Digital transformation, incentives, and pro-environmental behaviour: Assessing the uptake of sustainability in companies' transition towards circular economy

Abstract

In an era marked by technological progress and escalating environmental concerns, businesses must swiftly reconcile sustainability with digital innovation and evolving consumer expectations. This study takes a distinct consumer-oriented approach to assess the adoption of a circular economy across businesses. It specifically explores the integration of pro-environmental behaviour, digital transformation, and incentives as pivotal dimensions in enhancing corporate circularity.Employing a mixed-method approach, this research introduces a novel circularity readiness index specifically developed to quantitatively assess the integration of circular economy principles across the corporate landscape in Norway. Analysing 12 companies within the energy, transportation, fashion, food, and retail sectors, the methodology evaluates companies based on their environmental initiatives, the extent of digital technology integration, and the effectiveness of their incentive mechanisms that promote sustainable practices among their customers. This methodology reveals sector-specific insights regarding circular economy practices, with the energy sector demonstrating notable advancements due to the thorough integration of pro-environmental behaviour, digital transformation, and incentives. On the other hand, the food industry encounters challenges when implementing circular economy practices, highlighting the necessity of targeted initiatives.This study emphasizes the relevance of strategic integration of pro-environmental behaviour, digital transformation, and incentives for progressing towards a circular economy. Businesses should leverage the circularity readiness index to benchmark their sustainability efforts and pinpoint areas for enhancement. Policymakers should establish favourable circumstances by implementing specific policies and incentives, thereby enhancing the engagement of both companies and consumers in circular economy practices. This research contributes to the academic discourse on circular economy and offers practical guidelines for stakeholders aiming to foster sustainable development.