The Role of Circular Economy Practices in Supply Chain Management in Supporting Decarbonization : Study on energy-based companies
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The study explores the role of practices of circular economy (CE) in relation with supply chain management (SCM) in contributing decarbonization in energy-based companies. The key motivation for the research is the increasing pressure to minimize the greenhouse gas emission in energy sector, specially related to indirect supply chain emissions (scope 3), and contribute to environmental and sustainability goals. The practices related to decarbonization in the energy industry is more focused on efficiencies in the operations and the technological innovations, the contribution through circular economy initiatives related to the supply chain remains underexplored.
The study is incorporated with theories related to CE, sustainable SCM and decarbonization. The main terminologies consist of sustainable procurement, circular supply chains, lifecycle management, resource efficiency, and closed loop systems. The study explores how these strategies are
integrated in SCM initiatives to reduce the greenhouse emission and contribute to the sustainability goals and objectives.
A qualitative multiple case study method has been identified in relation with secondary data from ESG, annual reports, sustainability disclosures, and policy related documents from selected European energy organizations namely, Fortum Oyj, Pohjolan Voima Oyj, Statkraft, and Enel Group. The analysis of data is done through thematic and content analysis to explore the recurring patterns and interrelationships in connection with CE and SC decarbonization tactics.
The findings reflects that in order to minimize the reduction of the carbon generation across the SC operation, supplier management, sustainable procurement, efficiency of the resources, lifecycle management, and closed loop material processes acts as a crucial role .The cross company analysis reflects that the selected European and Nordic companies integrate CE practices in to their SC decision making to enhance the sustainability across companies to contribute to long term sustainability efforts to achieve decarbonization goals.
The conclusion of the study demonstrates that the integration of CE strategies into the SCM practices is a significant factor for achieving the systemic decarbonization outcomes in energy sector. The study assists both theoretically and practically by improving the understanding of how Supply Chain tactics can support the transition of sustainability and assist managers to inline circular economy initiatives with Supply Chain Management to achieve decarbonization.