manufactories?
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Institutionalisation
Is your business underlying any rules and regulations by law or any other institu-
tions with regard to sustainability or social responsibility?
o If yes, which ones and how are you implementing these in your business
practices?
Do you think it would be a gain for the fashion industry if there were more regula-
tions and more companies were forced to act in a responsible way?
Is there any support (for example subsidies/subventions) from the government for
sustainable production/business operations?
Chances
What do you personally believe are the advantages of acting in a responsible way
for your business?
Do your CSR activities have an influence on the stakeholder of your business?
How are your CSR activities perceived by:
o Customers?
o Suppliers and other stakeholders?
o Investors?
o Public/society?
o Employees?
Challenges
What drawbacks and challenges have you faced with regard to your CSR activities?
o E.g. cooperation with suppliers, manufacturers, carriers etc.
Are you facing any increased costs due to your CSR activities?
Does it pay off to act in a sustainable way?
Tensions
Do you believe that there is a contradiction between acting in a socially responsible
way and making profit? Or do CSR activities rather enhance your business per-
formance and profit chances?
What differences do you experience with regard to CSR in comparison to larger
companies?
o Is it more difficult to perform business in a socially responsible way due to
the smaller size of the company? (Less (financial) resources, economies of
scale, chances to find a supplier, smaller network, less public perception)
Are your CSR activities your competitive advantage, esp. in comparison to larger
firms or are they more a ‘side aspect’ of your business?