Circling the Sustainable: A Systematic Review of Theories and the Heroic (or not) Leaders Steering to Corporate Sustainability, Circular Economy and Eco-innovation Transition

Understanding the leaders who guide SMEs transitioning towards corporate sustainability, circular economy, and eco-innovations is crucial for enhancing knowledge about the relationship between these leaders’ characteristics and the transition to new sustainable paradigms for SMEs. However, despite the interconnectedness of corporate sustainability, circular economy, and eco-innovations, existing literature on their drivers is fragmented, often focusing on internal and external factors without isolating the role of leaders. This study allows us to delimit the most appropriate theoretical framework to analyse the behaviour of SME leaders to face to sustainability challenge after carrying a systematic literature review of research about sustainability, circular economy and eco-innovation topics following the PRISMA method. Most studies on corporate sustainability emphasize the importance of leaders’ social and psychological characteristics, while research on the circular economy highlights cultural and cognitive traits, knowledge, skills, and risk attitudes; often excluding the role of leaders in driving circular economy and eco-innovation, particularly in SMEs. A systematic review of studies can provide a detailed portrait of leaders driving sustainability in SMEs and offer insights into the theoretical frameworks explaining their impact. This review of 45 studies analyzing different theories on the relationship between leader characteristics and the transition to a circular economy identifies which theories are most frequently used and why, which are underutilized, and which could be better integrated. Additionally, two leader archetypes are identified in this context.