Unpacking the Transition Toward Circular Business Models: A Holistic Framework of Transition Drivers

Addressing a critical gap in the circular economy literature, this study explores the dynamic interplay and multilayered nature of internal and external transition drivers shaping the holistic transition of firms toward circular business models (CBMs). Utilizing 33 semi-structured interviews with diverse companies and a geographical focus on central Europe and beyond, the research delves into the roles of external stakeholders, public–private partnerships, ethical leadership, and digital advancement in defining sustainable practices. Through a qualitative data analysis, our study reveals four aggregated dimensions: implicit sustainability aspects, strategic sustainability management, sustainability governance, and intrinsic sustainability elements. These findings offer a nuanced understanding of the transition toward CBMs, highlighting the significance of both internal and external drivers in crafting a holistic framework of transition drivers toward CBMs, their dynamic interplay, and their multilayered nature. We propose specific CBM transition drivers on three different levels of granularity – that is, regulation and market, strategy and governance, and culture and resource level drivers – while also uncovering areas on which managers can focus to alter current business models toward the adoption of CBMs. The study provides valuable insights into the discourse on circular transitions, fostering a deeper comprehension of the multifaceted nature of sustainability drivers and their impact on firm-level practices.