Capability Configurations Linking Circular Economy Practices to Sustainable Supply Chain Performance: A Theory‐Building Systematic Literature Review

Circular economy ( CE ) practices do not automatically result in sustainable supply chain performance (SSCP), indicating the need for a conceptual explanation of how capabilities support the translation of CE practices into SSCP. This study employed a Scopus‐based theory‐building systematic literature review followed by cross‐study conceptual synthesis. The synthesis identified three complementary capability configurations with different yet interrelated functions: Information‐Digital‐Adaptive and Relational‐Integration primarily serve enabling roles by supporting information processing, analytics, visibility, collaboration, and coordination, whereas Operational‐Adaptive serves a transmitting role by translating enabling resources and CE requirements into coordinated and adaptive supply chain responses. The effectiveness of these configurations is context‐dependent and may vary with industry dynamism, supply chain integration, technological readiness, institutional and stakeholder pressures, and firm and resource characteristics. The proposed framework extends Dynamic Capability Theory by shifting attention from individual capabilities toward capability complementarity, differentiated functional roles, and contextual cross‐capability mechanisms.