1. Introduction
By following conventional unconcerned linear practices, the industrial management is consuming natural resources in an uncontrolled manner and generates huge amounts of waste. Being upset over current linear industrial activities, global environmental bodies and the United Nations (UN) have called for sustainable practices from the industrial community [
1]. An environmental innovation that is believed to assist the industrial community in the sustainability path is circular economy (CE) practices. CE practices aim to keep the resources in the value chain as long as possible, which actually is both regenerative and restorative. Hence, policymakers and industrial practitioners viewed CE practices as a potential industrial model for achieving sustainable production and consumption [
2]. Meanwhile, bioeconomy (BE) practices, which aim at the generation of renewable biological resources and the transformation of wastes into value-added products through bioprocessing technologies, also received wider attention from the industrial community [
3]. For an inclusive sustainable practice, both the CE and BE practices were merged and thus gave rise to a new concept called circular bio-economy (CBE). Although a concrete definition for CBE practices does not exist, Carus and Dammer (2018) [
4] defined CBE as the juncture of CE and BE that focuses on improving resource efficiency, lowering greenhouse gas (GHG) emissions, reducing the dependence on fossil carbon, and value extraction from waste. By following CBE practices, it is possible for all countries to achieve sustainable development goals (SDGs) [
5].
During the past twenty years, policymakers of the European Union (EU) have started attributing more importance to CBE practices, which is evident from recent initiatives such as the EU’s 2018 bioeconomy strategy update and the European Green Deal, with the intent of mitigating global warming and reducing the dependence on natural resources [
6]. Following the EU, other nations, such as the United States (Biorefinery Assistance Program), Germany (Baden-Württemberg Path Towards a Sustainable Future), Finland (The Finnish Bioeconomy Strategy), Netherland (Framework Memorandum on the Bio-Based Economy), France (A Bioeconomy Strategy for France), and Spain (Extremadura 2030), have also devised new environmental strategies for promoting CBE practices [
7,
8]. Compared with developing nations, technologically advanced countries are showing more interest in embracing CBE practices, which is evident from the aforementioned environmental strategies. Disparity existing in the technology and innovation infrastructure between developed and developing nations has been pointed out as the major reason for the difference in the embracement of CBE practices [
9]. The global municipal solid waste production is estimated to rise by 2.2 billion tons per year by 2025. Furthermore, it has been found that countries such as China (242.06 million tons), India (216.25 million tons), and African countries (110 million tons) are among the countries that generate large tonnages of waste, and need better treatment solutions [
10,
11]. Additionally, the production of industrial solid wastes has been a major problem as it is non-biodegradable. The generation rate of non-biodegradable industrial wastes is projected to increase by 10 to 15% every year [
12]. Wastes such as electronic scraps, used batteries, municipal solid wastes, and electroplating wastes are being recycled using suitable technologies [
13]. However, wastes from iron and steel plants, dye industries, and fertilizer industries have not been recycled due to their non-biodegradable properties.
The leather industry is one of the key players in the global market; however, the leather industry waste possesses severe environmental problems and hence it needs to be handled in an optimal way [
14]. India, one of the top ten leather-producing countries, accounts for nearly 12.93% of global leather production and contributes immensely to economic development and gross domestic development (GDP) [
15]. Annually, during the processing and production stages, globally leather industries generate four million tons of solid wastes (hair, dry sludge, buffing dust, fleshing, chrome shaving and splitting, and trimming) [
16]. When 500 kg of raw animal skin is processed, only 75 kg is converted into leather and the remaining is discarded as waste into the environment. Harmful chromium salts are used for tanning leather and its waste is discharged into the environment [
17]. Much of the solid wastes generated by the leather industries are generally dumped in open environment landfills while the liquid wastes are also directly discharged into water bodies without proper treatment. Therefore, despite contributing significantly to economic development, the leather industries are widely criticized for adverse environmental impact. Thus, the wastes from the leather industries need to be handled properly, and attempts have to be made in recovering value from leather wastes. Accordingly, attempts at energy [
18], biofuel [
19], and biofertilizer [
20] production from leather wastes have been made. Though these attempts are appreciable, most of them are at the laboratory stage and it has also been mentioned that there are many challenges in scaling up for large-scale production.
It is clear from the information that there is an imminent need to have sufficient technological infrastructure, environmental-friendly technologies, and environmental policies for efficient leather waste management in India. Since, India, a developing country, is still in the nascent stage of technological infrastructure, it is essential to establish and enhance a robust facility for recovering value from leather industry waste. It is widely believed that CBE practices will be instrumental for developed and developing countries in achieving SDGs. For India, being one of the largest leather producing countries, there is plenty of scope for CBE practices in producing a value-added product from leather wastes; however, many barriers are observed while implementing CBE practices.
Giving importance to CBE practices, this study addresses the critical gaps in the literature. First, the study develops a theoretical foundation to study the barriers to CBE practices by understanding the CBE practices, and their significance and role in achieving SGDs. Second, the study identifies the barriers that could be useful for developing strategies while implementing CBE practices in India. Here, the Indian leather industry is considered as it is one of the largest leather producers, and mishandling of leather waste has an adverse environmental impact [
21]. Thus, the need for CBE practices is imperative in the leather industry. This study raises the following questions for analysis:
What are the critical barriers that need to be considered for the successful implementation of CBE practices?
How should the barriers to the successful implementation of CBE practices be ranked?
How can the causal interrelationships among the barriers to the successful implementation of CBE practices be best revealed?
To answer the above research questions, an extant literature review was performed to identify the barriers to CBE practices. Then, a series of meetings with Indian leather industry managers was conducted to collect real-time barriers and verify the identified barriers. The rough decision-making trial and evaluation laboratory (R-DEMATEL) approach was used to reveal the causal interrelationship among the barriers. In this study, the integration of rough set theory with DEMATEL is used to avoid vagueness and consider the mutual influence of various barriers [
22].
This study contributes significantly to the existing body of literature on CBE practices by providing a list of barriers that may hinder the progress of the industrial community in the embracement of CBE practices. Furthermore, the weight significance of the barriers is evaluated. Based on the weight significance, the industrial management can decide which barrier has to be addressed immediately. Further, this study outlines the causal interrelationships among the barriers to CBE practices. Understanding the causal interrelationships among the barriers may help the industrial community in taking appropriate steps and also in devising efficient strategies to overcome the barriers.
The remainder of the paper is organized in the following manner.
Section 2 lays the theoretical foundation of the study by reviewing existing literature to identify the barriers to CBE practices and highlights the research gaps of the study. The rough DEMATEL technique is presented in
Section 3.
Section 4 provides the problem statement and application of the rough DEMATEL.
Section 5 thoroughly discusses the results of the study, and
Section 6 demonstrates the theoretical and managerial implications of the study. Finally,
Section 7 concludes the study.
3. Research Methodology
In this study, the DEMATEL technique has been used as a solution methodology. DEMATEL is an efficient method used to analyze the interrelationships among factors under consideration. In the DEMATEL technique, pairwise comparison between the factors under consideration is carried out to reveal the causal interrelationships and the interrelationships among the factors are represented using a digraph [
45]. In the digraph, the factors are categorized into cause and effect groups, and the interdependence among the factors are represented through a causal diagram [
46]. This method utilizes the experience and knowledge of the experts to reveal the interrelationships. Knowledge about the interrelationship among the factors will assist the industrial management and policy makers in devising appropriate strategies. The following are the reasons for preferring the DEMATEL technique:
In this study, the DEMATEL technique is integrated with the rough theory concept to deal with the vagueness and subjectiveness in the evaluation of barriers to CBE practices. With this integration, it is possible to utilize the strength of DEMATEL in revealing the interrelationship and the merit of rough theory in manipulating subjectiveness of the barriers. Hence, in this study the R-DEMATEL method is used. The following steps are involved in R-DEMATEL:
experts are asked to make pairwise comparison between the factors in terms of crisp scores (0 = no influence, 1 = very low influence, 2 = low influence, 3 = high influence, 4 = very high influence) [
22]. The direct relation matrix of the
expert is given as follows:
where
is the crisp judgment of the
expert for the
factor’s influence on the
factor, and
is the number of experts, and
is the number of factors.
Thus, the group direct-relation matrix
is given as follows:
where
In rough set theory,
is represented by a rough number and is defined by its lower and upper limit as follows:
where
upper approximation of
,
lower approximation of
, and
and
are number of objects included in the lower and upper approximation of
, respectively.
Now, the crisp judgments of factors in the direct relation matrix
are converted into rough numbers using Equations (3) and (4). The obtained rough number is shown as below:
Using the rough group direct relation matrix
, the normalized rough group direct-relation matrix
is obtained as given below:
where
The rough total-relation matrix
can be obtained using the following equation:
where
is the identity matrix.
The rows and columns of
are summed as shown below:
The prominence
and relation
are calculated as follows:
4. Problem Statement
As mentioned in the studies of [
9,
38], for reasons such as lack of awareness and technological inadequacy, the state of CBE practices is still in the infancy stage in developing countries. Since the transition toward CBE practices is becoming more compelling for realizing sustainable industrial practices, developing countries have also started showing interest in CBE practices. The need for CBE practices is essential for the leather industry as it generates a huge quantity of waste in all industrial stages. According to the reports of the Food and Agriculture Organization (FAO) (2015), Asian countries produce a large number of leather products [
47]. India, being one of the top ten leather-producing countries, houses about 3000 leather industries and generates more leather waste [
48]. During processing and production stages, leather industries annually generate four million tons of solid wastes (hair, dry sludge, buffing dust, fleshing, chrome shaving and splitting, and trimming) [
16]. Such kind of waste generation fails to meet the requirement for green, environmental protection, and sustainable development of leather industries. The wastes generated by the leather industries possess severe environmental impacts and hence need to be managed in an effective manner. With CBE practices, it is possible to minimize the adverse environmental impact and also recover value from the wastes. However, Indian leather industries are showing a lukewarm response to CBE practices.
Keeping this in mind, this paper aims to identify critical barriers to CBE practices by combining literature review and inputs from experts and evaluating critical barriers to CBE practices using the R-DEMATEL technique. Accordingly, the problem is formulated and solved in two stages (identification and evaluation) as shown in
Figure 1. To evaluate the barriers to CBE practices, there can be no better industrial context than the leather companies in India. Hence, in this study, five leather companies (
Table 2) located in India are considered case companies. For evaluating the barriers to CBE practices, inputs from the ten experts who have knowledge and experience in CBE practices were utilized. The ten experts were chosen by following the purposive expert sampling technique. It is the process of deliberate selection of experts based on certain criteria. The selection criteria involve knowledge proficiency, work experience, availability, willingness to participate, and ability to express opinions in an effective manner [
49]. Because of its significance, the purposive sampling technique has been used in many fields such as tourism management [
50] and policymaking [
51]. Earlier, twelve experts were approached for this study; however, only ten experts met the selection criteria. The profiles of the ten selected experts are given in
Table 3. The number of experts considered in this study is acceptable when compared with other studies, which considered five [
5] and six experts [
52], respectively.
4.1. Stage I: Identification of Barriers to CBE Practices
In this stage, the barriers to CBE practices were identified and listed based on an extensive literature review. The articles for the literature review were selected from reputed scientific databases using several keywords by applying certain selection criteria as mentioned in
Section 2. From the literature review, 20 barriers were identified. Then, a semi-structured questionnaire was framed to collect the experts’ (
Table 3) opinions for identifying the final barriers to CBE practices in the Indian context. A separate space was provided in the questionnaire where the experts could suggest other barriers to CBE practices. The ten experts were asked to rate the initially identified 20 barriers using the five-point Likert’s scale (0 = no influence, 1 = very low influence, 2 = low influence, 3 = high influence, 4 = very high influence). The Likert scale has been used in corporate social responsibility measurement [
53] and green supply chain management [
54]. It was decided that the barriers rejected by five experts could be excluded from the list; however, none of the barriers received a low rating. Additionally, the experts’ suggested five more barriers (unfavorable market environment, difficulty in developing customers, unfavorable investment condition, difficulty in meeting customer’s need, and unclear and partial understanding of CBE concept) in addition to the initially listed twenty barriers to CBE practices. Thus, the total number of finalized barriers to CBE practices is twenty-five. Based on the experts’ suggestions, the twenty-five barriers to CBE practices are categorized into six categories, namely, policies and regulations, technology and material, market and investment condition, social acceptance, knowledge and network formation, and organizational structure as given in
Table 1.
4.2. Stage II: Evaluation of Barriers to CBE Practices
In this stage, the barriers to CBE practices are evaluated using R-DEMATEL based on the experts’ ratings. First, the ten experts were requested to make pairwise comparison between the barriers to CBE practices using the crisp score in the questionnaire provided. Based on the experts’ responses, the group direct relationship matrix is constructed (
Table A1 of
Appendix A). Using Equations (3)–(5), the rough group direct relation matrix is established (
Table A2 of
Appendix A). the rough total relation matrix
is established using Equations (6)–(9) (
Table A3 of
Appendix A). The prominence and relation of the barriers are calculated using Equations (10)–(13) as shown in
Table 4 and
Figure 2.
5. Results and Discussion
The prominence value (
in
Table 4)
of the barriers to CBE is used to find the relative significance of the barriers. Based on the results, the barriers are ranked as follows: O4 > K1 > M2 > O1 > K2 > S2 > M3 > O2 > T2 > K4 > K6 > S3 > S1 > T1 > M5 > O3 > M1 > T3 > K5 > P3 > M4 > T4 > K3 > P2 > P1.
The outcome indicates that the leather industry’s resistance to change (O4) is the most critical barrier in CBE practices. The transition to the CBE practices by the leather industry requires a drastic commitment change at the managerial level [
40]. Most of the leather industries in India were obsessed with the traditional manufacturing process: i.e., a linear practice. Unawareness, limited exposure and knowledge of the circular economy practice restrict the change towards CBE practices. Furthermore, the abundant availability of raw materials, i.e., animal (cattle and sheep) skin, acts as a driving force for preferring the traditional practice rather than circular practice [
55]. Being unconcerned with adverse environmental impact, most leather industries are not ready to take up CBE practices. Next, difficulty in forming a reliable supplier network (K1) is the second most critical barrier. Because of the importance and benefits of adopting CBE practices, only a limited number of parties are involved in the CBE supply chain network. It is difficult for the industry interested in CBE to form a robust and reliable supplier network with limited parties. The third critical barrier to CBE practices is difficulty in developing customers (M2). Apart from the industrial community, the general public is unaware of CBE practices and the need to develop products that utilize CBE practices. Many customers were of the mindset that the quality of products developed through CBE practices is inferior to products developed using virgin materials [
56]. The result is that it becomes tedious and more difficult for industries engaged in CBE practices to acquire customers.
Lack of vision (O1) is the fourth critical barrier to CBE practices. The absence of foresightedness and limited awareness about current global industrial practices restrict the industrial community from embracing CBE practices. Most industries are confined to linear manufacturing practices and the competitiveness is also limited to the local vicinity. The next important barrier to CBE practices is unclear and partial understanding of the CBE concept (K2). The concept of CBE practices is gaining ground in a slow-paced manner; in most emerging economies it is still in a nascent stage. Limited awareness programs and initiatives to promote CBE practices have led to unclear and partial understanding. Therefore, aggressive steps and more awareness programs must be taken to familiarize and spread accurate information about CBE practices. Another important barrier to be addressed in CBE practices is unfavorable investment conditions (M3). The existence of misconceptions about products developed through CBE practices limits market success. In addition to this, a low level of acceptance and recognition from customers restricts stakeholders from investing in CBE practices. This creates unfavorable investment conditions [
41]. Then, problems related to standards (O2) are another important barrier to CBE practices. The failure of global nations in framing and establishing a globally accepted standard for products developed through CBE practices has limited product access to the global market. This problem closes the gateway for industries engaged in CBE practices to global business.
Next, the absence of physical infrastructure (T2) is another critical barrier to CBE practices. It is the result of poor market demand and scope. As there is no great demand for CBE products, few stakeholders are showing interest and are ready to invest. This leads to a scarcity of physical infrastructure. Another significant barrier to CBE practices is insufficient research and development (R&D) and innovation (T4). Being unaware of potential benefits offered by CBE practices, both the industrial community and the government have shown minimal attention towards CBE. Failure to give sufficient impetus results in poor R&D and innovation [
57].
5.1. Cause Group Barriers
Barriers falling into the cause group tend to influence other barriers; hence, they deserve immediate attention. Here, based on the values of , i.e., , the following barriers are categorized into the cause group: O1 > K2 > M4 > T2 > P2 > P1 > O4 > K1 > M2.
From
Table 4 and
Figure 2, it is identified that lack of vision (O1) has the highest value among the causal barriers, indicating the significance of this barrier. It seems obvious that lack of vision from the top-level industrial management remains a major impediment in the transition towards CBE practices. Only with the support and commitment from the top management level will it be possible to ensure the feasibility and success of CBE practices. Rather than taking account of the potential benefits (social, economic, and environmental) offered by the CBE practices, many industries consider adopting CBE practices to be a financial burden [
58]. While the concept of CBE practices is relatively new to the leather industry, leather industry managers need to embrace CBE practices quickly because this industry has been criticized heavily for its adverse environmental impact. Earlier, it was found that restrictiveness to change (O4) was the most significant barrier in CBE practices. By continuing the conventional linear manufacturing practice, the leather industry puts more pressure on the environment. Such activity raises questions over the sustainable industrial performance of the leather industry. By adopting CBE practices, the leather industry may recover value from the wastes and lower the environmental burden. The next important influencing barrier to CBE practices is unclear and partial understanding of the CBE concept (K2). Unawareness about the need to adopt sustainable industrial practices and stringent environmental norms allow the leather industry to carry out the conventional linear industrial practice. The enactment of strict environmental laws and periodic measurement of environmental performance may motivate the leather industry to adopt CBE practices. Besides, the government must conduct periodical awareness programs and seminars to impart knowledge of CBE practices among the industrial community [
59]. By doing so, there is a possibility that the industrial community may gain better insights into CBE practices. Problem in market creation (M4) is the third critical barrier to CBE practices. The perception prevails that the products developed through recycling processes are inferior in quality to products made from virgin material. Such perceptions in society drag down the preference level of customers towards products developed in CBE practices [
56]. Hence, the chance of market expansion for CBE products gets halted. The absence of demand for a product reduces the possibility of market expansion, and stakeholders hesitate to invest in CBE practices.
The absence of physical infrastructure (T2) is the fourth important barrier to CBE practices. Since a poor demand for CBE products exists, only limited parties are involved in the CBE supply chain network. Since the awareness of sustainability is low, society is not actively engaged in waste management. Furthermore, waste collection centers are located in a scattered manner. Further, only a few parties are engaged in the transportation of waste materials. When compared with waste plastic collection centers, the number of waste leather collection centers is very low. Hence, it is difficult to form a reliable supply chain network [
60]. The fifth and sixth critical barriers to CBE practices are unfavorable policies and politics (P2) and missing global policies (P1). The non-existence of global policy hampers the progress of CBE practices. Finally, failure in reaching consensus and harmony in framing a globally accepted framework for CBE practices remains a major hurdle [
39]. With a strong framework, it is possible to ascertain a global standard for CBE products. Such policies and frameworks will help in overcoming misconceptions about CBE products in society. Furthermore, while developing the framework, the socio-economic and technical capabilities of the individual nations must be taken into consideration. Only by considering these capabilities will it be possible to determine the feasibility of the framework to be developed.
5.2. Effect Group Barriers
The barriers falling into the effect group are the consequences of the cause barriers. Other barriers easily influence these barriers. Based on the values
, i.e.,
given in
Table 4 and
Figure 2, the following barriers are categorized into the effect group: T3 > M1 > T1 > S2 > T4 > S1 > P3 > K3 > K4 > K5 > M5 > M3 > O3 > K6 > O2 > S3.
Here, lack of technology for production (T3) has been identified as the highest ranked important effect barrier. This barrier is the consequence of a lack of commitment and vision from the top-level management. When the industrial management has a wider vision and is aware of the ongoing production trend among the global industrial community, it will show interest in investing in the R&D. However, because of unawareness and lack of exposure to the global industrial community, many members of the leather industry fail to invest in R&D. Without enhancing R&D, it is difficult to make progress in CBE practices [
61]. The leather industry can reuse the wastes generated with advanced technology in place, thereby recovering wealth from wastes. By doing so, the leather industry may minimize the environmental burden and increase its business performance. Next, unfavorable market environment (M1) is the second important effect barrier. Misconception about the CBE products and unawareness about their potential contribution to sustainability progress among society hamper the success of CBE products. In such a situation, finding opportunities for market penetration remains an uphill task for CBE products. Thus, there is a necessity to establish a conducive market ecosystem for CBE products. Problem in obtaining input material (T1) holds the third position in the effect group. To successfully remanufacture a product, a sufficient quantity of input material is required. In this case, due to the lack of a waste leather product collection center, the CBE practices companies face difficulty securing adequate discarded leather waste products [
62]. Along with quantity, the quality of the input leather waste product is also to be considered. Hence, for the leather industry involved in CBE practices, obtaining adequate input material remains cumbersome.
The fourth important barrier to CBE practices is limited public perception (S2). As discussed earlier, the understanding of CBE practices has been heterogeneous in society. Diversified perceptions convey a deviated intention about CBE practices and their significance. Therefore, clear detail on the purpose and importance of CBE practices must be imparted among the general public. Simultaneously, society must be encouraged to prefer CBE products. Besides motivating the society to prefer CBE products, the industrial community needs to enhance funds for R&D. Insufficient research and development (R&D) and innovation (T4) is the fifth significant barrier. Customers often raise concern over the quality of the products developed through CBE practices. Under such circumstances, the industrial community must attempt to improve the quality of the product by incorporating the customers’ requirements. To meet the customers’ requirements, the industry must have robust R&D [
63]. Only with robust R&D can the industry expect to meet the customers’ requirements.
7. Conclusions
CBE practices need to be incorporated by the global industrial community as it is believed to be an important environmental innovation in curbing the hazardous environmental impact of industrial wastes. However, compared with developed countries, developing countries such as India are often marred with many barriers to managing industrial wastes and have not enhanced the infrastructural facility essential for CBE practices. Therefore, there is an imminent need to identify and evaluate the barriers to CBE practices, and in this study, an attempt has been made to evaluate the barriers to CBE practices in the Indian leather industry context. Despite their significance, so far very few empirical studies have been carried out to investigate barriers to CBE practices in India. To fill this research gap, this study identifies the barriers to CBE practices in the Indian leather industry and also measures the degree of criticality of these barriers. Here, the rough-DEMATEL technique is used to evaluate the barriers to CBE practices. Based on values, i.e., , the barriers are prioritized, and using values, i.e., , the barriers are classified into cause and effect groups. When value is positive, the barrier falls into the cause category and when it is negative, the barrier falls into the effect category.
In this study, a real-time empirical study was carried out regarding barriers to CBE practices in the Indian leather industry context, wherein twenty-five barriers were identified and categorized into six categories as per relevant literature and experts’ inputs. Then, the barriers were evaluated using R-DEMATEL based on the experts’ inputs. According to prominence value , restrictiveness to change, difficulty in forming a reliable supplier network, difficulty in developing customers, lack of vision, and unclear and partial understanding of CBE concept are the top five critical barriers to CBE practices. Likewise, based on values, the barriers are grouped into cause and effect categories. Here, nine barriers fall into the cause group and the remaining sixteen barriers fall into the effect group. Barriers such as lack of vision, restrictiveness to change, an unclear and partial understanding of CBE concept, problem in market creation, absence of physical infrastructure, unfavorable policies and politics, missing global policies, difficulty in forming a reliable supplier network, and difficulty in developing customers fall into the cause group. Generally, barriers falling into the cause group need immediate attention. Further, the nine barriers of the cause group also hold the top position on the basis of prominence values. Hence, these barriers need to be addressed by the industrial management and policymakers in streamlining the CBE practices.
This study contributes significantly to the CBE literature by providing a consolidated list of barriers. Further, this study is carried out in the Indian leather industry context, which has not been explored. Both prominence and causal interrelationship among the barriers to CBE practices has been explored which may provide better insights for researchers and practitioners. Despite its contribution to the CBE literature, this study has limitations that provide a scope for future study. In this study, the Indian leather industry alone is considered. The barriers considered in this study may not be applicable to other industries. Furthermore, a study focusing on only one country may not represent an exact picture of developing countries. Hence, a cross-country study should be performed. In addition to causal interrelationship, the hierarchical relationship could be examined by integrating the interpretive structural modelling (ISM) technique and structural equation modelling (SEM) with the DEMATEL method.