Attaining circular economy through business sustainability approach: An integrative review and research agenda

• Published date: 01 February 2022
• Author: Sanchita Bansal,Mansi Jain,Isha Garg,Mrinalini Srivastava
• Date: 01 February 2022
• DOI: http://doi.org/10.1002/pa.2319

ACADEMIC PAPER

Attaining circular economy through business sustainability

approach: An integrative review and research agenda

Sanchita Bansal | Mansi Jain | Isha Garg | Mrinalini Srivastava

University School of Management Studies,

Guru Gobind Singh Indraprastha University,

New Delhi, India

Correspondence

Sanchita Bansal, University School of

Management Studies, Guru Gobind Singh

Indraprastha University, Sector 16C, Dwarka,

New Delhi 110078, India.

Email: bansalsanchita@gmail.com

In this systematic review, the concept of the circular economy deals with much rigor

to gain insights from the viewpoint of business sustainability. The ambivalent nature

of the circular economy and business sustainability has led the authors to examine

142 papers from the Web of Science database for review. This study intends to pro-

vide a clear understanding of the circular economy concept through the lens of busi-

ness sustainability. We synthesize the literature in a concrete form for researchers,

practitioners, and policymakers by presenting a thematic framework. Based on the

systematic review, key findings outlining trends and a reflection about the interface

of the circular economy principles systematically and categorically identified nine

business processes. Based on the analysis, key findings highlight on (a) addressing the

synergy between the circular economy principles and business sustainability at the

nine categorized business processes, as a systemic and holistic process; (b) future

studies to work on developing tools and techniques to effectively measure the practi-

cal applicability in integrating the circular economy principles with the business strat-

egies and models, including research methods like empirical research, action, and

longitudinal research; and (c) the need to develop approaches and strategies to

engage customers and other company stakeholders with the circular business pro-

cesses adopted. We contribute to the existing body of knowledge by identifying

future research agendas to advance in the concerned field of study consistently.

1|INTRODUCTION

Researchers are approaching the subject of sustainable development

from various contexts. In that course, the concepts of sustainable

development and circular economy (CE) are crossing paths. Both

these concepts emphasize on inter-generational commitments and

share a global perspective (Geissdoerfer, Savaget, Bocken, &

Hultink, 2017). Martins (2016) argues that the understanding of eco-

system services and sustainability can be achieved through the circu-

lar economy model.

Sustainable development is a matter of global concern,

encompassing environmental and socioeconomic issues. The blend

of environmental and socioeconomic issues is reported in the

Brundtland Report (Keeble, 1988). This report has explained the term

“Sustainable Development”as “development that meets the needs of

the present without compromising the ability of future generations

to meet their own needs”(Brundtland Report, 1987, p. 54). The

conceptualization has improved over the years to include a more in-

depth understanding of the term. The most contemporary under-

standing of the term started with Elkington (1998), who gave a

working conceptualization of the term in terms of the triple bottom

line. Sustainable development, in its most elaborative form, can be

explained as sustaining the ecological and social basis of human life

through the process of growth and/or change to meet the basic

needs (Lele, 1991). Furthermore, sustainability means transforming

the human lifestyle to maximize the likelihood that living conditions

will indefinitely support human health, well-being, and security

(McMichael, Butler, & Folke, 2003). The terms, sustainability and cir-

cular economy, are increasingly gaining the attention of the

researchers and the policymakers. Sustainability and circular econ-

omy integrate non-economic aspects into development (Geissdoerfer

et al., 2017).

Received: 29 June 2020 Revised: 16 July 2020 Accepted: 18 July 2020

DOI: 10.1002/pa.2319

J Public Affairs. 2022;22:e2319. wileyonlinelibrary.com/journal/pa © 2020 John Wiley & Sons Ltd 1of20

https://doi.org/10.1002/pa.2319

A contribution to the circular economy definition by Geissdoerfer

et al. (2017) stands as—a regenerative system in which resource input

and waste, emission, and energy leakage are minimized by slowing,

closing, and narrowing material and energy loops. This can be

achieved through long-lasting design, maintenance, repair, reuse,

remanufacturing, refurbishing, and recycling. The circular economy

envisages an industrial system that is restorative or regenerative by

intention and design (Yuan, Bi, & Moriguichi, 2006). Furthermore, CE

is defined as a global economic model to minimize the consumption of

finite resources by employing a more advanced and innovative design

of materials, products, and systems.

“Corporate sustainability,”by definition, is a business approach

that creates long-term shareholder value by embracing opportunities

and managing risk from economic, environmental, and social dimen-

sions (Dow Jones Sustainability Indexes, 2019). Moreover, companies

are pressured to adopt more sustainable models derived from the

intensification of specific trends, such as increasing dependence on

fossil fuels, the poor management of natural resources, carbon dioxide

emissions, and the competitive environment of the global markets.

Though these trends are in line with the European 2020 strategy, a

circular economy aims to eradicate waste not just at the manufactur-

ing processes, but systematically throughout the life cycles and uses

of products, and their components to make the organizations and

economy more sustainable (Garrido Azevedo & Matias, 2017). Fur-

thermore, Kirchherr, Reike, and Hekkert (2017) examine different def-

initions of CE and opine that CE is often not highlighted as a concept

that brings in a systemic shift and also finds explicit linkages of CE

concept to sustainable development.

A paradigm shift is required in the way things are made to move

toward CE, and that requires sustainability to be put at the heart of

the business model (Seyfang, 2004). To understand the determinants

of business success, the analysis of the economic impact of business

models and CE is needed. However, it is risky to transform the comp-

any's business model since it requires huge investments and experi-

mentation. To meet the investment requirement by the private sector,

a predictable and robust regulatory framework is necessary for

supporting innovation, improving business-to-business linkages, and

improving the conditions for investment (Seyfang, 2004). The eco-

nomic conditions of a particular country will determine the right mix

of policies to foster CE.

Extant literature attempts to define, and provide conceptual clar-

ity and understanding in the field of circular economy (Garrido

Azevedo & Matias, 2017; Geissdoerfer et al., 2017; Kirchherr

et al., 2017; Nathan & Scobell, 2012), CIRAIG (2015) and

Heshmati (2017) implement a critical literature review to present a

general and conceptual portrait of circular economy and its underlying

key concepts, while Centobelli, Cerchione, Chiaroni, Del Vecchio, and

Urbinati (2020) present a literature review focusing primarily on the

designs of business models in the context of circular economy. How-

ever, not much work is done on the integration of circular economy

with different business operations and management. Extant literature

falls short in terms of explaining how business corporations decide

and implement processes and projects incorporating circular economy

principles. This study conducts a systematic review of the literature

highlighting on the role of circular economy principles with the various

elements and stages of business processes, including the business

strategies and model, managerial decision-making, firm's economic

performance, human resource management practices, business intelli-

gence and knowledge transfer (industry 4.0), stakeholders (suppliers

and customers), entrepreneurial orientation, and the family controlled

businesses. The paper consolidates the developments in the extant lit-

erature on the contribution of the circular economy toward different

business elements through systematic review methodology, and sug-

gests the agenda for future researchers in the field.

The remainder of the paper is organized as follows. The next

section discusses the methodology used for the literature review. The

third section presents the thematic discussion of the papers under ref-

erence. The fourth section presents the future research agendas.

Finally, the paper discusses the conclusion and offers policy implica-

tions in the field.

2|METHODOLOGY

For conducting this study, we employed a systematic literature

review. The methodology of this paper is inspired by Bansal, Garg,

and Sharma (2019), Jain, Sharma, and Mahendru (2019), Nofal,

Nicolaou, Symeonidou, and Shane (2018), Sharma, Jain, Mahendru,

Bansal, and Kumar (2019), Sharma and Mahendru (2017), Srivastava,

Sharma, and Srivastava (2019), Talan and Sharma (2019, 2020) and

Tranfield, Denyer, and Smart (2003).

A search query on Web of Science is run using sustainable devel-

opment, circular economy, and related terms as the primary keywords.

The initial search returned 1,021 articles. We excluded some non-

English papers, book reviews, books, reports, and conference pro-

ceedings. Our data set after the first level analysis was limited to

794 articles. We performed a full paper analysis on these articles to

organize them into separate themes that enabled us to structure our

literature review. This step also further reduced the data set to 765.

These papers were reviewed and read in detail to segregate the

papers that pertain to the relationship between circular economy and

business sustainability. We came down to a list of 142 papers. These

142 papers are then reviewed to organize them into the thematic

analysis, which is presented later in the paper.

After classifying the papers under analysis into nine themes, we

present a thematic framework. Figure 1 presents the framework of

the study representing the major themes identified for this study. In

addition, Table 1 presents the majority of sources with respect to

each of the themes under study.

3|THEMATIC DISCUSSION

Sustainability practices adoptedby businesses are largely dependent on

the values andbeliefs of management.The barriers to adoptingsustain-

able practices would include management knowledge/skills, time, and

2of20 BANSAL ET AL.