Disentangling circular economy practices and firm's sustainability performance: A systematic literature review of past achievements and future promises.

ABSTRACT

This paper systematically and critically reviews the literature on the intersection of circular economy practices (CEPs) and sustainability performance (SP). We synthesize and analyze the extant literature to uncover the knowledge gaps, highlight the contradictory views, and provide a comprehensive overview of the field. Following a detailed database search, we selected 104 empirical studies published in peer-reviewed journals for analysis. Our review reports the publication trends, top publishing journal outlets, research methodologies, and empirical contexts. We outline the theoretical underpinnings, identify the diverse circular economy practices and the key factors that impact circular economy practices and sustainable performance. The review shows a propensity for most authors to reuse established theories or not use theory at all, revealing the need for theory development. Furthermore, our analysis revealed that R&D and innovation, digital technologies, organizational capabilities/resources, and stakeholder and institutional pressure substantially influence the CEPs - SP relationship. Through our detailed assessment of the existing literature, we identified and proposed several themes and avenues for future research.