Sustainability and its practice have attracted the attention of the world (companies and researchers), receiving a great degree of importance and recognition since 1992, which coincides with the Rio de Janeiro Summit. It has slowly, but without hesitation, led to changes in global economies. It includes several aspects, such as economic, social, environmental and political, not only at the macro-level but also at the micro-level. This issue is pushing companies to incorporate sustainability into their strategies. To achieve and adapt objectives related to sustainability requirements, companies usually rely on methods for formulating, implementing and monitoring their systems in terms of environmental, social and economic aspects [1
]. For all three aspects, several approaches or definitions have been proposed.
The economic sustainability aspect is linked with the company’s financial capacity to support economic production indefinitely. On the business side, the economic side of sustainability is defined as the efficient sustainability of a company’s assets over time. Moreover, economic sustainability could also be introduced as the present and future value of natural resources (e.g., drinking water). However, economic sustainability includes products, consumption, investment, local markets and the global economy as financial accounts have the long-term costs of using material and human resources [2
The environmental sustainability aspect guarantees human survival and sustainability in the long term. Zhong and Wu [2
] focused on developing methods that limit human activities that deplete natural resources. Hence, environmental sustainability is considered a responsible human–environment interaction, including the avoidance of the degradation and depletion of natural resources while preserving the long-term environmental quality. There is also a clear shift in industrial establishments regarding production and consumption patterns and increased competition in the market. With the increase in consumers’ awareness of environmental dimensions, companies tend to apply environmental regulations in their various functions and activities, especially for those operating in more polluting sectors. Companies usually use the environmental management system framework, based on ISO 14,001 standard. Through this standard, companies can achieve various returns, improve their economic and environmental performance, and guarantee their competitive products, contributing to their continuity and durability [3
Social sustainability is related to the quality of life in all societal segments. It represents the overall care and cooperation enacted by companies and individuals for the interest of society. Social sustainability requires that all members of society accept the differences and consider them as a centre of strength and superiority, which provides growth and well-being for all [4
However, to simultaneously enhance sustainability dimensions, closed-loops have been recognised as possible drivers because closing supply chains accelerate a change from a linear to circular economy [5
] and towards sustainability. Thus, companies have been interested in developing new management concepts, including the closed-loop supply chain, with different perspectives [6
]. Recently, closed-loop supply chain management (CLSCM) has acquired a substantial and noticeable consideration, and unprecedented consideration in the industry and academic community [7
]. Supply chain management (SCM) is described using different stages, namely, designing, controlling and operating systems to create the maximum value over the lifespan of products and recovering the value dynamically with different sizes and types of returns over time [9
]. In addition, closed-loop supply chain management prepares a systems for product recycling and reuse in manufacturing products [10
]. The closed-loop supply chain system also considers the entire product life cycle, e.g., purchasing and storing the raw materials, producing the final products, getting the market, and finding end-users. The entire life cycle strongly affects the attainability of the desired corporate objectives. However, it is essential to mention that the closed-loop supply chain lies in two different flow directions. These are the forward logistics flow and the reverse supply chain flow of materials, products, and information [11
Furthermore, current studies mention environmental rules and regulations as a significant motivator for industrial businesses to establish CLSC. Despite this clear understanding of environmental regulations, few studies have been conducted on the methodological elements of incorporating environmental management into CLSC management. Like any CLSC design, environmental strategy results from a series of feedback loops, including the manufacturing business, external stakeholders, and competitive and organisational forces. As a result, there is an obvious need to emphasise the importance of environmental management [12
The idea that CLSCs can help industrial businesses is based on two principles. First, CLSCs add value during times of increased competition by cutting costs or boosting revenue. Second, to encourage better environmental stewardship, the CLSC addresses environmental concerns raised by a growing number of various stakeholder groups such as customers, consumers and the general public. However, as previously indicated, the link between EMS and CLSCs still represents a challenge. To improve performance processes, companies focus their attention on developing the good management of closed-loop supply chains, including raising awareness about information systems and modern technology increasing CLSC processes’ implementation. Thus, this paper discusses the impact of closed-loop supply chains (Environmental Legislation, Customer awareness and Economic motivations) on sustainable development by examining the following hypothesis, which is divided into three sub-hypotheses:
There is a significant impact of closed loop-supply chain on sustainability.
There is a significant impact of environmental legislation on sustainability.
There is a significant impact of customer awareness on sustainability.
There is a significant impact of economic motivations on sustainability.
This paper is structured in six sections, described as follows: Section 1
provides the introduction and includes background information on the impact of the closed-loop supply chain on sustainability. Section 2
introduces a literature review that discusses and investigates the relationship between the closed-loop supply chain and sustainability. Section 3
illustrates the research methodology (quantitative research-based) and data-collection technique, conducted using a questionnaire. Section 4
introduces data analysis and findings. Section 5
includes a discussion, and Section 6
represents the conclusion, including limitations and recommendations for further research.
3. Research Methodology
Our research was based on quantitative data, using a deductive approach. We collected the primary data from 230 employees who worked in the field of the supply chain through the questionnaire. The questionnaire was disseminated to 290 employees who worked in the supply chain field, 256 were answered, and 26 were not valid for analysis. Thus, we obtained 230 questionnaires for further research. The response rate was 79.3%. The framework of the paper is illustrated in Figure 1
where the independent variable considered in this research is the closed-loop supply chain, which includes four dimensions, namely; customer awareness [20
], environmental legislations [21
] and economic motivations [22
], and the dependent variable considered is sustainability [30
shows the research variables and their measurements according to the conducted questionnaire.
As previously mentioned, this research adopts the quantitative approach. The reliance on quantitative data, quantitative analysis, and research in the form of such secondary data is one of the main difficulties of this type of analysis [31
]. Sometimes, the complete data set required to explain the relationships between research variables and validate the results is not available. Thus, precision is required to identify the data from the earliest research stage [32
]. The data-collection process and analysis derived from the theoretical framework should be relevant for observations and answers to the research’s issue. For testing, statistical approaches and techniques have been used to assign the hypotheses’ results. In addition, they will offer insights into how much of the variance of independent variables can be explained by the independent variables and what are correlative relationships, if any, is required to be taken [33
To study the relationship between the two dimensions of the closed-loop supply chain and sustainability, correlation and structural equation (SEM) models were used. This technique consists of multiple regression analyses and factor analysis and is used to analyse the structural relationship between the underlying structures and the measured variables [34
This Section identifies how the research hypotheses were achieved. The first sub-hypothesis of the study is concerned with the significant relationship between Environmental Legislation and Sustainability. The second sub-hypothesis is concerned with the vital connection between Environmental Legislation and Sustainability. The third sub-hypothesis is concerned with the significant relationship between Economic Motivation and Sustainability.
To investigate the first sub-hypothesis, “H1a: There is a significant impact of environmental legislation on sustainability”, SEM analyses were applied. Environmental legislation has a significant positive effect on sustainability, as the corresponding p-value is less than 0.05 and an estimate greater than zero. Considering the second sub-hypothesis, “H1b: There is a significant impact of customer awareness on sustainability”, SEM analyses were applied. There is a significant positive effect of customer awareness on sustainability, as the corresponding p-value is less than 0.05 and an estimate of greater than zero. Considering the third sub-hypothesis, “H1c: There is a significant impact of economic motivations on sustainability”, SEM analyses were applied. Perceived Usefulness has a significant positive effect on efficiency, as the corresponding p-value is less than 0.05 and an estimate greater than zero.
The data was analysed and examined empirically to assess the research hypotheses. When testing the research hypothesis for the relationship between the closed-loop supply chain (customer awareness, environmental legislation, and economic motivations) and sustainability, the findings showed support for the first sub-hypothesis, which states, “There is a significant impact of environmental legislation on sustainability”. In contrast, the results do not support the second sub-hypothesis, which states, “There is a significant impact of customer awareness on sustainability.” Finally, the results supported the third sub-hypothesis, which states that “There is a significant impact of economic motivations on sustainability”.
Therefore, the previous studies [26
] supported the study’s first hypothesis, which supports a significant positive impact of the two variables (environmental legislation and sustainability). However, the study was unable to provide any support for the second sub-hypothesis that deals with a positive relationship between the two variables (customer awareness and sustainability), as previous studies were able to [24
]. The study conducted research into a relationship not covered by any previous studies. Therefore, the third hypothesis states a positive impact and statistical significance influence of economic motives on sustainability. The study was able to support this hypothesis. In Table 11
, the research hypotheses are presented, and the final results of the analysis are shown.
This research intended to thoroughly discuss the relationship between closed-loop supply chain (Environmental Legislation, Customer awareness and Economic motivations) and sustainability with its three dimensions (Economic, Social and Environmental), introducing the above relationship in the context of developing countries. The data were collected from 230 employees who worked in the field of the supply chain in Egypt. Based on data analyses and results outcomes, the following recommendations are proposed: the first recommendation is to create a streamlined structure for closed-loop supply chain management that includes all departments. The second is related to the organisation, which should also seek to build a strategy concerned with strengthening the relationship between consumers and suppliers as a patron that helps in enhancing competitiveness and improving customer satisfaction skills. The goal is to develop efficiency and control of the manufacturing and distribution stages via participation in practices, planning, technology, and returns. In addition, the organisations should build a closed-loop supply chain management environment based on an open system. Such an open system leads to timely communication, providing information about the product, seeking and answering customer inquiries, and efficiently providing post-sale services to help the customer meet requirements for a continuous performance evaluation. The companies adopt the strategic or tactical approach to the supply chain tool on establishing long-term connections and relationships with suppliers, active communication and partnership with suppliers because efficiency in closed-loop supply chain management is a key to the organisation’s long-term success. The closed-loop supply chain-management practices provide continuous and sustained improvement. Companies must see closed-loop supply chain practices as sources of motivation that encourage them to develop their relationships with their partners in the supply chain. Moreover, companies should pay more attention to closed-loop supply chain management as they play a fundamental role in improving company performance by improving sustainable development. One of the most critical roles that companies must play is to conduct systematic studies whose results consist of the strengths and weaknesses of the closed-loop supply chain.
The added value of this paper lies in several aspects. The first is related to the research, as this study developed a new model, an integrated closed-loop supply chain approach, adopted in Egypt, a developing Middle East country, lacking a closed-loop supply chain approach in the petrochemical industry. Therefore, a new framework was developed, which could be employed in other countries and modified for various industries or sectors.
Furthermore, our research provides a clear understanding for decision makers regarding the factors influencing the closed-loop supply chain in the petrochemical sector’s acceleration towards sustainability. However, there are policy implications in Europe and other developed countries regarding closed loops initiatives, where companies can receive incentives for improving sustainability performances. Studies such as this can enhance policy decision making in developing countries, by adopting good practices from front-running countries.
However, our paper has some limitations. The first is related to the geographical and sectoral coverage as the research was conducted in Egypt within one sector of the petrochemical industry. The second limitation is the sample, which in our case was 230. The third limitation can be linked to the number of variables considered in our study. To overcome the mentioned limitations, further research is needed, especially considering closed-loop activities in other sectors and regions, broadening geographical coverage and the sample. Furthermore, additional comparative studies between the regions within the same industry bring even more in-depth views of challenges, gaps, and solutions. Additionally, further research is needed, including even more variables that affect those mentioned in our study.