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Revista de Gestão
Circular economy: analysis of the implementation of practices in the Brazilian
network
Flavia Cristina Silva, Fabio Ytoshi Shibao, Isak Kruglianskas, José Carlos Barbieri, Paulo Antonio
Almeida Sinisgalli,
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To cite this document:
Flavia Cristina Silva, Fabio Ytoshi Shibao, Isak Kruglianskas, José Carlos Barbieri, Paulo Antonio
Almeida Sinisgalli, (2019) "Circular economy: analysis of the implementation of practices in
the Brazilian network", Revista de Gestão, Vol. 26 Issue: 1, pp.39-60, https://doi.org/10.1108/
REGE-03-2018-0044
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Circular economy: analysis of the
implementation of practices in the
Brazilian network
Flavia Cristina Silva
Universidade Presbiteriana Mackenzie, São Paulo, Brazil
Fabio Ytoshi Shibao
Universidade Nove de Julho, São Paulo, Brazil
Isak Kruglianskas
Faculdade de Economia e Adminstração, Universidade de Sao Paulo,
São Paulo, Brazil
José Carlos Barbieri
Fundacao Getulio Vargas, São Paulo, Brazil, and
Paulo Antonio Almeida Sinisgalli
Universidade de Sao Paulo, São Paulo, Brazil
Abstract
Purpose –In total, 19 practices of circular economy divided into three groups, internal environmental
management, ecological design and investment recovery were studied in a local network composed of small
companies and individual entrepreneurs related to common product and by-product flows. The paper aims to
discuss these issues.
Design/methodology/approach –This research presents an applied nature, is characterized as
exploratory and adopted the case study as a technical procedure using sources and methods of data
collection. The primary data were collected through direct observation of the processes and semi-structured
interviews with managers and owners.
Findings –The most widespread practices are related to product design. However, in most cases, the
implementation was punctual and did not present continuous and corresponding actions, which highlights
the embryonic contours of European Commission (EC) in the observed network. The practices from the
management category were less observed, which revels the environmental variable is not included in the
strategic business planning.
Research limitations/implications –The research documents the application of CE practices in a local
network and brings this current paradigm shift to the Brazilian context.
Practical implications –To overcome barriers to the implementation of EC practices, it is suggested to
restructure commercial relations, to formulate public policies and to develop infrastructures that facilitate the
materiality of flows and the market.
Social implications –The study highlights the need of public policies that promotes cross-sectoral
cooperation in accordance with NSWP objectives.
Originality/value –Despite the focus on EC implemented practices this study offers a framework of the
research routes on the main barriers and suggests actions to overcome the challenges in the transition from
the economy to the circular model.
Keywords Barriers, Waste management, Case study, Circular economy (CE), Environmental management
Paper type Research paper
Revista de Gestão
Vol. 26 No. 1, 2019
pp. 39-60
Emerald Publishing Limited
2177-8736
DOI 10.1108/REGE-03-2018-0044
Received 7 March 2018
Revised 7 September 2018
Accepted 3 October 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2177-8736.htm
© Flavia Cristina Silva, Fabio Ytoshi Shibao, Isak Kruglianskas, José Carlos Barbieri and
Paulo Antonio Almeida Sinisgalli. Published in Revista de Gestão. Published by Emerald Publishing
Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone
may reproduce, distribute, translate and create derivative works of this article (for both commercial
and non-commercial purposes), subject to full attribution to the original publication and authors.
The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode
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1. Introduction
The patterns of production and consumption have put substantial pressure on the
environment. This fact has created the risk that the absorption capacity of the planet will
be compromised and the threat of ruptures in breaking ecological stability due to the
accumulation of pollution. Global sustainability depends on the dissociation of the rates of
economic growth and resource consumption, so that productivity can be achieved through
technological, relational and institutional innovations (Fischer-Kowalski and Swilling, 2011).
Agenda 2030, an agreement signed by more than 190 countries, includes 17 sustainable
development goals (SDG). Among these, SDG 12 proposes to assure sustainable production
and consumption standards. Moreover, this agreement establishes several goals, such as
sustainable management, efficient use of natural resources, mitigation of pollution and its
impact, the implementation of practices that prevent the generation of waste, and the
prioritization of reuse and recycling processes (UN General Assembly, 2015).
The role of the governments associated with Agenda 2030 is to elaborate public policies
that involve the manufacturing and agriculture sectors of society in order to meet the goal of
reducing the amount of waste generated. In addition, the role of companies encompasses
committing to sustainability, adopting new perspectives, realigning their business models
and acting interdependently (Cepal, 2016).
Cooperation among companies is established by relationships that integrate
environmental actions between suppliers and consumers. Moreover, it is the task of
research to highlight that these integrated environmental actions have economic and
political relevance (Ioppolo et al., 2014).
The literature presents a profusion of studies related to the topic of cooperation among
companies, which is carried out mainly in developed countries. However, with regard to
Brazilian companies, the transition to sustainable production requires methodologies
and practices adapted to the local reality because of the lack of structure and training
(Gomes et al., 2013).
The CE proposes to reduce the environmental impact, and at the same time, promote
economic growth through business development and new revenue streams (Kalmykova
et al., 2018). As a system that minimizes waste generation and emissions, and mitigates
material and energy loops to preserve resources, CE can contribute to sustainability through
conditional, beneficialortrade-offrelationships (Geissdoerfer et al., 2017). Like
environmental sciences and sustainable development, CE is aimed at helping to resolve
environmental issues (Sauvé et al., 2016).
This study aimed to analyze the implementation of CE practices in a network of
individual entrepreneurs and small companies that participates in flows of products and
by-products in common.
In addition to this introduction, this paper includes five other sections. The theoretical
foundations that underlie this study are presented in Section 2, while Section 3 describes the
research in terms of its methodological procedures. Further, the results are reported and
discussed in Section 4. Finally, the fifth section presents the final considerations, the
contributions and limitations of the research and suggestions for future studies.
2. Literature review
2.1 The roots of the CE
As highlighted by Merli et al. (2017), CE is a concept that shares many common principles
with others, including industrial ecology (IE). It emerged as connected IE, which is
particularly related to the exchange of the by-products and waste that are mirrored in the
natural cycles of material and energy (Gregson et al., 2015). The IE concept is described as a
multidisciplinary study of industrial and economic systems and their links to essential
natural resources (Allenby, 2000).
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In the biological sciences, the term symbiosis is used to describe a type of interspecific
harmonic relation that brings benefits to living organisms (Odum and Barrett, 2011).
Similarly, IE employs the term industrial symbiosis to describe the organizational
interactions related to resource and waste recycling (Lifset and Graedel, 2002).
The use of the biological analogy by IE suggests that concepts such as recycling and load
capability linked to the basic characteristic of an industrial ecosystem consist in the resilience,
or in other words, the ability to interact with the environment and enable its regeneration
(Ehrenfeld and Gertler, 1997). The key elements of IE are the biological analogy, system
perspectives, technological modifications, cooperation, dematerialization, eco-efficiency and
research and development (White, 1994). IE can be stratified by the extent of the interactions.
The first aspect refers to the degree of dependence on natural ecosystems in relation to the
resource supply, as well as the waste and emissions disposal channels, and the level of
impairment of the load capability of the planet; moreover, it is divided into elementary,
intermediate and self-sufficient models (Jelinski et al., 1992; Lifset and Graedel, 2002).
There are at least two ways in which IE themes can be incorporated into a larger whole.
One way is to view IE as operating partly at the firm or the unit process level (design for
the environment, pollution prevention, eco-efficiency and “green”accounting), at the
inter-firm (eco-industrial parks [industrial symbiosis], product life cycles and industrial
sector initiatives), district or sector levels, and finally, at the regional, national or global
levels (budgets and cycles, materials and energy flow studies and dematerialization and
decarbonization). While the firm and unit processes are relevant, much of IE focuses on
the inter-firm and inter-facility levels, because pollution prevention or related aims
address many of the significant issues at the firm, facility or unit process levels (Lifset and
Graedel, 2002).
Another way to link the elements together is to see them as reflecting the theoretical
aspects of IE in many of the interdisciplinary aspects of the field (systemic analysis of
resources and social and economic), while according Lifset and Graedel (2002), the more
practical and applied aspects appear in ecodesign.
IE provides a beneficial and inclusive economy by focusing on minimizing resource
consumption and waste disposal (Andersen, 2007). Like industrial symbiosis, urban
symbiosis can also contribute to strengthening the CE by means of transforming physical
resources into economic benefits (Su et al., 2013; Wen and Meng, 2015).
As highlighted by MacArthur et al. (2015), circularity is deeply rooted in history, and CE
correlates with several schools of thought. In the concept of cradle-to-cradle, CE seeks to
avoid the final disposal of products and promote the recycling of materials, transforming
them into inputs and raw materials (McDonough and Braungart, 2010).
Economic performance contributes to the CE through principles such as the
manufacturing of durable products and focusing on maintenance services that allow the
extension of the useful life of the products (Stahel, 2010). Moreover, regenerative design has
influenced the CE in relation to the rational use of natural resources with the aim of avoiding
their depletion and environmental degradation (Cole, 2012; Lyle, 1996).
For the CE, natural capitalism proposed the perspective that biotic and abiotic resources
constitute the world’s inventories of natural assets (Hawken et al., 2013); however, the blue
economy suggests that energy sources should be regarded as a keystone of economic
systems, which should be limited to the ecological conditions of the environment in which
they are inserted (Pauli, 2010).
Biomimicry or biomimetics is recognized as a principle compatible with the CE because
nature is taken as a model of design (Pomponi and Moncaster, 2017). For example, some
lessons interpreted by Bhushan (2009) include the chemical energy conversion by plants, the
energy production by aquatic animals, and reversible adhesion in dry and wet environments
by insects, reptiles and amphibians.
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The CE is a divergent concept in the literature stemming from several epistemological
fields (Homrich et al., 2018). Many other correlations could be established among the CE
and the major environmental concepts that have emerged in the past, including the green
and bio economies. As D’Amato et al. (2017) showed, those concepts were postulated by a
pool of social players such as academics, NGOs, industries and policy makers and their
definitions overlap.
Kirchherr et al. (2017) identified 114 different definitions for CE, highlighting the lack of
consensus. The CE refers in practical terms to reuse at three levels: the product level, such
as repair or refurbish; the component level, such as, for example, remanufacturing; and the
material level, which is regarded as recycling (Zink and Geyer, 2017). The CE proposes the
arrangement of a system in which the efficiency of the use of resources is increased.
In addition to being reduced, waste is used as a source of material and inputs for
companies organized in networks that is unlikely in the linear economic standard of the
consumption of resources, production and disposal (Geng et al., 2016; Kocí et al., 2016).
Despite the originality of the concept, proponents emphasize that the most significant
contribution of the CE is the combination of different strategies from past attempts in a
new framework (Bocken, Olivetti, Cullen, Potting, and Lifset, 2017).
2.2 Drivers and barriers to CE
The evolution of the CE concept has been shaped by different cultural, social and political
aspects (Yu et al., 2015). For instance, while China adopted the CE as a top-down strategy of
development and as a control instrument, the European Union, North America and Japan
have approached this concept as a bottom-up policy (Winans et al., 2017).
At the end of the 1990s, the CE was inserted in Chinese public initiatives by means of
policies to support research, articulations between stakeholders and the implementation of
eco-parks, and was focused mainly on waste recycling (Yuan et al., 2006). The second phase
of expansion, which was based on the lessons learned from the problems of technical
unfeasibility and economic difficulties, redirected the focus of the CE to the industrial
structure (Geng et al., 2016; Yuan et al., 2006).
Regarding the early application of the CE, China was the leading country in terms of
publications, while in publications from Europe, the usage of the term CE became more
common after the European Commission (EC) addressed the issue of waste in 2014
(Türkeli et al., 2018).
The EU started the transition with the publication of the Circular Economy Action Plan
in 2015, which preceded the environmental directives EC 2005, EC 2011a, EC 2011b and EC
2011c. The EC framework was based on eight building blocks: industrial symbiosis,
material resource efficiency, product life-cycle extension, biological products, energy
efficiency and renewable energy, the performance economy, the sharing economy and
finally, the platform economy (Taranic et al., 2016).
Despite divergences in governance paradigms and context, China and Europe are the
forerunners in the CE; the evolution of the concept in each of the regions can provide lessons
for the other. According McDowall et al. (2017), China encourages and coordinates the
transversal development of the CE through zones, regions and cities, where leading firms
and institutions are the focus of different administration programs, such as experimentation
and the coordination of management; further, the Chinese approach to the CE includes
land-use planning.
On the other hand, Europe has provided a model of product labeling requirements that
has been followed by a substantial number of countries, as has its product standards and
experiences with the eco-design process and the promotion of business model innovation.
In addition, McDowall et al. (2017) highlighted the possibility for synergy between the
two areas.
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In Brazil, the CE is supported by the National Solid Waste Policy (NSWP) (Brazil, 2010),
which institutes a shared responsibility policy for the product life cycle and establishes
reverse logistics as an instrument of economic and social development through an
environmentally friendly waste disposal process (Azevedo, 2015; Demajorovich and
Migliano, 2013). Although it is a beginning, the approach to waste management represents a
small part of the potential of the CE, which incorporates effective proposals for resource
management, such as regenerative design (Lyle, 1996), economic performance (Stahel, 2010)
and a cradle-to-grave approach (Braungart and McDonough, 2009), among others.
In addition to environmental reasons such as resource scarcity stemming from
unsustainable patterns of production and consumption, the economic benefits from new
markets is a relevant driver for the transition to the CE (MacArthur et al., 2015). The literature
proposes a large number of new possibilities for business models, for example, the integration
of key stakeholders and data in the development of CE strategies (Jabbour et al., 2017). Other
strategies include remanufacturing and sharing models (Bocken, Ritala, and Huotari, 2017).
In the literature, the formulation and application of the CE concept is considered fragile
because of the lack of methodological cohesion in the criteria for measuring results (Bjørn
and Hauschild, 2013). The proposed solutions to this problem include the adoption of
effective indicators of waste reduction (Veleva et al., 2017), life cycle assessment (LCA)
methods for the design and measurement of performance (Scheepens et al., 2016), and
streamlined life cycle analysis, which is a quicker and cheaper approach than LCA (Gnoni
et al., 2018). Furthermore, the focus on the production and services system aligned with
environmental preservation is not related to the social dimension or to the results that can be
expected in terms of balance (Murray et al., 2015).
The CE’s focus on waste management also generates disapproval from part of the scientific
community because of limiting conditions such as the unfeasibility of the reuse, recycling or
recovery of certain types of waste, either for technical or economic reasons. The quality and
quantity of recovered materials is a critical aspect for the stock supply of a growing economy,
as well the energy required for transformation, and because primary resource extraction is
necessary for all economies (Cullen, 2017; Lèbre et al., 2017; Murray et al., 2015).
As a social phenomenon, the CE finds limitations in the biological, chemical or technical
concepts for matching materials appropriately, mainly those regarding the management of
hazardous or potentially hazardous substances embedded in material cycles (Bocken,
Olivetti, Cullen, Potting, and Lifset, 2017). An overview of the CE concept by Korhonen et al.
(2018) highlighted that the complexity of material will be increased with new usages and
combinations, because the environmental impact assessments of biofuels, biomaterials and
other eco-efficiency initiatives remain incomplete due to unsolved methodological issues and
other limitations.
The CE concept has gained momentum over time among private and public institutions;
however, there are several challenges the concept must overcome to move society
toward sustainability.
3. Research design
This research presents an applied nature and is characterized as exploratory, because it
intends to approach the theme, as well as to solve specific problems, by performing an
intensive analysis of an individual unit, such as a person or community, stressing
developmental factors in relation to the environment (Prodanov and Freitas, 2009). In
relation to the operationalization of the research, the significance of the condition of the
contexts in which the players are inserted favored the choice of the case study as a technical
procedure (Yin, 2015).
Among 32 pallet manufacturers that were contacted by phone, 26 agreed to respond to
the questionnaire regarding the implementation of the CE practices presented in Table I.
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The scientific production regarding the CE has increased significantly in recent years.
A search in the Scopus database using the term “circular economy”in the article titles,
limited to 2016 and 2017, produced 367 papers. Nevertheless, this research followed the
premises that were validated by Zhu et al. (2010) in a study conducted in the Chinese
industrial sector with more than 300 companies.
Although the study that supports this research was developed at the early stage of the
CE in China, its framework is supported by recent empirical research, such as a case study
developed by Manninen et al. (2018) among share and regenerate firms in Finland, as well as
the review conducted by Petit-Boix and Leipold (2018) about the implementation of circular
economy practices at the city level. Similarly, in Brazil, Sousa-Zomer et al. (2018) adopted the
same nature of practices in a case study to provide evidence of the linkage between the CE
and cleaner production.
From 14 valid questionnaires that were answered, this study identified that the number
of practices implemented ranged from two to ten. In addition, the majority of companies
(64 percent) adopted up to five CE practices in their processes. The companies that identified
the highest number of practices were contacted again; however, only the firm identified as
Alpha Company agreed to participate in a qualitative survey.
Alpha Company and other firms are identified, and all of them became players in the
network shown in Table II. They are located in Ibiúna City, which has an economy mainly
based on agricultural production and supplies the metropolitan region of São Paulo with
several horticultural products.
Alpha Company belongs to the mechanically processed wood products sector. This
company manufactures pallets from lumber. Besides the product, the outputs of the
process are three by-products: residues resulting from the processing of wood logs, wood
shavings (by-product 1) and sawdust (by-product 2), differentiated by the granulometry,
and the secondhand clapboard sidings (by-product 3) in the assembly phase of the pallets.
These by-products are absorbed as inputs in other processes and circulated among
various supply chains. Figure 1 describes the relationship among the players, focusing on
the flows and transformations of the by-products of Alpha Company.
Constructs Circular economy (CE) practices
Internal
environmental
management
P1 Environmental commitment from senior managers
P2 Support for environmental management from mid-level managers
P3 Cross-functional cooperation for environmental improvement
P4 Special training for workers on environmental issues
P5 Total quality environmental management
P6 Environmental auditing programs such as ISO 14000 certification
P7 Eco-labeling of products
P8 Existence of pollution prevention programs such as cleaner production
P9 The internal performance evaluation system incorporates environmental factors
P10 Generation of environmental reports for internal evaluation
Ecodesign P11 Design of products for reducing consumption of material/energy
P12 Design of products for reuse, recycling, recovery of material, component parts
P13 Design of products to avoid or reduce use of hazardous products
P14 Design of processes for minimization of waste
Investment
recovery P15 Investment recovery (sale) of excess inventories/materials
P16 Sale of scrap and used materials
P17 Sale of excess equipment
P18 Collect and recycle end-of-life products and materials
P19 Establish a recycling system for used and defective products
Source: Zhu et al. (2010)
Table I.
Circular economy (CE)
practices
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3.1 By-product 1 –wood shavings
According to Brandt et al. (2002), each 1 m
3
of dry and classified wood sawn consumes
2.62 m
3
of logs with bark. The chips resulting from the initial processes, such as debarking,
unfolding and planning, are known as wood shavings. After they are driven by a treadmill
out of the productive area and stored outdoors, the wood shavings are acquired
by Entrepreneur B and resold to Gama Company for cage lining. After 49 days, when
the breeding cycle ends, and the poultry are slaughtered, the shavings and the wastes
they absorbed, now called chicken litter, are taken out by Entrepreneur B and resold to
Farmers 1 and 2.
3.2 By-product 2 –sawdust
The waste, in the form of a powder, is collected by mechanical mats in the vertical,
horizontal and refill sawing stages. The sawdust is stored in a protected place and sold to
Players Activities Process
Alpha Company Manufacturing of pallets Wood processing: sawing and assembling
Beta Company Manufacturing of briquettes Pressing of wood waste
Gama Company Breeding and slaughter of poultry Cutting farms
Entrepreneur A Recycling Recycling of materials
Entrepreneur B Transportation Transportation
Farmer 1 Agriculture Horticulture
Farmer 2 Agriculture Organic horticulture
Retailer A Food retailing Prepare meals
Retailer B Food retailing Prepare meals
Source: Research data
Table II.
Mapping of
network players
Source: Research data
Alpha Company
Beta Company
By-product 3: boards
refugees
By-product 2: sawdust
Retailer A
Retailer B Entrepreneur B
Entrepreneur A
Customer
Product: pallet
Crates
Chicken
meat
Briquettes
Farmer 1
Farmer 2
Gama
Company
Chicken
litter
Cage Lining
By-product 1: wood
shavings
Figure 1.
Mapping of the flow
and transformation
of products and
by-products
among chains
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Beta Company, which presses it under high pressure to obtain the briquettes. These
cylindrical blocks of high calorific value are sold to Retailers A and B for the maintenance of
ovens and wood stoves.
3.3 By-product 3 –secondhand clapboard siding
In the assembly phase, slats that have defects are segregated because they cannot be used in
the manufacturing of pallets. This material is purchased by Entrepreneur A and
transformed into household goods such as boxes that are sold to Farmers 1 and 2 for the
packaging of hardwood and beekeeping.
Alpha Company, Gama Company and Retailer B are classified as small-sized companies
according to the Brazilian Service for Supporting Micro and Small Enterprises (SEBRAE,
2016), and Beta Company and Retailer A are micro-sized enterprises. Entrepreneurs A and B
are self-employed, while Farmers A and B operate under the cooperative regime,
respectively, registered to family agriculture and organic agriculture programs. In a
comparison of this framework to guidelines such as ReSOLVE proposed by the Ellen
MacArthur Foundation, it is possible to identify two of six business model strategies as
follows: the regeneration strategy corresponds to the flows of Alpha’s by-products among
the other players; and the loop with the restoration of the organic value of the chicken litter.
A cross-sectional perspective was adopted to portray the specific period from August to
December 2017. The collection of the data, which utilized multiple sources and varied
methods, allowed the mapping of the process and the by-product flow, as well as the
identification of the network of players involved, as was presented in the previous section.
The primary data were collected through direct observation of the processes and
semi-structured interviews with managers and owners. Secondary data were obtained by
consulting various records, such as forestry origin documents, operating license waiver
certificates, material and input purchase requisitions, material entry and exit reports,
environmental labels, procedures, and safety information sheets of chemicals, among others.
Only the CE practices evidenced by three different sources, as suggested by the
methodological triangulation described above, were considered implemented as presented.
They are discussed in the next section.
4. Analysis and discussion of results
The industrial system is considered the producer of both products and waste. With this
approach, the limits of a company are extended to the environment, requiring that products
and waste should be developed and discussed among different companies (Zaneti et al.,
2009). The players are integrated in a network in which individual entities become engaged
in transactions for resource exchanges of materials, energy or by-products at the inter-firm
or same level as described by Ghisellini et al. (2016).
In terms of special conditions, although the players are not placed within strict
boundaries like a park, they are geographically close enough to promote circularity and to
take advantage of the exchange of material and energy flows. According Chertow (2012),
this type of symbiosis occurs among regional firms.
The participation of all the players constructs the network with originality and
exclusivity. As argued by Domenech and Davies (2011), the network morphology is
determined by the density and connectivity of the players.
Figure 2 shows the implementation of CE practices quantitatively. Although the
intentionality in the network formation was observed, and although the players emphasized
the importance of the circularity of materials, the findings showed that the players
implemented less than 50 percent of the actions, so that the minimum verified was two
practices and the maximum was ten.
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In terms of quantity, Alpha Company and Farmer 2 presented the highest results, with
ten practices each, while Entrepreneur B presented only two. A single practice was common
to all players; P12 is related to the design of products for the reuse, recycling and recovery of
materials of component parts.
The process of producing organic vegetables is aligned with environmental protection
from the preparation of the land to the delivery of the product; as Farmer 2 reported:
[…] we do not use pesticides and chemical fertilizers. For instance, the planting accompanies the
unevenness of the land to avoid erosion, the irrigation method is economical and supplied with
rainwater; moreover, we generate solar energy, and the transport of the products is associated with
the other cooperatives.
Patterns of the comprehensive utilization of water and energy, as well the principles
of ecology and sustainability are predicted for circularity in agriculture (Xuan et al., 2011).
Farmer 2 emphasized that a hindrance to the full conversion to the CE is the low investment
in technology and infrastructure, and the need for technology transfer was pointed out by Xi
(2011) in a study about the models of the CE in agriculture.
The manager of Alpha Company highlighted the strategies that produce sustainability:
Because of the quantities generated, we prefer to market the by-products rather than process them.
This fact is relevant for middlemen because it fosters the economy. For us, it also recovers
investment and reduces losses, allows us to optimize the process and keep focused on the product,
which guarantees reaching more customers.
The lack of awareness of society regarding the consequences of current development
standards is one of the obstacles to sustainability (Jacobi, 2003; Jacobi and Bensen, 2011).
The pressure of customers is a driver for CE transition (Moktadir et al., 2018). According to
Entrepreneur B, CE practices are not applicable to all markets:
I saw the opportunity to sell a service instead of charging only for the freight. In addition, I started
to buy the sawmill and sell it to the farm with the guarantee of withdrawal. For the customer, the
service is convenient and the price advantageous. For me, it is an investment because I make a
profit when I sell the chicken litter to the farmer. Nonetheless, this is not my main activity. My main
income comes from being a carrier of cargoes, and unfortunately, in this situation, there is not much
to do for the environment.
Four out of the 19 CE practices were not evidenced: P5 –quality and environmental
management system integration; P6 –environmental auditing programs such as ISO 14000
certification; P9 –the internal performance evaluation system incorporated into
environmental factors; and P10 –the creation of environmental reports for internal evaluation.
This deficiency was found in several small companies studied by Mello et al. (2015). They
pointed out that environmental issues are often addressed through non-systematized
Players P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 P13 P14 P15 P16 P17 P18 P19 Total
10
3
4
5
2
8
10
3
4
Legend Practice verified by all sources of collection
Practice verified through up to two data sources. However, the implementation cannot be evidenced
Denote that the practice was not verified through any collection source
Alpha Company
Beta Company
Gama Company
Entrepreneur A
Entrepreneur B
Farmer 1
Farmer 2
Retailer A
Retailer B
Source: Research data
Figure 2.
Evidence of
implementation
of CE Practices
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practices, which are focused on complying with legislation and waste recycling policies.
These findings are consistent with the study of Degenhart et al. (2016), which identified the
reactivity or animosity of companies in relation to the disclosure of their environmental
information, which is not required by law.
The managers who perceive environmental issues as a business opportunity tend to
integrate them into the company’s strategic planning, implement new technologies, institute
training programs, as well as establish organizational incentive policies (Dubey et al., 2018;
Muduli et al., 2013).
The implementation of practice P1 –commitment of environmental management from
senior managers was recorded only among the players who had the greatest number of
practices implemented: Entrepreneur A, with seven practices implemented; Farmer 1, with
10 practices evidenced, as well as Alpha Company and Farmer 2, which implemented 12 CE
practices, a number equivalent to more than 60 percent of the researched constructs.
On the other hand, the lack of commitment of the top management is related to the
absence of knowledge and control over the environmental aspects (Govindan et al., 2014;
Oelze, 2017). For instance, during the follow-up to the removal process of the chicken litter, it
was observed that the vehicle had oil leaks and emitted excessive black smoke.
Additionally, evidence of periodic maintenance could not be verified, and when asked about
this, Entrepreneur B was not knowledgeable about the consequences of these sources of
pollution for the environment or the importance of maintaining good conditions for the
conservation of the vehicle for economic safety reasons.
Most of the players do not have a hierarchical structure that supports middle management,
which is why practice P2 –support for environmental management from mid-level managers
was verified only in the three companies constituted and classified as small.
Alpha Company incorporates the environmental aspects in its training on health and
safety at work (P4). Rural cooperatives act as centers of knowledge diffusion and produce
empowerment in ecologically based agriculture (Almeida and Abreu, 2009). According to
Farmer 1, the techniques learned improved production and environmental quality: “We
usually do the training in thecooperative and then teach the rest of the family and employees.
The technician also visits the property, accompanies the project and clarifies the doubts.”
Organic agriculture requires adequate procedures and technologies (Souza et al., 2015).
Farmer 2 reported that the change from the traditional to organic farming was guided by the
cooperative: “Without the use of pesticides and chemical fertilizers, our products are
healthier, the land is more fertile, the cultivation has become cheaper, and we have a relevant
market.”These aspects correspond with the study of environmentally friendly practices for
agriculture districts in China (Toop et al., 2017).
ThefactthatpracticeP3–cross-functional cooperation for environmental improvements
was evidenced in the same players that implemented P4 (special training for workers on
environmental issues) corroborates the findings in the literature that the ability of employees to
contribute to environmental activities can be increased through training (Alayón et al., 2017).
Environmental labeling is not widely used among the players in the network; therefore,
the implementation of practice P7 was evidenced in only two of them. The statements of
both converge to emphasize the importance of family and organic agriculture labels for
sustainable production. According to Farmer 2:
[...] the consumer can not differentiate the vegetables produced in an organic way from those
produced by the conventional system; therefore, this consumer needs some identification to trust
that the product is free from pesticides, and the producer also needs to defend his market.
Thus, Moura (2013) pointed out that environmental labeling meets these economic and
communication needs, as it differentiates the product from its competitors. Further,
Lombardi et al. (2017) found that exposure to information about environmental practices can
positively change consumer behavior.
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Cleaner production practices constitute a milestone in the transition to a circular business
model (Sousa-Zomer et al., 2018). Pollution prevention actions (P8) were evidenced among rural
producers, such as the use of biodiesel as fuel for generators. Other pollution control and
treatment interventions, known as “end-of-pipe”measures (Glavičand Lukman, 2007), such as
systems for the treatment of domestic effluents by septic tanks and bio filters, were verified for
Farmer 2; for Alpha Company, containment basins for chemical product deposits were verified.
CE practices related to the planning and design phase (P11 to P14) stand out as the most
frequently implemented. In order to reduce the consumption of resources and materials
(P11), the most commonly performed actions were energy acquisition by contracted
demand, the replacement of machine parts, and the use of economical lamps by the Alpha
and Gama companies. The rural producers used solar energy, rainwater and irrigation by
drip and micro sprinkler techniques.
It was observed that the P12 practice, common to all players in this network, interconnects
them in the flow of the reuse, recycling and/or recovery of Alpha Company’sby-products.
Moreover, it isaligned with the NSWP, regulated by the provisions of Federal Law No. 12,305/
2010, which recommends the final disposal of waste in landfills only when other treatment
alternatives are unavailable (Brazil, 2010). The CE does not find consistent support in the
Brazilian legal system, because the programs foreseen by the NSWP have not yet been
effectively implemented, and there are no official EC indicators, which constitutes a barrier to
the EC, as identified by Galvão et al. (2018).
For Gama Company, it was not possible to confirm its declaration regarding the
commitment to eliminating or reducing the use of dangerous products (P13). It was observed
that the packaging and residues of various chemical products such as medicines for birds
and sanitizing products were discarded along with the common waste, and their final
destination was the municipal sanitary landfill. The environmental contamination by drugs
is associated with potential impacts on human and animal health, for instance, the risk of the
development of resistant bacteria and other unknown adverse effects (Eickhoff et al., 2009).
The processes of Alpha Company and Entrepreneur B were the leanest and the most
highly waste recyclable, and therefore, the most aligned with practice P14.
The practices aimed at the recovery of investment (P15 and P17) were evidenced only in
Farmer 2, who mentioned having sales and exchange relationships facilitated by the
cooperative. The other players declared thatthey work with suitable materials and equipment
for their production. As stated by Alpha Company’smanager,“the production needs to match
to the incoming material; therefore, we cannot stock either the raw material or the product.”
As pointed out by the owner of Beta Company, there is no excess of equipment.
The implementation of practice P16 –sale of scrap and used materials was validated in
Alpha Company through the flow of its by-products and was also evidenced for the retailers
that sell aluminum and paper waste.
The practices P18 and P19 were evidenced only in Entrepreneur B, which in addition to
recycling the waste of Alpha Company uses various materials such as scrap metal, tires,
electrical appliances and electronics in the manufacture of decorations and utilities.
The CE concept includes the prevention of toxic materials and waste recycling,
protecting the environment from their use as non-toxic elements (MacArthur et al., 2015).
The importance of adopting technical criteria for the use of chicken litter as a biofertilizer is
stressed in order to avoid environmental degradation (Corrêa and Miele, 2011). The studies
have pointed to the persistence of antibiotics and pathogens in chicken litter after
composting (Hahn et al., 2012) and the contamination of crops by lead (Machado et al., 2008)
and copper (Ribeiro et al., 2007). There was no evidence that Farmers 1 or 2 had any
mechanism to monitor the risk of contamination.
Although the players are aware of the relevance of their environmental contributions, the
network was formed intuitively and did not receive any institutional support or coordination.
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There were fewer observations of practices in the management category, which confirms the
tendency pointed out in Giunipero et al. (2012) study for the environmental variable not to be
included in strategic business planning.
As pointed out by Abreu and Ceglia (2018), the CE business model requires institutional
capacities to be strengthened through market instruments, public and private partnership
policies and legislation.
Although it was beyond the scope of this paper, the study of CE practices led to the
identification of barriers to its implementation. There is a gap between the expansion of
environmental management and the application of a beneficial economy to the environment
(Fuks, 2012). Consensus was found among the players interviewed that CE practices
compete with other priorities, and for financial reasons, are often overlooked. The same
problem was found for the small companies studied in the Baske by Ormazabal et al. (2016).
Clients’lack of interest in the environmental aspects regarding the product or service was a
recurring justification for the non-implementation of CE practices.
Entrepreneur A recognized that there would have been more opportunities for
production and growth if companies did not keep their processes stagnant and were open to
integration: “Most industries do not have any interest in unconventional materials and
processes.”The resistance to change and the shortsightedness identified among the
stakeholders were considered to be the main causes of failures in the agricultural CE in
Finland (Kuokkanen et al., 2016).
Gama Company believes that CE practices would be more easily implemented if
organizations shared the knowledge they gained: “Even companies operating in different
markets behave as competitors and keep their experiences confidential. As there is not any
possibility of exchange, adherence to CE practices requires time and investment in training
or consulting, which makes it an unfeasible change.”Common concerns such as climate
change, resource scarcity and other environmental issues require deep discussions and
shared experiences (Korolev et al., 2018).
Other points cited by the interviewees were the lack of tax incentives to reuse materials
and increase the shelf life of products, as well as the price of some recycled raw materials,
which are generally uncompetitive or even more costly than virgin raw materials. The use of
incentive taxes has been highly recognized by authors as an instrument to foster the
implementation of environmental policies aimed at achieving several objectives, from
energy saving (Yi, 2014) to innovation (Liao, 2018).
The barriers identified by the network players are consistent with the literature;
however, there are some classification differences, such as those found in the study of CE
barriers by Galvão et al. (2018). A framework was developed based on the nature of the CE
practices to be implemented in order to address the barriers frequently encountered, and
actions were suggested to overcome the challenges, as shown in Table III.
The organizations must overcome internal obstacles to establish a cooperative network
for the CE. The CE proposes a new configuration of materiality for which profound
transformations are needed, not only in the productive processes but also in their
foundations regarding the essential and non-essential demands that shape consumer
patterns (Lieder and Rashid, 2016; Sauvé et al., 2016).
Relevant measures to improve internal environmental management have been
suggested, such as the continuous evaluation of environmental performance metrics, risk
management, the alignment of policy, mission, vision and values with corporate
environmental responsibility, the creation of a common platform of knowledge and
information, investments in the ongoing training of employees and the dissemination of
knowledge to stakeholders (Geng et al., 2016; Mudgal et al., 2010).
Furthermore, institutionalized models such as the creation of funds and credit lines for
the execution of CE projects and the development of new markets for alternative materials,
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Barriers identified
Circular
economy (CE)
practices Authors Nature Description Authors Suggested actions to overcome
challenges Authors
Internal
environmental
management
Manninen et al.
(2018), Potting
et al. (2017), Zhu
et al. (2011, 2010)
Cultural Risk aversion;
Lack of support
and motivation
Kirchherr et al. (2018), Liu
and Bai (2014), Rizos et al.
(2015), Su et al. (2013), Su
et al. (2013)
Fostering collaborative practices
Development of new business
models
Creation of technical training
programs and dissemination of
knowledge
MacArthur et al. (2015),
Geng et al. (2016), Hopkinson et al.
(2018), Urbinati et al. (2017)
Contextual Competition and
uncertainty in the
market;
Lack of
commitment of the
consumer and
other network
players
Structural Hierarchy and
bureaucracy
inhibit innovation
Lack of learning
mechanisms
Lack of economic
incentives
Lack of human
resources
Ecodesign Cultural Resistance to
innovation International collaboration for the
reuse, recovery and recycling of
waste and by-products
Fiscal incentive policies for the
reuse of materials
Standardization of average
energy consumption and
Preston, 2012; Sauvé, Bernard,
and Sloan (2016); Merli, Preziosi,
and Acampora (2017) Ribeiro and
Kruglianskas (2014)
(continued )
Table III.
Framework for
research to implement
CE practices
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Barriers identified
Circular
economy (CE)
practices Authors Nature Description Authors Suggested actions to overcome
challenges Authors
minimum standards of
performance of materials and
products
Contextual Lack of favorable
regulations
Structural Competitor
priorities;
Lack of economic
incentives
Investment
recovery Cultural Competition
among the
departments of a
company
Creation of eco-industrial parks
Redefinition of consumption
targets and incentive to the
leasing system
Gregson, Crang, Fuller, and
Holmes (2015)
Contextual Lack of
integration with
network players
Structural Protected
technologies;
Lack of control
and waste of
materials and
inputs
Source: Research data
Table III.
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as well as the reformulation of waste collection and disposal rates, tend to encourage
investment between companies and private partnerships (Ribeiro and Kruglianskas, 2014)
as pointed out by Fischer and Pascucci (2017) in their study addressing institutional
incentives for the transition to a CE.
In order for CE results to exceed waste exchange, a focus on product design and
development is recommended. The use of integrated tools such as LCA, mass balance
and dematerialization can propel organizations to a productive stage that challenges the
traditional models of production, and consequently, of consumption (Preston, 2012;
Sauvé et al., 2016).
There should be no clash between economics and ecology in the constantly changing
environment in which firms are embedded (Porter and Vander Linde, 1995). There are
factors that may contribute to the recovery of investments; we highlight the systematization
and diffusion of information aimed at increasing the bargaining power of companies, for
instance, databases with projections of numbers and types of waste, technology sharing and
collaborative product development (Gregson et al., 2015).
The CE is based mainly on the Chinese and EU experiences. They have relevant
differences from the Brazilian political and economic scenario, which lacks the legal
framework to achieve the appropriate development of the CE. Another hurdle is related to
the lack of economic instruments for and the participation of society in the rational use of
natural resources. Those particularities require that caution be used in finding direct
equivalence between efforts and policies (Mathews and Tan, 2016).
Therefore, the network of players studied has particular characteristics and faces several
restrictions that may affect the timely implementation of CE practices, such as the decrease
in the production of pallets due to the deceleration of the Brazilian economy since 2015
as a result of the economic crisis (Rossi and Mello, 2017), as well as the exhaustion of
organic production due to its high price in relation to conventional agricultural products
(Silva et al., 2005).
The case study format was the second most used procedure among 500 published papers
about the CE indexed at the Web of Science and Scopus databases up to April 2017.
According to Merli et al. (2017), these studies aimed at applying the CE in specific
contexts or comparing its geographical differences. Further, as pointed out by Petit-Boix
and Leipold (2018), cities’initiatives to implement the CE are commonly reported in
non-academic journals, and because of the absence of peer-reviews, these data sources are
frequently avoided.
5. Final considerations
The CE is a topic that has evolved rapidly as a possibility to reconcile environmental
preservation and economic growth. The joint efforts of academia, NGOs, public decision
makers and stakeholders should be focused on the implementation of strategies and
overcoming challenges.
The bibliometric study of the CE in the Web of Science, Scopus and Google Scholar data
sources developed by Türkeli et al. (2018) noted that like India and some European
countries, Brazil has produced many citations, but few effective contributions to the CE
literature. Along with studies such as the one developed by Oliveira et al. (2018), this
research aimed to document the application of CE practices in a local network and bring this
current paradigm shift into the Brazilian context.
Despite the fact that this paper focused on the execution of CE practices, the findings
allowed the mapping of research routes to address the main barriers and to suggest actions
to overcome the challenges, i.e. the restructuring of business relations, the elaboration of
public policies and the development of infrastructures that facilitate the materiality flows
and the market.
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In addition to this theoretical contribution, the study provides practical insights for
managers and entrepreneurs with the purpose of implementing the CE business model, as
well as highlights the need for public policies that promote cross-sectoral cooperation in
accordance with the NSWP’s objectives.
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Corresponding author
Flavia Cristina Silva can be contacted at: flacrisil@yahoo.com.br
Associate Editor: Felipe Lara
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