The environmental consequences of commercial operations have recently garnered increasing awareness. Academics, organizations, customers, and other stakeholders have given this issue considerable attention [1
]. Nowadays, stakeholders require firms to take accountability for negative repercussions caused by their commercial activities. As a result, firms worldwide are continuously seeking ways to integrate environmental factors into their strategic planning [3
]. The impact of logistics on emissions and energy consumption has been highlighted in previous studies [4
]. The growing focus on sustainable practices has brought attention to the importance of Green Logistics (GL), which emphasizes the environmental impact of logistics activities [6
]. GL aims to manage logistics operations to balance economic, environmental, and social concerns [7
]. Therefore, GL plays a crucial role in promoting awareness of environmental issues and encouraging stakeholders to consider the impact of their actions.
Bangladeshi firms, mainly small and medium enterprises (SMEs), had been reluctant to adopt green and sustainability initiatives [8
]. Sustainability (the proper combination of economic, environmental, and social factors) is the most important issue faced by small and medium-sized enterprises (SMEs) currently, since SMEs must be economy-focused owing to unpredictability on both the demand and supply sides, as well as to the existence of countless rivals [10
]. Most ecological and sustainability initiatives are costly, making it more difficult for small and medium-sized enterprises (SMEs) to adhere to intended environmental and social goals following local rules and global demands, while staying competitive. Since SMEs do not operate within robust regulatory frameworks, most SMEs are not eager to improve their sustainability performances [8
]. However, the scenario has recently changed as many manufacturing SMEs implement environmental and sustainable projects while abiding by international regulations [11
]. Moreover, international organizations are funding Bangladeshi SMEs to incorporate green and environmental initiatives to attain sustainability goals and ensure workplace safety [12
]. Consequently, it is essential to investigate the crucial drivers of the sustainability performance of Bangladeshi manufacturing SMEs.
Extant studies on Green Logistics Management (GLM) have mainly emphasized GLM’s effect on ecological sustainability [13
]. Nevertheless, a dearth of literature exists on how the GLM affects a firm’s sustainability performance (SP) through circular economy practices (CEP). Circular economy (CE) is a relatively new paradigm that maximizes the economic, environmental and social components of enterprises to convert the entire society into one that is more sustainable via the participation of all stakeholders involved. The circular economy (CE) concept is built on “the regenerative cycle, which facilitates the reuse of used products, parts, and materials efficiently, thereby increasing profitability and reducing environmental distraction” [14
]. Several studies have documented the challenges and opportunities of adopting CEP in SMEs. Researchers have established CEP as a crucial predictor of SMEs’ sustainability performance [9
]. Literature has established that SMEs’ CEP ameliorates their sustainable-oriented innovation and subsequent SP [15
]. Recent research indicates that GLM can be regarded as an organizational component supporting the CEP [4
]. Extant literature [18
] contended that the GLM is a necessary precondition and fundamental procedure for establishing a CE. Another stream of literature demonstrates the pivotal role of the GLM in ameliorating a firm’s sustainability performance. One group of scholars has corroborated the linkage between the GLM and the different dimensions of sustainability performance [13
], while another group has reported the linkage between the GLM and a firm’s overall SP [5
]. Conversely, another area of research contends that the relationship between GLM and SP is not always direct [21
], creating contradictory findings in the literature. Some studies have unveiled a significant association between GLM and SP [22
], while others have reported an insignificant association [21
]. This inconclusive evidence compels us to study the function of CEP in the interaction between GLM and SP. As the GLM is a prerequisite for implementing the CEP, which in turn increases the sustainability performance of enterprises, we hypothesize that CEP successfully mediates the influence of GLM on SP. In addition, we posit that supply chain traceability (SCT) positively impacts the CEP of firms and acts as a moderator in the GLM-CEP association. Recent studies suggest that the exploitation of the SCT can be an essential catalyst for addressing supply chain disruptions and promoting green initiatives in the logistics system to help improve CE practices [21
This research draws on the NRBV of firms to conceptualize the GLM as a critical driver of organizations’ CEP and SP. The NRBV is strongly supported by the research on GLM and CE, suggesting that organizations seek to improve and reconcile their interaction with natural settings [25
]. The NRBV perspective demonstrates how green goods may offer organizations strategic abilities and favorable ecological impacts [2
]. This study also employs the resource dependence theory (RDT) [19
] as a theoretical lens, arguing that organizational production depends on acquiring and preserving critical resources. This results in an organization’s dependency on its surrounding environment, leading to interdependent organizational behavior and uncertainties. Extant studies have drawn upon the RDT to define the SCT, as the SCT requires multiple stakeholders’ collaboration and strong relationships [21
]. This study uses the NRBV to understand how the GLM drives the CEP and SP of organizations and the RDT to predict how the SCT will lead to an improved CEP. Thus, this research addresses the following questions: RQ1: Does green logistics management affect manufacturing SMEs’ sustainability performance? RQ2: What roles do circular economy practices and supply chain traceability play in improving sustainability performance of SMEs?
We aim to assess the interconnection among GLM, SCT, CEP and SP, and make several crucial contributions accordingly. First, this study increases the prevalence of NRBV and RDT by establishing the significance of these theories in studying green logistics in an emerging economy context. Second, our study advances the GL, CE, and SP literature by assessing the pivotal role of the GLM in enhancing the CEP and SP of firms. Third, no former study has established the mediating function of CEP in the GLM-SP linkage. This scholarship supplements the extant body of knowledge by assessing CEP’s role in the interplay between the GLM and SP of firms. Finally, our research expands the understanding of the SCT’s function in attaining the CE and sustainability objectives, which opens the door for further research.
The remaining sections of the paper are structured in the following manner: in the second section, we review relevant literature on GLM, CEP, SP and SCT. Section 3
outlines the research methodology of this paper. Section 4
highlights the findings, whereas Section 5
delves into them. The study ends with evaluating the theoretical and practical effects of the GLM on the sustainability of SMEs through enhanced CEP, in addition to considering the study’s shortcomings and possible future directions.
5. Discussion and Conclusions
Improving corporate sustainability practices and performance is critical for achieving national Goals. Several businesses implement eco-friendly and sustainable approaches that promote superior firm-level SP. Several companies, for instance, have incorporated green supply chain management (GSCM) strategies into their business procedures to ensure sustainability. A vital component of a sustainable supply chain is GLM, which may play a significant role in driving corporate SP. Consequently, our paper aimed to assess the function of green logistics in propelling SMEs’ SP via CEP.
First, we observed that GLM promotes organizational sustainability. This finding is similar to the outcome of earlier studies [1
], which reported a strong association between GL adoption and SP. Green logistics functions, including transportation, warehousing, management, and waste disposal, contribute to an organization’s environment and overall SP [5
]. In addition, Choi and Zhang [93
] argued that the GLM substantially boosts the SP of Chinese logistics companies. Khan et al. [94
] revealed that the GLM promotes social sustainability in Asian nations by reducing emissions, and waste materials and improving air quality, ultimately promoting better societal health. The NRBV also postulates that GSCM practices would promote superior SP. However, [21
] reported a positive effect of the GL on environmental sustainability but a negative effect on business performance.
Second, we noticed that the GLM strongly influences organizational CEP. Firms adopting GL management are more likely to integrate circular economy practices in their business than those that have not. Green logistics spurs the repeated usage of product packaging materials, leftover materials, and recycling waste and garbage reprocessing, thus implementing circular economy practices. Our finding aligns with those of de Souza et al. [48
] and Kazancoglu et al. [95
], which also argued that adopting green logistics management facilitates firms to enhance their overall CEP. In logistics, a more circular and environmentally friendly production process is associated with implementing GL, which strives to reduce carbon emissions, fossil fuel use, and material returns once it attains the end of its proper life cycle [48
Next, our findings revealed that the CEP had a crucial impact on the SP of firms. Several studies corroborated the strong effect of CEP on the SP of businesses [64
]. The negative impact of business processes on the environment can be mitigated by implementing CEP [96
]. CE emerged as a contemporary ideology that optimizes enterprises’ economic, environmental, and social considerations to advance society toward greater sustainability through the active participation of all stakeholders [17
]. Furthermore, we observed a mediating role of the CEP on the interplay between the GL and SP and that the GLM influences the circular economy practices of firms [48
], subsequently affecting their organizational sustainability [64
In addition, we incorporated the SCT as a moderator in our model to investigate whether it increases or decreases the effect of GL on CEP. The findings revealed that supply chain traceability, as a critical resource of the firm, strongly drives circular economy practices. This finding indicates that the tracing and monitoring information regarding a company’s supply chain operations aid in achieving circular economy objectives. This observation is akin to prior studies [97
], which asserted that a firm’s SCT facilitates its CE activities. Kouhizadeh et al. [99
] argued that technological integrations such as blockchain technology improves supply chain traceability, which is crucial for implementing circular economy practices in firms [100
]. The RDT reveals that enterprises are hardly self-dependent, requiring resources and stakeholder connections to create a competitive advantage. As SCT relies on the resources and connections of various stakeholders to improve sustainable performance, our findings lend credence to RDT. However, evidence of the SCT’s moderating effect on the GLM-CEP link could not be found.
5.1. Theoretical and Practical Implications
This work has many theoretical implications for the existing GLM and sustainability literature. First, our paper supplements the conceptual framework of the NRBV and RDT, hence enriching the sparse literature on developing countries’ SMEs. Our findings extend the scope of the NRBV and RDT to understand the factors driving CEP and SP in a highly competitive business environment. Second, our research provides factual analysis to reinforce the assertion that GLM implementation is crucial for enhancing CEP and SP [4
]. Following the NRBV hypothesis, our results demonstrate that GLM favors the CEP and SP. This result is similar to findings from studies undertaken in other locations worldwide. This illustrates that the NRBV paradigm is not region-specific and can be deployed everywhere to meet CEP and SP objectives. As a result, our scholarship broadens the scope of enterprises’ NRBV.
Third, our study adds to the corpus of knowledge by revealing a direct link between CEP and SP. It suggests that a more considerable degree of circular economy activities significantly benefit the SP of Bangladeshi SMEs. Given that most studies that have found a direct association between CEP and SP have been undertaken in developed nations, this observation is an essential supplement to the current research in emerging economies [17
]. The NRBV paradigm contributes to advancing the discourse on the role of green initiatives, particularly CEPs, in the SP of organizations.
Fourth, the current study contributes to the literature by examining the mediating effect of CEP on the interaction between the GLM and SP. Green logistics and sustainability studies have mostly emphasized the CEP as an outcome of the GLM [48
] and a stimulus of firms’ SP [17
], overlooking its function as a mediator. Therefore, we focus on the mediating factor of CEP between GLM and SP. Our empirical evidence suggests that CEP positively mediates the connection between the GLM and SP and implies that energy and resource usage reduction, recurring use of materials, and reprocessing of recyclable materials enhance the implementation of green transportation and distribution, green warehousing, waste management, and sustainable logistics information systems in to enhance firms’ SP substantially. Given that no earlier research has explored the crucial mediating function of the CEP in the GLM-SP relationship, our findings provide an essential contribution to the field.
Fifthly, our research improves our understanding of the significance of SCTs in accomplishing CE and sustainability objectives. The findings give evidence for the direct role of SCT in boosting CEP in Bangladeshi SMEs. The study indicates that identifying and managing information on a firm’s warehouse activities, transport, and distribution challenges in logistics has a direct impact on the company’s CEP. This research broadens the application of the RDT, and the findings pave the way for future studies to explore the relationship between SCT and GLM in other industries and domains.
In conclusion, the findings of this research have broad consequences for administrators, regulators and policymakers. This research recommends that a company integrate multiple GSCM initiatives with on-the-ground processes while adhering to the CEP to increase efficiency and achieve SP. The CE is a low-cost method several businesses utilize to turn linear economic systems into circular ones enabling long-term corporate sustainability. CE business models may assist in overcoming resource shortage issues while increasing the value of the enterprise. Furthermore, the CEP will boost a company’s core competencies in achieving corporate sustainability. Stakeholders are now urged to consider GLM, while building a sustainability action plan and reviewing the results delivered by their CEP. Considering SMEs are vital contributors to the area’s rising economies, the study will substantially impact the South Asian region. In conclusion, this study’s findings are pivotal since they offer a profound comprehension of the actual execution of the GL and CEP to obtain better SP.
5.2. Limitations and Future Research Avenues
Despite making significant contributions, the study’s findings may be subject to limitations that could guide future studies. This study collected data from small and medium-sized enterprises in Bangladesh, which may limit the universal applicability of its conclusions. Future research may consider collecting data from other regions and industries to verify our observations’ reliability. Moreover, although the study samples appropriately represent the intended population, the sample size may influence the findings. Consequently, future studies may consider employing additional strategies to increase respondent participation. Moreover, we adopted the PLS-SEM approach for data analysis and model validation. In the future, covariance-based structural equation modeling (CB-SEM) could be employed to confirm the results in other contexts. Moreover, we explored the moderating effect of SCT on the link between GLM and CEP. However, future research may also expand its moderating effect on other relationships. Finally, we adopted the SP as a single construct from the extant literature. However, a growing body of literature recognizes the SP as a multi-dimensional construct incorporating economic, environmental and social performance. Thus, future researchers may employ a multi-dimensional SP construct to measure how GL and CEP affect firms’ SP.