Circular economy and the policy: A framework for improving the corporate environmental management in supply chains

TLDR

The transition to a circular economy creates value through closed‑loop systems, reverse logistics, product life‑cycle management, and clean production, yet organizations confront financial, organizational, technological, social, policy, market, and logistical barriers. The study proposes a framework that highlights policy‑related barriers in supply‑chain transitions to the circular economy and discusses how these barriers affect corporate environmental performance. Using fuzzy DEMATEL, the authors evaluate causal relationships among policy‑related barriers in a Turkish apparel firm. Findings reveal that lack of CE legislation, mandatory requirements for manufacturers, and government support are the most critical barriers, with government institutions’ lack of CE awareness being the most influential factor and ineffective recycling policies the most impacted, and the authors recommend incentives, stakeholder communication, NGO cooperation, and circular procurement to enhance corporate environmental performance.

Abstract

Abstract The transition to the circular economy (CE) creates value through the closed‐loop systems, reverse logistics, product life cycle management, and clean production in terms of corporate environmental management. During this transition process, the organization faces many barriers such as financial, organizational, technology‐based, social, policy‐related, market‐based, and logistics‐based barriers. The objectives of this study are to propose a framework highlighting policy‐related barriers for a supply chain in the transition to CE and finally discuss potential implications on enhancing corporate environmental performance of a business. Further, this study evaluates the causal relationships between the policy‐related barriers using fuzzy Decision‐Making Trial and Evaluation Laboratory (DEMATEL) method. The application was conducted in an apparel firm in Turkey. From findings, lack of legislation for efficient CE (C4), lack of mandatory requirements and responsibilities for manufacturers/suppliers for the CE (C17), and lack of government support for environmentally friendly policies (C2) are revealed as the most important barriers, respectively. It is found that lack of attitude and awareness about CE in government institutions (C19) is the most influencing factor, whereas lack of effective recycling policies to achieve quality in waste management (C8) is the most influenced factor. The recommendations were developed for enhancing the corporate environmental performance of businesses through incentives and unique rewards, improving communication among stakeholders, the government's perception of CE and current linear economy, cooperation with nongovernmental organization (NGOs) and civil actions, the vision of government towards circular principles, the circular public procurement, the local governments in circular policymaking, and awareness of bureaucracy and government officials.