Essays on Circular Economy Strategies and Environmental Sustainability

Abstract

Facing increasing competition from the global market and the pressure to reduce ecological footprints, firms struggle to decouple their growth from increased environmental impact. The three essays in this dissertation seek to expand our understanding of how firms can enhance their economic and environmental performance through circular economy strategies and environmental practices.

The first essay proposes an analytical model that evaluates the decision to implement servitization – a business model that sells the functionality of the product rather than the product itself – with remanufacturing. By identifying the conditions under which jointly adopting servitization and remanufacturing can improve firms’ economic and environmental performance at the same time, the essay assists managers and policymakers in making informed decisions about promoting servitization and remanufacturing across industries.

The second essay integrates the case-based evidence presented in the servitization literature into a process theory that explains the causal mechanisms responsible for the recurring servitization failures. The process theory is articulated in a system dynamics model that enables the exploration of the parameter space resulting in different failure modes. The model systematically explores common operational challenges managers encounter when implementing servitization (e.g., short-term vs. long-term benefits), and critical operational decision processes during the transition (e.g., how to deploy resources to improve service capability). Through the meta-analytic effort, the essay intends to advance theory development by synthesizing the scattered narratives of servitization implementation in the literature into a coherent framework.

The third essay employs secondary data to empirically examine the effectiveness of the science-based carbon emissions target (SBT). Motivated by the urgent agenda to combat climate change, the essay assesses the extent to which committing to a universal standard may accelerate companies’ decarbonization progress, and the potential trade-offs between implementing SBT and other non-carbon-related sustainability performance. The findings in this essay provide initial evidence to reconcile the debate on whether adopting an SBT holds companies more accountable for their share of carbon reduction or is simply another symbolic attempt that distracts stakeholders from companies’ real efforts.

Together, through a variety of methodological approaches, the insights gained from these essays contribute to our understanding of aligning economic and environmental goals via various industrial endeavors. I believe the essays serve as a good platform for the research agenda exploring sustainability from an operations perspective over the early years of my academic career.