This chapter analyses the European regulatory and institutional framework governing sustainability and circularity in the fashion industry. It examines governance perspectives and policy instruments such as the European Green Deal, the Circular Economy Action Plan, the Strategy for Sustainable and Circular Textiles, and sector-specific initiatives aimed at reducing environmental impact. The chapter details emerging circular business models, including durability, product-as-a-service, reuse/resale, and recycling, and discusses how European regulation shapes their adoption. Particular attention is given to integration between public and private actors through partnerships, incentives, and collaborative platforms. The chapter also explores how crowdfunding can serve as a complementary mechanism to support circular initiatives, mobilise resources, and build public legitimacy. Overall, the chapter presents the EU framework as an environment conducive to sustainable transition, promoting transparency, innovation and competitiveness in the fashion sector.