Sustainable innovations in business-to-business at the crossroad: emerging paradoxes in the fashion industry

In the business-to-business (B2B) landscape, the circular economy approach is becoming increasingly widespread as companies steadily seek to embrace the principles of sustainability (Sairanen et al., 2024). A circular economy is:

In this vein, the Ellen MacArthur Foundation, one of the leading international organizations working in the field of circular economy and sustainability, argues on its website that “in a circular economy, products and materials are kept in circulation through processes like maintenance, reuse, refurbishment, remanufacture, recycling, and composting”. Considering industrial networks, the circular economy includes, for instance, using recycled materials, reusing and sharing products and offering maintenance services and support. The circular system is substantially built on innovations (Prieto-Sandoval et al., 2018; Ranta et al., 2020). Therefore, this paper considers sustainable innovations (Aarikka-Stenroos et al., 2022; Keränen et al., 2023) linked to the circular economy approach, focusing on the case of the fashion industry. Sustainable innovations can encompass new products, processes, services and marketing and organizational methods seeking significant sustainability impacts (Aka, 2019). They can also integrate environmental, social and financial considerations into company systems through research and development (R&D) and commercialization (Boons et al., 2013). Hence, among the huge academic literature on sustainability, the study focuses on the circular economy approach, which provides crucial opportunities based on different innovations, for instance, in product design, service and business models (Webster, 2015). Our study also contributes to the literature advancing sustainability as a major driver of innovation (Varadarajan, 2017). The circular economy is a leading approach in B2B markets (Ingstrup et al., 2021). Particularly, this paper examines suppliers’ perspective in the fashion industry and their relationships with various actors to market sustainable, innovative materials that go beyond traditional materials.

Material production and processing account for most of the fashion industry’s carbon footprint. In recent years, this sector has increasingly invested in developing innovative materials to align with sustainability principles. Fashion suppliers have had to respond to issues arising from well-established materials like animal leather and natural or naturally sourced fabrics like cotton. Specifically, animal leather has been one of the most controversial materials from a sustainability standpoint for several years (de Klerk et al., 2019) due to its production’s ethical and environmental impact, considering the tanning process, the treatment of animal farms and land use. Conversely, producing materials such as cotton (even organic cotton), hemp and viscose requires large amounts of water and land. It often involves using harmful chemicals (Rathinamoorthy et al., 2023). Even recycled materials raise some concerns; with increasing frequency, recycling chain processes lack transparency and lead to waste-tracking difficulties (Gong et al., 2022), resulting in an unclear final composition of the material. In this panorama, many companies embrace circular economy values to develop innovative and sustainable materials. In the empirical world, interesting solutions are emerging from, for instance, agricultural and food industry waste, such as apples, pineapples, mushrooms, oranges, grapes and bananas (Mishra et al., 2021; Provin et al., 2021). Indeed, food loss and waste represent a major global issue with far-reaching implications for the planet (Närvänen et al., 2022); in this context, fruits and vegetables are disproportionately affected by loss and waste as significant portions are discarded during the various stages of production, including harvesting, handling, transportation and processing (Martínez-Inda et al., 2023). The circular economy principles provide a framework for repurposing agricultural and food industry by-products as inputs for innovative fashion production processes; this approach enables the creation of sustainable and innovative materials by fashion suppliers. Also, interesting solutions come from recovering industrial process waste, where marble and other minerals can be an example. In the scenario under scrutiny, fashion firms are also exploring innovative materials, such as lab-grown fabrics and bio-based textiles, to enhance the sustainability of the fashion sector (Barletta et al., 2024; Ma et al., 2024). For instance, Hildebrandt et al. (2021) examine bio-based leather substitutes to produce items like shoes, handbags and clothing. However, innovative materials are gaining traction not only in the fashion industry. Accordingly, the extant academic literature has explored the topic of sustainable innovations across various sectors, including the food packaging industry (Keränen et al., 2021) and the automotive industry (Munten et al., 2021).

Nevertheless, despite the current attention surrounding the circular economy and the investments made by companies, the diffusion of sustainable innovations into the market encounters several difficulties because they must compete with well-established practices (Planko et al., 2016). The fashion industry continues to be dominated by traditional materials. Our paper’s perspective of paradoxes fits within this discussion.

We specifically rely on the market as network approach from the Industrial Marketing and Purchasing (IMP) Group (Håkansson and Snehota, 1995), and we aim to fill a gap regarding the increasing need for more research about the study of sustainable innovations from a network level (Harrison et al., 2023; Keränen et al., 2023; Mota et al., 2023). A successful circular economy implementation requires collaboration among different actors (Ingstrup et al., 2021; Schöggl et al., 2024) as sustainability and circularity have been advanced as network-related issues: this requires expanding these concepts’ analysis from companies to networks. Indeed, since a company cannot address the sustainability requirements in isolation, being embedded in a network has proved to be crucial (Bayne et al., 2021; Runfola and Monteverde, 2023). This is especially true when it comes to sustainable innovations, as their development and subsequent diffusion necessitate establishing network relationships and collaborating with several players (Keränen et al., 2021). Indeed, studies within the IMP framework have elucidated the critical role of collaborations among new and already existent actors in the network for developing sustainable solutions (Baraldi et al., 2011). The fashion industry is traditionally conceived as a mature, nontechnological industry, having strong established network relationships where the interplay with actors (both existing and possibly new) is needed to implement the circular economy approach with an innovative twist. Moreover, this sector has been effectively explored in the extant literature through the IMP market as network perspective (e.g. Guercini and Milanesi, 2019; Talay et al., 2020; Runfola et al., 2021).

In this realm, we explore how sustainability paradoxes (Akrout and Guercini, 2022) manifest in the outlined context, thereby investigating the challenges hindering sustainable innovative materials’ development and widespread adoption. The paradox concept has recently been increasingly adopted to investigate sustainability topics (Carmine and De Marchi, 2023). Paradox can be defined as “persistent contradiction between interdependent elements” (Schad et al., 2016, p. 6) and “contradictory yet interrelated elements that exist simultaneously and persist over time” (Smith and Lewis, 2011, p. 382), thus resulting in sustainability tensions and ambiguous sustainability issues (Hahn et al., 2014; Hahn et al., 2018). The circular economy system creates paradoxical tensions for companies; while pursuing circular economy goals can enhance environmental efforts, it may compromise product quality and competitiveness (Daddi et al., 2019).

The main reasoning behind our paper stems from the fact that, given the shared importance and urgency of sustainability in the market, one would expect that for those who invest in it, such as fashion suppliers through the proposal of innovative materials, sustainability would be a growth driver and a lever for market penetration. However, in reality, it represents constraints that are not easy to overcome: the paradox, characterized by its inherently contradictory nature, lies in this. The academic debate acknowledges the presence of sustainability paradoxes, and there are interesting studies about critical issues related to sustainability (Akrout and Guercini, 2022). Conversely, the existing literature is characterized by fragmented and nonsystematic definitions and indications that call for a deeper exploration of how and with what peculiar features sustainability paradoxes manifest themselves, considering the involved actors and networks. In conducting this research, we also enrich academic studies precisely investigating paradoxes in networks (Tóth et al., 2018; Butler and Purchase, 2021) through an original contribution that lies on the paradoxes that arise in the implementation of sustainable innovations based on the networked approach of the circular economy. In this article, we assume the perspective of suppliers that realize sustainable and innovative materials, targeting fashion customers. The main research question of the paper is the following:

From a methodological point of view, the exploratory nature of the research led us to adopt a qualitative approach, specifically through the investigation of four case studies – Alpha, Beta, Gamma and Delta – that, as a result of the empirical analysis, allow to identify four paradoxes, i.e. the product and performance paradox, the sourcing and production network paradox, the market bifurcation paradox and the misleading perceptions paradox. Our study emphasizes how the business network support is crucial for enabling supplier companies to develop and try to disseminate sustainable and innovative materials following a circular economy system; however, the difficulties encountered, albeit with different nuances and intensities, affect all the company’s network relationships, considering the phases of sourcing, manufacturing, market access and distribution to the final customer, in a sort of vicious circle. Hence, the emerging paradoxes call on all network business actors to make a greater effort to reshape and rethink their relationships to overcome the paradoxes themselves. It is crucial to start reflecting on these topics, also considering that, since a paradox is a situation of at least a contradictory nature, the quality of business relationships could be deeply affected by paradoxes (Biggemann and Buttle, 2009). Furthermore, in the IMP conceptualization, paradoxes intrinsically belong to business networks (Håkansson and Ford, 2002). In this scenario, sustainability issues offer ample scope for paradoxical choices and challenges (Hahn et al., 2018; Akrout and Guercini, 2022), especially for companies in the fashion setting.

The rest of the paper is structured as follows. The next section, divided into two distinct paragraphs, presents the study’s theoretical framework, focusing on the circular economy approach in the B2B realm and sustainable innovations in fashion from a network standpoint. Subsequently, the methodology is explained in detail, while each case study’s empirical findings are reported. Finally, the paper concludes by discussing the results obtained to answer the research question, implications and limitations; future research avenues are also proposed.

The circular economy approach advances a restorative industrial system that is sustainable by intention and design (Ellen MacArthur Foundation, 2013; Geissdoerfer et al., 2018). Sustainability and circular economy are intertwined in the academic debate (Melander and Arvidsson, 2022), with the circular economy approach being specifically treated as an effective means to introduce sustainability into business (Engez et al., 2021). Indeed, the circular economy aims to determine more environmentally sustainable economic growth for companies (Kirchherr et al., 2017), which can innovate in various ways (Mariadoss et al., 2011) and are encouraged to invest in designing specific technologies, products/services, operations and business models to meet the circularity approach (Ranta et al., 2018). Specifically, circular economy “keeps products, materials and components at their highest utility at all times through design processes that enable material flow to maintain operational value in consecutive use cycles”, thus providing also opportunities for innovation (Sönnichsen, 2023, p. 40). Creating long-lasting economic, environmental and social outputs for the social system characterizes the circular economy approach, which is presented as an alternative to the prevailing “take, make and dispose” model of production and resource usage (Ghisellini et al., 2016).

Hence, three main activities characterize the circular economy in the extant literature: reduce, reuse and recycle (Ghisellini et al., 2016; Kirchherr et al., 2017). The “reduce” principle is based on improving efficiency in both production and consumption processes; this means that the aim is simultaneously to minimize the use of energy and raw materials, as well as the generation of waste. Considering the business side, replacing harmful substances with less harmful ones could be a possible solution (Figge et al., 2014). The “reuse” activity involves reusing products and components that are not waste for their original purpose. In this way, the resources, energy and labor adopted are less than needed to realize new items from virgin materials or recycle and dispose of products (Ranta et al., 2018). Finally, referring to the third concept (i.e. the “recycle” principle), waste materials are transformed again into products, materials or various substances to accomplish their original purpose or another different one (Ghisellini et al., 2016). Overall, even if the three listed activities all contribute to the waste reduction goals, reusing and reducing require more energy and resources for their implementation, considering that, on the recycling side, objects can instead be readily disassembled into their main components. After all, academic interest in the “circular economy” has blossomed in recent times, with this term crossing a series of related and transversal concepts, such as “closed-loop economy", “industrial ecology” and “zero waste” (de Jesus et al., 2018).

The circular economy approach is innovation-driven (Engez et al., 2021) and grounded in the sustainability transition influencing several B2B actors, such as supplier firms, customers and business buyers (Ranta et al., 2020). In applying the circular economy system, various innovations usually introduce sustainability to the markets (Prieto-Sandoval et al., 2018). In this vein, Ranta et al. (2020) advance the idea of innovations as enablers of the circular economy. According to the study by Kaipainen and Aarikka-Stenroos (2021), to fuel circular economy, “we crucially need innovation” (page 59). Scholars in the B2B marketing domain have highlighted the role of innovations (and the opportunities that arise from them) as crucial for adopting business strategies based on sustainability and circular economy in industrial settings (Spring and Araujo, 2017). Thus, B2B companies improve their businesses’ circularity through sustainable innovations (Gusmerotti et al., 2019). From a broader perspective, innovation is the generation of new ideas or combinations realized through new products, services and processes. From a circular economy perspective, sustainable innovations require the company to abandon old practices (Seebode et al., 2012) to slow and close resource loops (Bocken et al., 2016). The circular economy promotes processes and products that try to minimize environmental and social impacts through the use of renewable resources, the reuse of recovering materials, the extension of product lifespan and the replacement of hazardous raw materials; in this approach, the objective is to transform waste into input because of other processes (de Jesus et al., 2018).

The fashion industry’s excessive resource exploitation, water usage, widespread chemical pollution and waste generation throughout manufacturing (Pal and Gander, 2018) are well-known environmental concerns. In pursuing sustainability, many companies incorporate natural materials like organic cotton, hemp and jute into their fashion products. However, from the suppliers’ perspective, producing these materials necessitates much cultivation of land and water (Rathinamoorthy et al., 2023). Another much-debated topic in the fashion system regards scandals involving animals (Achabou et al., 2020); the adoption of materials like fur, leather, silk and wool has faced growing opposition from advocates for animal rights. Also, recycling could raise issues regarding the origin of the raw material, production processes and end-of-life of the items, negatively affecting consumers’ perceptions (Meng and Leary, 2021). From this perspective, fashion firms increasingly propose new market solutions that rely on sustainable and innovative materials.

The development of these specific materials by fashion supplier companies usually requires engineered technologies with varying levels of complexity. In this respect, suppliers undertake various paths to offer innovative sustainable materials, including materials from waste from the agri-food supply chain, materials from industrial processes and materials from natural and vegetal sources. In the current panorama, these materials are often defined as “neo-materials” and are the basis of the fashion industry’s fundamental process of circular economy (Pellizzari and Genovesi, 2021). In this vein, innovations enable the successful adoption of the sustainable and circular economy requirements in industrial markets (Spring and Araujo, 2017); based on the research of Keränen et al. (2023), innovations are mainly realized to pursue sustainability objectives. Therefore, according to the sustainable innovations perspective, it is possible to derive that:

Furthermore:

In addition to this, referring to the work of Keränen et al. (2023) about bioplastics, sustainable materials innovatively proposed by suppliers in the fashion industry can specifically represent a case of sustainable innovation as they are ever more pushed by legislation, consumer demand and public innovation mechanisms.

Sustainable innovations are linked to sustainability objectives that are holistic and long-term oriented (Boons et al., 2013). Particularly, sustainable innovations require investing in relationships with multiple actors in the network (Aarikka-Stenroos et al., 2022; Keränen et al., 2023), and they specifically bring into focus the importance of relationships with diverse network actors, such as suppliers and customers (Boons et al., 2013; Varadarajan, 2017), along the entire supply chain (Li et al., 2021). The IMP theoretical lens provides a solid foundation for this study. According to the market as network approach, business relationships are part of a network, industrial markets are networks and companies are embedded in networks (Håkansson and Snehota, 1995). Business networks are thus interdependent as business relationships are connected (Wilkinson and Young, 2002). Considering innovations in the business network, Håkansson (1987) shows how companies cooperate to generate innovation, where relationships have a key role in the reciprocal sharing of capabilities and competencies (Håkansson and Snehota, 2017). In this scenario, among business marketing studies, for example, Dominidiato et al. (2023) examine sustainability-led innovation in the realm of supplier-customer relationships, while Keränen et al. (2021) explore the changes to existing industry value networks that can facilitate sustainable innovations diffusion in food packaging. Accordingly, sustainability is a recognized network concept involving different players (Baraldi et al., 2011; Öberg et al., 2012), requiring connectedness among actors (Harrison et al., 2023).

IMP Group scholars are increasingly exploring the sustainability topic (Johnsen et al., 2017; La Rocca and Dal Molin, 2024), also specifically in the fashion industry (Runfola and Monteverde, 2023), which has indeed demonstrated its suitability for exploration adopting a business network approach (Runfola et al., 2021). Thus, as a critical aspect for the company, sustainable innovations in the circular economy domain require identifying and involving various actors (Ghisellini et al., 2016; Brown et al., 2021) in the business network (Engez et al., 2021); sustainability is a networked concept. We consider suppliers’ perspectives that, in the business network, turn to fashion customers offering sustainable and innovative materials. Although it has become a reference theme for all fashion companies, sustainability also presents obstacles. Recent literature has highlighted the usefulness of addressing paradoxes and the multiple challenges they generate for businesses (Akrout and Guercini, 2022; Harrison et al., 2023). Indeed, the concept of sustainability itself is increasingly characterized by complexities, inconsistencies and challenges that give rise to sustainability paradoxes. These paradoxes are related, for example, to scandals, environmental disasters and crises within the fashion industry (Akrout and Guercini, 2022), and to tensions among multiple, interrelated and competing sustainability issues that influence corporate objectives (Hahn et al., 2018). The paradox perspective is particularly pertinent in an era of pressing problems such as climate change, biodiversity loss, modern slavery and social inequality (Carmine and De Marchi, 2023). This paper explores and defines the sustainability paradoxes from the perspective of fashion suppliers striving to meet sustainability demands. Paradoxes can negatively impact business network relationships (Håkansson and Ford, 2002; Biggemann and Buttle, 2009). In this vein, while Tóth et al. (2018) examine the paradoxical nature of tension in a collaborative value co-creation context, emphasizing the network imbalance precisely caused by tension, Butler and Purchase (2021) focus on how business network activity patterns change when actors experience four specific tensions (i.e. tension around relationship outcomes, tension around network position, tension around actor’s control within networks and tension around network structure). Therefore, our research is pivotal to understanding the relevance of the topics under analysis and the reasons behind the difficulties toward a sustainable transition of the fashion system and full adoption and dissemination of the principles of circular economy.

Considering the underexplored research topics, the study’s exploratory nature justifies a qualitative methodology (Crick, 2021), following the approach mainly applied by B2B marketing academics (Lindgreen et al., 2021). We adopted a multiple case studies approach to answer the paper’s research question (Eisenhardt, 1989). Case research is important in theory testing and building (Eisenhardt and Graebner, 2007). Through wide-ranging desk research (consulting secondary materials such as press articles, interviews with entrepreneurs released on websites, video recordings, white papers about the fashion industry, association and foundation records/archives, company websites, company reports and corporate social media profiles), we selected four Italian companies based on the following requirements: they are supplier companies, operating as B2B firms in the fashion industry; and they follow a circular economy approach in the realization of innovative sustainable materials, relying on specific technologies. We followed a theoretical sampling as the four cases have been selected “because they are particularly suitable for illuminating and extending relationships and logic among constructs” (Eisenhardt and Graebner, 2007, p. 27). Moreover, multiple cases develop a more robust theoretical foundation for theory building based on a broader range of rich empirical data and extensive exploration (Brown and Eisenhardt, 1997; Eisenhardt and Graebner, 2007). Thus, having four cases allows for adequate investigation of data complexity and theory generation (Bourgeois and Eisenhardt, 1988; Eisenhardt, 1989), and this number is in line with previous studies having a similar methodological approach for exploring analogous issues (e.g. Ciliberti et al., 2011; Guercini and Runfola, 2012). Indeed, even if it is difficult to indicate an ideal number of cases, “a number between 4 and 10 cases usually works well” (Eisenhardt, 1989, p. 545). The preliminary contacts with the four companies were made by e-mail. Consulting secondary data also allowed us to strengthen the analysis of the business cases. Table 1 provides a brief overview of each case study profile.

The peculiarity and added value of the identified case studies lie in the fact that, although all are oriented toward the development of innovative sustainable materials, each of them embraces and applies the circular economy approach in a different way (e.g. by upcycling food industry waste or by creating bio-based solutions) and at different times (e.g. at the company’s foundation or later in the process of integrating the corporate offerings). Consequently, gaining a broader perspective on the issues is possible. Thus, relying on previous academic contributions considering the case analysis method in the industrial marketing context (Halinen and Törnroos, 2005; Piekkari et al., 2010; Guercini and Runfola, 2012; Bonamigo et al., 2022) effectively, our study uses primary data from company interviews and secondary sources. Interviews are advantageous as they foster a connection between the researcher and the interviewee (Guercini, 2004). Through verbal and nonverbal communication, this allows for a deeper understanding of the participant’s views on specific situations (Bonamigo et al., 2022). Over time, IMP research has turned heavily and successfully to interviews as a primary data collection method.

Specifically, we conducted in-depth semistructured interviews and, to stay focused on them, we followed an ad hoc interview protocol articulated into three main thematic areas:

1. Company profile (mainly brief history, products offered and their positioning, principal customers and target markets);

2. Business network relationships leveraged for the development of innovative sustainable materials in the fashion industry, with a particular focus on the implementation of the circular economy approach; and

3. As a consequence of the previous point, main difficulties and challenges encountered in the sourcing, manufacturing, market access and distribution to the final customer phases.

We counted on the study of the extant literature and the analysis of the secondary documents to effectively build the protocol; furthermore, adopting an interview guide is valuable for study reliability and external validity purposes (Lindgreen et al., 2021). Because of confidentiality reasons, the actual names of the supplier firms involved in the research are withheld and anonymized.

Thus, from March 2023 to July 2024, we conducted, in total, eight interviews: two with the CEO of Alpha, two with the Co-Founder of Beta, two with the Sales Manager of Gamma and two with the Sales manager of Delta. In addition to data collection, this period has been valuable and strategic for observing the evolution and affirmation of the innovative materials sector in the context of sustainability in fashion; in fact, the “next-generation materials” are now more urgent than ever in the attempt to phase out water and energy-intensive materials in the fashion industry (Good On You, 2024). Specifically, the interviewees were carefully chosen based on the recommendations of each company’s top management; indeed, during preliminary contacts, these subjects have been indicated as having the most in-depth knowledge and experience in the topics covered by the investigation. To ensure the accurate derivation of the findings, we discussed the results that emerged during the interviews with the informants; the second round of interviews especially aimed to confirm and elaborate on specific insights gleaned from the researchers. Notably, open-ended questions were used to elicit detailed and nuanced responses from informants regarding the topics of inquiry. The interviews lasted nearly 50 min on average.

All interviews were recorded and transcribed, creating a chain of evidence for the entire research process (Lindgreen et al., 2021). Moreover, to guarantee the construct validity of the qualitative multiple case studies, we triangulated the interview data with secondary information from the sources, which was purposely obtained prior to the interviews (Eisenhardt, 1989). Considering multiple sources also has the potential to justify data credibility (Creswell and Miller, 2000). Continuous interrelation and triangulation built the results upon the combined perspectives revealed through interviews and secondary data (Denzin, 2017).

Table 1 presents the company profiles and collected data for the four case studies.

To reliably answer the research question, a variable-oriented strategy was adopted in the context of cross-case patterns (Eisenhardt, 1989) and made it possible to identify and interpret the common themes and the relationships emerging from the cases. Therefore, we identified the emerging themes and salient verbatim statements within our data (Moustakas, 1994). Particularly, the sustainability paradoxes were developed through a process of individual coding and subsequent collaborative discussion among the authors. Indeed, we debated relevant insights through several meetings. This process ensured a comprehensive and consensus-based interpretation of the results. Moreover, we conducted recurrent check-ins with the informants during the interviews (Franklin et al., 2010), which involved regularly seeking participant validation for our interpretations of their responses. For the data analysis phase, we also relied on the abductive approach of systematic combining, as proposed by Dubois and Gadde (2002); this methodological approach has proven to be suitable as the paper investigates an underdeveloped topic in the academic debate (La Rocca et al., 2017). Returning to the theoretical underpinnings of this research, we revisited existing academic literature on sustainable innovations within the circular economy system, with a particular focus on emerging studies on the paradoxes and challenges associated with sustainability in business contexts. The IMP Group’s market as network perspective provided a robust theoretical framework for examining our research topic through business network relationships. The methodological approach described above enabled us to identify the sustainability paradoxes encountered by suppliers of innovative materials in the B2B realm.

As early as 2010, Alpha entered the world of sustainability with an initial experiment to create an apple-derived fabric, thanks to a significant and key collaboration with a company located in northern Italy with a patented process for precisely making an apple-based material. The patent-holding company represents a pivotal network relationship for Alpha, especially considering its involvement in apple waste collection. Five years later, in 2015, Alpha officially introduced its innovative sustainable material, which had been developed by upcycling the apple juice industry waste.

Since 2018, Alpha has made significant investments to promote its material in business, highlighting the central contribution of the circular economy approach in reusing apple waste. Specifically, as interestingly detailed by Alpha’s CEO:

Considering Alpha’s network relationships, it is worth noting that the pulverization process is carried out by a separate company from those that process the waste. The drying and pulverization stage is crucial to prevent apple juice waste from rotting; in this regard, the interviewee admits that:

Nowadays, apple-derived products account for around 30% of the company’s business, and its commitment to sustainable innovation is constantly evolving. Recently, it introduced a plant-based material derived from bamboo. Particularly, the respondent says: “bamboo plants are pruned every few years to encourage regrowth. We source the pruning waste for our material, made possible through our partnership with an Italian agricultural company”; this company is grounded in a sustainable business model capable of supporting Alpha’s circularity requirements.

The manufacturing process of the sustainable materials made by Alpha occurs by covering, through coating or impregnation, textile support of recycled or natural fibers with polyurethane, also adding additives and pigments; to date, apples rather than bamboo are used to reduce part of the dominant chemical component, i.e. polyurethane, to 50%. In this regard, despite the role of innovation as a key driver of sustainability, some shortcomings emerge; the company’s CEO emblematically states:

Alpha aims to increase the percentage of polyurethane replaced by waste or natural components. However, the fashion supplier is bound to encounter challenges; as the interviewee acknowledges:

Nonetheless, leveraging an extensive experience at the company, Alpha’s CEO emphasizes that:

The informant’s words are truly emblematic of the company’s commitment to the circular economy precisely because Alpha aims to recover a waste product, i.e. something that already exists and would otherwise be thrown away. For instance, the leather-like fabric made from apples exemplifies how waste is upcycled from another industrial context, namely the agri-food sector.

The issue of market access (linked to the market penetration of sustainable innovative materials) turns out to be complex for Alpha since the product offered to its customers, in terms of price, is much higher than any synthetic material and slightly lower or, in any case, in line with animal-derived leather. Given this aspect, Alpha primarily targets luxury fashion brands. However, as the CEO explains, two main challenges arise: the first relates to the decision-making process in the luxury system, which is particularly structured when introducing new products. The second challenge is that:

On the other hand, Alpha effectively nurtures relationships with small sustainable fashion brands, particularly startups founded with a sustainable focus. These are fashion companies that have never used animal leather. Within this landscape, there may also be small business realities transitioning toward sustainability to meet consumer demand for alternative items. In these cases, Alpha’s CEO stresses that:

Also, Alpha occasionally offers its sustainable and innovative materials to some mid-to-high-end fashion customers.

Despite a strong presence in the B2B market, both domestically and internationally, Alpha is not unfamiliar with encountering resistance, perplexity and ambiguity. In this regard, the interviewee recounts how some brands are “reluctant to offer fashion products made from waste materials” or are driven by terminological confusion; for instance, “they are unaware that also PVC can be a vegan material as it does not contain any animal components!”. In this vein, Alpha’s CEO repeatedly emphasizes the difficulty of navigating the widespread confusion surrounding sustainability issues in the market, citing a glaring example: “according to some, animal leather, when it comes from food industry waste, is the perfect example of sustainability… Unlike our materials, which still contain polyurethane!”.

Beta embraces the principles of the circular economy by enhancing the value of raw materials, utilizing the products and byproducts of Italian stone industries, and transforming waste into opportunity. Notably, the company holds specific patents, which protect both the final product and the creation process, for producing highly innovative sustainable fabrics using unique raw materials: marble powder and mineral powder. In this way, through the recovery of processing and production waste, Beta has successfully and innovatively forged a strong link between Italy’s textile and stone sectors.

A coating technology applied to fabric is used to create the marble-derived material. Beta’s relationships with technical manufacturing companies are crucial to this aim, as these companies possess specialized machinery essential for fabric production. Beta’s production technology substitutes up to 50% of the synthetic component (e.g. polyurethane or PVC bases) with marble powder. However, a part of synthetic elements inevitably remains, preventing the complete embrace of sustainability. By partnering with suppliers to test new ideas, the company tries to reduce the chemical component as much as possible, for example, through materials derived from soy fermentation. Nevertheless, these early-stage experiments have not yet been applied to the company’s industrial volume. The fabric’s natural coloration stems from the marble powder’s inherent color, which varies depending on the specific type used, such as Rosso di Verona, Bianco di Carrara or Nero Ebano. As explained by Beta’s Co-Founder, sourcing marble powder presents several challenges:

Regarding raw material procurement, certain criticalities arise:

Another critical issue regarding Beta refers to the need to have marble powder correctly prepared to be inserted into textile machinery. As explained by the informant, in fact, “the material requires a specific grain size to perform well”.

On the other hand, Beta is aided by mineral yarn dyeing technology because minerals have more controlled granulometry. Additionally, they allowed the company to address a concrete challenge: being attractive on the market. As the interviewee highlights:

In addition to the sourcing phase, the production of innovative sustainable materials also faces challenges and potential resistance from the actors involved; Beta’s Co-Founder makes a strong case for this aspect:

Regarding market access and penetration, Beta supplies its innovative materials to some major luxury fashion groups. However, overcoming these customers’ initial skepticism and concerns is necessary, mainly related to performance and reputational issues. For this reason, currently, the use of sustainable materials is primarily reserved for seasonal capsule collections. As the interviewee explains, established luxury fashion brands are often reluctant to give up using animal leather for their products: “it fulfills the expectations of luxury, it is biodegradable, because it is a waste product of human nutrition, and it guarantees incredible performance”. Beta also targets sustainable fashion startups, which, unlike luxury brands, are highly proactive and eager to discover novel materials for their productions. However, these companies face a significant hurdle due to the high cost of innovative and sustainable materials, and, as a result, they cannot use them in significant volumes.

In 2012, Gamma began considering transitioning its entire production to a solvent-free process to address sustainability concerns and expand its product range beyond traditional materials such as acrylic and coagulated fabrics. In 2015, leveraging a significant relationship with an Italian polymer firm, Gamma embarked on the production of a bio-based material while simultaneously facing numerous challenges; indeed, Gamma’s Sales Manager admits: “I do not want to deny that it was incredibly complicated due to various commercial limitations, technical hurdles, supply chain constraints and procurement difficulties…”. In this vein, for example, the industrial machinery developed by Gamma required substantial production volumes to operate effectively, while the general market interest in bio-based products was still in its infancy. However, utilizing a specialized technology, Gamma persevered and successfully realized a novel bio-based material derived from corn, principally thanks to the collaborative and strategic relationship with the resin supplier and the interest and purchasing support from a luxury fashion brand.

The company’s decision to focus on corn stems from the fact that it ensures the production of high-performance materials resistant to tension, flexure and abrasion. Moreover, it yields a material with mechanical and physical properties aligned with those of a more traditional fabric. Also, Gamma produces reinforcement materials for the fashion industry, using solvent-free and recycled fibers, and materials derived from rice husk recovery, thus embracing a circular economy approach.

Regarding corn sourcing, Gamma’s Sales Manager emphasizes that:

The production process of the corn-based material raises further critical and complex aspects for this fashion supplier, as the informant explains:

In this sense, Gamma’s network relationships may have the potential to allow it to overcome some inherent difficulties in the production process; otherwise, from this standpoint, as mentioned by the interviewee, it might be necessary to rely on external technical partners or production labs, even if only for certain manufacturing operations.

Regarding the distribution of its innovative bio-based material on the market, Gamma’s Sales Manager clearly explains that:

On the other side, Gamma also targets what the interviewee defines as a “new niche”, consisting of smaller and less well-known fashion brands that are willing to pay a premium price for a sustainable product, in line with their values. Both sustainability-oriented luxury brands and small sustainable initiatives in the company’s network share a common factor that specifically identifies them as customers for Gamma: a sustainable philosophy that underpins their sales strategy and corporate identity. Indeed, as the informant points out:

Hence, from this perspective, significant hurdles exist to the market diffusion of innovative, sustainable products.

Overall, market access is affected by customer perceptions, which can lead to ambiguity and difficulties in cultivating relationships. For example, Gamma reports that, after a long negotiation with a very famous luxury fashion brand, the agreement did not materialize because this company decided that “not being the brand perceived as luxurious enough, all new productions would be made exclusively in real animal leather because real animal leather is a true luxury”. Similarly, there are business customers who, as explained by the respondent, “do not want to use the word 'recycled', so they only declare that the product is sustainable to avoid diminishing its quality perception”; likewise, some companies incongruously insist on asking for vegan products, “without realizing that they have been buying vegan products since the 1990s, as the term ‘vegan’ only means that there is no animal leather inside the item”.

This company specializes in creating fabrics for men’s jackets and coats, reinterpreting classic sartorial designs in a contemporary key. Considering its historical evolution, in the 1860s, Delta focused on producing blankets and woolen cloths. Originally, the most common fleece color was dark; however, white has been traditionally selected over time as it is considered more suitable for dyeing. Considering this, Delta, relying on careful crossbreeding and the advice and support of Italian sheep breeders, can currently select different color shades of the fleece, ranging from white to black, passing through intermediate shades of tobacco and cocoa. This way, the company produces ecological fabrics in natural shades and colors without chemical and polluting dyeing treatments.

Since 2022, Delta has been pursuing a significant innovation in the name of sustainability and, in particular, the circular economy, thanks to an important relationship between Delta itself and a company in the food industry (specifically the Ho.Re.Ca sector), which is a crucial supplier, as it leverages its customer network to recover coffee grounds for Delta. In this way, Delta can offer its business customers natural silk fabrics dyed with coffee grounds, thus reusing and recycling a byproduct that bars and restaurants must dispose of anyway. Investing in natural raw materials enriched with vegetable dyes is part of a company’s ongoing experimentation path; for example, Delta has created some brown-colored fabrics using acacia extract. However, production processes with vegetable dyes present challenges for the company, as Delta’s Sales Manager carefully explains:

The respondent continues:

Another important challenge is communicating to Delta’s entire business network relationships the importance and urgency of creating coffee-dyed items to respond to the sustainability requirements. The interviewee explains this point very well:

Nevertheless, Delta’s Sales Manager proudly states that “the company always embraces new ideas. However, innovation comes with immense challenges”. Indeed, Delta also realizes innovative sustainable materials with yarns derived from casein fibers originating from milk, seaweed derivatives or Mulberry and Abaca wood Viscose yarns. Despite the significant sustainability impact of using these materials, the informant also points out that it is essential to be careful as some fibers “can dirty and destroy the production machines”. In terms of criticalities, Delta frequently encounters some distorted requests from customers, who even go so far as to demand “simultaneously natural and blue materials, without having a real understanding that the two requirements are inevitably in conflict!”. Regarding market access and penetration of these innovative and sustainable materials, Delta limitedly faces a dichotomy; this supplier company is well-received by and enjoys following among customers in the luxury fashion industry, namely, established and famous brands that “align with sustainability topics or just seek high-end fabrics with unique styles”. In parallel, “there are also small or very small fashion companies devoted to sustainability”. In the latter case, these new ventures are customers having sustainability as their core characteristic. Delta’s customers extend beyond national borders, as its Made in Italy fabrics are exported to 21 countries worldwide.

In this section, we intend to delve into the main findings of our empirical investigation, based on the four business cases of suppliers of innovative sustainable products, and answer the research question: RQ) What sustainability paradoxes emerge for suppliers of innovative materials in business network relationships?

The paper highlights the emergence of at least four paradoxes of sustainability. In particular, the paradoxes can be traced back to:

1. the product and performance paradox;

2. the sourcing and production network paradox;

3. the market bifurcation paradox; and

4. the misleading perceptions paradox.

These paradoxes do not operate in isolation but are interconnected and influence each other.

The product and performance paradox implies that while innovative sustainable materials are anticipated to exhibit superior, optimal and technical performance, achieving these performance characteristics necessitates tradeoffs in the material development, such as the still unavoidable use of unsustainable and more traditional components. Our case analysis highlights how, although companies are oriented toward the circular economy, guaranteeing a high product performance also requires using traditional components, e.g. adhesives and binders. In this sense, adopting innovative solutions (such as those derived from apples, in the case of Alpha, or from coffee, in the case of Delta) could present technical problems regarding overall performance (for example, resistance, durability or color tone), which are crucial for fashion products. Moreover, despite companies’ efforts to introduce elements derived from waste as much as possible, the chemical component, especially polyurethane, remains paradoxically inevitable. Experimentation with other supplier companies to find valid alternatives to guarantee an innovative material that is both fully sustainable and performing is ongoing but with unconvincing results not yet applicable to industrial production (as in the case of Alpha, which is trying to introduce elements from algae into its production). This paradox represents a challenge for suppliers in their interactions in the whole network, not only with various raw materials suppliers and production companies but also with fashion customers that may not be fully satisfied with having to make compromises when purchasing a sustainable, innovative material limited to what the market can currently offer. The concept of new material implies that the diffusion of the circular economy approach can only be gradual and in line with the technological evolutions of the new material. In this sense, research on materials by suppliers of innovative sustainable products and other actors in the network can facilitate the spreading of novel materials in the fashion industry.

The sourcing and production network paradox suggests that while innovative sustainable materials are expected to rely on a robust supply and production network for streamlined procurement as well as efficient and optimized production processes, supplier companies encounter numerous sourcing and technical challenges. It concerns the challenges suppliers of innovative materials face in managing the production process and the supply chain. Independently from the type of raw material, innovative sustainable products raise difficulties. As regards corn, for example, concerning the case of Gamma that we have analyzed, the need to harvest plantations intended for the industrial use of the product can determine critical issues and potentially undermine the company’s relationship with its raw material supplier (in the specific case, with the supplier that grows and processes corn for Gamma’s use). At the same time, managing the marble purchasing and production process within a fashion company represents a challenge from a technical point of view, as strongly explained by Beta, also taking into account the company’s necessity of either adapting its machinery or turning to partners that can effectively collaborate to support the manufacturing process. In this sense, the growth of realities such as those we have investigated virtuously emphasizes the importance of the circular economy, which requires the support of the other actors in the network, such as manufacturing firms, technical partners and production machinery suppliers. Therefore, the diffusion of innovative materials also depends on the evolution, innovation level and cooperative approach of other actors in the network linked to the sourcing and production processes.

The market bifurcation paradox indicates that while innovative sustainable materials are anticipated to have widespread and broad market adoption, particularly given the contemporary exigency of sustainability, they struggle to penetrate the market, and supplier companies face a significant market bifurcation. It is concerned with the selling of innovative sustainable materials. Our analysis clearly shows a substantial bifurcation in terms of business customers. In the case we have analyzed, there are two main targets: luxury and small, sustainability-oriented companies (including startups). Furthermore, regarding luxury fashion companies, access to the market is often linked to temporary collections (such as capsule collections) rather than continuous and established production. The diffusion of innovative products finds a bottleneck in terms of access to the market (both for the temporary dimension in luxury and the small size of the other business customers). From a network point of view, therefore, this paradox seems to highlight the difficulty in activating new relationships in the fashion system with other network actors capable of guaranteeing a greater presence of sustainable raw materials in the collections and, consequently, the diffusion in the final market. The case studies we have examined, as testified by Gamma, for example, would be interested in establishing new business relationships within the network, going beyond the bifurcation to penetrate the market further; however, other potential customers paradoxically appear to be resistant to change, difficult to engage and not willing to pay a premium price for sustainable innovative materials.

The misleading perceptions paradox infers that while innovative sustainable materials’ concept related to sustainability is expected to be well-defined, clear and certain, it is perceived by business network actors as ambiguous, vague and open to subjective interpretation. It concerns a biased and contradictory perception of the network actors, like distributors, retailers, current buyers and potential customers, on the concepts of “sustainable innovative materials” and “sustainability” in general. Some terms (such as recycled, vegan and biodegradable, for instance) can be misinterpreted and hinder the diffusion of innovative products. At least, in the case we investigated, informants explained the difficulties regarding the terms used to describe the product. They emphasized a sort of misleading perceptions from the overall network actors regarding the new materials compared to the traditional ones. In this sense, the diffusion of the circular economy product once again requires collaboration from the other actors in the network. Also, it implies the diffusion of shared knowledge and awareness among actors about innovative materials’ potentiality, characteristics and limits.

Hence, Table 2 summarizes our reasoning.

This article proposes interesting evidence regarding sustainability innovation in the circular economy and its diffusion in the network (Keränen et al., 2023). It advances an original theoretical conceptualization of paradoxes in a B2B context. As already highlighted in the IMP literature (Öberg et al., 2012; Aarikka-Stenroos et al., 2022; Runfola and Monteverde, 2023; Sairanen et al., 2024), sustainability requires the effort of multiple actors in the network to find real adoption and diffusion. Our research precisely reiterates that a single company cannot guarantee diffusion, which aligns with what was highlighted previously. However, our paper shows additional elements. Following the growing attention toward the multiple challenges and paradoxes of sustainability (Hahn et al., 2018; Akrout and Guercini, 2022; Harrison et al., 2023), this research contributes to the IMP debate and the studies about paradoxes in the network (Håkansson and Ford, 2002; Biggemann and Buttle, 2009; Tóth et al., 2018; Butler and Purchase, 2021) by identifying at least four types of paradoxes: they represent obstacles for sustainability diffusion and show the challenges raised by adopting a sustainability approach linked to the circular economy system in the company (e.g. through sustainable innovations). Notably, our paper tries to reconcile the fragmented concept of sustainability paradoxes in the literature by delineating and defining four specific paradoxes that require mitigation.

Furthermore, a unique contribution of our study lies in the finding that paradoxes afflict fashion suppliers regardless of whether they are startups or established businesses. This finding is intriguing. Indeed, while difficulties might be expected for young companies, in line with previous academic contributions (e.g. Runfola and Monteverde, 2023), it is surprising that established companies, despite having consolidated network relationships, are equally susceptible to paradoxes, which ultimately lead to impasse situations. The issue of paradoxes related to sustainable innovative materials in the fashion industry emphasizes the need for supplier companies to rethink their network relationships and relational approaches because of the dissemination of these sustainable innovations on the market.

The paper provides interesting managerial implications. As a first point, this paper’s results call for the need to expand the company’s network; firms should thus open to novel relationships, both upstream and downstream of the supply chain, potentially with change-embracing and innovation-driven actors, possibly also with robust R&D investment and strong technological expertise. Indeed, our findings suggest that companies should avoid excessive reliance on existing relationships when developing sustainable innovative materials. Secondly, corporate communication and marketing managers should work on ad hoc communication campaigns to explain sustainable innovative materials’ characteristics, potential and existing limitations. In this way, they could promote a widespread understanding of these materials on the market and overcome the contrasting perceptions of network actors. From this perspective, an intervention by policymakers on a more homogeneous definition of sustainability issues would be desirable so as not to leave room for different personal and contrasting interpretations of the subject. In this scenario, as a third point, the pursuit of sustainable innovations within the circular economy framework has the potential to foster effective relationships and collaborations between companies from different sectors (such as fashion, food and marble), which are called upon to work together to achieve shared sustainability goals. Finally, this study could be significant for different trade associations, encouraging them to collaborate to foster effective relationships toward sustainability and circularity between strategic sectors. Trade associations can also serve as crucial intermediaries, connecting companies with research institutions, such as universities, to advance product innovation and support network relationships expansion. Additionally, nonbusiness actors, such as nonprofit organizations in the fashion industry, can play a pivotal role in facilitating and coordinating projects and initiatives related to developing sustainable innovative materials.

This study is an exploratory investigation of the phenomenon relating to new sustainable materials according to a network approach, and it is not without limitations. Future research should focus on expanding the cases considered to confirm the presence of the paradoxes and challenges we identified. Additionally, as the research was conducted within the fashion system, some paradoxes might be sector-specific due to fashion products’ unique characteristics. Therefore, future studies should extend the investigation of these paradoxes to other industries. This could reveal new ones or provide a deeper understanding of the ones we identified. Moreover, future research could verify whether the four identified paradoxes can represent the basis for a taxonomy of paradoxes in the field of sustainability; indeed, although with different intensities and precise characteristics, our study reports the presence of all paradoxes in each case study. Researchers could consider examining specific case studies to deepen the understanding of specific paradoxes and derive a taxonomy. Finally, through the network view of sustainability, scholars should explore how the paradoxes we identified can be mitigated or even overcome through network interactions and new relationship development to shield relationships from the detrimental impact of paradoxes themselves.

Despite the limitations, this paper originally contributes to the recent calls for understanding how to promote sustainable practices in the business world. It highlights how the network perspective, based on the study of business relationships, allows us to delve deeper into the reasons that explain both the diffusion and the barriers limiting the wider implementation of these practices, specifically focusing on the circular economy approach.

Piano Nazionale di Ripresa e Resilienza, Missione 4 –Componente C2– Investimento 1.1 Fondo per il Programma Nazionale di Ricerca e Progetti di Rilevante Interesse Nazionale (PRIN), finanziato dall’Unione europea – NextGenerationEU – Bando Prin 2022 DD MUR n. 104 del 02-02-2022 – Proge to “Communicating Companies’ Supply Chain Sustainability Practices in a Digital Environment” n. proge to PRIN 2022LHHLWM – CUP B53D23010060006.