Energy management to foster circular economy business model for sustainable development in an agricultural SME

Abstract

The role of energy management (EM) capabilities in enhancing circular economy (CE) business models of agricultural small and medium-sized enterprises by way of developing dedicated organisational competences is an under-investigated topic. In addition, the contribution of CE business models to the sustainability performance of agro-energy businesses deserves further investigation. To cover these gaps, a case study was conducted within an agricultural firm that exploits a high-tech hydroponic system to cultivate tomatoes. Interviews were conducted with top management of the firm and technicians to identify the EM capabilities that foster the development of organisational competences to implement a CE business model. The framework of dynamic capabilities was used to discuss the results. Results indicate that EM and auditing capabilities play pivotal roles in enhancing knowledge of sustainable production methods and accountability, and constitute the microfoundations of dynamic capabilities that are needed to sense, seize, and reconfigure the business model around CE, which allows the achievement of sustainability performance. EM, along with the promotion of an organisational culture of energy conservation, also enhances the knowledge and implementation of CE business models. Implications for SMEs’ agricultural managers relating to EM implementation are discussed, given its pivotal role in the implementation of CE business models.