Environmental policy and corporate sustainability: The mediating role of environmental management systems in circular economy adoption

Abstract

Companies see adopting the circular economy (CE) model as an opportunity to become more sustainable and aligned to the growing demand for more environmentally friendly products. Governments, institutions and researchers alike have highlighted the importance of organisations having an environmental policy, and that this policy be implemented though effective environmental management systems (EMSs) as the way to achieving corporate sustainability. However, despite exploring the relationship between EMSs and moving towards the circular model in the business world, research on this increasingly critical issue remains limited. To address this gap, research was carried out on 85 Spanish manufacturing companies. Results show that implementing an EMS has a positive effect as the companies analysed adopted a higher number of CE practices. From a managerial perspective, managers are challenged to show leadership initiative by exploring new, more sustainable ways of operating that engage new stakeholders. Implications for regulators focus on enhancing the circularity of EMS