Sustainability and the Circular Economy Business Development

Abstract

Currently, there has been a tendency for companies to focus on the development of their businesses following circular economy trends associated with sustainability. European Community guidelines have established deadlines for the implementation of management strategies that allow creating and maintaining an effective and resource-efficient economic system, reducing the amount of energy and materials used in production. This study aims to analyze the existing literature review on the integration of sustainability and circular economy (CE) principles into business development. The research methodology is a systematic literature review using the SCOPUS database, in which 97 academic articles were analyzed after exclusion using keywords. The findings show that, after the analysis carried out in VOSviewer, business development, and circular economy are themes studied by many authors, with links related to the theme of sustainability. The conclusions indicate that CE and sustainability are interlinked, and companies must implement appropriate sustainability and CE strategies to increase their competitiveness and improve resource efficiency. These strategies can integrate innovative technologies, the use of sharing platforms, extending the useful life of products, recovering resources to minimize waste, and integrating sustainability concepts into business.

1. Introduction

Sustainability and the circular economy (CE) have gained enormous attention in recent years from researchers, governments, businesses, investors, and society in general. Sustainability is concerned with integrating environmental resilience, economic growth, and social inclusiveness to ensure the wellness of current and future generations [1]. CE emphasizes the need to create and maintain a resource-efficient and effective economic system by reducing the amount of energy and materials used in production. According to Awan and Sroufe [2], CE involves prioritizing product reuse and repair, establishing restorative industrial systems, and incorporating a view of lifecycle costs into the tender process [3]. These practices contribute to the management of natural resources by removing valuable products or materials from waste streams. As a result, Pieroni et al. [1] identify CE as a strategy for achieving sustainability. Sustainability and CE are connected in multiple ways and have contributed to the structural changes needed to implement sustainability initiatives. For instance, CE encourages people to reuse, recycle, and reduce materials used in production and consumption processes. These activities contribute to environmental and economic sustainability.

CE challenges and changes the traditional linear economic model that follows the take-make-use-waste process. It encourages businesses to rethink and redesign their strategies and operations across the entire value chain [4]. For instance, value creation in CE is causing a paradigm shift from value-in-transaction to value-in-use, where businesses deliver ongoing value to customers [5]. Unlike the traditional upfront-sales models, circular models adopt a continuous service-oriented process that redefines the concepts of value and ownership. As a result of these changes, the World Resources Institute projects that CE will reduce natural resource use by 32% within 15 years and by 53% by 2050 [2]. In addition, the implementation of CE in the U.S. business sector is projected to contribute up to $4.5 trillion in Gross Domestic Product (GDP) growth by 2030. These numbers reflect the revolutionary impact of CE and its innovations. Other than these economic benefits, CE is projected to have a significant effect on the environment. Velenturf and Purnell [6] note that issues such as the depletion of natural resources, high carbon emissions, waste generation, and its associated pollution have become prominent challenges. Atchuthen and Kumar [7] study the influence of the energy sector on the economic growth of countries.

CE, as a sustainability initiative, addresses these problems by encouraging the adoption of innovations and change processes aimed at reducing resource exploitation and maximizing waste prevention. As a result, this systematic literature review synthesizes findings from 97 documents on the integration of CE and sustainability concepts and their potential impacts on business development.

2. Materials and Methods

A systematic literature review using the PRISMA 2020 (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) model was conducted. The PRISMA 2020 structured approach enhances the transparency of the review process by encouraging detailed documentation of search strategies, inclusion and exclusion criteria, and data extraction methods [8]. This allows other researchers to reproduce the study, validating the findings. For this study, the researcher followed three stages, including planning, conducting the review, and reporting [9]. The planning stage involved defining the research objectives, inclusion and exclusion criteria, and keywords. The study aimed to systematically review and synthesize existing literature on the integration of sustainability and circular economy principles into business development.

To gather and select relevant materials, the Scopus database was employed. This decision was guided by some studies [10,11,12], which characterize Scopus as one of the most extensive and comprehensive curated abstract and citation databases available. Scopus includes a wide range of sources, such as conference proceedings, books, and journal articles, covering various global and regional research domains. Furthermore, it upholds high-quality data standards through an independent Content Selection and Advisory Board, which enforces a rigorous content selection and re-evaluation process.

Table 1. Inclusion and exclusion criteria for the study.

Inclusion	Exclusion
Must be relevant to the study topic, i.e., focus on CE, sustainability, and their applications in business development Research published within the last 10 years to ensure recent and relevant data Only peer-reviewed journal articles, conference papers, books, and authoritative reports for credibility and quality Research published in English to ensure consistency and comprehensibility	Duplicative content Inaccessible full text

Source: adapted from Rosário and Dias [11].

summarizes the inclusion and exclusion guidelines used to filter relevant sources.

The second stage involved searching for relevant studies for analysis. It began with identifying the academic database, in this case, Scopus. Then, the keyword “sustainability” was used for the initial search, resulting in 426,058 document results. Adding the keyword “circular economy” reduced the search results to 9546. However, the researcher added the exact keywords “business development”, narrowing the search results to 99 articles that were considered for this study, ensuring that the sources identified were highly relevant to the study topic. In addition, these results were filtered to peer-reviewed sources published between 2014 and 2024. Other filters added include “full text” and “English” as the main language. The researcher also screened the documents to remove any duplicate records.

It is important to highlight that this study had limitations, as it only focused on the Scopus database, excluding other scholarly and scientific databases. When conducting literature searches up to May 2024, it is essential to include peer-reviewed scientific and academic publications from a broader range of sources.

These filter practices reduced the search results to 97 papers, which were then analyzed and synthesized in the final reporting stage (Figure 1).

Thematic analysis was used, with the key findings organized based on common themes and patterns observed in the research. We employed content and thematic analysis methods to identify, examine, and present a range of documents, as specified by the author’s study [12].

Of the 97 selected documents, 96 are articles, and 1 are conference papers.

3. Publication Distribution

Below, we present the quantitative analysis of peer-reviewed articles on the theme of sustainability and circular economy business development up to the period of May 2024. The year 2022 had the highest number of peer-reviewed publications on the subject. Figure 2 summarizes the peer-reviewed literature published until May 2024.

Similarly, Figure 3 illustrates the regions and countries with the most abundant literature contributions on the topic. In this sense, it was observed that the countries that stood out in the first place were Italy, Brazil, and Germany.

Table 2. Top 10 countries by number of publications.

Country	Number of Publications
Italy	58
Brazil	26
Germany	22
Netherlands	20
Spain	19
Sweden	18
UK	18
France	13
China	12
Finland	10

Source: own elaboration.

and Figure 3 present the leading 10 nations that have made significant scientific contributions in the studied fields. The analysis seeks to ascertain whether these countries deepen their studies on topics related to sustainability and circular economy business development.

The publications were sorted out as follows: Environmental Science (89); Social Sciences (73); Energy (41); Business, Management, and Accounting (29); Computer Science (27); Engineering (13); Economics, Econometrics, and Finance (8); Psychology (3); Agricultural and Biological Sciences (3); Medicine (1); Mathematics (1); Earth and Planetary Sciences (1); Biochemistry, Genetics, and Molecular Biology (1).

In

Table 3. Scimago Journal Rank (SJR).

Title	SJR	Best Quartile	H Index
Business Strategy and The Environment	3.67	Q1	147
Technological Forecasting and Social Change	3.12	Q1	179
Resources Conservation and Recycling	2.77	Q1	196
Current Opinion on Environmental Sustainability	2.51	Q1	122
Sustainable Development	2.28	Q1	91
Resources Conservation and Recycling Advances	2.03	Q1	21
Science of the Total Environment	2.00	Q1	353
Environmental Impact Assessment Review	1.96	Q1	114
Journal of Environmental Management	1.77	Q1	243
Waste Management	1.73	Q1	220
Journal of Industrial Ecology	1.70	Q1	130
Urban Forestry and Urban Greening	1.62	Q1	117
Ecological Informatics	1.10	Q1	77
Environment and Urbanization	0.99	Q1	90
Environment Development and Sustainability	0.89	Q1	82
International Journal of Environmental Research and Public Health	0.81	Q2	198
Smart and Sustainable Built Environment	0.78	Q1	28
Land	0.73	Q1	54
Sustainability Switzerland	0.67	Q1	169
Procedia CIRP	0.56	*	103
International Journal of Sustainable Development and Planning	0.27	Q3	23
Revista Venezolana de Gerencia	0.23	Q3	15
International Journal of Global Energy Issues	0.18	Q4	29
Natures Sciences Societes	0.17	Q3	22
Socijalna Ekologija	0.15	Q4	11

* data not available. Source: own elaboration.

, we analyze the Scimago Journal Rank (SJR), the best quartile, and the H index by Business Strategy and the Environment with 3.67 (SJR), Q1, and H index 147.

There are a total of 18 publications in Q1, 1 publication in Q2, 3 publications in Q3, 2 publications in Q4, and 1 publication without quartile information. Publications from the best quartile Q1 represent 18.72%; the best quartile Q2 represents 1.4%; the best quartile Q3 represents 3.12%; and the best quartile Q4 represents 2.8% of each of the titles of 96 publications.

Finally, 1 publication without indexing data represent 1.4%. As shown in Table 3, most publications do have quartile Q1.

The most quoted article was “Barriers to the Circular Economy–Integration of Perspectives and Domains” [14], with 375 quotes published in Procedia CIRP (proceedings conference) 0.56 (SJR), and with H index (103), this paper identifies the barriers to a transition to the Circular Economy, which is financial, structural, operational, attitudinal, and technological. The most cited article published in an academic journal is entitled “Designing Business Models in Circular Economy: A Systematic Literature Review and Research Agenda [15] with 333 citations, published in the journal Business Strategy and the Environment, which registered 3,67 (SJR) the best quartile Q1 and with a H index (147).

In Figure 4, we can analyze citation changes for documents published until May 2024. The period 2014–2024 shows a positive net growth in citations with an R2 of 25%, reaching 1377 in 2023, with a cumulative total of 33,985 having been recorded in May of 2024.

In Appendix A citations were cited from all scientific and/or academic documents from the period ≤2014 until May 2024, with a total of 33,984 citations, of the 97 documents, 10 were not cited. Self-citation documents in the period ≤2014 to May 2024 were self-cited 3668 times.

The bibliometric analysis was conducted to explore and pinpoint metrics that reveal the patterns and development of scientific or academic content within documents, using principal keywords (Figure 5). In this visualization, we can observe most of the network nodes. The size of each node indicates the frequency of the associated keyword—that is, how often the keyword appears. Furthermore, the connections between the nodes indicate keyword co-occurrences, where keywords appear together.

The thickness of these links, meanwhile, highlights the frequency of these co-occurrences—essentially, how frequently the keywords are found together.

Each color represents a different thematic cluster, with nodes illustrating the subject matter of topics within a theme and links showing the relationships between those topics under the same thematic umbrella. The analysis of this VOSviewer map of all keywords allows us to highlight six clusters, which are divided into the following groups: Cluster one is red and represents economic development and related keywords like life cycle assessment, decision-making, wasted management, and recycling. Cluster two is green and stands for life cycle analysis and related keywords such as clothing industry, life cycle, environmental, environmental policy, and circular economy. The cluster tree is blue and represents resource management and related keywords, for example, digitalization, behavior change carbon. Cluster four is yellow and represents environmental impact, and related keywords are economic aspect and pay-per-use. Cluster five is orange, represents business development, and stands for economic analysis, circular clothing, and economics. Cluster six is purple and stands for Circular Business Model with related Keywords decision making and implications for plastics recycling. The clusters are presented below in relation to their size. The largest is Business Development—cluster orange, followed in descending order and dimension by the following: Circular Business Model—cluster purple, Economic Development—red cluster, Business Model—blue cluster, Environmental Impact—yellow cluster, and finally the green cluster that represents life cycle analysis.

The results were achieved through the use of the scientific software VOSviewer, specifically designed to target the keyword “Sustainability” AND “circular economy” AND “Business Development”.

The study utilized scientific and academic documents focusing on this area. In Figure 6, we can analyze the connected keywords, which allows us to illustrate the network of keywords that co-occur in each scientific article. This analysis helps in identifying the subjects investigated by researchers and pinpointing emerging trends in future studies.

The clusters of the network-linked keywords map are presented according to their size, followed by descending order and dimension. Cluster one is yellow and represents innovation, and related keywords are consumer and waste management. Cluster two is purple and stands for recycling, and related keywords are industry, machine, and internet of things. The cluster tree is blue and represents business models and related keywords, for example, numerical models, conceptual frameworks, and consumption behavior. Cluster four is red, represents technological development, and stands for economic analysis and leadership.

Lastly, Figure 7 displays an extensive bibliographic coupling based on the document analysis, facilitating interactive exploration of the co-citation network. This feature allows users to navigate through the network and uncover patterns within the ‘competitive dynamics of strategic groups’ across different authors.

In Figure 7, it is possible to observe that there is a strong connection between the authors, who study the themes of circular economy, business models, innovation, and digital technologies.

The authors that stand out the most are Rítzen and Sandström [14], who have the most cited paper and identify the barriers to a transition to the Circular Economy, which are financial, structural, operational, attitudinal, and technological, and are included in cluster blue. In second place are the authors Kanda [16], who represent the red cluster and who research sustainability linked to supply chain management. In third place are Ranta et al. [17], green cluster, which investigates the topic of digital technologies catalyzing business model innovation for the circular economy. In fourth place are Li et al. [18], orange cluster, which investigates the area of circular economy linked to sustainability and, on the VOSviewer map, has fewer connections with other authors. Finally, we highlight Gorissen et al. [19], yellow cluster, which also investigates the area of business model innovation.

In summary, the methodology selected for this study provided precision and ensured the availability of comprehensive data for other researchers interested in building upon this review and interested in this theme. Moreover, by addressing key issues, the methodology enhanced coherence and improved the overall validity and reliability of the findings. Therefore, we assess that the established guidelines for systematic reviews and meta-analyses were adhered to, achieving a high methodological standard. We will discuss these aspects in further detail below.

4. Theoretical Perspectives

CE and sustainability principles significantly contribute to business development by promoting long-term economic viability while addressing environmental and social challenges. Sustainability focuses on meeting present needs without compromising the ability of future generations to meet their own needs [20]. This encourages businesses to adopt practices that minimize environmental impact and promote social equity. The CE complements this by advocating for the continuous use of resources through recycling, reusing, and remanufacturing, thereby reducing waste and conserving natural resources [21,22]. When integrated, these approaches help businesses innovate, improve efficiency, and build resilience against resource scarcity and regulatory pressures. In addition, businesses that integrate sustainability and CE practices can enhance their brand reputation, meet consumer demand for responsible products, and achieve cost savings, thus driving overall business growth and competitiveness [23]. This literature review section explains the concepts of CE and sustainability, how they relate, the various strategies businesses can implement, and the challenges that may hinder optimal success.

4.1. Definition of Concepts

4.1.1. Sustainability

The concept of sustainable development has gained massive popularity since its appearance in the Brundtland Report in 1987. This has primarily been driven by ongoing environmental and social issues, such as climate change, pollution, concerns over the depletion of natural resources, and poverty [24]. As a result, sustainable development and sustainability concepts, which are often used interchangeably, are perceived as effective strategies for addressing these challenges. The sustainability definition [25] is the ability to improve and sustain environmental, social, and economic systems for human development. In addition, the scholar also describes it as the “efficient and equitable distribution of resources intra-generationally and inter-generationally with the operation of socio-economic activities within the confines of a finite ecosystem” [25] (p. 5). In this case, sustainability can be interpreted to refer to the capacity to maintain or improve the quality and longevity of life for current and future generations through balanced environmental, social, and economic practices [26]. It encompasses the principle of meeting present needs without compromising the ability of future generations to meet their own needs.

Sustainability involves three interconnected pillars: ecological/environmental stewardship, social equity, and economic viability. Environmental stewardship emphasizes the responsible management of natural resources, reduction of pollution, and protection of ecosystems [24] (Figure 8). Social equity involves empowering individuals and communities, eradicating poverty, and promoting cultural diversity. It ensures fair access to resources and opportunities, fosters community well-being, and promotes justice and inclusivity. Economic viability focuses on creating resilient economic systems that support innovation, sustainable growth, and long-term financial stability [27]. Sustainability requires an integrative and systemic perspective, encouraging businesses, governments, and individuals to adopt practices that promote resource efficiency, reduce waste, and enhance the quality of life for all [28]. This approach aims to balance human development with the planet’s ecological limits, fostering a harmonious relationship between nature and society.

4.1.2. Circular Economy

A circular economy (CE) is an economic system designed to eliminate waste and the continual use of resources by creating a closed-loop system where products, materials, and resources are reused, refurbished, remanufactured, and recycled. It aims to keep products and materials in use for as long as possible, extracting maximum value during their lifecycle and minimizing environmental impact [29,30]. This approach involves designing products with durability, repairability, and recyclability in mind and implementing processes that support the return and regeneration of resources back into the production cycle. This practice is explained by indicating that circular business models include numerous strategic decisions aimed at preserving a product or service’s environmental and economic value within the system [15]. Another study indicates that this financial model replaces the “end of life” concept with a continuous lifecycle where value creation, transfer, and capture are ongoing [31], as shown in Figure 9. As a result, CE decouples economic growth from resource consumption, thereby promoting resource efficiency and reducing dependency on finite resources.

The adoption of CE has led to the development of new business models. Unlike the traditional linear economic models that primarily focus on sales transactions, CE encourages businesses to assess their pre- and post-production impacts [32]. This includes the effects of their business practices and products or services on the environment and communities served [33]. As a result, the paradigm shift towards circular business models requires companies to adjust their strategies and operations. CE also encourages innovation in business models, such as product-as-a-service and sharing platforms, which further support sustainable consumption and production patterns [34]. Ultimately, CE contributes to environmental sustainability, economic resilience, and social well-being by creating a regenerative system that benefits businesses, consumers, and the planet.

4.2. Theoretical Foundations

Various theoretical frameworks can help understand the impact of CE and sustainability on business development. These frameworks offer insights into how businesses can integrate environmental, social, and economic considerations into their operations. In addition, they guide on designing systems that promote resource efficiency, waste reduction, and the continuous reuse of materials. The main theories identified in this research are value-belief-norm theory and network theory.

4.2.1. Value-Belief-Norm Theory

The value-belief-norm (VBN) theory is a psychological framework that explains how individuals’ values, beliefs, and norms influence their environmental behaviors.

Hiratsuka et al. [35] explain that values reflect the goals that people strive to achieve in life [35]. As a result, these values influence behaviors and preferences and are often manifested through specific attitudes, beliefs, and norms. In this regard, the VBN theory argues that personal values such as altruism, biospheric values, or self-interest shape a person’s beliefs about environmental conditions and the consequences of those conditions. These beliefs, in turn, influence their awareness of the need to act, their perceived ability to make a difference, and their self-efficacy. In some cases, other authors describe norms as the sense of moral obligation individuals feel to act based on their values and beliefs [36]. When individuals internalize these norms, they are more likely to engage in pro-environmental behaviors, such as supporting sustainability initiatives or adopting circular economy practices. VBN theory highlights the importance of aligning business strategies with the values and beliefs of stakeholders to foster a culture of sustainability within organizations and communities.

4.2.2. Network Theory

Network theory is a framework that examines the relationships and interactions within a network of interconnected entities, such as individuals, organizations, or systems. It focuses on how these connections influence behavior, information flow, and resource exchange. For instance, another author identifies the impact of relationships on people’s behavior as a major principle of network theory [37]. In this regard, the researcher argues that an individual’s behaviors can be best predicted through the web of relationships they are embedded in rather than their demographic characteristics, motivations, or attitudes. Network theory can be used in the context of business development and sustainability to understand how businesses, suppliers, customers, regulatory bodies, and other stakeholders interact and collaborate to achieve sustainable outcomes. It has been explained that it helps map and analyze these networks, thereby allowing businesses to identify key influencers, optimize supply chain relationships, and foster partnerships that enhance resource efficiency and innovation [38]. Network theory also emphasizes the importance of strong, resilient connections and the role of networks in spreading best practices. Other studies indicated that networking brings stakeholders together and creates opportunities for information sharing, communication, and knowledge transfer [39]. These practices foster collective action and drive systemic change toward a circular economy. Therefore, the network perspective helps businesses leverage their networks to create value, share knowledge, and implement sustainable practices more effectively.

4.3. The Relationship between Circular Economy and Sustainability

CE and sustainability are intrinsically linked, as both concepts aim to create systems that support long-term ecological balance, economic resilience, and social well-being. [40] identify CE as a model implemented to support sustainable development. For instance, CE operationalizes sustainability by emphasizing the continuous use of resources and the minimization of waste through closed-loop systems [41,42]. This approach directly addresses the environmental pillar of sustainability by reducing the extraction of raw materials and the generation of waste, which lessens the ecological footprint of economic activities. Zaccone et al. [40] (p. 2) explain that one of the major questions driving the sustainability concept is “What kind of world do we want to leave to those who come after us?” CE addresses this question by encouraging the design of products and processes that facilitate reuse, repair, remanufacture, and recycling. This circular business model ensures that resources are kept in use for as long as possible, consequently aligning with the sustainable principle of conserving natural resources for future generations.

CE also enhances the economic and social pillars of sustainability. Economically, it promotes resilience by reducing dependency on finite resources and mitigating the risks associated with resource scarcity and price volatility [43]. Businesses adopting circular practices can achieve cost savings through more efficient resource use and create new revenue streams through innovative business models such as leasing, sharing, and product-as-a-service. These models generate economic value and provide consumers with more sustainable and cost-effective options [44,45]. CE contributes to social sustainability by facilitating job creation and community development. Some studies [40] indicate that circular business models aim to be more inclusive and participative through activities such as stakeholder and customer engagement through value co-creation processes. In addition, collaborative consumption models in CE enhance access to resources for people and communities who previously had limited or no access to them [46]. They can enjoy products or services without owning them, thereby enhancing access and affordability. CE supports a transition to more sustainable forms of employment in sectors like recycling, remanufacturing, and sustainable design, contributing to economic inclusion and social equity [47]. The increased emphasis on local production and consumption cycles also strengthens community ties and supports local economies.

4.4. Business Strategies for a Sustainable Circular Economy

Businesses can implement multiple strategies to transition to a sustainable circular economy. Each of these strategies can be tailored to address various aspects of sustainability, from environmental to social and economic. This section explains the main strategies identified in the research.

4.4.1. Business Model Transformation

Achieving a sustainable circular economy requires businesses to transition from traditional business models to circular business models. This procedure involves implementing systems and operations that support the circularity emphasized in CE [48]. Traditional linear models are increasingly unsustainable due to their reliance on finite resources and the generation of significant waste. Circular business models aim to address this challenge by creating systems where resources are used more efficiently, waste is minimized, and products are designed for longevity [49]. These models are defined [50], as the strategies companies use to create, capture, and deliver value across their value chains. These approaches improve resource efficiencies through practices such as life-long designs, product remanufacturing and repair, and closing material loops. Therefore, the transformation of business models addresses environmental concerns, opens new economic opportunities, and enhances resilience against resource scarcity and market fluctuations. The various innovative approaches related to this transformation include the sharing economy, closed-loop supply chains, and product life extension.

The sharing economy represents a shift from individual ownership to collective use of resources, maximizing their utilization and reducing the need for new products. Businesses that facilitate the shared use of assets like vehicles, tools, and living spaces through digital platforms and peer-to-peer networks can promote sustainable consumption patterns [51,52]. These practices decrease the environmental impact of traditional ownership models and improve community engagement. Closed-loop supply chains are another critical aspect of business model transformation [53]. These supply chains integrate forward and reverse logistics to ensure that products and materials are reused, refurbished, remanufactured, or recycled at the end of their lifecycle. This approach reduces reliance on virgin raw materials and minimizes waste [54,55]. By closing the loop, businesses can lower production costs, mitigate supply chain risks, and enhance their sustainability credentials [56]. Product life extension focuses on prolonging the useful life of products through design, maintenance, repair, and refurbishment. In this case, businesses create durable, upgradeable, and repairable products, thereby reducing the frequency of replacements and the environmental impact of production and disposal [57]. For example, brands may adopt strategies to extend product lifespans by offering repair services, spare parts, and user-friendly repair manuals. This strategy conserves resources and reduces waste. It also builds customer loyalty and creates new business opportunities centered around maintenance, repair services, and second-hand markets.

4.4.2. Technological Integration

Technological integration enables businesses to innovate and optimize processes for resource efficiency, waste reduction, and improved sustainability outcomes. Companies can leverage cutting-edge technologies to enhance their operations, create new business models, and foster greater transparency and accountability in their supply chains [17]. Digitization and Industry 4.0 are revolutionizing the way businesses operate and driving the transition towards a circular economy [16,58]. Industry 4.0 technologies, including the Internet of Things (IoT), artificial intelligence (AI), and big data analytics, are central to this transformation. For instance, IoT devices enable real-time monitoring and management of resource use, tracking products throughout their lifecycle, and providing critical data on product performance and maintenance needs [59,60]. This connectivity allows businesses to implement predictive maintenance, reducing downtime and extending the life of machinery and products [61]. In addition, AI and machine learning analyze vast amounts of data to optimize production processes, enhance product design, and improve supply chain efficiency. This reduces waste and maximizes resource utilization. Big data analytics offer insights into consumption patterns and resource flows. These tools help companies identify opportunities for reducing waste, improving recycling processes, and designing more sustainable products [62]. Integrating these technologies enables businesses to create smarter, more efficient, and sustainable operations aligned with the principles of a circular economy.

Green technologies and innovations are critical to supporting sustainable circular economy practices. These technologies focus on reducing environmental impact, conserving resources, and promoting renewable energy use [19]. Advanced manufacturing technologies, such as 3D printing and additive manufacturing, enable the production of complex, customized products with minimal material waste. They support on-demand manufacturing and reduce the need for large inventories [63,64]. In addition, these innovations also facilitate the use of recycled materials in new products, closing the loop on material use. Renewable energy technologies, including solar, wind, and bioenergy, reduce the carbon footprint of production processes and contribute to more sustainable resource management. Innovations in energy storage and smart grid technologies further enhance the efficiency and reliability of renewable energy systems. According to some authors, green chemistry and sustainable materials innovation focus on developing eco-friendly materials and processes that minimize toxic substances and environmental harm [65]. The continuous adoption of green technologies and innovation will significantly contribute to a more sustainable and resilient circular economy.

4.4.3. Sustainable Supply Chain Management

Sustainable supply chain management ensures that sustainability principles are integrated into every stage of the supply chain, from raw material sourcing to product end-of-life. This approach minimizes environmental impact and enhances economic efficiency and social responsibility [66]. It contributes to a more sustainable and resilient business model. One major foundational aspect of sustainable supply chain management is ethical sourcing and procurement. Lambrechts [67] (p. 405) defines ethical sourcing as “sourcing the materials, products, and services an organization needs from its suppliers in an ethical and socially responsible way, whether the focal organization is formally accountable or not.” This involves selecting suppliers based on their environmental and social practices and ensuring that raw materials are sourced responsibly and sustainably. Businesses can establish criteria for supplier selection that include environmental certifications, fair labor practices, and minimal ecological footprints [68]. Working closely with suppliers can help them promote sustainable practices throughout the supply chain, ensuring that materials are extracted and processed in ways that do not harm the environment or exploit workers [69]. Transparent and ethical sourcing enhances the sustainability of the supply chain and builds trust and credibility with consumers and stakeholders.

Circular procurement and material management are integral to creating a closed-loop supply chain. This involves prioritizing the purchase of recycled, refurbished, and remanufactured materials as well as designing durable, repairable, and recyclable products [70]. Companies can implement take-back schemes and product-as-a-service models to ensure that products and materials are returned at the end of their life cycle and reintegrated into the production process [71,72]. Effective material management also includes optimizing inventory levels to reduce waste and implementing recycling programs within the supply chain. Therefore, the adoption of circular procurement practices can significantly reduce waste, conserve natural resources, and create a more sustainable supply chain.

Green logistics and transportation focus on minimizing the environmental impact of moving goods through the supply chain. This can be achieved by optimizing routes, using energy-efficient vehicles, and adopting alternative fuels [73,74]. Implementing smart logistics systems, such as IoT-enabled tracking and data analytics, allows businesses to reduce fuel consumption, lower emissions, and improve delivery efficiency [75]. In addition, companies can explore modal shifts, such as increasing the use of rail or water transport instead of road transport, to further reduce carbon footprints [76,77]. Businesses that prioritize green logistics contribute to a reduction in greenhouse gas emissions and enhance overall supply chain sustainability.

4.4.4. Consumer Education and Engagement

Consumers play a significant role in innovation processes, and their participation in value creation and innovation integration is crucial [78]. In addition, the scholars note the impact of consumer behaviors on demand and, consequently, production processes. The success of CE models is hugely dependent on consumers’ willingness to participate in activities such as collaborative consumption and sharing [79,80]. Therefore, consumer education and engagement are essential strategies for advancing a sustainable, circular economy. Businesses can foster a culture of sustainability that extends beyond the company itself by educating consumers about the environmental impacts of their purchasing decisions and engaging them in sustainable practices [81,82]. This approach promotes responsible consumption and helps build brand loyalty and trust among consumers, who are increasingly concerned about environmental issues.

Raising consumer awareness about the principles of a circular economy and the importance of sustainability is the first step towards meaningful engagement. Businesses can utilize various communication channels, such as social media, websites, and in-store displays, to inform consumers about the benefits of sustainable products and practices [78,83]. Educational campaigns can highlight the lifecycle of products, from production to disposal, and the environmental benefits of choosing circular products [84]. For example, companies can share information on how their products are made from recycled materials or how they can be returned and repurposed at the end of their life cycle. With these practices for increasing consumer knowledge, businesses can empower customers to make informed decisions that support sustainability.

Encouraging sustainable consumption involves promoting behaviors and choices that align with the principles of a circular economy. Businesses can introduce incentives for consumers to participate in recycling programs, return used products, or choose eco-friendly alternatives [85,86]. For example, offering discounts or rewards for returning used items can motivate consumers to engage in take-back schemes and contribute to the circular flow of materials. In addition, other studies indicate that companies can promote the benefits of sharing, leasing, and renting products rather than owning them [87]. This can reduce overall consumption and waste and make sustainable choices more attractive and accessible. As a result, businesses can drive a shift towards more responsible consumption patterns.

Engaging consumers in the co-creation of sustainable products and services can enhance their commitment to circular economy practices. Businesses can involve consumers in the design process by soliciting feedback and ideas on product features, sustainability improvements, and end-of-life options [88,89]. Crowdsourcing platforms and collaborative workshops can be used to gather consumer input and foster a sense of ownership and participation [90]. Actively involving consumers can empower companies to create products that better meet their needs and preferences while also incorporating sustainable features [91]. This collaborative approach improves product design and strengthens the relationship between businesses and consumers, fostering loyalty and advocacy.

4.4.5. Sustainable Marketing and Branding

Sustainable marketing and branding are essential strategies for promoting a circular economy. These approaches help businesses to communicate their commitment to sustainability and influence consumer perceptions and behaviors toward more environmentally responsible choices [92]. Companies should align their marketing efforts with sustainable values to differentiate themselves in the marketplace, build brand loyalty, and drive the adoption of circular economy principles. Effective communication of sustainability initiatives is crucial for building trust and transparency with consumers [93]. Businesses can use various marketing channels, such as social media, websites, and advertising, to highlight their sustainability efforts. This includes sharing information about the use of recycled materials, energy-efficient production processes, waste reduction initiatives, and circular product designs [94]. Transparency about the environmental impact and benefits of these initiatives can enhance consumer trust and demonstrate the company’s commitment to sustainability. Storytelling can be a powerful tool in this regard, as it allows businesses to convey the journey and impact of their sustainability efforts in a relatable and engaging manner.

Building a sustainable brand identity involves integrating sustainability into the core values and mission of the company. This can be reflected in the brand’s messaging, visual identity, and overall positioning in the market [95]. A strong, sustainable brand identity communicates a commitment to the environment, society, and economic growth. Companies can highlight their dedication to sustainability through their logos, packaging, and product design, ensuring that every aspect of the brand aligns with sustainable principles [18,96]. Consistently promoting this identity can attract environmentally conscious consumers and establish a company as the leader in the circular economy.

Ethical marketing practices are essential for promoting sustainability without misleading consumers. This includes avoiding greenwashing, where companies make false or exaggerated claims about their environmental practices [97]. Instead, businesses should ensure that their sustainability claims are accurate, substantiated, and transparent. Third-party certifications and eco-labels can provide credibility and assurance to consumers about the sustainability of products and practices [98]. In addition, adhering to ethical marketing standards can help companies build long-term trust and loyalty with their customers, who increasingly demand honesty and integrity in brand communications.

4.5. Barriers to the Adoption of a Sustainable Circular Economy

The transition towards CE is characterized by various challenges that businesses must navigate to realize their full potential. These range from technical problems to economic, regulatory, and organizational issues. They present barriers to the adoption of sustainable practices and circular business models.

4.5.1. Economic and Financial Barriers

Economic and financial barriers refer to challenges related to the costs and financial implications of adopting sustainable practices. One major barrier is the perceived higher upfront costs associated with sustainable technologies, materials, and processes compared to conventional alternatives [99,100]. Businesses may hesitate to invest in sustainability initiatives due to concerns about profitability and return on investment, especially in industries with thin profit margins or high competition. In addition, financial constraints, such as limited access to capital or financing options for sustainability projects, can hinder investment in sustainable practices [101]. Businesses may face challenges in accurately measuring and quantifying the financial benefits of sustainability [102]. This makes it difficult to justify investments for stakeholders.

4.5.2. Organizational and Cultural Issues

Organizational and cultural issues encompass internal barriers within businesses that hinder the adoption of sustainable practices. Resistance to change within organizational cultures can pose significant challenges, particularly in industries with deeply entrenched traditional practices and mindsets [14,103]. Some authors [104] note that a lack of awareness, understanding, and buy-in from employees at all levels of the organization can impede progress toward sustainability goals. Organizational silos and conflicts of interest between different departments or stakeholders pose another major challenge [85,105]. Moreover, [106] notes that the absence of clear leadership and accountability for sustainability within organizations can result in a lack of prioritization and integration of sustainability into business strategies and operations. These concerns may hinder collaboration and coordination in implementing sustainability initiatives.

4.5.3. Regulatory and Policy Challenges

Inadequate or inconsistent government regulations and policies related to sustainability result in significant regulatory and policy challenges. In some cases, existing rules may not adequately address environmental or social issues or may incentivize unsustainable practices through subsidies or tax breaks [107,108]. Conversely, strict regulations and compliance requirements may impose additional costs and administrative burdens on businesses, especially small and medium-sized enterprises (SMEs) with limited resources [109,110]. Regulatory uncertainty or frequent changes in environmental laws and standards can create dilemmas and reluctance among businesses to invest in sustainable practices [61]. Lack of enforcement mechanisms and penalties for non-compliance may also undermine the effectiveness of regulations in driving sustainable behavior.

4.5.4. Technological Challenges

Some businesses experience technological challenges that include barriers related to the availability, scalability, and maturity of sustainable technologies and innovations. One major challenge is the lack of commercially viable and proven technologies for certain sustainability goals, such as achieving carbon neutrality or eliminating waste streams [111,112]. Businesses may hesitate to adopt new technologies due to concerns about reliability, performance, and compatibility with existing infrastructure and systems. The high costs of implementing and maintaining sustainable technologies, particularly in industries with long asset lifecycles, can deter investment [14]. Moreover, technological limitations, such as the lack of adequate recycling or waste management infrastructure, may constrain the feasibility of circular economy initiatives in certain regions or industries [113]. Addressing technological challenges requires ongoing research, development, and collaboration between businesses, academia, and government agencies to drive innovation and overcome barriers to adoption.

5. Conclusions

The concepts of CE and sustainability have attracted the attention of researchers, governments, and activists across the world. This has resulted from intensifying environmental issues, including severe climate change and pollution, which have prompted the implementation of sustainable initiatives. Sustainability emphasizes the need to balance economic growth with ecological resilience and social inclusiveness. CE, as a sustainable initiative, contributes to these pillars of sustainable development in various ways. For instance, CE highlights the need for circular business models that encourage designing products that can be reused, remanufactured, or repaired. This extended life cycle aims to reduce waste, which often results in pollution and consequent environmental impacts. In addition, CE includes collaborative consumption models, which encourage consumers to share products or services instead of owning them. Such a strategy maximizes the use of a product or service while, at the same time, enhancing equal access to resources. For example, an individual who previously could afford a product can access it through shared programs at a lower price. Activities such as remanufacturing lower production costs due to the reduced need for new raw materials. It also slows the exploitation of natural resources. These aspects show the various ways CE and sustainability are connected.

Businesses can implement sustainability and CE approaches to improve their competitiveness and overall business performance. However, achieving optimal results requires them to implement appropriate strategies. For example, they should adopt new circular business models to improve resource efficiency, extend product life cycles, and implement closed-loop supply chains. Another effective strategy is to integrate technologies such as IoT, AI, big data analytics, and renewable energy innovations. This strategy can help enhance operational efficiency and improve the company’s ability to achieve the desired sustainability goals. For instance, IoT devices can be used to monitor products throughout their lifecycles to ensure a smooth transition from the traditional linear model to the circular model. Other strategies include implementing sustainable supply chain strategies, consumer education and engagement, and sustainable marketing and branding. These approaches can help ensure ethical and sustainable sourcing and consumer participation throughout the value-creation process. Finally, sustainable marketing allows firms to show their commitment to sustainability through their branding and marketing communications. However, the effectiveness of these strategies can be affected by various challenges, such as the high costs and financial implications of adopting sustainable innovations, especially for SMEs with limited resources. Other challenges include regulatory uncertainties, technological issues, and organizational and cultural problems. Businesses looking to leverage sustainable CE guidelines must establish ways to overcome these issues.

Sustainability and circular economy are two interconnected concepts that have increasingly influenced business development theories and practices. (i) Businesses adopt models such as product-as-a-service, sharing platforms, product life extension, and resource recovery to minimize waste and maximize resource use efficiency; (ii) Companies focus on greening their supply chains by sourcing responsibly, reducing carbon footprints, and ensuring ethical labor practices, thus contributing to overall sustainability; (iii) Businesses integrate social and environmental concerns into their operations and interactions with stakeholders, going beyond mere compliance to proactive sustainability initiatives; (iv) Products are designed with sustainability in mind, using eco-friendly materials, energy-efficient processes, and considering end-of-life recycling or disposal; (v) Financial markets are increasingly favoring investments in companies that demonstrate strong environmental, social, and governance performance, encouraging sustainable business practices; (vi) Businesses promote products and services based on their environmental benefits, appealing to the growing consumer preference for sustainability; (vi) Governments and international organizations are developing policies to promote circular practices, such as extended producer responsibility, recycling targets, and waste management regulations.

By adopting these theories and practices, businesses can contribute to a more sustainable and circular economy, ensuring long-term viability and positive environmental and social impacts.

Exploring future lines of investigation in sustainability and circular economy business development involves delving into emerging trends, innovative technologies, and evolving theoretical frameworks: (i) Investigate how IoT can optimize resource usage, enhance product tracking, and facilitate real-time data collection for better decision-making in circular processes. IoT-enabled systems can support predictive maintenance, extend product lifespans, and improve recycling efficiency; (ii) Explore AI and ML applications in predictive analytics for resource management, waste reduction, and process optimization in circular business models. AI-driven insights can help in designing more sustainable products, optimizing supply chains, and enhancing energy efficiency; (iii) Assessing the role of blockchain in ensuring transparency, traceability, and trust in circular supply chains. Blockchain can facilitate secure and transparent transactions, track product life cycles, and verify sustainable practices.

According to the systematic literature review presented and the analysis of academic articles, it is possible to state that future research on sustainability and business development in the circular economy should focus on the use of advanced technologies, innovation of business models, understanding consumer behavior, and the development of robust metrics and policies. By addressing these areas, businesses can better navigate the transition to a more sustainable and circular economy, creating long-term value for society and the environment.