Integrated Industry 4.0, Circular Economy, and Low‐Carbon Management Framework: Implications for Sustainability Performance in the Manufacturing Sector

Abstract

ABSTRACT This study examines the integrated impact of low‐carbon management practices (LCMPs), Industry 4.0 (I4.0), and circular economy practices (CEPs) on the triple bottom line of manufacturing firms. A conceptual framework incorporating both direct and indirect relationships is developed and theoretically grounded in the resource‐based view (RBV) and dynamic capabilities theory (DCT). Data were collected using a structured online survey administered to senior managers in production, procurement, operations, logistics, and supply chain functions, resulting in 286 valid responses. The hypothesized relationships were empirically tested using Partial Least Squares Structural Equation Modeling (PLS‐SEM). The results indicate that I4.0 technologies have a strong and significant positive effect on LCMPs, which subsequently enhance economic and social performance. CEPs are found to directly and positively influence environmental, economic, and social performance. However, the direct relationship between I4.0 and CEPs is not statistically significant, and CEPs do not mediate the relationship between I4.0 and sustainability outcomes. Further the findings highlight LCMPs as a critical mechanism through which digital transformation translates into sustainability performance, while revealing limited integration between I4.0 and circular economy initiatives. This study contributes theoretically to sustainability literature and provides practical guidance for managers seeking to align digital transformation with low‐carbon and circular strategies.