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Green Innovation and Low‐Carbon Operations: The Role of Net‐Zero Capabilities in Transition Towards Carbon Neutrality in Circular Supply Chains

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  • Usama Awan
  • Saqib Shamim
  • Lea Hannola

Abstract

Reducing carbon emissions and achieving net‐zero goals remain critical global supply chain priorities, and the transition to a circular supply chain is pivotal in reducing carbon emissions. This study empirically examines how low‐carbon operations management practices impact circular supply chain management. We collected and analysed data from 183 respondents. Results from partial least squares structural equation modelling show that net‐zero capabilities have a direct positive moderating effect on green product innovation and enhance end‐of‐product‐life management and that net‐zero capability can play a major role as a boundary‐spanning function in accelerating green product innovation while balancing carbon emissions in the circular supply chain. Net‐zero capability refers to a firm's ability to reduce its greenhouse gas emissions and align its operations with decarbonisation efforts. For practitioners, our results highlight that firms should focus on more than just green innovation; they should strengthen their net‐zero capabilities to support sustainable supply chain practices.

Suggested Citation

  • Usama Awan & Saqib Shamim & Lea Hannola, 2026. "Green Innovation and Low‐Carbon Operations: The Role of Net‐Zero Capabilities in Transition Towards Carbon Neutrality in Circular Supply Chains," Business Strategy and the Environment, Wiley Blackwell, vol. 35(2), pages 2777-2791, February.
    • Handle: RePEc:bla:bstrat:v:35:y:2026:i:2:p:2777-2791
    DOI: 10.1002/bse.70266
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