Reconciling circular economy and net zero: firm capabilities to resolve sustainability tensions
Author(s)
Type
Journal Article
Abstract
Achieving net zero has become a key concern for firms to address climate change, yet growing evidence suggests that reducing reliance on fossil fuels for energy generation alone is insufficient. As material use is increasingly recognized as a significant source of greenhouse gas emissions, the circular economy has emerged as a potential pathway to support decarbonization. Despite the intuitive appeal of aligning circularity with net zero, their relationship remains conceptually underexplored and empirically ambiguous. To address this complexity, this article develops a framework conceptualizing the interaction between circular economy and net zero as a dynamic interplay of virtuous and vicious cycles. Drawing on paradox and capability perspectives, it explains when circular practices reinforce decarbonization and when they generate capability traps that undermine environmental performance. The framework contributes to corporate sustainability scholarship by identifying the capabilities that enable firms and their ecosystems to transform tensions into synergies, thereby supporting more coherent strategies and policy interventions at the intersection of circularity and net zero.
Date Issued
2026-04-01
Date Acceptance
2026-03-09
Citation
British Journal of Management, 2026, 37 (2)
ISSN
1045-3172
Publisher
Wiley
Journal / Book Title
British Journal of Management
Volume
37
Issue
2
Copyright Statement
© 2026 The Author(s). British Journal of Management published by John Wiley & Sons Ltd on behalf of British Academy of Management. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
License URL
Identifier
10.1111/1467-8551.70061
Publication Status
Published
Article Number
e70061
Date Publish Online
2026-03-20