Stakeholder Engagement in a Sustainable Circular Economy

In this chapter, we provide a preliminary understanding of collective stakeholder action (CSA), drawing on the literature on stakeholder engagement and the theory of collective action. We conceptualise CSA as a process in which connecting and influential stakeholders engage with businesses, advancing the development of and experimentation with novel business practices towards a circular economy. Empirically, we study organisational narratives as a temporal discursive construction about the concept of a circular economy and how the focal stakeholders have contributed to its development. As the primary finding of our study, we identify four key sub-processes driving the process of CSA at large: (i) pragmatic translation, (ii) collective definition, (iii) amplification and legitimisation and (iv) building institutional infrastructure. Connecting stakeholders bridge actor groups and build coalitions around focal issues, while influential stakeholders help these coalitions obtain legitimacy and institutional support through performative refinements of core issues and understandings. Our conceptualisation of CSA contributes to the perspective of stakeholder engagement as part of collective action processes. In such processes, joint efforts are undertaken based on the initiative of focal stakeholders bringing together groups of firms, as opposed to focal firms bringing together groups of stakeholders. Our findings show that connecting stakeholders are in key positions to initiate CSA processes, while influential stakeholders are necessary to ensure successful completion.

Stakeholder networks in the circular economy (CE) address sustainable production and consumption within a regenerative system. Thus, studying stakeholder interactions within these networks provides essential insight into action urgently required to help businesses foster more harmony between human activity and nature. However, management literature on CE lacks an appropriate analytical lens on stakeholder engagement. To overcome this gap, we conducted a systematic literature review that integrated qualitative content analysis of management research on CE to untangle the complexity of stakeholder interactions in CE. We identify specific aims, activities, and impacts of stakeholder engagement in CE according to their moral, strategic, and pragmatic components. Pragmatic stakeholder engagement dominates our sample, but the research illustrates that embracing moral and strategic stakeholder engagement is equally vital to leveraging stakeholder relationship synergies in CE. Our categorisation of stakeholder engagement in CE provides an overview for researchers and managers and points to the value of the underlying stakeholder network logic for collaboratively addressing environmental challenges such as climate change and biodiversity loss. Correspondingly, we enhance understanding of the intersection of stakeholder engagement with CE management literature and provide an agenda for future research.

Although the circular economy (CE) is considered a systemic and relational phenomenon, literature on the subject still fails to demonstrate an understanding of how stakeholders engage with one another and, therefore, how long-term partnerships are developed in a context focused on sustainability. In this chapter, we conduct a literature review and an in-depth analysis of 59 articles that have been published over the last decade. Taking on the theoretical lens of the quintuple helix model (QHM), we analyse articles from high-impact journals specialising in the circular economy. Through a constant comparison analysis, we identify three building blocks (vision, stakeholders, and processes) and nine underlying enabling mechanisms that are essential to developing sustainable partnerships for circular economies. We also highlight various obstacles that may affect the development of sustainable partnerships. We contribute to the growing body of literature on circular economy stakeholder engagement by taking a multi-actor, multi-level perspective, and provide a checklist for different stakeholders to understand what is needed to engage with one another and collaborate to resolve sustainability issues.

This chapter examines relationships among stakeholders seeking to promote the transition to a circular economy. We ask what kinds of relationships there are among circular economy stakeholders and how the transition to a circular economy is accelerated through these relationships. Our empirical material consists of 35 semi-structured interviews with circular economy stakeholders from private, public and third-sector organisations at local, regional and national levels in Finland, a country that has set the goal of becoming a global circular economy leader by 2025. Our inductive analysis identifies four prevalent types of relationships in the multi-stakeholder network: (1) directive relationships, (2) mediative relationships, (3) collaborative relationships and (4) competitive relationships. We show that directive relationships provide the foundation for the circular economy and mediative relationships enable the broadening and deepening of network activities. Together, directive and mediative relationships enable and form a basis for the collaborative and competitive relationships central to the implementation of a circular economy. We conclude that all relationship types are necessary to enabling the circular economy transition.

Transition towards a circular economy and reaching the tightening recycling targets in the European Union require multilateral and joint efforts of multiple stakeholders. We arranged workshops with European experts in waste management to gather insights from typical decision processes, stakeholder groups involved, and challenges faced when improving the collection of recyclable waste fractions. Furthermore, we experimented with a method to facilitate the stakeholder interaction during one of the workshops. Based on the experiences gained, we propose the use of multi-criteria decision-making (MCDM) to support the management of interactive decision-making processes in waste management value chains. We analysed the findings from our practice-oriented, empiric decision-making exercise in light of selected literature from the fields of stakeholder theory and stakeholder engagement. Our claim is that the formal procedure of MCDM can help to provide a structure for the assessment of complex decision problems in situations where interdependencies between the actors and their conflicting interests affect the outcome. Furthermore, the proposed MCDM approach provides concrete results in the form of priorities between alternative actions. Although we have experimented with the approach in the context of waste management, the approach should also be applicable for creating shared understanding and legitimate decisions in multi-stakeholder networks in other contexts.

Achieving a circular economy (CE) requires collaboration between diverse stakeholders, which often happens in socio-technical ecosystem settings, where complementary stakeholders can pursue the system-level goal of improving circularity. The stakeholders, as well as the ecosystem settings in which they collaborate, are diverse, which might impact the process of how stakeholders can be engaged in the CE goals. Thus, to achieve CE goals, different stakeholder engagement processes are needed in different ecosystem settings. Bringing together stakeholder engagement, the ecosystem approach, and CE research as our theoretical background, we address the considerable lack of empirical case research on stakeholder engagement processes by analysing six critical topical CE ecosystem cases in Finland: two at the regional level (a local environmental issue and an industrial collaboration), three at the national level (nutrient recycling, the construction sector, and beverage packaging recycling), and one at the global level (a sustainable fast-food business). Based on a detailed case analysis, we conceptualised four stakeholder engagement process archetypes to achieve CE goals. We propose a model that shows how stakeholders are engaged in different CE ecosystem settings depending on the ecosystem structure and the alignment of stakeholder interests with achieving the CE system-level goal. The model and archetypes contribute to the theory and can benefit organisations and managers engaging stakeholders in emerging or established CE ecosystems.

This chapter contributes to the circular entrepreneurship literature regarding the empirical analysis of the stakeholder engagement mechanisms in place between small and medium-sized enterprises (SMEs) and their key stakeholders. The context of analysis is circular entrepreneurship, consisting in the processes of formation and exploitation of opportunities to address key environmental challenges and requiring firms to establish close relationships with a series of stakeholders to narrow, slow, and close the resource loops. Through a multiple case study methodology involving four Finnish circular SMEs and their key stakeholders, this chapter investigates how firms engage their stakeholders, and which are the underlying key stakeholder engagement mechanisms leading to value creation. We summarise our findings in a conceptual framework of stakeholder engagement mechanisms in circular entrepreneurship, reflect upon the limits and challenges that stakeholder engagement may have in fostering value creation and circular practices, and suggest avenues for further research.

The role of multistakeholder collaboration in solving complex sustainability challenges is emphasised across academic literature. Stakeholders from different sectors typically adhere to different institutional logics and create value in different ways. Alignment reflects how stakeholders orient themselves towards multiple institutional logics in collaborative value creation. By reviewing the extant research literature, we identify the value-consolidation mechanisms employed in aligning institutional logics in stakeholder engagement. We empirically examine these mechanisms in three key dimensions: stakeholders’ cognition, goals, and practices. Two multistakeholder collaborations for circular economy were selected for the case study. After collecting interviews and document data and conducting qualitative content analysis, we found that several value-consolidation mechanisms were applied side by side in dynamic ways to align the cognition, goals, and practices of the stakeholders. Findings indicate that perfect alignment in multistakeholder settings may be hard to reach, but this does not always hinder collaborative value creation. The proposed framework offers alignment instruments for practitioners pursuing stakeholder engagement in collaborative value creation. Scholars can use the framework to determine which conditions incite the use of certain value-consolidation mechanisms, as well as what kinds of impacts this has on collaborative value creation.

To achieve industry-wide circular economy (CE) outcomes, such as material reuse or recycling, competitors need to join forces and enter the paradoxical relationship of coopetition, whereby competitors collaborate. According to the literature, coopetition can benefit sustainability. However, little is known about coopetition for a CE and how competitors, as stakeholders, can engage in resolving collective environmental challenges. This study examines the phenomenon of coopetition for a CE through an extensive multiple-case study from various industries in Finland. The findings indicate that coopetition for a CE can be organised through four distinctive modes of circularity: agreements for industry standards, pre-competitive R&D and knowledge-sharing, platforms, and reverse logistics systems. New industry standards supporting CE are set by engaging competitors in voluntary agreements. It is important to bring stakeholders together for CE-focused pre-competitive R&D and knowledge-sharing projects and networks. In applied and commercial coopetitive arrangements, stakeholder engagement (e.g., third-party coordination) enables cross-industry collaboration for reverse logistics systems, whereas platforms are used to connect stakeholders and match their supply and demand, thus facilitating the development of CE business models. Our chapter contributes to academic and practical discussions on how coopetition for a CE can manifest and how competitors, as stakeholders, can engage in collaboration and contribute to CE goals.

Recent circular economy research has emphasised that stakeholder engagement and mutual support of stakeholders are needed to implement the idea of a circular economy. While stakeholder engagement is often considered as something positive, a deeper understanding of what constitutes the positive in stakeholder relationships is needed. The purpose of this chapter is to increase our understanding of strength-based stakeholder engagement as an enabler of the sustainability transition to a circular economy. We explore what constitutes positive and constructive stakeholder relationships at the individual, organisational and societal levels of stakeholder engagement. We present an empirical study of specialists representing different stakeholders involved in advancing the circular economy in Finland. Drawing on a strength-based approach, our study contributes to the stakeholder literature by elucidating the positive foundation of stakeholder engagement. Our study shows that identifying and enhancing the strengths in stakeholder engagement reveals opportunities that exist for a circular economy.

In this paper, we examine fringe stakeholders in the context of transitions towards sustainability. Fringe stakeholders refer to marginalised and non-collaborative stakeholders whose voices are not easy to account for. Our conceptual study integrates extant knowledge about the concept of fringe stakeholders to provide valuable insights into studying fringe stakeholders in sustainability transitions. We discuss challenges to addressing fringe stakeholders in the multi-stakeholder approach and draw lessons for research design from a review of empirical studies of fringe stakeholders in sustainability transitions in urban settings. Finally, we discuss the methodological features that enhance giving voice to fringe stakeholders in stakeholder engagement research. As a contribution to research on stakeholder engagement, our paper presents insights related to addressing fringe stakeholders in the contexts of theoretical framing, research design and methodology.

The circular economy has been presented as a means to promote ecological, economic, and social sustainability. However, the connection between the circular economy and sustainability remains undefined in both theory and practice. In this chapter, we examine how a circular economy and its connection to sustainability are understood among key stakeholder groups promoting the circular economy in Finland, a forerunner country in sustainable development. Theoretically, we build on circular economy and corporate sustainability literature. Empirically, we conducted an analysis of 26 qualitative interviews with circular economy stakeholders. As a result, we present three categorisations of a sustainable circular economy: a business-centric circular economy, a systemic circular economy, and a regenerative circular economy. Our findings demonstrate that different stakeholder groups at the local, regional, and national levels acknowledge the importance of the circular economy for the promotion of sustainability. Stakeholder views vary in terms of how broadly sustainability is understood and to what extent a circular economy is connected to the promotion of economic, ecological, and social sustainability. The findings call for a dialogue among stakeholders on how the circular economy can promote sustainable development.