Promoting Green Manufacturing in Apparel Companies from a Circular Economy Perspective

Abstract

Due to environmental degradation and resource scarcity, the concept of the Circular Economy (CE) has been promoted in many countries, such as China, Japan, Germany, and Sweden, as a way to resolve the conflict between industrial development and environmental protection. The apparel industry makes a significant contribution to many countries’ economies. However, with global consumption increasing, most apparel is disposed of in the early stage. Thus, creating a “circular” flow of apparel has significant implications. Manufacturing is an essential factor of many companies’ survival in an increasingly competitive market. Nowadays, “Green” Manufacturing is rapidly emerging as a method for companies to reduce their environmental impact. The Global Recycling Council has recommended that apparel companies employ sustainable manufacturing. It recommends that apparel companies should comply with high standards in both the manufacturing and recycling stages to reduce their environmental impacts. Thus, apparel companies promoting Green Manufacturing from a Circular Economy perspective has become urgent and vital.
The so-called Circular Economy—the concept of the “circulation” of materials by using energy more efficiently and maximising the utility of materials and energy —has recently gained momentum. The idea of mediating the inherent conflicts between economic growth and resource dearth gives the concept of the Circular Economy a strong environmental appeal. However, the specific methods for building Circular Economy capability (CECA) at the company level have still not been thoroughly explored. Furthermore, although there have been several studies of Green Manufacturing implementation (GRMA), research attention to apparel companies in this context remains limited. Thus, this study seeks to fill these notable gaps by empirically investigating the implementation of Green Manufacturing as an approach to build Circular Economy Capability at the company level in apparel companies.
This research aims to 1) investigate the implementation of Green Manufacturing as an approach to build apparel companies’ Circular Economy capability, 2) analyse the development and implementation of Green Manufacturing in the apparel companies, 3) evaluate the drivers, barriers and outcomes of Green Manufacturing, from both the theoretical perspective and the methodological perspective. First, the Nature-Resource-Based View (NRBV) theory is employed to create the conceptual model highlighting the links between the constructs from a theoretical perspective. Second, this research conducts a literature review to analyse the constructs and sub-constructs of the conceptual model. Third, the Q-sort Pilot Study is undertaken to initially assess the validity and reliability of the measurement items before grouping them into questionnaire survey. Fourth, this study collects 374 samples through a survey distributed among the managerial level employees working in the apparel companies. Last, the Structural Equation Modelling methodology is applied to test the validity and reliability of the measurement items further, to assess the factor analysis of the constructs, and to verify the 7 hypotheses that derive from the proposed conceptual model.
The results show that the Stakeholder Engagement in Environmental Implementation (SEEI) and the Environmental Orientation (ENOR) are two drivers of Green Manufacturing (GRMA), which positively affect apparel companies’ Green Manufacturing (GRMA) implementation. Both the Green Manufacturing (GRMA) implementation and building apparel companies’ Circular Economy capability (CECA) lead to a positive outcome, which positively affects apparel companies’ Organisational Performance (ORPE). Furthermore, this research verifies three mediation relationships: The Circular Economy capability (CECA) mediates the relationship between Green Manufacturing (GRMA) and Organisational Performance (ORPE); The Green Manufacturing (GRMA) mediates the relationship between Environmental Orientation (ENOR) and Circular Economy capability (CECA); The Environmental Orientation (ENOR) mediates the relationship between Stakeholder engagement for environment implementation (SEEI) and Green Manufacturing (GRMA).
The research contributes to both theory and practice. In terms of theory, the findings contribute to the development of further theoretical models of these concepts: Environmental Orientation, Organisational performance, Stakeholder Engagement in Environmental Implementation, Circular Economy and Green Manufacturing. This research makes a significant contribution to the ongoing research relating to the Green Manufacturing implementation by presenting an integrated conceptual model. It examines the direct relationships, mediation and moderation relationships between above constructs. Practically, the study will be highly useful for policymakers and apparel companies to understand the current barriers, drivers and outcomes of implementing Green Manufacturing and can help them to evaluate the strengths and weaknesses of their current Green Manufacturing and look for improvements. In particular, this research 1) help apparel companies to understand the current barriers; 2) highlight the importance – indeed, the necessity – for apparel companies to develop their own Circular Economy Capability so that they can fully realise the potential gains in performance which can result from applying Green Manufacturing; and 3) guide apparel companies through the stages of implementing green practices. Moreover, the study 4) supports Circular Economy implementation by policymakers and can be used as evidence for them to convince manufacturing companies that still have doubts about the outcomes of implementing Green Manufacturing or building Circular Economy capability at the company level.