Enabling Green Innovation in the Circular Economy: A Systematic Thematic Review of Digitalization and Stakeholder Engagement

The shift toward a circular economy (CE) holds a central position in solving, globally, the long-standing environmental degradation and resource scarcity. Innovative sustainable processes and products lie at the core of such a shift, but they often face challenges associated with technological, organizational, financial, and regulatory paradigms. To date, two leading facilitators have been identified: sophisticated digital technologies, such as Artificial Intelligence, the Internet of Things, and Big Data, together with the collaborative creation of value among diverse stakeholders. Although the implications of each of these enablers on sustainability are known to some extent, little is understood about how their interrelatedness can counteract implementation barriers and drive innovation. The systematic thematic literature review examines how organizations utilize digital technologies and stakeholder engagement to facilitate green innovation in Circular Economy (CE) systems. Based on Stakeholder Theory, the Technology-Organization-Environment (TOE) framework, and the Resource-Based View (RBV), this review examines how organizations leverage digital technologies and stakeholder engagement to foster green innovation within circular economy systems. Following the PRISMA 2020 guidelines, a structured search was conducted in Scopus and Web of Science, covering peer-reviewed journal articles published in English between 2013 and 2024. Using predefined inclusion and exclusion criteria, 84 studies were retained for analysis from an initial pool of 850 records. The review integrates findings from five thematic areas: collaborative innovation among stakeholders, the use of digital technology to advance sustainability, challenges associated with adopting circular-economy values, linkages between technology and stakeholders, and the consequences of innovation. The findings suggest that collaboration between diverse stakeholders, combined with integration with digital technologies, provides a synergistic approach to maximizing innovation outcomes, overcoming implementation challenges, and diffusing circular practice. Skillfully crafted initiatives augment organizational capacities, foster collaborative actions, and advance sustainability initiatives. Despite providing a comprehensive synthesis of existing research, this review is limited by its reliance on secondary data. A qualitative quality appraisal was conducted to support the interpretation of findings. This review was not registered and received no external funding. Future research should conduct empirical analyses of these relationships and develop inclusive frameworks to guide initiatives emerging from collaborative and digital platforms across a wide range of sectors within the circular economy.