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ABSTRACT
With complex global supply chains and polluting production practices, the fashion industry leaves a considerable environmental and social footprint. Corporate Social Responsibility (CSR) and environmental sustainability are thus becoming key considerations for companies operating in the fashion sector. With rising costs of outsourcing, due to increases in wage rates and fuel costs, there is now greater interest from European fashion retailers in near-sourcing fashion products from closer to the EU. As such, we propose that it would be valuable to explore CSR and environmental sustainability within the Eastern European region. In this paper, the theoretical framework of fashion supply chains is set out and the importance of environmental sustainability and CSR from the perspective of people and knowledge in the fashion industry is explained. The paper then sets out the proposed qualitative case study data collection method to explore the implementation of CSR and environmental sustainability in Croatia's footwear manufacturing industry. Initial findings suggest that CSR is present in the observed company, and is focused on social aspects of corporate responsibility in order to attract and retain high quality workers in a labor-intensive sector. The continuing professional development of employees was seen as a means of building capacity in knowledge management within the firm However, the continued existence of these CSR initiatives was subject to challenges of the footwear supply chain, in particular cost and lead time pressures. Cost-cutting measures resulted in the loss of CSR activities, with negative implications for people and knowledge management and therefore overall business performance in this challenging industry sector.
Keywords: fashion supply chain, footwear, environmental responsibility, sustainability, corporate social responsibility, supply chain management, Croatia, Eastern Europe
1. INTRODUCTION
In today's fast changing business environment, it is no longer companies that compete in the global marketplace, but their supply chains. The fashion industry (i.e. textiles, clothing and footwear) is a global industry with considerable market potential: in 2010 in the European Union manufacturing industry, the fashion industry accounted for 7.1% of employees and 3.6% of total revenue, with 11.6% of all companies producing textiles, clothing or footwear products (Eurostat, 2010). As stated by the European Commission (2013), the year 2013 was characterized by divergent dynamics for various light industry sectors: from optimistic developments for footwear and leather, light...