Circular Economy Literature Research Articles

Companies’ future visions for circularity: A frame analysis based on Finnish front-runner CE companies

Despite increasing calls for circularity in business, the trending Circular Economy (CE) is not converting into action and the global usage of secondary material is declining. Addressing this gap is vital for our future well-being. Hence, more research is needed on whether and how companies translate broader CE discourses into their future visions. This study employed frame analysis to investigate how the CE’s meaning and goals are being envisioned and shaped in companies’ external communication to advance their future goals. Drawing empirical insights from documents focused on 41 Finnish self-declared front-runner CE companies from various industries, the paper contributes to current CE literature in two ways. First, five distinct future vision frames were identified – technological utopia, outsourcing circularity, business-as-usual, market leader, and systemic change – that demonstrate how self-described front-runner companies communicated circularity to their stakeholders. Second, the study demonstrates how company-level future visions align with or differ from macro-level CE visions. The study found that even self-described frontrunner CE companies were reluctant to align with strong sustainability in their framing, limiting the transformative potential of CE in business context. The findings have implications for managers regarding how they can assess their future visions from the perspective of weak or strong sustainability.

“What is going on in global goals projects, is agenda filled?” Highlighting circular economy literature within sustainable development goals–review-based

“What is going on in global goals projects, is agenda filled?” Highlighting circular economy literature within sustainable development goals–review-based

From awareness to practice: Insights from the managers of Finnish circular economy pioneering companies

In recent years, research on circular economy has increased tremendously, as well as gained attention from governments and business practitioners. However, the knowledge of effective and efficient transition from a linear business model to circular economy remains limited. Therefore, the objective of this research is to explore the awareness and current practices of managers from companies implementing circular business models. The required data for this research were collected from 22 managers, whose companies belong to the list of “41 pioneering Finnish circular economy companies”. Methodologically, the study adopts a qualitative approach, following content analysis. The collected data is analyzed rigorously to uncover insights regarding managers’ awareness to circular economy, experienced barriers, drivers, and indicators of circular economy. Key research results show that 66.7% of responses represent circular economy as a core activity, with 68% having already integrated circular economy principles into the supply chain. Main barriers include lack of knowledge and technology (21.4%), while strategies to address the barriers focus on promoting technology innovation (33.3%) and improving education and communication (31.3%). Besides, circular economy performance is measured primarily through recycled materials used (21.7%). Additionally, the study investigates the approaches companies employ to develop circular economy implementation strategies, an area often overlooked in circular economy literature. The findings indicate that process-led and market-led management strategies are commonly practiced, accounting for 32% and 21%, respectively. Overall, this study sheds light on the current state of circular economy implementation at the micro level and provides valuable insights for policymakers, practitioners, and researchers aiming to promote the transition towards a circular economy.

Circular economy implementation in the construction industry: an examination of the barriers in a developing country

PurposeThis study examines the barriers impeding the implementation of circular economy (CE) practices in the Nigerian architecture, engineering, construction and operation (AECO) industry across diverse regions of Nigeria.Design/methodology/approachThe study adopts a quantitative approach using a five-Likert scale questionnaire (Google Forms), utilizing various analytical tools, encompassing descriptive and inferential statistics. This methodological approach allows for a multifaceted exploration of the intricacies surrounding the barriers to circular CE.FindingsThe study identifies and examines 24 CE barriers which are determined to be significant to the implementation of CE. These barriers were categorized into four categories: “Economic”, “Market and Information”, “Policy and Operational” and “ product development”.Research limitations/implicationsThe adopted sampling technique may restrict the generalizability of the findings within and beyond the selected regions. Furthermore, while the analytical methods offer a comprehensive analysis, they may not capture the nuanced intricacies that qualitative methodology could provide. However, the findings can be applied to other developing countries with characteristics similar to those of the Nigerian construction industry.Practical implicationsThe study’s findings are significant for stakeholders such as policymakers, industry and academia. By elucidating CE-specific barriers, the research facilitates the formulation of targeted and tailored strategies, fostering the integration of CE principles in the Nigerian construction industry.Originality/valueThis study presents novel insights into the barriers hindering the implementation of CE in the Nigerian construction industry. Offering tailored strategies and categorizing barriers into clusters adds a unique perspective to CE literature, particularly in developing countries.

Product Quality in the Circular Economy: A Systematic Review of its Definition and Contexts in Scientific Literature

AbstractIn the context of the Circular Economy (CE), quality is one of the most widely used keywords, but generally perceived as an ambiguous term without further definition or explanation. The present paper analyzes the use of the term product quality in the context of the CE through a systematic literature review including 132 peer-reviewed journal articles. The results reveal that the term quality, although not always explicitly defined, is associated with a variety of topics, namely market value, customer perspective, functionality, technical attributes, longevity, R-strategies and design, and environmental aspects. The aforementioned topics are used in different application contexts and partly show reciprocal relationships amongst each other. They further refer to the three sustainability perspectives (environmental, economic and social). The quantification of quality is observed to be rather limited and mainly based on assumptions. When it is quantified, technical properties, functionality and longevity are most frequently mentioned aspects, which are used within circularity or environmental impact assessment. While acknowledging the limitations arising from the scope of the included studies, which may be influenced by the keywords chosen, the review revealed that quality in the CE literature is complex and ambiguous. Therefore, for future research, we recommend authors to clearly define quality and its characteristics in the context of their respective research. By doing so, a better interpretation and comparability of the results can be achieved. Graphical Abstract

Circular economy: A review of review articles

AbstractThe circular economy (CE) has emerged as a focal point in discussions surrounding sustainable development, industrial production, and resource efficiency. While it has garnered attention as a ground‐breaking paradigm with the potential to harmonize economic, societal, and environmental dynamics, divergent perspectives and critical inquiries have surfaced. This paper delves into the interdisciplinary literature on CE, exploring the interpretative flexibility inherent in its conceptualization. Acknowledging the diverse range of strategies associated with the CE, the study contends with the potential risks of its misappropriation, emphasizing the importance of understanding its systemic socio‐ecological implications. With an umbrella review approach, rarely applied in social sciences, the study navigates through 167 review articles, unveiling thematic trends and identifying gaps within the existing literature. By scrutinizing the techno‐managerial dominance within CE discussions, the paper calls attention to the overshadowing of numerous critical issues. It highlights the importance of systematic attention to CE's social aspects, essential to provide insights into how policies, strategies, and actions affect the society, as well as the emerging discussion on the alternative social transformative paradigm. The paper concludes with a three‐stage study design: a meticulous review of 167 articles, a thematic analysis revealing trends, and a reflective exploration of potential research avenues. This review serves as a comprehensive guide for scholars and practitioners for a holistic understanding of CE and encouraging contributions to address identified gaps and fostering the evolution of CE literature.

A systematic review of agent-based modelling in the circular economy: Insights towards a general model

Circular Economy (CE) is a popular topic for governments and businesses around the world; yet, only a few comprehensive and economy-wide frameworks exist, and the consequences of the CE on economic systems stay unclear. With this systematic review, we put under scrutiny the existing contributions to Circular Economy (CE) that apply the Agent-based modelling methodology. There is an open gap in the CE literature regarding the use of ABM. The research question that guides this systematic review concerns the potential benefit of ABM for CE and how to use this methodology in the context of CE. We put in evidence three thematic areas, two agents and one process, namely producers, i.e. firms and industrial systems, consumers, i.e. households and waste disposal, and the diffusion of innovation. We infer that the former three thematic strands of literature can be further synthetized together to form a general model of the Circular Economy. This development is crucial to properly evaluate how the agent's heterogeneity affects the diffusion and the consequences of the adoption of CE practices on the economy. Research has widely applied ABM simulations to consider the impact of heterogeneity amongst individuals and their behavioural interactions on the evolution of complex systems, yet very little did it systematically about CE. Our results complement those of Computable General Equilibrium models. The review provides an interpretative framework, suggests valuable future research directions within the new comprehensive thematic area, and contributes to the theoretical and managerial discussion on agent-based modelling in the circular economy.

Circular entrepreneurial ecosystems: a Quintuple Helix Model approach

PurposeThe shift toward a circular economy (CE) represents a collaborative endeavor necessitating the presence of efficient frameworks, conducive contexts and a common comprehension. This research serves as a pivotal stride towards this goal, presenting an exclusive prospect for the investigation and fusion of these frameworks, with particular emphasis on the Quintuple Helix Model (5HM), into a unified theoretical framework that underscores the core principles of the CE. This study is centered on three pivotal questions aimed at decoding the CE transition in specific regional settings.Design/methodology/approachAdopting an abductive approach firmly anchored in a two-stage qualitative process, this study specifically merges the foundational principles from institutional theory, entrepreneurship literature and CE frameworks to provide insights into the dynamics of circular ecosystems, with a specific focus on the Huelva region in Spain.FindingsThe findings demonstrate significant potential in the CE, ranging from the integration of product and service systems to innovations in eco-industrial practices. Yet, a notable deficiency exists: the absence of institutional entrepreneurs, highlighting the essential role that universities can play. As recognized centers of innovation, universities are suggested to be key contributors to the transformation toward a CE, aligning with their societal and economic responsibilities.Practical implicationsThis study highlights the importance of managing relationships with entities like SMEs and policymakers or academia for effective CE adoption. Policymakers can refine strategies based on the research’s insights, while the impact of university-driven circular ecosystems on sustainable societies is another crucial area for research.Originality/valueThe sustainability models cited in CE literature may not be comprehensive enough to prevent problem shifting, and it can be argued that they lack a sound theoretical and conceptual basis. Furthermore, the connections between sustainability objectives and the three levels of the CE operating system remain vague. Additionally, there is insufficient information on how regions foster the involvement of the environment in fivefold helix cooperation and how this impacts the CE.

Leveraging intellectual capital for building a supply chain circular economy system: A knowledge-based view

Organizations are inevitably pursuing circular economy goals through a supply chain approach. This paper examines the impact of intellectual capital on supply chain circular economy (SCCE) systems made up of a closed-loop supply chain (CLSC) and a reverse omnichannel. By employing the knowledge-based view, this paper constructed the relationship between intellectual capital and SCCE systems. We tested the proposed hypotheses by employing structural equation modeling on a dataset collected from 193 Chinese manufacturing firms. Finally, we used a bootstrap method and tested the indirect effect of intellectual capital components on SCCE systems. We found that intellectual capital both directly and indirectly contributed to SCCE systems. Human capital and structural capital, in particular, were positively associated with CLSC, whereas social capital was strongly related to reverse omnichannel. However, human capital and structural capital had no significant relationship with reverse omnichannel, and social capital had no significant impact on CLSC. We also found that structural capital mediated the human capital-CLSC association, and social capital played a mediating role between human capital and reverse omnichannel. Drawing on the knowledge-based view, our study offers insights into the intellectual capital literature, circular economy literature, and supply chain management literature. The findings add to our existing understanding of how existing knowledge of the organization can be leveraged for better operations by CLSC and improved services by reverse omnichannel.

Barriers to adopting circular business models: A cross‐sectoral analysis

AbstractFirm‐level adoption of circular business models is a crucial part of the transition toward circular economy, but companies that delve into such pursuits often encounter a series of barriers that hamper their success. Although multiple studies on barriers to circular economy have been made, there is a lack of understanding of how barriers are formed under firm‐specific characteristics such as sectoral conditions and the type of circular business model adopted. To bridge this gap, we illustrate a barrier framework in a multiple‐case study including nine Swedish firms. We derived about 28 barriers within five categories of circularity approaches (design, waste, service, platform, and nature) across three sectors (furniture, electronics, and garment). This research contributes to the circular economy literature by revealing how adhering to certain sectors and circular business approaches significantly changes the way barriers are perceived by firms. The outcomes may support both practitioners and policymakers as they facilitate circular economy transitions.

Assessing circularity of wastewater treatment systems: A critical review of indicators

AbstractGlobal energy demand, water demand, and raw materials extraction are major challenges for society as population grows. While a traditional linear economy approach leads to depletion of finite resources, damage to the Earth's ecosystems, and adverse impacts on human health, a paradigm shift toward implementation of circular economy principles is paramount to the reversal of world resources' exhaustion. The wastewater, or “used water,” sector can contribute to offsetting resource scarcity challenges by adopting circular economy principles to recover and reintroduce recovered resources into the economy. Transitioning to a circular economy model requires monitoring and tracking progress via metrics in the form of indicators. In this paper, a bibliometric analysis followed by a systematic literature review was conducted on available circular economy indicators in the used water treatment sector. Over 200 indicators were categorized into three impact categories: environmental, social, and economic to identify gaps in the existing literature. Results showed that less than 50% of the available circularity indicators are applied in the used water sector and environmental indicators represent the highest percentage among the potential applicable indicators. Research gaps in the circular economy literature in relation to used water treatment systems were identified and future research directions discussed.

The Evolution of Circular Economy: A Literature Review on Sustainability Transitions and Challenges

The aim of this study is to conduct a comprehensive literature review on Circular Economy and Sustainability. The review identifies significant gaps in the understanding of Circular Economy’s implementation, as well as the multifaceted challenges associated with transitioning from linear to circular models. The study highlights key developments, transitions, and challenges within Circular Economy literature, including barriers and enablers across different sectors, providing insights into the factors that facilitate successful transitions. By pinpointing critical gaps in existing research, this review sheds light on the key drivers of Circular Economy transitions and suggests pathways for overcoming the challenges that impede the global adoption of Circular Economy practices. Future research in Circular Economy should prioritize addressing barriers to implementation, such as market dynamics, consumer behavior, and regulatory obstacles, while also exploring innovative technologies and their applications in various sectors. By promoting interdisciplinary and cross-industry collaboration, Circular Economy research can help build a more sustainable and resilient economic future.

Systems and Ecosystems in the Circular Economy: What’s the Difference?

‘Systems’ and ‘ecosystems’ are buzz concepts in the circular economy literature. However, the differences between these concepts remain ambiguous. Systems and ecosystems are often used interchangeably and at times confusingly. While conceptual ambiguity offers possibilities for broad interpretations and engagement, it can undermine the relevance of these concepts as analytical lenses to disrupt the linear economy. In this perspective article, I examine whether systems and ecosystems are distinct concepts and how they complement each other. To do so, I analysed these concepts and applied them to a case of biomethane for transportation using scientific literature. Systems and ecosystems are not mutually exclusive; rather, they offer nuanced perspectives to describe, analyse, and facilitate complex interactions among entities and their external environment. They signify the complexity, interdependency, and co-evolutionary nature of the circular economy. Ecosystems are a subcategory of systems. Differences between the concepts of systems and ecosystems partially arise from their origins, evolution, and the research communities using them. The article shows how systems and ecosystems perspectives can enrich each other and calls for better integration between the two concepts in the circular economy discourse.

Domination of Managerial and Technical Frames—How the Circular Economy Is Reported in Finnish Business

AbstractOur research combines two research fields—the circular economy (CE) and sustainability reporting. Previous CE literature has focused on economic and environmental aspects, while the focus on social aspects has been rare. In the field of sustainability reporting, research on CE reporting is lacking. We address this gap. Our data consist of 32 sustainability reports from large Finnish companies. We applied frame analysis to the reports and found that CE reporting varies from none to moderate. Furthermore, we identified three different frames of CE reporting: CE management, technical CE and social CE. The management and technical frames dominate our data. This study contributes to the prior literature on CE reporting by showing how CE is positively framed in sustainability reports but lacks indications of the systematic change that is considered the core of CE in its previous conceptualisations. To achieve strong sustainability, companies urgently need to change the ways in which they operate.

Digital orientation, digital eco‐innovation and circular economy in the context of sustainable development goals

AbstractDigitalisation increasingly offers numerous opportunities for firms to integrate several environmental management practices into their day‐to‐day operations. Studies in the field of digital technology and circular economy (CE) have pointed out inherent tensions involved in the adoption of technology and CE practices. Firms often prioritise competing goals and prefer one over another, thereby underestimating their interdependent co‐existing relationships. In this context, the study addresses the following research questions: How does digital orientation facilitate digital eco‐innovation for CE‐linked sustainable development goals (SDGs)? What paradoxes do firms encounter while using digital eco‐innovation for CE‐linked SDG practices? What possible strategies could be used to overcome the various paradoxes associated with adopting digital eco‐innovation for CE‐linked SDG practices?Drawing from the paradox theory and using the SAP‐LAP model of inquiry, the study addresses research questions by applying a case study approach. The findings of a qualitative case study provide a novel perspective on digital eco‐innovation and CE literature. Unlike previous studies that deal with digital eco‐innovation and CE independently, the study primarily contributes to the literature by understanding how digital orientation contributes to digital eco‐innovation and the role of digital eco‐innovation in CE practices in the context of SDGs.

Scaling up the transition: The role of corporate governance mechanisms in promoting circular economy strategies

This study examines the role of corporate governance (CG) mechanisms in promoting Circular Economy (CE) strategies among non-financial listed companies in manufacturing industries, which is still a relatively unexplored topic in the CE literature. Our findings indicate that the presence of stakeholder engagement practices, sustainability reporting, and environment management teams have a direct impact on the adoption of CE strategies, while the presence of a CSR committee, adherence to the United Nations' Global Compact, and executives' compensation linked to environmental, social, and corporate governance performance do not have a direct effect but support CE strategies through other mechanisms. Overall, this study provides valuable insights for policymakers and managers as it shows that CG mechanisms can be used to promote the adoption of CE business models, thus contributing to climate risk mitigation objectives.

The Circular Economy in European Union Policy: Explaining an idea's success through policy learning

AbstractThe circular economy (CE) was adopted in 2015 by the European Union (EU). Since its emergence, the CE has proved to be a remarkably powerful idea that has shifted the understanding of the economy, and consequently, it has shaped the EU's economic and environmental policies. The public policy literature theorises such shifts in collective understanding through the concept of policy learning, a process through which ideas are understood and adopted. Yet this literature lacks clarity on the factors that can explain policy learning within a policy community. We use the case of the EU's adoption of the CE to address this gap, exploring the factors that account for the EU's adoption of the CE from the policy‐learning perspective. We show how actors in the policy community have constructed, championed, supported and pioneered the CE and argue that these four factors have mutually reinforced each other, leading to policy learning and the wide acceptance of this idea within EU policy‐making. Revealing these factors helps advance policy learning theory and contributes to the CE literature and environmental policy and governance literature more generally by furthering our understanding of how and why certain policy ideas are adopted.

How Circular Economy Disclosure Responds to Institutional Determinants Empirical Evidences in Non-Financial European Firms

Despite the increasing attention that the circular economy (CE) has received at the international level in recent years, the literature has paid limited attention to the importance of institutional factors that may influence firms’ disclosure of CE. Thus, there is a gap in the study of CE disclosure, especially when compared with other studies dedicated to environmental disclosure. This paper aims to fill this gap by investigating the institutional pressures, in terms of coercive, normative, and mimetic factors, that influence firms’ behavior with respect to CE disclosure. This research focuses on a sample of 366 nonfinancial firms, operating in 14 EU countries between 2015 and 2020. The results show that coercive and mimetic institutional pressures positively influence the level of CE disclosure issued by the firms. More specifically, the stringency of the environmental policy (coercive pressure) and the belonging to an environmentally sensitive sector (mimetic pressure) have a positive impact on the CE disclosure provided. With respect to normative pressure, the results are mixed. In fact, only the adoption of Global Reporting Initiatives’ (GRIs) standard requirements is positively and significantly related to CE disclosure. The presence of an external assurance, as well as the commitment to the SDGs, is not significantly related to the CE disclosure. The absence of an analytical standard that organically addresses the issue of CE, by guiding companies in their disclosure, may explain the irrelevance of these factors in the process of convergence of the information produced. This research contributes to this area by filling a gap in the CE literature, providing some insights into the determinants of disclosure and the role of institutional pressures in influencing the level of CE information. In addition, the research adds to previous studies on disclosure by measuring the CE information provided by companies with an indicator developed based on specific environmental items collected from the Refinitiv Eikon database, which could be used in future research. The findings of this paper have some important practical implications. In particular, the results confirm to policymakers that stricter regulations have a positive impact on disclosures related to the CE. Thus, a new specific European regulation should promote more homogeneous and analytical CE disclosure, increasing the sensitivity among firms and practitioners on this topic. A similar approach may be followed for the same purpose by other regional or local policymakers. The paper also emphasizes the necessity of introducing more stringent regulations on assurance and SDGs by the regulatory or professional bodies to achieve greater uniformity of behavior by firms.

Stakeholder governance to facilitate collaboration for a systemic circular economy transition: A qualitative study in the European chemicals and plastics industry

AbstractImplementing the circular economy (CE) requires novel forms of stakeholder collaboration. While the contemporary literature on stakeholder theory is commonly characterized as “pro‐business‐oriented,” it remains ambiguous on how precisely stakeholder collaborations may pave the way for a systemic CE transition. By applying a qualitative‐empirical research approach utilizing semi‐structured interviews, this paper identifies three types of stakeholder governance for CE collaborations—(i) company‐centric governance, (ii) industry‐oriented governance, and (iii) cross‐industry‐oriented governance. Our contribution to stakeholder theory lies in examining how a systemic CE transition may bridge “the stakeholder‐system divide.” We emphasize the unique role of innovative governance in ensuring the success of stakeholder relationships while highlighting how systemic changes of the business environment may give an impetus to stakeholder collaborations. We contribute to the CE literature by gaining the following insights into stakeholder collaborations in the European chemicals and plastics industry: (a) successful collaborations typically feature a variety of different stakeholders maintaining close mutual interactions; (b) a systemic CE transition calls for managerial strategies that are collectively governance‐oriented rather than company‐centric. This article thus sheds light on the criticality of stakeholder collaborations and collective‐oriented governance strategies in fostering CE practices within the European chemicals and plastics industry highlighting that stakeholder collaborations for a CE need to be extended beyond immediate industrial and sectoral boundaries.

Enabling the circular economy in the digital transformation era: evidence from an emerging country

PurposeRecently, the concept of the circular economy (CE) has witnessed significant momentum in academic and professional circles. However, there is a dearth of research that studies the enabling factors of the CE in the era of digital transformation. The existing research aimed to identify the impact of Industry 4.0 readiness on the CE in manufacturing firms operating in Jordan, as well as to identify the mediating role of the industrial Internet of things and big data analytics.Design/methodology/approachFor this work objectives, 380 questionnaires were analyzed. Convergent validity and discriminant validity tests were performed through partial least squares-structural equation modelling (PLS-SEM) in the Smart-PLS programme. Data reliability was confirmed. A bootstrapping technique was used to analyze the data and then hypothesis testing was performed.FindingsThe results indicate that Industry 4.0 readiness, industrial Internet of things (IIoT) and big data analytics positively enable CE, also the IIoT and big data analytics positively mediate the nexus between Industry 4.0 readiness and CE.Practical implicationsThis study promotes the idea of focusing on Industry 4.0 readiness to enhance CE in the Jordanian manufacturing sector and knowing the effect of IIoT and big data analytics in this relationship.Originality/valueThis research developed a theoretical model to understand how Industry 4.0 readiness might enhance the CE in manufacturing firms by invoking the IIoT and big data analytics as mediating constructs in the relationship between Industry 4.0 readiness and CE. This paper offers new theoretical and practical contributions that add value to industry 4.0 and CE literature by testing these constructs' mediation models in the manufacturing sector.