Extraordinary supply chain disruptions and the circular economy transition in the construction industry : An opportunity within crisis?

Abstract

With increasingly frequent supply chain disruptions threatening business continuity, localized material reuse and circulation emerge as resilience strategies in companies. The extraordinary supply chain disruptions initiated by the COVID-19 pandemic therefore presented an insufficiently understood but exceptional opportunity for Circular Economy (CE) transition in businesses. From the theoretical perspective of the institutional pressures shaping corporate behavior, this qualitative study explores the CE adoption in pre-pandemic sourcing practices at 20 Finnish construction companies and the new, CE-relevant practices resulting from COVID-19-initiated supply chain disruptions. The study discovers that while diverse sourcing practices both supporting and hindering CE adoption resulted from the extraordinary supply chain disruptions, a fundamental CE transition was suppressed by the lack of institutional enablement. While experienced regulations and customer priorities in particular were identified as preventing CE adoption, the construction companies expected both regulations and customer priorities to contrarily promote CE adoption in the future. An intriguing contradiction is therefore discovered between anticipated institutional pressures driving CE adoption, and experienced institutional pressures hindering it. To harness the CE transition opportunity embedded in future disruptions, institutional support for CE adoption in construction companies is needed. Accordingly, the study recommends regulatory development in support of construction material reuse, widespread public communication and education to overcome customer aversion towards CE solutions in construction, and support for construction companies in collaborating and establishing CE ecosystems.