Circular economy, the transition of an incumbent focal firm: How to successfully reconcile environmental and economic sustainability?

Abstract

Circular economy (CE) has garnered increasing attention in political circles and practitioner literature thanks to its potential to overcome the harmful consequences of linear patterns of growth. Nonetheless, the adoption of sustainable practices entails a holistic approach requiring businesses to make significant changes to their production, technologies and stakeholder management. These challenges resulted in limited progress in terms of the practical implementation of CE. This paper addresses the need for more literature focused on the pragmatic aspects of applying this paradigm to incumbent firms. The author presents the journey that Lucart S.p.A., a major European tissue paper manufacturer, has undertaken between 2014 and 2020 to apply CE principles to its practices. Insights from the transformation process, reconstructed through interviews with the firm's management and environmental impact data, suggest that to succeed it takes innovating (plants, products and marketing strategies) and setting up supply chains that reconcile environmental and economic sustainability.