Exploring Barriers to Circular Economy Transitions in Slow Fashion SMEs : insights from the Balanced Scorecard Framework

This study examines the barriers hindering the transition to a Circular Economy (CE) in Sardinian textile SMEs, a slow-fashion context characterized by artisanal, dura-ble, and small-batch production. Through a multi-case study among five companies, twelve barriers were identified across a Balanced Scorecard (BSC) structure span-ning the financial, customer, internal process, and learning and growth perspectives. Leveraging the DEMATEL technique, the cause-and-effect relationships among these barriers were mapped. The results show that "Difficult to increase turnover with more circular and exclusive products" and "Lack of supportive regulations" are the most prominent barriers, acting respectively as the strongest effect and the strongest cause in the system. These findings highlight the central role of economic viability and policy support in enabling CE adoption. The study also reveals that, despite strong structural alignment with CE principles, limited market incentives and financial constraints restrict

deeper circular transformations. Methodologically, this work contributes by offering a relational understanding of CE barriers rather than isolated lists, providing clearer guidance for prioritizing interventions. The approach supports managers in integrating CE goals into strategic decision-making and un-derscores the need for targeted regulatory and financial measures. [Publisher's Text]