From bane to boon: how Global Fortune 500 companies disclose about using Servitisation and Industry 4.0 as circular economy strategy

This study investigates the interplay between Circular Economy (CE) practices, Servitisation, and Industry 4.0 (I4.0) within the context of global Fortune 500 companies' disclosure practices examining how the sample reports on the use of Servitisation and I4.0 technologies as CE strategy across three phases: resource reduction, product lifecycle extension, and material recovery. Using content analysis and quantitative methods over a five-year period (2018-2022). Findings indicate that while Servitisation and I4.0 positively influence early CE phases, I4.0's impact on recycling and recovery (CE-Phase 3) is limited when control variables are considered. This suggests challenges in fully integrating I4.0 with advanced CE activities. The study contributes to the theoretical frameworks of Resource-Based View (RBV) and Dynamic Capabilities Theory (DCT) by illustrating how firms leverage their internal resources and capabilities to enhance their CE-related disclosure practices through the adoption of Servitisation and I4.0 technologies. The findings suggest that companies must develop dynamic capabilities to adapt and integrate these technologies into their business models, particularly when transitioning to more advanced CE activities. The findings highlight the need for companies to develop dynamic capabilities to integrate I4.0 into advanced CE strategies to enhance transparency in their disclosure practices. Additionally, this study provides insights for regulatory bodies to refine CE disclosure guidelines and support businesses in overcoming implementation challenges. Future research should explore specific I4.0 technologies, the accountability challenges in CE transitions, and their impact on sustainability reporting frameworks.