Green Supply Chain Management and Sustainable Performance: The Mediating Role of Circular Economy Practices and the Moderating Role of Digital Transformation

Abstract

Emerging economies are pushing manufacturing companies to enhance environmental, economic and social results simultaneously. The study investigates the impact of GSCM on sustainable performance, the impact of circular economy practices (CEP) on that, and the impact of digital transformation (DT) on that. A descriptive and cross sectional study design was used and data were collected using structured questionnaire from 270 managers and senior employees of manufacturing firms of Peshawar District, Punjab, Pakistan. The hypotheses were tested using the Structural Equation Modeling with bootstrapping. The results indicated that GSCM directly and positively affected sustainable performance and circular economy practices in significant way. The relationship between GSCM to sustainable performance was partially mediated by circular economy practices and the direct relationship was positively moderated by digital transformation, resulting in greater performance gains when the firm's digital maturity was higher. The study takes the NBV one step further by demonstrating that green supply-chain capabilities generate value by enabling circular resource loops and that these are boosted by digital capabilities. The results provide recommendations for the management and policy level to reconcile green procurement, circular operations and the digital investment in manufacturing in developing countries.