Driving circular economy progress through eco-innovations and greener enablers: a potent mechanism for environmental management and sustainability

Purpose Eco-innovation management efforts focused on the circular economy (CE) have become a considerable challenge for organizations, as they must diminish waste with maximum resource reprocessing. The present study unveils the contribution of eco-innovation, green empowerment (GE), and green passion (GP) in shaping a CE. Design/methodology/approach The study applied a deductive approach, and the researchers collected 298 cases from automobile manufacturing companies, both local and multinational firms, operating in Pakistan. Findings The path analysis unveils a positive effect of product eco-innovation (PEI) on GP but a non-statistically significant effect on GE and CE. Process eco-innovation (PREI) affects GE and CE positively, but negatively affects GP. The management eco-innovation (MEI) positively predicts GE, CE and GP. Moreover, GE has a positive effect on CE, while GP has a negative impact on CE. With regard to mediating effects, GE mediates the connection between MEI and CE but does not mediate between PEI, PREI and CE. Finally, GP mediates the connection between PEI, PREI, MEI, and CE. Practical implications The study’s outcomes assist policymakers and environmental experts in developing CE in industries by constructing an effective eco-innovation milieu with overflowing innovations. Moreover, the study advances employees’ empowerment and passion for accomplishing green sustainability and performance, where they also cultivate a circular environment. Finally, the study’s empirical findings enrich the domain literature’s depth. Originality/value The study offers an extensive and integrated framework that combines eco-innovation, GE, GP, and CE in a single framework with direct and indirect paths in Pakistani automobile manufacturing companies.