Impact of Green Skills Development and Circular Economy Training on Circular Economy Performance: The Role of Employee Proactive Behavior

The textile industry of Pakistan plays a vital role in the national economy; however, it faces increasing pressure to adopt sustainable and circular practices. The circular economy (CE) approach minimizes waste and enhances resource efficiency. However, prior studies have focused on technical and legislative elements of CE adoption, while eco-capability remains understudied in developing economies. This study investigates the role of green skills development (GSD), employee training on CE (ETCE), and employee proactive behavior (EPB) in enhancing circular economy performance (CEP) in Pakistan’s textile sector, supported by the Resource-Based View theory. Using a quantitative, cross-sectional survey design, primary data were collected from 215 middle-to-top-level employees working in textile manufacturing organizations across Pakistan through a structured five-point Likert scale questionnaire. Measurement and structural models were examined using PLS-SEM to assess reliability, and validity, and model relationships. Results indicate that GSD (β = 0.431, t = 5.846) and ETCE (β = 0.357, t = 4.728) significantly enhance CEP, emphasizing the importance of technical skills and structural training. EPB, however, showed no significant effect (β = −0.008, t = 0.080), indicating that individual initiative alone is insufficient. The finding suggested that formal skill development and systemic CE training are critical for improving sustainable performance and advancing UN SDGs 8 and 12 in Pakistan’s textile industry.