**1. Introduction**

The principle of a linear economy that prioritizes take-make-dispose has implications for increasing the volume of waste [1] and wasted resources [2], which can be reused or used as an energy source based on the creation of energy transfer infrastructure from recycled materials. Coupled with the fact that the amount of waste will increase to 2.59 billion tons in 2030 and 3.4 billion tons in 2050 worldwide, our approach to this has changed [3]. Considering that sustainable development goals on 17 main agendas involve three components (economic, social, and environmental), dependence on sustainable resource management is very essential [4].

Given the important role of organizations in preserving the environment, the circular economy concept can be an alternative for managing resources, reducing waste, and reprocessing them into high-value products [4]. Consequently, a circular economy approach benefits businesses and society as a whole with a better supply chain, low volatility of resource prices, better customer relations, and new job opportunities [5]. In the energy context, the circular economy approach can provide a new perspective because it manages waste into energy and manages resources efficiently [6].

**Citation:** Koval, V.; Arsawan, I.W.E.; Suryantini, N.P.S.; Kovbasenko, S.; Fisunenko, N.; Aloshyna, T. Circular Economy and Sustainability-Oriented Innovation: Conceptual Framework and Energy Future Avenue. *Energies* **2023**, *16*, 243. https://doi.org/ 10.3390/en16010243

Academic Editor: Antonis A. Zorpas

Received: 23 November 2022 Revised: 22 December 2022 Accepted: 23 December 2022 Published: 26 December 2022

**Copyright:** © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

In a circular economy, the use of waste as an energy source is one of the ways to reduce the use of fossil fuels. The circular economy has an important impact on energy conservation and energy infrastructure efforts because it provides the direction of research and development in an innovative and sustainable manner. However, the circular economy transition process related to energy in various sectors needs to be revealed through the visualization of literature mapping to obtain a comprehensive picture as the basis for making relevant research and policies [7].

The transition to a circular economy involves systemic changes aimed not only at reducing the impact of a linear economy, but also at building long-term resilience that generates new business opportunities and returns social and environmental benefits [8]. On the other hand, the circular economy has produced a significant impact on environmental improvement from the threat of degradation [8,9]. All industrial sectors have played a role in reducing the potential for damage by reducing, reusing, and recycling [10]; however, the relationship with sustainability-oriented innovation is still not well explored.

A circular economy provides an alternative in order to integrate ecological approach criteria, such as the recycling, reuse, and replacement of materials into the routine activities of an organization [11,12]. This approach involves managing the internal environment [13,14] and an eco-friendly design [14], as well as the management and recovery of corporate assets [14]. The circular economy will be successful if it starts from the internal environment by developing environmentally oriented procedures, such as green human-resource-management practices [2,15], training, and development [16], as well as an environment-based performance-evaluation system; thus, supporting intraorganizational environmental goals builds environmental ethics and improves ecological performance [17]. On the other hand, organizations implement product design process policies by considering environmental impacts because they are considered promising in achieving eco-efficiency [18,19]. In addition to environmental efficiency, eco-friendly design practices offer opportunities for companies to provide a market share with differentiated products [20] and increase global value propositions [21]. Finally, the positive impact is an increase in the ability of the organization to recover investments, resell and reuse used materials [13]. This requires companies to think strategically about how to mitigate emerging issues in order to gain greater value and is an important goal to be achieved in a circular economy [22].

In the energy sector, the impact of circular economy practices can increase energy efficiency and facilitate an increase in the quality of human life [23]. However, the increase in energy consumption raises concerns about climate change, especially when accompanied by an increase in greenhouse gas emissions [23]. Thus, adopting a circular economy strategy helps countries meet their climate change mitigation goals [24,25]. Another study states that the combination of circular economy principles and the use of renewable energy can result in a reduction of 37.5% in greenhouse gas emissions [25]. Therefore, a circular economy strategy can mitigate global climate change by increasing the use of renewable energy and changing the energy structure to be more sustainable.

On the other hand, sustainability-oriented innovation is seen as a systematic effort by organizations to promote the role of competitiveness and human and social welfare in building environmentally friendly practices [26–28]. Furthermore, sustainability-oriented innovation requires strategic sustainability behavior by implementing an integrated environmental strategy, creating an environmentally friendly culture, extending the product life cycle, and initiating an environmental management system [28]. In the available literature, innovation practices that encourage sustainability-oriented innovation occur in two ways. The first is product innovation, which introduces new product or service improvements to improve sustainable performance [29]. The second is process innovation, which requires organizations to redesign operational mechanisms for resource efficiency, energy use, and building an eco-efficiency culture [29]. As a result, there is a consolidation of organizational practices and values to achieve economic, social, and environmental goals.

In this perspective, according to emerging characteristics, research on the circular economy associated with sustainability-oriented innovation remains fragmented with numerous variations and has been investigated in different dimensions. Although a circular economy is the basis for implementing sustainability-oriented innovation, research on these two constructs is still rare [30]; however, a circular economy provides innovative solutions and promotes sustainability. Therefore, understanding the interconnectedness of the circular economy and sustainability-oriented innovation is critical to bridging an organization's transition to sustainability [31]. Previous studies have focused on the drivers and barriers to the circular economy in various industries. However, the literature on the circular economy as a sustainability-oriented innovation trigger has not been well explored. Thus, this article maps out the main research topics at the intersection of the circular economy and sustainability-oriented innovation. The combined bibliography was used to identify the main lines of research in the literature on circular economy and sustainability-oriented innovation in a broad scope and to suggest topics for future research.

## **2. Methods**

A systematic literature review is a research design used to systematically synthesize existing research evidence in terms of searching research articles, critical reviews, and synthesis of research results to answer trending topics [32]. Systematic literature reviews are research designs that enable robust investigation into the state of the art from a particular research field [33], systematic synthesis of evidence, and critical appraisals [34], while recognizing research gaps to promote future inquiry and knowledge advancement [35,36]. This study adopts the systematic literature review approach used by recent studies to holistically assess and synthesize the progress of the current relevant literature on the circular economy and sustainability-oriented innovation [37].

A systematic literature review is a method that reviews previous studies with several stages as follows: first, identify studies and research questions; then, determine the relevant studies; third, collect and retrieve the information; fourth, synthesize the data; and finally, report the findings. This study also involved a review panel, consisting of two professors and a researcher, establishing the conceptual boundaries of this topic. Consultations were held at every level from the initial identification to the final selection of relevant studies. This consultation helped resolve differences of opinion among the authors and reach a final consensus to continue the research. We followed established protocols to ensure the replication and accuracy of our findings [32].

To achieve the research objectives, we used VOSViewer to combine the downloaded data in the form of a research information system [38,39] that was fed to Mendeley [40]. First, we searched for the keywords "circular economy" and "sustainability-oriented innovation". Considering that environmental concerns are starting to become a trend in various areas, we searched the Scopus-ScienDirect database in the following six main areas: (1) Environmental Science; (2) Business, Management and Accounting; (3) Decision Sciences; (4) Energy and Engineering; (5) Economics, Econometrics and Finance; and (6) Agricultural and Biological Sciences. A search conducted in August 2022 yielded 1832 articles. All articles went through a rigorous review process before being published. During Phase 2, we identified and analyzed articles into 1326 terms in which the minimum number of the occurrence term was 10. In this phase, we selected articles and discarded those that did not meet the criteria, such as duplication, country of research, unsuitable keywords, and inappropriate scope. In Phase 3, we performed bibliographic coupling, resulting in 402 items with seven clusters. In stage 3, we used VOSViewer software to analyze data in the form of a research information system.

Figure 1 presents the research protocols from the initial data collection process to the determination of the number of key articles, which were then researched to achieve the research objectives.

**Figure 1.** Research protocols of the systematic literature review.
