Small and medium fashion businesses are being told to treat circularity as a core strategic priority rather than a side project, with a new guide from BSI setting out how design, supply chain, marketing and legal teams should work together to make the shift happen. The Circularity Playbook for SMEs, published on 22nd July, arrives as EU regulation reshapes the sector and UK policy is expected to follow. BSI research cited in the guide found that 62% of people globally think consumer goods should be designed for future reuse, repurpose and recycling even if it raises costs. Global fashion and textiles are estimated to account for 2 to 8% of global greenhouse gas emissions, with production consuming around 215 trillion litres of water each year, underlining why the sector’s move towards circularity carries both environmental and commercial weight.

Making Circularity A Core Business Priority

The playbook sets out practical steps for planning, implementing and scaling circularity, starting with businesses defining what the concept means for their own operations, whether that is designing for longevity and repair or trialling resale and rental models downstream. Small interventions carry outsized impact, the guide notes, pointing to measures such as publishing repair instructions, adopting modular design to simplify disassembly, and standardising components like zips or buttons.

Performance measures should be aligned with sustainability outcomes, the guide advises, recommending metrics such as profit per product lifespan, customer retention through repair and resale, and material efficiency and waste reduction.

Supply Chains And Supplier Engagement

Recognising the complexity of modern fashion supply chains, the playbook highlights that embedding circularity begins with mapping Tier 1 suppliers and main material sources, then identifying gaps in available data. Suppliers should be engaged early on circularity goals, with clear expectations set around what environmental and sourcing information is requested from them.

Navigating A Tightening Regulatory Landscape

The guide addresses the regulatory pressures bearing down on the sector, chiefly the EU’s Digital Product Passport rules. From 2027, DPPs, product specific data records that act as a digital identity for a product throughout its lifecycle, will be required for manufacturers selling into Europe in priority sectors, with fashion and clothing brought into scope from 2029 according to the European Commission’s Directorate General GROW. Alongside this, the EU’s Directive on Empowering Consumers for the Green Transition will, from September, prohibit misleading environmental claims and unsubstantiated sustainability labels.

To support compliance, businesses are encouraged to retain evidence for any environmental or ethical claims, make supporting product data accessible via websites or QR codes, and avoid making unverified sustainability claims. The guide also points to standards including BS 8001:2017, currently under revision, and the ISO 59000 series covering the circular transition, as tools for turning ambition into action.

Sara Walton, Sector Lead, Sustainability at BSI, said:

“Every company in the fashion and retail sector, no matter the size, has the opportunity to transition to a circular model. This is not just good for the environment, but can also drive resilience, create new revenue streams and drive long‑term value, especially as regulation and consumer scrutiny increase.”

“What’s critical is that circularity is not considered just a side sustainability project, but becomes a core business strategy, with input from a cross-functional team involving everyone from design to supply chain partners, marketing and legal. Every business will have its own considerations, but whether it is rethinking design principles or pivoting to rental models, now is the moment to start the transition from a linear to a circular model. Standards are a vital support here, because they provide a shared language, practical methods and recognized benchmarks to help businesses implement circularity, measure progress and communicate results with confidence.”

A Strategic Opportunity, Not Just Compliance

The playbook frames circularity as a route to differentiation as much as a regulatory response, arguing that businesses which design for durability, offer repair or resale services, and communicate transparently will be best placed to capture new value as consumer and policy scrutiny intensifies.

Professor Martin Charter, Director of The Centre for Sustainable Design, University for the Creative Arts, said:

“Circularity is not only about compliance, it is a strategic approach to building resilience, strengthening supply chains and differentiating in a competitive market. Businesses that design for durability, offer repair or resale services and communicate transparently are better positioned to respond to these changes and capture new sources of value. In a fast‑changing landscape, circularity provides a practical pathway for SMEs to respond to regulation, to innovate and to create long‑term value, for their business and for society.”

Taken together, the guide’s message to fashion SMEs is that circularity works best when it stops being treated as an isolated environmental initiative and becomes embedded across every function of the business, from the drawing board to the supply chain to the marketing team responsible for communicating results.