Do environmental and cleaner production practices lead to circular and sustainability performance? Evidence from Colombian manufacturing firms

Abstract

The implementation of activities close to the circular economy (CE), such as environmental management system (EMS) and cleaner production (CP) practices, and their relationships, are expected to have positive effects on the circular and sustainability performance. However, current research has provided results in which the effects are diffuse, contradictory, or even negative in some cases. Given the need for more consensus on the relationship between CE-related practices and sustainability performance, we investigated the effect of EMSs and CP practices, and their interactions on companies' circular and sustainability performance. This longitudinal study used official Colombian government data of 1544 manufacturing companies from 2012 to 2019, considering impact assessment and structural equation modeling. Our results clarify which elements of circular and sustainability performance have and have not been affected by the implementation of these practices and their interactions, highlighting important challenges for theory, practice, and society. In this regard, manufacturing companies that adopt EMSs, CP or both practices obtain benefits related to the sale of certain waste, the reuse of water and the creation of green jobs and improvements in their organizational performance. However, adopting such practices does not necessarily imply waste circularity. Moreover, our findings guide management decision-making on which practices to implement to achieve better performance. We also evidence limited sustainable value creation by industries in social terms. Finally, we recommend the strategic implementation of CE and the development of new business models enabled by systemic eco-innovations and technology for sustainable value creation.