The current sustainability challenges and the required systemic transformation highlight the need for innovations on multiple levels. Ecodesign integrates environmental aspects into product and process design to reduce environmental impacts, whereas eco‐innovation also concerns nontechnological solutions. In this paper, we formulate a model that combines eco‐innovation targets ad mechanisms with sustainability maturity, which also concerns stimuli and barriers faced by companies and ecodesign tools used. The results are based on a questionnaire sent to 902 textile and information technology (IT) companies (N = 104) in the Nordic countries. The tools that Nordic textile and IT companies use in particular are life cycle assessment, type I ecolabel, and carbon footprint. Internal stimuli, especially general willingness, were important for eco‐innovativeness, while legislation and customer demand also pushed companies forward. Specific no‐go barriers were not identified, although increase in costs was a common barrier. The respondents focus often on technological product innovations, but rarely on functional innovation, renting of products, and so forth. This highlights the need to address the availability of the right kind of tools to support a broader suite of innovation that can drive toward the circular economy.

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There is a need to better understand the role of ecolabels in the scope of the Circular Economy transition. The aim of this research was to study the perspectives and practices of ecolabel use among Finnish companies with circular economy business models. The survey-based research targeting 214 companies (response rate 18% = n. 39) showed that ecolabels were not commonly used among the sample of companies. (Human) resource constraints were found in this research to partially explain the low uptake of ecolabels. Therefore, the research opens further questions as to alternative benchmarking and communication tools for the environmental performance of companies that see themselves as frontrunners in the application of circular economy business models.