The Role of Blockchain in Facilitating the Transition to a Circular Economy: A Critical Review of Current Applications in the Fashion Industry

The clothing and textile industry faces increasing pressures due to anticipated changes in EU legislation, galvanising fashion companies to prioritise more circular production and consumption practices. Industry 4.0 technology, particularly blockchain, emerges as a crucial enabler for achieving Circular Economy (CE) principles. While the potential benefits of blockchain are recognised in existing literature, widespread adoption in the fashion industry remains a work in progress. Accordingly, this research investigates how fashion brands are currently implementing blockchain technology within their supply chains to support CE principles, whilst also examining the associated challenges and opportunities. Through a critical analysis of multiple case studies, this study identifies three key pathways through which blockchain aids fashion companies in aligning with CE principles: (1) Efficient Product Lifecycle Management, (2) Attaining End-of-life Circularity, and (3) Enabling Product Life Extension. Yet despite blockchain’s promises, its integration throughout the fashion supply chain poses significant challenges. This research underscores the need for further exploration to address these challenges, unlocking the full potential of blockchain technology in realising a CE within the fashion industry.