Environmental management practices for the circular economy development in Russia and their impact on the financial performance of companies

The article explores the impact of environmental management practices, which support regenerative thinking in Russian companies, on financial performance determined by the ability of businesses to generate an income stream. The study relies on the theory of circular economy and environmental management and applies the methods of linear and logistic regression analysis. The empirical basis includes the results of a survey of Russian companies conducted by the World Bank in 2019. The research findings show that the depth of implementation of environmental management practices depends on the presence of a formalized strategy and top management experience, as well as on the introduction of process innovation. We find that the practices under consideration such as the development of a vision and an environmental management strategy, targeting and monitoring, systematic management of energy resources and green innovation significantly contribute to the additional revenue stream of Russian companies. In contrast to previous works, the current study reveals that the system-based implementation of certain environmental management practices is a precursor to the introduction of a circular economy, which creates a holistic view of resource flows and is designed to enhance the performance of both manufacturing and service companies. In the paper, we also analyze the two-way interaction of the management practices and financial performance. Managers and investors can use the research results to examine the main drivers of revenue growth related to environmental management initiatives characteristic of the circular economy.