ABSTRACT The rising pursuit of carbon neutrality coupled with institutional pressure has compelled the marginalized communities and industries at the forefront to strive toward net‐zero targets. The European climate policy and Paris agreement have emerged as a cornerstone to achieve net‐zero emissions in industrial firms. The circular economy capabilities and supply chain digitalization (ScD) hold immense potential to diminish carbon emissions, achieve net‐zero performance, and sustainable development goals (SDGs). This research has proposed a conceptual framework to examine the effect of circular economy capabilities in linking environmental dynamism (EnD) and institutional pressures to achieve net‐zero performance. Additionally, the moderation of ScD has been investigated for this framework. This research amalgamated the concept of resource‐based, institutional, and dynamic capability theories to analyze antecedents for net zero performance. Investigation is done using a survey of three hundred forty‐one respondents working in the manufacturing sector of India. Data analysis is done using partial least square structural equation modelling. The findings highlight a positive relationship of EnD and institutional pressure with circular economy capabilities in advancing net‐zero performance of the organization. Results show that ScD positively moderates the relationship between EnD, the development of circular economy‐based capabilities, and net‐zero based performance. The blend of theoretical underpinnings and practical insights provides a strategic roadmap for policymakers and practitioners to mitigate environmental issues using circular economy capabilities and digitalized supply chain in the era of climate urgency.
Sharma et al. (Fri,) studied this question.
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