Circular Human Resource Management and Corporate Sustainability: The Conditional Role of Green Thinking and Environmental Management Investment

Despite growing interest in circular economy practices, limited empirical research explains how circular-oriented HR systems translate into measurable sustainability outcomes, particularly within manufacturing SMEs operating under resource constraints. This study investigates whether and under what conditions Circular Human Resource Management (CHRM) contributes to corporate sustainability by examining the mediating role of green thinking and the moderating role of environmental management investment (EMI). Drawing on the Natural Resource-Based View and Institutional Theory, the study addresses the gap between symbolic adoption of circular HR practices and their substantive sustainability impact. Data were collected from 616 senior and middle managers in environmentally exposed manufacturing SMEs in Turkey and analyzed using confirmatory factor analysis and moderated mediation techniques. The findings indicate that CHRM is positively associated with corporate sustainability, both directly and indirectly through green thinking, although the strength of these effects depends on the level of environmental investment. Specifically, sustainability gains are significantly stronger in firms that complement cognitive capabilities with tangible environmental infrastructure. These results suggest that circular HR practices alone are insufficient without supportive organizational investment. The study contributes by clarifying the conditional mechanisms through which employee-centered circular capabilities generate sustainability value and by delineating boundary conditions in SME contexts.