Environmental exploitation has increased significantly; the textile industry is a major contributor to this trajectory. Over the past decades, fast fashion has been a dominant business model, but the waste generated has been a big question; so many companies have adopted the circular fashion model. While companies are frequently reporting progress on circular programs or recycled materials, far less is known about the governance mechanisms, such as who makes the decision, who is accountable, or how the information flows, which shape everyday choices within an organization. This thesis examines the influence of employee perceptions and governance structure on the implementation of circular initiatives. H&M was studied as a single case study. In this study, a qualitative research design is used, in which semi-structured interviews and document analysis of corporate reports were conducted. This study adopts a multi-level analytical framework in which governance acts as central framing; sensemaking theory is used to examine employee perception and interpretation, while organizational change theory is used for structural constraints as a complementary perspective. The research findings show how decision-making is centralized and impacts accountability and traceability. Both are now formalized increasingly due to increased regulatory pressure. The results show that employees view circularity as a means to reduce impact on the environment, and they do not consider it a transformative shift because of structural constraints faced by fast-fashion retailers. One of the major enablers of sustainability was regulatory pressure, while technology, economy, and consumer behaviour were seen as barriers to the implementation of circularity initiatives.  This study contributes to research by showing how internal factors, such as governance, or external factors, such as structural constraints, shape the implementation of circularity initiatives. This research also provides practical insights on the effectiveness of circularity strategies and recommendations. The results of the study highlighted the need for three things: clear governance frameworks, stronger technological infrastructure, and long-term organizational alignment. 

Keywords: Fast-fashion, Sustainability governance, Circular economy, Circular fashion, Accountability, Traceability