Sustainable Strategies for the Circular Economy and Digitalization

Dear Colleagues,

This Special Issue in Sustainability addresses the relationships among the circular economy, business strategy, and sustainability and the role that digitalization plays in these relationships.

The Ellen McArthur Foundation (2024) defines the circular economy as ‘a system where materials never become waste and nature is regenerated… products and materials are kept in circulation through processes like maintenance, reuse, refurbishment, remanufacture, recycling, and composting… [it] tackles climate change and other global challenges, like biodiversity loss, waste, and pollution, by decoupling economic activity from the consumption of finite resources’.

It is clear from this definition that the concept of circular economy embraces many concepts within the broad area of sustainability. It recognizes that resources are finite, it avoids waste, emphasizes the R’s (reuse, refurbishment, remanufacturing, and recycling), and directly targets loss, pollution, and climate change. It is also clear that the circular economy contrasts with the traditional linear economy, characterized as ‘take materials… make products… throw them away’ (Ellen McArthur foundation, 2024), by emphasizing its three principles of eliminating waste, circulating products and materials at their highest value, and regenerating nature. The circular economy concept aims to separate economic growth from environmental degradation.

It is also clear that business has a significant role to play in developing a working and effective circular economy (Montag, 2023). Although there are success stories, it is not easy for businesses to implement circularity (Soufani and Loch, 2021). Breaking down the role of business into specific elements may be a useful way of examining how business can reorganize to better meet the needs of a circular economy. For example, business strategy can be rethought and reframed to better embrace circular principles; business ecosystems can be extended to better encompass circularity; business models can be reinvented to specifically address the requirements of the circular economy; products and services can be redesigned to better meet restorative and regenerative targets; and supply chains can be reconfigured from linear to circular form.

Farooque et al. (2019, p.884) defined circular supply chain management as ‘the integration of circular thinking into the management of the supply chain and its surrounding industrial and natural ecosystems. It systematically restores technical materials and regenerates biological materials toward a zero-waste vision through system-wide innovation in business models and supply chain functions from product/service design to end-of-life and waste management, involving all stakeholders in a product/service lifecycle including parts/product manufacturers, service providers, consumers and users’. This definition provides us with a conceptual starting point for examining the circular role of business. Many of these concepts are already familiar—zero-waste, multiple stakeholders, and ecosystems—but several are new—the integration of circular thinking, restoring of technical materials, and regeneration of biological materials.

Although not featuring in either of the above definitions, digitalization and Industry 4.0 with its new tools such as the Internet of Things (IoT), big data, block-chains, artificial intelligence, 3D printing, and virtual and augmented reality may offer businesses novel and innovative ways of altering their ecosystems, business models (Jabbour et al., 2019), and value chains to stimulate a more circular economy (Awan et al., 2022). An interesting research area is to examine the incentives and barriers (Tura et al., 2019) related to these new digital technologies as they are introduced to the circular economy.

The Special Issue invites contributions that address the issues identified above. Contributions can be conceptual, theoretical, empirical, or case-study in nature. Papers can address the circular economy at ecosystem, firm strategy, business model, supply chain, or product levels. Papers can consider how digitalization and Industry 4.0 technologies can shift business strategy, business models, products and services, supply chains, and ecosystems towards circularity. Below are some specific suggestions:

• The 4Rs of business circularity:
  • Rethinking and reframing business strategy for circularity;
  • Reinventing the business model for the needs of a circular economy;
  • Redesigning product and service value chains along circularity principles;
  • Reconfiguring the supply chain from linear to circular.
• Improving the relationship between business ecosystems and the geosphere/ technosphere through use of Industry 4.0 technologies;
• Increasing circularity by embedding IoT and blockchain in the supply chain;
• The role of digitalization in creating open loops, closed loops, and circularity;
• Increasing the levels of restoration and regeneration in product design, manufacturing, selling, and distribution through use of technology;
• Zero waste and highest value: new targets for lean, agile, 6∑, and quality systems;
• Holism, systems thinking, and causal loops applied to the circular economy;
• Using stakeholder theory to improve circular thinking within the firm;
• Enhancing, impeding, and influencing the development of the circular economy through the deployment of IoT, big data, blockchain, AI, 3D printing, virtual and augmented reality, and other Industry 4.0 technologies.

References

1. Awan, U., Sroufe, R. & Bozan K. (2022). Designing Value Chains for Industry 4.0 and a Circular Economy: A Review of the Literature. Sustainability, 2022, 14(12), 7084; https://doi.org/10.3390/su14127084.
2. Ellen McArthur Foundation (2024) Circular economy introduction. Available at: https://www.ellenmacarthurfoundation.org/topics/circular-economy-introduction/overview accessed 18 June 2024.
3. Farooque M, Zhang A, Thürer M, Qu T, Huisingh D (2019) Circular supply chain management: a definition and structured literature review. Journal of Cleaner Production, 228, 882–900. https://doi.org/10.1016/j.jclepro.2019.04.303.
4. Jabbour, C., de Sousa Jabbour, A., Sarkis, J. & Filho, M. (2019). Unlocking the circular economy through new business models based on large-scale data: An integrative framework and research agenda. Technological. Forecasting & Social Change. 144, 546–552.
5. Montag. L. (2023). Circular Economy and Supply Chains: Definitions, Conceptualizations, and Research Agenda of the Circular Supply Chain Framework. Circular Economy and Sustainability, 3, pp. 35-75.
6. Soufani, K. & Loch, C. (2021). Circular supply chains are more sustainable. Why are they so rare? Harvard Business Review, June 15.
7. Tura, N., Hanski, J., Ahola, T., Stahle, M., Piiparinen, S. & Valkokari, P. (2019). Unlocking circular business: A framework of barriers and drivers. Journal of Cleaner Production, 212, pp. 90-98.

Dr. Malcolm Brady
Guest Editor

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• circular
• economy
• business
• strategy
• model
• supply chain
• restoring
• regeneration
• open loop
• digitalization
• Industry 4.0
• sustainability