Green innovation and circular economy in South African supply chain organisations

Abstract

South Africa has complex environmental and economic challenges as part of its sustainable development. These include depleting natural resources, significant waste generation and high carbon emissions, compounded with an economic growth rate below global growth. Organisations within the supply chain play a key role in purchasing and distributing goods that underpin the economy. Waste generation and carbon emissions drive climate change which has been singled out as a significant risk to humanity. The negative environmental impacts of climate change, resource depletion, waste generation and carbon emissions have compounded the bleak economic outlook for South Africa. Developed countries have implemented circular economy policies that support green innovation within the supply chain. The circular economy is a model that supports waste reduction while improving the economy and the use of natural resources through reducing, reusing and recycling at a basic level. The research area of circular economy in the supply chain is trending globally and is still relatively new from a South African context, particularly around circular business models in the supply chain. Circular economy principles work hand in hand with driving green innovation, as the technology allows for the identification of new ways to reduce waste and cost across the supply chain. The research is qualitative and exploratory within the area of supply chain, with a focus on green innovation and circular economy from a developing country perspective. It intends to understand the key drivers that contribute to companies adopting green innovation strategies. The benefit of the research is for practitioners to understand how South Africa can achieve green in the supply chain and overcome economic issues by adopting circular economy principles. Twelve semi-structured interviews were carried out with managers of large organisations that have embarked on green initiatives within the supply chain. The study established commonalities with existing research on external and internal drivers supporting green innovation and the circular economy in the supply chain. The research established new insights around South African organisations' differences in the supply chain, particularly around operational risk being a critical driver considering water scarcity and electricity instability. It also identified internal drivers to changing business models from linear to circular, particularly around sustainability strategies, network collaboration, sustainability culture and changing the way companies are measured. Recommendations support how business models could be adapted to drive circular business models across supply chain organisations in South Africa.