Innovation and the circular economy: A systematic literature review

The circular economy emerged as an alternative model to the linear system, which now appears to be reaching its physical limitations. To transition to a circular economy, companies must not only be aware of but also engage in more sustainable practices. For such a transition, companies must rethink and innovate their business models and the ways they propose value to their clients while simultaneously considering environmental and social facets. This systematic literature review sought to map out from the company perspective the key topics interrelated with innovation and the circular economy, describing the internal and external factors to consider in such transition processes. Key lines of research were identified, and suggestions for future research and for facilitating movement toward a circular economy are provided. This work contributes to deepening the literature by identifying the priority areas concerning the circular economy and encouraging future research that meets international standards of excellence.     

Circular economy in Latin America: A systematic literature review

The purpose of this study is to identify circular economy concept trends of Latin America with regards to Europe, in which a systematic review of literature (SRL) was made using Scopus data in order to define the search, to select the relevant articles, and to analyze the results. Seventy‐one articles from Scopus were reviewed, and the analysis was complemented by the analysis with 57 documents from other scientific Web browsers such as Mendeley, Scopus, Academic Google, ScienceDirect, and SciELo which sum a total of 128 documents which the majority have come from Europe. Main concepts were identified, barriers and trends. The main conclusion was which the current concept is not very clear; in spite of Europe knows that limitation, Latin America is making the same mistake implementation.     

From circular business models to circular business ecosystems

The circular economy aims to minimize resource inputs and waste and emission outputs of the economy and its organizational subsystems. This can benefit both financial and sustainability performance of companies. To analyze industrial implementation of the concept, the prevalent unit of analysis on the firm level is currently the circular business model. Our investigation of nine Swedish biogas companies and one branch organization indicates a range of conceptual shortcomings that challenges this approach. Our comparative case analysis points towards circular ecosystems being a more appropriate concept to describe the high level of coordination between different stakeholders necessary to implement circular systems. This increases the suitability to analyze, plan, and communicate circular economy systems on an organizational level, especially if value chain integration is low. An ecosystem perspective can thus support innovation and entrepreneurship in the context of the circular economy.     

Integrating circular business models and development tools in the circular economy transition process: A firm‐level framework

Along with the concept of circular economy growing worldwide, circular business models (CBMs) have been receiving ever greater attention in both the business sector and academia. However, the existing literature on the CBM is scattered and fragmented; this study offers an integrated firm‐level framework to link CBM typologies, the circular economy transition process, and relevant tools for CBM development and clarifies the positioning and roles of those tools in the process. In response to the fragmentation issue, results of this study are presented in three subtopics: (a) CBM typologies and archetypes, (b) transition guidelines, and (c) major analytical tools for CBM research. The roles and functions of CBM typologies and tools were integrated in different stages of the transition process, and the challenges and shortfalls for CBM research in the various stages were identified. This work lays the foundation for future operational studies.     

Organizational transition management of circular business model innovations

Scholars and practitioners across fields increasingly recognize that business models for the circular economy may be an effective lever for solving ecological persistent problems such as climate change, biodiversity loss, and growing natural resource scarcity. Despite a growing interest in the potential of circular business models, interconnections between the organizational dimensions of firms and their business model innovation processes remain underexplored. Based on problem‐centered expert interviews with business consultants experienced in circular business development, this study creates a conceptual model that offers structured knowledge about why firms steadily reproduce linear BMs and how incumbents manifest themselves as a constant linear‐oriented value creation system. The model also demonstrates organizational conditions and management strategies that frustrate the reproduction of linear BMs and, thus, enable initial moves towards CBM innovation. Building on this, the article provides a set of propositions on how an organizational transition management may be configured and what incumbents require to successfully navigate circular business model innovation. The findings provide a foundation for a contemporary understanding of circular business model transition management, which simultaneously serve as impulses for future research investigations.     

A systematic literature review of socially responsible investment and environmental social governance metrics

Socially responsible investment (SRI) encompasses both ethical and financial paradigms. This systematic literature review explores three key research themes within the SRI literature, identifying a significant disconnect between themes and a fixation on the financial (as opposed to ethical) paradigm. One of the foundations of SRI is environmental, social, and governance (ESG) metrics. This review confirms the importance of ESG metrics in the SRI field, as they play two crucial roles, namely, as a proxy for sustainability performance and an enabler of the SRI market. However, there are two main issues related to ESG metrics that undermine their reliability: a lack of transparency and a lack of convergence.     

On the conceptualization and measurement of dynamic capabilities for sustainability: Building theory through a systematic literature review

We performed a systematic literature review to explore and understand how the 23-year long debate about dynamic capabilities has addressed sustainability issues. Based on this, we propose a unifying framework that distinguishes different facets of dynamic capabilities for sustainability (DCsS) based on the different types of performance they are more suitable to predict. The theoretical contribution is twofold. First, we add to the literature by highlighting the dependence of different forms of DCsS on different levels of the centrality of sustainability outcomes in corporate strategies. Second, we shed light on the operationalizations of DCsS by providing guidance on the adoption of pertinent constructs and measurement models. The review concludes with a discussion of the managerial implications of the proposed conceptual framework to help decision makers better understand, which strategic moves to make to achieve their intended sustainability goals.     

New sustainable business models in China

This research explores the need to establish new sustainable business models in China and uses multiple objectives to examine in a sample of Chinese companies the reality of the level of sustainable development, environmental awareness and performance, community responsibility, performance barriers and drivers and other sustainability issues. A mixed methodology was adopted, using a questionnaire survey and interviews with 20 manufacturing companies in Guangzhou and Shenzen. Evidence from the small sample of companies demonstrates the lack of significant sustainable development practices in China, although small and medium sized companies appeared to show interest in this area and would like to further contribute to for example triple bottom line objectives. Increasing concerns are found from the company level regarding the need to use renewable energy, source alternative sustainable materials, close the loop of the supply chain, improve the quality of products produced rather than reducing cost, export to Europe and treat employees as an asset. The lack of skills, finance and knowledge are found to be prohibiting the effective embedment of sustainable development within companies and hence cause an under‐performance in this regard. The study concludes that the establishing of a new business model for sustainable development in China is needed urgently, and this should be a joint effort with the Chinese government. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.     

Circular economy in corporate sustainability reporting: A review of organisational approaches

A growing commitment from companies to implement circular economy (CE) strategies demands the development of guidelines for consistent related external communication. The fields of non-financial reporting and sustainability are well established with numerous available international reporting frameworks and approaches; however, there is still an absence of standardised reporting principles and procedures for publishing progress on circularity. In this context, this article aims to explore how companies could include CE within their corporate sustainability reports, through an academic literature review and content analysis of existent reporting approaches. Results showed a clear disconnection between CE and sustainability reporting literature. Overall, only a few of the revised reporting approaches explicitly mention CE, and the guidance given to companies is very general, inconsistent and places the responsibility of selecting performance assessment approaches on the companies. The analysis contributes to identifying opportunities for transparent external communication of CE issues, as well as exploring the challenges and limitations.     

Charity advertising: A literature review and research agenda

The authors present an overview of the academic literature on charity advertising. Through systematically reviewing 63 empirical studies on charity advertising, a synthesis of the body of work is framed in a general model. Predominant antecedents in the charity advertising literature include various appeal tactics and victim portrayals. Research streams on moderators and mediators include various ad characteristics and audience characteristics. The audience's intentions to donate were the most used outcome variable. Recommendations for continuing theoretical advancement in the field are presented. Managerial implications are also presented. This literature review contributes a knowledge base to guide future charity advertising research.     

Enterprise maturity models: a systematic literature review

Maturity models (MM) have been used by different enterprise segments. However, while many MM have been developed, few have been validated because of the lack of studies that demonstrate how to classify model levels. This study investigates the literature that presents assessment models for classifying maturity levels as well as the development of the research area. A systematic literature review was carried out, finding 409 relevant papers and a list of the few methods for classifying the maturity level. This review enabled us to update the state of the art on MM and identify gaps that may prompt future research.     

Public procurement for innovation through supplier firms' sustainability lens: A systematic review and research agenda

Public sector purchasing processes are gaining increasing prominence as a demand-side innovation tool for addressing national sustainability challenges. Accordingly, there has been growing research attention to this topic. Prior studies suggest three key rationales that underlie the use of public sector procurement to drive innovation: (i) the buyer–user rationale (for creating new needs); (ii) the market/system failure rationale (for improving suppliers' capacity to innovate); and (iii) the public services rationale (for improving public services). However, operational activities at the upstream supply chain affecting the sustainable innovation capacities of supplier firms appear to be under-researched in the public procurement for innovation (PPI) scholarship, despite knowledge about innovation capacity being critical to successfully implementing PPI. This paper adopts a systematic literature review approach to synthesise existing fragmented literature on sustainability-oriented PPI, focusing on supplier perspectives. Findings from a synthesis of 41 relevant articles suggest, among others conditions, that a procurement framework that maintains a good balance of competition and innovation, builds buyer–supplier relationship and urges strong supply networks, maintains a stable political commitment, offers security for niche markets with effective innovation risk management culture would enhance suppliers' sustainability capacity and propensity to innovate. This paper contributes to the PPI literature and the literature on determinants of sustainable innovation systems from supplier firms' sustainability lens.     

Integrating sustainability and resilience in the supply chain: A systematic literature review and a research agenda

Sustainability has emerged as an important industrial strategic outlook expanding beyond organizational boundaries to include the supply chain. Simultaneously, the industry has also been faced with supply chain resilience concerns. Research on the intersection of supply chain sustainability and resilience is nascent and is a consequence of their observed mutual influences. However, confusion about concepts, implementation methods, and measurements of sustainable and resilient supply chains remains. This study completes a systematic literature review that critically examines several major observations and directions. We find the concept of sustainable supply chains is more established, and general agreement on its theoretical foundations exists. Supply chain resilience is relatively less mature. The nexus and relationships between the two topics are often incoherent: there is confusion on sustainable and resilient supply chains establishment; there is no clarity on what practices could jointly advance both areas. A major conflict exists since sustainability generally focuses on efficiency, while resilience seeks effectiveness. We recommend studies to analyze implementation relationships and impact. We also observe that performance measurement systems should be developed to assess supply chain sustainability and resilience performance taking with explicit consideration time horizons considered in these measures.     

Close the loop: Evidence on the implementation of the circular economy from the Italian fashion industry

Fashion is widely considered as one of the most polluting and destructive industries to the environment and is a resource-intensive industry in which opportunities to reduce environmental impacts abound. By relying on an exploratory approach, this paper features an investigation into the circular economy (CE) practices of four purposefully selected Italian fashion companies. The study endorses the overlooked perspective of the product lifecycle (vis-à-vis the business model perspective), consistent with the key principles of the CE, to provide a comprehensive picture of CE practices implemented. This study engages with the current debate on the relationship between the concepts of sustainability and CE, supporting the idea that there is a beneficial relation between the two. The analysis shows the emergence of categories of CE-related practices as well as CE implementation challenges. The study also provides granular insights into the nature of these challenges that hinder the implementation of CE and demonstrates how they can be turned into sources of competitive advantage. Drawing on this emblematic evidence, we develop a set of theoretical and managerial implications.     

Unravelling the design process of business models from linear to circular: An empirical investigation

In the last years, circular economy has represented one of the most-debated topics in management research. Although the understanding of this industrial paradigm has significantly improved over the last decade, a number of important research questions still remain unanswered. Among them, the design process of business model through which established firms evolve from being linear to circular deserves further investigation. Existing research still falls short to investigate how companies design the dimensions of value creation, value transfer, and value capture of their business models to launch circular products into the market. By leveraging a multiple case study analysis of four companies in the paper and beverage industries that have launched six circular products, the paper examines the process that these companies have followed to face the transition toward a circular business model. The paper contributes to the research field in the intersection between new product development and circular business models, by showing that the process toward a circular business model occurs along three major phases, that is, idea generation, product development, and commercialization. In each phase, companies implement peculiar managerial practices for launching circular products into the market, which typically address all the dimensions of the business model and follows a recurrent path over time.     

Industry 4.0, innovation,and sustainable development: A systematic review and a roadmap to sustainable innovation

Despite the recent interest in the Industry 4.0 applications for sustainability, little is known on the processes through which digital transformation and Industry 4.0 technologies enable sustainable innovation in manufacturing. The present study addresses this knowledge gap by developing a strategic roadmap that explains how businesses can leverage Industry 4.0 technologies to introduce sustainability into innovative practices. For this purpose, the study conducts a systematic review of extant literature to identify Industry 4.0 functions for sustainable innovation and applies interpretive structural modeling to devise the promised roadmap. The results offer interesting insights into Industry 4.0 applications for sustainable innovation. The strategic roadmap developed reveals that Industry 4.0 enables sustainable innovation through 11 functions. Industry 4.0 and the underlying digital technologies and principles allow businesses to improve interfunctional collaboration and better integrate with internal and external stakeholders. Industry 4.0 further improves the knowledge base and advanced manufacturing competency and promotes organizational capabilities valuable to sustainable innovation such as green absorptive capacity, sustainable partnership, and sustainable innovation orientation. Through these functions, Industry 4.0 subsequently enhances green process innovation capacity and the ability to develop or reintroduce eco-friendly products economically and competitively. Overall, the roadmap explains the complex precedence relationships among the 11 sustainable innovation functions of Industry 4.0, offering important implications for businesses that seek to leverage Industry 4.0 sustainability implications and manage sustainable development.     

Nudging toward diversity in the boardroom: A systematic literature review of board diversity of financial institutions

Going beyond the mere gender diversity in the boardroom, this systematic review comprehensively covers the research on board diversity of financial institutions. More specifically, we cover gender diversity, as well as other characteristics of diversity, such as nationality, age, tenure, experience, education, ethnicity, and religion. A systematic literature review was employed using Scopus and Web of Science databases, covering all publications until May 2020, which resulted in 91 studies from 66 top-ranked journals in accounting, finance, and economic fields. We analyze them based on the journal, methodology, research construct questions, and theoretical perspectives. Our results highlight the substantial knowledge gaps and the inconsistent findings of prior studies on several aspects of the field, suggesting avenues for further studies in terms of research designs, settings, scope, and theories. We argue that there is a need to explore other board diversity attributes rather than focusing on the gender diversity of the boards of financial institutions to achieve sustainable development. Also, more work is outlined on topics related to board diversity of financial firms that receive limited attention from scholars, such as (but not limited to) environmental performance, capital structure, intellectual capital, innovation and earnings quality of financial institutions, as well as the indirect effect of policy settings.     

Sustainable finance and investment: Review and research agenda

Sustainable finance and investment (SFI) is key to fostering sustainable global development. Research in this field has focused on specific topics, such as the financial performance of sustainable investments and companies committed to sustainability. The SFI literature is excessively fragmented, rendering it difficult to identify what constitutes the field and what differentiates it from traditional finance and investment. Based on a systematic literature review of 166 articles, we map and integrate the main elements of the SFI field and identify the most relevant avenues for further research. In this process, we provide a definition of SFI; identify the main players in the field; and describe their profiles, strategies, and outcomes. We also propose a framework for understanding the SFI field and a research agenda. This agenda organizes the main SFI research questions and suggests suitable approaches to address them. We conclude that SFI players have worked together to promote positive social and environmental impacts through their financial and investment activities. However, the under-theorization of the SFI concept, the traditional short-term nature of financial logic, and the lack of evidence on the SFI impacts on society and the environment are the greatest challenges facing the field.