04_apostol european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5529 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 38 evaluation of the livelihood assistance of a social protection agency in region-7 central visayas desiree jill apostol1 1 international university, philippines. e-mail: eslteacherdesiree@gmail.com received: 15/01/2021 accepted for publication: 06/11/2021 published: 12/11/2021 abstract this study aimed to evaluate the livelihood assistance given by the social protection agency to persons-with-workrelated disability (pwrds) or to those workers who have met work-related contingency. out of the 20 clients communicated by the researcher only 9 of them have responded with willingness to be interviewed. data collection was done through interview utilizing questionnaires. these questionnaires were designed into a google form and was sent to each respondents by link through their online messaging accounts. the study explored into the bottlenecks in each of the following stages in the acquisition and implementation of the livelihood of the pwrds: planning, attending livelihood training/seminar, purchasing, onset and lastly, maintenance of the livelihood. majority of the respondents expressed difficulties during the onset and maintenance of their livelihood. the challenge during the onset is the presence of customer debts, no space to display products, lack of knowledge to advertise, no customer at times and lack of supplies to sell. although majority of the clients have been able to maintain their livelihood, those who haven’t answered that their return to formal job employment and the recent pandemic brought about by covid-19 were factors for their livelihood to fail. keywords: livelihood assistance; persons-with-work-related disability; bottlenecks; challenges; onset and maintenance of livelihood 1. introduction in the philippines, a social protection agency is mandated to implement the employees compensation program by the virtue of presidential decree 626, as amended. it is through assisting employees who meet work-related contingencies such as sickness, accident, and death. the programs include the loss of income benefit, carer’s allowance, medical reimbursement, and rehabilitation programs. the kagabay program under the rehabilitation program is a special economic assistance program of the commission that aims to bring the persons-with-work-related disabilities (pwrds) back to the economic mainstream. the kagabay program is to provide equal access to livelihood opportunities and assist the pwrds in setting up their self-managed enterprise or home-based business. the livelihood assistance amounts to thirty thousand pesos (php30,000.00) in total. to breakdown, twenty thousand pesos (php20,000.00) is for their starter kit and the ten thousand pesos (php10,000.00) is for their complimentary kit if their business has been maintained after six months to one year. the process of granting livelihood assistance to the identified clients would include social preparation session that is being done on the first day the client will apply for the kagabay program. the pwrds are also given a one-day entrepreneurial development training seminar where basic business concepts are discussed. the clients will fill-up a business european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5529 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 39 plan form where they will stipulate the kind of business they plan to engage with, and the materials supplies they will purchase using the twenty thousand pesos grant. the assigned regional personnel will accompany the client in purchasing their livelihood starter kit. the researcher felt that there are some lacking process and requirement in the granting of the livelihood assistance of the agency. this study aims to evaluate the implementation of the livelihood assistance program in region 7 in fy 2017 to 2019. particularly, it sought to answer the following sub-questions: 1. what were the challenges/issues/problems encountered by the clients during the following stages of their livelihood? 1.1. planning the type of business 1.2. training-seminar proper 1.3. purchasing of their livelihood starter kits 1.4. onset of their livelihood 1.5. maintaining their livelihood 2. methodology this is a qualitative type of research that would collect information on the factors that affect the effectiveness of the livelihood program, the cause for the success or failure in the sustenance of the persons-with work-related disabilities’ livelihood and the recommendation in the improvement of the livelihood program. interview in the form of questionnaires utilizing the google form platform on the internet will be given to the respondents which will allow them to give their free form of answers. also, several yes-no questions are present in the questionnaires. the researcher will gather qualifiable information to analyze the practice of the respondents. the researcher will seek information and data from randomly selected persons with work related disabilities who have benefitted from the twenty thousand pesos (php20, 000.00) worth of livelihood assistance starter kit. the researcher will inform the respondents regarding their participation in the study. a google form link will be sent through them through the electronic mail or any of the respondent available messaging applications on the internet. confidentiality to the respondents’ data and result of interview questionnaires will be highly emphasized in the letter. 2.1 data interpretation table 1. what was your motivation to engage in business? responses frequency average family 4 50% additional income 2 25% disability 1 12.5% success in life 1 12.5% total 8 100% source: author’s elaboration as shown in table 1, family reasons have the highest percentage at 50% while disability and success in life have the lowest percentage at 12.5% each. it has been noted that filipinos have close family ties (asian journal media centre), thus leading to the majority of the respondent’s mentioning family as their motivation to engage in entrepreneurship. the potential to make money or additional income is one of the reasons why many people get into entrepreneurship (larry alton, 2015). table 2. what type of business are you currently involved with? responses frequency average none 1 12.5% sari-sari store 3 37.5% sari-sari store with hog raising 1 12.5%% welding 2 25% piso tubig machine 1 12.5% total 8 100% source: author’s elaboration european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5529 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 40 as shown in table 2, 37.5% is having a sari-sari store as the highest while the lowest are the following: none (no business in existence), sari-sari store with hog raising, and peso tubig machine at 12.5% each. according to www.tycoon.ph, a sari-sari store can be a good source of income if managed properly. thus, making it the first choice of livelihood for filipinos. table 3. why did you choose this type of business? responses frequency average knowledge on how to run the business 1 12.5% easy to manage 2 25% saleable 3 37.5% welding shop 1 12.5% no competitor 1 12.5 total 8 100% source: author’s elaboration table 3 shows that 37.5% of the respondents chose their business because of its saleability and this is the highest percentage. the lowest percentage at 12.5% each are the following: no competitor; knowledge on how to run a business; and welding shop. table 4. have you encountered difficulty in choosing the business? responses frequency average yes 2 25% no 6 75% total 8 100% source: author’s elaboration as shown in table 4, the highest response is no at 75% while the lowest is no at 25%. table 5. have you attended ecc’s entrepreneurship livelihood training/seminar? responses frequency average yes 7 87.5% no 1 12.5% total 8 100% source: author’s elaboration as shown in table 5, the highest is yes at 87.5% while lowest is no at 12.5%. table 6. what was the most important lesson you have learned from the training/seminar? responses frequency average about business management 3 37.5% right ways of doing business and how to grow business 2 25% planning and loving work 1 12.5% entrepreneurship, budgeting and customer service 1 12.5% time management, marketing strategies and quality business procedures 1 12.5% total 8 100% source: author’s elaboration european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5529 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 41 as shown in table 6, business management has the highest percentage at 37.5% while the lowest at12.5% for the following: planning and loving work; entrepreneurship, budgeting, and customer service; and time management, marketing strategies, and quality business procedures. table 7. did this lesson help you in pursuing your livelihood? responses frequency average yes 8 100% no 0 0% total 8 100% source: author’s elaboration as shown in table 7, 100% of the respondents answered that the lesson helped them in pursuing their livelihood. table 8. how much have you received from ecc to purchase your livelihood starter kit? responses frequency average php20,000.00 6 75% php20,000.00 and php10,000.00 1 12.5% php30,000.00 1 12.5% total 8 100% source: author’s elaboration table 8 shows the amount of the starter kit provided by ecc to the respondents. highest percentage is at 75% which is php20, 000.00 while lowest at 12.5% which is php30, 000.00. table 9. did you create a list of the things you have to buy as your livelihood starter kit? responses frequency average yes 8 100% no 0 0% total 8 100% source: author’s elaboration as shown in table 9, 100% of the respondents answered yes that they have created a list of the things they have to purchase. table 10. have you followed the list completely or have done some revisions while purchasing? responses frequency average yes 7 87.5% no 1 12.5% total 8 100% source: author’s elaboration table 10 shows the highest response is yes at 87.5% while the lowest is no at 12.5%. table 11. did you have any difficulties while buying/purchasing your starter kit? responses frequency average yes 0 0% no 7 87.5% maybe 1 12.5 total 8 100% source: author’s elaboration table 11 shows that no has the highest percentage at 87.5% while maybe at 12.5% is the lowest. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5529 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 42 table 12. why? responses frequency average sari-sari store business is easy to purchase 1 12.5% me and my wife already know what we need to buy for the business we have chosen 1 12.5% the supply store is very near to us 1 12.5% i already have my list for my starter kit 3 37.5% ecc representative assisted me well. 1 12.5% doesn’t have a personal transportation 1 12.5% total 8 100% source: author’s elaboration as shown in table 12, 37.5% answered having a list for their starter kit is the highest while the rest of the answers have the lowest percentages at 12.5% each. table 13. do you think that php20, 000.00 worth of starter kit was enough? responses frequency average yes 4 50% no 2 25% maybe 2 25% total 8 100% source: author’s elaboration table 13 shows that 50% of the respondents answered that the prescribed amount was enough for their livelihood starter kit and is the highest percentage while the lowest is no and maybe, both having 25% weight. table 14. why? responses frequency average because rice and canned goods are expensive 1 12.5% purchased the basic consumables with the amount given 1 12.5% everything needed were purchased including refrigerator 1 12.5% 20,000.00 was enough for the welding kits 1 12.5% i was able to purchase all for welding 1 12.5% a lot of stocks 1 12.5% for the past year, 20,000.00php is enough but for the present it is not because of the higher price of goods and products 1 12.5% expensive water dispenser 1 12.5% total 8 100% source: author’s elaboration each of the respondents gave different opinions on why they think that 20,000.00 was enough or not enough for the livelihood starter kit as shown in table 14. there was no highest nor lowest percentage on this table. table 15. how did you feel when you first started your livelihood? responses frequency average happy 2 25% happy and excited 1 12.5% amazed 1 12.5% excited 1 12.5% just fine 1 12.5% european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5529 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 43 happy because i felt i still have worth in spite of my disability 1 12.5% happy and satisfied 1 12.5% total 8 100% source: author’s elaboration table 15 shows that the highest response is happy at 25% while the rest of the response are the lowest and shares the same percentage at 12.5% each. table 16. did you have any difficulty in display or marketing your products? responses frequency average yes 3 37.5% no 5 62.5% total 8 100% source: author’s elaboration table 17 shows that the highest is the no response at 62.5% while the lowest is yes at 37.5%. table 18. what was the most challenging part of selling your products? responses frequency average customer debt (utang) 2 25% competitors 1 12.5% no business stall to display products 2 25% lack of knowledge to advertise my business 1 12.5% no customer 1 12.5% no more water to sell 1 12.5% total 8 100% source: author’s elaboration on table 18, the highest responses are customer debt, and no business stall to display products at 12.5% each. the rest of the responses are the lowest and having 12.5% each. according to www.tycoon.ph, when your business is located in a community where familiar names and faces make up the majority of your market, the sari-sari store becomes victim to use and abuse. hence, the threat of long-term debt. table 19. were you able to gain any profit from selling the products from the starter kit given by ecc? responses frequency average yes 7 87.5% no 0 % maybe 1 12.5% total 8 100% source: author’s elaboration as shown in table 19, the highest is yes at 87.5% while the lowest is maybe at 12.5%. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5529 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 44 table 20. is your livelihood/business still existing? responses frequency average yes 6 75% no 2 25% total 8 100% source: author’s elaboration in table 20, 75% of the respondents still have their business in existence as the highest response while 25% does not exist is the lowest response. table 21. why do you think your livelihood is sustained? if no, what do you think happened that made the business a failure? responses frequency average product is affordable and no debt allowed 1 12.5% sari-sari store still existing and profit is being enjoyed 1 12.5% formal job employment 1 12.5% due to pandemic, people lost their job so we lost customers too. 1 12.5% good maintenance 1 12.5% when there are customers, i do their request right away 1 12.5% right business management 1 12.5% yes 1 12.5% total 8 100% source: author’s elaboration as shown in table 21, each of the respondents gave different reasons on why their business was successfully sustained or failed and shared the same percentage at 12.5% each. table 22. have you received an additional 10,000php as complementary kit from ecc? responses frequency average yes 6 75% no 2 25% total 8 100% source: author’s elaboration table 22 shows that 75% of the respondents responded with yes which is the highest while the lowest response at 25% is no. table 23. what type of livelihood kit did you purchase with the additional 10,000php? responses frequency average additional stocks for my barbecue business 1 12.5% sari-sari store 1 12.5% load retailing and ice candy business 1 12.5% hog raising 1 12.5% additional welding kits 2 25% if there is, products for online selling 1 12.5% one peso tubig machine 1 12.5% total 8 100% source: author’s elaboration as shown in table 23, 25% answered buying additional welding kits is the highest response while the rest of the responses are at 12.5% each and the lowest. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5529 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 45 table 24. do you think the amount of 10,000php was enough as a complementary kit? responses frequency average yes 4 50% no 3 37.5% maybe 1 12.5% total 8 100% source: author’s elaboration as shown in table 24, the highest response is yes at 50% while the lowest is maybe at 12.5%. 3. results the objective of this study is to evaluate the livelihood program provided by a social protection agency in region 7. the results of the study will provide inputs to the development of the program. thus, it will also improve the services of the agency. 1. problem: what were the challenges/issues/problems encountered by the clients during the following stages of their livelihood? .1 planning the type of business saleability of products was the highest response at 37.5% regarding the reason on choosing the type of business. it is seconded by ease of management. while the rest of the answers are the knowledge on how to run the business, no competitor and welding shop. most of the respondents at 75% answered that they had no difficulty in choosing their business while 25% of the response was that they had difficulty in choosing their business. 1.2 training-seminar proper majority of the respondents at 87.5% answered that they were able to attend the livelihood training seminar of the agency while 12.5% have not attended. according to the respondents, the most important lesson they learned from the seminar is about business management (37.5%), right ways to do business and how to grow business (25%), planning and loving work (12.5%), entrepreneurship, budgeting and customer service (12.5%), and time management, marketing strategies and quality business procedures. all of the respondents at 100% answered that the lesson they learned from the seminar help them in pursuing their livelihood. .2 purchasing of their livelihood starter kits in preparing the list of things to buy in their starter kits, 100% of the respondents answered with yes. the respondents who followed the list completely is at 87.5% while 12.5% answered that they have done some revisions while buying. the respondents at 87.5% said that they did not have difficulty while buying while 12.5% answered with maybe. with the follow-up question asking why they have or not have difficulty, most of the respondents answered having a prepared list (37.5%), 12.5% for each of the following reasons: sari-sari store business is easy to manage, already know what to buy, the supply store is near, ecc representative assisted well and lastly, does not have a personal transportation. majority of the respondents at 50% answered that 20,000php was enough for the starter kit while 25% with no and another 25% for maybe. with the follow-up question on why they think it is sufficient or not, mostly mentioned that they were able to buy everything in the list with the prescribed amount while at 25% answered that because of the increase in the price commodities nowadays, the prescribed amount is not sufficient anymore. .3 onset of their livelihood the respondents at 25% answered that they were happy during the onset of their livelihood while the rest of the answers are at 12.5% each and has mentioned the words, “happy” and “excited”. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5529 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 46 most of the respondents at 62.5% answered that they didn’t have any difficulty in displaying their product while 37.5% answered yes that they had difficulty in doing so. according to the respondents, the most difficult part of selling their products are the following: customer debt (25%), no business stall to display (12.5%), lack of knowledge to advertise (12.5%), no customer (12.5%) and lack of water (products) to sell. .4 maintaining their livelihood most of the respondents at 87.5% answered that they were able to gain profit from the 20,000php worth of starter kit given by the agency while 12.5 answered with maybe. most of the respondent at 75% still have their business in existence while 25% answered that their business is not existing anymore. with the follow-up question on why do they think their business is sustained or why it has failed, the respondents gave the following answers: product is affordable and no debt allowed (12.5%), sari-sari store still existing and profit is being enjoyed (12.5%), formal job employment (12.5%), due to pandemic, people lost their job so we lost customers too (12.5%), good maintenance (12.5%), right business management (12.5%), and, yes (12.5%). most of the respondents at 75% said yes, they have received the additional 10,000php as complementary kit from ecc while 25% haven’t receive yet. respondents answered that they bought additional welding kits (25%), others are additional stocks for barbeque business (12.5%), sari-sari store (12.5%), load retailing and ice candy business (12.5%), hog raising (12.5%), peso tubig machine (12.5%), and if there is (additional 10,000php) products for online selling (12.5%). most of the respondents at 50% think that 10,000php is enough for the complementary kit, 37.5% answered that it is not enough and 12.5% answered with maybe. 4. conclusion and recommendation based on the findings of the study, the researcher therefore concludes that there was little to no difficulty faced by the respondents during the planning stage of their livelihood, training-seminar proper and until the purchasing of the livelihood starter kit. the research also concludes that the respondents had faced difficulty during the onset of their livelihood and in selling of their products because of the presence of the following factors: customer debt, no business stall to display and lack of knowledge in advertising. they also had difficulty in maintaining their business because of their formal job employment and the on-going pandemic brought about by covid-19. it can also be concluded that the prescribed amount of twenty thousand pesos (20,000php) for the livelihood starter kit is sufficient and ten thousand pesos (10,000php) for complementary kit needs to be reconsidered. based on the findings presented and conclusions made, the following recommendations are being offered: • the employees compensation commission should conduct a thorough assessment on clients’ livelihood training needs. in addition, ecc should also prepare a comprehensive course syllabus and should consult trainers and entrepreneurship experts with regards to livelihood training-seminar. it should also include lectures on the different stages of the livelihood process most specifically on the onset and maintenance of the livelihood that includes marketing strategies, handling customers and basic accounting. • furthermore, the agency should conduct a thorough assessment on the clients’ capabilities in handling a livelihood. it should also assess if clients have a proper space or avenue to display and market their products. • the agency should do an actuarial study on the prescribed amount of starter and complementary kit tailored-fit to the supplies needed for the specific business and the expected increase of prices of commodities. references alton, l. (2015). the 5 motivations that drive people to choose entrepreneurship. www.entrepreneur.com. https://www.entrepreneur.com/article/249417 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5529 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 47 employees compensation commission. (2000). prescribing the amount of starter kit provided to persons with work-related disabilities (pwrds) as part of their skills/ entrepreneurial training at an amount ranging from php 20,000 to php 30,000 per worker. www.ecc.gov.ph. retrieved december 23, 2020, from http://ecc.gov.ph/board-resolution-no-18-02-06/ manarang, r. (n.d.). top 10 sari-sari store business tips in the philippines. www.tycoon.ph. retrieved january 8, 2021, from https://tycoon.ph/top-10-sari-sari-store-business-tips-philippines/ velmonte, g. (2020). contributions of cooperatives to economic development. cape comorin, ii(ii), 70–76. https://www.capecomorinjournal.org.in/uploads/volume%20ii%20issue%20ii%20july%202020/15%20glenn%20 l.%20velmonte.pdf the employees compensation commission and state insurance fund (presidential decree no. 626, as amended). (2013). www.ecc.gov.ph. http://ecc.gov.ph/wp-content/uploads/2015/09/pd_626_2013_edition.pdf what is a livelihood? (n.d.). www.ifrc.org. retrieved january 8, 2021, from https://www.ifrc.org/en/what-we-do/disastermanagement/from-crisis-to-recovery/what-is-a-livelihood/ unboxing filipino culture: close family ties and most loved items in a balikbayan box. (n.d.). www.asianjournal.com. retrieved january 8, 2021, from https://www.asianjournal.com/magazines/unboxingfilipino-culture-close-family-ties-and-most-loved-items-in-a-balikbayan-box/ european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7040 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 19 urban transformation: environmental issues, wicked problems, and transport development in the context of circular economy daneš brzica1* 1 contact author institute of economic research, slovak academy of sciences, šancová 56, 81105 bratislava (slovakia) danes.brzica@gmail.com received: 16/09/2022 accepted for publication: 10/02/2023 published: 21/04/2023 abstract the paper brings some perspectives on new challenges for the synergy of urban transformation, environmental issues and transport development in the circular economy (ce) context. considering that the number of studies on the given topics only pays attention to some selected areas, we bring a more comprehensive view of the current challenges for cities. the growing size of cities and population density are putting pressure on urban transport systems. as a result of the increasing intensity of traffic and economic activity, there is an increase in emissions in cities. making decisions about changes in the city becomes more complex. the paper indicates the nature of “wicked” problems and obstacles in implementing the ce model in the context of sustainable transport/mobility development in big cities. it also demonstrates the situation in selected european cities regarding pollution and transport performance indicators. while the traditional city policy approach is predominantly based on the need to maintain the status quo and the reality of the city´s functioning is perceived as a routine matter, new approaches should work with challenges as opportunities for change towards greater efficiency and environmental sustainability and take into account new approaches to the governance of cities. one of the possible directions of urban development is using the ce in the context of the strategy of cities in the transport field. this could improve the situation within the goals of sdg 11. solutions based on traditional approaches can cause disorders in the functioning of big cities, weaken their resilience and thus threaten their further development. in the future, the city leaders and other stakeholders will have to reevaluate traditional approaches to city governance in this area, as it can be assumed that an increasing number of "wicked" challenges will arise, which will need to be quickly/effectively resolved about the justified needs of city residents. keywords: governance; transport; cities; “wicked” problems; emissions; un sdg 11 goals, circular economy 1. introduction considering that the number of studies on the given topics only pays attention to some selected areas, we bring a more comprehensive view of the current challenges for cities. the growing size of cities and population density are putting pressure on urban transport systems. as a result of the increasing intensity of traffic and economic activity, there is an increase in emissions in cities. making decisions about changes in the city becomes more complex. the paper brings some perspectives on new challenges for the synergy of urban transformation, environmental issues and transport development in european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7040 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 20 the circular economy (ce) context. this involves overcoming many barriers. the present study viewed that (1) cities will represent residences for an ever-increasing share of the world's population; (2) urban transport will require the fulfilment of many conditions regarding the ecological sustainability of the urban environment, and (3) ce has the potential to contribute to solving new “wicked” challenges. “cities generate a significant share of global gdp, consume significant energy resources and generate substantial volumes of waste and emissions. urban areas are home to over 75% of the eu’s population: creating around 70% of jobs and generating over 85% of the eu’s gdp. cities, responsible for about 80% of energy use, are essential for europe’s transformation to a climate neutral continent by 2050, as set out in the european green deal” (eurocoties, 2020). air pollution has escalated to hazardous levels in many cities. with the growth of a modern industrial sector and car ownership, but without enforceable pollution and vehicle emissions regulations, various toxic chemicals are released into the atmosphere in large cities (knox and mccarthy, 2012). among monitored pollutants belong not only particulate matter (pm10 and pm2.5), but also nitrogen oxides (nox), sulphur dioxide (so2), carbon monoxide (co), total organic carbon (toc), hydrogen chloride (hcl), and total dust (epa, 2020). the main obstacles to the development of transport in cities include economic, technical, organizational, environmental, informational, regulatory, infrastructural, and personnel. for example, in recent history, citi bank´s 100 bn usd environmental finance goal was one of the initiatives in its sustainable progress strategy. the strategy was organized into three pillars, and investment areas included renewable energy, green bonds, energy efficiency projects and green buildings, also sustainable transportation. citi bank´s share of environmental financing activities totalled 41.2 bn usd from 2014 through 2016 (hoek, 2014). sustainable transport is a significant component of sustainable urban development, and it seems that the ce can help address these challenges in this context. however, implementing changes – including support for the ce and the transport sector – may be threatened or slowed down by the nature of decision-making processes in complex entities such as large cities. the interests of various interest groups (stakeholders) are concentrated in large cities. advocacy of these often conflicting or significantly different interests can slow down or completely stop decision-making processes. wicked problems are specific forms of decision-making problems in complex entities. this paper aims to indicate the nature of “wicked” problems and obstacles in implementing the ce model in the context of transport/mobility development in big cities. it also demonstrates the situation in selected european cities regarding pollution and transport performance indicators. 2. literature review there is a wealth of literature related to the areas discussed here. this group includes works focused on (a) circular economy – e.g., com (2015, 2018, 2019), korhonen, honkasalo and seppälä (2018), kautto and lazarevic (2020), milios (2017), bocken, de pauw, bakker and van der grinten (2016), kirchherr, reike and hekkert (2017), nylén and salminen (2019), ghisellini, cialani and ulgiati (2016) and com (2015, 2018, 2019), but also works oriented (b) to wicked problems – e.g., head (2022). ghisellini et al. (2016) provide a very detailed overview of ce. for example, studies by korhonen, honkasalo and seppälä (2018) and kirchherr, reike and hekkert (2017) also deal with conceptual matters. works focused on air pollution include, for example, epa (2020). hong et al. (2014) discussed challenges and opportunities for developing sustainable transportation systems (stss) – in this case, for beijing's capital. johansson et al. (2016) discussed issues related to the paradigm shift from mobility to sustainable accessibility. however, only a few are simultaneously devoted to urban transformation, environmental issues, and transport development in the circular economy (ce) context. nylén and salminen (2019), for example, deal with how the circular economy discourse affects policymaking. a circular economy perspective embraces a systemic notion that things are designed to be reused as long as possible and then recaptured and repurposed when reuse is no longer possible (bals, tate and ellram (2022). in terms of methodology, the cra (constructed regional advantage) approach mentioned in the work asheim et al. (2006), “wicked” problems approach in public policy (head, 2022, 2008) and mlg approach (multi-level governance) mentioned in the work brzica et al. (2014) were used. moser et al. (2012) and head (2008) provide good insight into “wicked problems” issues. one of the documents (eurocities, 2022) suggests that “additional efforts are needed by the commission and member states to enhance the quality of emission estimation methods and to maintain their quality, especially for important and ever-present source sectors, like road transport (e.g., the hbefa emission factor database)”. other works cover the area of (c) smart and sustainable cities – e.g., james evans et al. (2019), kenworthy, j. (2006), haarstad (2017), pereira et al. (2017), tsun lai and cole (2022), guenduez and mergel (2022), angelidou et al. (2022), and przeybilovicz et al. (2022). hikman and banister (2014) seeks to develop achievable and low transport co2 emission futures in a range of international case studies, including in london, delhi, and auckland. the aim of european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7040 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 21 their book is that the developed scenarios and the consideration of implementation and governance issues can help city management plan for and achieve attractive future travel behaviors at the city level. the work of johansson et al. (2016) deals with the issue of transport and co-conceptual approaches. the authors note new methods in the shift from mobility to sustainable accessibility. according to them, to reach the climate objectives, there is a need for technical solutions in energyefficient vehicles dependent on electricity and replacing fossil fuels with biofuels. these solutions, however, are – according to them not enough. they also need to change direction in planning and developing society and infrastructure. 3. methodology the article is based on a methodological approach based on several steps: decomposition of the functioning system of large cities in terms of four investigated elements (traffic, pollution, ce and wicked problems). other studies, which are focused on only some of the problems discussed here, mostly used a combination of quantitative data analysis and case studies. some studies examine specific cities and towns (case studies) or segments (transport, air pollution). some other studies deal with methodological issues and concepts (wicked problems, reflexivity, resilience, multilevel governance). when it comes to wicked problems, analyzing systemic issues is often applied. this research paper uses a set of methods. methods, concepts and approaches such as qualitative/quantitative data analysis, participatory design, ideal-type transition pathway concept, multi-level governance concept, stakeholder-agency theory, holistic approach, constructed regional advantage concept and causal explanation are used. causal explanation represents a partially useful approach in specific situations. however, various factors in rather complex entities as cities are often operate simultaneously to produce an observed effect. we tried to maintain internal validity i.e., preventing the occurrence of sample selection bias (for cities) and information bias. wicked problems have been identified in literature across various disciplines and policy domains (e.g., business, cybernetics, ecology, agriculture, urban design, energy, transportation, health, socio-economic sciences and political, administrative sciences) (head, 2022). like kenworthy (2006), this paper provides critical responses to the challenge of changing the nature of urban development to a more ecological and sustainable model. 4. results 4.1 transport in big cities, “wicked” problems and circular economy urgency and the changing nature of the challenges are the basic parameters that characterize the current situation from the point of view of the management and governance of big cities. in this section, certain views on some important issues are presented. two important aspects can be seen from the perspective of the traditional approach to the current challenges in the transport field. the (1) aspect is underestimating the importance/scope of these challenges, and (2) underestimating the nature of these challenges. however, both of them are crucial for timely and adequate solutions. in the traditional understanding, challenges are a problem that often needs to be solved according to the intensity with which it manifests themselves. such an approach is not always suitable, especially because phenomena do not take place linearly in a complex world, and large-scale changes on the input side do not always bring large effects and vice versa. in addition, waiting for a situation where major positive/negative breakthroughs appear (e.g., an increase in pollution, traffic jams, new efficient solution) can mean that the situation is difficult to manage or requires much higher costs. several models exist steady growth economy, de-growth, ce or sharing economy. these alternative ecological models challenge the economic growth model, encourage sustainable resource use, reduce waste, reuse and recycle, and nudge sustainable consumption models (babacan, 2022). there is currently a wave of interest in transforming cities in the transport field about achieving a quality environment and safe transport network. new specifics characterizing the urban environment in terms of management and governance include, among others (oecd, 2006): • uncertainty; • specialization; • a number of actors; • interdependence; • multi-level decision-making; • time perspective, and political cycle. the ce in cities may assist in handling transport-related challenges (waste, lack of spare parts). cities may assist in designing/supporting measures designed and optimized for reuse and re-construct. they may support set of policies easing nature-friendly and sustainable modes of sharing various transport means (not only person-to-person but also b2b) thus reducing resources needed to meet the needs of cities. kautto and lazarevic (2020) point out that in connection with the circular economy, a significant challenge is “ …the development and implementation of policies and regulatory instruments for accelerating the closing of material loops and phasing out unstainable systems and practices. currently, numerous policy instruments have been adopted to promote more sustainable resource use. however, these are often scattered, weak and disproportionately divided along economic sectors. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7040 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 22 thus, carefully prepared, consistent, coherent and credible policy mixes are needed.” to realize this plan, however, it is necessary to cope with the very diverse structure of the number of actors and their interests at the level of urban systems. this diverse structure of actors and interests presents wicked problems. kautto and lazarevic also note the problem of reflexivity. according to them “the reflexivity failure is caused by the current lack of ability to monitor, anticipate and involve actors in processes of self-governance …. and to implement adaptive policy portfolios that can deal with uncertainty. due to the longterm nature of transformational change, inherent uncertainties of innovation, and knowledge gaps, change requires continuous monitoring of the goals, and reflection on the direction of change.” the following chart 1 shows a model of a modern view of contemporary challenges. in the case of this model, examples of the possible perception of the urgency of the solution and the nature of the challenges by top management are given. of course, these are only fictitious values intended to document the possible range of problems. figure 1: model view of current challenges notes: (1) negative values show a low degree of urgency of the need for a solution (2) positive values show a high degree of urgency of the need for a solution (3) the combination of colors indicating normal situations and "wicked" problems shows the expected ratio between the two components source: author´s elaboration 4.2 performance of transport network and its impact on city environment the ce package, adopted by the european parliament in 2018, sets new target level for the recycling of municipal waste (65% by 2035). while the traditional city policy approach is based on the need to maintain the status quo and the reality of city´s functioning is perceived as a routine matter, new approaches should work with challenges as opportunities for change in the direction of greater efficiency and environmental sustainability and take into account new approaches to the governance of cities (brzica, 2022). one of the possible directions of development is the use of the ce in the context of the strategy of cities in the field of transport. this could substantially improve the situation within the goals of sdg 11. table 1 shows the structure and description of the individual categories of indicators for the analyzed sdg 11 objectives. graph 2 shows the situation for sdg 11 including transport as well as air pollution indicators (in this case pm2.5)1. it provides a more detailed comparison of the position of selected european cities. some central european countries report very high degree of pm2.5. overview of primary pollutants in selected cities from january 27, 2023: the primary pollutant pm2.5 prevails in these selected cities: prague: 10.0 μg/m3, warsaw: 25.0 μg/m3, berlin 7.2 μg/m3, kosice 12.0 μg/m3, budapest 31.0 μg/m3, munich 6.9 μg/m3, brussels 3.0 μg/m3, paris 9.6 μg/m3, rome 30.0 μg/m3, bucharest 29.0 μg/m3, vienna 18.0 μg/m3, and bratislava 22.0 μg/m3. some cities show other primary pollutants: london (pm10) 27.0 μg/m3 or copenhagen (ozone) 41 μg/m3. contributing to pollution in some cities and countries (especially in central and eastern europe) is the fact that the age of the cars in use is high, the modernization of the transport infrastructure is insufficient and the governance of the cities is not optimal. 1 the environmental indicator pm2.5 was used in terms of its significant impact on health, especially in big cities. such pollution contributes to human mortality from respiratory, cardiovascular and other forms of diseases. the biggest cities are affected by the presence of substances of the pm2.5 type. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7040 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 23 table 1: overview of selected indicators for sdg 11 "sustainable cities and communities" sdg goal indicator indicator description 11.2 c110200a percentage of population satisfied with the quality of public transportation systems 11.2 c110201a performance of public transport network, ratio between accessibility and proximity to hospitals 11.2 c110201b performance of car transport network, ratio between accessibility and proximity to hospitals 11.3 c110301 difference between built-up area growth rate and population growth rate (percentage points) 11.6 c110602 exposure to pm2.5 in µg/m³, population weighted (micrograms per cubic meter) 11.6 c110602a percentage of population satisfied with quality of air 11.6 c110602b percentage of people exposed to more than 10 µg/m³ (micrograms per cubic meter) of pm2.5 11.7 c110701b percentage of population with access to at least one recreational opportunity (theatres, museums, cinemas, stadiums, or cultural attractions) within 15 minutes of cycling note: indicators c110602 and c110602b, related to pm2.5 secondary organic aerosol pollution, are highlighted. graph 1 above also applies to this indicator. omitted are indicators not related to transport, mobility and pm exposure (11.1, 11.3, 11.7a.). source: brzica (2022), modified, based on oecd data, 2020. figure 2. position of selected capitals and countries for sdg 11 (sdg 11.1 11.7) note: index is created from values of indicators for sdg 11.1 11.7. a higher number of points (obtained from aggregation of points from individual sdg 11 indicators) represent a better position of the city in terms of these indicators. see tab. 1 for more details. sdg 11 is a "sustainable cities and communities" category under the un program. source: brzica (2022), author’s elaboration based on oecd data, 2020. it is obvious that the top management of big cities must respond not only to air pollution, “normal” challenges in transport or modernization pressures, but also to the existence of another segment of challenges the set of "wicked" challenges. unlike the “normal” challenges, the "wicked" challenge set exhibits some specific characteristics. these need to be taken into account – including the case of ce in transport-related areas of large city functioning when designing effective policies in the area of environmental changes, transport policy and the approach of producers. it can be assumed that the perception of various types of challenges (including the ce) will be different among representatives of industry, the public sphere and the european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7040 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 24 management of individual big cities. while common problems appear mainly in conditions typical of stable states, "wicked" problems are typical for complex structures and unstable situations. the circular economy and comprehensive modernization of the production capacities of cities can improve the situation. it seems important to create a complete chain "environment modern production using ce modern transport infrastructure with modern means of transport effective governance with awareness of the need to solve wicked problems in related areas. 5. discussion addressing the multitude of challenges that big cities face today in the environmental field is not an easy task. nevertheless, the issue of the sustainability of the urban environment is becoming more relevant with increasing economic activity and technological changes. as the paper indicated, the existing challenges are serious not only in their content and scope, but also in the difficulty of finding solutions, as is the case of "wicked" challenges. policy decision-making is structured through organisational processes that reflect historical institutional arrangements. complex policy problems often involve conflicting interests and divergent perceptions among various stakeholder groups. disagreements about problems and policies arise from many factors, including material interests, sociocultural values and political (dis)trust (head, 2022). this fact further limits quick and effective solutions, especially regarding wicked problems. the responsibility of city representatives is considerable. however, it is related not only to micro-management but especially to the conceptual planning of urban development and to the strategic orientation towards reducing the ecological burden. effective multi-level city governance and the effort to solve “wicked” challenges also require city management to have the ability to find a consensus when solving important "wicked" challenges related to transport and environmental issues in big cities. 6. conclusion there are different approaches to emerging challenges. solutions based on traditional approaches can cause upheavals in the functioning of big cities, weaken their resilience and thus threaten their further development. in the future, the city leaders and other stakeholders will have to reevaluate traditional approaches to city governance in this area, as it can be assumed that an increasing number of "wicked" challenges will arise, which will need to be quickly/effectively resolved about the justified needs of city residents. compared to other works focused on some of the areas analyzed here, we tried to balance a set of key structures (for example, cities and transport systems) and processes (for example, air pollution, solving wicked problems, and governance processes). the holistic view of an integrated approach to the solution of urban ecology and transport in the circular economy context can be used for further research in several possible directions. understandably, the holistic approach raises some doubts about the breadth of coverage, the depth of analysis (use of comparison), the choice of indicators, working with a time frame, and problems with the unification of approaches and definitions. the last point is quite complex due to the "fuzzy" boundaries of many dimensions addressed in the article. these are mainly the concepts of multilevel governance, wicked problems or the urban system. it is their exact characteristics that due to their complexity – they run into the problem of precise and generally accepted definitions, and it is often possible to consider their characteristics as "fuzzy". from the results of our study, it can be concluded that the situation in the large cities in our sample corresponds to the seriousness of the situation, as indicated in other publications. in contrast to more narrowly focused works, we bring an approach that should consider the complexity of the challenges regarding city transport requirements in terms of their growth and ecological burden (here, specifically, air pollution with pm2.5 particles). we are trying to point out the effort through new approaches (both conceptual in the field of technology /ce/ as well as conceptual in the field of decision-making regarding difficult and complex situations /wicked problems/ to solve new challenges in the field of transport and related ecological burden. however, a quick and effective solution to a certain extent is hindered by increasingly complicated and complex relationships between growing groups of actors with different, often conflicting, interests. 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(2022): measuring progress of smart cities: indexing the smart city indices. urban governance, 44, un (2017): new urban agenda. 2017 united nations. isbn 978-92-1-132731-1. https://habitat3.org/the-new-urban-agenda. urbanization, vol. 18 (1): pp. 67 85. doi: 10.1177/0956247806063947. 5712-article text revision-17927-1-18-20210527 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5712 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 1 steps from zero carbon supply chains and demand of circular economy to circular business cases piontek, felix1, herrmann, constantin1 and saraev, alexandra1 1 sphera solutions gmbh, hauptstraße 111-113, 70771 leinfelden-echterdingen, germany e-mail: fpiontek@sphera.com received: 29/03/2021 accepted for publication: 09/05/2021 published: 19/07/2021 abstract the european green deal requires a zero carbon europe until 2050. consequently, all processes conducted, and actions taken need to ensure zero carbon emissions. beside the areas of energy systems, logistics and living, it certainly also includes industry sectors, industrial processes, and their entire supply chains. zero carbon supply chains mean net zero carbon emission from scope 1, 2 and 3. the key question for future business is therefore how to reduce the carbon emissions of all procured components down to zero, beside all procured and consumed energies (scope 1 and 2). a promising approach is a circular economy if primary produced materials will not be provided carbon neutral or will increase in price. however, today the development of circular business models often is a chicken and egg problem. it needs a clear business case to invest into changes, adaptions, substitutions, or life cycle system adjustments of linear products (take, make, dispose) to turn them into circular products or product systems (avoid, re-use, recycle, recover). the paper presents approaches and companies seeking carbon neutral products in a carbon neutral europe via identifying business cases for circular products. an evaluation matrix is presented allowing the identification of circularity status depending on the selected products or sector perspective. the matrix contains evaluation criteria based on the circularity building blocks by the ellen macarthur foundation. based on the results, hot spots and weak points are identified and allow entering a sixstep-approach for business-case identification. the steps refer to life cycle thinking, quantitative environmental assessment, simulation, creativity methods and end up identifying profitable business cases for circularity. the goal is to avoid trade-offs and to consider economic and environmental factors side by side. the presented approach combines life cycle assessment, circular economy and the development of business models and is partly developed and applied during the european h2020 project avangard. keywords: net zero, circular economy, zero carbon approach, business case, zero carbon supply chain, life cycle thinking 1. introduction in recent years, incentives as well as outside pressure are rising for companies to lower their carbon footprint. the paris agreement adopted by the united nations in 2015 aims to limit the temperature increase to 1.5 °c above pre-industrial levels. this means that the emission of greenhouse gases (ghg) has to be reduced significantly. in december 2019 the european union (eu) announced that it wants to be climate-neutral by 2050 (european commission, 2019). already before that more and more companies like volkswagen, bp, microsoft, apple and others committed to produce carbon neutral products or want to become carbon neutral or even carbon negative as an organisation as a whole. at the beginning of 2021, the science based targets (sbti) initiative reports over 1200 companies acting, over 600 companies having science-based targets and over 400 companies which explicitly commit to a maximum increase of the global average temperature below 1,5 °c (sbti,2021). european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5712 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 2 the paris agreement states that finance flows as well should be consistent with a pathway towards low ghg emissions and investing companies like blackrock publish statements that sustainability should be a new standard for investing. by including social and environmental aspects of sustainability into his letter to the ceos in 2018, the chairman and ceo of blackrock larry fink takes part in a shift from soft and sometimes greenwashed approach towards sustainability to a hard and essential factor of business (fink, 2018). all these actions, announcements and developments cause that over the last few years, sustainability efforts are changing from purely voluntarily published and often superficial sustainability reports to an important part of risk mitigation and a transparent positioning towards costumers and investors. at the beginning of 2021, the investment bank goldman sachs joined blackrock by publishing its own sustainability efforts including climate-related considerations towards investing (solomon, 2021). driven by the governmental initiatives mentioned above and a rising pressure by customers, other businesses as well as end consumers, net zero carbon emissions and other aspects of environmental and social aspects of sustainability as well as publishing transparent information become an important part of conducting business. due to the demand of various stakeholders, companies are searching for business models which offer reduced environmental impacts as well as profitability. it must be assured that the way a company conducts business is aligned with global goals to address climate change while earning money. additionally, a company should be able to communicate the implemented measures in a comprehensible way and to disclose emissions and reduction targets. this paper presents a way to address these needs answering the question “how can profitable circular business models be developed ensuring lower environmental impacts aiming for net zero emissions?” 1.1 net zero what does net zero really mean? for businesses, net zero includes the elimination of ghg emissions throughout the entire value chain (schulz, 2020). according to the greenhouse gas protocol published by the world resource institute (wri) together with the world business council for sustainable development (wbcsd) the ghg emissions of a company can be categorized into three scopes: scope 1 includes the direct emissions from the facilities and vehicles of the reporting company. scope 2 represents the emissions linked to electricity, heating and cooling and steam purchased for own use. those are often already assessed and reported by companies. however, the analysis of scope 3 is not yet widespread, although it often can include the largest part of emissions related to operations depending on the sector (sbti, 2018). figure 1 presents the three scopes graphically. scope 3 includes 15 sub-categories upstream and downstream, e.g., purchased goods and services, capital goods, business travel and employee commuting (greenhouse gas protocol, 2011). to be a truly carbon neutral company, an assessment of the hotspots of scope 3 emissions must be conducted and according to an ambitious target setting the emissions must be reduced to net zero carbon emissions. especially the sub-categories 1 (purchased goods and services) and 11 (use of sold products) of scope 3 might be orders of magnitude larger than scope 1 and 2. if a company sources most of the components of its products from its supply chain, as for example many oems e.g., in the automotive or consumer electronics sectors do, category 1 is related to more emissions than the assembly of the final products. if a product sold consumes fuels or electricity, the related emissions belong to category 11 and might, for example in the case of cars, planes, and many electronic goods, exceed scope 1 and 2. the reduction of emissions linked to these categories can be addressed by ecodesign of products and services considering material usage and emissions during use phase. typical approaches and measures consider efficiency, not only during use, but also during production and over the entire supply chain. this is often referred to as resource efficiency. but actually, the avoidance of resource use should be the goal rather than only lowering depletion and ghg emissions. this applies to the avoidance of wasted energy as well as wasted materials and avoidance of scrap production. it includes the shift to power production from green or renewable sources and bio-based fuels. an approach to maximize efficiency and use intensity and to avoid resource use might include a shift to more service-related circular business models, changes in material composition of products and optimizing emissions during use as well as options to prolong the lifetime of products. the longer a product is used the later the production of a new product which substitutes the old one is necessary. for this statement to be true, a product must fulfill the intended demand over its entire lifecycle so that the actual lifetime matches the duration of the technologically possible service life. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5712 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 3 figure 1. graphical representation of scope 1, 2 and 3 source: greenhouse gas protocol. (2011). corporate value chain (scope 3) accounting and reporting standard, s. 7. the complexity of the various options and measures for a reduction and the avoidance of unnecessary use of resources and ghg emissions, which can be summarized as ecodesign, needs to cover all effect over the entire life cycle. this can only be achieved by a bottom-up approach looking at the details of each individual product and how costumers are using them. this might allow for a more feasible way to identify how to reduce emissions compared to a pure top-down approach often focused on calculations of scope 1, 2 and 3 of an entire company. while scopes 1 and 2 and some sub-categories of scope 3 could be brought down to zero or nearly zero by technological development like electricity solely from renewable sources or carbon neutral fuels, materials to manufacture products or build facilities are still linked to emissions. therefore, an inclusion of all 3 scopes and all related aspects is necessary to achieve net zero emissions. 1.2 circular economy one way to reduce or negate the emissions linked to materials and consumption is the implementation of a circular economy (ce). ce can be defined as “…an economic system that is based on business models which replace the ‘end-of-life’ concept with reducing, alternatively reusing, recycling and recovering materials in production/distribution and consumption processes […] with the aim to accomplish sustainable development…” on different levels. (kirchherr et al., 2017) to establish a ce and for companies to be a part of it, business models which lower emissions and use less or no primary materials, but also generate profit are needed. as business models must be economically sustainable to ensure future success, keeping materials in the loop must be more attractive than simply continuing business as before and paying for carbon offsets. additionally, organisations like the sbti initiative (sbti, 2020) or cdp (former carbon disclosure project) (cdp, 2021) and even companies which provide carbon offsetting opportunities (southpole, n.d.) state that avoidance of emissions should be the goal rather than offsetting. additionally, the price for offsetting carbon is and will most likely keep rising. this can be illustrated by the example of emissions related to fossil fuels in germany: from 25 euros per released ton of co2 equivalents in 2021 an increase to 55 euros in 2025 will be followed by an auction system. the german environment agency even suggested 180 euro per ton (matthey & bünger, 2019) as a fair and compensating price for damages indirectly caused by the effects of rising temperatures. avoiding the release of ghg in operations as well as over the value chain might offer business cases beyond energy efficiency and a shift to renewable energy. the eu circular economy action plan as part of the european green deal includes measures to make sustainable products the norm in the eu and to make circularity work for people, regions and cities (european commission, 2020). in its first iteration it already focuses on various sectors including electronics and ict, batteries and vehicles, packaging, plastics, textiles, european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5712 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 4 construction and buildings, food as well as water and nutrients. beside the political agenda, the ellen macarthur foundation, a leading organization in the field of ce, defines four essential building blocks for a ce. the four blocks are: circular design, new business models, reverse logistics and cycles as well as enablers and favourable system conditions (ellen macarthur foundation, n.d.). after a short overview of the applied methodology, chapter 3 presents an approach to analyse the current status of business models and processes within a company towards their readiness for ce in the format of an evaluation matrix for approaching ce. chapter 4 explains a six steps approach to identify weak points and hotspots as well as deriving possibilities to address business cases including an evaluation of the environmental impacts of the circular solution. the goal is to support companies to transform their business in accordance with the challenges of a more circular and sustainable future and to create a safer, more sustainable and productive world. 2. methodology the approaches in this paper have been develop based on theoretical analysis and on the practical experience of the authors. while no single qualitative or quantitative study is the basis of this text, it summarizes the findings of several case studies and takes projects conducted together with various companies and partners into account. as it is the goal to allow for fact-based decision making, quantitative methods to evaluate the businesses models and to assess environmental impacts are include in the presented approaches. 3. evaluation matrix before a company can develop circular business models, it should assess the current way of its operations to identify hotspots and opportunities. figure 2 shows a schematic matrix to support the assessment. the matrix was developed by sphera and is refined over the course of the avangard project (www.avangard-project.eu). the four main categories are derived from the four building blocks for ce by the ellen macarthur foundation as mentioned above. the sub-categories and indicators should be adapted to the company and its respective industry or market sector. the evaluation can be carried out internally but might be supported by external experts. it is helpful to bring together employees from different departments to get a comprehensive overview. when analysing the status quo and filling out the matrix, the entire life cycle of the product or product group must be considered. this is equivalent as considering scope 1, 2 and 3 as explained in section 1.1 of this paper. to further develop the matrix shown in figure 2, multiple case studies have to be conducted. by doing this, general and industry specific indicators can be developed. different scales (e.g., fiveor seven-point likert scales) could be tested and can be colour-coded to allow for a concise and self-reflective evaluation of the status quo of products and business models within a company and their potential for circularity. hotspots like totally linear operations or chances to further develop existing offerings (e.g., refurbishment, the use of recycled spare-parts or changeable components like batteries) into fully circular business models can be identified. while filling out the matrix, it is important to consider the full life cycle of the products and their impacts on the environment. this might be challenging for employees and executives who are not yet familiar with life cycle thinking, but it is a pre-requisite to understand cause and effects per aspect of various stages relevant for ce (e.g., logistics, user behaviour, ability for repair, maintenance, disassembly and fractionising for optimized recyclability). as soon as it is fully developed and tested, the matrix should be accompanied by a written guide, or the process could be moderated by external environmental experts. the presented approach serves the purpose and offers an opportunity to start a process of self-reflection. the matrix enables a comparison with competitors from the same industry or companies and business models from other industries. of course, currently there are no reference values for different industries. therefore, companies and consulting experts must use their own understanding of the situation and be careful not to overor underestimate the scores of competitors and the company itself. a comparison to other, similar industry sector supports the process by highlighting gaps and opportunities. in summary, the matrix can be used for self-reflection which can be the basis of further assessments, benchmarking against competitors or other industries and for the development and proof of concept. if the matrix itself is not enough to come up with sustainable and functioning business models, a structured process presented in the next chapter can follow. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5712 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 5 figure 2. schematic assessment matrix source: based on herrmann, constantin. (2020, november 19), from zero carbon supply chains to circular electronics: steps to more sustainability [conference presentation]. e-waste world conference & expo, frankfurt, germany. http://www.avangard-project.eu/event/e-waste-world-conference-expo/ 4. six-step-approach to develop circular business models after an assessment of the status quo, gaps and potential changes using the matrix presented in the previous chapter, companies know their status regarding to upside and improvement potentials towards a ce. now they need a process to shift their operations towards circularity while making sure that this shift does not actually lead to more ghg emissions or more harmful environmental impacts in general. the development of circular business models might present itself as a chicken and egg problem. often the linear business models will not reveal a circular and profitable business case and vice versa, theoretical business cases might not work using the existing linear products. therefore, figure 3 presents a process to develop new business models while assessing and comparing the resulting potential environmental impacts from simulated circular products and business models. step 1 includes a life cycle analysis, e.g., using the life cycle assessment (lca) methodology according to iso 14040 and 14044 (iso 2006a, 2006b). it can refer to the linear product or the business models identified for potential change using the matrix presented above. the analysis should include all impact categories relevant to the company and to the respective industry and not solely focus on ghg emissions even though this might currently be the impact category which receives the most public attention. but while less noted impact categories should not be neglected, a so-called screening lca based on publicly available databases such as the gabi database (sphera solutions gmbh, 2021) should be sufficient. this allows for the identification of environmental hotspots (step 2) of the current situation. based on the identified hot spots and weak points to be improved, main categories subcategory indicators an sub-indicators (examples) comment value design: technical aspects & design materials modularity high degree of standardization of disassembly high degree of automation of disassembly durability / long service life of components and modules (for further use) durability of components and modules ease of updating / compatibility with new product generations technical aspects reverse logistics identification collection & return low transport effort per product unit high value in relation to collection costs established / functioning collection or return system legal requirements for collection and return storage high standardization of the modules business models system conditions and other aspects competitive situation in the sales market due to many other remanufactured products availability of qualified staff value perception of remanufactured products (up/ downcycling, same quality) brand risk (in case of premature failure of remanufactured products) / branding (quality perception) as remanufactured product (b2c) safety / default risk from remanufatured products established and reliable take-back system with influence on the quantity of returned products and sales volume (product stewardship) structured framework (laws, regulations) of the market for old goods / goods for remanufacturing structured framework conditions (laws, regulations) of the sales market such as e.g. admission criteria market acceptance of remanufactured products competitive situation in the sales market due to new products good storability plannable stock (consistent flow of in-/outgoing products) good sortability of removed modules constant and plannable return quantities constant and predictable sales quantities information on the whereabouts of the product / availability for return unique product assignment materials clearly identifiable (if no material declaration available) age and condition identifiable (technical / documentation) material declarations available / identification of materials easily possible identification of modules easily possible hazardous / toxic substances (during handling, danger to employees) environmentally critical and hazardous substances (potentially with legal restrictions on recirculation) efficient removal of modules that are not used efficient exchange and handling of individual product components (sorting, preparation, exchange) ease of disassembly (to be able to use modularity) european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5712 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 6 possibilities to influence should be discussed and specified (step 3). there is no need to spend the same amount of effort and time which would be needed for a comprehensive lca including the collection of primary data from suppliers. the identified starting points for changes and measures might include a wide range of options from a change in distribution processes or market access, a change of materials (e.g., the use of secondary material or the substitution of environmentally impactful materials by others suited for the intended application) used or even the discontinuation or addition of an offer, a service or a product. the findings and aspects from step 3 allow entering steps 4 to 6, which are highly iterative and interlinked. the concrete procedure depends on the people involved, the timeline, the identified hotspots and how vast the possibilities to influence these are as well as the willingness of the parties involved to implement changes. step 4 includes an assessment of the potential environmental impacts based on the findings from step 3. this allows to compare the resulting impacts with the baseline from step 1, if the identified weak points were changed. a comparative analysis like this is necessary to make sure that no trade-offs occur, meaning that benefits in one impact category are overcompensated by more harmful impacts in another, and to prevent a change which actually leads to higher harmful impacts overall. figure 3. overview of the six-step-approach. source: based on herrmann, constantin. (2020, november 19), from zero carbon supply chains to circular electronics: steps to more sustainability [conference presentation]. e-waste world conference & expo, frankfurt, germany. http://www.avangard-project.eu/event/e-waste-world-conference-expo/ step 5 can include a broad range of methods to come up with ideas and concepts but is guided by the facts and figures of the hot spot assessments and the possibilities to influence the identified weak points. these methods can refer to for example brainstorming (clark, 1989), the 635 method (higgins & wiese, 1996), design thinking (sachse & pecker, 1999), the morphological box (higgins, 1966), the relevance tree analysis (schmidt, 2000) or the walt disney method (dilts et al., 1991). as a broad range of creativity methods is available, companies should choose a method which suits the complexity of the process, the characteristics and the number of the people involved as well as the facts and figures developed during steps 1, 2, 3 and 4. the process should take the results of the previous analyses into account but must not be limited to the options and ideas derived from the hotspot analysis. if the process is set up in the right way, it might even be possible to assess the potential environmental impacts results or preliminary results of the business models and measures developed using the creativity methods over the course of the development. this may necessitate the setting up of a process that is iterative and takes place over several days or weeks. it could be supported by a predesigned tool which allows for parameter variation showing the european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5712 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 7 resulting impacts from changes suggested. the inclusion of environmental experts is another possibility to analyse potential environmental impacts during the development of business models. step 6 concludes the presented methodology to develop circular business models, which are already tested for their environmental benefits and applicability on ce. based on the results of several assessments of environmental impacts as well as the collaborative techniques, a decision in which direction the company and its operations and offerings should be developed must be made. as the process is iterative, these decisions will be monitored and solutions for identified weaknesses can be developed and implemented. 5. benefits from a shift to circular business models the change to more circular and overall, more sustainable ways to conduct business offers various advantages. lowering ghg emissions, material use, and other environmental impacts related to the business on the one hand has benefits for the environment and on the other hand lowers the risk of costs directly (e.g., co2 taxes) or indirectly (by necessary changes due to climate change) related to ghg emissions. as it satisfies demands from various stakeholders, a shift to innovative business models can be used in communications to investors, business partners and to the public. measures regarding sustainability will be received positively by rating agencies and other players in the financial markets. as more companies pledge to source their materials and goods from sustainable suppliers, this is an advantage when selling to other companies. additionally, more sustainable offerings can attract end consumer groups which did not buy a company’s products before or did not use its services. circular business models align a company with the circular economy action plan of the european commission (2020) which relates to other european strategies to benefit the economy and the environment. an lca study conducted before implementing the developed circular business models ensures that there are environmental benefits. lower ghg emissions help companies to contribute to the targets set in the paris agreement and achieve their own goals (developed e.g., in cooperation with the sbti). by implementing a structured, iterative process which includes several sustainability assessments and should involve people from different departments, it is ensured that the new business models lower environmental impacts and that they can become economically sustainable as well. 6. discussion, conclusion, and further research the approaches developed in this paper are based on practical experience and theoretical development. they have been fully or in parts applied in projects with various companies and partners and are based on established methods like lca and several creativity methods. therefore, the presented approaches have been proven to be feasible and of practical relevance. however, this research does not evaluate the suggested methods based on a comprehensive literature review of other possibilities and ways to develop new business models. the approaches should be further developed by implementation of findings from related research as well as experiences from future case studies. as sustainability becomes more important and emerges from a “nice to have” to a fundamental pillar of conducting business, the need for carbon neutral or net zero business models is rising. circularity offers a path to minimize the emissions linked to the use of materials to produce tangible goods. this paper presents an approach to develop circular business models using a matrix approach. if the matrix approach does not lead to a successful development of business models, a six-step-approach can be used which includes lca and creativity methods embedded in a structured process. independent whether the creativity methods are used, a sustainability assessment should make sure that trade-offs are avoided. the presented approaches address the need for sustainable ways of conducting business and combines self-assessment and creative methods with lca and other sustainability assessment methods (peña et al., 2021). as the circular economy currently receives global attention, it empowers companies to develop and change their business models. the six-step-approach enables a structured process to develop more sustainable business models and ensures that they de facto lead to lower potential environmental impacts. several possibilities to adapt the process to the circumstances within a company are mentioned. as the matrix presented is still under development, more examples from case studies are needed. this would offer an opportunity to develop the scales used and will allow for a comparison to other companies and industry averages european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5712 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 8 acknowledgements the presented research has received funding from the european unions’s horizon 2020 research and innovation programme under grant agreement no ° 869986. references cdp. (2021) publication of the 2021 questionnaire preview and reporting guidance. https://www.cdp.net/en/guidance clark, ch. h. (1989): brainstorming: how to create successful ideas. wilshire book company. dilts, r., epstein, t., & dilts, r. w. (1991). tools for dreamers: strategies for creativity and the structure of innovation. meta publications. ellen macarthur foundation. (n.d.). building blocks. retrieved march 15, 2021, from https://www.ellenmacarthurfoundation.org/circular-economy/building-blocks european commission. (2019). a european green deal. https://ec.europa.eu/info/strategy/priorities-2019-2024/europeangreen-deal_en european commission. (2020). eu circular economy action plan. https://ec.europa.eu/environment/circular-economy/ fink, l. (2018). larry fink’s annual letter to ceos – 2018 – a sense of purpose. http://www.corporance.es/wpcontent/uploads/2018/01/larry-fink-letter-to-ceos-2018-1.pdf greenhouse gas protocol. 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(2017). conceptualizing the circular economy: an analysis of 114 definitions. resources, conservation and recycling, 127, 221-232. https://doi.org/10.1016/j.resconrec.2017.09.005 matthey, a, & bünger, b.. 2019. methodenkonvention 3.0 zur ermittlung von umweltkosten: kostensätze. dessau: umweltbundesamt. peña, c., civit, b., gallego-schmid, a., druckman, a., caldeira-pires, a., weidema, b., ... & motta, w. (2021). using life cycle assessment to achieve a circular economy. the international journal of life cycle assessment, 1-6. https://doi.org/10.1007/s11367-020-01856-z sachse, p., & specker, a. (1999). design thinking: analyse und unterstützung konstruktiver entwurfstätigkeiten. in proceedings of the 12th international conference on engineering design: communication and cooperation of practice and science. 2 (vol. 26, pp. 941-946). technische universität münchen, konstruktion im maschinenbau. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5712 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 9 schmidt, g. (2000). methode und techniken der organisation. verlag g. schulz, s. (2020, october 29). what does “net zero emissions” mean and how can businesses achieve net zero?. sphera. https://sphera.com/glossary/what-does-net-zero-emissions-mean-and-how-to-achieve/ science based targets initiative. (2021) companies taking action. https://sciencebasedtargets.org/companies-taking-action science based targets initiative. (2018). value change in the value chain: best practices in scope 3 greenhouse gas management science based targets initiative. (2020). foundations for science-based net-zero target setting in the corporate sector. solomon, d. (2021) goldman sachs update on our 2030 sustainable finance commitment. https://www.goldmansachs.com/media-relations/press-releases/2021/announcement-04-mar-2021.html southpole. (n.d.) carbon offsets explained. retrieved march 15, 2021, from https://www.southpole.com/carbon-offsetsexplained zwicky, f. (1966). entdecken, erfinden, forschen im morphologischen weltbild. droemer/knaur. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6720 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 11 shadow bank systems in european affairs: measuring capability of fraud risk in special reports stefano de nichilo1* 1 department business and economics, university of cagliari via università 40, 09124 cagliari, italy stefanodenichilo1985@gmail.com received: 27/04/2022 accepted for publication: 28/09/2022 published: 29/12/2022 abstract in the last twenty years, the european court of auditors has placed increasing importance on producing “special reports” examining the economy, efficiency and effectiveness of eu spending, particularly concerning the shadow bank system. this institutional focus on performance audit, alongside traditional financial and compliance audit, has occurred when the european union is increasingly evaluating its policies and programmes under political pressure to demonstrate their added value with shadow bank systems. the rapid growth of the market-based financial system since the mid-1990s changed the nature of financial intermediation in the european states. “european shadow banks systems” are essential institutions within the marketbased financial system. european shadow banks systems are financial intermediaries that conduct maturity, credit, and liquidity transformation without access to central bank liquidity or public sector credit guarantees. examples of the european shadow banks system include finance companies, asset-backed commercial paper (abcp) conduits, limited-purpose finance companies, structured investment vehicles, credit hedge funds, money market mutual funds, securities lenders, and governmentsponsored enterprises. this intermediation chain binds european shadow banks systems into a network. the european shadow banking system rivals the traditional banking system in the intermediation of credit to households and businesses. this study contributes theoretically to research and empirically to the management practice of agile marketing concepts in digital transformation and international business contexts to develop practical competencies of speed, flexibility, and customer responsiveness in marketing strategies and operations. keywords: accountability methodology, agile marketing capabilities, performance audit, shadow bank system, special reports and up grade procedure services 1. introduction this article examined the court’s role in the institutional “chain of accountability” (denichilo, 2021b), addressing the ongoing shift from compliance audit (regularity, legality) towards performance audit and european shadow bank systems (homer & stephenson, 2012). audit by the court ranges from checking individual transactions carried out and the operations of the eu institutions to checking the effectiveness of policy initiatives to gauge how policy has fared (caiden, 1992). european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6720 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 12 the article analyses the political interests at stake in debates on accountability and the practical challenges inherent in the performance of performance audits (mendez, bactler 2011) with the european shadow bank system. to what extent are special reports increasingly resembling evaluations of european shadow bank systems studies? how does performance audit contribute to the accountability of european shadow bank systems? the article draws on primary documents related to the court’s ongoing internal reform process, including international peer review special reports to perform the european shadow bank system, hearings of the european parliament’s budgetary control committee, and court documents (knill, balint & bauer 2008). this study seeks to identify the key theoretical dimension of the agile marketing capability in the european shadow bank system and provide practical guidelines to facilitate its implementation. our finding is current theoretical and empirical research on agility concepts in the context of digital transformation and international marketing management. 2. literature review the court stresses the role of the parliament to actively engage in the accountability process by examining the court’s reports, rather than accountability being derived through transparency, given the public availability of all its reports for the assessment of the european shadow bank system (power, 2015). the auditor checks that funds are expended for stipulated purposes, that programmes are carried out as intended, and that funds are not spent on unauthorised activities (van wolleghem, 2020). as such, the court considers that it “accounts” for the performance of the eu budget via-à-vis the parliament’s budgetary control committee. so, the court distinguished clearly (denichilo, 2020a) between public audit as the “financial and performance audits of policies and related public funds and their link to the accountability process” and accountability as referring “mainly to democratic oversight of policies and activities of public bodies” (harber, marx and de jager 2020). a first international peer review (2008) criticised the range, level, and usefulness of reporting. it advocated the court focus on “areas of greater relevance, significance on risk”. in its special report for 2008-2012, the court frequently focused on eu programmes (ellinas & suleiman 2008), mainly examining compliance, to some extent effectiveness, but less regularly, economy and efficiency of the european shadow bank system. however, it rarely audited the management of eu institutions in procurement, organisation structures, facility management and human resources management (cortese, del carlo 2008). a second peer review (2014) advised the need for what introsai defines as a “problem-oriented performance audit” (denichilo, 2013) and to study more closely the causes of problems and their consequences as a basis for recommendations (rolle 2010). auditors of the four vertical chambers, acting under the oversight of their director, compiled an initial portfolio of potential audit tasks (sposato 2010) to assess european shadow bank system. proposals were evaluated using the four criteria: risk, materiality, relevance, and coverage. they were subsequently prioritised using three levels of assessment: low, medium, and high. nevertheless, while the chambers were aware of audit requests and issues of significant interest, especially for the parliament, and included them in their work plans, they were “neither collected in a structured way nor treated preferentially” (van der meer & edelebos, 2006). special reports on european shadow bank system are now framed according to five umbrella themes: “smart and inclusive growth”, “sustainable growth-natural resources”, “security and citizenship”, “administration”, as well as “other” (denichilo, 2020c). the court has acknowledged the difficulty in determining which of its work is taken up by the media. auditors may enthuse about a report on a seemingly salient topic, such as eu financing of climate change prevention mechanisms. however, there is no guarantee that politicians and/or the press will seize upon it. a special european shadow bank system report that received good media coverage in recent years had a precise human dimension, examining the effectiveness of free school milk and fruit schemes (colella, griffin, gaparaju s. 2000). with its interest at heart, the court produced a special report of the european shadow bank system on the “single audit”, identifying the weakness of multi-level cooperation (march & olsen 1995) in audit with the commission’s reliance on national audit authorities in different policy areas. the agility of special reports on the european shadow bank system is a strategy that addresses the challenges posed by digital transformation. it facilitates easy adaptation to the current complex business environments characterised by escalating competition, diverse customer requirements and expectations and rapid technological change. dynamic capabilities are hallmarks of the agility of the shadow bank system, defined as a paying agency’s dynamic capability to redeploy resources for creating value and managing turbulent environments efficiently. given the pivotal role of marketing in developing a paying agency’s dynamic capabilities and the need to build efficient marketing capabilities to compete in international markets successfully, marketing researchers are now focusing on dynamic marketing capabilities (bock, opsahl, george & gann 2012). european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6720 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 13 marketing and strategy research broadly recognised the positive linkage between the agility of the shadow bank system and marketing performance (chen, wang, nervo, benitez-amado & kou 2015). agility is crucial for creating customer value and added competitive advantage and providing firms with the ability to face market changes. in a paying agency, the marketing function mainly concerns demand creation, and agile competencies facilitate coping with the demand and quickly adapt tactics and operations in response to environmental changes. therefore, agile capabilities in the marketing area refer to dynamic marketing capabilities. earlier studies on agility describe agile paying agencies, especially in supply chain and it, in disruptive business contexts they are known to continuously monitor and detect environmental changes, opportunities, and threats, thus responding swiftly to market changes with timely decision-making and innovation. firms can quickly exploit existing or acquired resources to respond to changing market needs. customer responsiveness entails using it to improve the adequacy, accuracy, accessibility, and timeliness of the information and facilitate access to relevant customer data (chaffey 2010). customer responsiveness requires timely identification and proactive or reactive response to changes. agile paying agencies may better predict market demand, enhance customisation, or use it to meet customer expectations. agile paying agencies are also characterised by decision-makers who resolutely deal with changes, opportunities, and threats in the business environment. people in an agile organisation are more productive, efficient, and effective in achieving organisational objectives. they benefit from close relationships and collaboration, decentralised decision-making, and it expertise to address dynamic environments. moreover, marketers use technology integration to align with businesses to facilitate adequate information flow across the supply chain (eckstein, goellner, blome & henke 2015). 3. methodology we identify the three distinct subgroups of the european shadow banking system. these are: (a) the governmentsponsored shadow banking sub-system; (b) the “internal” shadow banking sub-system; and (c) the “external” shadow banking sub-system (table 1). a) the government-sponsored shadow banking sub-system (lending to nonbanking financial institutions) the seeds of the european shadow banking system were sown nearly 30 years ago, with the creation the governmentsponsored enterprises (gse). the gses have dramatically changed the way banks fund themselves and conduct lending (agea pwc audit reports 2011-2013). the funding “utility” functions performed by the gses for banks and the way they funded themselves were the models for what we refer today to as the wholesale funding market (agea pwc special report 2014). b) the “internal” shadow banking sub-system (interbank payment) the principal drivers of the growth of the european shadow banking system have been the transformation of the largest banks since the early-1990s from low return on equity (roe) utilities that originate loans and hold and fund them until maturity with deposits to high roe entities that originate loans to warehouse and later securitise and distribute them, or retain securitised loans through off-financial statement asset management vehicles (manes rossi, brusca and condor 2020). the transformation of banks occurred within the legal framework of financial holding companies, which through the acquisition of broker-dealers and asset managers, allowed large banks to transform their traditional process of hold-to-maturity, spread-banking to a more profitable process of originate-to-distribute, fee-banking (denichilo 2011). portfolio management started to decide which assets were retained and sold and charged originators (internal and external) the replacement cost of financial statements for warehoused assets. modern banks “rent” their financial statements and set their “rents” based on the replacement cost of their financial statements (agea e&y up grade procedure services 2014). c) the “external” shadow banking sub-system (off-balance sheet) some european banks also practised the mixture of bank and markets-based credit intermediation process that emerged was later adopted by diversified broker-dealers and also turned a range of independent, specialist non-banks into an interconnected network of financial entities that operated entirely external for banks and the official safety net extended to banks, hence the term “external” shadow banking sub-system (agea e&y financial letters 2019). the constant flux in the current business environment has led marketers to focus on applying the agile method, experimentation for shortening cycle time, increasing flexibility, sharper competitiveness, and swift adaptation to market globalisation (asseraf, lages & shoham 2018). businesses must continuously rethink their business model, offering, and processes to stay in tune with the digital transformation characterised by technological progress, digital communication, and shifting customer demand. they must also integrate technology with marketing communication strategies to satisfy customer needs. literature on marketing and strategy has focused on the agility of special reports on the european shadow bank system to address the challenges posed by digital transformation, such as “embrace change”, and predict market needs and innovative, especially in highly competitive and international marketing management scenario, and cater to the needs of international european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6720 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 14 customers. from this perspective, agility is a firm’s ability to stay up-to-date with market dynamics and accordingly adapt strategies, tactics and operations to rapidly respond to market changes in new business opportunities. in the digital and international context, literature on the agility of special reports on the european shadow bank system in marketing is scarce (barkema, baum & mannix 2002). however, agility in management and marketing literature has recently gained academic attention, where scholars have recognised the role of marketing in shaping agility as a critical driver of international performance. extant literature explores the drivers and outcomes of international marketing agility or that of inherently global firms. in contrast, a few other studies examine the relationship between agility and entrepreneurial orientation or consider customer agility. however, extant knowledge still needs to understand how specifically agile capabilities in marketing might take place when considering international context and what key aspects may contribute to developing a proper agile marketing capability (barrales-molina, martinez-lopez & gazquez-abad 2014) range of performance materiality 110% of pm 130% of pm over 60% of pm level hard medium soft usefulness audit advisory reporting significance of risk: risk materiality high medium low relevance big medium small coverage over in line under general controls: umbrella themes smart and inclusive growth innovative inclusive growth sustainable growth-natural resources agricultural commerce industrial security and citizenship participation collaboration only vote administration labour finance service other exclusive customization unique multilevel cooperation: media pressure legal structural weak application controls: cavr completeness not all all overall accuracy adequacy precision accurate validity flexibility competitiveness adaptation restricted access accessibility timeliness cycle time shadow bank system: a) the government-sponsored utility functions b) the “internal” roe (return on equity) c) the “external” ritual or abuse of right table 1. checklist of internal controls for special reports on european shadow bank system. (objective: 30% – 60% of pm; estimated error > 5% of payments; projected error < 10% of the reported expenditure) source: our elaboration of agea e&y up grade procedure services 2014 4. results to take up the theme of the essay by professor ernesto longobardi and professor antonio pedone, "public debt in the euro area after the crisis: restructuring hypotheses, insolvency proceedings, (weak) prospects for fiscal union", in a. di maio and u. marani (edited by), economic policies and international crisis. for a broader examination of the same theme, see longobardi-pedone and denichilo (2009). among the leading causes of the accumulation of private debt were: the intensity and persistence of severe macroeconomic imbalances within countries and between significant economies; the expansive stance of monetary policies, also justified by a low inflation context, which produced an abundant supply of liquidity and credit; the uncontrolled acceleration of financial european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6720 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 15 innovation in forms that made distribution and distribution opaque the extent of the risks, to which the transition of banks from the "originate and hold" model to the "originate to distribute" model contributed; under these circumstances, the surge in the default rate on worst-quality mortgages in the united states was the spark which lit a colossal fire, extending to the credit system (with the failure of many banks, until the liquidation of lehman brothers in september 2008) and then to the financial system as a whole international and the global economy. faced with the explosion and spread of the crisis, many governments intervened massively to rescue financial institutions, causing a sharp and rapid surge in the deficit and public debt with european shadow bank systems. so, the automatic effects of the crisis on tax revenues and some expenses contributed to the worsening of public accounts. this study contributes theoretically to the literature on agile and dynamic marketing capabilities of special reports on the european shadow bank system. first, this work advances the field of dynamic marketing capabilities by defining a new capability: the agile marketing capability of the european shadow bank system (tables 2 and 3). application controls general controls prevent, detect, and correct transaction errors and fraud in application programs. they are concerned with the accuracy, completeness, validity and authorization of data captured, stored, transmitted to the other system, and reported. make sure an organization’s control environment is stable and well-managed. examples include security; it infrastructure; and software acquisition, development, and maintenance controls. table 2. dynamic marketing capabilities of internal control source: author’s elaboration internal control assertions evidence of controls test types of internal controls completeness controls to ensure financial transactions and data are completed. control totals and sequencing. manual semi-manual automated accuracy controls to ensure financial transactions and data are accurate. logic tests and checksums. manual semi-manual automated validity controls to ensure financial transactions and data are valid. maintained record trail and electronic signature. manual semi-manual automated restricted access controls to ensure restricted access to data and financial transactions. passwords, asset tags, locks and approval forms. manual semi-manual automated table 3. internal control assertions: cavr source: author’s elaboration second, this study extends the existing theories on the agility to the marketing domain, providing a theoretical framework to study the critical dimensions of the agile marketing capability of the european shadow bank system (table 4). controls of agile marketing capabilities gather evidence of controls continual improvement pace. earlier studies claim supply chain, and it agility continuously detect environmental changes and swiftly respond with innovative solutions, such as redeploying resources and quickly performing tasks. this study finding shows that, when referring to international and digital marketing, ongoing efforts in adopting cutting european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6720 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 16 edge technology that analyzes market trends, customer behavior, and competition are crucial to providing optimized services and innovative responses to international customer needs. customer-oriented responsiveness. most studies on agility focus on swift responsiveness, that is, to identify and respond to changes in the supply chain, technology, competition, and demand reactively or proactively and recover from them. it facilitates gathering customer information. agility implies more excellent market prediction and customization. the case study confirms the marketing function. the firm can be more responsive to customer demand at a global level by using metrics for measuring customer satisfaction levels, analyzing sentiments across media channels and countries, and generally tracking information and, in turn, offering more customized products. high flexibility. prior studies on agility highlight the relevance of an adaptive approach to competing with speed strategies, redeploying resources flexibly, and managing new or diversified products and objectives with the existing facilities and supply chain. the study results extend the current literature by showing that such flexibility is achieved with flexible planning that places individuals at the center and easily adapts to changing customer requirements. interestingly, the concept of flexibility attempts to pursue simplicity by explicitly providing an easy home searching tool, which makes rental simple, accessible, and adaptable to the different requirements expressed by customers across countries (grewal & tansuhaj 2001). people collaboration. according to the literature, agility suggests collaboration is crucial for achieving a firm’s objectives effectively and efficiently. this is further enhanced by it integration and alignment throughout the supply chain, facilitating information flows. the empirical evidence presented in this study confirms this argument. it demonstrates that collaboration among departments and being open to feedback and advice from others are some of the essential features for global marketing teams that strongly need to foster close and trust-based relationships. in addition, particularly for digital, international business, communication tools throughout the organization are critical to facilitate up-to-date information on achievements and targets and weekly goals across teams and departments for business alignment (hagen, zucchela & ghauri 2018). table 4. agile marketing capabilities assertions of european shadow bank system source: author’s elaboration european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6720 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 17 in sum (table 4), the study findings support a framework that identifies the critical dimension of agile marketing capability; continual improvement pace, customer-oriented responsiveness, high flexibility, and people collaboration (teece, peteraf, & leih 2016). item weighted average first quartile median third quartile std. dev./ max min max 1 2.33 0.77 2.01 2.31 0.22 0.22 3.33 2 1.33 0.54 1.05 1.34 0.33 0.12 4.35 significance of risk: materiality 3 3.33 1.22 3.34 4.23 0.45 0.15 5.55 4 4.33 1.55 3.77 4.31 0.55 0.11 7.33 5 5.70 2.55 4.77 6.21 0.66 0.05 5.34 general controls: umbrella themes 6 5.33 2.77 3.33 6.33 0.33 0.23 7.22 7 7.29 3.77 4.24 7.22 0.77 0.55 14.51 8 8.29 4.88 5.77 8.22 0.66 0.77 12.44 9 9.10 5.99 6.22 10.02 0.99 1.01 17.9 10 5.22 2.22 3.44 5.21 0.32 0.51 7.22 multilevel cooperation: media pressure 11 7.23 3.79 4.77 8.22 0.67 1.66 12.11 application controls: cavr 12 6.23 1.88 4.56 6.24 0.22 1.77 8.29 13 7.33 3.99 4.55 8.33 0.55 1.88 9.99 14 5.55 1.75 2.77 5.25 0.33 0.55 8.88 15 6.99 3.77 4.88 6.88 0.67 1.57 7.59 table 5. critical dimension of the agile marketing capability. number of observations: 100% of agea debt register practices year 2014 (number of observation 4.887 practices) source: our elaboration of agea e&y up grade procedure services 2014. 4. conclusion the need for an orderly reduction of excessive private and public debt with european shadow bank systems was anticipated by spaventa (2008); on the problems encountered and on the few steps forward made in this area (denichilo 2020b). under the traditional originate-and-hold model, the lending bank retains the credits in its assets and hedges the risk with capital. with the originate-to-distribute model, on the other hand, credit risk is transferred using the most varied and everchanging techniques of securitization and the creation of “derivative” credits (köhler, ratzinger-sakel and theis 2020). however, public debt problems are extraordinary; they are different from the rest of the world's shadow bank systems (buchak, matvos, piskorski and seru 2018). the split between responsibility for money and exchange, assigned to the centre, and that of fiscal and debt policies, which remain on the periphery, deprives sovereign states of an essential piece of their sovereignty, a lender of last resort that provides markets with an implicit debt guarantee. overall error % performance materiality tolerance effective error adjusted error opinion projected error (call) 30% 60% medium risk <10% 1.33% 7.55% accepted estimated error (put) 30% 60% medium risk >5% 6.77% 4.5% rejected european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6720 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 18 overall consistency test % performance materiality tolerance effective error adjusted error opinion rho di sperman 30% 60% medium risk 5.23% 4.25% 5.25% accepted tau di kendal 30% 60% medium risk 4.33% 5.25% 5.66% rejected internal consistency test % performance materiality tolerance effective error adjusted error opinion likert's interquartile gap test 30% 60% medium risk <2 1.77 1.66 accepted table 6. capability overall conclusion of policy investigations template source: our elaboration of agea e&y up grade procedure services 2014 although the present study provides an initial theoretical and empirical understanding of the agile marketing capability of shadow bank system, it gives managerial insights on developing an agile marketing capability, particularly in digital and international contexts (denichilo 2021a). these insights would help managers and practitioners employ agile features in their marketing strategies and operations (lee, sambamurthy, lim & wei 2015). the study findings provide interesting guidelines for managers and practitioners in implementing agility in the marketing field (ravichardran 2018). the definition of the critical factors of agile marketing capability advances the knowledge of practitioners and international markers on how to implement agile marketing and improve their ability to leverage digital technologies to satisfy their customers in dynamic and global business contexts. although the study findings provide an excellent theoretical and empirical understanding of the agile marketing capability of the european shadow bank system, this research has some limitations that may be addressed in further research (lu & ramamurthy 2011). concerning the methodological perspective, the qualitative data analysis involved only one firm because of the nature of the research. although the study findings may be generalized to a certain degree, exploring this topic in multiple research contexts would be necessary. future research may use this study as a pilot case and increase the viability of the results in order organizational settings. future studies could also develop scales for measuring the agile marketing capability of the european shadow bank system and use survey instruments to validate our findings (rixen 2013). it would be interesting to understand the relationship between the identified dimension and their underlying nature, as well as develop a proper procedure references agea e&y up grade procedure services 2014. agea e&y financial letters 2019. agea pwc audit reports 2011-2013. agea pwc special report 2014. asseraf y., lages l. f. & shoham a. 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(2020), does administrative capacity matter? the absorption of the european fund for the integration of migrants. policy studies. 4562-article text-14394-1-9-20200612 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4562 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 38 the impact of stimulating the development of human capital on economic development latif zeynalli phd student azerbaijan state oil and industry university, azerbaijan, baku e-mail: latif.zeynalli@gmail.com received: 25/05/2020 revised: 07/06/2020 accepted for publication: 09/06/2020 published abstract human capital is a significant ingredient of economic development. today, the concepts of human capital have been defined as the knowledge, skill, creativity, and health of the individual. the long-run impact of human capital on the current innovation and economic development is still a question. therefore, the interest in research to explore the contribution of human capital in economic growth increased. the production and processing of knowledge are directly related to scientific and healthy workflow. educated and healthy people are one of the most critical factors in the models, namely the power of human capital, the development of the economy. in this study, the author uses a qualitative methodology. the investigation shows that the most crucial difference between developed and underdeveloped countries is the level of economic development. the biggest obstacle to the development of underdeveloped countries is low education level, lack of health conditions and brain drain. these factors prevent the accumulation of human capital in underdeveloped countries and cause waste of resources in the country. considering these factors, the primary purpose of the study is to study the impact of human capital development on economic development in azerbaijan. keywords: human capital, economic development, sustainable economic development, human capital index, knowledge economy, education european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4562 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 39 1 introduction in the contemporary world, human capital is undoubtedly considered one of the main factors affecting the sustainable economic development of each country. the rapid development of human capital has particular importance for countries like, which aims to form a competitive structure for its economy to meet requirements of today's global competition and bring the welfare of society to high standards of living. human capital is an economic value that embodies people's competency, knowledge, skills, social and other qualities. human capital development benefits a country directly and indirectly. the direct way is when people are educated, healthy and self-confident, while the indirect way is through economic development, the labor market, international economic relations and so on. in the middle of the last century, the idea of having "more territory" in international politics was replaced by the idea of having "better and better quality human capital" human capital was originally defined as ‘[...] knowledge, skills, attitudes, aptitudes, and other acquired traits contributing to production’. this definition is broader than just educational attainment, as it includes any productive skills or capabilities of individuals, not just those that are formally taught (muhammad ali, et.al.,2018) human capital plays as the primary factor for the investment abroad implying that venture capital is a strict process of establishing the perimeter for choosing the right criteria for investments and what will include into it (vahid jafari-sadeghi, et.al., 2018). the human capital assumes the prevailing special weight in the structure of commonwealth. human capital wealth is defined as the labour force. in other words, human capital wealth is an asset that generates a stream of future economic benefits (earnings) (adalat muradov et.al., 2019). human capital is the sum of investments in knowledge and skills that can benefit an individual's future activities (zeynalli.l.v, 2017). nowadays, effective functioning of the economy in a nation is directly related to human capital development. a concept of human capital includes the elements of human knowledge, skills, ability and health. emergence of the human capital concept has brought about the concept of knowledge economy. knowledge economy is considered an advanced stage of hightech and innovation-driven economy. the experience of developed countries shows that the main factor behind today’s economic achievements is not just natural resources, but innovations based on human knowledge and abilities. theoretical and practical propositions of representatives of institutional, neoclassical, neo-keynesian and other economic schools are based on development of the human capital concept. t.schultz, g.becker, s.kuznets, e.denison, r.slow, c.kendrick, s.fabrikant, i.fisher, r.lukas and many well-known economists put a lot of effort to develop this concept. g.becker has rendered great services in developing human capital theory, and defined human capital as the source of knowledge, skills and motivations.(капелюшников р.и, 1993) human capital, as viewed by economists, involves a process of investment that enhances human labor productivity by means of advances in knowledge and its applications. it specifically involves investment expenditures on education, training, health, nutrition, and related factors that increase the productivity of the labor force. nobel laureate t. w. schultz was one of the first economists to identify the deficiency of the standard neoclassical production function in neglecting the critical role of european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4562 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 40 human capital. (schultz.t, 1956) t. schultz, another figure known for his human capital theory, suggests that human capital encapsulates a combination of knowledge, skills, relationships and professionalism that humans can fully realize and avail of resources existent in society. they are related to intelligence, health, knowledge, quality work and quality of life. (schultz.t, 1968) he attributed to investments in human capital not only direct expenditures on education in secondary and higher education institutions, but also self-learning, work experience as well as expenditures on health, education and science. t. schultz paid attention to education than display of other forms of human abilities and therefore called for studying this phenomenon in the context of form and sources of human capital. (schultz.t, 1964) nowadays, the content of human capital concept is formed by a set of knowledge, skills, habits and abilities that are used to meet various needs of an individual and society. thus, s. fischer, r. dornbusch and r. shmalenzi consider human capital as a measure of human ability to earn income (s. fisher, et.al.,1998). the united nations development program defines human capital as a set of individual qualities, such as skills, knowledge, social attributes as well as creative imagination, capable of performing labor activity to create economic value (müəlliflik hüququ bmt-nin i̇nkişaf proqramı, 2013). thus, human capital is an intense productive factor for development of society and the economy. it implies to creative professionals, intelligence, knowledge, quality and higher labour productivity as well as high quality of well-being. the bearers of human capital are people who remain competitive (or able to meet competition) with their mental, psychological, intellectual, cultural, creative and professional abilities as well as high quality of life. the factors forming human capital are as follows: § knowledge; § skills; § competences; § creativity (abilities); § health; § ethics (norms of cultural behavior and system of values); § level of well-being. these factors form human creative energy. use of human creative energy for personal interests (benefits) as well as the benefit of society depends on the existing environment. in other words, every human being can be competent and creative, but use of creative energy, whether positively or negatively, is directly dependent on working environment, incentives in society and opportunities available around. formation of human capital in a nation assumes to ensure that every citizen has adequate knowledge, skills, competence, health and all other necessary qualities. meanwhile, human capital on the national level is perceived as competitive and highly productive knowledge accumulated in all areas of society and economy, innovation system, intellectual capital and innovation technologies, creative and innovative labor resources as well as quality of well-being in society. they all together ensure competitive edge for a nation and its economy in international arena. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4562 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 41 human capital on the national level is formed by means of investments in upbringing, education, culture, health care and safety, professional development, science, knowledge and intellectual growth, entrepreneurial skills, innovations and enhancing quality of human well-being. (becker g.s, 1962) development of human capital is conditioned as follows: § attainment of required knowledge, skills, competence and creative abilities is dependent on quality, accessibility, continuity and target-oriented nature of education in a nation; § state of health and labour ability hinges on quality and accessibility of country’s health care system; § ethics or behavioral culture depend on outlook and system of values that are largely and systematically promoted in the country according to studies conducted by the world bank, 16 percent of today’s economic growth in the world comes from physical capital, 20 percent from natural resources and 64 percent from human capital. according to studies conducted in western countries, returns on investments in human capital are two times greater than other types of investment in developed countries. (maryam ebrahimi, 2020) this fact explicitly shows the role of human capital in the development of society. nowadays, competition for quality human capital is heightened in the world and human capital is the cornerstone of the global innovation development. at present, human capital is the main component of national wealth and remains a major driving force for economic growth in the world. achievements of scientific and technological progress, organization of labour and its cultural emergence and productivity depend on the quality of human capital. human capital is country's most valuable wealth. being healthy, educated and experienced contributes to the long-term development of an individual and society. country’s future is dependent on talent, skills, and professional experience of its population. human capital is the economic value embodying competences, knowledge and skills, social and other qualities. (müəlliflik hüququ bmt-nin i̇nkişaf proqramı, 2013) human capital theory suggests that people want to be compensated for their human capital investments, assuming that people seek to maximize their economic benefits over their life-time. accordingly, human capital theory was originally developed to explain variations in financial returns of employees. applied to entrepreneurship this means that entrepreneurs strive to receive financial returns from their venturing activities relative to their human capital investments. therefore, entrepreneurs' human capital should be positively associated with a preference for venture scale and growth (unger, j. m., et.al.,2011) in the developed countries capital investments in human capital are admitted as the most effective expenditures for society which quickly covering itself on account of returns. human capital is considered as one of the factors strengthening the economic potential and the economic growth in generally. in this type of approach the development is not only measured through increasing the economic growth rate, but also through human capital investment and reduction of poverty (becker g.s., 2009) european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4562 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 42 2 literature review 2.1 human capital and economic development human capital is a broad concept which identifies human characteristics which can be acquired, and which increase income. it is commonly taken to include peoples’ knowledge and skills, acquired partly through education, but can also include their strength and vitality, which are dependent on their health and nutrition. human capital theory focuses on health and education as inputs to economic production. this is in contrast to the concept of human development which views health and education as intrinsically valuable outcomes to be placed alongside economic production as measures of human welfare. (simon appleton& francis teal, et.al.,1998) robert e lucas conducted a study “on the mechanics of economic development” and states that the factors behind the economic growth is the human capital accumulation rate, in which both the economic growth and human capital accumulation rate is proportional to each other since, human capital levies externalities on production. the economic growth rate is proportionally more than the increase in the accumulation rates of human capital, thus, constructing increasing return to scale. he further explains satisfactorily the rich countries growth but does not explain the poverty traps countries (zia ur rehman, et.al., 2018). the modern economy is the most knowledge based, therefore, the human capital based on knowledge and skills, is a leader of the national wealth. in order to develop the human capital from the “potential” state to the state of “the cost of creating added value”, the state should have special programs and effective management system. human capital is a cost that brings benefit (mayis g. gulaliyev, et.al, 2019). modern economists are of the view that natural resources play an important role in the economic development of a country. a country which has abundant natural resources is in a position to develop more rapidly than a country that is deficient in such resources. however, the presence of abundant resources is not a sufficient enough condition to explain all aspects of economic growth. economies are created and managed by people. these people must be capable of performing the duties required to create such an economy. matters of economic growth and decline hinge on the population. this is called human capital, and to truly understand the world, we must understand the role that populations play in an economy's growth or decline. human capital is the fundamental source of economic growth. it is a source of both increased productivity and technological advancement. in fact, the major difference between the developed and developing countries is the rate of progress in human capital. the underdeveloped countries need human capital to staff new and expanding government services to introduce new systems of land use and new methods of agriculture, to develop new means of communication to carry forward industrialization and to build the education system. since 2005, leading international organizations and a number of research centres have undertaken a number of serious investigations and prepared reports in order to increase attention to effective use of azerbaijan's oil and gas revenues, diversification of the country's economy and human capital development. the world bank's document "azerbaijan country economic memorandum: a new silk road – export-led diversification" describes the steps needed to develop human capital in the country. in the document, the world bank european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4562 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 43 recommended that the government of azerbaijan should pay more attention to issues such as deepening of reforms in the education and healthcare systems, greater investment in these areas, adaptation of the education system to labour market requirements and strengthening of social security and employment services. (world bank, 2009) the "azerbaijan 2020: look to the future" development concept, approved by a decree of the president of the republic of azerbaijan dated 29 december 2012, stated that one of the most important challenges of our time was "to lay the foundation of transition from a traditional economy to a knowledge-based economy and prioritize appropriate human capital development, which is essential for it". section 7 of the concept was called "human capital development and establishing an effective social security system". the document stated that "providing the population with quality health and education services in the field of human capital development is part of the concept and access to these services for various social groups, including lowincome families and poorer citizens, is a key strategic line." [2] another document reflecting the state policy in the field of human capital development is the strategic road map on the national economic prospects of the republic of azerbaijan, which was approved by a decree of the president of the republic of azerbaijan dated 6 december 2016. one of the four strategic goals outlined in this document is related to human capital development: "as an integral part of the efforts to achieve competitive, inclusive and sustainable economic goals, the third goal is to accelerate human capital development." accordingly, the third strategic goal in the document is to develop human capital. it emphasizes that, as an integral part of reforms in the field of economic transformation in azerbaijan, comprehensive measures will be taken to ensure continuity in human capital development, raise labour productivity and increase the role of knowledge in economic development. [4] the strategic road map on vocational education and training development in the republic of azerbaijan was approved by a decree of the president of the republic of azerbaijan dated 6 december 2016. despite the emphasis on human capital development in both key strategic documents, their approaches and targets for human capital development are quite different. if the development concept focuses on 5 aspects of human capital development, the strategic road map focuses exclusively on improving education, as well as stimulating investment in research and development. 3 methodology of research human capital, innovation and economic development are rather large and vague ideas whose measurement has to be specified in greater detail. the human capital data used in this study come from different sources. starting in 2005, azerbaijan has generated large oil revenues. according to the data of the state oil fund of the republic of azerbaijan covering the period of 20002017, the fund received a total of $138.1 billion, of which $102.3 billion (or 74.0%) was funneled to various projects related to the country's economic development (both through the state budget and funded directly by the fund). during this period, the state budget revenues and expenditures increased rapidly: state budget expenditures increased from azn 2.1 billion in 2005 to azn 22.7 billion, in other words, more than 10 times in 2018. accordingly, the amount of funds allocated from the state budget for education, health care, social protection, and social security as well as culture has seen a dramatic increase. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4562 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 44 one of the main tasks in public administration is to ensure the development of individuals and the whole society as the most important strategic resource with strong potential and creative abilities. to achieve it, the government should develop and implement a consistent and rational policy. this policy should cover all the elements that make up human capital, reflect specific goals and objectives for each element, and ensure consistency of the indicators and incorporate mechanisms for their implementation. the main source of data for this study are from the human capital report of the world economic forum and the human development report of the united nations development program was used. this study pays special attention to the indicators reflected in the human capital report of azerbaijan for 2016. in particular, the human capital report of the world economic forum compared azerbaijan with other countries on the basis of 0-14 age group, 15-24 age group, 25-54 age group, 55-64 age group and over 65 age group. in addition, comparison of azerbaijan’s per capita gdp data on indicators of selected countries and country group and azerbaijan’s hdi trends based on consistent time series data and new goalposts were highlighted. in essence, the study did not use time series data for analysis. 4 results and discussions the impact of stimulating human capital development on economic development has been discussed from the perspective of developing and developing countries. according to the human capital report of the world economic forum, the indicators of the human capital index of 43 countries were obtained and compared. first, this section reflects the human capital index of azerbaijan in 2016, as well as the score and level of the 5 group of indicators shown in table 1 below. table 1. azerbaijan's human capital value index for 2016 human capital index 0-14 age group 15-24 age group 25-54 age group 55-64 age group over 65 age group sc or e l ev el sc or e l ev el sc or e le ve l sc or e le ve l sc or e le ve l sc or e le ve l azerbaijan 70.72 54 83.18 68 61.65 87 66.66 48 78.85 24 60.93 50 source: wef, human capital report. (2016) as it has seen azerbaijan is 54. next place the general scope of human capital index score in 2016. it ranks 68th in the age group 0-14, 87th in the age group 15-24, 48th for the age group 25-54, 24th for the age group 55-64, and 50th for the age of 65 years. as it will be recalled, it is possible to make regional comparisons in the human capital index. human capital index ranking of countries in the region found that europe and central asia, from azerbaijan in this respect are shown in table 2. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4562 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 45 table 2. ranking of the countries in europe and central asia region in terms of human capital index values in 2016 number hci rank countries hci 1 1 finland 85.86 2 2 norway 84.64 3 3 switzerland 84.61 4 5 sweden 83.29 5 7 denmark 82.47 6 8 netherlands 82.18 7 10 belgium 81.59 8 11 germany 81.55 9 12 austria 81.52 10 14 ireland 80.79 11 15 estonia 80.63 12 16 slovenia 80.33 13 17 france 80.32 14 19 united kingdom 80.04 15 20 iceland 79.74 16 21 lithuania 79.34 17 22 luxembourg 79.28 18 25 czech republic 78.45 19 26 ukraine 78.42 20 27 latvia 78.13 21 28 russian federation 77.86 22 29 kazakhstan 77.57 23 30 poland 77.34 24 31 cyprus 76.97 25 33 hungary 76.36 26 34 italy 75.85 27 35 malta 75.66 28 37 armenia 75.39 29 38 romania 74.99 30 39 croatia 74.99 31 40 slovak republic 74.94 32 41 portugal 74.39 33 43 bulgaria 73.66 34 44 greece 73.64 35 45 spain 72.79 36 47 kyrgyz republic 72.35 37 54 azerbaijan 70.72 38 57 serbia 70.54 39 58 tajikistan 70.53 40 59 macedonia, fyr 70.01 41 63 moldova 69.67 42 70 albania 68.23 43 73 turkey 67.57 source: wef, human capital report. (2016) when the countries in the europe and central asia region are ranked according to their general index values, the first five; finland, norway, switzerland, sweden and denmark. 37 out of 43 countries in this region azerbaijan is located next. according european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4562 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 46 to these indicators, the human capital index in azerbaijan is lower than in europe and central asia and is ahead of only 6 countries in the human capital index. this situation shows us that our country is weak in general in terms of manpower training in this region. it is possible to say that our country is in the middle of the 130 countries examined from the point of view of all these. in this respect, azerbaijan will create a focus on education and employment elements of human capital will be in the interest of the country. table 3 shows the first 15 countries according to the human capital index of the 0-14 age group. table 3. top 15 countries in terms of human capital index of the 0-14 age group for 2016 number countries score 1 finland 98.17 2 cuba 96.87 3 barbados 95.92 4 ireland 95.87 5 singapore 95.81 6 japan 95.78 7 switzerland 95.76 8 belgium 95.29 9 new zealand 95.20 10 estonia 95.09 11 norway 94.69 12 iceland 93.85 13 canada 93.46 14 sweden 93.25 15 france 93.07 source: wef, human capital report. (2016) in the values of the human capital index calculated for the age group of 0-14, the first five countries are as follows; finland, cuba, barbados, ireland and singapore. the 15th is france. accordingly, azerbaijan is ranked 68th in this category with 83.18 scores. table 4 shows the first 15 countries in terms of human capital index calculated according to 15-24 age group. table 4. top 15 countries in terms of human capital index of the 15-24 age group for 2016 number countries score 1 finland 85.35 2 norway 84.72 3 netherlands 83.70 4 switzerland 83.34 5 australia 82.56 6 austria 82.41 7 new zealand 82.25 8 denmark 81.89 9 sweden 81.03 10 germany 79.78 11 iceland 79.63 12 slovenia 79.13 13 belgium 78.25 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4562 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 47 14 russian federation 78.21 15 ukraine 78.04 source: wef, human capital report. (2016) in the values of the human capital index calculated for the age group of 15-24, the first five countries are as follows; finland, norway, netherlands, switzerland and australia. the 15th is ukraine. accordingly, azerbaijan is ranked 87th in this category with 61.67 scores. table 5. top 15 countries in terms of human capital index of the 25-54 age group for 2016 number countries score 1 finland 81.24 2 switzerland 80.51 3 sweden 80.17 4 norway 80.11 5 japan 79.13 6 singapore 78.70 7 germany 78.39 8 denmark 78.17 9 canada 77.61 10 netherlands 77.58 11 belgium 77.55 12 france 77.32 13 luxembourg 77.24 14 united kingdom 76.78 15 austria 76.75 source: wef, human capital report. (2016) in the values of the human capital index calculated for the age group of 25-54, the first five countries are as follows; finland, switzerland, sweden, norway and japan. the 15th is austria. accordingly, azerbaijan is ranked 48th in this category with 66.66 scores. table 6. top 15 countries in terms of human capital index of the 56-64 age group for 2016 number countries score 1 japan 85.72 2 new zealand 85.70 3 norway 85.34 4 sweden 84.58 5 canada 84.22 6 denmark 83.99 7 finland 83.90 8 switzerland 83.54 9 germany 83.31 10 estonia 82.98 11 armenia 81.84 12 lithuania 81.24 13 netherlands 81.06 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4562 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 48 14 kazakhstan 80.95 15 australia 80.85 source: wef, human capital report. (2016) in the values of the human capital index calculated for the age group of 56-64, the first five countries are as follows; japan, new zealand, norway, sweden and canada. the 15th is australia. accordingly, azerbaijan is ranked 24th in this category with 78.85 scores. table 7. top 15 countries in terms of human capital index of the 65 and over age group for 2016 number countries score 1 japan 75.61 2 norway 74.53 3 new zealand 74.07 4 denmark 74.04 5 armenia 74.01 6 germany 73.54 7 switzerland 73.28 8 canada 73.05 9 finland 72.95 10 ukraine 72.21 11 latvia 72.10 12 austria 72.00 13 estonia 71.77 14 slovenia 71.39 15 russian federation 71.14 source: wef, human capital report. (2016) in the values of the human capital index calculated for the age group of 56-64, the first five countries are as follows; japan, norway, new zealand, denmark and armenia. the 15th is russian federation. accordingly, azerbaijan is ranked 50th in this category with 60.93 scores. table 8. comparison of azerbaijan's per capita gdp data on indicators of selected countries and country group. countries gross national income (gni) per capita. ($) azerbaijan 15,751 turkey 23,500 russian federation 23,843 kazakhstan 22,054 kyrgyz republic 3,113 tajikistan 3,164 estonia 27,645 latvia 23,685 lithuania 26,884 ukraine 7,593 belarus 15,765 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4562 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 49 georgia 8,785 armenia 8,350 uzbekistan 6,135 turkmenistan 14,890 source: human development report. (2016) as can be seen from the table, azerbaijan has a leading position in the caucasus region. it lags behind only 6 countries on the same indicator. according to the table, average per capita income is 15,410 usa dollars. in this regard, per capita income in azerbaijan is 2.2% higher than the average. according to the report, this figure is kyrgyz republic, with the lowest per capita income of $ 3113. table 9: azerbaijan’s hdi trends based on consistent time series data and new goalposts life expectancy at birth expected years of schooling mean years of schooling gni per capita (2011 ppp$) hdi value 1995 65.3 10.0 10.2 3,387 0.612 2000 66.8 10.4 10.6 4,314 0.640 2005 68.8 10.7 10.7 6,940 0.679 2010 71.0 11.7 10.7 15,246 0.740 2015 71.9 12.7 10.7 16,334 0.758 2016 72.0 12.7 10.7 15,751 0.757 2017 72.1 12.7 10.7 15,600 0.757 source: http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/aze.pdf azerbaijan’s hdi value for 2017 is 0.757— which put the country in the high human development category—positioning it at 80 out of 189 countries and territories. the rank is shared with lebanon and the former yugoslav republic of macedonia. between 1995 and 2017, azerbaijan’s hdi value increased from 0.612 to 0.757, an increase of 23.7 percent. table a reviews azerbaijan’s progress in each of the hdi indicators. between 1990 and 2017, azerbaijan’s life expectancy at birth increased by 7.3 years, mean years of schooling increased by 0.5 years and expected years of schooling increased by 2.0 years. azerbaijan’s gni per capita increased by about 79.2 percent between 1990 and 2017. table 10: human development index for azerbaijan years health index education index hdi 1995 0.696 0.618 0.612 2000 0.719 0.640 0.640 2005 0.750 0.652 0.679 2010 0.784 0.681 0.740 2011 0.789 0.684 0.741 2012 0.792 0.689 0.745 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4562 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 50 2013 0.795 0.698 0.752 2014 0.797 0.709 0.758 2015 0.799 0.709 0.758 2016 0.800 0.709 0.757 2017 0.802 0.709 0.757 source: human development reports. the development of human capital index of azerbaijan is examined in table 10, the respectively, there is a 1.2-fold increase in education and health indices, and a 23.7% increase in the hdi. according to the world bank report, azerbaijan's human capital index rose from 0.56 to 0.60 from 2012 to 2017. azerbaijan's human capital index in 2017 was lower than the average figure of regional countries, but was slightly higher than the average figure of countries with similar income. according to the report, if children born in azerbaijan today benefit from full education and full health, 60 per cent will be productive and 98 out of every 100 children will be able to live to be 5. a 4year-old child in azerbaijan can complete an average of 11.6 years of education by the age of 18. children in azerbaijan are expected to complete 11.6 years of pre-school, primary, secondary and full secondary education by 18. however, when the school education process is adapted to the quality of learning, it is only 8.8 years. according to the report, 2.8 years are missing in learning. the assessment of pupils' learning quality is slightly below average in azerbaijan. according to the human capital index, pupils' learning quality was rated at 472 points. boys were rated at 466 points and girls at 479 points for the quality of education they receive here. it should be noted that in this scale, 625 indicates the highest achievement and 300 the minimum achievement. as for the longevity of people, 87% of 15-year-olds in azerbaijan will live to be 60. this figure is 83% for boys and 92% for girls. the statistics shown are the means of evaluating the lethal and non-lethal health effects if a child born today ages in the current conditions. moreover, the human capital index shows that 18 out of every 100 children born in azerbaijan are short and are at risk of mental and physical restraint, which may continue throughout their lifetime. 5 conclusion the most important difference between developed and underdeveloped countries is the level of economic development. the biggest obstacle to the development of underdeveloped countries is low education level, lack of health conditions and brain drain. these factors prevent the accumulation of human capital in underdeveloped countries and cause waste of resources in the country. in societies with healthy individuals, the production of information and the effective use of information increases the level of economic development with a high level of education. the high level of knowledge and skills of labor force increases productivity while accelerating technological development and this increases factor productivity. therefore, human capital plays the most important role in economic development. review of azerbaijan's human capital index is very low as a result of the scope of the europe and central asia. 37 out of 43 countries. nevertheless, azerbaijan has a leading position in european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4562 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 51 the caucasus in terms of per capita income. thus, per capita income in azerbaijan is $ 15,751, almost twice as high as in georgia and armenia. this study examined the relationship between economic development and human capital in azernaijan. according to the world bank report, azerbaijan's human capital index rose from 0.56 to 0.60 from 2012 to 2017. although, azerbaijan’s hdi value for 2017 is 0.757— which put the country in the high human development category—positioning it at 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(1993) экономический подход гэри беккера к человеческому поведению. сша: экономика, политика, идеология, № 11, с. 17–32 10. maryam ebrahimi (2020) qualitative exploration of grounded theory in organizational research, igi global, may 15, 2020 business & economics 251 page european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4562 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 52 11. mayis g. gulaliyev, rashad s. muradov, leyla a. hajiyeva, hijran r. muradova,konul a. aghayeva, elnur s. aliyev (2019) study of human capital development, economic indicators and environmental quality, ekoloji 28(107): 495503 12. muhammad ali, abiodun egbetokun, manzoor hussain memon (2018) human capital, social capabilities and economic growth, economies 2018, 6, 2; 2-19 13. müəlliflik hüququ bmt-nin i̇nkişaf proqramı, 2013. i̇nsan i̇nkişafı bakı s.36 14. s. fisher, r. dornbusch, r. shmalenzi (1998) economy per.s english. co 2nd ed. m.delo, 864 p. 15. schultz.t.w, 1956. 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(2011). human capital and entrepreneurial success: a metaanalytical review. journal of business venturing, 26(3), 341-358. 20. vahid jafari-sadeghi, salman kimiagari, paolo pietro biancone (2018) level of education and knowledge, foresight competency and international entrepreneurship a study of human capital determinants in the european countries, european business review vol. 32 no. 1, 2020 pp. 46-68 21. wef, human capital report, 2016 22. world bank (2009) azerbaijan country economic memorandum new silk road: export-led diversification. 23. zeynalli.l. v (2017) the basic definitions and approaches for human capital. amea i̇qtisadiyyat i̇nstitutu. “elmi əsərlər” -№3, 101-107 http://economics.com.az/images/fotos/elmi_eserler_pdf/2017_3/15zeynalli_l.pdf 24. zia ur rehman, muhammad tariq, muhammad azam khan (2018) the role of human capital in economic development in the selected central asian countries, the dialogue volume xiii number 3, 236-244 02 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5593 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 15 changing the orientation of youths towards street hawking in ibadan, nigeria ahmed olaitan adebisi1 and joseph omoniyi basorun2 1 federal university of technology, department of urban and regional planning akure, nigeria. e-mail: adebisiurp120385@futa.edu.ng 2 federal university of technology, department of urban and regional planning akure, nigeria. e-mail: jobasorun@futa.edu.ng received: 08/02/2021 accepted for publication: 03/11/2021 published: 12/11/2021 abstract despite the vital role of street hawking in the livelihoods of youths in a recessed economy, its adverse implications on urban space and social well-being of the youths are too critical to overlook. this study, therefore, examines the implication of street hawking and its causal factors among youths in sango-ojoo axis of ibadan. the study was a descriptive survey among 37 youths who were randomly sampled at potential hawking terminals. data was collected through the use of multiple-choice questionnaires, and interview guide, while chi-square test was used in data analysis. findings revealed a preponderance of female youth hawkers and poor education was the major causal factor of hawking amongst the youths. the study further established a relationship between street hawking and vulnerability to shocks. the paper recommends sustainable policy through quality and affordable education to the poor, empowerment programme and habitual campaign on the dangers of street hawking. keywords: street hawking; social impact; youth, ibadan; nigeria 1. introduction in most parts of the world, youths constitute the largest visible group of the unemployed; a clear illustration of their disadvantaged position in the labour market. unemployment rate in the developing countries is generally high and this is the main reason why many people start their working lives in the informal sector. globally, three out of four employed youths are in informal employment, compared to three in five for adults. this ratio is as high as 19 out of 20 for young women and men in developing countries (ilo, 2017). in this study, a youth is any person between the ages of 15 and 24 years as defined by united nations (un), united nation children’s international emergency fund (unicef), international labour organization (ilo) and world bank, without prejudice to other definitions by member states. (un, 2014). in a bid to escape poverty, many youths migrate to cities to look for better opportunities. such movement from rural to urban area is inevitable and even desirable as a way to improve their quality of lives, though with wide socio-economic implications (alarima, 2019). it intensifies the strain for jobs without necessarily improving the job conditions of those who are left in rural european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5593 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 16 areas; impacts provision of public goods, education, utilities, housing, and infrastructure; and affects demographic and skills composition in both rural and urban areas (nweke, 2019). nigeria is the most populous african country with rapid urbanization where greater proportion of the youths below the age of 25 years encounter alarming unemployment while those with low education chose hawking activities for survival. amoo et al. (2016) opined that in the face of economic recession in nigeria, street hawking plays vital roles in the lives of many frustrated youths whose hope of better employment in the city have been dashed. street hawking is a form of street trading. the distinct features are the predominantly non-sedentary nature, and perpetual movements which may occur within the established market places or outside them along major thoroughfares and the intersection of major roads (ayodele et al., 2014). kulkarni (1984) divides hawker into two broad categories on the basis of their operations. they include the “principal –hawker”, who is solely responsible for his own capital, the management of his business and profits and losses; and the “agent-hawker”, who is employed by the owners of business or kiosks, and later paid commission for his effort. in the latter category are the wards or children of business owners who take no commission for their efforts (adepoju & femi, 1987). in ibadan, vast majority of the youths are immigrants from the countryside, and street trading for them represents a desperate means of survival when the hopes of ready employment have been thwarted. families who cannot afford the high cost of house rent are forced to live in urban slums which expose them to various health and environmental hazards. these low-income parents often engage their children in street hawking and petty trading to supplement aggregate family income (ogundele & ojo, 2007 ; ayodele & olubayo-fatiregun, 2014). the need to continually provide for the family in the midst of unfriendly conditions has led youths and children to engage in street hawking activities (ekpenyong & nkereuwuem, 2011; magaji & sarka, 2020). this study, therefore, attempts to appraise the situation among youths along sango-ojoo road ibadan for possible change of orientation to a more impactful venture. the objectives of study are to; (i) examine the socio-economic characteristics of the youths hawking in the area; (ii) investigate the reasons for engaging in the act; (iii) assess the socio-economic implications of street hawking on their livelihoods; and (iv) suggest sustainable measures that can minimize the trend in ibadan. the contribution of street hawking to economic growth and development can not be denied. unfortunately, the hazards attached to it outweigh its beneficial socio-economic implications. such hazards like motor accident, rape, kidnapping, extortion, sexual molestation, robbery and anti-social behaviours are too extreme to ignore (basorun, 2011; nduka & duru, 2014). different socio-economic factors and implications are cardinal to street hawking. studies have revealed some of these socio-demographic factors to be; poverty, lack of formal employment in the city and, regional socio-economic differences (basorun, 2011). put succinctly, the implications range from health, sexual, academic performance and attainment, behavioral to physical hazard (nduka & duru, 2014). street hawking, no doubt, exposes people to risk especially at the city centre which is the business hub associated with heavy traffic. as espoused by amoo et al. (2012) ; sam, akansor and agyemang (2019), street hawkers sustain an intense risk of physical injuries as they carry their goods on head or hands and run after moving vehicles in an attempt to ensure they complete their daily sales. undoubtedly, unemployment, poverty, inflation, poor school performance, unstable families, peer group influence, large family size and parental care have been ascribed to the incidence of street hawking in nigeria (fawole, 2003). ogundele and ojo, (2007) had argued that economic status, household size, parental upbringing and single parenthood significantly contribute to street hawking in ibadan. the hazards posed by street hawking in ibadan, include nature and harassment by government officials (toyin, 2013). all these problems have attracted attention for actions that will ameliorate the lives of the youths for a better future in ibadan, being a highly urbanized city in nigeria. the menace of street hawking in nigeria is socially, economically, politically and spatially oriented. it accounted for about one third of the 50 million labour force out of 123.9 million people in 1999 (adeyinka, 2006). the failure of the formal sector to manage the demand for jobs, goods and services presents the informal economy as the highest employer of urban poor (tripple, 2005 ; sakarombe, 2020). various efforts have been made by the three tiers of government and non-governmental agencies to stem the tide of street hawking in nigeria, through capacity building, establishment of free education foundation for the poor (for instance, rochas okorocha foundation in ibadan, port harcourt and imo state), the enactment of the 2005 child’s right bill by the national assembly to curb juvenile hawking, forceful evacuation and inducement of fine on vulnerable hawkers by some state governments and total eradication (introduced in lagos in 2015). the vocational skill acquisition centres established by oyo state (along oke-ado) and other state house representatives in their respective local government areas and wards, are not unconnected with these efforts. in spite of all these, street hawking remains a menace in nigeria. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5593 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 17 there is paucity of literature on street hawking among youths in ibadan, this study, therefore, attempts to bridge the literature gap with respect to youth involvement in hawking in the city. sango and ojoo were specifically targeted for the study because the locations are commercial hubs that have evolved on account of the presence of strategic landmarks and facilities like the polytechnic ibadan, the university of ibadan, sango park, ojoo vehicular park, sango market, ojoo market among others. these facilities act as urban magnet pulling youths regardless of sex to carry out mainly informal activities for socio-economic benefits. 2. literature review up till now, the incident of high unemployment rate in the country and ibadan in particular, is why vast majority of the youth dominates cities carrying out mainly informal activities (momoh & adejumobi, 1995; mitullah, 2004; skinner, 2008; owusu et al., 2013; uko, akpanoyoro & ekpe, 2020). street hawking plays some beneficial roles as it keeps the youths with antisocial tendencies busy with informal employment. this in a way reduces city crime and other juvenile deliquencies like rape and theft, and also helps to cushion the effect of high unemployment by generating daily income. no doubt, this daily income acts as a means of livelihood to the hawkers (adeyinka et al., 2006; uko et al., 2020). the roles of street hawking in the distribution network to the final consumers is equally significant as it reduces benefits like; low transport cost to market, cost effectiveness compare to sellers in shops and promotes the distribution of emerging products that are yet to gain prominence. sam et al. (2020) observed that hawkers encounter the risk of being knocked down by vehicles in the process of chasing buyers on motion in an attempt to sell their goods. the nature of nigeria roads increases the vulnerability, helplessness and endanger the lives of many of these youths hawking for a living (odeleye, 2000; basorun 2011). other socio-physical hazards like motor accident, kidnapping, ritual killings, rape, mobbing, exposure to antisocial activities such as smoking, and drug abuse, among others are too critical to ignore (nduka & duru, 2014). the activity itself defaces human environment in the way hawkers and buyers dispose refuse indiscriminately. poor education background of majority of the hawkers notwithstanding, their livelihood capacity in the city can still be optimized for self-sufficiency. livelihood incorporates skills, assets (both material and social) and activities essential for survival (carney, 1998). it becomes sustainable when the capacity to respond, cope and recover from dangers and stresses, maintain skills and assets without compromising the natural resource base (carney, 1998; in adaawen & jorgensen, 2012). sustainable livelihood focuses on how to sustainably enhance the social, physical and economic resources and assets on which the street hawkers draw their quest for survival. the argument is that in looking at livelihoods there is the need to understand the poverty situation from the perspective of the poor (ellis, 2000). it highlights how policies and institutions can minimize the vulnerability of the street hawkers as they try to make a living. such policies include; employment opportunities, empowerment scheme, quality and free or affordable education, reaching out to the poor and provision of basic infrastructures. it is a known fact that the rural areas lack sustainable infrastructures and job opportunities, just as cities also lack sustainable development to manage existing infrastructures, services and employment to keep pace with the teeming population. the provision of basic infrastructure and employment opportunities in the rural areas will indirectly minimize youths’ migrating to the cities for socioeconomic advantages. in the same vein, the supply of sustainable infrastructure and employment in the city would curtail people’s engagement in street hawking activities. 3. methodology this study is conducted along sango-ojoo axis of ibadan. sango-ojoo area comprises of akinyele and ibadan north lgas linked by a distributor road. ibadan-north local government where sango is geographically located lies within latitude 7º 231 n to 3º 331 e and on a longitude 7º 281 n to 3º 531 e. it shares boundaries with akinyele local government in the north; lagelu and egbeda lga in the south; ibadan-north west lga in the west; and ibadan-north-east lga in the south. it occupies a total land area of 145.58 square kilometers (figure 1). akinyele local government where ojoo situates is geographically located on latitudes 7º 201 n to 3º 521 e and a longitude 7º 241 n to 3º 521 e. the lgas that bound it are afijio, in the north; lagelu, in the east, ido, in the west, and ibadan north, in the south. the total land coverage is 464.892 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5593 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 18 square kilometers (figure 1). this study is limited to street hawkers between the ages of 15-24 years who are regarded as youths by the united nation (un), international labour organization (ilo), and world bank. the paucity of records about these hawkers in the study area led to the conduct of a 6-days periodic counting of hawkers at potential hawking locations along sango-ojoo route (figure 2). from the estimated average total of 66 street hawkers daily (regardless of age and sex), 37 youth hawkers were randomly selected for this study, representing 59.1% sample size. close-ended questionnaires, interview guides and field observation were research instruments employed in this study. the questionnaire sought for information on socio-demographic attributes of the youth hawkers, reasons for hawking, factors motivating them to hawk and the implications of street hawking business. this was supported by physical observation, random sampling of 37 buyers and formal interviews of directors in the ministries of education, science and technology, lands, housing and urban development and women affairs as well as programmes and policies meant to empower youths and reduce street hawking in ibadan. simple chi-square was used to test the significance of relationship between two categorical variables using spss version 17. figure 1. map of study area source: google earth 7.1.7.2606; authors’ digitization with arcgis 10.3.1, 2020 figure 2. google imagery showing sango-ojoo road european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5593 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 19 source: google earth 7.1.7.2606; authors’ digitization with arcgis 10.3.1, 2020 4. results and discussion there was preponderance of female youths (59.5%) than males (40.5%) hawking along sango-ojoo road. it is a common knowledge that informal activities like street hawking and trading are gender based. while men have high affinity for professional activities (artisanship) like crop farming, poultry and animal husbandry, fishing and logging, carpentry, wood work (carving), blacksmithing, shoe making e.tc. more often than not, products of these activities are sold by their wives or children in the market (dada, 2013). more than half (56.8%) of the youth hawkers were single, while 43.2% were married. this explains the reason for hawking as many need to be self-sufficient to cater for matrimonial demands. high family size is usually not unconnected with polygamy and poverty. although this fact is relative as it depends on culture and other socio-demographic indicators like level of education and religion. large family size characterized by poverty and poor educational background of the children in the face of recessed economy opt for informal employment like hawking and trading (omokhodion et al. 2006). this justifies why large percentage (59.5%) of the hawkers had a fairly large household size of 5 to 8. however, the proportion (29.7%) of those with lower household size (1 to 4) reveals their quest for monogamy or a lower number of children. the low proportion (10.8%) with very large household size (9 to 12 and 12 & above) indicates that the present economic adversity in the country has made many nigerians to limit their number of births (dada, 2013). the fact remains that a significant relationship between household size and street hawking activities exists, because people with high household size have large number of children to cater for and street hawking is an option for them when their hopes for better employments in cities have been frustrated (fawole, 2003; omokhodion, 2006; owusu et al., 2013; magaji & sarka, 2020). this claim was statistically significant at 5% significance level with a calculated chi squared value greater than tabulated value as presented in table 1. table 1. statistical computation of respondents’ household size household size observed expected residual 1-4 11 12.3 -1.3 5-8 22 12.3 9.7 9-12 4 12.3 -8.3 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5593 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 20 total 37 source: author’s computation, 2020 x2 (3, n=37) = 13.351, p <0.001 x2 tab = 5.991, p = 0.05 df=2 findings revealed that 27.0 % of the hawkers were self-employed and own their goods, 18.9% were employed by their mothers, 2.7% by father, 13.5% by guardian, and 37.8% by either a company or master. the high percentage of the hawkers that lived alone explains the high rate of self-employment. the influence of mother may not be unconnected with the “strong tie that exists between mothers and child than fathers” (basorun, 2011). the significantly high percentage employed by boss or a company attests to parents’ low financial status as hawkers receive reasonable commission to relief the family in anticipation of future pursuit. table 2 below confirms a significant relationship between the occupation of hawkers’ employer and street hawking. for instance, a large percentage (67.6%) of the hawkers had their employers (most of whom were their parents or guardian/relatives they resided with) as traders or hawkers. this is reflected in the high chi squared value of 70.189 which is statically significant at p<0.001. unequivocally, it can be said here that most of the hawkers are employed by parents that are into either trading or hawking business which perhaps fosters their involvement in hawking. table 2. statistical analysis of occupation of hawkers’ employer occupation observed n expected n residual artisan 3 6.2 -3.2 trading/hawking 25 6.2 18.8 food vendor 3 6.2 -3.2 farming 4 6.2 -2.2 transport operators 1 6.2 -5.2 none 1 6.2 -5.2 total 37 𝑥! (5, n=37) = 70.189, p = 0.001 𝑥! tab = 11.070, p = 0.05 df =5 source: author’s computation, 2020 surprisingly, majority of the hawkers (67.6%) had attained secondary education, 8.1% had tertiary education, 10.8 junior secondary education, 5.4% primary education while only 8.1% had no formal education. with this analysis, it could be speculated that the aspiration for higher education may be the cause of their involvement in hawking to acquire some income. higher education guarantees a better livelihood. an educated person is better positioned in a society that illiterate (dada, 2013). the tendency for a better educated person to get good employment is high. there are limited better employment opportunities for people with low level of education in a developing economy. the need for them to make a living against all odds results in informal employment like street hawking and trading (nduka & duru, 2014). the chi squared result of 52.525 which is statistically significant at p < 0.001 shows that poor educational background is one of the causal factors precluding youth from securing a well-paid job, hence, the need to engage in hawking for survival (table 3). table 3. educational attainment of hawkers european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5593 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 21 level of occupation observed n expected n residual no formal education 3 7.4 -4.4 primary 2 7.4 -5.4 junior secondary 4 7.4 -3.4 senior secondary 25 7.4 17.6 tertiary 3 7.4 -4.4 total 37 𝑥! (4, n=37) = 52.595, p < 0.001 𝑥! tab = 9.488, p = 0.05 df =5 source: author’s computation, 2020 on hawking items, about 41.0% of the respondents hawked either water or soft drinks; snacks, bread and or food were hawked by 34.4%; clothing and or shoe materials by 6.6% and fruits by 14.8%. the items hawked are complimentary in nature. for instance, water or drinks and snacks, bread or food are sold together, because the same people patronizing hawkers selling snacks or food also demand water and drinks. the complementarity of these items justifies the reason why hawkers congregate “at the same location and move together with traffic pattern” (nduka & duru, 2014). the study found that (59.5%) of the hawkers earned average daily income of #1,001 to #2,000 ($2.62 5.24), while 24.3% earned #2,001 to #3,000 ($5.25 – 7.86), 8.1% earned less than #1,000 ($2.62) and above #3,000 ($7.86). some factors that determine income of the hawkers include; season, weather and period of the day. generally, there are more sales during festive periods and peak hours of the day, just as there are more demands for cold water and drinks in a hot weather than cold. another factor that determines income is location. a hawker selling drinks usually in a traffic hold-up is likely to realize more income than on a road side of free-moving traffic. the analysis in table 4, however, affirms with a statistical significance of hawking activities to the accruing relatively high daily income which attracts the youths. conversely, there exists an indirect relationship between the income and expenditure of the hawkers as majority of them (88.5%) spent below #500 ($1.31) daily despite the associated dangers and stress. table 4. statistical estimate of respondents’ income from hawking per day income observed n expected n residual less than #1,000 3 9.3 -6.3 #1,001 2,000 22 9.3 12.8 #2,001 3,000 9 9.3 -.3 above #3,000 3 9.3 -6.3 total 37 𝑥! (3, n=37) = 26.027, p < 0.001 𝑥! tab = 7.815, p = 0.05 df =5 source: author’s computation, 2020 high percentage of the hawkers (39.6%) worked to supplement family income. this is expected in a developing economy, where poverty is marked by relatively high family size. with poverty and large family to cater for, parents send their children to the street to work and earn daily income to sustain the family (ogundele & ojo, 2007; omokhodion et al., 2006). about 27.0% of the hawkers gave low level of education as reason for their engagement in hawking. this justifies the significant correlation between low-income level and level of education as opined by nduka & duru, (2014). as revealed by the ministry of lands, housing and urban development, most of the markets in ibadan are insufficient for the traders and unaffordable as european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5593 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 22 corroborated by some (19.8%) of the hawkers. nearly 25.9% were doing this to enlarge their businesses while 7.5% only desired to have means of buying drugs for the treatment of their aged parents’ health challenges. the ministry of education, science and technology and the ministry of women affairs revealed that there were scholarship grants and empowerment scheme set up by the oyo state government for the less privileged. unfortunately, there was low awareness about these opportunities as claimed by about 70.3% of the street hawkers. only 29.7% were aware, while about 8.1% were beneficiaries of the programmes. it is, therefore, imperative for the government to increase publicity of the programmes and seek for more financial assistance from local and international organizations to fund the scheme. analysis of findings indicated that 32.4% of them had been either sexually molested or physically assaulted; 25.0% had one form of accident, 24.3% experienced stress and fatigue and 18.2% had attempts of robbery or kidnapping (table 5). information further revealed that at times the females faced molestations by the garage boys (customers) and police also physically molested them when escorting bullion van conveying cash to banks. apparently, the female hawkers face more dangers than the males such as sexual molestation and physical assault, stress and fatigue while the male hawkers are more vulnerable to accidents. high level of accidents of male hawkers may be due to their physical resilience and ability to withstand and run along moving vehicles to sell their goods. table 5a. analysis of hawking hazard on gender basis hazard gender male female total accidents 10 (27.0%) 8 (21.6%) 18 (48,6%) sexual molestation/physical assault 1 (2.7%) 6 (16.2%) 7 (18.9%) robbery/kidnapping 2 (5.4%) 3 (8.1%) 5 (13.5%) stress and fatigue 2 (5.4%) 5 (13.5%) 7 (18.9%) total 15 (40.5%) 22 (59.5%) 37 (100%) source: authors’ field work, 2020 table 5b. statistical analysis of hawking hazards hazard observed n expected n residual accidents 18 9.3 8.8 sexual molestation/physical assault 7 9.3 -2.3 robbery/kidnapping 5 9.3 -4.3 stress and fatigue 7 9.3 -2.3 total 37 𝑥! (3, n=37) = 11.324, p = 0.010 𝑥! tab = 11.070, p = 0.05 df =3 source: author’s computation, 2020 majority of the buyers (40.6%) claimed that street hawking exposed hawkers to accident. urban degeneration (gradual loss of city aesthetic) was given by 13.5%, 21.6% believed it created filthy environment, while 24.3% argued that it created congestion of pedestrian and vehicles in the street. field observation revealed that most of the food vendors exposed their foods to pollutants that may be noxious to consumers’ health. in summary, the dangers of hawking can be classified into three namely impacts on hawking environment, impacts on the buyers and impacts on the hawkers themselves. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5593 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 23 reactions from the hawkers indicated that 41.0% anticipated to stop hawking and go back to school, 37.7% wished to start a business and 16.4% desired to acquire a particular technical skill. the fact remains that majority of them were not happy with hawking, they only opted for it to gather money for better opportunities. they were willing to stop hawking and go for better jobs because of the inherent dangers 5. conclusion and recommendations street hawking in nigeria is an easy business for anybody because of its free entrance and exit unlike other informal employments. here, hawkers are assured of daily income needed to cater for self and family needs. vulnerability of hawkers to dangers is gender-based as females were more susceptible to dangers and stress than males. they were also exposed to higher risks of skin, respiratory, injury, eye and even rape by men who pretend to be their customers. in nigeria, high cases of sexual molestation have been reported which contravenes the provisions of the child right act. yet, little is heard about punishment in accordance with the provisions of the law against child abuse. accident is another rampant danger. sango-ojoo road is a busy road of commercial activities and discharges traffic to higher order road like oyo express road. male hawkers are more prone to this hazard as they often run after moving vehicles to sell their items from the field data analyses and observations, there were some basic socio-economic factors motivating youths to hawk in ibadan. these include; household size, level of education, residency of hawkers, occupation of employers and income. however, the dangers/hazards of hawking overweigh its benefits. employment, education finance, family support and savings for better enterprise are some of the beneficial implications while accident, physical and sexual molestations and robbery are critical dangers hawkers were susceptible to. there is need to invest in the lives of these youths to secure their future and the development of the country as a whole. poverty and poor education are, no doubt, part of the major causes of street hawking in nigeria. vast majority of nigerians are denied of well-paid and better employment opportunities on account of low level of education. education plays a significant role in the economy of a nation as it determines the future of children. the 4th goal of the sustainable development goals (sdgs) is ‘quality education’ which is “to ensure inclusive and equitable quality education and promote lifelong learning opportunities for all”. in nigeria, education systems have been commercialized and hawkers are excluded from the systems because their parents could not render the necessary financial support to school. the state government should, therefore, sustain its free education programs as well as the universal basic education program by the federal government in collaboration with the federal ministry of education for the hawkers to utilize the window to improve on their formal education. skill acquisition centres are also systems that could improve livelihood potentials of the marginalized and impact professional skills, knowledge, social ethics and norms in the lives of the youths. since some of the hawkers possess a particular potential that can be enhanced, the government in collaboration with concerned agencies like unicef, ilo and the world bank should, therefore, establish sufficient and standard skill acquisition centres in the lgas to develop innovative skills of the youths. empowerment programmes should also be introduced to complement this with utmost sincerity and frequent public awareness. it is obvious that majority of the youths lack financial capacity to rent stalls in the market. on this note, the oyo state government needs to seek the assistance of local and international organizations on the construction of accessible and affordable markets at subsidized rates to the users. it is imperative for the government in alliance with the ministry of women affairs to sensitize the public regularly through the social media on the social and health implications of street hawking. this should be extended to all neighbouring primary and secondary schools. major cause of street hawking is high birth rate beyond financial capacity of the people. in this regard, regular awareness campaign against uncontrolled births and benefits of family planning is essentials to reduce the prevalence of street hawking in ibadan metropolis. challenges encountered during the study were but not limited to: • dearth of data on the numbers of street hawkers in the city; • many of the hawkers requested for patronage before responding to the enumerators; • the garage boys also obstructed data collection process. despite these limitations, the study was successful and all set-out objectives achieved. furthermore, the following areas need attention to further the extent of this study: • the integration of geographic information system (gis) to track major hawking spots in the city; european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5593 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 24 • future researchers should adopt geostatistics to measure the vulnerability of hawkers disaggregated by hawking terminals. references adaawen, s.a., & jorgensen, s.h. 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(2013). bracing the odds in the face of double tragedy: the dillemma of street trading in ibadan metropolis of nigeria. international research journal of arts and social science, 2(5), 134-143. retrieved from http://www.interesjournal.org/irjass tripple, g. (2005). the place of home based enterprises in the informal sector: evidence for cochabamba, new delhi, surabaya and pretoria. journal of urban studies, 4, 611-632. uko, f. e., akpanoyoro, m. j., & ekpe, j. p. (2020). an evaluation of the contribution of the informal sector in employment and income generation in nigeria: thematic approach. management, 1(2). un-habitat: for a better urban future. (2012). retrieved from http://www.unhabitat.org unicef. (2017). child protection from violence, exploitation and abuse. retrieved from http://www.unicef.org united nations. (2014). retrieved january 6, 2018, from definition of youth: http://undesadspd.org/youth/worldprogrammeofactionforyouth.aspx 5084-article text-17116-3-11-20210206 http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi:10.13135/2704-9906/5084 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 internationallicense 1 good governance: the impact on the performance of tunisian listed companies ammar samout1, boutheina marnissi2 1department of management science, faculty of economics and management of sfax-tunisia 2laboratory of epidemiology and veterinary microbiology, institute pasteur of tunis, university tunis el manar, tunis, tunisia e-mail: boutheinamarnissi90@gmail.com received: 12/09/2020 revised: 09/11/2020 accepted for publication: 15/11/2020 published: 08/03/2021 abstract the purpose of our research is to study the impact of governance tools on tunisian company performance. empirical verification conducted by an expert panel composed of 100 tunisian companies listed on the tunis stock exchange. the observation period is 10 years, from 2008 to 2018. it shows that the composition of the board of directors, the remuneration system, shareholders and information disclosure on the performance of these banks which have a positive impact. on the other hand, for the two performance indicators (roe and roa), the age of the company is not important. keywords: governance; performance; director board 1. introduction governance is a concept that has evolved a lot since the emergency of 1980s, and on the other hand the debates around this issue of the interests involved.even in political science the first classical essays on the subject says about the concept centered on two main components: law then order, governance today addresses issues related to the mechanisms necessary to negotiate the various interests of society by the way the broad notion covers the different ways in which individuals and groups organize themselves to achieve common goals. the literature is full of works attempted to test the effect of governance on performance and most of these works show that governance has a significant effect on the performance of the company and on its http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi:10.13135/2704-9906/5084 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 internationallicense 2 value in the market, and this for different contexts and performance indicators.among these studies we can cite that of widodo, ds, silitonga, p., & ali, h. (2020)), coffey, b., bush, j., mumaw, l., de kleyn, l., furlong, c., & cretney, r. (2020) and beshi, t. d., & kaur, r. (2020).most governance studies ignored governance issues at the level of listed companies mainly in emerging countries (sajko, m., boone, c., & wernicke, g. 2017). however, this theme is important for several reasons. listed companies occupy a preponderant role in the economies of countries.they are a major component of any national economy. the change of the international context following globalization, liberalization, deregulation of financial systems, the adoption of new technologies affects the functioning of these type of business.the business sector has a big role in the economic and social development of our country. its direct involvement in the implementation of public sector strategies justifies the strengthening of corporate governance practices with a view to greater efficiency and performance. despite structural changes in the financial system in tunisia which have strengthened the role of the financial market from 1990s, listed companies still remain also the main focus of economic development. in view of all these considerations, it is interesting to conduct a study developed within the framework of listed companies. our work is inspired by research related to corporate governance and proposing several control mechanisms to improve performance (widodo, d. s., silitonga, p., & ali, h. (2020) and hutahayan, b. (2020)).our ambition in this research to determine the effect of governance on the performance of listed companies.from this perspective, as part of the research, we will try to provide answers to the following question« will the governance improve the performance of tunisian listed companies? ». 2. review of literature and formulation of research hypotheses a large amount of literature attempts to examine the impact of governance on performance, and most of the work in society shows that governance has a significant impact on company performance and its value in the market, as well as different environments and performance indicators. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi:10.13135/2704-9906/5084 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 internationallicense 3 e. schiehll (2004) established the relationship between company performance and the four attributes of corporate governance structure:board composition, management participation, incentive compensation and major shareholder participation. the work carried out by horstmeyer and wells (2017) suggests that the effects of good governance also depend on the economic conditions characterizing a sector. shareholder rights are maximized when the sector is booming, and appear significantly less important when economic conditions are bad.bauer et al. (2008) used data provided by the international governance indicators (gmi). the japanese companies in the sample are classified according to six governance dimensions. the author analyzes the impact of governance quality on its performance. using the total index shows that companies with higher governance levels outperform other companies at rate of 15% each year.evenly, recent work by horstmeyer and wells (2017) suggests that the effects of good governance also depend on the economic conditions characterizing a sector. shareholder rights are maximized when the sector is booming, and appear much less important when economic conditions are bad. we must also take into account the stage reached by the company in its life cycle. thus, a mature listed company needs more supervision and control: in this case, it could be shown that a reduced board of directors is better suited. otherwise, a younger company will be able to benefit more from the advice of its board, which will therefore be all the more effective as its members will be more numerous.black, jang, and kim (2003) showed in their sample of 526 south korean companies that they developed an index based on the governance review of the korea stock exchange.an increase of 10 points in the governance index resulted in a 65% increase in the tobin index « q » and a market booking rate of 13%. they also found that any improvement in governance practices would result in a 47% increase in tobin’s « qvalue » and a 96% increase in market/book value.from the other side, chong and lopez-de-silanes (2007) believe that governance will definitely affect the operating performance of the companies studied, but this impact is far less than the impact on the market value of these companies. finally, bauer et al. (2003) confirmed that governance is positively correlated with the profitability and market value of european companies in the research. but it is negatively correlated with operational performance.in addition to that, gruszczynski (2005) tested the existence of this link in a polish language environment. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi:10.13135/2704-9906/5084 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 internationallicense 4 his research shows that there is a significant correlation between the calculated governance scores and the financial performance of the polish companies studied.otherwise, bauer et al. (2008) studied the relationship between governance quality and japanese company performance. they set out to develop a total index covering six aspects of governance. so, the results of this study show that companies with the best governance perform 15% better than other companies each year.furthermore, mohamed, basuony, and badawi (2013) studied the impact of corporate governance on the financial and stock market performance of 88 non-financial companies listed on the egyptian stock exchange egx100 index.the study prove that there are about three governance mechanisms studied ownership structure, board composition and audit quality.we incorporate control variables into the analysis and we enumerate: the company size, age, department and financial structure.the financial performance is evaluated through roe and roa and also through q's stock market performance. according to al-ahdal, wm, alsamhi, mh, tabash, mi, & farhan, nh (2020), corporate governance plays a critical role in creating a corporate culture of awareness and transparency. in this context, the study by these authors provides a brief overview of the history of corporate governance mechanisms in india and in the gulf corporation council (gcc) countries, the corporate legal system and established supervisory policies. by the indian governments and the gcc. in addition, this study analyzes the impact of corporate governance mechanisms on the financial performance of indian and gcc listed companies. the study uses a sample of 53 listed non-financial companies from india and 53 listed non-financial companies from gcc countries for the period 2009-2016. the results revealed that the responsibility of the board of directors (ba) and the audit committee (ac) have an insignificant impact on the performance of companies as measured by roe and tobin's q. furthermore, fictitious country results show that indian companies outperform those in the gulf countries in terms of corporate governance practices and financial performance. according to these authors this research is seen as a battery of further research and studies, particularly in listed companies in india and in the gcc in the context of corporate governance and financial performance. at the national level, madhar, s. (2016) studied the relationship between governance and performance by studying 46 moroccan issuers between the end of 2012 and the end of 2014. the author developed a grid of 31 governance guidelines that mainly cover board practices and shareholder rights. in order to http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi:10.13135/2704-9906/5084 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 internationallicense 5 hypothesis 2: the higher the governance’s score related to the compensation policy, the higher the company's financial grow and the stock market performance increase. measure the performance of the companies in the sample, it prefers financial and stock market indicators, especially turnover, ebitda and net profit margin.based on the results of these studies, our research will first try to study the correlation between the governance index published on the canadian globe and mail website and performance indicators.therefore, we will test the hypothesis to study this correlation as follows: the general hypothesis: companies with higher governance scores will have better performance. since the governance indicator we use is composed of 4 sub-indexes, we will test the impact of each sub-index on performance. the composition and performance of the director board:the board of directors is considered to be one of the main means to correct the defects of managers (widodo, d. s., silitonga, p., & ali, h. (2020), garcia, a. s., & orsato, r. j. (2020) and f. adjaoud et al. (2007)). this is how hermalin and weisbach (2000) describe it as the "heart of governance". the size of the board of directors is also seen as a variable that may have a significant impact on its effectiveness (p. andré and e. schiehll 2004). according to the results of yermack(1996) and s. bahagat and black (2002), this effect is negative because the board loses its effectiveness as the size of the board increases.in contrast to these results, the results of godard (2001) show that the size of the board has no effect on the performance of french companies and it has nothing to do with the performance indicators used.yermack (1996) also showed a negative correlation between the size of the board of directors and the value of the company, because of communication difficulties and the high cost of joint decision-making.through these studies, we can draw the following first hypothesis: hypothesis 1: the higher the governance’s score related to board composition, the higher the company's financial and stock market performance increase salary system and performance:widodo, d. s., silitonga, p., & ali, h. (2020), srivastava, a., & bhatia, s. (2020) and p. andré and e. schiehll (2004) believe that company performance will be related to the relative importance of long-term incentive compensation, such as cash dividends and the grant of stock options. therefore, our second assumption is: http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi:10.13135/2704-9906/5084 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 internationallicense 6 hypothesis 3: the higher the governance’s score related to respect for shareholder rights, the higher the company's financial and stock market performance increase. shareholder rights and company performance: gompers, ischii, and metrick (2003), esposito, p., & dicorato, s. l. (2020) and horstmeyer, d., & wells, k. (2017) show that the company with the strongest shareholder rights has higher value, higher profits, higher sales growth, and more and lower capital expenditures. therefore, the third research hypothesis can be as follows: disclosure and performance: the increase in information disclosure has led to lower agency costs and therefore increased company value (f. adjaoud, d. zeghal and s. andaleeb (2007),beshi, t. d., & kaur, r. (2020) and çelik, ş., & güleç, t. c. (2020)) therefore, we can state the last hypothesis of the study as follows: 3. research methodology in this case, we propose a choice of methods that can verify the research hypothesis.firstly, we expose our research samples. secondly, we developed the variables held within the framework of this research. 3.1. framework of research the purpose of this study is to evaluate the impact of good governance on the performance of listed companies. therefore, we take 130 listed companies in tunisia as a sample.the sample covers companies belonging to three different sectors: the industrial, commercial and service sector.these samples held can better consider the impact of governance on performance. therefore, the research interval is 30 years, from 1990 to 2019 according to financial information collected from the bank’s annual activity report, aptbef’s annual report, bvmt’s guidelines, and documents from the financial market committee (cmf). 3.2. the variable research in the following, we introduce the variable used to evaluate the structure of the board of directors and measure bank performance. a) variables that depend on company performance our goal is to study the effect of explanatory (exogenous) variables on performance. performance is an endogenous or explanatory variable. hypothesis 4: the higher the governance’s score related to disclosure, the higher the company’s financial and stock market performance increase http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi:10.13135/2704-9906/5084 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 internationallicense 7 performance can be measured by using market indicators of stock market prices (price-tobook ratio, price-earnings ratio, total shareholder return, etc.) or roe or roa type accounting indicators. in our research, we use the ratio of return on assets (roa) to return on equity (roe) roa (return on assets) economic performance: this ratio is also called the earning rate of permanent capital because it represents the ability of the capital to create a certain level of operating profit to compare the result with the method to achieve the goal. roa = capital used = equity + lmt debts the financial performance of the return on equity (roe):this ratio is also called the return on equity, which represents the ability of shareholders to invest in equity to generate profit roe = net income/equity b) independent variables we try to identify the most important variables that describe corporate governance. regarding to the characteristics of the board, we selected 4 variables -the composition of the board of directors; -equity and compensation; -shareholder rights; -information disclosure. four characteristics constitute the four sub-indices of our global governance index c) control variables if we want to verify the impact of governance mechanisms on bank performance, we must consider other variables to draw conclusions, especially: company size: introduce variables of scale to achieve economies of scale or diseconomies of scale. smirlok (1985), akhavein, etc (1997) , guan (2003) and çelik, ş., & güleç, t. c. (2020)found a positive and significant relationship between bank scale and performance. company age (age): company age is usually regarded as a variable that has a very important impact on performance. generally speaking, the company age variable is represented by the logarithm of the number of years of operation (brown and caylor (2006), ben cheikh and zarai(2008) and al-gamrh, b., ismail, k. n. i. k., ahsan, t., & alquhaif, a. (2020)). therefore, we have one independent variable, two dependent variables and one control variable. therefore, we have two models: http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi:10.13135/2704-9906/5084 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 internationallicense 8 model 1 : roai,t = β0 + + β1 govi,t+ β2 agei,t + + β3 t i,t+ εi,t model 2 : roei,t = β0 + + β1 govi,t+ β2 agei,t + + β3 t i,t+ εi,t with gov: the governance index, t: the size of the company, age: the age of the company dt: the company's debt, β0: the constant and 𝛆 the errorterm table 1: variable choice’s variable signification measure roa return on assets net income / total assets roe return on equity net income / equity gov corporate governance this index looks at four important characteristics of the board of directors, namely: the composition of the board of directors; shareholding and compensation; the rights of shareholders; disclosure of information. age company age log (number of years) t size of the company log (book value of total assets) source: personal design next, we continue to conduct econometric research, through which we try to test whetherthere is a connection between performance indicators (roe and roa) and the governance of tunisian listed companies. we try to test the hypothesis that corporate governance has a positive impact on financial and market performance, and observe under what conditions this impact will occur. 4. interpretation of the results and discussion 4.1 descriptive statistics table (2) illustrates the mean, standard deviation and mean of the variables considered in our study.the table also confirms the average age of 10 years. in 100 companies, the average age of shareholders' equity is 1.35. for div, the average value of this variable is 8.4. therefore, the average values of roa and roe are 0.90 and 10.6, respectively. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi:10.13135/2704-9906/5084 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 internationallicense 9 table 2: descriptive statistics. medium median minimum maximum standard deviation roa 0,90 0,82 0,20 1,55 0,35 roe 10,62 10,88 1,95 17,50 3,84 ca 11,57 11.25 8,10 15,30 1,70 sr 4,50 2,14 1,49 5,61 1,12 div 8,48 8,10 3,35 12,22 1,08 sc 2,85 2,90 0,7 5,42 1,66 t 8,40 8,05 5,51 12,60 1,85 age 10,40 10,13 3,50 20,5 3,15 source: eviews 9 4.2. study of the effect of performance on governance using the global governance index the low r2 in table 3 indicates that the explanatory power of our model is moderate so, the results that come from our estimates can be interpreted as follows: > the effect of the total assets variable (t) is positive and is statistically significant given that the probability associated with this variable is 0.050, or equal to 0.05. the sign associated with its parameter indicates that an increase in total assets has a positive impact on the roa and the roe. > the impact of the governance index (gov) variable is positive and statistically significant given that the t-stat is lower than that of the table of at the 5% threshold. the sign associated with its parameter indicates that the increase in the governance index influences the roe and roa. > the impact of the variable age is positive given its coefficient of 0.008 for roa and 0.007 for roe. it is statically insignificant in view of the student statistic calculated lower than that of the table. table 3: study of the effect of performance on governance (global index) variables roe roa constant 8.356*** (4.452) 7.569*** (2.851) age 0.008 (0.036) 0.007 (0.019) t 6.054*** (1.548) 3.128** (1.323) gov 0.325 (0.245) 0.435 (0.685) r2 number of observation 0.502 100 0.523 100 source: eviews 9 the values in brackets represent the standard errors * significant at the 10% level, ** significant at the 5% level, *** significant at the 1% level. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi:10.13135/2704-9906/5084 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 internationallicense 10 4.3. study of the effect of performance on governance using the sub-indices making up the global governance index. the decomposition of the governance index consists of replacing this index with its four sub-indices (bc, sc, sr, and div) in the three performance equations. the estimated models, in this step, are as follows: 𝑴𝒐𝒅el 3 ∶ roe = 𝑐𝑡𝑒+ 𝛼1 𝐵𝐶 + 𝛼2 𝑆𝐶 + 𝛼3 𝑆𝑅 + 𝛼4 𝐷𝐼𝑉 + 𝛽1 𝑇 + 𝛽2 𝐴𝐺𝐸 + 𝜀𝑖 𝑴𝒐𝒅el 4 ∶𝑅𝑂𝐴 = 𝑐𝑡𝑒 + 𝛼1 𝐵𝐶 + 𝛼2 𝑆𝐶 + 𝛼3 𝑆𝑅 + 𝛼4 𝐷𝐼𝑉 + 𝛽1 𝑇 + 𝛽2 𝐴𝐺𝐸 + 𝜀𝑖 where 𝑖=1 100 designates companies ; bc: the composition of the board of directors; sc: shareholding and compensation; sr: shareholder rights; div: information disclosure. t: size ; age: age of company ; c : constant ; and 𝜺 : standard error the various estimates indicate that the sub-indices have a significant impact on financial performance. therefore, our hypothesis has been verified for model 3 and model 4. table 4: expressive study of expression form variable roe roa constant 6.324** (3.511) 7.133** (3.220) bc sc sr div 0.125* (0.052) 0.241* (0.068) 0.189* (0.034) 0.518 (1.021) 0.425 (0.085) 0.324* (0.088) 0.225* (0.043) 0.125* (0.214) age 0.005 (0.0326) 0.0065 (0.0121) t 5.522*** (1.254) 4.225** (1.113) r2 number of observation 0.48 100 0.502 100 source: eviews 9 http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi:10.13135/2704-9906/5084 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 internationallicense 11 the value in parentheses indicates the standard error *significant at the 10% level*significant at the 5% level*significant at the 1% level*** it is important to note that the low value of r2 in table 4 indicates that the explanatory power of our model is moderate. the results that come from our estimates can be interpreted as follows: > the effect of the total assets variable (t) is positive and is statistically significant given that the probability associated with this variable is 0.050, or equal to 0.05. the sign associated with its parameter indicates that an increase in total assets has a positive impact on the roa and the roe. > the impact of the variable on the composition of the board of directors is positive and statistically significant given that the t-stat is lower than that of the table of at the 5% threshold. the sign associated with its parameter indicates that the composition of the board of directors influences the roe and roa. > the impact of the shareholding and compensation variable is positive and statistically significant given that the t-stat is lower than that of the table of at the 5% threshold. the sign associated with its parameter indicates that the composition of the board of directors influences the roe and roa. > the impact of the shareholder rights variable is positive and statistically significant given that the tstat is lower than that of the table of at the 5% threshold. the sign associated with its parameter indicates that the composition of the board of directors influences the roe and roa. > the impact of the variable information disclosure is positive and statistically significant given that the t-stat is lower than that of the table of at the 5% level. the sign associated with its parameter indicates that the composition of the board of directors influences the roe and roa. > the impact of the variable age is positive given its coefficient of 0.008 for roa and 0.007 for roe. it is statically insignificant in view of the student statistic calculated lower than that of the table. 5. discussion the relationship between governance and economic performance has long remained the subject of much controversy between different schools of economic thought. indeed, according to our estimates, governance has a positively significant effect on the performance of listed companies for the 4 models. for model 1 and 2 then, we noticed that according to various estimates, governance has an impact on financial and economic performance. in fact, the gov variable is very important in the first of two models. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi:10.13135/2704-9906/5084 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 internationallicense 12 therefore, our general hypothesis has been verified. this result is the same as the research direction of gruszczynski (2005), which reveals the positive relationship between governance index and performance in the polish language environment. the total assets variable (t) is positive and significant in the two equations using roe (6.054 ***) and roa (3.128 **). this is consistent with our assumption that size has a positive effect on financial performance. several authors have found similar results such as beshi, t. d., & kaur, r. (2020), durnev and kim (2003), bohren , odegaard (2001) , f. adjaoud, d. zeghal and s. andaleeb (2007) who find in different contexts of positive association between size and performance. the table bellow shows that any financial performance indicator prove the variable age is not important where (roe is 0.004, roa is 0.008). this result doesn’t match our expectations and results in other circumstances and other authors. for example, ben cheikh and zarai (2008) found that in the tunisian context, the age variable has a significant impact on a company's stock market performance (mtb) and accounting performance (roa) (with a 1% threshold). their results are also consistent with those of cameron and whitten (1981). shortly, using the total sample and the overall governance index can confirm our general assumptions about the impact of governance on performance. therefore, the breakdown of governance indicators will allow us to test the effectiveness of each governance sub-index that is evaluated against these two performance indicators. for model 3 and 4 in both models, the estimated coefficients of variables related to board composition are positive and significant. our research results are consistent with the literature review we have developed. the size of the board is also seen as a variable that may have a significant impact on its effectiveness (widodo, d. s., silitonga, p., & ali, h. (2020), p. andré and e. schiehll (2004) and al-gamrh, b., ismail, k. n. i. k., ahsan, t., &alquhaif, a. (2020)). as for the variable "shareholding and compensation", the results showed a positive and significant impact on the economic performance of tunisian companies. this result is consistent with the results observed by widodo, d. s., silitonga, p., & ali, h. (2020) ,hergli et al. (2007) and p. biancone, s secinaro, v brescia (2018), who argued that moderate executive compensation related to company performance (accounting or market value related) is a factor that has a positive impact on company value. regarding to the variable "shareholder rights", the results show that it has a positive and significant impact on the economic performance of tunisian companies. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi:10.13135/2704-9906/5084 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 internationallicense 13 this result is consistent with the results found by coffey, b., bush, j., mumaw, l., de kleyn, l., furlong, c., & cretney, r. (2020) and gompers, ischii, and metrick (2003), which indicate that the company with the strongest shareholder rights has greater value, higher profits, and stronger sales growth. as for the effect of the variable "information disclosure" on the performance of companies, the results reveal a positive and significant impact on the economic performance of tunisian companies. this result is consistent with the results observed by r. bauer and al (2008), in the japanese context, who found that information disclosure is one of the most determining factors of performance. the total assets variable (t) is positive and significant in the two equations that using roe (5.522 ***) and roa (4.225 **). this is consistent with our assumption that size has a positive effect on financial performance. the age variable is not important for financial performance indicators (roe is 0.005, roa is 0.0065). 6. conclusion to conclude this research aims to study the relationship between corporate governance and performance in tunisia.it aimed also to determine corporate governance practices in the algerian context based on the criterion of performance.we tried to take a critical look at the quality of corporate governance while analyzing the impact of the governance index on performance to verify whether governance really has an effect on performance.indeed, the analysis of this relationship is based on the implementation and study of several statistical tests as well as the use of multiple linear regressions the first contribution of this study to the scientific literature is a complete and well-argued econometric analysis of the existing relationship between governance and performance.the analysis of this relationship relies on the implementation and study of several statistical tests as well as the multiple linear regressions.the results of econometric tests confirm the theories. moreover, this study finds a significant relationship between the governance index, total assets and economic and financial performance. this study has some gaps that need to be addressed. the first limitation relates to the relatively small size of our sample. the second limitation concerns the small number of factors likely to explain the level of performance of companies.nevertheless, it can be considered as a starting point for further research. finally, there is two main research perspectives can be outlined. the first is to add other governance variables. the second would be to carry out a comparison with what is practiced in other countries and in particular emerging countries. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi:10.13135/2704-9906/5084 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 internationallicense 14 references adjaoud, f., mamoghli, c., siala, f. 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(1996). higher market valuation of companies with a small board of directors.journal of financial economics, 40, 185-211. microsoft word 5 musa, abdullahi sakanko.docx http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4943 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 95 women participation in nigerian economy: does governance matter? musa, abdullahi sakanko*, dakwal, solomon mangut** *department of economics university of jos, nigeria ** department of economics university of jos, nigeria e-mail: sakanko201@gmail.com received: 04/08/2020 revised: 01/10/2020 accepted for publication: 02/10/2020 published: 26/10/2020 abstract this study examines the effect of governance measures (control of corruption, accountability, and effectiveness of government) on women's participation in nigerian economy using annual time-series data for 29 years spanning from 1990 2019. the autoregressive and distributive lag (ardl) bounds test discloses the existence of a long-run co-integration relationship between accountability, control of corruption, effectiveness of government and women participation in the labor force. the empirical results obtained revealed that both in the short-run and in the long-run, accountability and the percentage of female employment have a positive and statistically significant effect on women's participation in nigeria. although, the effectiveness of governance shows negative and statistically insignificant effect both in the short-run and in the long-run while the control of corruption exerted a negative and statistically significant impact both in the short-run and long-run. therefore, the study recommends that the government at all levels should ensure that accountability prevails in every sector, to allow fair play in representation, employment, and diffusion of decisions to strengthen and energize women's participation. keywords: ardl model, accountability, control of corruption, effectiveness, women’s participation jel classification: c32, e02, j16 http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4943 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 96 1. introduction in a global dimension, good governance can be assessed through the sustainable economic opportunity that is available/made possible for the entire citizenry. this can be guaranteed through prudent economic management, organized private sector, adequate infrastructural facilities, effective community and rural development. it has also been argued that good governance ensures that the rule of law where property rights are guaranteed, voice and accountability are ensured, violence is suppressed, corruption is checked, and governance is effective. this simply means that good governance gives every citizen, regardless of gender, equal treatment, equal opportunities, and equal rights. in developing countries, several women are denied the opportunity to excise their fundamental rights, such rights as, holding leadership positions, contributing in decision making, participating as head of the household, and many others. studies like (eagly, 1987; cheung & hanandez, 2001) have shown that women are more sympathetic than their male counterparts. they are less corrupt, very effective, accountable, and strict in following the rule of law. similarly, international comparisons have shown that countries with more women in parliament or government have lower levels of corruption (dollar, fisman & gatti, 2001; swamy, knack, lee & azfar, 2001; vijayalakshmi, 2008; paweenawat, 2018; hazarika, 2018). accordingly, weak or bad governance creates ineffective institutions, a high level of corruption, violation of the rule of law, engaging in extravagant policies that disregard for the property right, constitutions, and customs that will ensure order and certainty in the society (ogundiya, 2010). furthermore, since women are known to be too sympathetic and peace-loving, weak governance indulges in political instability, corruption, and abuse of the rule of law to scare them away from participating in politics resulting in gender marginalization. similarly, when the institutions that are supposed to support and encourage women participation are weak, better quality of life vanish and the right of the female is taken off. the power imbalance between women and men is manifested or exemplified in governance arrangement. increasing the number of female participation may likely promote gender responsiveness of government which is crucial in eradicating corruption. in most societies, women assume some key roles: that of a mother, a home-manager, and a political activist. of these various roles, the mother has been engendered by the women’s movement. some developing countries have quotas, directing a minimum level of female participation in government. for example, the new constitution of afghanistan and the interim constitution of iraq both require that twentyfive percent of the legislature be female (quota project, 2005). in nigeria, the awareness about the role of http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4943 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 97 women in the development of a nation came up in the 1980s. fortunately, the international conference on women in beijing in 1995 intensified the effective participation of women in nigeria. however, despite the enhancing effort and the major roles women play, they are yet to be given recognition. women are a force to be reckoned with in any society because of their population their leadership abilities and their important roles. available statistics revealed that overall women’s political representation in the government of nigeria is less than 7 percent (agbalajobi, 2010). this could be due to some cultural stereotypes, poor governance, political parties, religious beliefs, low level of education, poor finance, the godfather syndrome, negative stigmatization, harmful traditional practices, and patriarchal societal structures. concerted efforts have been made by some key government and non-governmental organizations on how to increase the level of participation of women in politics or governance in general to complement the declaration made at the fourth world conference on women in beijing, which advocated 30% representative. the national gender policy recommendation of 35% for the more inclusive representation of women in both elective and appointive positions respectively is also a significant effort. certain proportions of women in elected positions increased slightly between 1999 and 2007, from an average of 2.3% to 7.8%. while in 2015, 20 women out of 359 were in its lower house representing 5.6% and 7 out of 109 were in its upper house representing 6.4% (women in parliaments, 2019). also, united nations development programme [undp], (2019), reported that women in the nigerian parliament dropped from 7.3% in 2010 to 6.6% in 2012 and 2014 and declined further to 5.8% in 2015 and 2018 respectively. similarly, according to nigeria women trust fund (nwtf), (2019) following the 2019 elections, women make up 7.3% of the nigerian senate, 3.1% of the house of representatives, no state governors is a woman, one deputy governor and out of 42 ministers 7 are female representing 20%. furthermore, the report also revealed that between 1999 2015, 6% of councilors were women, 24% of judges in the federal court were women, and an average of 7% of each type of high-level government officials and senior administrators were women (national bureau of statistics [nbs], 2018). undoubtedly, the rising inequalities in education have been of great concern to female, nongovernmental organizations, and individuals in nigeria. as reported by (undp, 2019), 45.2% of educational inequalities recorded between men and women in 2012 and 2013, reduced to 43.3% in 2014 and 2015, rose to 43.8% in 2016 and declined to 38.1% in 2017 and 2018 respectively. likewise, income http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4943 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 98 inequalities fell from 34.5% in 2012 and 2013 to 28.5% in 2016 and 28.2% in 2017 and 2018 respectively (kumar, 2017; undp, 2019). the government has made several efforts to address the low level of women participation in nigerian economy and politics to improve governance. among such efforts, are the establishment of women’s political empowerment office, nigeria women trust funds, women lobby group, independent national electoral commission (inec) gender policy, the national multi-stakeholder dialogue, the initiation of several interventions to actualize affirmative action and the convening of the nigeria women strategy conference and national center for women development. despite these numerous policies, programmes, and interventions, women's participation in government in nigeria is still low, and this can be attributed to the weak or ineffectiveness of governance. the empirical study of cheung & hanandez (2001) uncovers that states with higher rates of women participation in government have lower levels of corruption. in another view, if women partake in a potentially corrupt transaction, it is more likely to fail. the reason is that women are naturally more honest, but they are more opportunistic when they have the odds to smash an implicitly corrupt contract and less engaged in retaliating nonperformance (frank, lambsdorff & boehm, 2011). it is on this note that this study seeks to examine the effect of governance on women participation in the nigerian government. the study was motivated by the fact that previous studies (jaumotte, 2000; damisa, samndi & yohanna, 2007; hora, 2014; ekundayo, 2017; and osimen, anegbode, basil & oyewole, 2018) placed emphasis on the determinants of women participation, gender inequality, and governance. the objective of this study is to examine the effect of governance on women participation in nigeria. to achieve this aim, the study answered two principal research questions how does the corruption control, accountability, and effectiveness of government influence women's participation? is there any relationship between control of corruption, accountability, and effectiveness of government and women’s participation in nigeria? the intention of this study is to explore the potential of women in nigeria through good governance. this study is paramount to the government, policymakers, and women because it provides policy suggestions on how good governance can influence women's participation in the country. it formulates policies that will promote good governance and enhance women participation in nigeria. lastly, this study serves as a useful material for future study by contributing to the scanty literature on the topic. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4943 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 99 2. review of relevant literature asian development bank [adb], (2005) defined governance as the institutionalization of a system through which citizens, institutions, organizations, and groups in a society articulate their interests, exercise their rights, and mediate their differences in pursuit of the collective good. the united nations development program [undp], (1997) established that governance is an exercise of economic, political, and administrative authority to manage a country’s affairs at all levels. governance refers to the quality of the institutions to make, implement and enforce sound policies in an efficient, effective, equitable and inclusive manner. in broad terms, governance is about the institutional environment in which citizens interact among themselves and with government agencies/officials. fundamentally, it is about power, relationships and accountability: who has the influence, who decides what, and how decision-makers are held accountable (adb, 2005). on the other hand, agishi (2014) formulated that women’s participation is the active roles performed by women. similarly, women participation is the activities of the feminine members of lawmaking organizations or people who try to influence the activities of a country (nwabunkeonye, 2014). according to bamberger (1988) women participation refers to an active process whereby women influence the direction and execution of development projects rather than merely receive a share of project profits. this study adopted gender roles as a theoretical framework. the theory was propounded by eagly (1987). the gender role theory suggests that an individual’s gender is an important determinant of his or her behaviour and influence over others. the theory is based on the assumption that the behavior of men and women is assessed in terms of societal expectations of how their gender ought to behave. women are expected to display more feminine characteristic such as sympathy, while men are expected to be more assertive, women are also flexible and better at managing ambiguous situations. the theory affirms that the feminist nature of women makes them so sympathetic, good managers of any situation, and effective in influencing and solving complicated situations in the economy. therefore, governance that actively involves women participation can contribute significantly to the growth of the economy. since they are more sympathetic than their counterpart in managing and executing a policy that will improve the lives of people. this view is supported by empirical studies that investigated determinants of women's participation in nigeria, and in other african countries. the studies also examined the developed economy. osimen et al, (2018) studied political participation and gender inequality in nigeria and found that nigerian women are http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4943 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 100 still being marginalized due to the style of leadership inherent in the country. hora (2014) researched factors hindering women participating in public institutions at bamidele communities of kenya and observed that over burden of domestic responsibilities, negative attitudes regarding women’s ability to govern, lack of role model women leaders are factors that hinder women's participation in the community. equally, jaumotte (2000) examined the determinants of female labour force participation in oecd countries and discovered female education, the general labour market conditions, and cultural attitudes remain major determinants of female participation. damisa, samndi, and yohanna (2007) investigated the determinants of women participation in agricultural production in nigeria and established that the level of the disposable income, perception, tenure rights and the level of the contribution of the women to agriculture had a significant impact on women participation in agricultural production in nigeria. furthermore, welch (1997) examined why american women tend to participate in political activities slightly less than the men and found out that the political socialization process, the family responsibilities and the overrepresentation of women in demographic groups that have low participation levels are the reasons for low participation of women in politics in america. also, ekundayo (2017) investigated good governance theory and its implications in nigeria and found that poor governance does not only exist but also thrives in nigeria due to poor political leadership and observable flaws in the political leadership recruitment process in nigeria. lastly, paweenawat (2018); hazarika (2018), analyzed gender and corruption nexus and obtained that nations with a greater number of women participation suffers less from corruption. 3. methodology this study employed time-series data span from 1990 to 2018, governance indicator measures (effectiveness, control of corruption and accountability) sourced from world governance indicators (2019), women labour force participation and female employment rate sourced from world bank (2019). model specification the functional form of the relations established below: (1) )(govfwlfp = http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4943 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 101 where: wlfp is women labour force participation and gov is governance. the equation (1) shows the functional relationship between women labour force participation and governance. to achieve the objective of the study three governance indicators were adopted and presented in equation 2: (2) where: acc is accountability, coc is control of corruption and eff denotes effectiveness. in order to derive equation (3) and obtain functional relationship between women participation and governance, equation (2) is substituted into equation (1) and rewritten as: (3) where: femp is the female employment rate. to obtain an econometrics model, equation (3) transformed, presented as: (4) where: α is the intercept of the model, β1 – β4 are coefficients estimated. the theoretical expectation of β1 – β4 > 0. by implication, the coefficients of the parameters are expected to be greater than zero. that is, a positive relationship between governance indicators and women labour force participation is expected. µt is error term (stochastic variable). the equation (4) is the long-run estimate, showing only the long-run relationship between the regressors and regressed. since, the variables showed mixed order of integration, there is need to specify short-run estimate to test explanatory variables effect on explained variable. the speed of adjustment to equilibrium when short-run shocks occur also reveals. the short-run model presented in equation (5) where ecm (-1) is error correction mechanism: (5) the conducted unit root test, diagnostics, and stability tests. the diagnostic and stability test were normality tests, serial correlation test, heteroscedasticity test, ramsey reset test, cusum, and cusumq to verify soundness, reliability, and validity of the model. 4. research findings and discussion of results in an empirical analysis, the first thing is to conduct pre-test of unit root to determine whether the variables are stationary or not and to also know the appropriate method of analysis to be employed. the augmented dickey-fuller (adf) and philips peron (pp) tests of unit root used results is presented below: ),,( effcocaccgov = ),,,( fempeffcocaccfwlfp = tfemptefftcoctacctwlfp µbbbba +++++= 4321 )1(43210 -+++++= ecmfemptefftcoctacctwlfp lllll http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4943 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 102 table 1: units root tests results variables level first difference adf pp adf pp wlfp -0.655 -0.181 -2.663* -2.950* acc -1.578 -1.570 -4.124*** -4.115*** coc -0.355 -2.008 -4.376*** -5.591*** eff -3.241** -5.872*** -10.040*** -16.515*** femp -0.561 -0.382 -4.331*** -4.359*** ***denote 1%, ** 5%, and * 10% level of significance source: authors’ computation (2020) given the adf and pp results in table 2, the variables were stationary at the same order except one. effectiveness of government (eff) is stationary at levels but women labor force participation (wlfp), accountability (acc), control of corruption (coc), and female employment rate were stationary at first difference. thus, we reject the null hypothesis and accept alternatives and conclude that the variables have no unit root at 10%, 5%, and 1% level of significance. provided that the result of the adf and pp tests showed a mixture of i(0) and i(1) for the variables, the correct estimation technique to follow is the ardl method. however, it was necessary to test for cointegration among the variables. this was done using the ardl bound testing for co-integration to verify whether a long-run relationship exists among the variables, illustrated in table 2. table 2: bounds test test statistic value significant i(0) i(1) f-statistic 3.147 4 10% 2.2 3.09 5% 1% 2.56 3.29 3.49 4.37 source: authors’ computation (2020) the f-statistics value (3.149) is greater than the upper boundary i(1) at 10% levels of significance. therefore, a long-run relationship exists between women labour force participation and the explanatory variables in the model. hence, we employed the autoregressive distributive lag model to capture both short-run and long-run effects of governance indicators on women labor force participation in nigeria. the short-run estimates, submitted in table 3: http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4943 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 103 table 3: short run ardl variables coefficient t-statistic d(acc) 1.120 5.675*** d(coc) -0.946 -6.451*** d(eff) d(femp) -0.039 0.128 -0.478 7.828*** ecm(-) -0.620 -10.379*** r2 = 0.95 dw = 2.16 source: authors’ computation (2020) table 3 is the short run ardl error correction model and the signs are in conformity with theoretical expectations. the result shows that acc and femp have a statistically significant and a positive effect on the wlfp in nigeria within the period of the study. a 1 percent increase in acc and femp would lead to 1.12 and 0.13 percentage increases in wlfp respectively. this collaborates with a prior expectation of this study and findings of (undp, 2019), that accountability improved gender participation, as well (jaumotte, 2000) on the female employment as a determinate of women labour force participation. these suggest that accountability and female employment can boost women's participation. this is because a government that lives within the framework of accountability, ensures that citizens are given equal rights, empowerment, and participating opportunities, as well as secures sound system, hence reduction of inequalities which may increase women’s income and involvement in decision making. however, coc and eff have a declining effect on wlfp, coc is statistically significant and eff statistically insignificant. a percentage increase in coc and eff would bring about 0.95% and 0.04% decreases in the wlfp. these outcomes are contrary to the theoretical expectation of this study and the discovery of (undp, 2019), that corruption has an inappropriate effect on women participation the negative sign of coc, implies that fighting corruption does not promote women’s participation. this could be as a result of corruption fighting back mechanism, less women involvement and insincerity in the fight against corruption in nigeria. a serious government is needed to fight corruption and more participation of females is required because increase in women participation is found to have a decreasing effect on corruption (paweenawat, 2018; hazarika, 2018), while that of eff could be traced to the weak http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4943 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 104 or low intervention of government to critical issues that need urgent attention, such as political violence, abuse of rights, the rule of law, marginalization, etc. the coefficients of the error correction term have the correct negative sign, it is less than one and it is statistically significant. this unique outcome has three significant implications. first, it confirms the presence of a stable or strong long-run relationship between wlfp and the determinants (acc, coc, eff, and femp), as previously established by the bound test result in table 3. secondly, the value (-0.62) implies that about 62% of the short run’s disequilibrium arising from last year’s shocks will be corrected within the current year. lastly, the negative sign suggests the presence of a unidirectional causality in the long run from the explanatory variables to the explained variable. the coefficient of determination (r2) shows that a 95% total variation in wlfp is explained or caused by regressors. the model is a good fit because the coefficient of determination has demonstrated the accuracy and inconclusiveness of variables that are determinants of wlfp. after the short-run results and implications was ascertained, the long-run estimates of the ardl model are shown in table 4: table 4: long run ardl variables coefficient t-statistic acc 0.254 3.483*** coc -1.002 -4.688*** eff -0.451 -0.986 femp 0.156 64.010*** source: author computation (2019) table 4 expresses the long-run results. the variables depicting synonymous characteristics with the short-run result. acc and femp have a positive and statistically significant effect on wlfp in the long run. a percentage increase in acc and femp would result in a 0.25 and 0.16 percent increase in wlfp in nigeria. these findings correspond to (undp, 2019; jaumotte, 2000) and the theoretical expectation of this study. nonetheless, coc and eff have a negative effect on wlfp and it is statistically significant except eff in the long run. a one percent increase in coc and eff would lead to 1.00 and 0.45 percent decreases in wlfp. this outcome is contrary to the theoretical a prior odd of this study and the empirical findings http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4943 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 105 of (dollar et al, 2001; kumar, 2017; undp, 2019), that corruption has an inappropriate effect on women participation to ascertain whether the results presented in table 3 and 4 could be relied upon, some diagnostic and stability test was carried out and the results presented in table 5: table 5: diagnostic tests assumptions test prob. normality jarque-bera 0.406 heteroscedasticity breusch-pagan 0.982 serial correlation cusum and cusumq ramsey reset breusch-pagan stable f-statistics 0.378 0.050 0.875 source: author computation (2019) this test is very essential as the results of the estimated model have policy implications. table 5 shows diagnostic test results for the classical assumption of autocorrelation, normality, heteroscedasticity. the model passed the diagnostic test. implying that the residual of the model is serially independent, homoscedastic, and normally distributed. by fulfilling these underlines classical assumptions of regression analysis, it is concluded that the estimated parameters are best, linear, and unbiased as well as efficient. this means that policy implication can be drawn from the results of this study. on the stability of the parameters, cumulative sum of recursive residuals (cusum) and cumulative sum of recursive residual squares (cusumq) tests were conducted. the results are contained in the appendix. it revealed that the estimated parameters of the models are stable over the studied sample period as both the recursive residuals and its squares are contained within the 5% critical bounds. we accept the null hypothesis and conclude that the required level of significance is not smaller than 5% (0.05). overall the model is well fitted, stable, and good for policy recommendation. 5. conclusion and recommendations over the years we have overlooked the need for extensive continuing dialogues and mentorship to enable women to reflect on their ancestral roles and be convinced of the need to alter these in favor of equality with men, until the recent time that gender inequality has been a global highlight in the local, http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4943 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 106 national, and international domains. this is because the fortunate women in the society have realized that men dominate not only in the household decision making process but in essential positions in government which make them more superior, hence the need for an advocate of women's voice to achieve fair representation and participation in government and decision making. it's on this note that this study examined whether governance influences women's participation using annual time-series data for 29 years stretching from 1990 2019. the ardl bounds test disclosed the existence of a long-run co-integration relationship between governance indicators measures (accountability, control of corruption, and effectiveness of government) and women participation quantified as women labor force participation. the empirical results obtained reveal that both the short-run and long-run accountability, the percentage of female employment have a positive and statistically significant effect on women's participation in nigeria government. although, both in the short-run and in the long-run, the effectiveness of government shows negative and statistically insignificant while control of corruption prevails negative and statistically significant both in the short-run and long-run. based on these findings the study recommends as follows: the government at all levels should ensure that accountability prevails in every sector, to allow fair play in representation, employment, and delegations of responsibilities to strengthen and energize women's participation. the government should implement the 30% women representation affirmed by the world conference on women in beijing. this is because a study in international comparisons have shown that nations with more women in government have lower levels of corruption (dollar, fisman and gatti, (2001). though, this study found control of corruption to have a declining effect on women's participation which means more need to be done in the fight against corruption before a sizable representative of women can be achieved. since employment is found to have an appreciative effect on women's participation. women should be encouraged to participate in every sector of the economy and women empowerment programmes should be established to eliminate gender inequality so that they can demonstrate their abilities outside the house itself. finally, policymakers and relevant organizations should strengthen anti-graft in the area of checkmating bad governance to promote good governance as it would affect not just women’s participation in the country but the whole economy. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4943 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 107 5.1 the limitations and suggestions for further study the study was constrained by inadequate data on governance indicators which limited the scope and there is a shortage of empirical studies on women’s participation and governance in nigeria. therefore, the study recommends that further studies should use the primary sources of data to overcome the first limitation. further research can examine the determinants of women's participation in labour force in nigeria. lastly, future studies can conduct a comparative study across the various geopolitical zones in nigeria on factors that determine women's participation. appendix a: stability test -6 -4 -2 0 2 4 6 2016 2017 2018 2019 cusum 5% significance http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4943 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 108 appendix b: residual tests -0.4 0.0 0.4 0.8 1.2 1.6 2016 2017 2018 2019 cusum of squares 5% significance 0 1 2 3 4 5 6 7 8 -0.04 -0.02 0.00 0.02 0.04 0.06 series: residuals sample 1994 2019 observations 26 mean 1.12e-13 median -0.000794 maximum 0.057070 minimum -0.041562 std. dev. 0.021537 skewness 0.594352 kurtosis 3.501012 jarque-bera 1.802697 probability 0.406022 http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4943 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 109 breusch-godfrey serial correlation lm test: f-statistic 1.649181 prob. f(2,2) 0.3775 obs*r-squared 16.18565 prob. chi-square(2) 0.5003 heteroskedasticity test: breusch-pagan-godfrey f-statistic 0.265629 prob. f(21,4) 0.9816 obs*r-squared 15.14202 prob. chi-square(21) 0.8158 scaled explained ss 0.448170 prob. chi-square(21) 1.0000 references asian development bank (2005). country governance assessment. philippines: asian development bank. http://hdl.handle.net/11540/6353. agbalajobi, d. 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(2001). gender and corruption. journal of development economics, 64(1);25-55. https://doi.org/10.1016/s0304-3878(00)00123-1 united nations development programme (1997). making globalization work for all: united nations development programme annual report. new york: author united nations development programme (2019). human development data. new york: author vijayalakshmi, v. (2018). rent-seeking and gender in local governance. the journal of development studies, 44(9); 1262-1288. https://doi.org/10.1080/00220380802265611 welch, s. (1997) women as political animals? a test of some explanations for male-female political participation differences. american journal of political science 21(4); 711-730 women in national parliaments (2019): world classification of women participation, nigeriaposition retrieved from http://www.ipu.org/wmn world bank (2019). world development indicators report on nigeria. washington dc: author world bank (2019). world governance indicator. washington dc: author http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6063 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 16 the nexus between demographic dividend and covid-19 in bangladesh: a disappearing opportunity md. tanvir alam, sabrina afrin tonny2 1 department of public administration, stamford university bangladesh, dhaka, bangladesh 2 research assistant, liberation war museum, dhaka, bangladesh e-mail: babu.taanvir@gmail.com, sabrinatonny09@gmail.com received: 25/09/2021 accepted for publication: 26/01/2022 published: 15/04/2022 abstract in common parlance demographic dividend means the economic growth caused by changes in the age structure of population of a country. bangladesh entered the phase of demographic dividend in early 2007, considering the average timeline of this important phase which is 20-30 years; bangladesh is currently passing the midway point of it. amid this situation, sudden initiatives such as lockdown, closure of educational institutions, changes in the recruitment process, delayed employee selection process and declining trend of job posting caused by covid-19 has created serious tension among the potential employee sector. the objective of this study is to find out the adverse impact of covid-19 on demographic dividend, especially on the potential employee sector consists of tertiary level final year students, fresh graduates and job seekers. in doing so primary source of data is used; the data was collected using qualitative method followed by a semi-structured questionnaire. this is a cross-sectional study, for the data collection, non-probability convenience along with self-selection sampling technique is used due limited mobility induced by covid-19 lockdown. after collecting, the data are analyzed using ibm spss software. the findings of this study revealed the adverse impact of covid-19 on demographic dividend is taking place through potential employee sector. keywords: demographic dividend; covid-19; employment; job market; potential employee sector. 1. introduction since the covid-19 induced closure of educational institutions, the tendency of suicide have multifolded in bangladesh, a study identified lockdown, shutting down economic activities and social distancing as reason behind prevalent mental problem (islam et al., 2020). a renowned daily news paper reported that “covid triggered a rise in suicide ideation, with 10 students allegedly ending their own lives” (“depression, anxiety behind rise in suicide of du students,” 2021), these students are from the dhaka university which is the most reputed university of the country and the news is from just one daily, let alone student from countryside normal educational institutions and numerous local news paper. the authors argue that this is not just an isolated incident of mental case, rather a serious loss of potential human capital which threatens the demographic dividend. this is a serious problem due to the large number of student enrolled in tertiary level education as estimated by university grant commission (mannan, 2017) and since bangladesh's unemployment rate climbed to 5.30 percent in 2020, up from 4.20 percent in 2019 (unemployment, total (% of total labor force) (modeled ilo estimate) bangladesh | data, 2019), pertaining to their age group, which falls under the demographic dividend age division, this issue http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6063 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 17 posses a formidable threat for the nations entire demographic dividend. the objective of this study is to find out the adverse impact of covid-19 on demographic dividend, by classifying the entire potential employee sector into three sections; tertiary level final year students, fresh graduates and job seekers. the study initially introduces the importance of the issue by stating the problem followed by the research objective, and then it moved to literature review section, thirdly the methodology section is described to ensure validity and reliability of the study. after that in the analysis section graphical illustrations is used for reader’s convenience, finally the findings are revealed prior to move to discussion part followed b y the conclusions. 2. literature review 2.1 demographic dividend and covid-19 in bangladesh demographic dividend is a life time window of opportunity for any country, especially for country like bangladesh which is graduating from the category of least developed country (ldc ), while coronavirus disease-19 or more popularly known as covid-19 is a severe acute respiratory syndrome which succeeded at stopping the whole world from every dimensions range from social, economic to cultural and even political, and bangladesh is not exception to that. the siginfiaicne of demograpic divididend is unprecednted, as suggested by urmanavicius, the demogrpahic dividend can even cause changes in the structure of the society as the demographic factors are associated with skill composition (2021) bangladeshis is currently going through both demographic dividend and covid-19. the demographic dividend is the difference between the number of working-age people between the ages of 15 and 64 and the number of non-working-age people between the ages of 14 and 65. it is a demographic dividend if the number of working individuals is larger than the number of non-working individuals. a country's demographic dividend era lasts no more than 20-30 years, in other words, by 2040, bangladesh's ability to generate rapid economic development by using the demographic dividend would begin to diminish (chowdhury, 2020). demographic dividend comes with many advantages, but the proper utilization is only possible when the active functional youth engagement is ensured. coronavirus disease 2019 (covid-19) is a contagious illness caused by the coronavirus 2 that causes severe acute respiratory illness. in december of this year, the first known case was discovered in wuhan, china (page et al., 2021). since then, the disease has spread worldwide, resulting in a pandemic. through spillover infection, the virus is considered to be natural and of animal origin. there are numerous ideas as to where the initial case (also known as patient zero) came from. the impact of covid-19 caused serious distress around the world, and bangladesh is no exception, on the contrary comparing other countries bangladesh is facing greater risk because of covid-91 as bangladesh is yet to be a developing country and currently passing through the period of demographic dividend 2.2 covid-19 and student the impact of covid-19 has serious ramification all over the country, especially for student. students as are passing through their tenure of learning, amid this situation their overall curriculum system turned upside down overnight, which subsequently affected their pathway for graduation. a study by rahman et al (2021) on covid19 responses among university students of bangladesh shows that the majority of the students that took part in the study had a significant impact (61.48 percent). due to the epidemic, they were also extremely concerned about their mental health (47.84 percent). online classes have become the only alternative option. students in dhaka, the capital city, reported more dangerous present locations than students outside of dhaka. while online class has been a viable option for only private university, public university and the students of public university is suffering from long term discontinuity from their academic study, begum et al (2020) in their study by covering a massive sample around eleven hundreds student find out some major barriers to students, which ranged from self bearing online learning cost to part time job through nearby covid-19 patient, income reduction, financial problem associated with lost job, overpriced internet access etcetera, these problems manifested into physiological challenges and threatens the continuity of the study of students, the article concludes by recommending to provide financial subsidy to disadvantages students, another study supports the previous claim by focusing on socio-psychological impact of covid-19 on student, the study identified numerous psychological concerns among university students and suggested to build awareness for the mental health of students (far abid hossain http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6063 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 18 et al., 2021). a prominent study by (faisal et al., 2021) reveled that anxiety, depressive symptoms, and mental health status are common sympton among university students in bangladesh during t his lockdown period. in total, 40% of the subjects experienced moderate to severe anxiety, 72% experienced depressive symptoms, and 53% had a moderate to poor mental health condition. there is no denying that such harsh condition can be overburden for any students to complete their academic journey and be prepared to enter the job market, many student have faced delayed graduation due to covid-19 ((maimuna, 2020)) and facing an uncertain future. 2.3 covid-19 and fresh graduate besides running students, who are yet to complete their education, fresh graduate also suffers from covid-19 induced challenges. these fresh graduates were about to enter the job market and start their cornerstone for their career, unfortunately as lockdown and associated closing initiatives were introduced by respective authority they couldn’t enter the desired job market. earlier studies from khan (2020) shows that many organizations delimit their working personnel restrict their operations, shut down their projects to survive in the market, resulting less opening for fresh graduate to enter the job market thus proving the adverse impact of covid-19 on fresh graduate. another study by shahriar et al (2021, p 1) supports the previous argument by stating that “the rate of graduate unemployment increased from 47% to 58% in 2020 with an expected annual loss estimated at $53 million”. the opening entrance in job market is hampered by covid-19 induced challenges does not remains in the boundary of private sector, even oublic secotr is greatly under influence, for example the 43rd bangladesh civil service examination’s viva has been postponed for indefinite period (“42nd bcs viva postponed indefinitely,” 2021) . the actual scenario remains as volatile and fragile as ever in bangladesh, while more students are entering job market without any experience even without the experience of an internship, as reported in news paper column , “with the covid-19 pandemic and predicted economic recession, youths are warned that their career path and work-life settlement will not come easy” (maimuna, 2021). 2.4 covid-19 and job seekers in addition to the tertiary level student and fresh graduate, an third group emerged as job seekers with the advent of covid-19 period, who once was employed. it all began when to tackle to infection government of bangladesh took preventive measures including lockdown, as a result most of the business and organization were shut down, and the employed person used their savings to live in one of the most expensive city of the world (“dhaka one of the most expensive cities in the world,” 2020). as the situation remained unchanged for longer period of time, eventually many employed person went unemployed and lost their job, according to a world bank report, around 68 percent of those who were forced to cease working due to the epidemic in dhaka and chattogram have lost their jobs (byron, 2020). another study by world bank portrayed “provides early insights into the labor market impacts of the ongoing coronavirus 2019 crisis in bangladesh. the findings point to substantial uncertainty about job prospects for many people” (genoni, et al, 2020). besides these one of the most revenue earning sector of bangladesh which is ready-made garments sector (rmg) also suffered from covid19 challenges, resulting less productivity, emotional health, fewer job posting and even loss of employment (kabir et al., 2020). another study by hossain (2021) initially revealed that many people have experienced declining income and lost job due to covid-19, followed by the limitation of unfavorable economic policy, and finally suggested to adopt employment-oriented economic policies. besides individual research, institutional study from organizations likes asian development bank by hayashi & matsuda (2020) provided key insight of covid-19 impact on job portal, stating that since the covid-19 outbreak, job listings on the main online job matching sites in bangladesh and sri lanka have decreased significantly. all industries saw a large drop in new job ads including bangladesh’s textile sector, portrayed by another study, the link between employment and demogrphaic factors is high (urmanaviciene & arachchi, 2020) the above discussion shows that both covid-19 and government response to tackle the infection rate created an unfavorable situation for potential employee sector which comprised of tertiary level students, fresh graduate and job seeker; which in ultimately threatens the demographic dividend of bangladesh, despite of the significance of the issue no study has been done to explore the adverse impact of covid-19 on demographic dividend. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6063 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 19 3.0 methodology the study is about the demographic dividend of bangladesh which is experiencing adverse impact by covid19. as the study deals with sensitive issue the methodology of this study is carefully formatted. the objective of this study is to find out the adverse impact of covid-19 on demographic dividend, especially on the potential employee sector consists of three groups namely; tertiary level final year students, fresh graduates and job seekers. in doing so primary sources of data is used; the data will be collected using qualitative method followed by a semi-structured questionnaire, the questionnaire is delivered by mail-survey questionnaire and google form. this will be a cross-sectional study, so for the data collection, non-probability convenience along with selfselection sampling technique will be used due limited mobility induced by covid-19 lockdown. the population of potential employees sector is huge as the population of entire city is around 18.2 million (swapan et al., 2017), among them 4.81 percent people are unemployed (dataleads, 2017), which makes around 0.9 million people jobless, among them majority are students, fresh graduate and job seekers, and to maintain the consistency respondents from only social science background were suggested to participate, as subjects like pharmacy and c.s.e have different modalities for academic activates like lab class, field study etcetera. a total of 150 respondents have be taken as sample, where each groups will have 50 respondents. after collecting, the data is analyzed using ibm spss software and the results will be demonstrated using graphical illustration like figure, chart, bar etcetera. data type data collection method sampling style data source primary qualitative convenience & self-selection final year student (50), fresh graduate (50), job seeker (50) 4.0 analysis the analysis part can be organized under three broader categories, analysis of student, and analysis of fresh graduate and analysis of job seekers 4.1 analysis of data from final year university students the collected data from final year university students were analyzed using ibm spss software, and then illustrated in figures, bar, pie chart etc. the analysis is given below following. first the degree of depression of the respondent (final year students) is measured using zung depression scale, which is a popular public domain scale and free to use as self rating depression scale. n=50. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6063 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 20 figure 1: figure 1 shows that among the 50 respondents, 5 respondents shows normal symptoms hence scoring below 44 in zung depression scale, while 8 students shows symptoms of mild depression, the degree of depression reach on the highest scale by 20 students who experience moderate depressions, and 17 students scored 70+ thus being severely depressed. 38 among 50 students who are suffering types of depressions, says they are losing interest to study. secondly, the degree of knowledge of the respondent (final year students) is measured using staple scale, where n=50. the rationale of using staple scale is that as staple scale does not support neutral value it is appropriate to measure the degree of knowledge of the students because being a student there is no point of neutrality in terms of gaining knowledge. figure 2: figure 2 shows the degree of learning of the final year students using staple scale. the graph shows that among the respondents 13 students think that the degree of learning is worse, while 18 students think it is bad, on the contrary 12 students think that the degree of learning is moderate and 07 students thinks it is good. the total score 20-44 (normal) score 45-59 (mildly depressed) score 60-69 (moderately depressed) score 70+ (seveerly depressed) depression scale among stduents 5 8 20 17 0 5 10 15 20 25 degree of depression among students 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% degree of learning degree of learning worse 13 bad 18 moderate 12 good 7 degree of learning http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6063 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 21 number of students who think the degree of learning is on negative is 33. among the 50 students, 38 students believe that the knowledge they are receiving through online classes is inadequate to enter the job market. finally for the issue of delayed graduation of students is addressed, the respondents (n=50) reflected their perception towards the reason for delayed graduation and associated impact of it. figure 3: figure 3 shows the reason behind delayed graduation of students induced by covid-19. the most prevalent reason identified by the majority of student (18) is the closure of educational institutions, followed by the second biggest reason financial problem of family induced by covid-19 which is identified by 15 students. the third biggest reason behind delayed graduation is identified by 13 students as the tuition fee problem, and only 4 students identified several other reasons including lack of study environment, absence of teachers company etcetera.. 42 out of 50 students think that they will not be able to complete their study if the situation remains unchanged, thus they will be fall below the margin of human capital without education. 4.2 analysis of data from fresh graduate first the degree of depression of the respondent (fresh graduate) is measured using zung depression scale, which is a popular public domain scale and free to use as self rating depression scale, where the n=50. figure 4: figure 4 shows that among the 50 respondents, 7 respondents shows normal symptoms hence scoring below 44 in zung depression scale, and 7 fresh graduate shows symptoms of mild depression, the degree of depression reach on the moderate scale by 16 students who experience moderate depressions, and 20 students 36% 30% 26% 8% reason behind delayed graduation closure of educational institutions financial problem of family tuition fee other score 20-44 (normal) score 45-59 (mildly depressed) score 60-69 (moderately depressed) score 70+ (seveerly depressed) depression scale among fresh graduate 7 7 16 20 0 5 10 15 20 25 degree of depression among fresh graduate http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6063 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 22 scored 70+ thus being severely depressed. 32 among 50 fresh graduates who are suffering types of depressions, says they are losing hope for bright career. and for analysis of the major problems to enter the job market faced by fresh graduate which induced by covid19, is given below, where n=50 figure 5: figure 5 shows that, among the problems induced by covd-19 to enter the job market three problems are most prevalent. among the respondents, 22 fresh graduates hold the absence of internship experience as a major challenge to enter the job market, the second major problem identified by 13 fresh gradates is the changed hiring policy of organization induced by covid-19 which discourage to recruit fresh graduate, finally 9 students experienced the responsibility to look after covid-19 relative fallen onto their shoulder. while only 6 students mentioned about other problems like low job posting, delayed recruitment process etcetera. 4.3 analysis of data from job seekers as mentioned earlier, job seekers mean the individual respondents who have prior job experiences. .first the degree of depression of the respondent (job seekers) is measured using zung depression scale, which is a popular public domain scale and free to use as self rating depression scale, where the n=50. absence of internship experience 44% hiring policy changed by covid19 26% covid-19 patient in family to look after 18% other 12% covid-19 induced problems to enter job market score 20-44 (normal) score 45-59 (mildly depressed) score 60-69 (moderately depressed) score 70+ (seveerly depressed) depression scale among job seekers 2 9 17 23 0 5 10 15 20 25 degree of depression among job seekers http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6063 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 23 figure 6: figure 6 shows that among the 50 respondents, only 2 respondents shows normal symptoms by scoring below 44 in zung depression scale, and 9 job seekers shows symptoms of mild depression (scoring 45-59), the degree of depression reach on the moderate scale by 17 job seekers who experience moderate depressions, and 23 respondents shows symptom of severely depressed by scoring above 70+. among the 50 respondents, 40 respondents who are suffering moderate and severe types of depressions, says they are being compelled to lose interest for job opportunity. and finally for analysis of the major challenges induced by covid-19 for job seekers to enter the job market is given below, where n=50 figure 7: figure 7 shows that, among the challenges induced by covd-19 to enter the job market three problems are most prevalent. among the respondents, 19 job seekers fears the age out for public job, 14 respondents finding it hard for them to switch job industry, and 10 respondents find the stalled recruitment as disruptive challenge for their career. only 7 respondents identified challenges like maintain hygiene, long distance and family restrictions. 4.4 analysis of data from student, fresh graduate and job seekers the reflection of students, fresh graduate and job seekers on the adverse impact of covid-19 on demographic divided is given below; 38% 28% 20% 14% covid-19 induced problems for job seekers age out for government job switch industry stalled recruitment other http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6063 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 24 figure 8: the figure 8 shows the perception of entire respondents towards the impact of covid-19 on demographic dividend of bangladesh. among the 150 respondents none could identify any positive indication of covid-19 on demographic dividend, where 21 respondents find it neutral by claiming that the higher degree usage of technological devices equalizes the negative impact, on the contrary 66 respondents find the impact of covid-19 on demographic dividend has adverse impact and 63 respondents labeled the impact as highly adverse. 5.0 summary of main results drawing the key insight from each analysis sagements, it can be said that the covid-19 and associated initiatives are taking a toll on the potential employments sector of bangladesh. the findings of the study are given below; • serious depression is prevlenant among students, fresh graduate and job seekers , resulting them less active and emotionally unstable for active functionality. among the three classes, the severe degree of depression is more prevalent among fresh graduate comparatevely than students, and subsequently more prevalent among job seekers than fresh graduate. • most of the student is affected by delayed graduation caused by covid-19, and they are afraid that the learning modalities or quality during covid-19 period will not help them to complete in the job market • fresh graduates are suffering from experience gap as well as changed hiring policy of market and responsibility for family member diagnosed with covid-19; all problems are induced by covid-19. • majority of job seeker are already lost their job due to first wave of covid-19, and still struggling to get into the market before their age runs out, in addition to that switching job industry is pretty had during this time and stalled recruitment caused by covid-19 added another layer of challenges for them. 6.0 discussion the above results indicate a serious situation forthcoming for bangladesh. both covid-19 and unsophisticated absent mined government action is responsible for such situation. the results of this study imply the uncertain future for bangladesh’s potential employment sector due to covid-19, which subsequently will threaten the demographic dividend of this country. as bangladesh is on the midway of this life time opportunity named demographic dividend, and the government of bangladesh could not took appropriate measure to secure the 42% 44% 14% 0% 0% perception of covid-19 on demographic dividend highly adverse adverse neutral positive highly positive http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6063 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 25 smooth work flow of working people, there is high possibly that this window of opportunity will disappear soon unless required initiatives are taken. 7.0 conclusions the study deals with a crucial subject which is responsible for bangladesh’s decade long success and achievement that is demographic dividend. the aim of this study was to reveal the adverse impact of covid-19 on bangladesh’s demographic dividend by identifying the key affected area of potential employee sector, this study shows how the covid-19 created waves of challenges for this sector thus threading the flow of demographic dividend. in spite of declaring stimulus packages to handle this issue and make a favorable environment for the potential employee sector, budget 2021-22 proposed 15% tax on private universities(report, 2021) which has created concern among all stakeholders and made the situation volatile and fragile than ever. 7.1 limitation of the study the study was done during the peak devastating hour of employment sector caused by covid-19, hence the sample may represent a protion of margion of error as the sample style was selfe selection, on top of that the study was conduced only on 150 samples, leaving the majority out of equation. finally the qualitative dala collection method may not revel the actual scenario of the respondents. regardless of the limitations, considerig the toll taken by covid-19, the study was successful and all set-out objectives achieved. furthermore, the following areas 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(2021). perspectives of older employees in changing market. european journal of social impact and circular economy, 2(3), 48-58. urmanaviciene, a., & arachchi, u. s. (2020). the effective methods and practices for accelerating social entrepreneurship through corporate social responsibility. european journal of social impact and circular economy, 1(2), 27-47. https://thefinancialexpress.com.bd/education/job-market-struggle-for-freshers-1608801159 https://www.thefinancialexpress.com.bd/education/student-internship-brighter-path-to-career-ahead-1614797318 4915-article text-15065-1-11-20200717 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4915 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 53 social stock exchange between academics and practitioners' view davide calandra1 and matteo favareto*1 1 department of management, university of turin, italy. corresponding author: matteo.favareto@unito.it received: 15/06/2020 accepted for publication: 17/07/2020 published: 20/07/2020 abstract this paper aims to investigate social stock exchange (sse) as an alternative market considering both academics and practitioners’ view. sse is a platform typically used by social entrepreneurs to collect financial resources for measurable social or environmental projects. through the analysis of 12 scientific papers and 132 documents, websites, blogs and titles reviewed by experts, the authors identify the main themes strictly connected to sse. notably, based on the previous gap analysis, this paper reveals definitions and tools which social stock exchange could address. despite the potential importance of this alternative market, the study shows few sses. the discussion between academics and practitioners shows interest by social entrepreneurs in this investment vehicle, considering the debate under the accreditation and sectors. thus, the paper contributes theoretically and practically to the primary literature providing to overcome the lack of evidence on sse. this article concludes its journey suggesting a structured future research agenda. keywords: social stock exchange, social enterprises, impact investing, academics, practitioners 1. introduction social enterprises aim to deal, primarily, with social and environmental issues, seeking to improve the quality of life of society or groups of people (doherty et al., 2014; secinaro et al., 2019). as defined by bugg-levine et al. (2012) in the harvard business review, an increasing number of entrepreneurs and investors believe that social enterprises can generate attractive financial returns. therefore, the central role is assigned to the social entrepreneur, a direct link to attract financial capital on a large scale to carry out projects with positive social and environmental externalities (colasanti et al., 2020; mcwade, 2012). according to mendell & nogales (2009), social entrepreneurs seeking investment are confronted with outdated categories and schemes (e.g. the demand for more bank guarantees). therefore, as indicated by the same authors, a cultural adaptation is needed first of all of the financial communities and then of the legal, accounting and political communities at both national and international level. therefore, over the years, alternative financial institutions such as social stock exchange (sse) have emerged (galina et al., 2013; wendt, 2017). these institutions stand alongside social enterprises, to seek capital to finance their activities and investors who are willing to invest their money in projects with social and environmental outputs (calderini et al., 2018). besides, through the exchange of securities in specially created institutions, it is possible to maximise the social value of investments compared to private profit (pavlov, 2017). however, as pointed out by many authors, there is not yet a full consensus in the literature on the infrastructures, definitions and tools that sse can provide for entrepreneurs (mendell & nogales, 2009; pavlov, 2017; secinaro et al., 2019). although a nascent stream of literature is actively focusing on social social european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4915 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 54 stock exchanges, at the moment, this area of research does not present a systematisation and comparison between what academics say and what professionals need. therefore, starting from this research issue, the paper will aim to understand and systematise the concept of the social stock exchange in theory and practice. in particular, researchers using a qualitative methodology of analysis will proceed to classify and extract, through academic and professional databases, information on the field of research investigated. the results obtained demonstrate some interesting elements. first, the definition of sse is still to be finalised. although there is agreement on the first version, deepening the analysis, it is possible to realise how many descriptions are present today. this substantial uncertainty in the literature is partly due to the situation of uncertainty, also at the level of professionals concerning sses around the world. the original plans for the constitution of the sse have undergone variations due to the lack of interest on the part of the stakeholders involved in the use of the instrument. in other cases, there is evidence of platforms that are not active. it shows uncertainty and lack of clarity on the use of sse definition, already "in the shadows" compared to the traditional stock exchange market. nevertheless, there are some successful cases in the world and this is driving the development of new platforms dedicated to impacting investing. secondly, content's speaking, the initial discussion of the professionals is based on being able to define standards for the operation of these platforms. that is to say, specify whom they are designed for, what are the entry requirements, what is the necessary documentation to submit in order to obtain accreditation and then maintain membership. at the level of practical results, the paper investigate the concept of social stock exchange analysing the most critical and successful models in the world such as the impact investment network (u.k.), the impact investment exchange (singapore) and the bolsa social (spain). the paper aims to contribute to the emerging literature on social stock exchanges and, more widely, to the tools that social entrepreneurs can use in their activities. the rest of the paper is organised as followed. the next paragraph will assess an in-depth literature review on the role of social enterprises and the need for sse. the third paragraph will analyse the method adopted by the researchers. additionally, the fourth paragraph will assess the main results for practitioners and academics. finally, the last section will discuss and conclude the paper. 2. literature review 2.1 social enterprises and the need for social stock exchange according to battilana & lee (2014), the theory of organisation has evolved by considering social enterprises (s.e.s) as a particular form of hybrid organisation. according to the analysis of the literature published in the academy of management, these enterprises combine both business and charitable organisational aspects. besides, these organisations often host projects of high social value (battilana & lee, 2014; galaskiewicz & barringer, 2012). for instance, these organisations could host microfinance organisations, sustainable food producers, labour companies and any other project of public importance. (biancone et al., 2020; dart, 2004; dees, 2018; mair, 2010; mauksch et al., 2017; steiner, 2016). additionally, s.e.s have been viewed as an innovative, and increasingly global, solution to bridge the service delivery gap of governments (agapitova et al., 2017). in a world filled with poverty, environmental degradation, and moral injustice, social enterprises offer a ray of hope. these organisations seek to achieve social missions through business ventures (smith et al., 2013). attracting investments seems to be one of the main problems of social entrepreneurs. at the same time, some investors are ready to invest their money, but they do need guarantees and want to be sure in economic and social effects of social enterprises (boguslavskaya & demushkina, 2013). that is why social stock exchanges appeared. sse serves as a mediator between social enterprises, that need funding, and investors who are willing to invest their money (boguslavskaya & demushkina, 2013; pavlov, 2017). the history of sse is not longer than 15 years; it is a new social and economic phenomenon which is rapidly developing around the world. these are platforms dedicated exclusively to organisations with a social mission & vision. according to boguslavskaya & demushkina (2013), pavlov (2017) and (2019), sses create multiple advantages either for investors or for social enterprises and the community. the same authors state that benefits designed for investors include: make the procedure of social-enterprise investment simpler (1), increase the european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4915 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 55 transparency of social projects (2), help to save time and cost of project searching (3), reduce the financial and administrative expenses (4), provide objective information about social projects placed on the exchange (5), increase the social value of investments (6), enable to obtain not only the financial but also the social impact of investment (7). additionally, they specified some advantages that sses generate for social enterprises: create the opportunity to get investment (1), ensure stable functioning of the organisation (2), raise the value of their social activities (3), help to grow the company's value (4), increase company's recognisability and rating (5). the introduction of social stock exchanges would contribute to balancing the different interests of the subjects involved in the exchange, bringing them closer to those of the community. at the same time, it would give the possibility for the third sector to plan their activities carefully and to ration the available resources in a long-term perspective. investing ethically means using and managing its financial resources to promote the development of projects or work of an ethical and social nature (sparkes, 2001). sse investors are often driven by a goal that exceeds mere profit maximisation (battilana & lee, 2014; mendell & nogales, 2009). they are prepared to sacrifice part of their profit to fund organisations working for the community. in conclusion, sse can connect two worlds, finance and ethics, that always have been antithetical and meet the expectations of different stakeholders involved in wendt (2017). 3. methodology 3.1 review of scientific literature and practitioners' view to answer the research question, the researchers used the literature analysis approach. in particular, the method, applied rigorously, makes it possible to investigate the primary scientific studies on specific topics (paul & criado, 2020). therefore, the methodology used makes it possible to report all the research phases and to easily allow the analysis in different areas (massaro et al., 2016). the analysis was implemented using as keywords "social stock exchange" following the objective of the article. among the search criteria, we focused on english items that were inherent to the searched object. the authors used scopus and google scholar as databases. although in the social sciences scopus returns a convincing result (falagas et al., 2007; mongeon & paulhus, 2016), the reduced number of articles have prompted researchers to continue the analysis also on google scholar for a more accurate study of the topic. after an initial selection phase using databases, the researchers went on to consult the references of the articles found (i.e. snowball sampling) to increase further the sample being studied (biancone et al., 2019; lecy & beatty, 2012). further, the following search criteria were used: availability of the full text of the article (also by request to the author) (1), studies dealing with common stock exchange issues (2). moreover, to verify the opinions and practices of professionals, researchers used a measurement technique based on electronic periodicals, expertly revised titles, consumer magazines, newspapers, news and blogs (dal mas et al., 2019; massaro et al., 2018). therefore, ulrichsweb has been used to explore all data related to professionals (meeks, 2018). as soon as the scientific and academic sample was available, all authors independently developed the analysis by reading the titles and abstracts of both datasets. subsequently, through opinion sharing and conflict resolution, the researchers came up with a final sample of study (lecy & beatty, 2012). the results and method benefited from the prisma approach for the classification of results (liberati et al., 2009). figure 1 shows the research steps and the number of scientific articles that have been selected for the construction of the academic sample. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4915 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 56 figure 1. the prisma flow source: authors' elaboration on liberati et al. (2009) for the selection of professional contributions, the researchers used the filter "reviewed by experts". compared to primary research with 7,728 results, the application of the screen allowed evaluating 1,637 results validated by experts in the field. after a careful selection, the researchers reached a final professional sample of 132 documents, websites, blogs and titles reviewed by experts. 3.2 content analysis subsequently, after obtaining the results, the researchers carried out the independent content analysis. the objective of this method is to provide a reading of the content of the elements by creating cognitive patterns (see categories) that allow the reader to visualise the items in a research flow (flick et al., 2004). according to elo & kyngäs (2008), content analysis can be inductive or deductive. in this case, the study uses a deductive method based on three phases: preparation, organisation, concluding remarks. the first step was the reading of academic and professional contributions. through the organisation phase, researchers built a matrix to test the paper's research question by identifying reading codes derived from the literature (dal mas et al., 2019; secinaro et al., 2019). the third step made it possible to validate and conclude the article. figure 2 shows the steps used for the analysis of social stock exchanges. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4915 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 57 figure 2. the qualitative process of content analysis source: (elo & kyngäs, 2008) 4. results the following sub-paragraphs aim to specify the academic and practical results identified by the researchers. the variables under observation are definition (1), accreditation process (2), areas of activity of accredited members (3). european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4915 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 58 4.1. practitioners' view on the social stock exchange the first variable under observation is the definition of social stock exchange according to the three models. analysing this variable, we want to highlight the functioning of the platforms to understand how the founders conceived them. we also want to go deeper into what is the mission and vision that they pursue. regarding the u.k. platform of the impact investment network (iin), it is a network of companies and investors pursuing a social purpose. the iin is the first u.k. organisation authorised to distribute the social stock exchange brand and its accreditation methodology. the iin aims to support companies, that join the network, to grow ethically and sustainably. once they have obtained accreditation to the system, companies have the opportunity to receive investments from the platform's partners; this can represent an essential boost for the development of projects with a high social impact. moreover, thanks to the partnership between iin and nex exchange, by joining the network companies can be listed on the segment of london stock exchange (lse) dedicated to organisations with high social impact, the nex exchange. analysing the singapore stock exchange model, called impact investment exchange (iix), first of all is necessary to highlight that it is a platform dedicated to social organisations. the initial press release indicates the date of conception, 2009. it was ideated to create more sustainable finance that takes a greater interest in socio-environmental issues. however, as can be seen from the analysis of specialist news, in practice it is an investment platform dedicated to organisations with a high social and environmental value; it helps them to obtain funding thanks to the network of over 1,000 investors with a social impact purpose. to date, the iix platform includes a specific section called impact partners, which represents the first point of encounter and contact between social impact companies and investors. it is a social crowdfunding platform, which was launched in 2011 and aimed to facilitate investments in social enterprises. basically, the impact partners platform should help potential investors to identify, assess and invest in social and environmental projects. the analysis of the results of the professionals has made possible, as well, to find out more about the social stock exchange in spain. bolsa social was born in 2014 and this is the first spanish crowdfunding platform dedicated to investors and companies with high social and environmental value. bolsa social's mission is to finance companies that have growth potential and generate a positive impact on society and the environment. the second variable under observation is the accreditation process that an organisation must follow in order to access to each platform. concerning social stock exchange in the u.k., the selection process starts directly on the iin website by filling in a form in which the companies insert general data of their organisation. the company will also have to demonstrate how its activities generate a positive and tangible social impact on the environment and the territory. if it meets this requirement, the organisation will be contacted by the iin business development team to discuss the objectives that the company intends to achieve through its impact activities. the team will also support the company and will help it to prepare the application. among the mandatory documents to be submitted there is the impact report; it is a document in which the company declares its social, ethical and environmental commitment. finally, it will have to prove to be an economically/financially solid organisation with good growth prospects. applications will be submitted to the impact admissions panel; this is an insitution composed of experts in social investment and impact reporting that has the task of assessing the suitability of candidates. if the application is successful, the company will obtain the accreditation to the platform. given the nature of the platform, each year, companies accredited to the iin must submit an impact report demonstrating their social commitment (otherwise they will be excluded from the platform). analysing the impact investment exchange and impact partners in singapore, organisations that want to become members must comply with the following criteria: core business criteria (1), investment readiness criteria (2). concerning the first criterion to be met, candidate companies must demonstrate that they are economically/financially solid and pursue a social mission. the second criterion requires the presentation of a business plan in which the company defines its strategic objectives and how it intends to create a positive and tangible social impact through its activities. this document must be accompanied by financial data (historical and prospective) that demonstrate the financial situation of the company. also, in the case of the ixx, the candidate companies must submit their impact report. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4915 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 59 as regards the process that a company must follow to become an accredited member, it consists of a series of steps that can be summarised as follows. first, the candidate will have to fill in an online form in which provides information about the company and details of the investment required. then there will be a screening process in order to evaluate the suitability of the candidate with the platform's mission. if the company pass this initial selection step, will be accepted as an accredited member. the impact partners team will prepare a technical description sheet of the company and its social project (which will then be visible to investors). the impact partners team will also facilitate matching between the accredited company and potential social investors. finally, analysing the case of the bolsa social, it is necessary to specify that can submit the applications only organisations that pursue a social mission/vision (for this reason is mandatory to present the impact report as a guarantee). besides, is fundamental being an economically/financially solid organisation with good growth prospects. as regards the process that a company must follow to access to bolsa social, it consists of a series of steps that can be summarised as follows. the selection process starts by filling in an online form in which the company presents to the bolsa social team, detailed information about its company, its business model and its current and prospective financial situation. bolsa social will carry out a screening of the applications received. once the selection process is over, the investment campaign will begin. each company sets itself a minimum and maximum capital target that it wants to achieve through the investment. the bolsa social team will publish detailed information about the company and the investment project on a dedicated page. bolsa social will also organise dedicated events to promote contacts between investors and companies. investors will be entitled to participate in the development of the project in which they have invested. they will also receive detailed information about the progress of the work. finally, the third variable analysed is related to the sectors of activity of accredited members on social stock exchanges. regarding the iin platform, it is possible to divide the accredited organisations into the following clusters of activities: reduction of harmful emissions, energy efficiency and recycling (1), consultancy/service delivery for social organisations (2), healthcare, social services, services for people with disabilities or dysfunctionality (3), innovative technologies serving the community (4), eco-homes and home repair (5), sustainable mobility (6). analysing the case of iix and impact partners platform, the accredited members are organisations belonging to the following areas of activity: industrial and rural development (1), innovative technologies serving the community (2), recycling and energy efficiency (3), social inclusion and services for people with low income or disabilities (4), education (5). in the case of bolsa social, the accredited organisations are active in the following sectors: services for people with disabilities or dysfunctionality (1), sustainable fashion (2), social inclusion (3), sustainable mobility (4), industrial and rural development (5), eco-homes (6), innovative technologies serving the community (7), production, responsible consumption and recycling (8). table 1 shows the practitioners' view by illustrating the results obtained from the study of the three variables considered. table 1. practitioners' view definition • the meeting point between companies with a social impact and investors • platforms dedicated to companies with a social mission and the promotion of their impact activities • securities trading and exchange platforms and social crowdfunding accreditation process organisations of different types and sizes may apply. a fundamental requirement is to be a solid organisation from an economic/financial point of view, with good growth prospects, and to have a social mission/vision. accredited members will obtain investments and will have to demonstrate how they can generate a positive and tangible european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4915 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 60 social impact on the environment and the community. areas of activity of accredited members • health; • sustainable mobility; • energy efficiency and recycling; • education; • innovative technologies at the service of the community; • tourism and sustainable fashion; • industrial and rural development; • social integration. source: authors' elaboration 4.2. academics' view on the social stock exchange regarding the first variable, definition, according to (wendt, 2017), social stock exchange allows the democratisation of capital. in fact, social stock exchange can be defined as a meeting point between investors and social organisations (wendt, 2017). social stock exchanges promote the impact investing and give the possibility to social enterprises to pursue their social objective. according to the author, impact investing could be defined as a process by which investment managers screen, evaluate and monitor investments using environmental and social governance. as stated by bernardino et al. (2016) and moritz & block (2016), these platforms are similar to a social crowdfunding model. crowdfunding can support entrepreneurs for financing their projects; there are several motivations to choose these platforms. the most relevant is obviously to receive funding from the donors to attenuate a particular problem by displaying the main characteristics of the projects and the managerial structural schemes of support (such as a social organisation) for efficiency and sustainability (belleflamme et al., 2014; bernardino et al., 2016). as stated by bernardino et al. (2016) and moritz & block (2016), projects with a social or nonprofit oriented background have a higher probability of receiving funding from the crowdfunding. following dadush (2015), social stock exchanges should be platforms designed to connect investors with social businesses in need of capital. sse serves as a mediator between social enterprises that need funding and investors who are willing to invest their money. adhana (2020) defined social stock exchange as a platform on which social enterprises, volunteer groups and welfare organisations are listed so that they can raise capital for the welfare of the society and the disadvantaged. sse allows investors to buy shares in social enterprises vetted by an official exchange. these platforms would be created to serve the community, generating source from society and giving back to society in the form of welfare, upliftment through providing high infrastructures like roads, schools, hospitals. analysing the second variable, accreditation process, according to (chaturvedi et al., 2019) only social enterprises that have a track record of achieving measurable positive social and environmental impact are listed on the sse. to be accepted on sse, organisations need to comply impact and financial requirements. impact requirements relate to the preparation of an impact report for at least a year by the listing entity, obtaining an impact certification by an independent body at least a year prior to listing and ensuring the primacy of social/environmental mission. financial requirements would include meeting a minimum market capitalisation amount, publishing financial statements that meet specific specified standards at least a year before listing and demonstrating a financially sustainable business model (chaturvedi et al., 2019). also, dadush (2015) stated that social stock exchanges need to fix specific admissions criteria for social businesses wishing to transact on their platform. establishing requirements with which accredited members must comply to obtain and maintain their memberships, such as the production of financial and social reports. is fundamental that companies must have "social or environmental impact as a core aim". to satisfy this requirement, companies must submit a social impact report for review by the independent admissions panel composed of finance and impact-investing experts european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4915 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 61 concerning the third variable under investigation, areas of activity of accredited members, as mentioned by pavlov (2017) accredited members, on platforms, have to be social organisations that pursue a social mission & vision. this means they have social ends (primary goal) which generate revenues (secondary purpose) from their activity, like mainstream businesses, and they reinvest them internally to grow as firms, reaching more people in need. these organisations are operating in different areas of business, but they must pursue a social objective (bernardino & freitas santos, 2016). analysing more specifically the sector of activities of social enterprises, on social stock exchanges, we can find different areas, such as food, security and agriculture (1), small business development (2), animal protection (3), education and health (4), environment and conservation (5), sustainable mobility (6), vulnerable people (7) (bandini, 2014; chaturvedi et al., 2019). table 2 shows the academics' view by illustrating the results obtained from the study of the three variables considered. table 2. academics' view definition • the democratisation of capital (wendt, 2017) • social crowdfunding (bernardino et al., 2016; moritz & block, 2016) • platform designed to connect investors with social businesses in need of capital (dadush, 2015) • the platform which allows investors to buy shares in social enterprises vetted by an official exchange (adhana, 2020) accreditation process • accreditation rules: impact and financial requirements (chaturvedi et al., 2019) • admissions criteria and requirements (dadush, 2015) areas of activity of accredited members • social mission & vision (pavlov, 2017) • social objective (bernardino & freitas santos, 2016) • the sector of activities of social enterprises on the social stock exchange (bandini, 2014; chaturvedi et al., 2019) source: authors' elaboration 5. discussion and conclusion the analysis of the literature of academics and professionals has made it possible to put together two visions into a single paper. this approach, according to romme et al. (2015), facilitates the dialogue between what is present in practice and what is studied by academics. mutual knowledge and common interest should facilitate the exchange of vision and contact between both realities. the paper is a connecting point by analysing the definitions, the process and the primary sectors. the analysis of the results poses some interesting reflections. first, despite the terminology, to date, social stock exchanges seem to be more similar to social crowdfunding platforms than real stock exchanges dedicated to buying and selling securities. the reference literature also confirms this with the contribution of bernardino et al. (2016). according to several experts, this is a necessary evolution of the instrument, in fact, in some cases, the original project, related to the creation of social stock exchanges, didn’t meet the interests of investors and social organisations. this reflection, therefore, opens the way for further research into why this model has not developed as much as the traditional market. additional research by academics on this point could be directed to the models we map in the analysis of the case studies and the variables that constitute them. also, a summary of the business models used could be beneficial to european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4915 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 62 the creation of future models. finally, further research could be addressed in a comparison between social crowdfunding and social stock exchanges to investigate why the first one is more of interest to stakeholders. another significant result obtained concerns the terminology used. the analysis among practitioners and academics showed that the professional world had devoted more interest to sse than academics. as reported by romme et al. (2015), this may be due to the difference in benefits and the immediate need of practitioners to provide solutions to a practical problem. furthermore, the comparison between the two visions leads to the conclusion that sse is still too little known and exploited below their potential. also, on this point, further research elements can be followed in the future. first, researchers through specific theoretical frameworks such as stakeholder theory could verify the feasibility of the model. besides, further research could be repeated to see if there is an evolution of the terminology used today in the future. finally, the analysis of the academic and professional vision poses some points for reflection. the number of scientific contributions identified makes the sse a new tool that has been used less and less by entrepreneurs at the moment. moreover, the market is still not aware of its potential. also, there is the difficulty of intercepting the social investor, which is more easily reached through crowdfunding tools (moritz & block, 2016). finally, researchers indicate a strong information asymmetry on the use of sses, as well as the presence of a few companies accredited to the social network, can list within a segment dedicated to social. therefore, future studies may also focus on the legal and political aspects of sse. we believe that these elements can be developed in future studies to understand whether the instrument can also be relaunched by companies that own conventional stock exchanges. for the best of our knowledge, the paper contributes to the literature of the tools available to social entrepreneurs and provides an analysis of the research for sse (adhana, 2020; chaturvedi et al., 2019; pavlov, 2019). also, through the investigation of professionals, the paper highlights future challenges that professionals could solve to make sses platforms more attractive to investors and social enterprises. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4915 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 63 references adhana, d. 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(2016). the playground of the rich? growing social business in the 21st century. social enterprise journal, 12. https://doi.org/10.1108/sej-12-2015-0036 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4915 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 65 wendt, k. (2017). social stock exchanges—democratisation of capital investing for impact. ssrn electronic journal. https://doi.org/10.2139/ssrn.3021739 03_olufunmilayo european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5464 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 26 enhancing financial resource management of families in economic recession: a case study of kaduna state olufunmilayo foluke alabi1 1 federal college of education, nigeria. e-mail: drfunmialabi@gmail.com received: 28/12/2020 accepted for publication: 23/08/2021 published: 12/11/2021 abstract families manage their financial resources before the economic recession. the current economic recession is already taking a toll on the family, particularly families in developing countries. the economic recession has impacted the family finances thereby creating challenges that may lead to family crises and instability. the enhancement of family financial resource management is a must for family survival. the general objective of the study was to investigate the financial resource management of the family in economic recession. specifically, the study, identified how families managed their financial resources in the period of economic recession, determined the impact of economic recession on family financial resources. the area of the study was kaduna state. the population consist the couple and their children. the sample of the study was made up of the couple and any child in the family that was not above 24 years. the sample size was 600 respondents selected from three local government areas using systematic random sampling. structured questionnaire was used for data collection and mean score was used for analysis. the result revealed that families enhance their financial support from children, family members, keeping livestock and return from pensions. it was further revealed that families manage their financial resources in economic recession through prudent financial plans, buying items in bulk and cutting down on luxury. the implication is that if families do not manage their family financial resources effectively during economic recession, they are likely to face the following challenges: poverty, health problems, inability to afford basic amenities, lack of education or poor education, and emotional stress. based on these findings, it was recommended among others that financial institutions should provide family with microfinance to enable them invest in their business. entrepreneurship education and home economics should be made compulsory at all levels of education in order to learn saleable skills that can enhance their finances and through these the impact of the financial challenges would be reduced. keywords: families; enhancement; financial resource management; economic recession 1. introduction the economic recession which began officially in december of 2007 had both direct and indirect effects on families. the direct effect on family life is loss of employment of parents. the global economic recession of 2007/2008 affected nigeria as a periphery economy that is dependent on the global trade (onwe & ezeadaobi 2019). the federal governments revenue is european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5464 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 27 over-dependent on crude oil, lives on foreign finished household’s electronics, military gargets, imported foods, clothes and cars (onwe & ezeadaobi 2019). there have been symptoms of economic recession in nigerian but it has become more evident during the covid -19 pandemic. the current economic recession in nigeria is due to the unexpected and sustained decline in oil prices and this was the most important cause of recession, but in 2020 public health crisis was the trigger of economic recession in the whole world and nigeria inclusive. the covid-19 pandemic has had far reaching effects on the global economy, this in turn affects the families ( ozili & arun 2020) the family is the smallest unit in the social structure of every society. it is often made up of persons united by marriage, blood or adoption, which may be characterized by common residence, economic corporation and it can be nuclear or extended ( alabi 2013, sociation 2010, & atti 2016). ikulayo (1999) noted that the family is a group consisting of two adults of both sexes who maintain a social approved sexual relationship and one or more children of their own or adopted ones. the family as a unit share resources, responsibility for decisions, values, goals and commitment to one another over time (christensen 1990). family is also viewed as a decision making unit that uses its human and material resources to meet its demands. the family also achieves its goals and responds to events through planning the use of its resources. deacon and firebaugh (2001) asserted that resources are available means (as in business) computable wealth (money, property and products). for family, one of the resources available is known as income or money. money management according to anyakoha and eluwa (2010) is an organized process of allocating and using money to achieve specific goals that are usually purchased with money. the family has the obligation to provide for both the fixed (electricity bills, water bills, house rent, school fees) and day to day expenses for food, clothes and medical bills for the members of the family. to fulfill these obligations resources are needed. resource management referred to the coordination of resources of an individual or organization through the process of planning, organizing, directing and controlling in other to attain individual or organizational objectives (rice and tucker 2005). resource management is the development and allocation of resources to meet family goals (mary and earl 2008). family financial resource management is a series of actions planned to balance income with expenditure and it includes planning, controlling and evaluating the use of money to meet family goals (nwankwo 2003). family resource management is the prudent planning, money savings, financial budgeting and effective coordination of financial resources in the family. before someone can even think about changing their financial behavior, they will experience a change process called consciousness raising (oneil & xiao 2012).this term means that they will begin to learn new facts, ideas and tips that support the idea of making a positive change, for example saving money and reducing debts (oneil & xiao 2012 ). the causes of decline in financial resources are attributed to unemployment, corruption in the society, greediness, low services and inflation (akinwumi 2008). it can also be attributed to poor management, inadequate financial control, inappropriate financial policy and high cost structure among others ( nickaf & opadeyi 2011). effective family resource management has the capacity of ameliorating challenges faced by families during economic recession. economic recession is a period of significant decline in economic activity/lasting more than a few months and there is a drop in the following five economic indicators: real gross domestic product, income, equipment, manufacturing and retail sales (bureau of economic research 2009).the nigerian economic crisis/recession resulting in the breakdown and decline in economic vigor has caused downsizing, mass unemployment, underemployment and bankruptcy (alabi 2013). the long term effects of economic downturn among families can negatively impact the educational and work outcome of next generations (haveman, heinric and smeeding 2011, irons 2009, vonwacher 2011). the experience of living on low income and poverty is almost overwhelmingly negative, impacting on adults and children’s lives in a variety of ways including loss of self-esteem and feelings of isolation and restricted opportunities and choices (udonwa & iyam 2018)., this places heavy demands on parents capacity, to manage everyday pressures under severe financial strain in their home (udonwa & iyam 2018). the covid -19 pandemic has had a far reaching effects on the already fragile nigerian economy and families, it affected the global travel businesses, national health care systems, food industry, events industry, education and global trade (ozili and arun 2020). the situation being experienced by families necessitates for good planning, effective management and reduction of expenses which is a clear indication that families need financial security. family financial security will contribute to their emotional stability; strengthen community and a nation better able to live a thriving economic legacy for future generations. financial security is the ability to meet future needs while keeping pace with day to day obligations (national initiative on financial security 2001).there are very few studies and research work on impact of economic recession on companies, how recession affected different aspect of the economy, like banking industry, textile industry and other establishments in nigeria ( chukwu, liman, enuelu & ehiaghe,2015). some other courtiers like usa have been able to carry out studies on families european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5464 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 28 struggle to afford food ((deparle 2010), increasing demands on food banks and charities (house committee on ways and means 2009). a research carried out on achieving family sustainable development through family financial management in kano state revealed that the strategy for financial management is to stress the need for effective cash management to family members, the mean score was 3.12 out of scale of 4 (ibrahim 2012). research on management of family finances in period of economic meltdown in benue state revealed that adequate financial budget is needed this had a mean of 2.73 out of a scale of 4, while prudent financial planning had 3.4, avoid unnecessary expenditure had 2.9, joint saving had 2.59, investment on business ventures 2.8 out of scale of 4 (ebeirim & ochai 2011). only very few studies have been carried out on family management of finances in nigeria. however the gap that has emerged from literature is the area of causes, challenges, impact, and ways of improving finances of workers and families in economic recession. research works are few in this area especially in developing countries. managing financial resources of families in economic meltdown has been studied in one state out of 36 states in nigeria but kaduna state not inclusive. furthermore no research has been carried out on enhancement of family financial resources in economic recession in kaduna state. it is against this background that the study sought to investigate the enhancement of financial resource management of families in period of economic recession. therefore, the research aim to determine resources available to the family in economic recession period, identified how families managed their financial resources in the period of economic recession, determine the impact of economic recession on family financial resources in kaduna state. the study answers the following research questions: what are the sources of income available to the families in economic recession in kaduna state, what are the ways of managing family financial resources during economic recession, what are the impact of economic recession on family financial resources, the answer to these questions should improve the existing practice though ameliorating the impact of the economic recession through enhancement of family financial resource management so as to have family stability. government and ngos should assist families with resources and economic relief packages to reduce the impact of economic recession. entrepreneurship education and subjects like home economics should be made compulsory for all students at all levels of the education in kaduna state, so that skills learnt can be used as a means of generating money. finance institutions should provide families with micro-finance to enable them invest in their businesses. the research will be structured to continue to in the next paragraph as follows; the review of the literature, followed by methodology, presentation of findings, discussion and finally conclusions. 2. literature review economic recession is a significant decline in economic activity spread across the economy lasting more than months normally visible to real gdp, real income, employment industrial production and wholesales-retail sales (national bureau of economic research 2020). economic recession is a period of economic slowdown featuring low output, illiquidity and unemployment. it is characterized by its length abnormal increases in unemployment, falls in the availability of credit shrinking output and investment, numerous bankruptcies, reduce amount trade and commerce, as well as highly volatile relative currency value fluctuation mostly devaluations and financial crises and bank failure (fapohunda 2012). opeyemi (2008) observed that there are cases of unemployment, retrenchments, downsizing and layoffs, which served as indications to a troubled economy. she further noted that individuals have nowhere to turn to except involving in misconduct and societal condemned activities such as militancy, armed robbery advanced fee fraud, ritual practices for fetish money among others. global recession has been a recurrent topic of debate over past decade reflecting the breath and severity of 2007-2009 global financial crises and the halting nature of the recovery and recently fears that the global economy was on down turn. further more in 2009 the interest was understandably focused on the severity of the global reaction and its devastation consequences (allen 2009). attention shifted to the signs of a flourishing global possibility in 2010 2011 but hopes that this would be sustained were soon curtailed by the possibility of another global recession due to the euro area debt crisis (alessandria, kabaski and midrigan (2010). in nigeria so any companies shut down, the textile sector laid off about 5,000 worker, peugeot automobile nigeria (pan) sacked 565 workers out of 753 workforce and placed the remaining staff on half salary. also the cadbury nigeria plc fired 300 staff while the banking sector seems to be worse hit (sanusi. l.s. 2010). financial pressure in the 2015 euro area eased in late 2012, but in 2015-2016 fears of a global recession reemerged partly because of financial market turbulence in china (bacchetta and van 2016). since mid 2018 concern about a global recession european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5464 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 29 have returned as the world economy experienced a synchronized slow down largely derived by extra ordinary weakness manufacturing among elevated trade tension and heighten the policy uncertainties ( cuba-borda,mechanick and raff 2018). recently the covid-19 pandemic and the lock down restrictions had negative socio economic consequences for all nations. the international labour organization (2010) revealed that as many as 51 million workers were fired in 2010 globally while 30 million more jobs are at risk. the united nations meanwhile predicts that 200 million workers mostly in developing economies could be pushed in to extreme poverty. massachusetts lost 150,000 jobs in two years after the official onset of the recession and unemployment more than doubled from 4.5% to 9.4% (schworm and unifoil 2010) job loss and unemployment has been especially high in occupations held by men and among those in the lower 30% of income distribution. 2.1 major causes of economic recession in any economy experiencing great depression, global economic recessions as drawn from great lesson depression of 1981, 1991, 2004, 2008-2009, includes the following: high inflation, a general rise in price of goods and services which leads to low purchasing power accumulation of debt services especially foreign debts high interest rate -discouraging investors fall in aggregate demand, fall in wages and income mass unemployment and general loss of confidence on the government due to economic indices global health crisis( onwe and eze 2019). 2.2 effect of economic recession recession results in higher unemployment lower wages and income. education, private companies, investments and economic opportunities are all likely to suffer in the current down turn and the effect will be long lived (www.epic.orgpublication). deidda (2015) found out that housing costs were a financial burden and were associated with economic hardship such as preventing families from spending money on healthcare, education, food and clothing. findings from these studies converge suggests that many families lived in a time of financial instability and were vulnerable to financial shock. changes in life circumstances can easily place households at risk of experiencing economic hardship, ranging from difficulty in covering basic needs to filing for bankruptcy (bauchet and evans 2019, deidda 2015, helfin 2016). economic hardship places stress on family relationship (masarik and conger 2017). 2.3 coping strategies coping strategies that families used varied tobe et al (2016) observed that families receiving counseling services also used faith to build support system and developed new relationships with others. reliance on family and relationships were observed among economically distressed families, strong family relationships helps to sustain those under emotional and financial stress among mid west families (tobe et al 2016, vesely et al 2015). families also coped financially by borrowing from payday loans, filling for bankruptcy, using government subsidies, changing jobs or savings for emergencies (gjertson 2016, lebert and voorpostel 2016). 2.4 the family stress model economic adversity has been associated with a range of child outcomes, including elevated risk for behavior problems (brooks-gunn& duncan 1997,evans & english,2002) reduce social competence( bolger, patterson, thompson,& kupersmidt, 1995), the family stress model(fsm) proposes that economic hardship leads economic pressure in the family. makers of hardship may include low income, negative financial events, high debts relative to assets, or whether a family meets governmental guidelines for defining poverty status( conger,et al 2010). pressure such as unmet material needs ( e.g inadequate food or clothing), the inability to pay bills or make ends meet, and having to cut back on unnecessary expenses are psychological manifestations and responses to economic hardship. these pressures are thought to place parents at increased risk of emotional european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5464 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 30 distress. the present study tested some of the predictions derived from the fsm to understand the impact of economic hardship on families and how to have effective family financial management. the current paper contribute to the body of literature by examining the impact of economic recession on families and enhancement of family resource management in kaduna state since no research on this topic has been carried out in this area in kaduna state. 3. methodology 3.1 research design and area of study the research design employed for this study was descriptive survey. this method according to osual (2011) is the best suited for collecting information from a large and small population located at different places in the area of the study. eboh (2009) also noted that descriptive study entails the systematic collection and presentation of data to give a clear picture of a particular situation. gall, gall and borg (2007), asserted that descriptive survey research design focused on people, facts about people, their beliefs, opinions, attitudes motivations and behaviors. the descriptive survey design is best suited for this study because it seeks the opinions of selected family members in this study. the area of the study was kaduna state. kaduna state was chosen for the study due to cases of family crises resulting from poor management of recourses in economic recession, coupled with the researcher’s familiarity with the area that could ease work for collection. 3.2 population of the study the population of the study comprised 3,300 respondents that are married and one adult child of the family that is 24 years and above from three senatorial zones of the state. available record from the national bureau of statistics (nbs) and annual abstract of statistics (2008). these people were selected since they have sufficient knowledge about the topic under investigation. therefore, they will be able to supply adequate information on the research instrument. 3.3 sample and sampling technique six hundred (600) respondents were selected from three local government areas (lgas) of kaduna state using systematic random sampling. one lga was randomly selected from each of the three senatorial zones in the state. from each of the lga, the selected family members include: three respondent’s husband, wife and a child not below 24 years. random sampling ensures that every unit in the study population has a known and equal chance (that is, equi-propability) of being included in the sample (eboh 2009). systematic random sampling is a variation of the simple random sampling, systematic random sampling is characterized by a random start, followed by a pre-determined or systematized order of selection (ebob 2009, osuala 2011). once the first unit has been selected (that is the random start) all the rest of the units for the sample are pre-determined ( ezeji 2010 ). it is probability sampling because the chance of selecting for each unit is known and the starting point is random. in systematic random sampling the count of units must be known ( eboh 2009). this is how total number of units in the sample frame (n) is divided by the units in the sample (n) to obtain sampling interval (k) rounded up to the nearest whole number k=n/n for example in this study 1100 families and sample of 200 was drawn then sampling interval k is 1100/200 = 5.5. the first unit from the population is selected randomly and then every 5th family unit on the list is selected using eboh (2009) formula. in this study after the first selected family, every fifth family was selected 600 respondents was attained. in systematic random sampling having a form of order in some way increases the sample efficiency. 3.4 research instruments the instrument for data collection was research questionnaire titled: enhancement of financial resource management of families during economic recession in kaduna state. for question one, the items were based on two point scale of available and not available. for research questions two, three and four, four point’s scale of strongly agreed (4), agreed (3), strongly disagreed (2), and disagreed (1). the instrument for the study was subjected to validation by three lecturers who were experts in the field. the experts were served with the copies of the instrument and were required to vet the items for appropriateness, adequacy and clarity in measuring what they are set to measure. the experts suggested areas for improvement of the instrument european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5464 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 31 towards meeting the purpose of the study. the observations and suggestions were used to improve the final copy of the instrument. testretest method was used to determine the reliability of the instrument. this method involves collecting data from the same individuals twice within a given space of time; this group was not part of the final respondents. a total of 30 respondents were involved and 30 copies of the instruments were administered to them twice at the interval of two weeks. reponses from the subjects were analyzed using spearman rank order to obtain the reliability coefficient of 0.80, 0.84, 0.78 and 0.93 thus the instrument was reliable. 3.5 data analysis a total number of 600 questionnaires were administered with the help of three research assistants. distribution and collection of questionnaire was by hand. the data from the questionnaire was analyzed using mean and standard deviation to answer the research questions through the use of spss package. the 4-point scale of response option of one, two, three and four were assigned value of strongly agreed (4), agreed (3), disagreed (2), strongly disagreed (1).the researcher used 2.5 as the level of acceptance which means that any item with mean of 2.5 and above was accepted while anyone which had a mean of below 2.5 was rejected. 590 questionnaires were completed and retrieved which was 93.3%. 4. findings of the study the following findings were made by the study based on the research questions: research question 1: what are the sources of income available to families in economic recession in kaduna state. research question 2: what are the impacts of economic recession on families in kaduna state. research question 3: what are the ways of managing family financial resources in economic recession. 1. five available source of financial resources of the family (see table 1 in appendix section) 2. ten ways families mange their financial resources in economic recession(see table 2 in appendix section) 3. ten impact of economic recession on family financial resources(see table 3 in appendix section) the study reveals that the response for the respondents on sources of finance available to the family are salary, return from stock investment, turnover from saving/contributions, turnover from livestock and return from pension. while there were no financial resource support from relatives, support from children, returns from rent from building and places of worships. the respondents agreed on nine items resources on ways of managing financial but disagreed on one way families manage their finances in economic recession. they practice financial budget, buying in bulk, prudent financial planning, cutting down luxuries, avoiding unnecessary expenditure, getting involved in joint account, engage in animal and food production, engage in small scale business and having financial accountability for the members of the family. families try to put in their best for survival but they find it difficult to follow and execute financial plans in recession period due to inflation. the study further revealed that the respondents agreed on all the impact of economic recession on the family. 5. discussion and further research based on the analysis of the data collected on enhancement of family financial resource management in economic recession. research question 1 which is: what are the sources of income available to the families in economic recession in kaduna state? in response to research question 1: five (5) items out of ten (10 items) were agreed on as sources of finance available to the family. the items agreed on are money from salary, return from stock investment, turnover from savings and contribution, turnover from pension and turnover from livestock. the items have a mean range of 2.50 to 3.47. this indicates that all those items are sources of family financial resource. this is in line with deacon and firebaugh (2001) who noted that earning salary is a source of income for a family. research question 2 sought answer on what are the ways of managing financial resources of families in economic recession in kaduna state. on ways of managing financial resources in economic recession, the respondents agreed on all the ways families’ manage their financial resources during economic recession. their responses includes: practicing financial budget, bulk buying when money is available, prudent spending, cutting down luxuries, window shop and avoid unnecessary european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5464 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 32 expenditure. they engage in animal production, engage in small scale business and making financial accountability to each member of the family this is in line with deacon and firebaugh (2001), that opines that family achieves its goals responds to events through planning the use of its resources and implementing the plans. stroud (2008) also opined that financial budget and effective planning reduce cost by avoiding waste in expenditures and giving up luxury items. the findings showed that when there is effective financial management family goals can be achieved and this is needed during economic recession. research question 3 is on what are the impacts of economic recession on families in kaduna state. it was revealed by the respondents that in economic recession, families experience poverty, ill health, inflation and inability to pay children’s’ school fees, adult family members delay or forgo academic pursuit, reduce income level leading to nutritional distress, financial hardship leading to harsh and inconsistent parenting, inability to meet economic needs and depending on other people for family needs. these findings are in line with opeyemi (2008) who observed that the influence of economic recession is attributed to unemployment, poverty and corruption in the society. this implies that economic recession influences the family financial resources and living conditions of the family is negatively affected. the study has provided the following suggestions for further research: a similar study should be carried out using other family members (adolescent ,elderly), some of the ways of managing finances can be applied to businesses either personal or group ventures. 6. conclusion this paper highlights aims to: determine resources available to the family in economic recession in kaduna state, identify how families manage their financial resources in economic recession, determine the impact of economic recession on families in kaduna state and the research questions on: what are the sources of income available for families, what are the impact of the economic recession on the families, what are the ways of managing family financial recourses in economic recession that guided the study. the study made use of related research work and literature as a guide in formulating the research questions for this study. it also made use of family stress model which confirmed that families feel the impact of the financial stress. the findings of this study revealed that economic recession can lead to, poverty, ill health, adult family members forgoing academic pursuit, emotional distress, inflation, inability to pay children school fees, loss of job, and hardship is the order of the day in economic recession therefore there is need for effective family financial management before and in the period of economic recession. it was further revealed that families have some ways to manage the challenges that affects the family but even with the management families still felt the impact. the study has implication for families, since during economic recession families feel the adverse effect. it is expected that when families are able to enhance their financial resource management they should not feel the adverse effects of the economic recession. there is also the need for inculcation of new skills on how to handle economic recession and to learn new skills for self reliance. improve creativity in schools and colleges on family financial resource management. the study will go a long way in assisting curriculum planners and teachers in getting information on causes, ways of enhancing financial management of families and the impact of economic recession. there by giving the students and families’ opportunities to learn how to cope. families will also learn and adopt skills of saving for emergency. families, government and marriage counselors can adopt the ways of managing family financial resources in economic recession the study covered only selected sample of the population which makes it a bit difficult to determine what the opinion of the other members of the family may be, other members of the family can be researched on by other researchers. in the research, methodology questionnaire was used to get responses, other researches can use both questionnaire and focus group discussion so as to double cross the respondents opinion. hypothesis was not used in this study but in further studies it can be incorporated. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5464 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international 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(2011), challenges for the u.s economic recovery. washington, d.c; testimony before the budget committee. retrieved july 11, 2019 from www.columbia.edu. retrieved 15th march 2021 udome,r.e & iyam, m.m, (2018).managing home finances and family standard of living: the case of parent in akwa ibom, nigeria. nigerian journal of home economics, 11(12) 118-124. www.epic.org.publication .retrieved 15th march 2021. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5464 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 35 appendix table 1: mean responses on sources of income available to the families in economic recession. source: author’s elaboration resources available to family members female family members male family members x1 sd remark x2 sd remark salary 3.46 0.92 available 3.27 0.90 available support from relatives 2.17 0.56 not available 2.16 0.55 not available occasional return from stock investment 2.50 0.90 available 2.56 0.90 available support from children 2.29 0.71 not available 2.16 0.55 not available return from rent from building 2.00 0.00 not available 2.17 0.56 not available turnover from business 3.19 0.98 available 3.67 0.95 available turnover from savings or contribution 3.01 0.81 available 3.47 0.92 available return from pension 2.61 0.93 available 2.60 0.92 available turnover from livestock 2.73 0.96 available 2.61 0.93 available place of worship 2.17 0.56 not available 2.16 0.55 not available european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5464 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 36 table 2: mean responses on ways of managing family financial resources in economic recession. ways of managing family financial resources female family member male family member x1 sd remark x2 sd remark able to follow and execute financial plans in recession time 2.00 0.00 agreed 2.17 0.56 disagreed practicing financial plans 2.64 0.81 agreed 2.56 0.80 agreed bulk buying when money is available 2.74 0.82 agreed 2.71 0.81 agreed prudent financial planning 3.66 0.95 agreed 3.47 0.92 agreed cutting down luxuries 3.46 0.95 agreed 3.47 0.92 agreed window shopping and avoid unnecessary expenditure 2.94 0.85 agreed 2.91 0.84 agreed get involve in joint account saving 2.66 0.81 agreed 2.97 0.85 agreed planning of income and expenditure 3.27 0.90 agreed 3.14 0.92 agreed engage in animal and food production 3.66 0.95 agreed 3.47 0.92 agreed engage in small scale business 2.66 0.81 agreed 2.56 0.80 agreed financial account ability from each member of the family who are of age 3.01 0.86 agreed 2.80 0.83 agreed source: author’s elaboration european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5464 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 37 table 3: mean response on impact of economic recession on family financial resources management. impact of economic recession on family finances mean response of female mean response of male x1 sd remark x2 sd remark poverty in the family 2.59 0.80 agreed 2.73 0.82 agreed problem of ill health 2.94 0.94 agreed 2.83 0.79 agreed inflation (i.e. things are expensive) 2.77 0.83 agreed 2.91 0.84 agreed inability to pay school fees of children on time 2.66 0.81 agreed 2.74 0.82 agreed job loss and inability to get jobs 3.44 0.92 agreed 3.66 0.92 agreed adult family members delay or forgo academic pursuit 3.04 0.86 agreed 2.59 0.80 agreed reduces income or slash in salary 2.80 0.83 agreed 2.73 0.82 agreed emotional distress that leads to harsh and inconsistent parenting 3.01 0.86 agreed 3.91 0.98 agreed inability to meet economic needs 3.66 0.95 agreed 3.43 0.92 agreed depending on others to help meet ones needs 3.01 0.86 agreed 3.41 0.92 agreed source: author’s elaboration european journal of social impact and circular economy issn: 2704-9906 doi: 10. 10.13135/2704-9906/6817 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 1 ‘circular sustainability accounting’ in businesses for a circular economy: a framework of analysis alfonso aranda-usón1, josé m. moneva2, sabina scarpellini3* 1 university of zaragoza department of accounting and finance & iedis research institute, gran via 2, 50005, spain alaranda@unizar.es 2 university of zaragoza department of accounting and finance & circe research institute, gran via 2, 50005, spain jmmoneva@unizar.es 3* contact author university of zaragoza department of accounting and finance & circe research institute, gran via 2, 50005, spain sabina@unizar.es received: 08/06/2022 accepted for publication: 18/11/2022 published: 29/12/2022 abstract the introduction of the circular economy by firms entails, among other issues, an evolution of sustainability accounting and reporting practices because firms must implement specific activities for closing materials loops. additionally, the circular economy includes finding collaborative solutions in the value chain and making decisions in a decoupling scenario. thus, to change from a linear economy to a circular one requires the measurement and analysis of activities and has impacts other than environmental and social ones that are yet to be included in sustainability accounting and disclosure. in this scenario, this study offers an outlined framework of how circular economy-related principles can be integrated into sustainability accounting, given the strong contemporary approach towards sustainability. an integrated analysis of the circular model’s implications for sustainability accounting is conducted to explore a line of inquiry hitherto little explored. keywords: sustainability accounting; circular economy; environmental management; circular business model; stakeholders 1. introduction the circular economy (ce) has been promoted by businesses because it involves a transformation of the linear economic model to reduce dependence on raw materials and energy, and to mitigate the environmental impact of production and consumption (andersen, 2007; ghisellini et al., 2016). presently, businesses are progressively introducing different ce-related activities (aranda-usón et al., 2020), and sustainability accounting has been highlighted as a tool that could partially capture impacts derived by the closing of materials loops (scarpellini, marín-vinuesa, et al., 2020). adopting a circular business model raises the need to measure and analyse activities and impacts other than those considered in the framework of traditional environmental accounting, which could, perhaps, be insufficient to face the challenges of decoupling and participation at the meso level that a ce entails. when the reporting is considered from a circular viewpoint, businesses must identify and measure the impacts of a wide range of sustainability issues to become more transparent, and sustainability accounting enables businesses to create value over time within the triple bottom line (tbl): economic, social, and environmental (elkington, 2001; murthy & parisi, 2013), including reporting and accountability at a meso level. in european journal of social impact and circular economy issn: 2704-9906 doi: 10. 10.13135/2704-9906/6817 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 2 summary, we could argue that the role of sustainability accounting seems adequate in transitioning from a linear economy to a circular one to measure results in any of the three dimensions of sustainability. however, despite the growing number of contributions focused on analysing the ce in the micro field, research on the integration of ce-related activities and investments in accounting and reporting in the framework of sustainability remains under discussion. a few scholars have emphasised the need for methods to assess circular products’ and business models’ environmental, social, and economic sustainability performance (bocken et al., 2016; pauliuk, 2018; stewart & niero, 2018). stewart and niero (2018) have explored the relationship between reporting and the new circular model. other studies on environmental accounting have partially analysed certain ce-related activities (aranda-usón et al., 2020; stewart & niero, 2018), carbon accounting (marco-fondevila et al., 2020, 2021), circular eco-innovation (portillo-tarragona et al., 2022; scarpellini, valerogil, et al., 2020), or waste management and cleaner production (marrone et al., 2020; portillo-tarragona et al., 2022; zhou et al., 2017). however, analysing the implementation of the circular business model in companies from an accounting perspective is an incipient line of research that has been addressed by very few researchers (di vaio et al., 2022; scarpellini, 2022; scarpellini, marín-vinuesa, et al., 2020). additionally, the theoretical framework of analysis is still unclear. to fill this gap, the main goal of this study is to define a framework of analysis to connect the implications of a ce for businesses within sustainability accounting and reporting. this article is organised as follows: following this introduction, we summarise the background, and in the third section, we analyse the ce-related implications in a sustainability accounting framework. finally, in the concluding section, we outline the conceptual basis and suggest avenues for further research on this topic. 2. background the ce model originated partially in the paradigms of the industrial economy and industrial ecology (andersen, 2007; murray et al., 2017) and applied to the closing of material loops (yuan et al., 2006). these paradigms emphasise the benefits of recycling waste and sub-products through, for example, the development of complex connections, such as undertaking industrial symbiosis between different businesses and production processes (ehrenfeld & gertler, 1997; jacobsen, 2006). significant schools of thought related to the ce emerged in the 1970s and were introduced by pearce and turner (1989), but gained prominence in the 1990s (scarpellini et al., 2019). they include the functional service economy, natural capitalism, and the ‘cradle-to-cradle’ principles (urbinati et al., 2017). in more advanced stages, the ce falls within industrial ecology (li et al., 2010; pitkänen et al., 2016), as it does within the industrial symbiosis between local companies with different production processes (andersen, 2007). in the literature, a few authors have defined three levels for the theoretical analysis of the ce: macro, meso, and micro (mathews & tan, 2011; murray et al., 2017). the macro or national level, promoting eco-cities and sustainable production and consumption, proposes to achieve a ‘recycling-orientated society’ (geng et al., 2012). at a macro level, long-term strategies are based on decoupling economic growth from consumption (figge et al., 2014; ghisellini et al., 2016). the meso level, or the eco-industrial park level, is designed to promote regional development and the natural environment (scarpellini et al., 2019; yuan et al., 2006). finally, at the micro level or individual firm level, companies are encouraged to engage in eco-design for cleaner production approaches (aranda-usón et al., 2020; murray et al., 2017), where decoupling usage from ownership is one of the primary schemes for a ce. several researchers have indicated that the adoption of a circular business model involves significant internal changes in firms’ environmental accounting practices (scarpellini, marín-vinuesa, et al., 2020) mainly related to the cost structure, the definition of prices for by-products and waste that are recovered from being transformed into resources for other companies. the application of voluntary standards and new environmental standards, or the delivery of complete information to clients about the reparability and extended use of products and services, as well as human resources management (marrucci et al., 2021) are a few recently analysed topics. additionally, a ce pursues business changes at the meso level (yuan et al., 2006). thus, in a ce-related context, companies must initiate an active dialogue with, for example, peers, knowledge partners, valuechain partners, and regulators to explore the role of the ce in their specific business. this scenario implies that when businesses adopt a circular business model, the ce must be integrated into their reporting, and the ce-related actions must be considered part of sustainability (barnabè & nazir, 2021a; gunarathne et al., 2021). therefore, the joint support of all stakeholders is considered necessary to implement a ce at a large scale among businesses (banaite & tamošiūnienė, 2016; lieder & rashid, 2016; stewart & niero, 2018). franco (2017) explains the influential nature of firms via the fact that they are subject to pressures from a wide range of stakeholders in a ce context, such as research institutes (rattalino, 2017), value-chain actors (tyl et al., 2015), and customers (boons & lüdeke-freund, 2013). hence, sustainability accounting and reports play an essential legitimacy role for companies because through such communication tools, they may seek to maintain their license to operate and reduce possible gaps between their stakeholders’ expectations regarding sustainability (hahn and kühnen, 2013). murray et al. (2015) indicated the need to consider the wider systems’ role european journal of social impact and circular economy issn: 2704-9906 doi: 10. 10.13135/2704-9906/6817 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 3 in business and accounting decisions, which has become prevalent within environmental management and sustainability reporting (bebbington & gray, 2001). thus, sustainability accounting partially helps firms capture the impact on the environment and society of the level of material loop closing achieved by firms. however, how ce-related principles can be integrated into sustainability accounting remains understudied in the current literature. only a few studies on ce have considered sustainability accounting from a tbl perspective. merli et al. (2018) have shown that whereas sustainability aims to integrate environmental, economic, and social dimensions, the ce literature has focused primarily on environmental issues, and our study aims to fill this gap. the need to translate the concept of sustainability to the level of the individual organisation and merge it with accounting is not new (gray, 1992), and the doubts highlighted in the past by bebbington et al. (1994) about the capabilities of businesses to implement sustainability and apply a broader basis of self-imposed sacrifices for future generations can also be pertinent to the case of a ce if it exclusively prioritises waste recovery. thus, integrating the ce into broader sustainability requires the subordination of traditional economic criteria to criteria based on social and ecological values. these changes require accountants to measure and disclose information about critical ecological functions, and scholars are claimed to provide a framework of analysis for sustainability accounting. given these premises, this study aims to find out which the framework of analysis for the ce is from an accounting perspective considering the business stakeholders in a circular model (rq1). a few authors believe that the ce prioritises economic systems and gaining environmental benefits while only implicitly including social aspects (geissdoerfer et al., 2017). although ecological renewal and survival and the reduction of finite resource use evidently benefit society, there is little explicit recognition of the social aspects inherent in other conceptualisations of sustainable development (murray et al., 2017). considering the goal of addressing the tbl of sustainability, we suggest a second research question to study how the ce impacts social, environmental, and economic aspects as pillars of sustainability accounting and reporting (rq2). this study is based on a conceptual analysis. thus, to answer to the research questions, this study synthesizes reflections reached on the basis of a desk research and the analysis of previous studies. given these considerations, the nexus between the ce and sustainability accounting has to be defined with specific boundaries as a third research question (rq3), sparking a line of inquiry among academics to link the ce with sustainability on the evolution in accounting and reporting, as firms must implement specific internal and external actions related to the circular model. 3. approach to a “circular sustainability accounting” various external and internal factors influence the adoption of the ce at the micro level. there is a complex relationship between a firm and external factor related to the ce, such as institutional, environmental, and technological pressure; the market; society; and other cultural issues. institutional pressure on firms is increasing because of resource policy frameworks and regulations for material resource efficiency (zeng et al., 2017). the commitment to sustainable development and the ce can be consolidated with environmental regulations and public incentives (ghisellini et al., 2018; hu et al., 2018). policymakers develop regulations and incentives to build an effective modern corporate governance system that could overcome barriers and engage firms to improve their behaviour in operating a ce (y. liu & bai, 2014). it is now accepted that the adoption of broader circular principles related to the exchange of goods and services can also be promoted through policies to promote social responsibility in companies (y. s. liu & yang, 2018) and to support ce strategies (ormazabal et al., 2018) that comply with regulations. fletcher et al. (2018) highlighted the role of policies in the transition to a ce: governments facilitate the introduction of ce principles through incentives to facilitate resource recovery and to guarantee investments (aranda-usón et al., 2019). moktadir et al. (2018) also stated that regulation and public support improves the adoption of sustainable manufacturing practices and a ce. the role of society and other stakeholders also emerges in ce implementation (pomponi & moncaster, 2017; stewart & niero, 2018; webster, 2013); however, the debate about the ce’s social dimension is ongoing (murray et al., 2017; scarpellini, 2021, 2022), as mentioned earlier. other sociocultural issues include market and consumer habits (borrello et al., 2017; milios, 2017). additionally, increasing consumption levels are applying ever more pressure on the prices of materials and the subsequent relevance accorded to industrial ecology and waste management (salesa et al., 2022). to this end, theoretical contributions in the field of industrial ecology (andersen, 2007), industrial economy (stigler, 1971), and industrial sociology have been considered to classify main ce-related activities in the framework of sustainability accounting and the stakeholders’ perspective (figure 1). european journal of social impact and circular economy issn: 2704-9906 doi: 10. 10.13135/2704-9906/6817 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 4 figure 1. study synopsis source: author's elaboration based on baumgartner and ebner (2010) in this framework, sustainability accounting emerges with a bottom line in which firms incorporate economic, social, and environmental impacts from a circular perspective (figure 2). we emphasise the need for methods to assess the environmental, social, and economic sustainability performance of ce-related activities because little is known about how companies position the ce in their sustainability agenda (aranda-usón et al., 2019; bocken et al., 2016; elia et al., 2017; stewart & niero, 2018). with these premises in mind, the accounting processes are approached from a circular perspective to answer the second research question (rq2), and figure 2 provides an analytical framework for circular sustainability accounting. figure 2. circular sustainability accounting framework of analysis source: author's elaboration the internal implications for sustainability accounting derived from the adoption of the ce by businesses are mainly related to the collaborative model and the loop closing that the ce requires. the implications of the ce for sustainability accounting european journal of social impact and circular economy issn: 2704-9906 doi: 10. 10.13135/2704-9906/6817 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 5 can be classified according to the tbl and the three pillars of sustainability because environmental, economic, and social aspects must be integrated into the circular model. in this scenario, to enable and accelerate the ce transition driven by industry, new integrative decision support tools are required to identify and tap the potential of ce transition scenarios at the company and inter-company levels (lieder & rashid, 2016). integrated tools that will be introduced by firms when adopting a circular business model will require the inclusion of the primary industrial ecology objectives in sustainability accounting practices and the integration of material flow information in reporting. in the activities of recycling and waste valorisation, the accounting procedures of firms will be influenced by the collaboration scheme that the ce entails with other companies (competitors, suppliers, etc.) in the value chain, the definition of by-product prices, and the management of shared facilities, among other changes. a few researchers have included the industrial economy in their analyses of the ce because it refers to a restorative and regenerative model by intention and design (ellen macarthur foundation, 2013; franco, 2017; roos, 2014). in a circular model systems orientation, actors are analogous to a natural ecosystem (ehrenfeld, 2004) because they collaborate in a meso scheme rather than viewing an industrial economy as a collection of individual actors loosely coordinated by the price signals in a market, as is usually the case. an industrial economy is a system in which material flows and technical nutrients are designed to circulate at high quality (lieder & rashid, 2016; murray et al., 2017) and in which greater resource productivity is promoted by developing ways to continually reacquire and reintroduce the discarded assets following the completion of one life cycle (moktadir et al., 2018; pomponi & moncaster, 2017). in the circular model, supply chain collaboration (increasing dependencies) and changing success factors have significant implications; so, risks and liabilities will differ. new entities can be found within the value chain (e.g., recollection platforms) that enable firms to share risks, costs, and revenues among suppliers, collaborators, and competitors; therefore, new accounting practices are required. the cash flow, cost structure (total cost), and financing required for a circular business model will impact ‘classical’ financial indicators that must change. changes in cost structure can enhance the implementation of ce-related activities, such as for materials, energy consumption, staff behaviour, etc., closing the material loops and adopting a business model (lewandowski, 2016). thus, mutual learning is required, traditional measurements must be improved, and business management focusing on a ce must include activities such as controlling, leading, monitoring, organising, and planning (lieder & rashid, 2016). the social dimension of a ce is mainly related to the following aspects and activities that a circular model introduces: specific indicators for social issues included in corporate social responsibility (csr); health improvement due to environmental improvement and waste reduction; voluntary standards that can include social aspects; information delivered to consumers; and other aspects derived by the sharing economy model and other collaborative schemes. to frame the implications of the ce in sustainability accounting and reporting (rq3), a matrix is proposed as an integrated approach for our analysis (figure 3). figure 3. boundaries of the ‘circular sustainability accounting’ from a ce perspective. source: author's elaboration european journal of social impact and circular economy issn: 2704-9906 doi: 10. 10.13135/2704-9906/6817 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 6 in summary, the adoption of a circular model by firms implies the introduction of several changes in the management accounting practices inherent in the ce-related activities introduced by businesses and linked to the micro and meso dimensions of the ce. at the micro level, the new processes derived from industrial ecology and industrial economy involve measuring and controlling resource flows and waste disposal. in the economic–financial sphere, the ce implies the decoupling paradigm that involves separating usage from ownership. changes in decision-making processes are required because of the control of production capacity in circular thinking and the output control required to adopt incremental material loops closing. in the social sphere, the ce, undoubtedly, influences business ethics, csr, accountability, and measurement of social impacts derived from the circular business model, such as generating employment through investments. at the meso level, a ce implies a decoupling of value-chain optimisation from supply chain competition. this general paradigm implies the introduction of a new sphere of activities and impacts that must be measured and integrated into accounting practices because of the collaborative environment that the ce requires among several companies, for example, in industrial symbiosis. it must also be considered that the essential future developments for ce implementation will imply more extensive work in social awareness. the tbl includes a social dimension involving human stakeholders, human well-being, and human rights, and stakeholders demand greater transparency in a circular phenomenon (benito-bentué et al., 2022). moreover, the ecological renewal and the closing loops of the ce benefit the society (by reducing resource use). however, the explicit recognition of the social aspects of the ce is not clearly stated in the accounting sphere, and it remains unclear how the ce will be considered in the circular sustainability accounting practices in response to the stakeholders’ and society’s pressure (scarpellini, 2022). the ce cannot be exclusively related to the flows of raw materials and resources as it has been considered at the first stage of analysis. thus, circular sustainability accounting transcends the limits of environmental accounting for the material flow measurement, and it will enable organisations to consider their impacts on a wide range of sustainability issues. in this framework, businesses can be more transparent about the risks and opportunities related to the ce principles, and circular sustainability accounting facilitates sustainability of the planet’s boundaries (antonini & larrinaga, 2017), expanding the debate about a strong or weak approach to sustainability accounting (moneva et al., 2006) for accountability in the anthropocene (bebbington et al., 2020). from a tbl perspective for reporting, environmental indicators have been proposed and applied by different authors (aranda-usón et al., 2018, 2020; barnabè & nazir, 2021b; ibáñez-forés et al., 2022); the economic measurement has been mainly analysed in the framework of the circular business model (centobelli et al., 2020; rossi et al., 2020); and the social dimension of the ce is still understudy (mies & gold, 2021; padilla-rivera et al., 2020; scarpellini, 2021, 2022; vanhuyse et al., 2021). some specific ce-related indicators for sustainability reports have been proposed by (ibáñez-forés et al., 2022). finally, we must realise that circular integrated reporting will only be accepted if it delivers the ‘right’ message and if it does not create an alternative source of accounting-based discourse that challenges existing power positions, such as for environmental and social accounting (larrinaga-gonzalez & bebbington, 2001; larrinaga & garcia-torea, 2022). 4. main conclusions drawing on the reviewed literature, this study offers an outlined framework of how ce-related principles can be integrated into sustainability accounting, given a strong approach to sustainability. we, accordingly, pay particular attention to earlier research focused on adoption of the ce by businesses and stakeholders, and external and internal factors to address sustainability accounting and reporting goals from a tbl perspective. framing of sustainability accounting and reporting from a circular perspective is at the forefront of the circular business model and opens new, contemporary debates surrounding the theoretical backgrounds of industrial ecology, industrial economy, and industrial sociology as the first approach to an integrated framework of analysis based on accounting and management theories. it is not our intention to revisit these theoretical frameworks; instead, we establish a common framework of analysis to explore the boundaries of an incipient circular sustainability accounting discipline, to add something substantial to the debate about the specificity of reporting from a circular perspective. this necessity meets the challenge for modern accounting and the future debate around integrated sustainability reporting. the framework outlined here provides a better understanding of ce principles integrated into sustainability accounting, combining them with the tbl proposition to design an integrated reporting mechanism adapted to the circular model. overlapping ce principles at the micro level and the business model, a new integrated vision of the social aspects of the ce emerges. this study provides specific ce-related activities for reporting processes to be measured for non-financial disclosure. practitioners can apply these measurements to achieve greater ce-related accountability, but would require more detailed social european journal of social impact and circular economy issn: 2704-9906 doi: 10. 10.13135/2704-9906/6817 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 7 impact analysis for integrated reporting. thus, our findings directly translate into practices that are the leading accounting indicators for reporting ce in businesses. additionally, this study addresses the research gap by defining the boundaries of sustainability accounting applied to circular models and examining the general conceptual framework of the ce through a tbl prism. future intensive scientific work should concentrate on developing environmental and social assessment methods designed for companies adopting a circular business model. using the framework outlined here, firms can consider introducing ce principles into their reporting practices; however, circular integrated reporting requires further development. this study has a few limitations. it is the first attempt to define specific boundaries of sustainability accounting related to the ce, and further applied and comparative studies are recommended. although considerable efforts have been made to generalise the framework of analysis to the dawn of the ce as an economic model and transfer it to a more recent vision of sustainability accounting, a deeper theoretical debate and analysis is required going ahead. acknowledgements this study was made possible by funding from the spanish ministry of science and innovation project pid2019107822rb-i00. it was partially co-financed by the regional government of aragon in the framework of research group ref. s33_20r and the lmp159_21 project. the university of zaragoza is also acknowledged for the uz2021-soc-02 project. references andersen, m. s. 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(2017). institutional pressures, sustainable supply chain management, and circular economy capability: empirical evidence from chinese eco-industrial park firms. journal of cleaner production, 155(1), 54–65. https://doi.org/10.1016/j.jclepro.2016.10.093 zhou, z., zhao, w., chen, x., & zeng, h. (2017). mfca extension from a circular economy perspective: model modifications and case study. journal of cleaner production, 149(1), 110–125. https://doi.org/10.1016/j.jclepro.2017.02.049 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7425 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 27 social pillar score and the csr committee: an empirical analysis of corporate governance mechanisms adriana bruno1*, matteo pozzoli2, sabrina pisano3, elbano de nuccio4 1 contact author university of naples parthenope, via generale parisi 13, 80132, napoli (italy) adriana.bruno@uniparthenope.it 2 university of naples parthenope, via generale parisi 13, 80132, napoli (italy) matteo.pozzoli@uniparthenope.it 3 university of naples parthenope, via generale parisi 13, 80132, napoli (italy) sabrina.pisano@uniparthenope.it 4 lum university – giuseppe degennaro, s.s 100 km 18 70010 casamassima, bari (italy) denuccio@lum.it received: 22/02/2023 accepted for publication: 20/04/2023 published: 21/04/2023 abstract this empirical study on corporate governance mechanisms addresses the potential impact of the corporate social responsibility committee (csrc) on the social pillar score (sp). based on a sample of 457 listed european companies from the refinitiv thomson-eikon database over a one-year period (2021), this paper examines the effect of a corporate social responsibility (csr) committee and the moderating effect of gender diversity on the social pillar score. our analysis shows that the more firms have csr committees, the more likely they are to adopt “socially responsible policies and practices”. in addition, female directors on the board positively moderate the previous relationship. therefore, this research stresses that gender diversity and csr committees significantly predict a firm's social initiatives. thus, our findings show that csr committees and gender diversity are socially sensitive variables. finally, the analysis demonstrates a positive relation between firm size, board size, role duality, board independence variables, and the social pillar score. keywords: social pillar; corporate and social responsibility; csr committee; gender diversity 1. introduction although there is yet to be a clear definition of the environmental, social and governance (esg) approach (li et al., 2021), it is quite sure that esg focuses on three pillars: the environmental, social, and governance pillars. the social pillar includes health and safety, diversity and opportunity, training and development, employment quality, product responsibility, community, and human rights. (marsat & williams 2014). it also represents a major component of corporate reputation (bruno a. et al. 2015). currently, stakeholders are focused on environmental, social and governance (esg) behaviour and disclosures to prevent firm misconduct, obtain higher assurance of corporate reputation (arayssi et al., 2020) and comprehend management plans to european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7425 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 28 produce value in the medium and long term (escrig-olmedo et al., 2010; zumente and bistrova, 2021). the main element of a profound change is good corporate governance, and scholars have recently concentrated their attention on seeking means that enhance the social performance of firms (urmanaviciene a. 2020). in this context, corporate boards (cbs) are key in corporate governance (john k. & senbet l.w. 1998). they can considerably influence firms’ engagement and disclosure of social activities in business reporting (francoeur, c et al. 2019). firms must have a strong social commitment to establish value-creating stakeholder relationships to build sustainability (secinaro s. et al 2020). the linkage between companies and the community is specifically founded on the decisions made by the cb, which traditionally aligns the interests of stakeholders and shareholders with day-to-day managerial operations (belkhir, 2009). accordingly, the sensitivity and qualitative characteristics of cb can (positively or negatively) impact csr (urmanaviciene a. & udara s. a. (2020) and esg performance. at present, academia and practitioners seem more attracted by environmental issues, while social and governance features appear less investigated (leopizzi et al., 2020). even if the social pillar (sp) should be interpreted by a more general approach that a company uses to act sustainably, it can also be separately addressed to consider how it promotes a better quality of life for all involved parties. the sp area involves human rights, gender equality and diversity, social assistance, educational programmes, investments, and involvement in social protection programs (murphy, 2012). this paper moves from the perspective that, thanks to the operation of csr committees and a wider diversity on the board, a specialized focus on esg issues can support policies in favour of more socially sustainable development within and outside the firm (stevens, 2010). this research explores whether the presence of csr committees can enhance social performance and whether the combined presence of higher diversity and csr committees can further support the sustainable development of practices in the sp area. this perspective has been generated by the expectation that a csr committee pays particular attention to esg features (baraibar-diez and odriozola, 2019), and contextually, the combination of board diversity and csr committee operations can produce a “leverage” effect. in addition, women have different leadership styles because they are more concerned with organizational needs and focus on community welfare and service organizations (arayssi et al., 2016). women directors possess characteristics that are more aligned with social issues since they have more communal characteristics, such as being supportive, gentle, and emphatic (monteiro et al., 2022; uyar et al., 2022). consequently, women are more concerned with corporate social performance since they tend to address stakeholders’ interests better. women’s presence in board rooms encourages firms to become socially responsible and adopt environmentally friendly practices (arayssi et al., 2016). therefore, this research aims to show that the presence of csr committees, combined with gender diversity, could support a new competitive environment for behaviour that can be addressed as socially responsible (rené et al. 2021). to achieve this objective, the paper is organized as follows: section 2 presents a literature review of the relationship between the social pillar, csr committees, and gender diversity. section 3 details the dataset and methodology. section 4 provides the results and discusses the influence of the different components of the social pillar. section 5 concludes the paper. 2. literature review the literature investigates the global relationship between csr and financial performance (bird et al., 2007). specifically, the literature on human capital reinforces the idea that social expenses on employees should be linked with financial goodwill because motivating employees should increase productivity (becker 1962). specifically, a study from marsat & williams, 2014, shows a strong positive relationship between the social pillar and firm value. interestingly, in this paper, even if not all the components of the social pillar are positively related to the overall results of global financial goodwill, this finding is consistent with the idea that the social pillar is an intangible asset producing firm market value and taking part in corporate social responsibility (scholtens 2006). most other studies are focused on the complete measure of csr and its main components or more specific issues such as human capital, religiosity (shahid a. et al., 2022), legitimation, behaviour, and a good reputation among local communities (marsat, s., williams, b., 2013). other studies have focused on the link between stakeholder welfare (including the environment) and firm value. (jiao 2010). european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7425 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 29 moreover, previous research examined board gender diversity (bgd), concluding that a csr committee could also emphasize its effectiveness. bgd plays a crucial role in prioritising csr-related issues (eberhardt-tot et al., 2019) and tends to improve responsible management and social performance. it has been shown that board gender diversity (i.e., the proportion of female directors) is positively associated with firms' social commitment to human rights, product responsibility, and, consequently, their contribution to firm sustainability (beji et al., 2021; arayakarnkul p. et al. 2022). martínez-ferrero et al. (2020) examine the effect of gender diversity and the moderating effect of the existence of a csr committee. specifically, this study aimed to improve the understanding of the factors determining a firm’s affiliation with the united nations global compact (ungc) as the largest voluntary corporate responsibility initiative worldwide. the results suggest that female directors on the board significantly encourage the firm’s affiliation with the ungc and support the mediating effect of the existence of a csr committee. therefore, the positive impact of female directors on ungc signatories appears to be mediated by the existence of a csr committee. however, a few studies (sectoral and limited to some specific period) have tried to investigate the opposite relationship between the existence of csr committees on the social pillar and the moderating effect of board gender diversity. specifically, uyar et al. (2021) showed that csr committees and bgd positively enhanced csr performance. govindan et al. (2021) show that firms operating in the logistics sector with a sustainability committee are more likely to have greater corporate social responsibility performance (both overall and social) in 2018 than those that do not. therefore, these authors confirm that logistics companies listed on the stock exchange will likely disclose a broader range of csr aspects within their reports, implying an impact from stakeholder pressures on their csr practices. the presence of a csr committee also plays a significant role in improving corporate social performance strengths, even though it cannot reduce public concerns (burke et al., 2019). other research found a positive relationship between csr performance and the presence of a csr committee. specifically, spitzeck (2009) found that companies with a csr committee have better corporate sustainability performance in the corporate responsibility index. these committees can successfully improve corporate social performance strengths. baraibar-diez and odriozola (2019) also analysed the influence of a csr committee on csr performance, specifically esg performance in the uk, france, germany, and spain. they found that companies with a csr committee have different esg scores than firms without one. a csr committee is related to better performance when considering the four scores (environmental, social, governance, and economic) and the four countries independently (except for economic scores in spain). the social pillar in the literature is mostly studied about environmental reporting and is not studied “per se” (ashfaq, k. & rui, z. 2018). studies focus on specific contexts such as europe (baraibar-diez, e. & odriozola, m.d. 2019) and italy (cucari et al. 2017). the literature has explored the relationship between a firm’s social performance and reporting while also considering board gender diversity; however, these studies focused mainly on developed countries and paid less attention to emerging countries that require special consideration (arayssi et al., 2020; khwaja n. c.l. 2021; yadav p. & prashar a. 2022). other authors have concluded that board characteristics influence the presence of csr committees. in detail, they found that independent directors promote the creation of specialized committees to make decisions related to csr strategies. moreover, in this specific situation, the csr committee is a mediator between independent directors and the adoption of the global reporting initiative – international finance corporation (gri-ifc) strategy. (garcía-sanchez et al. 2017), a body of literature has documented a positive relationship between board gender diversity and sustainability performance (uson et al. 2022) across a broad spectrum of sustainability indicators (amran, a et al. 2014; eberhardt-toth, e. 2017). other authors have considered culture in the relationship between corporate social performance and firm performance (wei s. & veenstra k. 2021). moreover, other researchers confirm that ‘structural’ gender diversity is a significant predictor of a firm's environmental sustainability initiatives, so gender diversity is also a sustainability issue (kassinis g. et al. 2016). regarding the social pillar in the national literature, we have discovered that some italian authors have already shown that cb diversity, proxied by director independence (a demographic diversity in boards and gender diversity), affects corporate social performance (csp). in this research, csp concepts were presented, including those that evolved from the concept of corporate social responsibility (csr), which is a static concept emphasizing accountability. at the same time, csp is a bottom-line concept emphasizing sustainable outcomes (veltri et al. 2020). the sample in this research is the most capitalized firms. in this stream, apart from very specific points of view, our approach is innovative since we investigate the link between gender diversity and the social pillar related to csr. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7425 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 30 3. theoretical framework and hypothesis development stakeholder theory (cummings, l. & patel, c. 2009) and agency theory are common theories used to understand the link between corporate governance and sustainability performance. specifically, stakeholder theory argues that it is important for companies to establish strong relations with stakeholders to maintain and improve corporate legitimacy; thus, according to this theory, effective corporate governance can convey to society that the firm is well managed and that the interests of stakeholders are considered (michelon and parbonetti, 2012). in contrast, agency theory predicts that companies protect investors and reduce agency conflicts by using control mechanisms, such as corporate governance structures (jensen and meckling, 1976). from this perspective, csr is crucial for fulfilling stakeholders’ expectations (khan et al., 2013). drawing on stakeholder and agency theories, this study examines the association between a csr committee and social pillar performance, adopting board gender diversity as a moderating variable. based on the findings illustrated in the literature review, this paper aims to test whether the presence of a csr committee, as found in some previous research (jorge 2020), is positively related to social and environmental performance. this should confirm that esg issues deserve specialized attention and a dedicated workforce. more specifically, this research investigates whether the presence of a csr committee can support the sp score. hp 1: the presence of a csr committee positively influences the social pillar score. in contrast, we observed that some studies had illustrated the positive reaction that cb diversity could have on esg performance with a moderating effect from the operation of a csr committee (martínez-ferrero et al., 2020), even if there is no evidence of the opposite effect, that is, a positive impact of a csr committee on esg performance with a moderating effect from cb diversity. we based our hypothesis on the consideration that cb diversity can offer different points of view and support a more conscious decision-making process. hp 2: the level of board gender diversity positively moderates the relationship between the presence of a csr committee and the social pillar score. 4. methodology 4.1 dataset the sample comprises 457 european listed companies collected from the refinitiv thomson-eikon, a database that several scholars have already applied to analyse cb characteristics in connection with esg performance (del giudice & rigamonti, 2020; dorfleitner et al., 2020). the refinitiv thomson-eikon database applies a consolidated methodology that attributes an esg score to the investigated companies (refinitiv, 2022). the analysis is organized by determining a complex score, articulated on the sum of the three single pillar scores. the choice of the european context arises from the “hard low approach” adopted here, i.e., ad hoc regulatory measures have been applied that aim at "imposing" the presence of women on boards. a further peculiarity that concerns europe (italy, norway, holland, france, iceland, belgium, denmark, greece, slovenia, austria, spain, and germany) is the different degree of effectiveness of the rules depending on whether they are companies with listed or publicly controlled shares. in this regard, the european commission and the european parliament have started harmonising the different gender equality approaches (callegari et al. 2021). each pillar includes a few esg themes, with the related data points evaluated as proxies of esg magnitude per industry group. the themes for the social pillar are workforce, human rights, community, and product responsibility. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7425 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 31 figure 1: the refinitiv thomson-eikon methodology source: author´s elaboration the score is measured on 186 metrics (54 in the social pillar). the points are then weighted based on the industry sector in relation to the theme's importance in that specific context. table 1: esg themes in the social pillar category pillars categories themes data points weight method social community equally important to all industry groups, hence a median weight of five is assigned to all equally important to all industry groups human rights human rights tr.policyhumanrights transparency weights product responsibility responsible marketing tr.policyresponsiblemarketing transparency weights product quality tr.productqualitymonitoring transparency weights data privacy tr.policydataprivacy transparency weights workforce diversity and inclusion tr.womenemployees quant industry median career development and training tr.avgtraininghours transparency weights working conditions tr.tradeunionrep quant industry median health and safety tr.analyticlostdays transparency weights source: author´s elaboration the sample in this study comprises companies from the european economic area, as represented in the following table. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7425 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 32 table 2: country composition of the sample n° companies % austria 15 3,3% belgium 14 3,1% cyprus 2 0,4% czech republic 1 0,2% denmark 11 2,4% finland 37 8,1% france 72 15,8% germany 86 18,8% greece 2 0,4% hungary 1 0,2% ireland 11 2,4% italy 44 9,6% luxembourg 3 0,7% malta 1 0,2% netherlands 22 4,8% poland 2 0,4% portugal 12 2,6% spain 34 7,4% sweden 87 19,0% total 457 100,0% source: author´s elaboration the european economic context has already been widely analysed in investigations of the impact of board characteristics on esg performance (martínez-ferrero et al., 2021; nicolò et al., 2021; rossi et al., 2021; gurol and lagasio, 2022). the european union has a strongly supportive attitude towards esg issues, representing—especially since the beginning of the 2000s—a benchmark worldwide (ec, 2001; eu, 2011). the industry composition is subsequently reproduced. the whole sample needs to consider the banking and financial services sector. we preferred to leave the financial sector out of the investigation, as some countries propose ad hoc legislation for board composition. accordingly, we focused our attention on nonfinancial companies. almost half of the companies belong to the “manufacturing” sector (47%). the other half represented industry segments, such as “information” (9.6%), “real estate and rentals and leasing” (7.9%), “utilities” and “construction” (5.3%), “professional, scientific, and technical services” and “retail trade” (5%); the other sectors are more specialized, and each is below 5% of the sample. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7425 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 33 table 3: sector composition of the sample trbc sector name number of companies % accommodation and food services 7 1,5% administrative and support and waste management and remediation services 10 2,2% agriculture, forestry, fishing and hunting 2 0,4% arts, entertainment, and recreation 4 0,9% construction 24 5,3% educational services 1 0,2% health care and social assistance 4 0,9% information 44 9,6% management of companies and enterprises 1 0,2% manufacturing 215 47,0% mining, quarrying, and oil and gas extraction 6 1,3% professional, scientific, and technical services 23 5,0% real estate and rentals and leasing 36 7,9% retail trade 23 5,0% transportation and warehousing 21 4,6% utilities 24 5,3% wholesale trade 10 2,2% other services (except public administration) 2 0,4% total 457 100,00% source: author´s elaboration we tested our hypotheses on 457 companies with a linear regression generated by stata software. the final number of observations used in the regression analysis is 448, as the software identified the data of 10 companies as incomplete or inapplicable. all data refer to the 2021 period, representing our objective's most recent financial and nonfinancial information. considering that we have considered a single period, the number of examined companies is equivalent to the number of applied observations. 4.2 model specification and variables our dependent variable is refinitiv’s social pillar score (socialscore). this is a weighted score computed by refinitiv for each company based on the social information recovered in the four social categories identified: workforce, human rights, community, and product responsibility. our dependent variable is the existence of a csr committee (csrcomm). we measured this variable using a dummy equal to 1 when the company has a csr committee within the board and 0 otherwise. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7425 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 34 moreover, to test the moderating role of the presence of female directors in the relationship between csr committees and the social pillar, we inserted an interaction term (csrcommxgendiv) into our regression. we obtained the interaction term by multiplying the csrcomm variable with board gender diversity (gendiv). we inserted different control variables in the regression to control for endogeneity and reduce possible bias. more specifically, we inserted both other cb and firm-specific characteristics as follows: • board size (bosize) measured as the number of board members • role duality (roledual) computed using a dummy equal to 1 when the ceo is also the chairman of the board and 0 otherwise • board independence (boind) measured as the percentage of independent directors sitting on the board • board meeting (bomeet) computed as the number of meetings held during the year • firm size (size) computed as the natural logarithm of total assets • leverage (lev) measured as the long-term debt divided by total assets • profitability (profit) computed using the return on total assets to test the hypotheses, we developed the following regressions: 𝑆𝑜𝑐𝑖𝑎𝑙𝑆𝑐𝑜𝑟𝑒 = 𝛼 + 𝛽!csrcomm + 𝛽"𝐺𝑒𝑛𝐷𝑖𝑣 + 𝛽#𝐵𝑜𝑆𝑖𝑧𝑒 + 𝛽$𝑅𝑜𝑙𝑒𝐷𝑢𝑎𝑙 + 𝛽%𝐵𝑜𝐼𝑛𝑑 + 𝛽&𝐵𝑜𝑀𝑒𝑒𝑡 + 𝛽'𝑆𝑖𝑧𝑒 + 𝛽(𝐿𝑒𝑣 + 𝛽)profit + 𝜀 (1) 𝑆𝑜𝑐𝑖𝑎𝑙𝑆𝑐𝑜𝑟𝑒 = 𝛼 + 𝛽!csrcomm + 𝛽"𝐺𝑒𝑛𝐷𝑖𝑣 + 𝛽#𝐶𝑆𝑅𝐶𝑜𝑚𝑚𝑥𝐺𝑒𝑛𝐷𝑖𝑣 + 𝛽$𝐵𝑜𝑆𝑖𝑧𝑒 + 𝛽%𝑅𝑜𝑙𝑒𝐷𝑢𝑎𝑙 + 𝛽&𝐵𝑜𝐼𝑛𝑑 + 𝛽'𝐵𝑜𝑀𝑒𝑒𝑡 + 𝛽(𝑆𝑖𝑧𝑒 + 𝛽)𝐿𝑒𝑣 + 𝛽!*profit + 𝜀 (2) 5. results 5.1 descriptive analysis the following table reports the descriptive statistics of all the variables. table 4: descriptive analysis variable | obs mean std. dev. min max -------------+-------------------------------------------------------- socialscore | 457 73.55954 15.43326 23.00668 98.22132 csrcomm | 457 .9037199 .2952982 0 1 gendiv | 457 34.96473 11.7173 0 69.23077 bosize | 457 10.91466 4.112367 2 28 roledual | 457 .2691466 .4440023 0 1 boind | 457 59.19293 24.84083 0 100 bomeet | 449 11.00445 5.827887 3 56 size | 457 22.44632 1.60134 18.00879 26.99351 lev | 456 .2284475 .1356608 0 .9066298 profit | 457 .0510317 .0657023 -.2163655 .433664 source: author´s elaboration the average social score recorded by sampled companies in 2021 is 73.55, revealing discreet attention to social issues. the minimum value is 23, and the maximum is 98.22. a csr committee is present in 90% of the sampled companies. the average percentage of women on the board is 34.96. considering that the average board size is 10, previous data reveal that approximately 3 or 4 directors are women on average. a total of 26.91 companies have a ceo who is also the board's chairman. the average percentage of independent directors sitting on the board is higher than that of women and is almost equal to 60%. finally, board members meet approximately once a month. before performing the regression analysis, the next table shows the correlation between all the variables. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7425 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 35 table 5: correlation matrix | socialscore bosize roledual csrcomm boind bomeet gendiv -------------+-------------------------------------------------------------- socialscore | 1.0000 bosize | 0.3459* 1.0000 roledual | 0.1520* 0.1411* 1.0000 csrcomm | 0.3378* 0.1919* 0.0643 1.0000 boind | 0.0687 -0.2542* -0.1391* 0.0613 1.0000 bomeet | -0.1096* -0.1874* -0.0856 0.0067 0.1461* 1.0000 gendiv | 0.1383* 0.0946* 0.1551* 0.1469* 0.0520 -0.0354 1.0000 size | 0.4985* 0.5429* 0.1416* 0.2412* 0.0695 -0.0657 0.1195* profit | 0.0053 -0.1210* 0.0507 0.0403 0.0416 -0.1039* 0.0060 lev | 0.0080 0.0252 -0.0300 0.0543 0.0513 0.1395* 0.0119 | size profit lev -------------+-------------------------- size | 1.0000 profit | -0.0520 1.0000 lev | 0.1267* -0.2733* 1.0000 note: *** p < 0.01, ** p < 0.05, * p < 0.1 source: author´s elaboration both csrcomm and gendiv are positively correlated with socialscore. moreover, bosize, roledual and size are also positively correlated with socialscore. bomeet, instead, presents a negative correlation with socialscore. 5.2 regression results the subsequent table shows the results of the regression analyses performed using stata software. table 6: regression results (dependent variable socialscore) variables model 1 model 2 csrcomm gendiv csrcomm*gendiv bosize roledual boind bomeet 11.5791*** (2.167769) .0372033 (.0534431) .3392589* (.1924118) 2.606915* (1.420351) .0449805* (.02663) -.1623585 (.1117212) 3.804429 (5.307205) -.1894688 (.151023) .2582784* (.1609875) .3601894* (.1925096) 2.670899* (1.418367) .0477557* (.0266385) -.1637325 (.1115243) european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7425 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 36 size profit lev constant 3.659373*** (.4813271) -1.238915 (9.849703) -5.642679 (4.753141) -24.3959*** (9.487964) 3.571471*** (.4835786) -1.277033 (9.832082) -5.475304 (4.745771) -16.19662 (10.76189) observations 448 448 adjusted r-squared 0.3046*** 0.3071*** source: author´s elaboration model 1 reports the results of the regression testing hypothesis h1 to understand the direct influence of csrcomm on socialscore. it shows a positive and statistically significant association between the presence of a csr committee and social pillar score (β = 11.5791, p < 0.01), meaning that the decision of the company to create a csr committee within the board brings greater attention to the social aspects of sustainability. concerning gender diversity, model 1 shows no significant relationship between the presence of women sitting on the board and the social pillar score. regarding the control variables, model 1 also shows that board size, role duality, board independence and firm size positively and significantly influence the social pillar score. model 2 shows the findings of the regression developed to test hypothesis h2, that is, the moderating effect of gendiv on the relationship between csrcomm and socialscore. the coefficient of the interaction term csrcomm*gendiv is positive and statistically significant (β =.2582784, p < 0.1), meaning that the presence of women sitting on the board positively moderates the relationship between the csr committee and the social pillar score. in other words, companies with a greater number of female directors present a stronger positive relationship between the existence of a csr committee and the social pillar score. 6. discussion and conclusions this paper focuses its attention on the impact that the presence of csr committees can have and the moderating role of board gender diversity in pursuing social objectives. the disaggregation of the effect that these variables can have on social performance has allowed us to consider a specific aspect of the esg approach that is critical for companies’ financial and nonfinancial health: a shared vision and modus operandi that can determine a positive relationship with stakeholders and create a common strategic and operational perspective. this motivation for this research derives from a gap in the research on the relationship between social performance and the related determinants that can be found in company governance. in this context, the research concludes that the presence of a csr committee contributes to greater efficacy in pursuing social matters. this supports the idea that esg issues require a specialized structure to assist the board of directors with social issues. this conclusion appears consistent with a body of literature examining csr and esg more generally (baraibar-diez e odriozola, 2019). structured governance can improve the esg approach of companies by enabling better control of delicate themes such as those included in the sp. it can consequently contribute to creating value in the medium and long term. the research also stresses that the presence of board diversity supports sp performance. this work suggests that companies with a more diversified board conduct aboard have better social performance. these results are also consistent with the previous literature (alijifri k & moustafa m., 2007) that has demonstrated how gender diversity enhances the tendency of corporate culture to integrate sustainability values (jizi et al., 2022). it has been confirmed that the diversity of perspectives and sensitivity a company uses in decision-making is significant for stakeholders’ engagement. moderation analysis shows that csr committees and boards are not replacements for one another, as both benefit the corporate pursuit of social themes (uyar et al., 2021). european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7425 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 37 this work confirms the adoption of agency theory and stakeholder theory. companies that apply control mechanisms that can protect people directly or indirectly involved in company management reduce agency conflicts and enhance stakeholder relations. there are many implications arising from this research. from a professional and practical point of view, companies should pay close attention to creating and managing csr committees, especially if we consider that they are mostly voluntary bodies. these results reflect the importance of promoting these instruments to enhance company attitudes towards sustainability. from an institutional perspective, regulators could consider amending their legislation, addressing the contribution provided by studies that demonstrate good practices and fair corporate behaviours. csr committees can provide greater assurance to stakeholders, especially in those contexts where there is a need to provide greater certainty about the company's ethical behaviour. at the same time, technical bodies have some additional data on which to base their codes and requirements. there are some limitations in this study. we considered only the european context. the enlargement of the sample could demonstrate if these results apply to other regional zones or are typical of only the european environment. we also considered the composition of csr committees and boards without investigating the skills of the component members. it seems that this variable can be crucial in analysing the collected data. it could highlight if the people involved are equally and highly qualified or if creating these conditions can always lead to better social performance. 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(2021). “esg importance for long-term shareholder value creation: literature vs. practice”. journal of open innovation: technology, market, and complexity, vol 7, issue 2, 127. https://doi.org/10.3390/joitmc7020127 yadav, p. and prashar, a. (2022), "board gender diversity: implications for environment, social, and governance (esg) performance of indian firms", international journal of productivity and performance management, https://doi.org/10.1108/ijppm-12-2021-0689. usón a.a,. moneva j.m., scarpellini s. (2022) “sustainability accounting and the introduction of the circular economy principles in businesses“, european journal of social impact and circular economy vol 3, n. 3. https://doi.org/10.13135/2704-9906/6817 urmanaviciene a. udara s. a. (2020) “the effective methods and practices for accelerating social entrepreneurship through corporate social responsibility“, european journal of social impact and circular economy, vol 1, issue 2, pp. 27-47. https://doi.org/10.13135/2704-9906/5085 urmanaviciene a. (2020) “wises’ social impact measurement in the baltic states”, european journal of social impact and circular economy, vol 1, issue 2, pp. 48-75. https://doi.org/10.13135/2704-9906/5091 http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6597 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 27 how to resolve audit matters in european affairs? introduction to a sustainable management accounting under ias 37 stefano de nichilo1 1 lectures university of cagliari e-mail: stefanodenichilo1985@gmail.com received: 27/02/2022 accepted for publication: 13/04/2022 published: 15/04/2022 abstract concerns regarding the development of environmental accounting have been around for decades. this work is an update to some of the previous questions around the development of ecological accounting to see how this has changed over the last two decades. specific findings from the paper analysis include ecological management accounting, “cost of decommissioning” (ias 37) requires a fundamental change to organization management, different values exploring relationships such as corporate governance, inclusive of the living and physical world, with a longer time horizon, and a centrality of external factors. environmental accounting is a more commonly used synonym for ecological accounting, though this term is distinct and does not cover many of the ecological challenges. in terms of corporate governance, the board of directors (bods) is the main responsible structure in meeting and safeguarding both shareholders and stakeholders’ interests. integrated reporting’s primary aim is to improve information quality provided to shareholders while responding to stakeholders’ interests and needs. using lenses of stakeholder theory, this study explores the relationship between board of directors’ characteristics as size, gender diversity, return on decommissioning asset, outside directors, number of executive committee and, using a self-constructed performance disclosure index. applying a content analysis method, data were collected from integrated reports to determine the self-constructed disclosure index. through quantitative analysis, we analyzed which bods’ characteristics are correlated to disclosure index. the analyzed sample was formed of 100 integrated reports produced by 27 european members states, published on the website for the period 2016–2020. the current study contributes to existing knowledge by exploring the voluntary adoption of integrated reporting using quantitative analysis and focusing on the european context. the obtained results highlight that integrated report alignment levels is directly correlated with the proportion of outside directors on the board and return on decommissioning asset. keywords: accounting; corporate governance; ecological; environmental; integrated reporting; sustainable development 1. introduction this research sets out to explore how far ecological management accounting; the business community over the last two decades has developed an interest in external factors, broadly termed as social and environmental concerns (van der stede, 2012, 2015). the development of frameworks such as integrated reporting and narrative reporting guidelines have increased http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6597 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 28 the reporting on and accountability of organizations to these issues (umar et al. 2020). this paper is exploring how far this move has developed in terms of ecological management accounting over the last two decades. this work starts with a challenge to the concept of environmentally concerned businesses, drawing a wider ecological view of the issues and business concerns (corvo et al. 2021). in doing so, one central issue is whether the business community can carry on with small changes and become ecological enterprises, or whether this requires a significant and fundamental change in organizations to shift the focus to achieve a more ecological balance (alexis 2017). this can be seen as a move towards relationships and away from the discrete object system that underpins much of accounting theory. more recently there have been additions to this discussion with a subsequent call as to the current state of affairs with sustainability, and the macro picture of ecological catastrophe that may be around the corner. the prevailing notion is that businesses have argued all is fine and, that under the term ‘sustainable business’, they are tackling environmental concerns (biancone et al. 2020). this argument can be developed, and several models used to explore the permutations. there are some different ways that the environmental issues can be resolved. so, an important sub-question is how these do (or do not) cross into the boundary of what can be defined as ecological accounting? in the end, is this a reflection on a business and whether becoming more environmental and sustainable is leading to an ecological business model and or is this something else? this paper is, in effect, updating this discussion to explore how far the notion of ecological management accounting has come over the last twenty years (birnberg 2000). it is important to stress that terms such as environmental and sustainability have become commonly used and synonymous in the business community (biancone et al. 2018). previous discussions on ecological accounting have highlighted the care that must be taken to ensure these terms are not conflated in and with the ecological term and concepts and in exploring this to highlight where there are differences and how this is moving forward the discussion and debate on ecological business (ashraf 2019). both have covered social and environmental concerns in the accounting field over the 20 years but to what extent and specifically can this be connected back to the ecological debate? (hopper & bui 2016) the difference in this work is that it has a specific focus on one topic area, environmental accounting. 2. literature review the activity of internal auditors, and the processes and control systems they deal with, are not predicable ex ante and are depicted contingently, they cannot rely on a “one-size-fits-all” procedure, but need to be adjusted to the specific context of a specific firm at a specific time. that said, management accounting as a discipline is able to identify specific procedures, which can better match specifically defined situations in which the organization may be involved (bocken, short, rana & evans 2014). according to contingency theory, situational factors (or contingent or contextual factors) influence the design of the management accounting system, while organizational performance and effectiveness depend on the quality of fit of the management accounting system, when designed ad hoc, and the specific situational factors that activated it (chapman 2006). these characteristics of the discipline make it difficult to undertake big numbers-based empirical studies, as each organization is unique and the potential situational factors are infinite and nested with each other, while the effectiveness of the fit between the management accounting system and the situational factors is often not easily measurable. the external environment and its level of uncertainty are relevant situational factors, related to change in the environment, which occur unexpectedly, such as the financial crisis of 2008 (secinaro, brescia, calandra & biancone 2020). when the conditions under which the firm operates are more stable, the external environment will be considered as more certain (eckles, hoyt & miller 2014). on the contrary, dynamic conditions are the premise for an uncertain external environment. it is documented that firms operating in a more stable and certain environment adopt a formula-based approach to the measurement of management accounting systems effectiveness, whereas firms operating in a dynamic and uncertain environment adopt a subjective approach to performance evaluation. in the current situation, a formula-based approach, which presupposes the meeting of targets, will easily fail if the uncertain dynamics of the environment make the targets inappropriate. uncertainty is also correlated with the level of sophistication of the management accounting system, given that a certain external environment needs only internal, financial and historical information, whereas an uncertain external environment will require a more sophisticated management accounting systems, which can also gather information that is external, less finical and future-oriented, as well as generally requiring decentralization in the organizational (and decisional) structure. the competitive strategy adopted by the firm is also a situational factor, which is able to shape the management accounting systems. a low-cost competitive strategy will require a formula-based approach, requiring significant attention paid to cost http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6597 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 29 control mechanisms and frequent and detailed quantitative reports on performance. on the other hand, a differentiation strategy will control costs less effectively and be mainly focused on non-financial measures of performance. sustainable destination can then appear in their holistic vision, as integrated, adaptive socio-ecological system (clarke 1997). these are the elements that will be discussed: a. destination as an integrated systems; b. destination as a social system; c. destination as a socio-ecological system; d. destination as an adaptive system. in this context, the stakeholder theory is also employed to explain stakeholder relationship in business belonging to different sectors, including the tourism sector. the theory can contribute to regulating relationship between tourism actors at the destination level. in particular, the principles of the theory are considered more significant in the case of destinations involved in sustainable tourism development, due to the role stakeholders should play. indeed, as described in previous paragraphs, international and european sustainable tourism organizations consider the involvement and the commitment of all stakeholders in planning and in the decision-making process at the destination level as a fundamental step in sustainable tourism development (fischer 1995). many studies aim to identify stakeholder of tourism. sautter and leisen (1999), refer to workers, local enterprise, residents, tourists, public administrators, competitors, activists and international chains as the stakeholders involved in tourism planning at a destination level. ryan (2002), considering potential stakeholders of an hypothetical tour operator in an hypothetical destination, identifies government, travel agencies, local administrators, accommodation enterprises, natural and urban environment, workers, brokerage houses and other special interest groups. currie (2009) considers the mitchel (1997) categories and identifies local indigenous enterprises as dormant stakeholders, fishing and sailing enterprises as discretionary stakeholders, the water managing authority as demanding stakeholders, governmental authorities as dominant stakeholders, tourism and accommodation enterprises as dependent stakeholders, environmentalists as dangerous stakeholders, and natural resources managing enterprises as definitive stakeholders. byrd (2007) selects the current and potential community and tourists as the stakeholders principally involved in sustainable tourism development at the destination level. according to the traditional approach, the interests of the three stakeholder groups are incompatible. for example, actions aimed at the maximization of business profits could cause damage on the natural environment. expectations of workers could be conflicting with business profit objectives. environmental associations and local authorities could conflict in the management of natural resources. however, according to a different perspective, stakeholders interests can be considered complementary. in destinations focused on tourism development, and especially sustainable tourism development, business cannot pursue economic goal that negate the efforts to safeguard the natural and cultural environment. this is because natural and cultural attractions represent the core of tourism products and the most interesting destination features for tourists 3. methodology empirical research conducted in order to understand the characteristics of the financial statement disclosure concerning decommissioning funds in listed european non-financial companies (significant amounts exceeding 1 million euro of decommissioning funds) for the years 2016-2020 for the 27 member countries of the european union (stoval, higham & stephenson 2019). we voluntarily excluded banks, insurance companies and other financial companies from the analysis due to the wide existing regulatory differences and the peculiarities of the typical activities of these companies. from the reading of the financial reports it emerges that in the section dedicated to the presentation of the accounting principles adopted, the non-financial companies report the letter or in any case the indications provided by the accounting standard ias 37 although only some companies make explicit reference (baxter & jack 2008). for these reasons, the purpose of the research is to verify how the information contained in the accounting documents is managed with the relative level of transparency provided about the characteristics that determine the values of the items in question (currie, seaton & wesley 2009) (table1). http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6597 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 30 table 1. data sampling of european business corporation with cost of decommissioning. materiality: substantial amounts exceeding 1 million euros. european members 2016 2017 2018 2019 2020 austria 1 1 0 1 1 belgium 3 4 2 2 2 bulgaria 4 3 3 4 3 croatia 4 5 4 3 4 denmark 2 1 1 1 2 estonia 1 1 0 0 1 finland 1 1 0 0 1 france 13 14 17 15 16 germany 15 17 23 19 20 greece 2 0 0 0 1 ireland 3 1 1 0 1 italy 12 16 17 20 18 netherlands 4 2 2 2 2 poland 5 3 2 5 3 portugal 6 8 7 6 7 czech republic 3 3 2 2 2 romania 3 3 2 3 2 slovakia 1 0 0 0 0 slovenia 1 0 0 0 0 spain 10 11 12 12 9 sweden 3 3 3 2 3 hungary 3 3 2 3 2 other 0 0 0 0 0 total annuals reports 100 100 100 100 100 source: author’s elaboration on european commission data set. the quality of the external information regarding the provisions for risks and charges relating to the dismantling of plants, the repurposing of sites and reclamations in the financial statements of the 100 listed companies is rather heterogeneous (battaglia 2011). it can certainly be said that if the disclosure required by the accounting principle were expected by the companies in a complex manner, there would certainly be an improvement in the level of transparency. below is an example of a summary checklist for the italian context which highlights the information required by the accounting standard with its presence in the financial statements being researched (table 2). http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6597 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 31 table 2. summary of empirical evidence of disclosure for cost decommissioning: italy checklist 2016 ias 37 indications presence of information yes no 84. for each class of provisions, the company must highlight: a) the book value at the beginning and end of the financial year; 29 0 b) the additional provisions made during the year, including increases to existing provisions; 23 6 c) the amounts used (ie costs incurred and charged to the provision) during the year; 22 7 d) amounts not used and reversed during the year; 11 18 e) the increases in the discounted amounts that occurred during the year, due to the passage of time, and the effect of any change in the discount rate. 11 18 85. the company must indicate for each class of provisions: a) a brief description of the nature of the obligation and the expected timing of the resulting outlay; 11 18 b) an indication of the uncertainties relating to the amount or timing of such disbursements. where it is necessary to provide adequate information, the company must highlight the main assumptions made about future events. 6 23 c) the amount of any compensation provided, specifying the amount of each asset recognized for the expected compensation. 0 29 86. unless the likelihood of engaging any resource to settle the obligation is remote, the company must disclose for each class of contingent liability at the reporting date a brief description of the nature of the contingent liability and, where feasible: a) an estimate of its financial effects, 0 29 b) an indication of the uncertainties relating to the amount or timing of each disbursement; is 0 29 c) the probability of each indemnity. 0 29 source: author’s elaboration the table highlights the lack of information required by paragraph 86 regarding contingent liabilities. the reader of the financial statements cannot be certain either that the company is not exposed to potential liabilities or that these, although they exist, are not indicated (castellani & sala 2010). by categorizing the indications present in the accounting standard, it is possible to reach the following groupings: a. indications of paragraph 84: quantitative information expressed with numerical values and through the use of tables. b. indications of paragraph 85: information of a descriptive nature that can be expressed in discursive form. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6597 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 32 c. indications in paragraph 86: information on elements that are not reflected in the numerical values of the financial statements. this categorization allows us to identify, in summary, how the information reaches a good level of transparency regarding the formation and variations of the elements that are represented by numerical values. lower levels of information concern the description of the phenomena that generated the values that feed the financial statements (bryman & bell 2007). finally, an even lower level of disclosure can be found in all the elements that are not reflected in the book values. once the results of the empirical analysis have been summarized in an aggregate manner, the understanding of the level of transparency in the financial statement disclosure concerning the decommissioning funds can be carried out through the construction of a transparency index (cook & reichardt 1979). although it is generally recognized that information transparency is an abstract concept, difficult to measure and undermined by the subjectivity of the researcher in the appreciation of phenomena, in the context of empirical research the use of these indices is widely used. this is due to the fact that the indicators are capable of giving a representation of the observed phenomenon which, although it does not exist in reality, can still be appreciated. in order to limit the subjectivity inherent in the choice of variables to be considered in defining the indicator, it is considered appropriate to include only the information required by ias 37 and reported in the paragraphs indicated above (acar & ozkan 2017). for the study it is considered appropriate to construct two indicators. the first having as variables the information required by the accounting standard, each considered with the same importance as the others in defining the level of transparency (corbetta 2003). this indicator allows to minimize the subjectivity of the researcher regardless of any consideration regarding the relevance of the researcher's subjectivity regardless of any consideration regarding the relevance of each single element. the second considers the same variables but attributes a different weight to each of them due to the subjectivity inherent in the sensitivity of the writer (le, p. t. a. 2019). below is the first unweighted disclosure index used, which is based on the presence of the elements required by the accounting standard in paragraphs 84, 85 and 86. unweighted disclosure index = 1/11 84a + 1/1184b + 1/1184c + 1/1184d + 1/1184e + 1/1185a + 1/1185b + 1/1185c + 1/1186a + 1/11 86b + 1/11 86c the attribution of an equal weight to all variables, although it reduces the subjectivity of the researcher in attributing different weights, implicitly assumes that each variable has the same relevance for the reader of the report. this assumption, although it may not be completely correct, at the same time it could be less incorrect than the attribution of a different weight to the individual variables due to the subjectivity of the evaluator. in the doctrine, there are different possibilities for attributing weight to variables. in particular, the criterion of distinction is used in two main types: a. specific variables of the issuing company, corporate variables, which depend on the choices made by the company and which an investor can only become aware of through the information provided by the company; b. market variables, publicly available, from which the reader of the financial statements can learn through alternative instruments to the financial statements. this distinction therefore makes it possible to attribute greater weight to company variables, information that is characterized by having the specific company as the only supplier of these elements (brasini 2010). in the context of liabilities, the elements referred to by the accounting principle are characterized by exclusively relating to company-type variables and therefore the possibility of distinguishing the weights based on this classification is precluded. it is therefore necessary to identify possible solutions in order to distinguish the relevance of the multiple information requested. for this purpose, it is possible to distinguish how the information required by paragraphs 84 and 85 represents charges whose probability of occurrence is judged by management as high unlike those required in paragraph 86 and relating to charges whose possibility of future manifestation is remote. from this point of view, at least double importance can be attributed to the elements referred to in paragraphs 84 or 85 with respect to those indicated in paragraph 86 (creswell 2013). in consideration of the fact that the quantitative information required by paragraph 84 may allow the reader to be more aware of the numerical values only if supported by an adequate description, it is believed that the information required by the two paragraphs can be attributed the same importance. the reasoning illustrated leads to attribute a weight of 0.4 to the information required by paragraph 84, of 0.4 to that required by paragraph 85 and, finally, of 0.2 to that referred to in paragraph 86 (cook & reichardt 1979). at this point it is necessary to identify within each paragraph of the weights based on the most basic information required. also in this circumstance it is important to consider the trade-off between desired objectivity and sensibility of the evaluator. based on the assumption that the elementary variables mentioned contribute to the definition of the information transparency of the same aspect, it is particularly complex and risky to attribute different weights. on the basis of the reasoning described, it is considered reasonable to attribute the same weight to each variable referred to in the same paragraph. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6597 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 33 weighted disclosure index = 4/10 ( 1/5 84a + 1/584b + 1/584c + 1/584d + 1/584e) + 4/10 ( 1/385a + 1/385b + 1/385c) +2/10 (1/386a + 1/3 86b + 1/3 86c) the index reported considers the information required by the accounting standard in paragraphs 84 and 85 as equally relevant in the definition of a transparency standard and overall suitable for the definition of 80% of the level of disclosure due to the presence of the individual elements mentioned. the information required by paragraph 86, due to the remote probability of occurrence, is therefore suitable for defining 20% of the level of disclosure due to the presence of the individual elements referred to in the paragraph (table 3). table 3. “unweighted” disclosure index by macro sector: year 2016 sector average paragraph 84 average paragraph 85 average paragraph 86 overall average consumer services 0.389 0.000 0.000 0.399 industrials 0.323 0.043 0.000 0.363 oil & gas 0.233 0.019 0.000 0.309 tecnology 0.183 0.000 0.000 0.189 telecommunications 0.132 0.000 0.000 0.189 utilities 0.289 0.043 0.000 0.333 source: author’s elaboration once the disclosure indicators have been defined as illustrated above, it is possible to quantify the average value of the index for each macro-sector, divided between the paragraphs of the accounting standard where such information is referred to (table 4). table 4. “weighted” disclosure index by macro sector: year 2016 sector average paragraph 84 average paragraph 85 average paragraph 86 overall average consumer services 0.343 0.000 0.000 0.343 industrials 0.283 0.059 0.000 0.443 oil & gas 0.256 0.027 0.000 0.283 tecnology 0.161 0.000 0.000 0.163 telecommunications 0.161 0.000 0.000 0.163 utilities 0.253 0.067 0.000 0.319 source: author’s elaboration the differences in the statistical results obtained from the application of the two different indices are summarized below (table 5). http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6597 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 34 table 5. results of financial statement disclosure performance index (id (1;2): weighted and unweighted index: year 2016 statistical quantities weighted index 1 unweighted index 2 average 0.336 0.329 std. dev. 0.019 0.017 median 0.343 0.273 minimum 0.081 0.091 maximum 0.533 0.545 q1 0.243 0.273 q2 0.443 0.455 source: author’s elaboration this study aims to outline a modeling system to measure sustainability and the aggressiveness of european corporate governance in non-financial companies, concerning activity and analysis of decommissioning asset with environmental issues. hypothesis testing (table 6) uses the following design sustainability research model: id(1;2) = β0 + β1 (size) + β2 (gender diversity) + β3 (roda) + β4 (out-side director) + β5 (number of executive committee) + ξ table 6. framework and hypotheses independent variable previous studies of irrituals rites expected sign evidence size (h1). companies having larger boards issue integrated reports that have a higher alignment level to disclosure index (id). bods’ monitoring capacity increases with the number of its constituting directors, a benefit that might be surpassed by the disadvantages related to inadequate communication and inefficient decision-making process, specific for large groups (andriotis 2018). after reaching a specific size, the larger the board is, the + http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6597 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 35 more ineffective it becomes. a board larger than 7–8 members is less likely to function effectively, diminishes its monitoring capabilities, and is much easier to be controlled by the ceo. board size positively impacts the integration of various reports, whether mandatory or voluntary, influencing id(1;2) voluntary adoption and dissemination of integrated csr (jones, atkinson, lorenz & harris 2012). larger boards, being formed of more experienced and knowledgeable directors, can deal with integrated report preparation, playing a central role in the integrated reporting process. environmental performance and disclosure are higher for companies with larger boards, where a larger board increases the probability of having the required expertise and diversity to enhance environmental performance (denichilo 2020c). log(asset) gender diversity (h2). companies with higher board gender diversity issue integrated reports that have a higher alignment level to disclosure index (id). bods should be composed of an appropriate mix of independent directors having relevant knowledge, competence, and industry experience to bring a diverse perspective and take objective decisions, enabling their preferential access to outside and additional resources, broader social networks, and build new business relationships (arena et al. 2010). board diversity is closely related to board composition, as group diversity can improve the quality of the decisions in that group, and can be referred to gender, age, nationality, cultural background, and educational attainment. environmental performance is higher for firms having a board composed of more legal experts and active ceos. moreover, companies that have a more significant proportion of western european directors record higher environmental corporate social responsibility (ecsr) governance mechanisms, while those with a higher number of colored directors report a higher quality of the integrated report. companies should disclose their diversity policy (including gender, ethnicity, cognitive, and social) regarding senior management and board, reporting on diversity with measurable + dichotomous variable (0/1) http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6597 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 36 targets and the progress made (baltaretu 2011). regarding gender, it is considered that men and women have different moral reasoning, women using more care reasoning and protective attitudes. the presence of women directors on boards positively impacts the integration of various reports, whether mandatory or voluntary, while id(1;2) quality is higher for companies that have more women directors. return of decommissio ned assets (h3). companies that have a higher profitability of decommissioning asset have a lower alignment level to id. the profitability is one of significant determinants of financial reporting disclosure of decommissioned assets (denichilo 2020 (a) and (b)). companies with high levels of profitability of decommissioned assets improved influence in investor decision and have more interesting stakeholders, so there is a lower propensity of performance index id. return on decommissioni ng asset (roda) out-side director (h4). companies that have a higher proportion of outside directors on the board issue integrated reports that have a higher alignment level to id. board composition and independence are closely related, the last one increasing with the proportion of independent outside directors (chenhal & morris 1985). the presentation of csr information is impacted by outside directors, meaning that they have a role in ensuring that companies take into consideration the interest of their shareholders and stakeholders. board independence is closely linked to independent non executive directors’ presence, which should be in the majority. companies having a board formed in majority by independent non executive directors record higher levels of voluntarily disclosed information and voluntarily disclose more strategic and forward-looking information. moreover, boards formed in a higher proportion of outside directors have greater control over management’s decisions and improved monitoring effectiveness (modica 2012). outside non executive directors are more objective and independent when managing and analyzing a company’s actions than executive directors, offering additional assurance to market participants that their interests are safeguarded + dichotomous variable (0/1) http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6597 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 37 and reducing the agency costs (stoval, higham & stephenson 2019). the integrated report quality is higher for companies that have more nonexecutive directors. number of executive committee (h5). companies that have a more active board issue integrated reports that have a higher alignment level to id. board activity has contrary views an active board with more meetings can be interpreted or viewed as inefficient, while others believe that more board meetings enable directors to supervise the company better (buckley 2012). by having more meetings, the board can debate, analyze, and decide on a broader range of topics, including the information included in the integrated report. + number source: author’s elaboration 4. results the study analyzes the characteristics and determinants of the sustainability index on investment projects with cost of decommissioning. first we see the results of the descriptive analysis of the sustainability model of the projects (tables 7 and 8). next we present the results of multivariate analysis (tables 9, 10 and 11). table 7. descriptive statistics of independent variables variable mean std. dev min max size 25.95 4.25 10.75 44.88 gender diversity 0.44 5.33 0 1 return of decommissioned assets 4.55% 0.99 -17.55% 10.33% out-side director 0.55 6.55 0 1 number of executive committee 7.88 1.25 3 12 source: author’s elaboration table 8. descriptive statistics id (1;2) index from 2017 to 2020 variable mean id1 std. dev id1 min id1 max id1 2017 0.339 0.021 0.081 0.553 2018 0.411 0.022 0.085 0.552 2019 0.421 0.024 0.089 0.554 2020 0.441 0.023 0.082 0.555 source: author’s elaboration table 9. descriptive statistics id (1;2) index from 2017 to 2020 variable mean id2 std. dev id2 min id2 man id2 2017 0.331 0.019 0.091 0.545 2018 0.333 0.021 0.092 0.549 2019 0.339 0.023 0.094 0.548 2020 0.411 0.022 0.092 0.549 http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6597 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 38 source: author’s elaboration table 10. multivariate analysis of id (1) model model coefficient id(1) t and p value intercepts 1.33 1.75*** size 1.55 -1.09 gender diversity 0.25 1.11 return of decommissioned assets -1.07 2.22*** out-side director 2.22 2.19*** number of executive committee 0.22 1.29 2017 0.01 dichotomous variable (0/1) 2018 0.01 2019 0.02 2020 0.02 r2 0.38 f value 3.33 source: author’s elaboration *, **, *** p-value at 0.10, 0.05 and 0.01 table 11. multivariate analysis of id (2) model model coefficient id(2) t and p value intercepts 1.22 2.75*** size 1.45 -1.11 gender diversity 0.22 1.22 return of decommissioned assets -1.15 3.33*** out-side director 2.44 3.55*** number of executive committee 0.44 1.22 2017 0.01 dichotomous variable (0/1) 2018 0.01 2019 0.02 2020 0.02 r2 0.59 f value 2.85 source: author’s elaboration *, **, *** p-value at 0.10, 0.05 and 0.01 model 1 is significant (p value 0.01 level) and r2 is 0.38. model 2 is significant (p value 0.01 level), and r2 is 0.59. the independent variable that have a significant result (level 0.01) are: roda and out-side director. an optimal solution for anticipating uncontrollable factors and mitigating their dangerous effect may be to rely on subjectivity (power 2009). using objective performance measures can lead to the myopic decision to analyze only what is in the numbers and only what was predictable when those objective metrics for performance settled down, which implies the risk of overlooking the relevance of some factors that clearly impact on actual performance. hence, subjectivity could should affect estimates, while forecasting and budgeting, at the time of control, may have consequential repercussions for the incentive system of the organization (palermo & van der stede 2011). subjectivity in performance evaluations unfortunately impose various criticalities. first, subjectivity is expensive, in terms of the time and resources required to assess the evaluation and to investigate the causes of any inefficiency in performance http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6597 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 39 (denichilo 2021b). moreover, subjectivity creates ambiguity regarding its causes and the fairness of the procedure adopted in the evaluation, as the evaluation itself may be characterized by a series of biases (power 2007). 5. discussion and conclusion several themes emerged throughout the analysis, the first is around terminology and its impreciseness and multiple usages of terms (torkington stanford & guiver 2020). of most concern is the concept of sustainability, which is seen as a connected, interchangeable, and over-arching concept and, in many ways, has hindered the development of environmental management accounting (freeman 2001). the concept of ecological accounting has not been used to any note in the period since 2000. environmental management accounting is more of a favored term and is positioned as separate from sustainability, this may be a clearer way forward (adams 2020). the use of environmental and accounting can provide a clearer path along which environmental concerns and accounting can be developed. alongside mainstream accounting research that has become more aware of stakeholders of the firm, more entities need including in the environmental accounting debates (adelman 2017). the environment cannot speak for itself and operating in an anthropomorphic environment, the concerns and impacts on the voiceless entity will be marginalized (berke & conroy 2000). the environmental entity must be central to any debate on ecological development. this means starting with the impact on the environment and working backwards to the organization changing the emphasis allows a clearer ecological standard to be established and not seen as a nice add on (denichilo 2021a). the traditional accounting discipline was settle with the aims of disclosing information on the organization, moving certainty and reliability about business contracts towards the business community. the postmodern view of management accounting discipline clarifies that the certainty of contracts in the business community is hardly believable. the best way to maintain environmental uncertainty is to smooth over the information and the requisites for the accounting of failure. accordingly, discussions on the organizational performance should move from statements of what happened towards projections on what will happen, supporting the reliability of traditional management accounting systems with a forward-looking strategy of “asif” planning, thus evolving risks into opportunities. finally organizational should equilibrate the instruments adopted to control uncontrollable situational factors and adequately combine objective and subjective instruments for management accounting. excessive reliance on objective performance metrics leads to business as usual, while new opportunities are missed out on. while, in business life nowadays, there is no room for demonizing objective metrics and relying on a purely subjective approach to evaluations, which would likely be affected by hidden pitfalls and side effects, there is a general call to avoid myopic evaluations and look at performance dynamically, with a continuous approach to management accountants’ role as risk mitigators, while considering risks and financial distress as facilitators for turnaround activity, which is positively centered on innovation. further development of these accounting approaches, with an awareness of the factors impacting on the development of ecological accounting, will help 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(2015). management accounting: where from, where now, where to? journal of management accounting research. vol 27 issue 1,pp. 171-176 2015. 05_urmanavicius european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5511 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 48 perspectives of older employees in changing labour market justas urmanavicius1 1 independent researcher, lithuania. e-mail: adebisiurp120385@futa.edu.ng received: 01/02/2021 accepted for publication: 03/11/2021 published: 12/11/2021 abstract due to an ongoing increase in the average life expectancy and a decrease in the average birth rate, there are less active people that are of working age in the labor market. however, this year's covid-19 pandemic highlighted that older workers are much more vulnerable in an ever-changing labor market. it is therefore essential to analyze how employers create working conditions for more senior employees during a pandemic. as well as the employment opportunities of older workers in the longer term. applied methods of analysis: scientific literature and analysis of various documents, interviews, and analysis of the research results, their interpretation. the study found that older employees had difficulty adapting to changed working conditions and faced a higher risk of health issues. the article thus showed that existing stereotypes among employers limit the employability of older people. keywords: work; aging; older employees; workers; labor market; covid-19. 1. introduction demographic, cultural and economic changes, as well as the health system's progress, led to the changes in the structure of society while declining birth rates and higher life expectancy resulted in increase of the share of older people in many countries. furthermore, improving quality of life and longer life expectancy increases the number of elderly population in society. the share of the retirement-age population grows, and the number of working-age populations declines due to the ageing society, thus challenging the state's labor market. the european employment strategy states that there is a need to promote employment accessibility for all those who can participate in the work activity and emphasize that the increase of personal abilities for lifelong participation in the labour market is one of europe's strategic objectives (europe 2020, com (2010). thus, it seeks to ensure positive interaction between economic, employment and social policy measures by promoting long-term and continuous participation in the work activity and providing conditions to remain active in the labor market. employment and active participation of elderly population are considered the main objectives of the eu labor market policy. in order to implement the objectives mentioned above, it is essential to ensure good mental and physical health of an elderly population, to apply more flexible retirement system, to create the most suitable working conditions, to ensure that the elderly would be able to acquire new knowledge and skills, to refresh the existing ones, and be provided with equal employment opportunities in the labor market. from an economic point of view, one of the most important measures to avoid a rise in the share of non-working age population is the increase of retirement age. however, this process is extremely negative since pre-retirement age people find it difficult to get employed and stay in the existing jobs. it promotes the protection of interests of elderly population in the labor european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5511 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 49 market. furthermore, the average age of elderly, withdrawing from the labor market does not coincide with the average retirement age. in lithuania, even 44,8 percent of persons over 50 years old are unemployed (social report, 2016-2017). the statistics lithuania publishes the latest demographic trends in lithuania, which show a further decline of population: the number of permanent residents in lithuania declined by 37,8 thousand or 1,3 percent in 2018, in comparison with 2017. given the presented facts, it is evident that lithuania is rapidly aging and already has the seventh oldest population in the eu. currently, the median age in lithuania is 43 – it means that half of the lithuanian population are older than 43, indicating the population aging. the share of elderly population grows, while the share of the working-age population diminishes. while comparing, it should be pointed out that the elderly population, i.e., persons over 65 years, accounted for 11 percent of the total population in 1990, and in 2018 this number is equal to 23 percent of the total population of lithuania. the share of the working-age population (15-64 ) of the total population diminished from 67 percent in 1990 down to 62 percent in 2017. if one hundred working-age persons maintained 16 elderly persons in 1990, currently, one hundred working-age persons have to maintain even 29 older people, therefore, the state must adapt to the changes as mentioned earlier by addressing the issues of elderly population in the labor market and providing for proper social policy (the statistics lithuania). even in economic growth conditions, when there is a shortage of workers, older people often remain on the margins. in the reality of covid-19, they are at even greater risk of not participating in the world of work and society. forty-one percent in lithuania, job seekers, are over 50 years old, and one in four of them has been looking for work for more than a year. a prolonged job search reduces older people's employability and pushes a person into long-term unemployment, which also has long-term psychosocial consequences. the influence of the aging population on the labor market is researched by didžgalvytė and lukšaitė, (2014). it should be noted that moskvina and skučienė (2014) analyzed the factors of dismissal from the labor market at elder age that should be considered, in order to select legal measures to keep older people included in the labor market. meanwhile, theoretical aspects of the elderly participants in the labor market were examined by corsi and lodovici, (2013), seltzer and yahirun, (2013). brazienė and mikutavičienė, (2015), skučienė, bartkus, moskvina and uleckienė, (2015), mikulionienė and rapolienė (2016) looked at the opportunities of older people to be included in the labor market. however, there is a lack of research done on covid-19 impact on older employees in the market. this article aims to review the aspects of inclusion of older employees in the labour market and analyze how employers create working conditions for senior employees during a pandemic. the following objectives are set to reach the aim: to describe the changes in the labour market in the context of ageing population, to identify the factors limiting the employment of older persons, and to put forward the recommendations on how to increase the inclusion of older persons in the labour market. the following research methods were applied: analysis of scientific literature and documents, key informant interviews, analysis and interpretation of the research results. qualitative research method – survey of expert opinion in the form of a structured questionnaire (interview) – was selected for empirical research (bitinas, rupšienė, žydžiūnaitė, 2008). the interview method was more appropriate for the same reasons – it was sought to go deep into real and sometimes hidden reasons why elderly employees are looked at rather skeptically in the labor market (baley, 2007). 2. literature review 2.1 changes in the labour market in the process of population ageing population aging is a long-term trend that started in europe several decades ago. it is evident from the changing structure of population age and is reflected in the growing share of elderly population, related with decreasing proportion of working-age people. it can be argued that this process is not only an actual change of elderly population – it is a complex process, reflecting the relationship of elderly population with the remaining society in the light of increasing life expectancy, and including the following age factors: biological (entirety of physiological changes), psychological (individual abilities to adapt his behaviour to environmental changes), social (social norms and roles applied to an individual in respect of his age) (labanauskaitė, astrauskaitė , kiyak (2014). in the process of ageing, some of population face difficulties due to biological, psychological, and social age, since adaptation in the labour market is affected by all above factors. therefore, ageing itself cannot be defined only as diminished physical powers. it should be noted that population ageing causes the following problems: working-age people european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5511 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 50 are no longer able to generate enough income for pensions: the elderly are forced to work longer and cannot enjoy their retirement. it is projected that the share of elderly population will increase, while the share of youth and working age people will decline significantly in eu in the next few decades (european commission, 2014). seeking to identify the future trends of population ageing, the eurostat population projections (europop2015), covering the period from 2015 to 2080, forecast the eu population will increase with its peak of 528,6 million in 2050, and thereafter will gradually decline down to 518,8 million in 2080. while comparing the age pyramids of 2015 and 2080 (see figure 1), it might be observed that the share of elderly people will continue to increase. over the next decades, the share of elderly population will significantly grow due to high number of baby boomers. however, it obvious that the shape of this pyramid will transform, becoming similar to rectangle, narrowed in the middle (in the age of 45 – 54 years) in 2080. figure 1. eu population age pyramids 2016 and 2080 (% of the total population) source: eurostat, 2016 another important aspect of population ageing is a gradual ageing of the elderly population, since a relative segment of very old people grows faster than any other age segment of the eu population. the share of people aged 80 years, or the share of elderly people is projected to increase more than double from 5,4 percent to 12,7 percent during the period of 2016–2080 (see figure 2). figure 2. eu population by broad age groups 2016–2080 (% of the total population) source: eurostat, 2016 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5511 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 51 while referring to the period of 2016–2080, the share of working-age population is expected to continuously decrease until 2050, slightly stabilizing later, while the share elderly population is projected to account for an increasing share of the total population: people aged 65 and over will account for 29,1 percent of the eu-28 population in 2080, in comparison with 19,2 percent in 2016. as a result of the movement of people from one age group to another, the projected eu-28 ageing index will increase almost double from 29,3 percent in 2016 to 52,3 percent in 2080 (see figure 3). the total age-dependency ratio is projected to increase from 53,2 percent 2016 to 79,7 percent 2080. figure 3. eu population by broad age groups 2016–2080 (% of the total population) source: eurostat, 2016 on the basis of the eu projections, it might be argued that the share of people aged 80 or elderly people in the eu population will increase more than twice during the period of 2016 – 2080, i.e., from 5,4 percent to 12,7 percent in 2080. people aged 65 and over will account for 29,1 percent of the eu population, in comparison with 19,2 percent in 2016. as a result of the movement of people from one age group to another, the projected eu ageing index will increase almost double from 29,3 percent in 2016 to 52,3 percent in 2080. in summary, it should be stated that the presented projections stimulate to transform both social security and labour market system with the expectation that the share of the oldest population will grow at a particularly high pace in the next decades. population ageing has twofold effect on the structure of labour – the number of elderly employees as well as the number of persons, who are no longer able to carry out economic activity, thus, becoming dependent on the social security mechanism, is growing (ambrazevičiūtė, 2014 ). the latter causes financial burden on the working age people, who finance the social insurance fund. the current system of the labour market is adapted to the model where the larger share of population maintains the socially supported elderly population. negative influence of population ageing on the labour market is dealt with increase of retirement age and formal reduction of the number of economically inactive people (okunevičiūtė – neverauskienė, 2011). however, actual number of economically inactive population does not depend solely on the retirement age. despite threat to the changes in the labour market, it is believed that population ageing will not necessarily affect the labour market negatively, if certain changes are made. the conditions of the labour market must be adapted to the socio-demographic changes, focused on the labour productivity, quality of the labour force, and labour force participation (moskvina, okunevičiūtė –neverauskienė, 2011). considering the negative influence of population ageing on the labour market and the economic stability of the country, it should be noted that special measures are required to provide conditions for the longest possible activity of employees in the labour market. although ageing is primarily defined as an entirety of physiological changes, not only physical limitations burden elderly people. namely, the economic activity potential of elderly population can be limited by the following reasons: insufficiently flexible employment forms; lack of development of adapted places; limited opportunities of lifelong learning; unequal access to healthcare services; lack of measures promoting later retirement ( kanopienė, mikulionienė, 2006). european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5511 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 52 while analysing the influence of the labour market on employment of elderly people, the retirement time, the working load, the method of retirement (how fast a person moves from part-time work to full retirement, the nature of work before retirement), the changes in the labour market, and the causes of retirement should be considered. as it has already been mentioned, the motives for retirement are often caused not by physiological changes that prevent from economic activity, but by incompatibility of the needs of the labour market and the elderly people. it might be argued that the reasons for early retirement of elderly people from the labour market are determined both by employer and employee position. didžgalvytė, lukšaitė (2014), nilsson, bülow, kazemi (2015) various studies revealed that individual's view towards normal retirement depends on the social security system, his financial situation, needs, even on occupation. for example, people, who are engaged in physical work, tend to quit earlier because of health problems and reduced physical capacity (moskvina, skučienė, 2014). other reasons are related with employer's needs in considering elderly population as more difficult to adapt to the labour market. it should be noted that elderly population faces more difficulties in adapting to the labour market due to the following reasons: professional and working experience is not in demand under modern economic conditions; lack of information and technological skills; lack of foreign language skills; qualification development programmes are targeted at young people; employers' view that elderly population is insufficiently energetic, that elderly population often lacks confidence in its forces, often does not want to raise its qualification or acquire to speciality; insufficient social partnership fails to implement appropriate representation of elderly employees at the company or the state level. ( lengvinienė, rutkienė, tandzegolskienė, 2014). given these factors, it is essential to retain elderly people in the labour market. this requires the measures to protect elderly employees present in the labour market. furthermore, the employees should be encouraged to refresh their skills and to develop their qualification 2.2. regulation of labour relations in respect of population ageing a political, economic, social and cultural context of eu has led to the fact that the region of western and central europe has experienced one of the most noticeable and earliest population ageing trends. demographic changes in the community have been driven by both declining birth rates and progress in the health system. therefore, eu was one of the first to launch specific actions to deal with the issues caused by influence of population ageing on the labour market. the eu strategy papers state that the longest possible participation in the labour market stimulates the domestic markets, stabilizes the pension fund systems, has positive effect on the overall employment, therefore, it is one of the strategic objectives. looking at the statistics, it can be seen that during the period from 2001 to 2010, exit from the labour market was delayed by 1,6 years (women – 1,9, men – 1, 3). it evidences about quite successful strategy of retention of elderly employees in the labour market. therefore, it is important to analyse the measures implemented at eu level for changes in labour relations in the context of population ageing. article 147 of consolidated version of the treaty on the functioning of the european union (2012) states that while solving the issues of employment the union shall encourage cooperation between member states and support and, if necessary, complement their action. paragraph 1 of article 153 of the same legislation specifies that the union shall support and complement the integration of persons excluded from the labour market (consolidated version of the treaty on the functioning of the european union. oj, c326/47 (2012). while analysing the evolution of the eu policy in dealing with the issues of population ageing in respect of the labour market, two stages can be distinguished: from founding of the community in 1957 to the treaty of amsterdam, and after this treaty. in the first decades of the community existence, population ageing was not included in any official policy agenda or reflected in any other papers. the treaty on european union included the provision prohibiting discrimination on the grounds of nationality and gender, but age was not mentioned there. the first period was characterized only by declarative documents, which including recommended guidelines to avoid the consequences of population ageing. although the papers, issued during this period, affected the law of the member states, they did not lead to specific binding rules of law of the community (ambrazevičiūtė, 2014). here, the resolution of the european parliament, adopted in 1982, on the situation and problems of the aged in the european community should be noted. this paper observes demographic change that emerges as the composition of population changes by age group, i.e., as the share of elderly population increases. with regard to labour law, clause 8 of the resolution was of particular importance, stating that the legal regulation where a person is removed from the labour market as he reaches the retirement age is not acceptable in the community (council recommendation of 10 december 1982 on the principles of a community policy with regard to retirement age, oj 1982, l 357). it was highlighted that person's exit from the labour market as he reaches the retirement age is his right rather than an european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5511 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 53 obligation imposed by the state. this resolution encouraged the european council to adopt the recommendation on the principles of a community policy with regard to retirement age. the latter emphasized that termination of employment relationships should not be based on the fact of retirement, and financial incentives to promote the early retirement may be introduced only because of exceptional economic circumstances. while analysing population ageing and the changes in the labour market in the context of regulation of labour relations, the treaty of amsterdam 1997 is considered as a qualitatively new and progressive step, since the council gained the competence to directly affect the legal systems of the member states and to take actions in event of discrimination (age is also included in the types of discrimination). as the issue of population was declared as one of the most important fields of social policy, the european commission encouraged the cooperation of the member states in solving this issue at the community level in 1999. application of employment policy and labour market measures was named as one of the four action fields in the document for overcoming the consequences of ageing (kanopienė, mikulionienė, 2006). on the basis of the treaty of amsterdam, on 27th of november, 2000, the council directive 2000/78/ec, regulating the principles of equal treatment in the labour market of the community and targeted towards establishment of equal rights and non-discrimination principles, as well as towards promotion of the eu employment policy, was adopted (council directive 2000/78/ec of 27 november 2000 establishing a general framework for equal treatment in employment and occupation). over the recent decades, the european labour market has been affected by international migration, fast technological development, growing dynamism and competitiveness. these changes have led to the necessity to restructure the labour market, to improve adaptability of companies and employees by applying the concept of flexicurity, which is based on a combination of social security and flexibility. while applying the principles of flexicurity, security guarantees are associated with help for improving skills for career development, with possibility to change the work place or retrain rather than with retention in the work place (mačernytė panomariovienė, 2011). considering the relevance of population ageing, 2012 was announced as the european year for active ageing and solidarity between generations. active ageing was defined as the process of optimising opportunities for health, participation and security in order to enhance quality of life as people age. active ageing is understood as the process allowing to realize the potentials for physical, social, and mental well-being (european parliament and the council decision on the european year for active ageing and solidarity between generations. oj 2011, l 246/). it should be noted that solidarity between generations is the key factor in the labour market. invaluable experience of elderly employees and skills of youth should be used as an exchange program. taking into account the relevance of flexicurity in the context of population ageing, the communication from the commission "towards common principles of flexicurity: more and better jobs through flexibility and security", 2007, should be mentioned (communication from the commission to the european parliament, the council, the european economic and social committee and the committee of the regions towards common principles of flexicurity: more and better jobs through flexibility and security. com (2007) 359 final). the latter presents the common principles of flexicurity: flexible and reliable contractual arrangement, modern labour laws, collective agreements, modern labour organization; implementation of comprehensive lifelong learning strategy, improving the adaptability and employability of workers; effective and active labour market policy, reducing unemployment spells and easing the transition periods; social security measures that encourage employment and facilitate labour market mobility. it might be stated that this communication encouraged the baltic countries to restructure the labour market in the way that social security would be associated with opportunities to adapt in the labour market rather than with retention of a working place. in other words, the guarantees of employment rather than of labour market should prevail. in lithuania, one of the most important aspects of the principle of non-discrimination in the labour market and other fields is primarily regulated in the main document of the country, i.e., the constitution of the republic of lithuania, the article 29 whereof states that "all persons shall be equal before the law, courts, and other state institutions and officials. human rights may not be restricted; no one may be granted any privileges on the grounds of gender, race, nationality, language, origin, social status, belief, convictions, or view" (the constitution of the republic of lithuania, official gazette 33, 1014 (1992). meanwhile, article 48 of the constitution is more relevant in the context of labour. it specifies that "everyone may freely choose a job or business, and shall have the right to have proper, safe, and healthy conditions at work, as well as to receive fair pay for work and social security in the event of unemployment". the legal regulation of lithuania in addressing the issues of elderly population in the labour market is focused towards additional support and implementation of the principle of non-discrimination by age. considering the real situation, where european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5511 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 54 difficulties in the labour market are faced by people in their fourth or fifth decade, the age limit additional support has been decreased. relatively strict regulation of the labour market limits the flexibility of employers in making decisions on admission and dismissal from work. this, in turn, potentially negatively affects the employment possibilities of the high-risk groups as the elderly population. therefore, more flexible regulation of labour relations, established by the labour code, which came into effect in 01 07 2017, might be beneficial for older employees. 3. methodology problem of research – less favourable attitude of employers towards elderly employees is one of the problems hindering the integration of elderly population in the labour market. object of research – integration of elderly population in the labour market. aim of research – to reveal the attitudes of employers in respect of support and inclusion of elderly employees in the labour market. objectives of empirical research: 1) to conduct the survey of employers' opinion, which would help to identify the factors hindering the inclusion of elderly population in the labour market 2) to propose methods and ways on how to improve inclusion and participation of elderly population in the labour market in the future 3) to give preliminary view of covid-19 impact on labour market for elderly employees. qualitative research method – survey of expert opinion in the form of a structured questionnaire (interview) – was selected for empirical research. the survey was conducted through a formal interview, i.e., interview with pre-arranged questions that all respondents were asked in the same order. this form of interview was selected, seeking to find out the expert opinion about the current situation and, by comparing answers, to reveal the expert attitude towards support and inclusion of elderly employees in the labour market. in case of this research, the method of interview was more appropriate for the same reasons – it was sought to go deep into real and sometimes hidden reasons why elderly employee are looked at rather sceptically in the labour market. analysis and interpretation of qualitative research data requires high objectivity in order to ensure the validity of the research results. data were analysed on the basis of comparative analysis. the informant group consisted of 5 employers – the persons leading the companies. the following criteria were applied: experience of management (at least 3), the number of employees (at least 15). the aforementioned criteria were selected in order to reflect the attitudes of employers, taking into account the experience of managers in management of human resources, and the structure of employees in the companies. the prepared questionnaire consists of a group of interrelated questions to be answered by interviewed informants. the problem-related questions: how do you evaluate the employment opportunities for elderly persons? are there any discriminatory provisions for employment of elderly persons? what are the possibilities for development of qualification and retraining?. 4. results in addition to being more susceptible to contracting covid-19, older workers face a number of challenges that contribute to their likelihood of being laid off from their jobs. the shift to working from home could hurt older employers due to a lingering perception that more seasoned workers aren't as tech-savvy as their younger counterparts. the informants were asked to comment on the employment opportunities for elderly persons. ” i usually focus on older people as a guarantor of stability and responsibility. we now notice that the supply of older people looking for work is really high. for example, the school and kindergarten catering sector is home to people who have worked in luxury restaurants that have had to close due to quarantine, which increases the competence of our company and improves the quality of services” the respondents emphasized the disadvantages of elderly employees, highlighting that these employees are not sufficiently motivated, would hardly adapt to the existing innovations in the company: "older workers are not flexible, hardly accept innovations, resulting in a decrease of work performance", "they find it more difficult to accept new information, they need to be motivated to go to training", "elderly employees find it more difficult to adapt to certain innovations, especially information technology", "technology is constantly improving in our sector, they hardly adapt to innovations", "do not want to be retrained, in order to master new technologies". during the survey, respondents agreed that proper leadership by managers and management of organization motivates individuals to change and to adapt to the changes in an organization: "if physical health allows, i have not noticed that employees would lose their motivation naturally with age", "our organization does not divide european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5511 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 55 employees to old and young, our team is friendly", "precise tasks and division of work allows for effective use of the age difference and right motivation of employees", "age is not very important for motivation, sometimes young people do not want anything…", "poor foreign language skills, the older generation is perfect of russian language, however, the labor market often requires good english language skills". the respondents stated that they would be more cautious about older persons, when looking for a new employee, since the named disadvantages of elderly employees include not only physiological changes, but also extremely difficult acceptance of technological innovations at work and lack of foreign language skills. however, those employers whose attitudes towards elderly employees remain positive are ready to provide opportunities to be retained in the labor market. it was asked whether the employee's experience is considered an advantage. it has been noticed that none of the informants identified age as a direct advantage, however, they were positive about experience and emphasized the personal characteristics, which help to adapt and work in a team: "age is not an advantage, however, experience is always a decisive factor when getting employed", "experience must be in line with positivity, creativity", "we select employees according to their ability to work in a team, communicativeness, responsibility", "we choose according to desire to work, to adapt to the duties, requirements", "it is essential that a person would be able to work in team, to have the desire to change and improve", "i have noticed that older people are more responsible and diligent in carrying out tasks at work". the informant noted: "people of older generation like to emphasize the fact that they are with higher education, however, often the knowledge gained in 1980s, is outdated", "we evaluate experience and competencies of the people because we cannot rely solely on a diploma as the knowledge was acquired long ago." it was sought to find out the attitude of the informants towards older long-term unemployed persons. the majority stated that long-term unemployment has negative effect on the person's skills, therefore, these individuals find it hard to adapt in a new team, they lack self-confidence, willingness to change and improve: "long-term unemployment shows that a person has been refused to be employed by a number of employers for some reasons", "people lose their working skills over a long period of time, therefore, i would think good before employing", "it is risky to employ a long-term unemployed person, i would employ him, if i knew at least the main causes of long-term unemployment", "if a person could not work because of a good reason, i would give him a chance", "it would depend on the position in the company and the reasons that led to long-term unemployment." in conclusion, it might be argued that the respondents would go deep into the reasons of long-term unemployment and consider the specific situation of these persons. while considering the opportunities of elderly employees to be retained in the labour market, the informants stated that they would employ the older person, who had completed retraining courses. for some employers, completing courses would serve as a proof of motivation, however, a part of them emphasized that it would not be an advantage: "yes. it would prove that a person still has aims, motivation. we would kindly employ this person for the position that does not require much experience"; "if these courses are related with company's activities and the person meets other required criteria, we will consider his candidacy to the required position"; "we would employ him, however, it would not be an advantage. maybe, we would impose a probationary period to let him show what he is able to do." the informants would agree on training elderly employees if it positively affected their productivity. some employers would like the state to at least partially finance this kind of training: "we could not pay for training solely from our funds, it is huge expenses"; "i would like to get the state support not only for employing the elderly, but also for retaining and raising the qualification of elderly employees"; "training is quite expensive, but it is better to invest in an employee than to look for a new one." during the interview, the respondents said pointed out that they would use the possibility to employ an older person by subsidizing his working place. however, they would employ only if an employee met all requirements and this position was required: "subsidies are very necessary"; "i use subsidies when the company's needs meet according to the working place"; "it is the possibility for an older employee to go back to work.". the informants stated that compensation of salary expenses is a sufficient incentive to employ an older person, while subsidies could also be granted with a probationary period. the research revealed a positive attitude towards employment of retirement-age persons, although the informants stated that productivity of employees in this age group should be lower, and the possibilities would allow employing only for jobs that do not require much skills: "it is nothing bad, if a person has willingness, skills, motivation. it is only welcoming, if he still needs activity. i hope the number of these pensioners will increase in the future"; "i have employed some of such people because recommendations, knew that they are trustable people"; "the number of learning, active seniors is increasing, therefore, maybe the number of those, who would be active in the labour market, despite of getting a pension, would also grow in the future". it european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5511 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 56 can be argued that there is a positive attitude towards working persons of retirement-age, who are capable to work and are required for organization, however, the solutions for staying in the labour market as long as possible require systematic and targeted measures, which would be focused on and dedicated for the employees, who are currently active in the labour market and will reach their retirement age a few years later. 5. conclusion population ageing is a complex phenomenon, defining the relationship of elderly population with the remaining society. this process leads to the fact that the difficulties of adaptation in the labour market, caused by biological, psychological and social changes, are faced by an increasing share of population. in lithuania, there is a lack of a clear public employment strategy, therefore the applied solutions are often insufficient and inconsistent, there is a lack of a comprehensive approach to the situation, the needs of different groups and the causes of unemployment are underestimated. in order to ensure public employment, appropriate targets should be set for the public sector and business organizations, and self-care for those in their fifties and older should be encouraged. it is still early to predict outcomes of covid-19 crisis, but health risks for older workers already raised their unemployment rates in lithuania suggesting that some older unemployed workers will stop looking for work permanently. as lithuanian population ages, elderly people will account for an increasing share of population, therefore, on the one hand, their active inclusion in the labour market will be characterized by ever increasing influence on the public life, on the other hand, it will be difficult to discriminate the majority of employees. thus, the society will have to change the view towards elderly employees and understand that there is a need of a full range of measures that would be active before an employee falls into the category of high-risk group, related with his age. attractiveness of elderly population as labour force in the labour market may be increased by applying flexicurity principles. strengthen enforcement of laws particularly in areas that are viewed to put elderly employees at a disadvantage. the results of the completed research revealed that the employers' attitude towards older employees is determined by stereotyped thinking that the elderly does not have sufficient motivation to change, therefore, age affects their decision in the process of employee selection. older persons, working in organizations, are rated quite favourably – especially those with experience and wishing to retrain. in most cases, the employer does not select an elderly person due to his lack of knowledge or skills rather than due to his age, thus, the support system for elderly population should be so as to help people to stay in the labour market as long as possible. addressing the issue of influence of population ageing on the labour market requires a systematic and preventive approach. therefore, application of some support measures in the labour market should be started as soon as possible. the persons, who fall into this age group, should be provided with the opportunities of retraining and refreshing their skills. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5511 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 57 references ambrazevičiūtė, k. 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(accessed 05.09.2018): treaty of amsterdam. oj (1997). available (accessed 10.08.2018): https://eurlex.europa.eu/legal-content/en/txt/?uri=oj:c:1997:340:toc 01_ iyer_ejsice european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6821 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 1 the emerging circular economy trends of united arab emirates (uae) universities shankar subramanian iyer1 1 s.p. jain institute of global management, block 5 academic city dubai, united arab emirates shankar.subramanien@gmail.com received: 06/12/2022 accepted for publication: 05/07/2023 published: 28/07/2023 abstract this paper examines the emerging circular economy trends in universities in the united arab emirates (uae). the circular economy is a model that aims to reduce waste and maximize the use of resources, promoting sustainable development. the study analyses uae universities' various initiatives to adopt circular economy practices, including using renewable energy, sustainable building design, and waste reduction strategies. the paper also discusses the challenges and opportunities for implementing circular economy practices in universities in the uae and highlights examples of circular economy initiatives in various universities. the paper concludes by providing recommendations for universities in the uae to promote sustainable practices further and contribute to the circular economy movement. the findings of this study provide insights into the emerging circular economy trends in universities in the uae and offer directions for future research in this area. the adkar change management can be adapted to inspire the ce initiatives of the uae education sector. keywords: circular economy; eco-design: business education; management education, adkar 1. introduction the concept of circular economy has been gaining momentum in recent years to promote sustainable development and reduce waste. the united arab emirates (uae) has also recognized the importance of adopting circular economy practices to address environmental challenges and promote sustainable growth. universities in the uae are playing a vital role in this transition by implementing circular economy practices and promoting sustainability education. this paper focuses on exploring the emerging trends of the circular economy in universities in the united arab emirates (uae) (dave et al., 2022). the circular economy is a model that aims to minimize waste and optimize resource usage, thus promoting sustainable development. the study delves into the various initiatives that uae universities have taken to implement circular economy practices. these initiatives include using renewable energy sources, sustainable building design, and waste reduction strategies (campra et al., 2021). this paper explores the emerging trends of the circular economy in universities in the uae. it aims to provide insights into the initiatives taken by these universities to adopt circular economy practices, the challenges and opportunities they face, and the impact of these practices on sustainable development. the key challenges include the need for more awareness and understanding of circular economy principles, the need for significant investments, and the need for clear regulatory frameworks. however, the study also highlights the benefits of adopting circular economy practices, such as reducing costs, improving the environmental footprint of universities, and promoting innovation and collaboration. the paper also provides examples of circular economy initiatives implemented in various universities in the uae. these examples range from small european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6821 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 2 scale projects such as composting and recycling to large-scale initiatives such as using renewable energy in campus buildings (dantas et al., 2021). the uae is a rapidly developing country with a growing population, which puts pressure on natural resources and generates significant waste. in response to these challenges, the uae has launched several initiatives to promote sustainability and reduce waste. one of the most prominent initiatives is the uae vision 2021, which aims to promote sustainable development and reduce the country's ecological footprint. universities in the uae have also recognized the importance of adopting circular economy practices to promote sustainability and reduce waste. these universities have implemented various initiatives, such as using renewable energy sources, sustainable building design, and waste reduction strategies. moreover, universities in the uae are also promoting sustainability education to raise awareness and encourage students to adopt sustainable practices in their daily lives(lusk et al., 2020). despite these efforts, universities in the uae need help in implementing circular economy practices. these challenges include the lack of awareness about circular economy principles, the need for significant investments, and the absence of clear regulatory frameworks. therefore, this paper aims to provide an overview of the emerging circular economy trends in universities in the uae, analyze the challenges and opportunities for implementing circular economy practices, and offer recommendations for universities to promote sustainable practices further and contribute to the circular economy movement. the paper concludes by offering recommendations to the uae universities to promote sustainable practices and contribute to the circular economy movement. these recommendations include increasing awareness and education about circular economy principles, developing clear regulatory frameworks, encouraging collaboration among universities, and investing in research and development of circular economy solutions. overall, this paper provides valuable insights into the emerging circular economy trends in universities in the uae, highlighting the challenges and opportunities for implementing circular economy practices. the findings of this study offer directions for future research in this area and provide a roadmap for universities in the uae to promote sustainable practices and contribute to the circular economy movement (kirchherr et al., 2019). the uae education sector is transforming smart universities and smart education systems. this transformation is spearheaded by the smart government initiatives of various emirates, such as dubai and abu dhabi. the aim is to make the education sector more sustainable, efficient, and effective by reducing paper usage, streamlining administration, and using emerging technologies. one of the most significant changes is the move towards paperless offices and administration. this means universities use digital platforms to record and issue certificates, reducing paperwork and making the process more efficient. this move towards paperless administration is a step towards sustainability, as it reduces paper usage and waste (mendoza et al., 2019). the smart government initiatives are also promoting emerging technologies such as blockchain, cloud-computing, virtual reality, ai, and machine learning in education to further sustainability and standardize education curricula in the uae. for example, blockchain technology can securely store education records, making them easily accessible and tamperproof. cloud computing can store and access educational resources and data, making it easier for students and teachers to collaborate and share information. virtual reality can create immersive learning experiences, making education more engaging and interactive. ai and machine learning can be used to personalize learning, adapting to the needs and preferences of individual students. these smart education initiatives are making the education sector more sustainable and creating opportunities for implementing circular economy initiatives. for example, blockchain technology can be extended to implement circular economy practices by creating a secure and transparent system for tracking and managing waste. this can help reduce waste and increase the efficiency of recycling and waste management processes (ghareeb et al., 2020). overall, the uae education sector's move towards smart universities and smart education systems is a positive step towards creating a more sustainable and efficient education sector. emerging technologies and smart government initiatives are creating opportunities to implement circular economy practices and promote sustainability in the education sector. (iyer, 2022). given the previous gap analysis, our paper aims to explore the following research questions: a) what are the current circular economy trends being adopted by uae universities? b) what challenges and opportunities do uae universities face in implementing circular economy practices? c) how effective are the circular economy initiatives being implemented by uae universities in promoting sustainability and reducing environmental impact? d) what are the best practices for implementing circular economy initiatives in uae universities? european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6821 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 3 2. literature review the concept of the circular economy is gaining increasing importance in the global economy, focusing on sustainability and resource efficiency. uae universities also recognise the need to adopt circular economy practices to promote sustainability and reduce environmental impact. this literature review explores uae universities' emerging circular economy trends and the challenges and opportunities associated with their implementation. 2.1 circular economy trends in uae universities uae universities are increasingly adopting circular economy practices to promote sustainability and reduce environmental impact. these practices include waste reduction, recycling, and using renewable energy sources. for example, the masdar institute of science and technology, based in abu dhabi, has implemented a zero-waste policy, where waste is reduced and recycled to minimize its environmental impact. similarly, the american university of sharjah has implemented a sustainability plan, which includes using renewable energy sources such as solar power and reducing water consumption. 2.2 challenges and opportunities the implementation of circular economy practices in uae universities has its challenges. one major challenge is the need for more awareness and understanding of the circular economy concept among stakeholders, including students, faculty, and administrators. this can hinder the adoption and implementation of circular economy practices. the lack of infrastructure and resources for waste management and recycling can also pose a challenge. however, several opportunities exist for implementing circular economy practices in uae universities. the uae government has committed to promoting sustainability and reducing its environmental impact through initiatives such as the uae vision 2021, which aims to achieve a sustainable environment and infrastructure. this allows universities to align their sustainability efforts with the government's objectives and collaborate on circular economy initiatives. uae universities' emerging circular economy trends demonstrate a commitment to sustainability and resource efficiency. however, the challenges associated with implementing circular economy practices must be addressed to ensure their effectiveness. the opportunities for collaboration with the uae government on sustainability initiatives provide an avenue for universities to make a significant impact on the circular economy and promote a sustainable future in the uae 2.3 gaps in the literature despite the growing interest in circular economy practices in uae universities, gaps in the literature need to be addressed. most of the available literature is descriptive and based on case studies, which limits our understanding of the impact of these practices on sustainability and resource efficiency. while some studies have identified the challenges associated with implementing circular economy practices in uae universities, there is a need for more in-depth research on these challenges, including the barriers to adoption and the strategies for overcoming them. the engagement of stakeholders, including students, faculty, and administrators, is critical for the successful implementation of circular economy practices in universities. however, there needs to be more focus on stakeholder engagement in the available literature. 2.4 circular economy – present and future scenario the circular economy is a newer concept and not so known till now to most people. most people are still caught in the linear sustainability economy. the circular economy (ce) model considers a reduction in the negative impact on the environment, thus moving away from the traditional linear business model, where the final product is value creation after reaching its highest consumption point. in the ce, the main goal is to enhance the product's life span, create goods with a long-life cycle and focus on services rather than products (figure 1). the focus should be on the change management to shift from a linear to a circular economy. the adkari model (figure 2) is a perfect application for this chance management, as european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6821 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 4 discussed below. the circular economy has primarily three pillars shown in the figure, and the fourth can use innovations through r&d to achieve the other three (baars et al., 2021; iyer et al., 2020). figure 1. innovations and r&d source: authors’ elaboration figure 2. the adkari model source: authors’ elaboration 3. the adkari model 3.1 awareness of circular economy the circular economy is a concept that aims to promote sustainability by reducing waste and maximizing the use of resources. awareness of circular economy can be looked at from different levels, including individual, community, organizational, industrial or national level, and humanitarian levels. at the individual level, awareness of the circular economy involves understanding the importance of reducing waste and adopting sustainable practices in daily life, such as recycling, composting, and reducing energy consumption. it also involves promoting the idea of a circular economy to others, such as family and friends, to increase awareness and encourage the adoption of sustainable practices. at the community level, awareness of circular economy involves promoting sustainable practices and adopting circular economy principles in european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6821 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 5 local communities. this includes encouraging local businesses to adopt sustainable practices, supporting local recycling programs, and promoting the use of locally sourced products to reduce waste and promote sustainability. at the organizational level, awareness of circular economy involves promoting sustainable practices and using circular economy principles in organizations and businesses. this includes implementing sustainable supply chain practices, reducing waste in production processes, and promoting using renewable energy sources. at the industrial or national level, awareness of circular economy involves promoting the adoption of circular economy principles in industries and at the national level. this includes promoting sustainable manufacturing practices, reducing waste in production processes, and using renewable energy sources to reduce carbon emissions. at the humanitarian level, awareness of circular economy involves promoting sustainable practices in developing countries and using circular economy principles in humanitarian efforts. this includes promoting sustainable agriculture practices, reducing waste in refugee camps, and using renewable energy sources in humanitarian aid efforts. in summary, awareness of circular economy can be promoted at different levels, including individual, community, organizational, industrial or national, and humanitarian levels. this involves promoting sustainable practices, reducing waste, and using renewable energy sources to promote sustainability and reduce environmental degradation (mukwenda et al., 2019). 3.2 desire for circular economy the desire for a circular economy can be driven by various factors, such as communication, risks involvement, benefits, building momentum, and addressing fears. effective communication is essential in creating a desire for a circular economy. communication efforts should emphasize the importance of sustainability and the benefits of a circular economy in reducing waste and promoting the efficient use of resources. communication can be achieved through different channels, such as social media, advertising, public relations, and education programs. involving stakeholders, such as businesses, governments, and communities, in the circular economy process can help create a desire for the circular economy. by involving stakeholders in the process, they will understand the risks of not adopting sustainable practices and the benefits of a circular economy. communicating the benefits of a circular economy can create a desire for it. the benefits include reducing waste, conserving natural resources, creating jobs, and reducing greenhouse gas emissions. these benefits positively impact the environment, economy, and society (kirchherr et al., 2019). building momentum is important in creating a desire for a circular economy. this can be achieved by creating partnerships, collaborations, and alliances. the momentum created can drive change and inspire others to adopt sustainable practices. addressing fears related to a circular economy can create a desire for it. some fears include the loss of jobs, the cost of implementing sustainable practices, and difficulty changing consumer behaviour. addressing these fears can help stakeholders understand that a circular economy can create new jobs, save costs in the long run, and that change is possible. by doing so, stakeholders will understand the importance of adopting sustainable practices and be motivated to promote a circular economy (rodriguez, 2020). 3.3 knowledge of circular economy knowledge is the major contributor to ce successful implementation, and for this, the participants need to acquire technical skills, technology know-how, team dynamics skills, project management skills, collaborate with others to share learnings and within the decided time frame. knowledge of circular economy requires acquiring technical skills and technology competency. technical skills refer to using tools, machinery, and other equipment to perform specific tasks. in the context of a circular economy, technical skills are required to design products that can be easily recycled, repaired, or reused. technical skills are also needed in waste management, recycling, and upcycling processes (kirchherr et al., 2019). technology competency refers to the knowledge and ability to use technology to achieve specific goals. in the context of a circular economy, technology competency is essential in developing and implementing innovative technologies that support circular economy principles. this includes using digital platforms to facilitate the exchange of resources and materials, developing smart waste management systems, and using renewable energy sources. technical skills and technology competency can be acquired through various means, such as training programs, workshops, and educational courses. these programs can help individuals and organizations understand the principles of circular economy, learn about sustainable practices, and gain technical skills and technology competency. in addition, collaboration with other stakeholders can also help in acquiring technical skills and technology competency. partnerships with technology companies, research institutions, and other organizations can provide access to the latest technologies and knowledge supporting circular economy practices. by doing so, stakeholders can design products that support circular economy principles, implement sustainable practices, and european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6821 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 6 create innovative solutions that promote a circular economy. group dynamics refer to how people interact and work together in a group setting. in a circular economy, group dynamics promote stakeholder collaboration, communication, and teamwork. this includes engaging stakeholders from different sectors and disciplines to work together towards common goals, sharing ideas and perspectives, and building trust and relationships. project management is also crucial in implementing circular economy practices. this involves setting clear goals, timelines, and budgets and identifying and managing risks and stakeholders. effective project management ensures that circular economy initiatives are implemented efficiently and effectively. shared learnings are also important in promoting knowledge of the circular economy. this involves sharing best practices, successes, and challenges among stakeholders. by learning from each other, stakeholders can identify opportunities for improvement and develop more effective circular economy strategies. finally, a clear time frame is essential in implementing circular economy practices. this involves setting realistic timelines and milestones, monitoring progress and adjusting strategies. a clear time frame ensures that circular economy initiatives are implemented promptly and effectively (stacy et al., 2021). 3.4 ability to implement circular economy circular economy is an economic system that aims to eliminate waste and promote the continual use and regeneration of resources. to implement circular economy, a formulated framework is needed to establish the principles and guidelines for the process. a strategy is also necessary to identify the areas where circular economy can be implemented, such as product design, resource management, and waste reduction. this strategy should be flexible to adapt to changing circumstances and evolving technologies. training is crucial to ensure that all stakeholders, including employees, suppliers, and customers, understand the principles and practices of the circular economy. transparency is also essential to build trust and accountability among all parties involved. finally, rework processes are necessary to ensure that any waste generated during the production or consumption cycle is reused or recycled. this can include repurposing materials, repairing products, or recycling waste back into the production process. by adopting this approach, we can promote sustainable and responsible resource use and create a more resilient and equitable economy (kachian et al., 2018). 3.5 reinforcement for circular economy change agents or leaders are individuals or groups who advocate for and initiate change within an organization or community. they can help promote circular economy's principles and encourage others to adopt sustainable practices. by providing leadership and guidance, change agents can help to reinforce the importance of the circular economy and ensure that it is integrated into the organization's culture and operations. learning from mistakes is also an important aspect of reinforcement. when mistakes are made, it provides an opportunity to learn and improve. by analyzing the causes of mistakes and identifying ways to prevent them in the future, organizations can strengthen their commitment to circular economy and reinforce the importance of sustainable practices. sharing experiences is another way to reinforce circular economy. organizations can inspire others to adopt sustainable practices by sharing success stories and best practices. this can be done through case studies, workshops, and other forms of communication. sharing experiences can also help to build a sense of community and collaboration around the principles of circular economy. in summary, reinforcement is critical for successfully implementing the circular economy. by leveraging change agents/leaders, learning from mistakes, and sharing experiences, organizations can strengthen their commitment to sustainability and promote the continual use and regeneration of resources. (khan et al., 2019). 3.6 feedback and continuous improvement through innovations the last step that has been suggested and added by the researchers as improvement in terms of innovation is the continuous development using r&d. the feedback can be given based on the measurement using the ce index, which is introduced below whether the implementation is going as expected or fine-tuning is required to set it on track. the innovations will start the whole cycle again, spreading awareness to measure the effectiveness of implementation feedback and continuous improvement are essential for successfully implementing a continuous loop in a circular economy (kirchherr et al., 2019). this involves using measurement, feedback, fine-tuning, and innovation to create a more sustainable and efficient system. measurement is a crucial part of the continuous loop process. it involves using an index, such as a sustainability index, to measure the organisation's activities' environmental, social, and economic impacts. by measuring european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6821 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 7 these impacts, the organization can identify areas for improvement and track progress over time. feedback is another essential component of the continuous loop process. it involves collecting feedback from stakeholders, such as customers, employees, and suppliers, on the organization's sustainability efforts. this feedback can be used to identify improvement areas and develop new strategies to enhance sustainability. fine-tuning involves small adjustments to the organization's processes and practices to improve sustainability. this can involve optimizing supply chain efficiency, reducing waste, and reducing energy consumption. by fine-tuning these processes, the organization can reduce its environmental footprint and improve its overall sustainability. innovation is also important for continuous improvement in a circular economy. this involves developing new technologies, products, and services that promote sustainability and reduce waste. innovation can help to create new markets and opportunities for the organization, while also contributing to more sustainable outcomes. (jia et al., 2020). 3.7 circular economy index a circular economy index is a tool that measures an organization's progress towards implementing circular economy principles. this index typically includes a set of indicators that assess the organization's performance in areas such as resource efficiency, waste reduction, and product design. a circular economy index could be developed for uae universities to measure their progress towards implementing circular economy principles. resource efficiency measures the university's use of natural resources such as water, energy, and materials. this could include tracking energy consumption, water usage, and waste generation. waste reduction measures the university's efforts to reduce waste and increase recycling. this could include tracking the amount of waste generated, the percentage of recycled waste, and implementing waste reduction strategies such as composting and reusing materials. product design measures the university's efforts to design products and services that promote circularity. this could include tracking the use of sustainable materials, implementing product design strategies such as modular design, and developing new circular products and services. stakeholder engagement measures the university's efforts to engage stakeholders (such as students, faculty, and staff) in circular economy principles. this could include tracking the implementation of circular economy education programs, using circular economy messaging in marketing and communications, and developing circular economy partnerships with local businesses and organizations. this can help to promote sustainable practices and support the transition towards a more circular economy in the uae (de oliveira et al., 2021). 4. alternative solutions to problems by leveraging the prospects uae universities can contribute to the ce prospects by leading a lot of initiatives. some of the above-illustrated initiatives are already work in progress, and some are suggestions from the industry to the sector to contribute more (figure 3). figure 3. education sector in uae european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6821 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 8 source: author’s elaboration 4.1 curriculum design for the circular economy curriculum design for the circular economy is the process of developing educational programs and courses that equip students with the knowledge, skills, and values needed to understand and apply circular economy principles in their future careers (kleba et al., 2020). i. identify learning objectives: this step involves determining what knowledge and skills students should acquire through the curriculum. learning objectives should be specific, measurable, achievable, relevant, and time-bound. ii. select relevant topics: this step involves selecting topics that are relevant to the circular economy, such as resource efficiency, waste reduction, product design, and sustainable business practices. topics should be aligned with the learning objectives. iii. develop learning activities: this step involves creating learning activities that engage students and enable them to apply circular economy principles. activities could include case studies, problem-based learning, and group projects. iv. choose relevant teaching methods: this step involves selecting teaching methods that are appropriate for the learning objectives and activities. teaching methods could include lectures, discussions, and experiential learning. v. incorporate assessment strategies: this step involves developing assessment strategies that measure student learning and achievement of the learning objectives. assessment strategies could include exams, essays, and presentations. vi. integrate technology: this step involves integrating technology into the curriculum to enhance student learning. the technology could be used for online learning, virtual simulations, and collaborative work. vii. review and revise: this step involves reviewing and revising the curriculum to ensure it is up-to-date, relevant, and aligned with the learning objectives. curriculum design for the circular economy should be interdisciplinary and incorporate a range of subjects, including engineering, business, environmental science, and social sciences. by integrating circular economy principles into the curriculum, students can develop the knowledge and skills to promote sustainable practices and support the transition towards a more circular economy (nunes et al., 2018). 4.3 research & development, collaborations & innovations research and development (r&d) and collaborations & innovations can be vital in ensuring a circular economy in uae universities. uae universities can invest in r&d to develop sustainable technologies that promote the circular economy. for example, the masdar institute of science and technology or khalifa university in abu dhabi has developed renewable energy technologies such as solar panels and wind turbines. uae universities can collaborate with industry partners to develop innovative solutions that promote the circular economy (kirchherr et al., 2019). for example, the dubai electricity and water authority (dewa) has partnered with the american university of dubai to develop a solar-powered air education sector in uae people involvement ce index using smart apps curriculum design campus application research development, innovation & collaboration emerging technology european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6821 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 9 conditioning system. uae universities can implement circular business models that promote product reuse, repair, and recycling. for example, the dubai future accelerators program has partnered with universities to develop circular business models for waste management. uae universities can educate students and raise awareness about the importance of the circular economy. for example, the university of dubai has implemented a sustainability-focused curriculum that teaches students about sustainable business practices and the circular economy. uae universities can provide funding for circular economy projects that promote sustainable practices. for example, the abu dhabi sustainability week funds research and development projects promoting sustainability and circular economy. r&d and, collaborations & innovations can ensure a circular economy in uae universities by developing sustainable technologies, collaborating with industry partners, implementing circular business models, educating students, and providing funding for circular economy projects. by promoting a circular economy, uae universities can contribute to a sustainable future for the uae and the world. (brown et al., 2019). 4.4 emerging technology usage emerging technology usage can play a significant role in supporting the circular economy in uae universities. iot is a network of devices connected to the internet that can communicate with each other. in universities, iot technology can monitor and optimize resource consumption, such as energy and water usage. this can help universities reduce waste and promote a circular economy (kirchherr et al., 2019). 3d printing is a technology that allows objects to be created by adding layers of material. in universities, 3d printing can create objects from recycled materials, reducing waste and promoting a circular economy. blockchain is a decentralized digital ledger that records transactions securely and transparently. in universities, blockchain technology can track the provenance of materials, ensuring that they are sustainably sourced and promoting a circular economy. ai is the use of computer systems to perform tasks that would normally require human intelligence. in universities, ai can be used to optimize resource consumption, predict maintenance needs, and identify opportunities for waste reduction, promoting a circular economy. ar is a technology that overlays digital information into the real world. in universities, ar can be used to create immersive educational experiences that teach students about sustainable practices and the circular economy. emerging technology usage can support uae universities' circular economy by optimising resources, reducing waste, promoting sustainable sourcing, and creating immersive educational experiences. by leveraging the power of technology, uae universities can contribute to a sustainable future for the uae and the world. (jose et al., 2020). 4.5 people involvement people's involvement is crucial for enhancing circular economy in uae universities. people's involvement is necessary to encourage participation in circular economy initiatives. students, faculty, and staff need to be engaged in the planning and implementing of circular economy initiatives, and their feedback needs to be considered. people's involvement is necessary to implement behavioural changes that support circular economy initiatives. students, faculty, and staff must be educated on sustainable practices and provided with the necessary tools and resources to implement them. people's involvement is necessary to encourage innovation in circular economy initiatives (kirchherr et al., 2019). students, faculty, and staff can contribute to developing new technologies, processes, and practices that support circular economy principles. people involvement is necessary to promote collaboration between different departments and stakeholders in the university. circular economy initiatives require the collaboration of various departments, including facilities management, procurement, and sustainability. people's involvement is necessary to enhance the circular economy in uae universities. by promoting awareness, encouraging participation, implementing behavioural changes, encouraging innovation, and promoting collaboration, uae universities can contribute to a sustainable future for the uae and the world. the implementation and success of the ce project depend on the people involved and their wholehearted participation. first, the people need to convince of the need for the ce requirements, importance and benefits, which proper training and workshops on the topics can augment. the people's involvement can be consolidated by introducing extrinsic and intrinsic rewards to motivate them (bonato et al., 2018). 4.5 circular economy using smart app european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6821 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 10 the ce index is a tool that measures the extent to which circular economy principles are being implemented in an organization. a smart application can collect data on circular economy practices in uae universities. this can help identify areas where improvements can be made and track progress over time. using a smart application to track ce index, uae universities can increase awareness of circular economy principles among students, faculty, and staff. this can encourage greater participation and a culture of sustainability (kirchherr et al., 2019). a smart application can help identify areas where innovation can be applied to improve circular economy practices. this can lead to new technologies, processes, and practices supporting circular economy principles. using a smart application to track ce index can give uae universities a clear picture of their progress towards circular economy goals. this can help identify areas where improvements can be made and track progress over time. a smart application can facilitate collaboration between different departments and stakeholders in uae universities. uae universities can work together to improve their circular economy practices by providing a platform for sharing data and ideas. ce index using a smart application, can boost circular economy in uae universities by improving data collection, increasing awareness, encouraging innovation, monitoring progress, and facilitating collaboration. using such a tool, uae universities can contribute to a sustainable future for the uae and the world. the ce index development can be a major contribution to the area of existing knowledge and help in measuring the organization’s current initiatives on a standardized scale compared to the other industrial initiative and can make suggestions to implement more projects. the index will induce competitiveness among the various organizations and help the cause of csr and ce (figure 4) (upadhyay et al., 2021). figure 4. sustainable development goals (sdgs) source: author’s elaboration european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6821 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 11 table 1. sustainability development goals1 (sdgs) sdg no. description of how the uae education sector can develop this sdg 1. eradicate poverty by education, which uae education sector can contribute 2. make learners employable and as entrepreneurs 3. train people on well-being and health and spread awareness and run research projects. 4. standardized common circular economy curriculum 5. gender equality exemplary practices at the uae education sector organizations 6. awareness and experimental learning at the campus 7. implement projects on campus & collaborate with industry, design curriculum for these projects 8. uae education can develop research, encourage innovativeness in renewable energy, tie-up with industry to partner more projects 9. uae education is recognized as economic contributor as education hub for the middle east and the many collaborations with the industry, is leading the way forward 10. uae education lead research & development initiatives and implement innovations that will contribute to ce and to build infrastructure for such future initiatives. 11. uae education can spread awareness and initiatives for building smart cities and communities like dubai and abu dhabi. 12. the collaboration with the industry the uae education sector can lead initiatives towards responsible consumption and production of goods, products, services to ce and away from the linear economy. 13. the uae education can build ecological, economical curriculum to spread awareness of the human action on nature and the subsequent climate changes. 14. the uae education can spread awareness of the impact of human activities affecting ocean lives and actions to avoid such impact. 15. the uae education can spread awareness of the impact of human activities affecting lives on land and actions to avoid such impact. 16. institutes like unep, who should educate the people in collaboration with government like uae, involving the education sector to spread peace & justice. 17. the uae education collaborates with the public and private companies to achieve ce goals leading to sustainability in business. source: author’s elaboration the sdgs of the un shown in table 1 can be extended to be the circular economy initiatives for the uae education sector. the above table shows the contribution of the uae education sector towards the sdgs, making them ce goals that can be reworked as circular economy development goals (cedgs) in the future (rodriguez-anton et al., 2019). the circular economy of uae universities can contribute to several sustainable development goals (sdgs) set by the united 1 https://sdgs.un.org/ european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6821 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 12 nations. the circular economy of uae universities can promote responsible consumption and production by reducing waste and promoting the reuse and recycling of materials (sdg 12). the circular economy of uae universities can contribute to climate action by reducing greenhouse gas emissions through renewable energy, energy-efficient technologies, and sustainable practices (sdg 13climate action). the circular economy of uae universities can provide quality education by integrating circular economy principles and practices into the curriculum, providing students with the knowledge and skills needed to build a sustainable future (sdg 4quality education). the circular economy of uae universities can promote innovation and infrastructure development by encouraging the adoption of new technologies and processes that support circular economy principles (sdg 9industry, innovation, and infrastructure). the circular economy of uae universities can contribute to sustainable cities and communities by promoting renewable energy, reducing waste, and encouraging sustainable practices (sdg 11sustainable cities and communities). the circular economy of uae universities can foster partnerships by collaborating with local communities, businesses, and government agencies to promote sustainable practices and achieve the sdgs (sdg 17partnerships for the goals). in summary, the circular economy of uae universities can contribute to several sdgs, including responsible consumption and production, climate action, quality education, industry, innovation, infrastructure, sustainable cities and communities, and partnerships for the goals (kirchherr et al., 2019). 5. barriers that need to be overcome for successful ce projects implementation while implementing circular economy projects in uae universities can bring numerous benefits, several barriers must be addressed to ensure their success. one of the primary barriers to implementing circular economy projects in uae universities is a need for more awareness among stakeholders about the benefits of circular economy. without a clear understanding of the principles and advantages of the circular economy, stakeholders may not see the value in investing in such projects (kirchherr et al., 2019). the limited budget is another significant barrier to implementing circular economy projects in uae universities. circular economy projects often require significant investment in new technologies and processes, which may not be feasible for universities with limited financial resources. resistance to change is another barrier to implementing circular economy projects. some stakeholders may be resistant to change and unwilling to adopt new practices or technologies that support circular economy principles. implementing circular economy projects requires specialized expertise and knowledge. uae universities may need to gain in-house expertise, making it challenging to implement circular economy projects successfully. implementing circular economy projects in uae universities requires collaboration between stakeholders, including faculty, staff, and students. with collaboration, it can be easier to achieve the desired outcomes. to overcome these barriers, uae universities must invest in awareness-raising campaigns, allocate adequate budgets, provide training and capacity building to staff and students, and foster a culture of collaboration and innovation. by addressing these barriers, uae universities can successfully implement circular economy projects and contribute to a more sustainable future. the united nations should recognize the ce development programs; the un support will force governments to follow suit. the uae government must announce policies that exempt and give concessions to organizations developing ce initiatives. the individual mindset can be shifted by spreading awareness of employee benefits, importance, and individual rewards. the employees' participation in implementing these ce projects will accelerate and ensure their success. the major barriers are culture, lack of knowledge, lack of resources, and lack of priority for organizations to implement ce projects. the uae education sector should navigate these barriers successfully (hart et al., 2019). 6. discussion and conclusion the objectives have been met and established. the sdgs of the un can be extended to be the circular economy initiatives in the various sectors, as the study has shown for the uae education sector. the objective of suggesting ce initiatives to be implemented by the uae education sector has been met. the main contribution has been the management change perspective used to ensure the ce initiatives' successful implementation. the suggestions and recommendations will help managers successfully implement ce initiatives with government policy support. the contribution of this study is the addition of innovation and a continuous feedback loop added to the adkar management change model. quantitative and qualitative studies can confirm these findings in future research and use other change management models to spearhead these european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6821 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 13 ce initiatives in the education sector and other sectors. "the emerging circular economy trends of uae universities" research makes several theoretical contributions to the field of circular economy. a. firstly, the research contributes to understanding the adoption of circular economy practices in the higher education sector. the study explores uae universities' current circular economy practices, which provides valuable insights into the strategies universities can adopt to reduce their environmental impact and achieve sustainability goals. secondly, the research contributes to the literature on the circular economy by identifying emerging trends in the circular economy practices of uae universities. by analyzing the data collected from the survey, the research identifies several emerging trends universities can adopt to promote circular economy practices. these emerging trends include the use of renewable energy, the development of circular business models, and the adoption of sustainable procurement practices. thirdly, the research contributes to developing a circular economy framework for the higher education sector. the study proposes a framework universities can use to guide their circular economy practices. the framework includes three key components: circular design and production, circular consumption and waste management, and circular business models and collaborations. overall, "the emerging circular economy trends of uae universities" research provides a valuable contribution to understanding circular economy practices in the higher education sector, identifies emerging trends, and proposes a framework universities can use to guide their circular economy practices. b. firstly, the research provides practical implications for universities to adopt circular economy practices. the study identifies several emerging trends, such as the use of renewable energy, sustainable procurement practices, and circular business models. universities can use this information to develop strategies to reduce their environmental impact, promote sustainability, and achieve sustainability goals. secondly, the research has policy implications for policymakers promoting circular economy practices in higher education. the study proposes a framework that policymakers can use to guide universities in adopting circular economy practices. policymakers can use this framework to develop policies and regulations encouraging universities to adopt circular economy practices. thirdly, the research has practical and policy implications for the wider community. by adopting circular economy practices, universities can become leaders in promoting sustainable practices and reducing their environmental impact. this can inspire other businesses and institutions to adopt circular economy practices, leading to wider adoption of sustainable practices in the community. overall, the research "the emerging circular economy trends of uae universities" has practical and policy implications for universities, policymakers, and the wider community in promoting circular economy practices and achieving sustainability goals. 8. recommendations for future research further empirical research is needed to assess the effectiveness of circular economy practices in uae universities. this research should focus on the impact of these practices on sustainability and resource efficiency. there is a need for more indepth research on the challenges associated with implementing circular economy practices in uae universities. this research should identify the barriers to adoption and the strategies for overcoming them. future research should focus on stakeholder engagement, including the attitudes and perceptions of students, faculty, and administrators towards circular economy practices. this research should also explore the role of stakeholder engagement in the successful implementation of these practices. comparative analysis of circular economy practices in uae universities with universities in other countries can provide insights into the best practices and strategies for implementation. future research should focus on the long-term impact of circular economy practices in uae universities, including their impact on sustainability and resource efficiency. this can help universities assess their sustainability efforts' effectiveness and make adjustments as needed. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/6821 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 14 references baars, j., domenech, t., bleischwitz, r., melin, h. e., & heidrich, o. 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(2020). hyper-consumption to circular economy in the united arab emirates: discarding the disposable and cherishing the valuable. socioeconomic challenges, 4(3), 33-45. https://doi.org/10.21272/sec.4(3).3345.2020 mendoza, j. m. f., gallego-schmid, a., & azapagic, a. (2019). a methodological framework for the implementation of circular economy thinking in higher education institutions: towards sustainable campus management. journal of cleaner production, 226, 831-844. mendoza, j. m. f., gallego-schmid, a., & azapagic, a. (2019). building a business case for implementation of a circular economy in higher education institutions. journal of cleaner production, 220, 553-567. mukwenda, h. t. (2019). adaptation of the adkar model to the management of the higher education student loan scheme in uganda. makerere journal of higher education, 11(1), 45-57. nunes, b. t., pollard, s. j., burgess, p. j., ellis, g., de los rios, i. c., & charnley, f. (2018). university contributions to the circular economy: professing the hidden curriculum. sustainability, 10(8), 2719. https://doi.org/10.3390/su10082719 rodriguez vazquez, s. (2020). applying the adkar model to boost web accessibility in higher education institutions. in 3rd swiss conference on barrier-free communication (bfc 2020). rodriguez-anton, j. m., rubio-andrada, l., celemín-pedroche, m. s., & alonso-almeida, m. d. m. (2019). analysis of the relations between circular economy and sustainable development goals. international journal of sustainable development & world ecology, 26(8), 708-720. https://doi.org/10.1080/13504509.2019.1666754 stacy, m., gross, g., & adams, l. (2021). applying organizational change theory to address the long-standing problem of harassment in medical education. teaching and learning in medicine, 1-9. doi: 10.1080/10401334.2021.1954523. upadhyay, a., mukhuty, s., kumar, v., & kazancoglu, y. (2021). blockchain technology and the circular economy: implications for sustainability and social responsibility. journal of cleaner production, 293, 126130. https://doi.org/10.1016/j.jclepro.2021.126130 5067-article text-16398-2-11-20201216 http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5067 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 84 artificial intelligence to fight covid-19 outbreak impact: an overview davide calandra1 and matteo favareto1 1 department of management, university of turin, turin, italy corresponding author: matteo favareto – matteo.favareto@unito.it received: 27/08/2020 revised: 18/11/2020 accepted for publication: 18/11/2020 published: 18/12/2020 abstract artificial intelligence (ai) is showing its strength worldwide in the healthcare sector. today, in the aftermath of the covid-19 pandemic, the help of technology appears to be relevant to keep the increase in new infections stable and help medical staff in treatment. therefore, this paper aims to investigate how ai can be employed against covid-19 outbreak. using a multiple case study approach, researchers find out the following insights. first, ai could be used for drugs discovery and knowledge sharing, tracking and prediction, clinical decision making and diagnosis, social distancing and medical chatbots. second, this paper provides an in-depth analysis of international best practice for tracking contacts and social distance applications. third, ai technologies could have a transversal impact, also focusing on prevention strategies as a new corporate social responsibility vein. in the end, this paper has theoretical and managerial implications, too. on the theoretical side, we contribute to the extensive discussion about ai and healthcare considering covid-19 outbreak. on the practical side, we provide medical personnel and policymakers with a tool to understand artificial intelligence and focus investment choices in the practical applications analysed. keywords: artificial intelligence; ai applications; covid-19; coronavirus; health impact; prevention strategies 1. introduction the novel coronavirus disease (covid-19) has created tremendous chaos around the world, affecting people’s lives and causing many deaths. the first cases were detected in wuhan, china, in december 2019, and now it has been spread to almost every country (nguyen, 2020). with this growing crisis, companies and researchers over the world are looking for the ways to address the challenges of this virus considering companies and health issue, to mitigate the spread and develop a cure for this disease (secinaro et al., 2020). in this baffling battle, science, and artificial intelligence (ai) technologies are playing a vital role (kumar et al., 2020). ai commonly refers to the computational technologies that mimic or simulate processes supported with human intelligence, for instance, reasoning, deep learning, adaptation, interaction, and sensory understanding (tran et al., 2019). these are technologies that can perform a task that usually requires human perception and judgement (hamid, 2016). these techniques have an interdisciplinary approach and can be applied to different fields, such as medicine and health. ai has been used in the field of medicine since as early as the 1950s when physicians made the first attempts to improve their diagnoses using computer-aided programs (frankish & ramsey, 2014). the interest and advances in medical ai applications have surged in recent years, thanks to the substantially enhanced computing power of modern computers and the vast amount of digital data now available for collection and utilisation (tran et al., 2019). ai is gradually changing medical practice. there are several applications of ai in medicine, and they can be used in a variety of medical fields such as: clinical, diagnostical, rehabilitative, surgical and predictive (jiang et al., 2017; hamid, 2016). as suggested by shi et al. (2020), ai could play an essential role in covid-19 increasing efficiency during working activities and for disease diagnosis, tracking contacts and prognosis. despite the importance of this field, no studies reviews and discusses the role of ai in tracking services. therefore, this paper aims to investigate how ai can be employed against covid-19 outbreak, answering to the following questions: what are companies and labs, around the world, doing to fight covid-19 outbreak? what could be the central role of ai against covid-19? to answer these challenging questions, researchers use a multiple case study theoretical and practical approach to developing the topic. we present the main fields where ai is currently being used and some organisations that are involved in those areas of research. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5067 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 86 finally, the paper is organised as follows. section 2 will assess an in-depth literature review on the role of ai against covid-19 outbreak. section 3 elaborates on the methodology. section 4 presents the main results obtained. finally, section 5 will discuss and conclude the paper with future implication for research. 2. literature review 2.1 covid-19 and the need for ai technologies to support the research naudé (2020); vaishya et al. (2020); yassine & shan (2020) proposed studies in which they analysed how ai technologies can be used in the fight against covid-19 outbreak. as stated by yassine & shan (2020), artificial intelligence is one of the means or avenues to understand the virus and develop preventative and control measures. it includes but is not limited to the usage of mathematical modelling to understand virus transmission, structural biology to determine virus structure and develop vaccines, computational biology to understand virus evolution, as well as docking studies to screen for drugs and inhibitors. ai has the potential to help in all the stages of healthcare, from syndromic surveillance through to rapid diagnosis tests, and faster drug development (naudé, 2020; vaishya et al., 2020; yassine & shan 2020). according to kumar et al. (2020), ai technologies are fundamental tools for tracking and monitoring covid-19 spread around the world. these technologies are helping in diagnosing the virus and in processing the healthcare claims. tracking the spread of covid-19 can be a piece of essential information for public health authorities to design, plan, and deal with the pandemic (kumar et al., 2020). as stated by lalmuanawma et al. (2020), contact tracing is a crucial aspect to prevent a wider spread of covid19. the process of contact tracing is to identify and manage people who are recently exposed to an infected covid-19 patient to avoid further spread. in this regard, various infected countries come up with a digital contact tracing process with the mobile application, utilising different technologies. all these digital apps are designed to collect individual personal data, which will be analysed by ai tools to trace a person who is vulnerable to the novel virus due to their recent contacted chain (lalmuanawma et al., 2020). pham et al. (2020); bragazzi et al. (2020) dealt with how big data and artificial intelligence can help better manage the covid-19 pandemic. thanks to the latest advancements in the field of computational techniques and information and communication technologies (icts), artificial intelligence and big data http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5067 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 87 can help handle the vast, unprecedented amount of data derived from public health surveillance, real-time epidemic outbreaks monitoring, trend now-casting/forecasting, regular situation briefing and updating from governmental institutions and organisms, and health resources utilisation information (bragazzi et al., 2020). according to pham et al. (2020) in the context of covid-19, big data refers to the patient care data such as physician notes, x-ray reports, case history, list of doctors and nurses, and information of outbreak areas. same authors stated that big data potentially provide several promising solutions to help combat covid-19 epidemic. by combining with ai analytics, big data help to understand the covid19 in terms of outbreak tracking, virus structure, disease treatment, and vaccine manufacturing. divya et al. (2018); ahuja et al. (2020) analysed another relevant topic linked with ai and covid-19: ai-powered chatbots and virtual health assistants. while ai may assist in the discovery of novel drugs and vaccines, it can also help ease the stress placed on medical hotlines. call centres nationwide that are dealing with the covid-19 pandemic are notoriously understaffed. artificial intelligence has the potential to revolutionise public communications and deliver alternative methods to dissipate public information. ai-powered chatbots have been used with success in clinical scenarios and can advise many more people than a staffed call centre. in conclusion, ai-powered chatbots and virtual health assistants are fostering social distancing and streamlining the entire clinical process (divya et al. 2018; ahuja et al., 2020). according to mahomed (2020); sun & zhai (2020); nguyen et al. (2020), ai can be used to control social distancing. as stated by sun & zhai (2020); mahomed (2020), social distancing avoids direct contacts among people and reduces the potential cross-transmission of virus-carrying droplets from human respiration. by nguyen et al. (2020) ai technologies play a crucial role in social distancing control. for instance, they allow public place monitoring and can detect, recognise, and identify whether people comply with social distancing requirements or not. zhavoronkov et al. (2020); mohanty et al. (2020) dealt with the topic of ai applications to find out new drugs and treatments. ai can be used to initiate drug discovery and fast-track drug development. these technologies have the potential to improve the drug discovery, planning, treatment, and reported outcomes of the covid-19 patient, being evidence-based medical tools. according to mohanty et al. (2020), ai can help, as well, in drug repurposing process. drug “repurposing” refers to the use of existing approved drugs for the treatment of a never-considered therapeutic indication, in this case, covid-19. the aihttp://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5067 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 88 based drug repurposing is a cheaper, faster, and practical approach and can minimise the failures in clinical trials (mohanty et al., 2020; xue et al., 2018). table 1 below shows the list of related work includes in the literature review section. table 1. list of related work references field • naudé (2020); vaishya et al. (2020); yassine & shan (2020) • kumar et al. (2020); lalmuanawma et al. (2020) ai applications in the fight against covid-19 ai technologies for monitoring and tracking covid-19 spread • pham et al. (2020); bragazzi et al. (2020) ai and big data for covid-19 fighting • divya et al. (2018); ahuja et al. (2020) • mahomed (2020); sun & zhai (2020); nguyen et al. (2020) • zhavoronkov et al. (2020); mohanty et al. (2020) ai-powered chatbots and virtual health assistants to manage medical call centers and ease public tension ai for social distancing control ai for drugs discovery or repurposing against covid-19 source: authors’ elaboration 3. methodology to implement the analysis, we employed a case study approach to investigate ai applications against covid-19 (mccutcheon & meredith, 1993). for each topic under discussion will be described theoretical items and then practical examples of companies that are currently involved in coronavirus fight. because of the virus and the crucial role of ai, nowadays scientific community and companies are focusing more and more on the topic. there are so many firms and labs that are studying the virus evolution to find out a remedy. for this reason, it would have been difficult to describe all of them. for the best of our knowledge, we chose only some companies, and we described strategies and contribution to fight back against covid-19 spread. as stated before, we decided to employ a case study approach. according to yin (2014), case studies can be defined as qualitative research methods that support researchers when "a how or why the question is being asked about a contemporary set of events over which the investigator has little or no control". besides, qualitative methodologies can usually be better understood by practitioners in leading to managerial practices (dal mas et al., 2019), helping to bridge the gap between academia and practice http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5067 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 89 (massaro et al., 2018). additionally, according to crowe et al. (2011), the collective case study involves studying multiple cases simultaneously or sequentially in an attempt to generate a still broader appreciation of a particular issue. as suggested by granello & wheaton (2004), to collect data, we used different types of online sources: (1) corporate document and materials; (2) scientific papers published in peer-review journals; (3) youtube interview of the founders; (4) newspaper articles. to answer the research questions of this paper, the authors use some study's limitation. furthermore, all the sources extracted should: • deal with ai in healthcare; • link with covid-19 pandemic topic; • describe theoretical and practical outputs in terms of covid-19 response. besides, we searched for papers that use a case study methodology to develop the analysis. using the criteria mentioned above, we used scopus and google scholar as databases. thus, the first one is a broad scope database essential for peer-reviewed and conference proceedings analysis (mongeon & paul-hus, 2016). finally, google scholar is an international open-access database that collects information on academic sources in different fields (falagas et al., 2007). the analysis was implemented using as keywords "artificial intelligence" and "covid-19" or "coronavirus" and following the objective of the article. among the search criteria, we focused on english items that were inherent to the searched object. overall we got 155 documents divided as follows. to describe companies’ projects, we consulted 20 corporate documents published on companies’ official websites. we analysed 55 scientific papers published in peer-review journals, and we watched 15 youtube interviews of the companies’ founders to understand, in a better way, the documents we got and obtaining updates on the topic. besides, we referred, also, to 65 newspaper articles published by international journals, in different countries, and dealing with the specific topic we analysed. figure 1 below shows the methodology used to carry out the analysis. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5067 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 90 figure 1. characteristics of the analysis source: authors’ elaboration 4. results and discussion ai tools and technologies can be employed to support efforts of policy-makers, the medical community, and society at large to manage every stage of the crisis and its aftermath: detection, prevention, response, recovery and to accelerate research (oecd; naudé, 2020). there are different areas where ai technologies can contribute to the fight against covid-19 (naudé, 2020; vaishya et al., 2020; yassine & shan, 2020): drugs discovery and knowledge sharing (1), tracking and prediction (2), clinical decision-making and diagnosis (3), social distancing control and medical chatbots (4). figure 2 shows dominant variables that have been analysed for ai against covid-19 outbreak. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5067 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 91 figure 2. dominant variables for ai against covid-19 outbreak source: authors’ elaboration 4.1 ai for drugs discovery and knowledge sharing: the deepmind and insilico medicine case studies the first application of ai to fight the coronavirus is certainly assistance to researchers to develop drugs and treatments to contain the pandemic. even long before the covid-19 outbreak, ai was used for its potential to contribute to new drugs discovery (naudé, 2020). ai technology is used in speeding up drug testing in real-time, where standard testing takes plenty of time and hence helps to accelerate this process significantly, which may not be possible by a human (vaishya et al., 2020). in the case of covid-19, several research labs and data centres have already indicated that they are recruiting ai to search for treatments for a vaccine against covid-19 (naudé, 2020). according to ledford (2020) “it is likely to be one of the biggest drug-making challenges the world has ever faced”. several companies are currently involved in this big challenge, and ai technology certainly can help to understand the virus and to accelerate medical research on drugs and treatments. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5067 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 92 this case could consider google’s deepmind with the ai-based model alphafold. alphafold system can release structure predictions of several under-studied proteins associated with sars-cov-2, the virus that causes covid-19. deepmind has used ai to predict the structure of the proteins of the virus information that could be useful in developing new drugs (naudé, 2020). us company insilico medicine represents another example. it is a biotechnology company that was able to use its integrated ai-based drug discovery pipeline to generate new drug compounds against covid19. the results revealed a novel method of developing new treatments against covid-19 while also demonstrating cost-effectiveness and time efficiency (zhavoronkov, 2020; mahomed, 2020). through the use of ai technology, the company was able to categorise thousands of molecules for potential medications in only four days, and these data were then made available for free to researchers (mahomed, 2020). also, ai techniques can support physicians to analyse the thousands of research papers published around the world on the pandemic. many promising initiatives, however, have been started to gather and share data and to train new ai models. these include the world health organization’s (who) global research on coronavirus disease database, which also provides links to other similar initiatives. one of these is the open-access data of the gisaid initiative. amongst other initiatives, perhaps the most ambitious is the joint initiative between semantic scholar, the allen institute for artificial intelligence, microsoft, facebook, and others, to make openly available the covid19 open research dataset (cord-19) which contains around 44.000 scholarly articles for data mining (naudé, 2020). 4.2 ai as an observer and predictor of the evolution of the pandemic: the bluedot case study with the help of real-time data analysis, ai can provide updated information which is helpful in the prevention of this disease. it can be used to predict the probable sites of infection, the influx of the virus, need for beds and healthcare professionals during this crisis (vaishya et al., 2020). in this sector, the contribution of the canadian company bluedot has already become remarkable. it is a global ai database company which uses outbreak risk software, combined their health and medical expertise with advanced data analytics to build solutions that track, contextualise and anticipate infectious disease risks (mahomed, 2020). bluedot predicted the outbreak of the infection at the end of 2019, issuing http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5067 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 93 a warning to its clients on 31st of december 2019, before the world health organization did so on 9th of january 2020 (naudé, 2020; kreuzhuber, 2020). bluedot uses an ai-driven algorithm that scours foreign-language news reports, animal and plant disease networks, and official proclamations to give its clients warning to avoid danger zones. bluedot's reports are then sent to public health officials in a dozen countries, airlines, and frontline hospitals where infected patients might end up. bluedot's "global early warning system" combines more than a hundred datasets with proprietary machine learning and natural processing language algorithms in 16 languages, providing an automated surveillance platform that can analyse risks of the virus spread. also, according to the information reported on the council of europe website, several covid-19 apps allow tracking and prediction of the virus spread around the world (table 2). for each country is reported: name of the application (1), main functionality (2) and the origin (3). data are updated on the 10th of june 2020. table 2. overview of covid-19 apps country name of the application main functionality origin argentina covid-19 ministerio de salud self-diagnostic governmental australia coronavirus australia quarantine enforcement governmental australia coronalert alerting governmental australia covidsafe contact tracing governmental austria stoppcorona contact tracing governmental bahrain beaware bahrain quarantine enforcement governmental brazil coronavírus sus information governmental brazil the spread project contact tracing private bulgaria virusafe contact tracing governmental canada canada covid-19 self-diagnostic governmental canada covid shield contact tracing private canada covi contact tracing private chile coronapp self-diagnostic governmental china alipay health code contact tracing private colombia coronapp colombia medical reporting governmental czech republic erouška contact tracing governmental denmark smittestopp contact tracing governmental http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5067 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 94 finland ketju contact tracing private france stopcovid contact tracing governmental france utakecare contact tracing multistakeholder france alertanoo contact tracing private georgia stop covid contact tracing governmental germany coronika contact tracing private germany our health in our hands (ohioh) contact tracing multistakeholder germany ito contact tracing multistakeholder ghana gh covid-19 tracker app na governmental greece docandu covid checker self-diagnostic multistakeholder hong kong stay home safe quarantine enforcement governmental hungary virusradar contact tracing governmental iceland rakning c-19 contact tracing governmental india test yourself goa self-diagnostic governmental india corona watch contact tracing governmental india quarantine watch quarantine enforcement governmental india mahakavach contact tracing governmental india test yourself puducherry self-diagnostic governmental india cova punjab contact tracing governmental india aarogya setu contact tracing governmental india covid-19 feedback medical reporting governmental india covid-19 quarantine monitor contact tracing governmental india gok direct kerala not covid-19 specific app governmental india trackcovid-19.org self-diagnostic private indonesia pedulilindungi contact tracing governmental iran na na governmental israel hamagen contact tracing governmental italy allertalom medical reporting governmental italy diary “digital arianna” contact tracing private italy immuni contact tracing private italy rintraccia dei contatti contact tracing private italy sm-covid-19 contact tracing private italy covidapp covid community alert contact tracing private jordan aman contact tracing governmental kuwait shlonik self-diagnostic governmental latvia apturi covid contact tracing governmental http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5067 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 95 malaysia gerak malaysia contact tracing governmental malaysia mysejahtera information governmental malaysia mytrace contact tracing governmental morocco wiqaytna contact tracing governmental mexico plan jalisco covid-19 contact tracing governmental mexico covid-19mx self-diagnostic governmental netherlands privatetracer contact tracing private north macedonia stopkorona! contact tracing governmental norway smittestopp contact tracing governmental poland kwarantanna domowa quarantine enforcement governmental poland protego contact tracing multistakeholder qatar covi information private republic of angola covid-19 ao quarantine enforcement private russia social monitoring contact tracing private saudi arabia tawakkalna (covid-19 ksa) quarantine enforcement governmental singapore tracetogether contact tracing governmental singapore safeentry contact tracing governmental south africa covi-id contact tracing governmental south korea self-isolator safety protection quarantine enforcement governmental south korea mobile self-diagnosis self-diagnostic governmental south korea self quarantine app quarantine enforcement governmental spain stop covid19 cat information governmental spain covid-19.eus contact tracing governmental spain coronamadrid medical reporting governmental sri lanka self shield quarantine enforcement governmental switzerland alertswiss not covid-19 specific app governmental switzerland swisscovid contact tracing multistakeholder thailand morchana contact tracing governmental turkey korona önlem self-diagnostic governmental ukraine action not covid-19 specific app governmental united arab emirates tawakkalna (covid-19 ksa) quarantine enforcement governmental united kingdom covid symptom study medical reporting private united kingdom nhs app contact tracing governmental united states coalition app contact tracing private united states covid-19 apple app information multistakeholder http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5067 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 96 united states covidsafe contact tracing multistakeholder united states how we feel self-diagnostic private united states private kit: safe paths contact tracing private united states covid watch contact tracing private united states novid contact tracing private united states coepi medical reporting private uruguay coronavirus uy self-diagnostic governmental vietnam covid-19 self-diagnostic governmental source: authors’ elaboration on council of europe data 4.3 ai to support physicians in clinical decision-making and diagnosis: the infervision and alibaba case studies due to a sudden and massive increase in the numbers of patients during covid-19 pandemic, healthcare professionals have a very high workload. here, ai is used to reduce the workload of healthcare workers. it helps in early diagnosis and providing treatment at an early stage using digital approaches and decision science (vaishya et al., 2020). ai applications can support doctors and medical researchers in the clinical decision-making process. according to jiang et al. (2017), ai can assist physicians in making better clinical decisions or even replacing human judgement in specific functional areas of healthcare. for instance, infervision, a chinese high-tech enterprise in artificial medical intelligence, created an ai software that flags possible lung problems on computed tomography (ct) scans, using hundreds of thousands of lung images collected from major chinese hospitals. originally used to diagnose lung cancer, the software is also capable of detecting pneumonia associated with respiratory diseases such as coronavirus. this ai-based technology allows a better understanding of coronavirus cases and makes the process quicker. it represents good support for physicians in their clinical decision-making process. another example is the alibaba damo academy that is dedicated to exploring the unknown through scientific and technological research and innovation. the technology, developed by alibaba damo academy and alibaba cloud, can analyse ct images within 20 seconds for diagnosing suspected novel coronavirus cases with an accuracy rate of 96 per cent. doctors usually spend around 5 to 10 minutes diagnosing ct images of a patient. the ai diagnosis system can ease the already strained hospital resources (pham et al., 2020). http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5067 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 97 finally, robots can be used to support medical professionals in their daily routine; for example, in china, robots that are typically used in the catering industry are used to clean, sterilise, and deliver food and medicines to reduce human contact. the use of ai technologies should not attempt to replace healthcare professionals entirely but rather assist in improving and fast-track diagnosis while alleviating bottlenecks in the healthcare system (mahomed, 2020). 4.4 ai to control social distancing and medical chatbots: the microsoft healthcare bot case study one of the biggest challenges of implementing a defence mechanism against a pandemic is to ensure public participation and acceptance of any mechanism proposed by the authority (young, 2013). physical distancing from one another is a critical part of ensuring that the virus does not spread. ai has been argued to be necessary to manage the pandemic by using thermal imaging to scan public spaces for people potentially infected, and by enforcing social distancing and lockdown measures (rivas, 2020). for example, china's sophisticated surveillance technology uses facial recognition and body temperature to identify whether an individual has a fever and therefore, could be a carrier of the virus (mahomed, 2020). an ai-based computer vision camera system has been used in the uk to monitor adherence by individuals to social distancing measures. more controversially, israel's cyber monitoring system enables its security services to identify and quarantine people who may be infected (naudé, 2020). also, several companies are investing in the development of medical chatbots based on ai. these technologies can screen people and advise whether they should be evaluated for the infection. they enable "at-home risk assessments" in a few minutes. ai-powered virtual health assistants and chatbots, enable self-service, drive better outcomes, and reduce costs (divya et al., 2018). moreover, they can ease the stress placed on medical hotlines (ahuja et al., 2020). chatbots are fostering social distancing and streamlining the entire clinical process. the microsoft healthcare bot is an example of this technology. the service combines built-in medical intelligence with natural language capabilities, extensibility tools and compliance constructs. that service allows healthcare organisations such as providers, payers, pharma, health maintenance organisations (hmos), telehealth to give people access to trusted and relevant healthcare services and information. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5067 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 98 virtual health assistants and chatbot technology will never replace medical personnel. nevertheless, technology can help make better use of medical personnel's time and relieve some of the burdens from the healthcare system (bitran, 2019). 4.5 ai-based technologies: a transversal impact as we described, ai technologies have a crucial role in the fight against covid-19 and can be used in different ways and applied for a wide range of purposes. ai is not only helpful in the treatment of covid19 infected patients but also for their proper health monitoring (mahomed, 2020). it is also useful to facilitate the research on this virus using the available data. ai can help in developing proper treatment regimens, prevention strategies, drug and vaccine development (vaishya et al., 2020). in this sense, ai-based technologies are essentials because they can generate a positive transversal impact on society and healthcare organisations (naudé, 2020). these technologies, also, can contribute to the optimisation of logistics processes in hospitals and allow a better allocation of resources for firms (jiang et al., 2017). in the end, considering prevention strategies, ai-based technologies can support companies’ enhancing their social responsibility (pan, 2020). in this sense, as discussed by zhao (2018), covid-19 could allow businesses to consider alternative corporate social responsibility challenges. 5. conclusion digital technology, including information technology and ai, are therefore proving to be essential tools to help build a coordinated response to this pandemic. in our research, we focused on central areas of applications where ai technologies are currently impacting against covid-19, and we analysed some practical cases. table 3 shows the elements under discussion and case studies that have been analysed in our paper. from our analysis came up with some crucial insights. first, we described how ai technologies play a crucial role in terms of contact tracing and monitoring of the pandemic spread. for this reason, governments around the world are investing more and more to http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5067 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 99 develop covid-19 apps. these ai-based technologies can allow storage of data that could be useful for tracking “hot zone” and create global alert of high-risk pandemic areas. secondly, we observed that high-tech companies around the world are embracing a more healthcareoriented approach. big players are even more oriented to create a positive impact on society and are developing new technologies that can help to fight the virus. this paper showed that the use of modern technology with ai improved the screening, prediction, contact tracing, forecasting, and drug/vaccine development with extreme reliability (lalmuanawma et al., 2020). considering these platforms assists ai experts to analyse massive datasets and help physicians train machines, set algorithms, or optimise the interpreted data for dealing with the virus with more speed and accuracy (jamshidi et al., 2020). the analysis highlights, as well, that ai techniques are a fundamental tool for clinical decision-making. they can be used in different ways and applied for a wide range of purposes. applications based on ai simplify work for physicians and medical staff providing them meaningful insights. this paper has theoretical and managerial implications; in fact, it could be useful either for researchers or professionals (i.e., policymakers, physicians, managers, healthcare, and administrative staff). we wanted to underline that artificial intelligence applications are fundamental to contain the spread of the virus and to find out a vaccine as soon as possible. analysing some ai applications, we aimed, also, to help healthcare organisations to allocate their financial resources better and investing more in these technologies. finally, we chose to describe ai applications against covid-19 to allow a better understanding of these techniques and help other professionals to gather what currently exists. like any research, this paper has some limitations. first, the writing period did not allow the researchers to deepen their knowledge in the practical field. this element represents a future strength that will lead to a more in-depth analysis considering new methodologies. for example, future investigations could include the targeted analysis of individual case studies. moreover, at the level of business models, it would be interesting to analyse how the perception of tech companies has changed compared to the previous and current period of covid-19. table 3. elements under discussion and case studies analysed for each topic http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5067 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 100 macro variables case studies • drugs discovery and knowledge sharing • tracking and prediction • clinical decision-making and diagnosis • social distancing control and medical chatbots deepmind; insilico medicine bluedot infervision; alibaba microsoft healthcare bot source: authors’ elaboration http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5067 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 101 references ahuja, a.s., reddy, v., marques, o. 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(2020). potential covid-19 3c-like protease inhibitors designed using generative deep learning approaches. insilico medicine hong kong ltd. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5083 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 1 the importance of foreign direct investment and energy consumption and their effects on economic growth in the case of mena adel nsib adel1 1master’s student – university of sfax, tunisia e-mail: adelnecib314@gmail.com received: 12/09/2020 accepted for publication: 10/01/2022 published: 22/04/2022 abstract the main purpose of this paper is to investigate relationship between foreign direct investment and economic growth for mena countries from 1990 to 2014. we firstly tested heterogeneity and cross sectional dependence and found that all series have homogeneity and cross sectional dependence. for that reason, hadri kruzomi and pesaran et al. multifactor error structure panel unit root tests were used. for obtaining long-run relationship, we used weterlund's panel and group cointegration tests. the results supported the long-run relationship, therefore, we used common correlated effect model, thanks to this method, and coefficients for each cross-section unit could be calculated individually. keywords: economic growth; energy; renewable energy; mena; fdi; ide 1. introduction since the early 1990s, the world has been experiencing globalization, liberalization, regulation and technological progress, major changes that affect various economic sectors in different countries of the world, including most of them have chosen an economic policy issued by a pop-up in order to be able to improve its economic growth and development and meet the challenges associated with this opening up while providing an appropriate ground for global competition to attract more foreign investment. therefore, attracting fdi is always a matter of continuing interest for home countries as host countries where there is an almost complete consensus on the benefits that can be made and be attracted by fdi, they will create jobs that will promote economic growth and development, as they allow the transfer of knowledge and technology and encourage reforms, especially for host countries. in the context of development, we can also talk about the importance of energy, as this sector has seen growing interest in recent years. realizing the need to develop this sector, in terms of its economic and environmental benefits, a number of researchers have in fact documented the benign effects of alternative energies (nuclear and renewable energy) in reducing carbon dioxide emissions and reducing the impacts of climate change (alfarra and abu-hijleh, 2012; apergis et al. 2010; lee, 2014; monia and weld raphael, 2010banother important characteristic of renewable energy resources is that they promote sustainable development. glorioso et al (2007) european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5083 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 2 research on the relationship between foreign direct investment, energy consumption and economic growth is seen as a hierarchy of objectives and constraints that involve global, regional or local considerations and has attracted the interest of academic researchers and policy makers in the economic literature (root and ahmed, 1979; dunning, 1981; schneider and frey, 1985) mina (2020). fdi and energy consumption were seen as the driving force of modern economies and societies. therefore, as they were a top priority for economic growth, united nations members would need to improve fdi and access to energy in order to achieve many economic growth objectives, including poverty reduction, industrialization, health and education. indeed, the growing interest of academics and scholars in the relationship between foreign direct investment, energy consumption and economic growth has made it a platform from which we are trying to seek to clarify their impact on economic growth by asking the following question: what is the importance of foreign direct investment and energy consumption and what are their effects on economic growth in the case of the countries of the middle east and north africa?. 2. literature review and hypothesis fdi uses foreign technology and management techniques to exploit local resources at low cost. there is a clear distinction between fdi and portfolio investment: in the fdi situation, the home company has direct and ultimate control over the scope and nature of day-to-day operations, and transfers not only capital to host countries, but also technology and management skills. on the other hand, portfolio investment is simply the provision of capital from a lender to a borrower; it is motivated by the per capita rate of return and obliges borrowers to repay the loan plus interest. the investment portfolio may involve the purchase of shares, bonds or other foreign securities and has no controlling interest in the investment. the main components of fdi are: equity, reinvested earnings (the investor's share of income retained in the form of dividends by subsidiaries in proportion to its share of equity) and intra-company loans (where the investor borrows funds from the subsidiary, usually without the intention of seeking repayment). hypothesis 1: foreign direct investment (fdi) has a direct positive effect on economic growth. in contrast, the subject of fdi has been studied by several economic disciplines both theoretically and empirically. the various existing theories on fdi evolve over time to adapt to new data in the international economic environment. it is first and foremost since the turn of the 2000s that the literature on fdi has experienced a strong acceleration, in line with the development of the phenomenon. indeed, the authors who have dealt with fdi have attempted to formalize its causes by developing or applying different theoretical approaches. the arguments put forward are inspired by several theories relating to economics, trade, investment or marketing. following a chronological order, the analysis will focus on the theories that have focused in particular on the impact of fdi on development and economic growth. blomston et al (1992) khemici & abdelmadjid, k. (2013), in studying the impact of fdi on growth, have shown that the magnitude of this impact depends on the stock of human capital in the host country. the authors highlight the positive effect of fdi on income growth. moreover, (ait ken and hanison, 1993), idrissa & abdou (2019), (saggi, 2000) acquah & ibrahim (2019), have shown that fdi can generate negative, even mixed effects on the development of host countries. in the same framework, darrat et al (2005) carried out a comparative study (1979-2002) covering countries in two regions, namely those of mena and those of central and eastern europe. this study showed that fdi flows stimulate economic growth only in eu member countries. whereas, the effect of fdi remains negative or even non-existent in the mena countries. development economics argues that capital accumulation is a factor in long-term growth. however, this thesis has recently been challenged: the joint movement of investment (its gdp ratio) and the growth rate is largely driven by a third factor, technological innovation (ben habib and jovanovic, 1991; king and levine, 1994) mtiraoui, a. (2020). at this level, the oecd emphasizes the links between investment and growth, while conditioning them on the policy reforms that need to be put in place and on the need for co-operation between all countries, whether members or non-members of the organization. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5083 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 3 hypothesis 2: foreign direct investment has a negative effect on economic growth. in the energy literature, few studies have addressed the problem of intersectoral dependence and the degree of heterogeneity. therefore, to address this problem, our study applied a heterogeneous panel technique with cross-sectional dependence. moreover, energy policies developed at the global level can also affect individual nations. moreover, it also manages exogenous shocks. this is one of the studies dealing with the problems mentioned by applying heterogeneous panel techniques for some countries. hypothesis 1: an increase in renewable energy consumption improves positive production, and if there is a decrease in renewable energy consumption, energy conservation policies will have a significant negative impact on economic growth. this means that renewable energy consumption leads to economic growth, which is called the growth hypothesis. hypothesis 2: the preservation hypothesis assumes a one-way causal relationship that links economic growth to renewable energy point-of-sale consumption; thus, a decrease or increase in energy consumption will not affect economic growth. hypothesis 3: the feedback hypothesis indicates a two-way causal relationship between renewable energy consumption and economic growth. any increase in the use of renewable energy will play an important role in stimulating economic growth with the opposite effect. hypothesis 4: the neutrality hypothesis shows that these two variables are independent. most of the existing energy literature has studied the links between renewable energy use and economic growth, but has given mixed empirical results from countries. 3. methodology all time series data below were collected from the database published by the world bank. our data include the following variables: economic growth: measured by gdp per capita, an economic indicator of the wealth produced per year in a given country, in constant us dollars. foreign direct investment: these investments play a major role in the internationalization of a firm. highly appreciated by academics, they also help measure a country's economic attractiveness. -energy consumption: energy consumption is variable according to various parameters. among others, for a boiler it will depend on its efficiency, for an air conditioner on its cop and for a housing on its insulation. renewable energy: renewable energy is energy generated by natural processes that are continually replenished. it is measured by renewable energy consumption (% of total final energy consumption). -population: in statistics, a population is a finite set of objects, units or individuals that are the subject of a study or observation and which is subject to statistical processing. details on the description of the variables used and their sources are presented in table 1. table 1. description of variables and data source variables description source growth economic gdp growth (annual %) world bank foreign direct investment net foreign direct investment as % of gdp world bank european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5083 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 4 energy consumption total energy consumption world bank renewable energy renewable energy consumption (% of total final energy consumption). world bank population total population world bank source: world bank 3.1 data source the data used come from the world bank database. these data will be annual and relate to gross domestic product growth (annual gdp growth in %), net foreign direct investment as % of gdp, renewable energy consumption (% of total final energy consumption), total population, total energy consumption. there are 275 observations (1990-2015). 3.2 empirical methodology the paper uses a four-step empirical methodology. the first step is to examine the stationary properties of individual series in panel data. the second step is to test for the presence of cointegration. in the third step, we estimate our models using the estimator. the third step is to examine the shortand long-term causality between variables using the vector error correction model (vecm). in the third step, we estimate using individual effects models. in the last step one can be drawn from the ardl which integrates the ct dynamics with the lt equilibrium without losing the lt information. 3.3 unit root tests in panel data the unit root test on time series data has become one of the most important tests for economists, particularly econometricians, although the unit root test on panel data is more recent. unit root tests in panel data have become popular among economic researchers working on panel data structures because they are much more powerful than normal unit root tests for individual time series. among the various unit root tests developed in the literature, levin, lin and chu (llc) (2002) and im, pesaran and shin (ips) (2003) are the most popular. both tests are based on the adf principle. however, llc assumes homogeneity in the dynamics of the autoregressive coefficients for all panel members. in contrast, the spi is more general in that it allows for heterogeneity in these dynamics. therefore, it is described as a "heterogeneous panel unit root test". it is particularly reasonable to allow such heterogeneity in the choice of shift length in adf tests, when the imposition of a uniform shift length is not appropriate. furthermore, slope heterogeneity is more reasonable where cross-national data are used. in this case, heterogeneity is due to differences in the economic conditions and degree of development of each country. levin et al (2002) consider the following basic adf specification: (1) where δ is the first difference operator, xit s the dependent variable i over the period t, is a white noise disturbance with a variance of . both and the order of shift , 1 , 1 1 = + x + t+ x + k it i i i t i ij i t it j x a b d g u= d då 2s ib european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5083 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 5 where the alternative hypothesis corresponds to xit being stationary. the test is based on the , or is the ols estimate of in equation (4) and is his standard mistake. according to the llc test, the panel procedure significantly increases the efficiency of the finished samples. the proposed model is as follows: (2) at this level, levin et al. (2002; llc) also assumed: where the test statistic is: , is the ols estimate of in the equation (4) and is his standard error. im et al (2003) proposed a test procedure based on the middle group approach. the starting point for the ips test is also the adf regressions given in equation (1). but the null and alternative hypotheses are different from the llc test, where rejection of the null hypothesis implies that all series are stationary. we now have : h0: β1 = β 2 = … = β n = 0 vs h1: some but not necessarily all β i 0 ips developed two test statistics and called them lm-bar and t-bar tests. the alternative t-bar statistics to test the null hypothesis of the unit root for all people (βi = 0) is as follows: (3) where t is the calculated adf statistics of the individual panel members. using monte carlo simulations, ips shows that tbar convertiris normally distributed under the null hypothesis and outperforms m-bar in small samples. they then use estimates ( ) i i i t bb s b ù ù= ib ^ ( )is b , 1 , 1 1 = + x + t+ x + k it i i t i ij i t it j x a b d g u= d då 0 1 2 1 2 : ....... 0 ; : 1 ....... 0 h h b b b b b b = = = =ìï í = = =ïî ! ^ ^ ( ) i i i tb b s b = ^ ib ib ^ ( )is b 1 n i i t t n b == å 0 1 : 0 ; : 0 i i h h b b =ìï í ïî ! european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5083 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 6 of the mean and variance to convert ( ) in a standard z-bar ( )statistics so that conventional critical values can be used to assess its significance. the test statistic ( ) is defined as follows: (4) where is as previously defined , and are the mean and variance of obtained from monte carlo simulations with i = 1,2,…, n. the llc and ips unit root tests are used in this study to test the stationarity of the data used for the 30 african countries. 3.4 cointegration tests in panel data after checking that the series are integrated in the same order, we move on to the next step by testing the possibility of longterm convergence between our data series. engle and granger (1987) indicated that variable series can be stationary and are therefore interpreted as co-integrated (having a long-run relationship) if there is a linear combination of two or more nonstationary variable series. the unique order of integration of the variables allows us to use the panel cointegration technique to test the long-run relationships between the variables in each model. the existing literature suggests several panel cointegration tests, such as pedroni (1999, 2004), kao (1999) and westerlund (2007). for this study, we used the cointegration technique of pedroni (1999). this test is based on a method similar to that of engle and granger (1987) on time series with the following data generation process: yit = ai + x’itbi + eit; n=1… 14; t= 1 …25 (5) where yit is the dependent variable; ai is a fixed effect taking into account the unobserved heterogeneity between the dependent variables; and x’it is a vector of explanatory variables. to test the cointegrating relations, pedroni constructed seven different statistics based on the cointegrating residual of eit , which are divided into two categories. the first includes statistics called "intra-dimensional" or "within". 3.5 model with individual effects we will now focus on heterogeneous panel models, where the only source of heterogeneity comes from individual constants. it is thus assumed that the coefficients of the different stochastic explanatory variables are identical for all individuals in the panel (ß1 = ß). it is further assumed that these coefficients are deterministic constants. the individual constants α1 ; the latter differ from one individual to another. yit = αi + ßk xkit + εit t z z ( [ | 0]) (0,1) var[ | 0] i i n t e t z n t b b = = ® = t [ | 0]ie t b = var[ | 0]it b = k å european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5083 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 7 innovations εit are supposed to be i: i: d: of zero mean, variance equal to ϭε2 ; ∀i ∈ [1; n] and are assumed to be uncorrelated either in the individual dimension or in the time dimension. therefore, in this context, two cases must be distinguished: the case in which the parameters αi are deterministic constants (fixed-effects model) and the case where the parameters αi are realizations of a random variable of expectation and finite variance (random effects model). we will thus successively consider these two types of model. 3.5.1 fixed-effect model it is now hypothesized that the individual effects 𝛼𝑖 are represented by constants (hence the name fixed-effect model). we will determine the general shape of the estimators of the parameters 𝛼𝑖 et 𝛽 in this fixed-effect model. assumptions: the individual fixed effects model has a residue structure that tests standard ols assumptions. it is in fact a classical model with individual indicator variables. we're going to make an additional assumption about the nature of the residue process. this hypothesis is simply the generalization in the panel dimension of the definition of a white noise ∀𝑖 ∈ 1; 𝑁 𝑒𝑡 𝑡 ∈ 1; 𝑇 : • 𝐸 𝜀𝑖𝑡 = 0 • 𝐸 (𝜀𝑖𝑡 𝜀𝑖𝑠) = ϭε2𝑡 = 𝑠 0 ∀𝑡 ≠ 𝑠 • 𝐸 (𝜀𝑖𝑡 𝜀𝑗𝑠) = 0 ∀𝑗 ≠ 𝑖, ∀ (𝑡, 𝑠) estimateur within ou lsdv (least square dummy variables) : the ordinary least squares (ols) estimator of the parameters 𝛼𝑖 et 𝛽 in the fixed-effects model is called the within estimator; or the fixed-effects estimator or the least square dummy variable (lsdv) estimator. as we have seen, the term within is explained by the fact that this estimator takes into account the within-group variance of the endogenous variable. the third name lsdv is only because this estimator leads to the introduction of dummy variables. the ols estimators of this model are the best linear, unbiased and convergent (blue) estimators. in practice, the ols or lsdv estimator is obtained from a transformed model where the different model variables are centred with respect to their respective individual means. the following specification is then retained : �҄� 𝑖𝑡 = 𝛽𝑘 �҄� 𝑘𝑖𝑡 + �҄� 𝑖𝑡 with �҄� 𝑖𝑡 = 𝑦𝑖𝑡 − ῡ𝑖𝑡 �҄� 𝑖𝑡 = 𝑥𝑖𝑡 − 𝑖𝑡 and ῡ𝑖𝑡 = �҄� 𝑖𝑡 = 𝜀𝑖𝑡 − 𝜀 𝑖𝑡 the realizations of the estimators of the constants 𝛼𝑖 are deduced at the mean point, after estimation of the parameters 𝛽𝑘 by mco on the previous transformed model. �҄� 𝑖 = ῡ𝑖 − �҄� 𝑘 𝑘𝑖 k å x 1 1 ti t yit t = å 1 p k= å x european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5083 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 8 3.5.2 random effects model in the standard practice of econometric analysis, it is assumed that there are a large number of factors that can affect the value of the variable being explained and yet are not explicitly introduced as explanatory variables. these factors are then approximated by the structure of the residuals. the problem arises in a similar way in panel econometrics. the only difference is that three types of omitted factors can be considered. first, there are factors that affect the endogenous variable differently depending on the period and the individual under consideration. in addition, there may be factors that affect all individuals identically, but whose influence depends on the period under consideration (temporal effects). finally, other factors may, on the contrary, reflect differences between individuals of a structural type, i.e. independent of time (individual effects). therefore the residual, noted 𝜀𝑖𝑡 ; of a panel model can be decomposed into three main components as follows (hsiao 1986): ∀𝑖 ∈ 1; 𝑁 𝑒𝑡 𝑡 ∈ 1; 𝑇 ; 𝜀𝑖𝑡 = 𝛼𝑖 + 𝜆𝑡 + 𝜗𝑖 the variables 𝛼𝑖 s here refer to the individual effects that represent the set of structural or a-temporal specificities of the endogenous variable, which differ from one individual to another. it is assumed here that these effects are random. random variables 𝜆𝑡 represent strictly identical temporal effects for all individuals. finally, the stochastic process 𝜗𝑖𝑡 designates the component of the total residue 𝜀𝑖𝑡 orthogonal to individual and temporal effects. in general, a number of technical assumptions are made about this tailings structure. assumptions: it's assumed that the residue 𝜀𝑖𝑡 = 𝛼𝑖 + 𝜆𝑡 + 𝜗𝑖𝑡 are i.i.d. and satisfy the following conditions, ∀𝑖 ∈ [1; 𝑁] 𝑒𝑡 𝑡 ∈ [1; 𝑇] : 𝐸 (𝛼𝑖) = 𝐸 (𝜆𝑡) = 𝐸 (𝜗𝑖𝑡) = 0 𝐸 (𝛼𝑖𝜆𝑡) = 𝐸 (𝜆𝑡𝜗𝑖𝑡) = 𝐸 (𝜗𝑖𝑡𝛼𝑖) = 0 𝐸 (𝛼𝑖𝛼𝑗) = {𝜎𝛼 2 𝑖 = 𝑗 {0 ∀𝑖 ≠ 𝑗 𝐸 (𝜆𝑡𝜆𝑠) = {𝜎𝜆 2 𝑠 = 𝑡 {0 ∀𝑠 ≠ 𝑡 𝐸 (𝜗𝑖𝑡𝜗𝑗𝑠) = {𝜎𝜗 2 𝑠 = 𝑡 ; 𝑖 = 𝑗 {0 ∀𝑠 ≠ 𝑡 ; ∀𝑖 ≠ 𝑗 𝐸 (𝛼𝑖𝑥𝑖𝑡) = 𝐸 (𝜆𝑡𝑥𝑖𝑡) = 𝐸 (𝜗𝑖𝑡𝑥𝑖𝑡) = 0 under these assumptions, the variance of the endogenous variable 𝑦𝑖𝑡 conditional on the explanatory variables 𝑥𝑖𝑡 is then equal to 𝜎𝑦 2 = 𝜎𝛼 2 + 𝜎𝜆 2 + 𝜎𝜗 2. the variances 𝜎𝛼 2, 𝜎𝜆 2 and 𝜎𝜗 correspond to the different components of the total variance. for this reason, the random effects model is also called the error component model. in this course, due to simplification, the time effect is neglected. we will assume that it does not exist (static panel). 3.6 the ardl models “autoregressive model with scaled distributed delays” the "autoregressive distributed lag/ardl" or "autoregressive distributed lag/arre" models are dynamic models. the latter have the particularity of taking into account time dynamics (adjustment lag, expectations, etc.) in the explanation of a variable (time series), thus improving forecasts and the effectiveness of policies (decisions, actions, etc.), unlike the simple (non-dynamic) model whose instantaneous explanation (immediate effect or not spread over time) only restores part of the variation of the variable to be explained. within the family of dynamic models, there are three types of models. if we consider the dependent variable « yt » and the independent variable « xt », noteworthy: autoregressive (ar) models: these are dynamic models in which the explanatory variables include (xt), the lagged dependent variable (its past values). in general, they are as follows (implicit form) european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5083 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 9 yt = f (xt, yt-p) … (1a) the term "autoregressive" reflects the regression of a variable on itself, i.e. on its own lagged values. staggered lag or distributed lag (dl) models: these are dynamic models that have as explanatory variables: and its past or lagged values. in general, their form is: yt = f (xt, yt-q) … (1b) the term "staggered delays" shows that the short-term effects of xt on yt are different from the long-term ones. from one point in time to another, the response scales of yt at the change of xt differ. autoregressive staggered-delay (ardl) models: these models combine the features of the two previous ones; among the explanatory variables are the following (xt), the shifted dependent variable (yt-p) and the past values of the independent variable (xt-q ). they have the following general form: yt = f (xt, yt-p, xt-q) …(1c) or yt = φ + α yt-i + bj xt-j+ et...(1d) with et iid (0,ϭ ) : error term; « b0» reflects the short-term effect of xt on yt considering the following long-term or equilibrium relationship «yt = k + φxt + µ », it is possible to calculate the long-term effect of xt on yt (or « ») as follows: ø = as with any dynamic model, the following information criteria will be used (aic, sic and hq) to determine the optimal offset (p* or q*) ; an optimal shift is one where the estimated model offers the minimum value of one of the stated criteria. these criteria are: akaike's (aic), schwarz's (sic) and hannan and quinn's (hq). their values are calculated as follows: aic (p) = log ǁ∑ǁ+ sic (p) = log ǁ∑ǁ + hq (p) = log ǁ∑ǁ + 1 p i= å 1 p i= å ! )/ (1bj i-å å α 2 2n p t log 2 t n p t 2log 2 t n p t european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5083 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 10 with : ̂∑ = variance-covariance matrix of estimated residuals; t = number of observations ; p = lag of the estimated model; and n = number of regressors. all of these dynamic models can help capture the short-term dynamics and long-term effects of one or more explanatory variables on a variable to be explained. this will only be possible if the time series under study are cointegrated, thus allowing the estimation of an error-correction/erm model. in fact, two series are said to be "cointegrated" if they are integrated of the same order; and, a series will be said to be "d-integrated" if it has to be differentiated "d" times to make it stationary. a stationary series is stationary in terms of mean and variance, if its mean (e(yt) = c) remains invariant or constant over time and that its variance does not increase with time (var (yt) = ϭ), as well as its covariances (e (yt-c)(yt-p -c) = yp ). to test the stationarity of a time series (absence of unit root), several tests are available in most software: augmented dickeyfuller/adf test, phillippe-perron/pp test, andrews and zivot/az test, ng-perron, kwiatkowski, phillips, schmidt and shin/kpss test, ouliaris-park-perron, eliott-rothenberg-stock, etc. the first three tests are easy to apply and are commonly used. it should be noted that the adf test is effective in the presence of error autocorrelation, the pp test is recommended in the presence of heteroskedastic errors, the az test is suitable for series that are victims of endogenously identified regime change (trend break), and the kpss test decomposes a series into three components (deterministic part, random part, white noise) with the null hypothesis of stationarity. it should be noted that, as part of the family of dynamic models, an ardl model makes it possible to estimate short-term dynamics and long-term effects for series that are co-integrated or even integrated at different orders, as will be seen with the boundary test approach of pesaran et al. (1996), pesaran and shin (1995), and pesaran et al. (2001). however, an ardl model cannot be applied to integrated series at orders greater than 1. 4. results and discussion 4.1 results and discussion to study the stationarity of the series used, we used unit root tests on panel data (levin lin and chu, im persaran and shin, hadri, ...). the next table 2 summarizes the results of the (summary) tests, applied to the different variables of the model. the unit root tests show that all the statistical series at the level are assigned a unit root. moving on to first differences, we can see that all the series are stationary. we conclude that they are integrated of order i (1) and i(0). table 2. unit root test results variables / methods integration order levin et al. im et al. adf-fisher chi square pp-fisher chi-square gdp i(1) -8.13344 (0.0000) -8.91040 (0.0000) 125.563 (0.0000) 130.484 (0.0000) stationarty hadri z-stat heteroscedastic consistent z-stat 5.47912 (0.0000) 3.10673 (0.0000) fdi i(1) -2.94203 (0.0016) -4.46400 (0.0000) 59.9463 (0.0000) 54.5151 (0.0001) stationarty hadri z-stat heteroscedastic consistent z-stat 3.58597 (0.0000) 3.35800 (0.0000) levin et al. im et al. adf-fisher chi square pp-fisher chisquare european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5083 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 11 en niveau différence première en niveau différence première en niveau différence première en niveau différence première log ce i(0) -0.9882 (0.1615) -16.9238 (0.0000) 1.18831 (0.8826) -16.4708 (0.0000) 20.3619 (0.5604) 202.044 (0.0000) 20.5153 (0.5508) 220.380 (0.0000) stationarty hadri z-stat heteroscedastic consistent z-stat 10.8187 (0.0000) 9.10802 (0.0000) cer i(0) 1.06230 (0.8560) -11.4987 (0.0000) 0.70665 (0.7601) -12.9988 (0.0000) 21.2863 (0.5031) 181.082 (0.0000) 26.5511 (0.2288) 175.253 (0.0000) stationarty 5.99423 (0.0000) 5.99423 (0.0000) log pop i(0) 1.64641 (0.9502) -3.12926 (0.0009) 3.92872 1.0000 -7.65503 (0.0000) 15.4128 (0.8439) 101.834 (0.0000) 46.2751 (0.0018) 82.1472 (0.0000) stationarty 12.8872 (0.0000) 13.1507 (0.0000) notes: probability values are given in brackets. significance thresholds * (1%), ** (5%), and *** (10%) source: author elaboration on eviews9 4.2 co-integration after checking the non-stationarity properties for all the variables in the panel, we study the existence of a shortand longterm relationship between these variables. that is to say, the study of the existence of a co-integration relationship, by applying the co-integration tests of pedroni, kao and johansen which are based on unit root tests on estimated residuals. table 3 summarizes the results of the seven (7) pedroni co-integration statistics. they were established by eviews 9.0 which has an appropriate program to handle co-integration on heterogeneous panel data. the co-integration of the variables depends on the probability value associated with each statistic. from the results of pedroni's co-integration tests we can see that out of the seven statistics, four have probability values less than 5%. these are mainly (panel ppstatistic) and (panel adf-statistic) for the intra-individual tests "pedroni (1999), (weighted statistic)", and (group pp-statistic) and (group adf-statistic) for the inter-individual tests "pedroni (1999)". therefore, all of these tests show the existence of a co-integration relationship. in what follows, we will estimate the long-term relationship of cointegration using the most adequate methods for this type of approach. table 3. co-integration model results no deterministic trend intra dimensions (four statistics) inter dimension (3 statistics) pedroni panel vstatistic panel rhostatistic panel ppstatistic panel adfstatistic group rhostatistic group ppstatistic group adfstatistic staistic -0.772857 -3.372856 -10.82630 -8.643915 -1.912110 -17.11109 -8.810620 prob (0.7802) (0.0004) (0.0000) (0.0000) (0.0279)** (0.0000) (0.0000) kao adf resid(-1) stastic -5.269950 -11.68755 prob (0.0000) (0.0000) johansen fisher (from trace test) fisher (from max-eigen test) statistic prob statistic prob none 470.5 (0.0000) 344.0 (0.0000) at most 1 413.9 (0.0000) 272.4 (0.0000) at most 2 233.4 (0.0000) 155.1 (0.0000) european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5083 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 12 at most 3 115.8 (0.0000) 93.08 (0.0000) at most 4 64.62 (0.0000) 64.62 (0.0000) notes: probability values are given in brackets. significance thresholds * (1%), ** (5%), and *** (10%) source: author elaboration on eviews9 4.3 casuality of granger panel the existence of co-integration implies the existence of causality in at least one direction. having found that there is a longterm relationship between gdp, fdi, rce, cet and pop.the next step is to test the causal links between these variables using the granger panel test causality. a granger causality analysis is performed to determine whether there is potential predictive power across indicators. the results of the granger panel causality test for all individuals are summarized in the following table 4. table 4. the panel vecm granger casuality results dependent variables source of short-term causality (independent variables) long term ∆gdp ∆fdi ∆cer ∆ce ∆pop ect ∆gdp 0.051942 (0.051942)** 0.001617 (0.00371) -0.005544 (0.00110) 5.06 (6.1) 0.051942 (0.04927) ∆fdi 0.045439 (0.08979)*** 0.004624 (0.00480) 0.001820 (0.00142) 6.47 (7.8) -0.005544 -0.005544 ∆cer -0.212568 (1.30807) -0.683442 -0.683442 0.003703 (0.02068)* 0.000922 (0.00114) 0.001617 (0.00371) ∆ce 4.649756 (4.17685) 1.783248 (2.96392) -0.024501 -0.024501 0.002028 (0.00364) -0.276848 (0.12601)*** ∆pop -7.83706 (37.0688) -27.43068 (26.3043) 2.058512 (1.98284) -2.163168 (0.58612) 0.042438 (0.23936) notes: probability values are given in brackets. significance thresholds * (1%), ** (5%), and *** (10%) source: author elaboration on eviews9 the aim of our study is to demonstrate the interactive relationships between the set of variables gdp, fdi, cer, cet and pop, but this does not preclude the study of all possible relationships. from the results of the granger panel causality tests presented in the table above, we can deduce the meanings of the causal relations that can be found between the variables at the critical threshold (probability of error) of 1%, 5% and 10%. the results indicate the existence of two unidirectional causalities: fdi to gdp and cer to gdp. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5083 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 13 4.4 models with individual effects if the main objective is the estimation of the coefficients of the variables other than the constant and if they differ little. table 5. results of individual effect models variables effet fixe effet aléatoire test hausman fdi 0.865040 0.352954 0.002507 (0.865040)*** (0.7244)*** (0.00250) cer -1.884330 -0.016893 3.740207 (0.0606)*** (0.9865)*** (0.0548)** lce -0.304002 0.852544 1.035037 (0.7614)*** (0.3946)*** (0.6463)*** lpop -3.716112 -3.214474 1.650091 (0.0002) (0.0015) (0.0024) notes: probability values are given in brackets. significance thresholds * (1%), ** (5%), and *** (10%) source: author elaboration on eviews9 4.5 models ardl this approach was introduced by pesaran and shin (1999) and further developed by pesaran et al (2001). this approach has many advantages over johansen's cointegration technique. the variables are integrated of different orders. another advantage is that the error correction model (ecm) can be derived from the ardl which integrates the ct dynamics with the lt equilibrium without losing the lt information. table 6. results from models ardl dependent variable(gdp) coefficient z-statistics probability log run results fdi 0.154327 (0.076262) *** 2.023651 (0.0454)* lce 6.62561 (1.431944) 4.627010 (0.0000) lcer 0.357443 (0.638771) *** 0.559580 (0.5769)** lpop -3.728982 (0.771053) *** -4.836217 (0.0000)* short run results ect 0.288799 (0.288799) *** 2.241166 (0.0270)* δidet-1 0.152298 (0.272353)*** 0.559194 (0.5771)*** european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5083 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 14 δidet-2 0.365498 (0.340335) *** 1.073937 (0.2851)*** δcet-1 0.024823 (9.603603) 0.002585 (0.9979)*** δcet-2 11.35308 (7.457255) 1.522420 (0.1307)*** δcert-1 3.321993 (2.702170) 1.229380 (0.2215)*** δcert-2 3.555253 (2.299951) 1.545795 (0.1250) δpopt-1 -3002.347 (3211.346) -0.934919 (0.3518) δpopt-2 2711.985 (2711.985) 1.763306 (0.0806)*** notes: probability values are given in brackets. significance thresholds * (1%), ** (5%), and *** (10%) source: author elaboration on eviews9 the long and short terms of the ardl methodology are presented in table 6. the ardl results for the relationship between economic growth and foreign direct investment are positive and important in both the long and short term given the same importance of the relationship between energy consumption and economic growth, which indicates foreign direct investment and energy consumption as in mena countries increases economic growth in the long and short term. 6. conclusion bridging the gap between foreign direct investment and energy consumption is one solution to achieving development goals. the role of foreign direct investment and energy consumption in achieving these goals is becoming an important topic in some of the discussions in the current literature. international organizations, economists and policy makers have considered them as a means to achieve the future development of society as a whole. despite this growing interest and importance, the relationship between foreign direct investment, energy consumption and economic growth is not yet clear. therefore, the main objective of this study is to clarify this relationship by showing the ability of foreign direct investment and energy consumption to achieve economic growth at a given point in time, reduce environmental degradation and improve social conditions in 11 transition countries over the period 1990 to 2015. the granger results revealed that fdi and energy consumption are closely linked to the pillars of economic growth. the result can be summarized as follows. first, the adoption of fdi has positive effects on economic growth, as well as on the use of renewable energy. in addition, the study indicates that foreign direct investment and energy use cannot stimulate growth simultaneously in economic terms and advance the environmental and social dimension without certainty of requirements, especially in countries in transition. references alfarra, h. j., & abu-hijleh, b. (2012). the potential role of nuclear energy in mitigating co2 emissions in the united arab emirates. energy policy, 42, 272-285. apergis, n., & payne, j. e. (2010). renewable energy consumption and economic growth: evidence from a panel of oecd countries. energy policy, 38(1), 656-660. feng, b. f. (2014). general n-soliton solution to a vector nonlinear schrödinger equation. journal of physics a: mathematical and theoretical, 47(35), 355203. im, k. s., pesaran, m. h., & shin, y. (1995). testing for unit roots in dynamic heterogeneous panels. department of applied economics working paper, 9526. jeste, d. v., palmer, b. w., appelbaum, p. s., golshan, s., glorioso, d., dunn, l. b., ... & kraemer, h. c. (2007). a new brief instrument for assessing decisional capacity for clinical research. archives of general psychiatry, 64(8), 966-974. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5083 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 15 lima, l. i. l., silva, g. m., chilque, a. r. a., schvartzman, m. m. d. a. m., bracarense, a. q., & quinan, m. a. d. (2010). caracterização microestrutural de soldas dissimilares dos aços astm a-508 e aisi 316l. soldagem & inspeção, 15(2), 112120. pachauri, r. k., allen, m. r., barros, v. r., broome, j., cramer, w., christ, r., ... & dubash, n. k. (2014). climate change 2014: synthesis report. contribution of working groups i, ii and iii to the fifth assessment report of the intergovernmental panel on climate change (p. 151). ipcc. pedroni, p. (1999). critical values for cointegration tests in heterogeneous panels with multiple regressors. oxford bulletin of economics and statistics, 61(s1), 653-670. persyn, d., & westerlund, j. (2008). error-correction–based cointegration tests for panel data. the stata journal, 8(2), 232-241. pesaran, m. h. (2001). shin. smith, rj. van bavel, j. j., baicker, k., boggio, p. s., capraro, v., cichocka, a., cikara, m., ... & drury, j. (2020). using social and behavioural science to support covid-19 pandemic response. nature human behaviour, 1-12 5158-article text-17216-1-9-20210223 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 75 moderating role of organizational culture between adoption of agile project management methodology and project success ali hasan1, muhammad zeb khan2, ubaid ur rehman3 1 project management, szabist, islamabad, pakistan 2 project management, szabist, islamabad, pakistan 3 project management, szabist, islamabad, pakistan e-mail: hasan582@gmail.com1; dr.zeb@szabist-isb.edu.pk2; ubaidq1993@gmail.com3 received: 02/10/2020 revised: 26/12/2020 accepted for publication: 27/12/2020 published: 08/03/2021 abstract purpose of this research is to investigate the moderating role of organizational culture between adoption of agile project management methodology and project success, as well as impact of agile project management methodology on project success. the data for this study has been collected from telecommunication services provider industry of pakistan. total sample size of 197 professionals was recorded. a questionnaire was distributed among the participants via hard copy and internet survey websites. using collected data, we tested the effect of agile project management methodology on project success and further examined the moderating effect of organizational support between agile project management methodology and project success. the examination included pearson’s correlation coefficient as well as regression using ibm spss statistics version 20. results indicated that project management methodology has a strong correlation with project success and this correlation is not moderated by organizational support. the research findings have practical implications both in organization and project manager’s perspectives. our research was limited to specific geographic area due to time and cost constraints. future researchers may opt to conduct the study in other geographic areas of pakistan and different industry including additional and different moderating variables. keywords: project management methodologies, agile, iterative, project success, organizational support, telecom industry european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 75 1. introduction worldwide, there has been an intense debate to define / redefine theory of project management for complex and uncertain project situations (koskela & howell, 2002) argued that traditional theory of project management is outdated especially in managing uncertainty and rapidly changing project environment. projects that are complex in nature, uncertain and time-constrained therefore traditional project management methodology can be inappropriate and potentially unfavorable (t. williams, 2005). companies are facing many challenges and changes in process to adopt agile project management methodology (pace, 2019). transformation in organizational culture is one of them. with substantial increase in research on project management methodologies and its effect on project success it was found that traditional project management methodology was not giving optimal results in certain scenarios (dybå & dingsøyr, 2008) therefore researchers and practitioners started looking for alternative methods for project implementation. earlier agile project management methodology was developed as an alternative to traditional project management methodology as it offers less risk, more visibility, increased business value, more adaptability, faster delivery and reduced costs (canty, 2015) also stakeholders' feedback has been given extra value in agile project management methodology which proved to be beneficial (highsmith, 2003). project efficiency/success is measured as performance of the project management methodology (serrador & pinto, 2015) against the time, cost and quality constraints (triple constraints) of the project. the direct effect of agile project management methodology on project success remain implicit and is not directly addressed in the most focused and concerted way in the available literature yet. to explore this an empirical study on effect of agile project management methodology and its effect on project success with moderating role of organizational culture. the present study adds value to theory and practice in multiple ways. first, it evaluates the direct relationship between agile project management methodology and project success. second, it investigates the moderating role of organizational culture in the relationship between agile project management methodology and project success. by using a structural equation modeling (sem) technique for agile project management methodology, we will test and validate that organizational culture can work together for project success. this study will be a value addition in literature and help policy makers in organizations in adopting correct project management methodology to increase project success rate. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 76 researchers (bloch, blumberg, & laartz, 2012) found that project failure can be so disastrous for a company that it may threaten the existence of the company. these alarming situations put scholars and practitioners in search of solutions to the cater the problem of project failure and to produce consistent project success. this outlines the underlying issue driving this study further research is needed to examine the relationship between successful delivery and project management methodology (garland, 2009; joslin & müller, 2016; pinto, 2014; turner & keegan, 2001; ul musawir, abd-karim, & mohd-danuri, 2020). considerable attention have been given to agile project management methodology during the last 02 decades (dybå & dingsøyr, 2008) researchers recommended that organizations are required to be more agile, more adaptable to changes to achieve more success (sherehiy, karwowski, & layer, 2007). historical models and studies on project management methodology were mainly focused on project governance and its role in project decision making, project success and strategy implementation(garland, 2009; joslin & müller, 2016; pinto, 2014; turner & keegan, 2001; ul musawir et al., 2020). however, the effect of implementation of agile project management methodology and its effect on project success remain implicit and is not directly addressed in the most focused and concerted way in the available literature yet. research is fairly new in this field, several characteristics e.g. collaboration, modularity, iteration, time-bounding, parsimony, adaptiveness and incremental development (miller, 2001) are to be associated with the agile project management, organizational culture and project success. we will be exploring the new avenues to test effectiveness of the agile philosophy and its relationship with project success. though agile project management methodology is popular due to many reasons (less risk, more visibility, increased business value, more adaptability, faster delivery and reduced costs) but researchers need to explore the possibilities to make this claim valid. so far, previous research on agile project management methodology was incidental and more focused research in this area will help practitioners and researchers to add value in agile project management methodology literature and practical implementation. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 77 (lee & xia, 2010) have concluded after quantitative and qualitative analysis on software development agility that there is no positive relationship between agile project management methodology and the project success. the adoption of the agile methods in any organization is not unproblematic challenges are being encountered while migrating to agile project management methodologies (boehm & turner, 2005; chan & thong, 2009; cockburn & highsmith, 2001) and employees behave reluctantly in accepting this transformation (nerur, mahapatra, & mangalaraj, 2005). the main objective of this research is to investigate that for achieving project success adoption of agile project management methodology works better than traditional project management approaches with moderating role of organizational culture. agile project management methodology has become a preferable approach for planning and executing projects (pace, 2019) however there are still some issues in adoption of agile culture in organizations. the purpose of this paper is to investigate, through a quantitative study, the evidence that that for achieving higher rate of project success adoption of agile project management methodology works better than traditional project management approaches with moderating effect of organizational culture this research sheds light on: to determine the impact of adoption of agile project management methodology and its effect on project success. to check moderating role of organizational culture between agile project management methodology and project success. following questions will be addressed in this research paper. to what extent does agile project management methodology influence project success? to what extent does project management methodology influence project success and is this relationship influenced by moderating role of organizational culture? european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 78 2. literature review 2.1. concept and definitions with ever growing complexity of the projects, organizations seems to be more vigilant in choosing a suitable application of project management methodology (joslin & müller, 2016) as it plays a very critical role in making a project successful or failure. up till now, research and the findings on project management methodologies are biased to some extent e.g., available literature is divided on whether success of the project is directly related to project methodologies or not (lehtonen & martinsuo, 2006). while researching the impact of project management methodologies on project success (milosevic & patanakul, 2005) inferred that project management methodologies, higher or singular level, may not be sufficient in concluding the effect of project management methodology on project success. to get a complete understanding and clarification of project management methodology element(s) and their inconsistent impact on project success in depth analysis and knowledge is required as some element(s) may have a greater impact on project success in collective manner than being studied alone. 2.2. agile project management methodology integration of planning and execution phase is core of agile project management methodology which allows an organization to build up a working force capable of responding to emerging requirements in an efficient manner through collaborative working and then prioritizing work packages i.e. lowest level of wbs. although the agile techniques are set of guidelines that are performed in the software development and it is new method to achieve the project goals and to quickly perform the tasks by reducing the impact of the factors that delay the project. meaning of term agile is comprehensible, adoption of agile project management methodology is making a paradigm shift in project management techniques by using best practices of management science (anderson, 2004). agile project management methodology focuses on delivering maximum value against business priorities i.e. features of the product by applying very tight discipline to "time and cost" and keeping iteration on review and prioritization of the features whereas in traditional project management approaches feature were considered to be fixed by the time the project is initiated. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 79 figure 1 what's different about agile? source: author elaboration whenever any organization decides to adopt agile project management methodology major change in traditional culture, mindset and sometime in project team are also required. considering the need for smoothing the process of project planning, the iterative technique was introduced in which re-planning during the execution phase of the project was considered. experienced project managers believe that margin should be kept in planning phase of the project considering the uncertain environment and changing business needs so that adjustments can be made at the later stages of planning as well. agile technique therefore was required to deal with such needs of the project managers where they can modify plans in accordance with the demanding situations. in 2001, the "agile manifesto" was written which states that agile implementation need to cognizance on 04 values and 12 principles (dybå & dingsøyr, 2008) which are that there should be interaction among the individuals over the technique, there should be interactions with the client and their requirements should be negotiated and lastly the plan should be changed according the responses received. project documentation is not a top priority in the agile project management methodology like traditional project management and this is to facilitate the project managers in the dynamic environment where the plans need not to be rigid and there is a cushion so that the response can be documented by project managers when and where required. it is also to be noted that unlike traditional planning techniques, in agile more flexibility is utilized for project management. (lindvall et al., 2002) stated that the agile strategies have turned out to be more effective because they immediately deal with the issues that are raised specially when the projects are being executed and managed in dynamic environments. project managers from numerous organizations were interviewed to validate this and it was inferred that project managers need to modify their plans according to the changing timelines, resources, techniques etc. (collyer, warren, hemsley, & stevens, 2010). although european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 80 agile is flexible method of project planning and changes can be later made but it is also important to note that the agile project management methodology does not ignore the planning in the earlier stage of the project. the fact is to be understood that the planning phase in agile method is not just confined to one point but is spread over the course of cycle in place of plans been made in one go. figure 2 agile project management methodology source: author elaboration (serrador & turner, 2015) analyzed 1386 projects and found an inverted-u relationship between agile project planning and success of the project, in terms of planning time. by this study, they observed that if much amount of time is given to the planning it will have a negative impact on the project success, and vice versa. (mann & maurer, 2005) explained that thorough iterative planning technique in agile project management methodology success rate of the projects can be increased. with ever growing popularity of agile project management methodology one limitation of agile project management methodology was also under observation of researchers and it was concluded that agile technique can't be applied on megascale projects however in small-scale projects it is considered to be most effective and followed technique (paasivaara, lassenius, heikkilä, dikert, & engblom, 2013). most of this analysis is based on narratives and smaller number of samples were studied. an example can be quoted to explain this, 48 respondents were interviewed from 08 groups to study the variation among organizations that have adopted the agile techniques of project planning and organization that have not yet adopted the agile planning technique. it was noted that the project success in terms of completing the project withing budget and time was similar in both agile and non-agile organizations (feldt & magazinius, 2010) it was also concluded that although planning strategies have progressed through the years, there are other elements too which are european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 81 to be associated with the non-compliance of project goals. the consequences of such research have confused organizations for the adoption of agile planning technique. 2.3. project success to have a holistic view and to obtain a learning opportunity for future project, scope, schedule, cost, team satisfaction, customer satisfaction and quality are the main objective and subjective criteria which are considered to measure the true effectiveness of the project. project success could also be summarized by comprehensive assessment of external factors starting from initiation, planning, execution, monitoring and control to the closing phase. for a project to be successful there must be acknowledgement of the role of project management within project. adopting a relevant and efficient project management methodology is very vital for achieving project success. many researchers have tried to make a consensus on notion of project success and believed that the conventional / traditional project management methodologies were mainly focused on triple constraints of pmi i.e. time, scope and cost and producing a quality project (parker, parsons, & isharyanto, 2015; p. williams, ashill, naumann, & jackson, 2015). there are 10 dimensions of success of project described by (müller & turner, 2007) while they were contributing to the research and have great collection of study on the capabilities of the project managers. (kloppenborg, manolis, & tesch, 2009) restated similar concept that project success is linked with the traditionally used triple constraints where all these collectively contribute as the necessary elements of the project success. a vast correlation among efficiency of project and success of the project was found by (serrador & turner, 2015) they argued the efficiency is not alone measurement scale for project success, but it also can't be overlooked while (pinto, 2014) focused on satisfaction of stakeholder expectations. the use of right project management methodology to deliver unique results does involve financial investment for organizations (fisher, 2011). project success is now being measured through the lens of organizational achievement instead of meeting the constraints. 2.4. organizational culture culture is the environment we live in. organizational culture is a system of the shared values, beliefs, ideologies, principles, attitudes and the set of assumptions (mclaughlin, 2013) also unwritten rules that have been developed over time and are european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 82 considered to be integral part of social and psychological environment of an organization. these rules and values are required to abided by the employees. these values, beliefs, ideologies, principles, attitudes and the set of assumptions have a strong influence on the employees in the organization and outside the organization (iivari & iivari, 2011). according to the previous research (iivari & huisman, 2007) organizational culture is based on vision, values, norms, systems, symbols, language, assumptions, beliefs, and habits of the organization. the model presented by (quinn, 1984; quinn & rohrbaugh, 1983) was mainly focused on values as core constituents of organizational culture. organizational culture has been associated with different opinions (smircich, 1983) presented a framework in which system development depends upon organizational culture. (cameron & quinn, 2011) explained that there are 04 types of organizational cultures: clan (family-like), adhocracy (dynamic and entrepreneurial), market (results oriented), and hierarchy (structured and controlled). organizational culture, more particularly, influence employees’ insights of the work environment and their behaviors and creates a relatively more homogeneous working environment among employees which directly impacts organizational progress and functioning (borucki & burke, 1999). specific research has also been done on the relationship between agile project management methodology adoption and organizational culture (siakas & siakas, 2007; strode, huff, & tretiakov, 2009; tolfo & wazlawick, 2008) and its effects (robinson & sharp, 2005) which clearly depicts a strong impact of organizational culture on transforming behaviors of employees. different studies identified and recommended certain characteristics to achieve the compatibility with agile project management methodology. few researchers argued hard to change the entire culture of the organization (tolfo & wazlawick, 2008; tolfo, wazlawick, ferreira, & forcellini, 2011) though it’s quite difficult. 2.5. agile project management methodology and project success research on the project success and project management has been carried out for more than 03 decades but in the recent times adoption of agile project management methodology has shown a significant improvement in statistics of project success and it is dominating other project management methodologies (stankovic, nikolic, djordjevic, & cao, 2013). after thoroughly analyzing the data available from previous researchers (sheffield & lemétayer, 2013) concluded that culture of the organization is the key aspect of the project success. agile project management methodology has evolved substantially to respond to the modifications that were required during the course of the project. this paradigm shift from conventional project management methodology like waterfall to agile project management methodology was not only limited to software-based industries (serrador & pinto, 2015) due to the facts that it is different and efficient in project results. agile project management methodology emphasis on communication with all the stakeholders at each level of the planning to cater the ongoing changes which make agile project management methodology the best iterative technique in project management. organizations should be extra cautious in understanding agile project management european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 83 methodology before adoption (nerur et al., 2005). agile project management methodology is not only limited to software industry. traditional project management methodology is outdated, complicated in nature and becoming obsolete with time. (conforto, salum, amaral, da silva, & de almeida, 2014) said that opportunities must be created within the organizations / industries to implement agile project management methodology for achieving project success. many researchers have denied the fact that project success is related to agile project management methodology adoption as not much difference was observed between the companies that are using agile project management methodology and the companies which use conventional / traditional project management methodology. seasoned project managers and (magazinius & feldt, 2011) concluded that project success is not only a factor to measure relation between project management methodology adoption and project success. a distinction of opinion has been highlighted within available literature and therefore aim of this paper is to examine through quantitative analysis the relation between the adoption of agile project management methodology and success of the project. 2.6. moderating role of organizational culture between agile project management methodology and project success it is not easy to change the culture of any organization overnight and if project success is intended then agile project management methodology should be blended with traditional project management technique (boehm, 2002). transformation in organizational culture is essential for agile project management methodology adoption (pace, 2019) as there are many challenges and changes to overcome during this process. researchers also recommended that organizations and enterprises need to be more responsive to change to achieve higher project success rate (sherehiy et al., 2007). project management institute (pmi) in their annual global survey of project, program and portfolio track and publish the major trends in project management and in edition of 2017 pmi mentioned that ‘organizational culture sets the tone that change the work-life experiences of employees which ultimately translated in to organizational and project success’. previous researchers (cameron & quinn, 2011) examined the 04 types of organizational cultures and how it contributes to projects success and summarized that clan orientation culture (family-like) had the strongest association with project success and organizational culture. agile method strongly advocates that organizational culture has an effect on the extent to which an agile method european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 84 is used and for effective and efficient creation of project management culture, organizations must understand the benefits it can bring along with. 2.7. summary of literature hypothesis and conceptual framework for this research study listed as: figure 3 theoretical model underlying empirical research source: author elaboration h1: agile project management methodology is positively and significantly associated with project success. h2: organizational culture moderates the relationship between agile project management methodology and project success. 3. method research was carried out to find how the impact of agile project management methodology relates with the project success with moderating role of organizational culture. questionnaire was developed on the basis of previously established questions available in literature. the survey questionnaire contained two (02) sections, including demographic information while the other part comprised of questions related to variables under investigation. we have used three (03) variables naming agile project management methodology (apm), organizational culture (oc) and project success (ps) these variables were measured using 5-point likert scale that ranges from 01 (strongly agreed) to 05 (strongly disagreed). seven (07) questions for variable apm were adopted from research work of (lu & ramamurthy, 2011), twelve (12) questions related to oc were taken from research work of (iivari & iivari, 2011) and four (04) questions for variable ps were adopted from research work of (aga, 2016). european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 85 main reason for adopting the questionnaire owes to its appropriateness in measuring adoption of agile project management methodology, organizational culture and project success. all the variables and measurement items are mentioned in appendix a 3.1. research design and data collection data collection for this research study has been conducted through “questionnaire” technique. the population selected for this study was telecommunication services provider industry of pakistan. the use of simple random sample selection allows researchers to determine the appropriate sample size of participants, which can be generalized to a larger population (trochim, 2006). the sampling frame consisted of individuals and non-probability sampling technique was adopted, based on their willingness to participate. initially questionnaire was distributed to the employees working in different telecommunication services providing organization operating in pakistan which includes huawei, jazz, ptcl, telenor, ufone, zong and zte. respondents were selected randomly and there were no specific numbers for any organization, role, gender etc. the study was performed from february to may 2020. initially fifty (50) questionnaires were distributed with 41 returned out of which 38 were valid questionnaires in second phase of data collection due to covid-19 pandemic it was not possible to collect the response through visits and meetings. therefore, researcher utilized ‘surveymonkey’ and ‘google forms’ to deliver the questionnaire and 159 responses were recorded via internet which makes the total to 197 responses. 3.2. data analysis detailed analysis of the collected survey responses was performed vi statistical package for the social sciences (spss). the data was confirmed to have no missing values which might prevent accurate analysis. the results of skewness and kurtosis with respect to each variable independently shows that all the values are well within range. the reliability of every variable scale used was tested through cronbach's alpha (ά) calculation and all the values of cronbach’s ά were greater than 0.7, which confirms that the questionnaire has a very good reliability. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 86 table 1 results of reliability reliability statistics variable name cronbach's alpha ά number of items agile project management methodology (apm) 0.872 7 organizational culture (oc) 0.843 12 project success (ps) 0.893 4 source: author elaboration data preparation for factor analysis was done using kaiser-meyer-olkin (kmo) and bartlett's tests. kmo measure of sampling adequacy value is greater than 0.4 that indicates that sample is adequate. bartlett's test of sphericity significance level is less than 0.05 which indicates that factor loading analysis is suitable for the data. table 2 kmo and bartlett's test kaiser-meyer-olkin (kmo) measure of sampling adequacy .837 bartlett's test of sphericity (sig.) .000 source: author elaboration 4. result research survey questionnaire also includes demographic scale such as the gender, age, qualifications and experience of the respondents. 66% respondent were male, 72% respondent holding project management experience, 79% respondent have experience between 8 to 11 years, and 95% respondent working on projects. descriptive analysis shows that variables distributions proved to be normal, skewness and kurtosis with respect to each variable independently shows that the values are well within range. in our factor analysis any value less than 0.70 have been be dropped in order to have acceptable results overall. therefore, values against apm6, apm7, oc5, oc8, oc10 and oc12 were dropped in further analysis. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 87 4.1. variable relationship correlation tells the intensity of the relationship between all the variables under discussion pearson. correlation analysis was conducted for this research work which shows that the relationship between apm and oc is very weak and not significant (+0.080), relationship between apm and ps is very strong and significant (+0.733) and relationship between oc and ps is weak but significant (+0.010). table 3 correlation between variables apm oc ps agile project management methodology (apm) pearson correlation 1 sig. (2-tailed) n organizational culture (oc) pearson correlation .080 1 sig. (2-tailed) .262 n 197 109 project success (ps) pearson correlation .733** .184** 1 sig. (2-tailed) .000 .010 n 197 197 ** correlation is significant at the 0.01 level (2-tailed). source: author elaboration 4.2. linear regression in our study linear regression analysis shows adjusted r square value 0.535 that shows independent variable agile project management methodology (apm) will bring 53.5% change in dependent variable project success (ps). to calculate variable moderation effect, direct & indirect effects and conditional effects of moderator variable i.e. organizational culture (oc) researchers’ used model number-1 of preacher and hayes with bootstrap (n = 1000, 95% ci) using spss path r-sq. adjusted r sq. beta value t value p value apmà ps .537 .535 .733 15.037 .000 model summary from the results we can clearly observe that model is significant. moderator (oc) have significant positive effect on project success as p-value < 0.05. results shows that with addition of organization culture support project success is enhanced. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 88 r r-sq. mse f df-1 df-2 p value .745 .555 6.457 88.810 3.000 193.0 .000 model details coeff se t p llci ulci constant 14.839 0.183 80.903 0 14.478 15.201 oc 0.105 0.042 2.513 0.013 0.023 0.187 apm 0.794 0.05 15.938 0 0.696 0.893 int_1 -0.013 0.015 -0.853 0.395 -0.043 0.017 agile project management methodology is showing significant positive effect on project success as pvalue < 0.05 and effect of agile project management methodology (79.4%) is much higher than organizational culture (10.5%). in interaction-1 (int_1) it is visible that confidence interval i.e. llci and ulci values range from -.043 to .017 and it contains value 0 in its range which depicts that in our moderation interaction is not significance. further it is interesting to note here that interaction have a negative effect (-.013) and with p-value (0.395) > 0.05 means it is statistically insignificant relationship. table 7 conditional effect of x on y at values of the moderator(s) level oc effect se t p llci ulci low -4.866 0.857 0.091 9.44 0 0.678 1.036 medium 0 0.794 0.05 15.938 0 0.696 0.893 high 4.866 0.732 0.087 8.421 0 0.56 0.903 *values for quantitative moderators are the mean and plus/minus one sd from mean. *values for dichotomous moderators are the two values of the moderator. source: author elaboration moderator value(s) defining johnson-neyman significance region(s) table 8 johnson-neyman conditional effect of x on y at values of the moderator(s) oc effect se t p llci ulci -7.191 0.824 0.162 5.074 0.000 0.502 1.146 -6.227 0.791 0.142 5.552 0.000 0.509 1.074 -5.263 0.758 0.123 6.152 0.000 0.514 1.002 -4.298 0.725 0.105 6.904 0.000 0.516 0.933 -3.334 0.691 0.088 7.816 0.000 0.516 0.867 -2.37 0.658 0.075 8.795 0.000 0.51 0.806 -1.406 0.625 0.066 9.483 0.000 0.494 0.755 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 89 oc effect se t p llci ulci -0.441 0.591 0.064 9.293 0.000 0.465 0.718 0.523 0.558 0.069 8.117 0.000 0.422 0.695 1.487 0.525 0.08 6.575 0.000 0.367 0.683 2.452 0.492 0.095 5.186 0.000 0.304 0.68 3.416 0.458 0.112 4.089 0.000 0.236 0.681 4.38 0.425 0.131 3.25 0.002 0.166 0.685 5.344 0.392 0.15 2.605 0.011 0.094 0.69 6.309 0.359 0.171 2.102 0.038 0.02 0.697 6.574 0.349 0.176 1.983 0.05 0.000 0.699 7.273 0.325 0.191 1.701 0.092 -0.054 0.704 8.237 0.292 0.212 1.377 0.171 -0.128 0.713 9.202 0.259 0.233 1.11 0.27 -0.204 0.721 10.166 0.226 0.254 0.887 0.377 -0.279 0.73 11.13 0.192 0.276 0.697 0.487 -0.354 0.739 12.094 0.159 0.297 0.535 0.594 -0.43 0.748 source: author elaboration further johnson-neyman conditional effect of x on y at different values of the moderator was studied which shows that up to a certain level moderator (oc) helps in creating a positive effect of iv (apm) on dv (ps) beyond that effect becomes insignificant i.e. p-value > 0.05 figure 4 moderating effect of organizational culture source: author elaboration hence, we can conclude that oc has insignificant moderator effect on relationship apm and ps. whereas, conditional effect of x on y at different levels of the moderator (low, medium and high level) depicts that when the value of moderator (oc) is increased value of effect of iv (apm) on dv (ps) tends to decrease. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 90 results of hypothesis the results of hypothesis after detailed analysis is mentioned in table 9 table 9 result of hypothesis sr. no. hypothesis result 1 agile project management methodology is positively and significantly associated with project success. supported 2 organizational culture moderates the relationship between agile project management methodology and project success. not supported source: author elaboration 5. discussion the relationship between project success and agile project management methodology is a noteworthy issue. reasons for this are the profusion of the concept of organizational culture, popularity of agile methodology for project planning and execution, ambiguity of the concept of agility in the context of project management and the variety of ways the two variables may be related with each other. while the theories that support agile project management methodology adoption are attractive and logical what has been missing is empirical validation. projects with agile project management methodology are more likely to succeed than the one that relies on traditional approaches ? our findings suggest that there is research support for the application of agile project management methodology in achieving higher project success rate. this study described whether and how agile project management methodology effects the project success through a comprehensive and empirical analysis of telecommunication services provider industry of pakistan. study also discussed that with varying levels of agile approaches project success factor can be increased. our findings offer limited support for previous research work by (budzier & flyvbjerg, 2013) in which the relationship between agile project management methodology and project success was explored in data set of it projects and they found that agile project management methodology appears to improve project delivery times but no evidence was found that agile project management methodology have positive impact on other success factors. an insignificant moderator effect of organizational culture was observed between agile project management methodology and project success, through the bootstrapping results. there is also additional empirical european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 91 evidence resulted out of this study to support the fact that organizations and enterprises need to be more agile, more responsive to changes to achieve more success (sherehiy et al., 2007). 6. conclusion aim of this study was to explore the direct effect of agile project management methodology on project success and what are the indirect effect of agile project management methodology on project success via organizational culture. there was positive relationship witnessed between agile project management methodology on project success. on the other hand, the proposed moderator organizational culture has insignificant effect on relationship between agile project management methodology and project success. it is interesting to note that our original regression analysis showed statistical significance but low values for percentage of variance explained (r2). it is witnessed that up to a certain level moderator helps in creating a positive effect of iv on dv after which if level of organizational culture is increased the effect of agile project management methodology on project success becomes insignificant. 6.1. theoretical and practical implications this study has enabled us to understand the concept of agile project management methodology, organizational culture and how these variables effects project success via their relationship as described in theoretical framework. we have examined the linking of agile project management methodology and project success through telecommunication professionals sample. first, agile project management methodology has been studied with regards to the project success perspective and then addition of proposed moderator organizational culture. this study is an addition to literature of agile project management methodology and provides a guideline to the policy makers in organizations that are striving to maximize project success and are not very clear about the adoption of effective and efficient project management methodology. we have also found that the theoretical model got the practical implications, both for the managers and organization involved in project. this study can be referred to adopt these changes establishing relationships between agile project management methodology, project success and organizational culture. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 92 6.2. limitation and future work although our findings offered some intriguing perspectives on the adoption of agile project management methodology and its direct impact on project success, there were also some limitations to the study that need to be acknowledged. first, ‘non-response’ errors in survey questionnaire i.e. the participants fail to understand and respond to particular questions in its true essence and ‘response error’ survey questionnaire i.e. where the participant does not give an accurate response or gives an incomplete response (cooper & schindler, 2001). secondly, limitation of this research was an examination of the impact of underlying factors of organizational cultural behaviors (shared values, beliefs, ideologies, principles, attitudes etc.) on the relationship between agile project management methodology and project success. although agile has been used for project planning for several years now, to our knowledge, this research report is one of the first empirical studies on adoption of the of agile methods for project success in telecommunication sector of pakistan. future researchers should examine underlying factors of organizational culture and establish their relationship with project success, as measured by multiple perspectives (efficiency, stakeholder satisfaction etc.) and using different flavors of agile project management methodology (agile scrum methodology, lean software development, kanban, extreme programming etc.) conflict of interest there is no conflict of interest acknowledgement: authors express his gratitude and thanks to szabist for their supervision, technical support and guidance in this research. in addition, also thanks for providing partial institutional support. funding this research based on the academic point of view and receive no funding from any organization or institution. appendix a measurements for agile project management methodology (apm), organizational culture (oc) and project success (ps) european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5158 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 93 variable name measurement question agile project management methodology (apm) apm-1: we are quick to make and implement appropriate decisions in the face of market/customerchanges. apm-2: we constantly look for ways to reinvent/reengineer our organization to better serve our market place. apm-3: we utilize our skills better in agile practice. apm-4: we fulfill demands for rapid-response, special requests of our customers whenever such demands arise; our customers have confidence in our ability. apm-5: we can quickly scale up or scale down our production/service levels to support fluctuations in demand from the market. apm-6: where necessary, members of this team try to simplify existing code without changing its functionality. apm-7: whenever there is a disruption in supply from our suppliers we can quickly make necessary alternative arrangements and internal adjustments. organizational culture (oc) oc-1: the organization values feedback and learning. oc-2: social interaction in the organization is trustful, collaborative, and competent. oc-3: the organization values teamwork. oc-4: the organization is flexible and participative and encourages social interaction. oc-5: the project manager acts as a facilitator. oc-6: the organization enables empowerment of people. oc-7: the management style is that of leadership and collaboration. oc-8: the organization values face-to-face communication. oc-9: communication in the organization is informal. oc-10: the organization is results oriented. oc-11: the leadership in this organization is entrepreneurial, innovative, and risk taking. oc-12: the organization is based on loyalty and mutual trust and commitment. project success (ps) ps-1: the project was 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(2015). relationship quality and satisfaction: customer-perceived success factors for on-time projects. international journal of project management, 33(8), 1836-1850. williams, t. (2005). assessing and moving on from the dominant project management discourse in the light of project overruns. ieee transactions on engineering management, 52(4), 497-508. 01 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5988 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 1 criticality assessment of green materials: institutional quality, market concentration and recycling potential matteo mazzarano1 1 università cattolica del sacro cuore, department of mathematics and physics, milan, italy e-mail: matteo.mazzarano@unicatt.it received: 29/07/2021 accepted for publication: 01/11/2021 published: 12/11/2021 abstract the carbon transition and digitalization transformation are tied to a set of critical raw materials (crm). energy accumulators, renewable energy modules, and electronic devices all contain a certain amount of these. the versatility and utility of such elements come together with the limited number of countries where their extraction and refining occur. as the demand for these materials is growing globally, concerns arise regarding the security of the production chain. several works highlighted the risks associated with these materials without presenting clear interaction between such factors. this gap in literature might have overlooked systemic risks underlying green sectors. this article investigates the correlation between three aspects: market concentration, institutional quality, and circularity. the approach will contain the presentation of the main characteristics of recyclability and the institutional status of exporters. a synthetic index is derived and plotted against the potential of recycling per material. in such a manner, we can group minerals according to sourcing vulnerability: one comes from material recovery and the other via imports. an indicator calculated with a cartesian distance method provides the synthesis of security versus safety. according to our findings, electrical vehicles carry the highest vulnerability for their main components in circularity and human rights violations. this implies that the supply chains' instabilities threaten the transition to a low carbon society. ending remarks highlighted the limitations of our research, where possible interest for future research may lay. keywords: critical raw materials; responsible sourcing; market concentration; conflict minerals; circularity 1. introduction acquisition of crms is topical for the eu strategic agenda: a stable and clean supply of raw materials is necessary to key industries. it is called criticality, the economic and technical dependency on a particular material, and the probability of supply disruptions for a defined stakeholder group within a specific time frame (schrijvers et al., 2020). the eu institutions established a three-fold policy direction to aid in this context in 2008 with the raw material initiative (commission of the european communities, 2008). it involved three pillars: safe mining within the eu economic area, secondary materials from waste recovery, and sustainable and fair supply from global markets. the first relates to sustainable mining and new explorations (hàmor, 2004; vrkljan et al., 2017). material recovery is also connected to municipal waste as urban mining (cossu & williams, 2015). households are not the primary source of waste within the eu economy. however, it represents one of the european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5988 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 2 core issues of eu waste policy (expósito & velasco, 2018). finally, safe trade practices are intended to reduce the vulnerability of imports. due to industrial dependency, crm extraction cannot be delinked from nations that cannot foster human rights. this is why some of them are part of the so-called conflict minerals (koch & burlyuk, 2020). the policy issue abides by the oecd due diligence practices (oecd, 2016a). while internal eu production increases the safety of the supply line, the other two are face limitations. material recovery from waste still faces technological uncertainties (ali et al., 2017), and harmonization of due diligence data is still in evolution (oecd, 2020). mineral governance should and policy-making at different levels (bleischwitz & bahn‐walkowiak, 2007), possibly anticipating risks and crises (bleischwitz, 2020). safe mining represents a strategic source. however, within a circular perspective, extractive practices might be taken as secondary. therefore, the circular tools for material governance should focus on the limitations of the other pillars in material governance. securing external sources and advancing recycling technologies could impact the resolution of the eu agenda for digitalization and green transition. material governance is linked to several strategic industries: eee, ev, solar panels, and wind farms (bobba et al., 2020; monnet & ait abderrahim, 2018). safe trades and secondary materials are elements of the umbrella definition of circular economy (homrich et al., 2018). several authors have commented on the capability of circular economy practices to reduce the criticality of materials (chiu et al., 2020; tercero espinoza et al., 2020). however, it was commented on the potential trade-offs between materials and processes (schaubroeck, 2020). this might represent a structural limit to eu policies intended to reduce the criticality. yet, there are few if no articles that address the complementarity between critical aspects. the purpose of this paper is to highlight the potential presence of a trade-off between circular economy pillars of material governance under the framework of internal versus external weakness of european raw material supply chain. the reference literature of criticality assessement for crm have not investigated the issue so far (mudd et al., 2018; santillán-saldivar et al., 2021a; song et al., 2019). we will develop an indicator for external safety according to market concentration and national institutional quality. for circularity, we will use the contribution of recycled materials to raw materials demand, known as the end-of-life recycling input rates (eol-rir). this is not the only possible indicator of circularity. it is, however, the one adopted by the eu commission and eurostat to classify materials for circularity (talens peiró et al., 2018). since market distribution, institutional quality cannot change is short term, we will consider them complementary in this study. the complementarity of recyclability and safe markets is analyzed using a cartesian distance indicator, identifying as vulnerable the elements that cannot be accessed with either of the pillar. it is necessary to consider the changes in definition to recall which crms are. a revision of the criticality definition was implemented several times. the first official publication was in 2011 with 14 crms. following editions every three years increased the number of elements: 2014 with 20, 2017 with 27, and 2020 with 30. such a surge could be interpreted by the attention that the eu commission had towards several evolving topics. circular economy policy packages were implemented during those years: 2008 and 2014 the waste framework directive, circular economy action plan in 2015 and 2017 was the waste of the eee package. the paris agreement's signatures accelerated climate change policy in 2016. regarding responsible sourcing, the eu passed the eu's regulation on responsible sourcing of minerals, also sometimes referred to as the 'conflict minerals regulation', in may 2017. according to this legislation, by january 2021, around 95% of crm imports should follow rs criteria (eu, 2017). the recommendations declined within the due diligence guidelines follow the premise of corruption avoidance, human and environmental rights, conflict avoidance (oecd, 2016b). the article is structured in such a manner. the literature review presents the major works regarding crm criticality. the methodology section is used to explain the derivation and use of indicators for our analysis. the results will deliver a synthetic outcome. in the discussion, we will comment on the relevance of the results according to each sector and how this could affect the development of the eu agenda. finally, a review of the limitations of our methodology is presented, along with the possible new application. 2. literature review the thriving market for consumer and portable electronics and low-carbon technologies (hybrid and electric vehicles, wind turbines, and solar panels) is heavily dependent on the availability of critical raw materials (crms): it is possible to find studies on ev (jones et al., 2020), solar panels and wind farms (rabe et al., 2017). their extraction, production, and trade are associated with various risk factors. in 2013, a study conducted by the iisd identified 32 materials as significant for the de-carbonization european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5988 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 3 of the european energy system (church & crawford, 2018). some are classified as "critical" and included in the eu critical raw material list, being either scarce or extracted in a limited number of countries (blagoeva et al., 2016). commonly, criticality assessments consider the 'supply risk' and 'economic importance' of the raw material. supply risk reflects the severity of the impact on the disruption of supply chains and is based on significant suppliers' concentration and political stability. economic importance reflects the sum of the value of end-use sectors that consume the raw material (song et al., 2019). other studies also include analyses of the reserves and the number of raw materials. some have been confirmed and can be economically recovered with current technology, even potentially by eee waste (mazzarano, 2020). it is possible to estimate depletion rates for global reserves with a long-time focus. in general sourcing material use from production, chains relate equivalent measures (pehlken et al., 2017; ziemann et al., 2018). such approaches are similar to ecological footprint, applying water and carbon emissions (misopoulos et al., 2020; stefanakis, 2019). criticality assessment usually involved the development of indexes. one of the most famous has been annually derived from uk geological survey (british geological survey, 2015). it uses a composition of several indicators involving geopolitical risk, economic relevance, recycling potential, and ore scarcity. however, several of such indicators have been subjected to criticism in the context of life-cycle assessment (cimprich et al., 2019), in the sense that they made hands challenging to use in supply chain analysis. the geopolitical risk component is somewhat relevant in crm studies, but it is significantly mitigated by recycling capacity, becoming a less critical factor (santillán-saldivar et al., 2021b). furthermore, scales and non-continuous indicators are not helpful to capture correlations in the supply risk index used in criticality indicators (blengini et al., 2017). from the markowitz portfolio approach, the correlation between indicators is a possible tool to minimize risk. for crm, there exists no significant correlation between depletion, self-sufficiency, and economic importance indicators (f. f. martins & castro, 2020). economic importance has also been uncorrelated to supply risk (arendt et al., 2020). the study of indicators correlation is a recent development, and rs aspects are often not considered a primary study interest. furthermore, the result in terms of which material is more critical is a redundant exercise. top positions are usually occupied by the same materials (f. martins & castro, 2019). there are comprehensive studies on the supply chain of crms such as lithium and cobalt. macro-economic factors have been addressed in studies regarding european union imports (deloitte, 2015). few studies pay attention to the correlation between the institutional quality of exporters and material circularity. the instability of institutional systems affects the endurance of economic relations. this generates uncertainty and impacts the value chain of products (ambekar et al., 2019; silva & schaltegger, 2019). there is no absolute way to examine stability. according to a normalized scale, available indexes are based on the investigation of experts panel and grade nations (kunčič, 2014). this indicator has been used in several studies of crm supply risk. we will show in the next section how it is possible to correlate market safety to circularity in next section. 3. methodology we employed three indicators to evaluate the criticality of materials under the frame of circularity vs. market safety. for circularity, we adopted the percentage of reuse of discarded materials, the eol-rir. volumes of crm international transactions could be traced to the exporters using the comtrade dataset. we use the reference value of 2018, as it is its latest entry. according to each product, this trading indicator is hereby used to derive the market quota of each exporter. institutional quality is based on six normalized indicators. the eol-rir was the most suitable circularity indicator in criticality analysis: it aligns well with eu targets, including raw materials policy, and the section explains how it can be calculated using material system analysis data (talens peiró et al., 2018). eol-rir refers only to available recycling. it is the percentage of participation of discarded materials in input to production. crm is defined by both market concentration and a north-south dynamic of human rights. since institutional quality does not identify directly human rights violations, we assumed that institutional quality is a robust measure of protection. thus, we do not presume that nations with generally good institutions have no infringement. human rights could be violated everywhere, but good institutions tend to repair or counter the damage. raw materials exporters with stable institutions might host relatively decent work environments. when rights are violated, it is more probable to restore the previous situation than in a nation with weak or unstable institutions. the operational definition of institutional quality is based upon a rating approach. estimating a general value of quality is non-trivial. according to regulatory quality, six quality indexes evaluate nations, government effectiveness, the rule of law, corruption, voice, and accountability index. values of such variables are collected in indicators of worldwide governance indicators. they are european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5988 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 4 estimated using the unobserved components model (ucm). the premise underlying this statistical approach is straightforward – each of the individual data sources provides an imperfect signal of some more profound underlying notion of governance that is difficult to observe directly (kaufmann et al., 2011). the distribution of such indexes is expected and always has a variance of 1 and a mean of 0, with a minimum value of -2.5 and a maximum of 2.5. since we cannot choose which is more effective in preventing or restoring human rights, we will assume that they are jointly and equally responsible for human rights respect. since it is needed positive values from a normal distribution, the exponential value will be used in such way: 𝐼! = #𝑒"#$ ∀$ (1) the generalized index "i" for a country "i" is the inverted average between the value of the six indexes. each index 'm' could be given any weight 'x' according to the institutional quality the criticality assessment requires. however, as previously stated, it might be better to have no discrimination on such occasions. all weights are equal to 1/6. this methodology is helpful as it does not substantially change the value of the variance of distributions, avoiding other biases to our analysis. since we had to refer the value to a material, we matched the generalized index with the market participation. 𝑀& = 1 𝑛 #𝑝!𝐼! ∀! (2) in such a way, the index of market institutional quality "m" for material "k" is an average of the institutional quality of nations. the value can vary from 0 to 100. the meaning of the index is a positive interaction between a market distribution and the quality of partners. the maximum index level can only be achieved when the market is split between fair exporters: the lower the level, the more concentrated the market around unfair partners. since market distribution is not necessarily normally distributed, we cannot expect the "m" index to appreciate the same properties as the institutional one. figure 1. classification areas source: author’s elaboration according to circularity and market source vulnerability, the classification of materials will be plotted on a reference of two axes. the x-axis will represent the first while the y-axis the latter. splitting the area into four, it is possible to discern between zones of no policies (both high values), overall criticality (low and low), high market vulnerability, and low circularity. speaking of mere distribution, it is possible to see the objectives according to frequencies. the areas will be split according to the median value. as reported in figure 1, half of all materials have either very low eol-rir (˜8) or low market vulnerability (˜22). each commodity is constituted by a cloud of points spread between four areas. according to where these dots are located, it is possible to see where each sector should focus its policy. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5988 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 5 unfortunately for crm in international trade datasets, heavy and light rare earth elements (hree and lree) are used. the former comprehends yttrium (y), gadolinium (gd), terbium (tb), dysprosium (dy), holmium (ho), erbium (er), thulium (tm), ytterbium (yb), lutetium (lu). the latter comprehends scandium (sc), lanthanum (la), cerium (ce), praseodymium (pr), neodymium (nd), promethium (pm), samarium (sm), europium (eu). furthermore, group 5 elements have to be considered as a whole. this collects vanadium (v), niobium (nb), tantalum (ta), and dubnium (db). criticality assessment considers, therefore, twenty-eight materials and groups. market concentration could be considered on two levels. one could be captured by index m, as the proportion of trade that each nation control for a particular crm. the second appears when nations participate and possibly control several markets. to summarize market concentration, shannon index of attention is applied. its derivation originates from communication theory but has prolific application in social sciences (tabner, 2007). the lowest value of 0 indicates the monopoly of markets of one country on every market. the number of exporting counties is collected in i = 1,..., n, and commodities in k = 1,..., k 𝑆! = 1 𝐾 ##𝑝! ∀! 𝑙𝑛(𝑝!) ∀& (3) we suggested in figure 2 that the number of dominators is few in crm markets. while these nations have unstable institutions and deal with low circular materials, it is rather challenging to address diversification. for our purpose, the m index is penalized by high concentration for commodities exchanged in this condition, even by very stable countries. it is possible to compare concentration from this panel to a" normal one" using a standard distribution fitting (blue). in figure 2, a comparison of concentration is highlighted. dominant exporters do most transactions of crm. the normal distribution in blue is centered around si mean and standard deviation. figure 2. market concentration per exporters, si source: author’s elaboration european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5988 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 6 the m index multiplies market concentration to the i index of institutional quality. this index has low tails, and most firms are distributed around its mean of 6. nations with an index around 1 have the most inferior instability to report, with all indexes near -2.5. the characteristics of such distribution are helpful to penalize extreme events and allow higher points on middle-tier countries. the interaction between such data is reported in the result section. to have a comparable criticality index, we needed to synthesize the correlation between the indicators and the distance to the most unsafe of trades for rs-circularity objective: those low on both m and eol-rir (c in equation 4). figure 3. i index with normal density fitting source: author’s elaboration since we intend to address the usefulness of the trade-off, we place no preference between the two indicators. cartesian distance between each element to (0,0) functions as a pareto-efficient indicator: elements are given a higher value if any form of hedging strategy exists between circularity or safe markets. 𝐷& = /𝑀& ' + 𝑐& ' according to eu standards, the analysis we provided allows for interpreting results for market safety according to possible rs considerations and circularity. we reported hereby the outcome of our study. 4. results we reported a summary of the preliminary analysis in table 1. among essential categories of crm, it is possible to find lree, hree, and g5. their market is respectively controlled by japan (15.44%), the popular republic of china (11.6%), and brasil (24%). cobalt, lree, and silicates are the lowest circularity in ev, eee wind, and solar farms. for market and institutional fragility, molybdenum and cobalt are the lowest. the latter is particularly vulnerable for both factors. china represents the most relevant source of market concentration and instability. while it is ranked low on all institutional quality indicators, it is the dominant player in several markets. among these, we find bismuth, hree, molybdenum, and nickel. cerium and lree are dominated by japan, which generally accounts for stable institutions. in responsible sourcing, "top-down" approaches based on institutional indicators for critical analysis have generally similar results, despite different focuses. in our case, we developed a system based on three major indicators: market safety, circularity, and cartesian distance index. institutional quality has been weighted to market participation. in case most any market is composed mainly of overall fragile states, we called the market tainted. the comparison element to draw vulnerability is the european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5988 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 7 circular limits of the eol-rir. the exposure is based on the possibility to acquire a material according to fair market or circular source, as recycled materials. table 1. table’s example hs92 m index eol(rir) cartesian d chemical name application main trader 2613 5.68 30.00 30.532 mo wind chn (31.036%) 250410 36.57 3.00 36.693 c ev chn (10.46%) 251910 29.18 9.50 30.686 mg ind (23.039%) 252010 32.57 1.10 32.589 ca esp (5.29%) 260111 20.31 24.00 31.439 fe solar, wind, ev, eee bra (11.134%) 260200 25.34 12.00 28.040 mn wind, ev gab (17.484%) 260300 24.69 55.00 60.289 cu solar, wind, ev, eee bgr (8.882%) 260400 10.24 33.90 35.412 ni ev, eee chn (40.858%) 260500 4.73 0.00 4.729 co wind, ev, eee aut (28.584%) 260600 31.03 12.40 33.413 al solar, wind, ev, eee gin (17.477%) 260700 19.49 75.00 77.490 pb solar, wind, ev blx (7.352%) 260800 30.26 22.90 37.945 zn solar, wind, eee blx (7.772%) 260900 9.44 32.00 33.364 sn eee mys (31.452%) 261400 21.00 19.10 28.383 ti ev, eee blx (9.73%) 261590 11.22 15.43 19.079 g5 solar, wind, ev, eee bra (23.849%) 261610 15.53 55.00 57.152 ag solar, eee bol (8.522%) 280450 19.09 1.00 19.115 te chn (15.148%) 280490 33.78 1.00 33.798 se solar, eee deu (6.511%) 280530 19.87 8.45 21.589 hree solar, eee chn (11.598%) 282560 29.99 1.70 30.040 ge jpn (6.044%) 283691 30.65 0.00 30.648 li ev, eee chl (11.023%) 284610 32.64 1.00 32.651 ce eee jpn (20.777%) 284690 30.81 0.50 30,815 lree eee jpn (15.431%) 391000 55.63 0.00 55.628 si solar, ev blx (5.368%) 711019 26.68 11.50 29.054 pt zaf (23.751%) 711029 24.72 9.70 26.555 pd eee rus (34.217%) 810600 27.57 1.00 27.590 bi eee chn (19.52%) 811219 13.55 0.00 13.549 be eee usa (20.995%) source: author’s elaboration european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5988 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 8 figure 4. scatter plot areas’s indication source: author’s elaboration critical materials for the sector intending to secure the production chain could look at circularity and/or market safety. again, institutional quality is just a 'preventive' measure. it does not state an absolute and unequivocal measure of violations. in this application, we see that most green materials are outside the comfort zone of fair and recyclable materials; a synthetic graph of the analysis is portrayed in figure 4, along with the distinction areas we previously mentioned. with a wider perspective on all examples, we could outline a trade-off between circularity and institutional quality. the correlation for eee is -26.5%, for solar panels is -37.2%, for ev -22.9% and finally wind farms is 24.0%. its relevance in this paper is to prove the existence of the inverse relation between index m and eol-rir in crm. the calculation has been made on all crm according to the report of the eu commission. we collected the relevant information in table 1. the total panel of materials is referred to the category of electronic and electrical equipment (eee). they design all commodities that are designed to function via electricity. we used eee as a yardstick configuration as they contain almost all crm. its waste designation is named waste eee (weee) according to eu packages of 2008 and 2014. a recent report highlighted that these commodities are normally not designed to be fully recycled (raudaskoski et al., 2019). they are relevant for the strategy of circularity, and usually, the other three products are considered related to them for sustainable electricity generation and components (accumulators). therefore, we split materials according to the uses in three sectors of the green transition. these are solar panels, electric vehicles (ev), and wind farms. the highlighted trade-off is present in both solar farms and evs. the difference between sector vulnerability is represented in figure 5. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5988 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 9 figure 5. sector allocation of crm source: author’s elaboration wind farms are based on materials characterized by a heterogeneous set according to circularity and generally tainted markets. solar farms register some materials in the comfort zone, such as copper and zinc. outside hree and g5 materials, it is overall a safe sector. some materials could be recovered by discarded (iron, silver, and lead). others by acquired on fair markets (silicon, aluminum, and selenium). wind farms rely mostly on tainted markets, whereas most of these are easy to recover from european scrap metals (copper and lead). unfortunately, cobalt and g5 are necessary for components, greatly endangering this sector's circularity and production chain fairness. finally, ev crm is characterized by both trade-offs and deep criticalities. due to the level of technological complexity, this should not sound surprising. nonetheless, it is relevant to point out that both lithium and cobalt, the lowest in eol-rir, are required. according to our result, lithium is significantly safer than most other recyclable materials but not within the tradeoff. these two are, according to our criticality, the most difficult to control for a sustainability transition. the european production chain for transition commodities such as these is incredibly vulnerable in the following decades without institutional quality and recycling technology improvements. in this section, we briefly classified materials according to an index "m" and eol-rir. the first evaluated together market concentration and institutional quality. it greatly penalizes materials that are concentrated in fragile states. eol-rir refers to the recycling potential of the referred material. a brief discussion over the results will classify the focus of policies. 5. discussion circularity and rs collect strategies are intended to reduce the adverse effects of external dependency. since the eu is abiding by oecd due diligence practices, imports must conform to international standards. however, indicators for human rights violations are sparse, and data clearance is one of the main pillars of due diligence. efforts to create a consensus have been made (oecd, 2020). using national-level indicators for institutional quality allows having a homogenous measure comparable between suppliers and between sectors. using such indicator along with market concentration is possible to identify the nodes of monopoly and political instability. reducing dependencies from fragile nations (or fostering their development) represents a strategy for external risk mitigation. investing in recycling technologies and enforce circularity policies reduce internal vulnerability: the lack of relevant raw materials' deposits. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5988 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 10 demand for green transition commodities still is dominated by the european market. eu represents the destination of most of those raw materials, nevertheless their risk. the focus on gdp use in criticality analysis is redundant in these terms. the main vulnerability to recall is to eu welfare. the impossibility of applying carbon-neutral policies and allocate enough eee affects contemporary and future standards of living. thus, when considering rs, firms increase the welfare value of their chain more than the economic value. in such a sense, gdp is not a measure of welfare (stiglitz et al., 2018). it is a common feature to use as an economical substitute when using economic value over the total gdp (or sector) (ferro & bonollo, 2019). in this sense, focusing on critical indicators of circularity and institutional quality allows identifying alternative strategies. for instance, sectors that are characterized by negative correlation could focus on circularity or rs efforts according to their cost function. such approach could be done with three indicators at time, and could be repeated for as many indicators are necessary. however, literature has demonstrated that the relevance of geopolitical and economic relevance indicators could be redundant. the cartesian distance approach has an inherent limitation: it is an indifference indicator. since our interest was to give no particular preference to the indicators at any level, it does not penalize our results. the higher the value, the safest in the supply line. the cartesian distance indicator grows logistically with its argumenta values. in case one of the two variables is near zero, the other hand explains its importance. therefore, a long distance with one of the two arguments as near-zero indicates specialization possibility. if the application (for instance, solar panel) involves lead, circular policies could mitigate risks on the supply line. lead is relatively cheaper to recycle, but the sources are often not institutionally stable. as long as sectors can allocate their inputs according to the correlation, they can maximize their results in circularity and rs. applications of cobalt are, in terms of rs, the most unsafe. the nearest element in terms of low value is beryllium, with 13.549 points of cartesian distance. in our study, its applications are mainly concentrated in eee, in particular for circuits. while its circularity is nearly null, its primary source consists of usa mines. this means that rs strategies might yield better results. circularity policies are topical for crm. secondary materials substitute virgin materials, reducing dependency on fragile countries. as reported in results and figures 4 and 5, most materials low in the m index have decent eol-rir (in many cases debatable but helpful). similarly, one lree, cerium, is low in circularity but proper in the m index. sectors that rely on such material could focus on circularity improvements to success in sdg. overall, commodities related to wind farms and solar panels employ crm characterized by a decent level of circularity: most of them are above the median demarcation line. complex commodities such as eee and ev are unfortunately challenging to manage. eee is a comprehensive group. however, crm applications are characterized by stable trade partners such as japan. our analysis may affect, for the most significant part, only some of the commodities within eee. for instance, ict-related commodities are composed of a complex set of crm (kasulaitis et al., 2015) compared to heavy household appliances. green transition dependency to crm does not represent a bottleneck for its policies. some commodities critical for it could benefit from concentrated efforts on only one of these: rs or circularity. solar farms, for instance, use hree, but most of their materials generally have decent circularity levels. therefore, improving rs factors by blending the product chain with secondary materials is possible. a similar approach could be made for wind farms. energy policies involving such instruments are fascinating nexus for mineral securities and rs. considering their relatively low-risk sources, they are useful for carbon transition, considering conflict minerals legislation. on the other hand, evs are a strong driver of carbon-free mobility. unfortunately, their production relies on several crm affected by possible conflicts and low circularity. 6. conclusion although used in low concentrations, the growing electronics and transition commodities market has increased the global demand for critical materials. this has generated concerns about crm international reserves and supply since they are either scarce or extracted in a limited number of countries. the main strategies for mitigating material criticality are recycling and responsible sourcing (lapko et al., 2019; young, 2018). recycling is likely to reduce input from primary raw materials, although it may not meet the growing market demand for certain materials (mayyas et al., 2019). rs leverages stewardship and certification programs that support sustainable development and practices in mining countries, steering cooperation among countries and industrial sectors, arguably securing the supply of raw materials (gandenberger et al., 2012). both strategies present organizational and operational constraints, besides major technological issues (for recycling). commonly described as immaterial, digital technology is, on the contrary, high energy and material intensive (see the work of ecoinfo in france. see also maxwell (2014) and lepawsky (2018)). european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5988 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 11 there is now vast literature documenting the materials, infrastructure, labor conditions, and energy requirements underpinning digital technology production, maintenance, and disposal. there is still no consensus, however, on which indicators are necessary for disclosure. ngos and national laws in the us and eu have recently focused on supplying "conflict minerals" tin, tantalum, tungsten, and gold. the first two, in particular, are used to produce components of circuit boards and electronic devices). mining and trade are entangled in conflict and severe social conditions in the democratic republic of the congo (drc). demanding enterprises to verify purchased goods as "conflict-free" means that they are not extracted in a conflict zone and used to finance war as in certain provinces of the drc. our paper has presented a critical study on crm. to classify the vulnerability of the eu in terms of total supply, we considered two aspects: responsible sourcing and circularity. in this sense, the general objective should be to access materials on markets safe from human rights violations and secondary materials. we identified as a proxy variable for human rights safety an index of institutional quality. eol-rir is the reference for circularity. it is generally employed in criticality assessment for crm, and it is a proxy for secondary material recovery. the former relates to the market concentration jointly with the institutional quality of exporters. we elaborated a synthetic index for these two aspects: market/institution fragility versus circularity, hence internal versus external vulnerability. using a classification based on trivial index generation, we presented evidence of a trade-off between circularity and market concentration/institutional quality. according to our results, energy commodities of wind and solar farms represent a safe instrument for transition policies when we consider internal and external vulnerability. the article presents a novel investigation of the systemic limits of outsourcing green commodities. considering that european union has put the transition to a low carbon society, the production of such artifacts should at least abide by principles of fair labor and democracy. it addresses the emergent correlation between the two aspects of circularity and safe trades using external and internal weakness as the key of interpretation. the study presents several limitations anyway. first, it was mainly an exploratory study over the limits of criticality studies in the context of crm. the indicators employed were the most used in the literature. however, there is a lack of comprehensive indicators of welfare regarding raw materials and their extraction. the methodology tried to overcome the issue by generating more indicators from available data. the implied complementarity of the two weaknesses is highly debatable from an economic standpoint, especially if looking at a dynamic one. thus, the paper presents a conservative perspective over the potential of electrification of the automotive sector. transition commodities such as ev, solar panels, and wind farms present decent average circularity and safe external sources when the former lacks. the ev sector represents both methodologies, the most critical sector for circularity, market vulnerability, and human rights violation. in terms of liability risk, it means, according to these results, the industry with the most significant liability risk for responsible sourcing and material circularity. the exponential growth of markets for electric vehicles is likely to put under pressure in the short and medium-term. the results show that beryllium and cobalt traded in europe are critical from the institutional quality and circularity perspective. the methodology applied is not necessarily bound to application in crm. energy commodities such as gas and oil are affected by similar performance. instead of circularity, climate impact could be a possible substitute. overall, the paper presented results on non-energetic elements using two main aspects. this limitation could hinder the completeness of our results. however, indicators of rs could greatly vary between commodities and nations. circularity is based upon industrial definitions. thus fewer indicators could be considered alternatives to eol-rir. finally, rs and circularity represent a gap in the literature. while our study is not intended to give a complete toolkit for supply strategy, it identified an advantage. future studies might consider the problem of destabilized supply chains. a trade war affecting green products could impede carbon reduction for short periods. the effect on welfare would therefore be significant, especially in the long term. several studies have presented the potential for business accounting (piontek et al., 2021; scarpellini, 2021). further data in the field could improve the understanding of listed companies' financial risks with unstable supply chains. better knowledge of the complex supply networks of crms for europe can provide several insights for european policymakers. consensus over rs indicators is vital for this purpose and represents a relevant gap in the literature. it should be further explored to support the development of cooperation programs and actions (e.g., the clean cobalt initiative). the challenges for a sustainable transition consist of discovering more innovative technologies and rethinking commodity design to improve their durability and reparability. improved interaction with local communities might strengthen supply security even when national indicators say otherwise. local realities often constitute particularities. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5988 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 12 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(2018). modeling the potential impact of lithium recycling from ev batteries on lithium demand: a dynamic mfa approach. resources, conservation and recycling, 133, 76–85. https://doi.org/https://doi.org/10.1016/j.resconrec.2018.01.031 5058-article text-17220-1-9-20210223 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 100 barangay governance in northeast of catanduanes, philippines: basis for catanduanes state university panganiban campus extension program jaymund marino floranza1, 1 catanduanes state university panganiban campus e-mail: jmfloranza@up.edu.ph received: 19/08/2020 revised: 17/01/2021 accepted for publication: 26/01/2021 published: 08/03/2021 abstract governance is an act or a process of governing with power and performing the duties and functions within one's jurisdiction. barangay governance gives an important role in setting direction to the people in the barangay level. it is an empowerment of the local government units in the country where this present study is interested. this quantitative-qualitative research study intended to look into the barangay governance capabilities among barangay captains in northeast of catanduanes, philippines as basis for catanduanes state university panganiban campus extension program. the data gathered through the questionnaire and interview guide concluded that the respondent-barangay officials in northeast of catanduanes are in the middle age, male, college level in educational attainment, barangay council members and a neophyte in barangay governance having served for three years and below as barangay officials. the indicators of governance revealed that barangay captains are more equipped with barangay fiscal administration than in legislative and judicial functions. the unstructured interview about the problems regarding the governance capabilities of barangay captains reveals the incompetence of the barangay captains, the non-cooperation of the residents or the constituents themselves, and the non-cooperative barangay kagawad that genuinely affects the capability of the barangay european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 101 captain. given the situation, the study recommends that barangay officials, particularly the barangay captains, are enjoined to attend barangay governance capability training seminar. intensive monitoring and assessment of their barangay performance should be done regularly. a proposed training package will be carried out where all catanduanes state university panganiban campus faculty-extensionists will be involved. keywords: barangay governance competency; barangay officials; local governance; local government code of 1991 ____________________________________________________________________ 1. introduction in the broadest sense, governance is an act governing with power and exercise of authority within one’s jurisdiction (boysillo 2017; aquino et al. 2017). governance is a process of administering with authoritative direction or control (boysillo 2017). it is also a leader’s continuous exercise of authority and performs functions as a government unit. in a specific sense, barangay governance sets directions to the people in the barangay level. it is empowering local government units (lgus), particularly in the barangay level, where this present study is focused. in the philippine setting, the barangay is the least political and yet significant political figure in the community (flores 2019). it is more inclusive and participatory rather than exclusive barangay governance (shore 2011). one introduced a connection with the concept of good governance and decentralization in the light of connected thoughts and theories. the idea of ‘governance’ to ‘good governance’ to ‘local government’ is based on the socio-economic and the socio-political context (nadeem 2016). another author concludes the concept of networked governance that promotes democratization while establishing allied power (porio 2012). european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 102 in the same manner, the commission on higher education memorandum order no. 52, series of 2016 states that the philippine higher education institutions are mandated to engage in extension programs to allow faculty members discover practical, evidence, and science-based answers that can address real-world social, cost-effective, and environmental challenges of partner communities. the concepts of governance at the barangay level and community outreach programs of higher education institutions both required partnerships and, therefore, this research is abstracted. the product of this research will be used as a basis for the catanduanes state university panganiban campus (catsu pc) extension program activities and rerouting its priorities. community outreach programs are a way to express a deep sense of responsibility of the faculty members in higher education institutions (heis). the faculty members are more knowledgeable and highly skilled than those in the community sectors. through the extension program activities, they are not only delivering academic matters but also performing community service (rubio et al. 2016). thus, the present study is significant. the study identified the barangay governance in northeast of catanduanes, philippines as the basis for catsu pc extension program. this research specifically presented the respondentbarangay officials profile in northeast of catanduanes in terms of age; sex; educational attainment; position in the barangay and number of years as barangay official. it determined the respondent-barangay officials' perception in northeast of catanduanes regarding their barangay captain's governance capabilities in terms of legislation; program/project implementation; barangay justice system; barangay fiscal administration. it further ascertained the problems do the respondent-barangay officials considered that affect the barangay governance capabilities of the barangay captain; and the significant difference in the summary responses of the respondent-barangay officials in northeast of catanduanes regarding their barangay captain's governance capabilities in terms of their position in the barangay. based on the findings, a three-year extension program can be proposed to enhance barangay governance capabilities among barangay captains in northeast of catanduanes. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 103 2. literature review the legislation of the philippine republic act (ra) 7160, which recognized as the local government code (lgc) of 1991, transformed many of the laws and regulations governing national down to barangay units by decentralizing many of the tasks previously performed by the central government. the philippines has a comprehensive decentralization in governance. that includes a high amount of discretion among barangay officials leading to ineffectiveness in local management (yilmaz & venugopal 2013). the inability to deliver better essential services in the barangay is also evident (layug et al. 2010). the barangay units perform as the principal authority in developing and implementing government guidelines, plans, programs, projects, and activities. however, to fulfill the barangays’ mandates confined in the lgc, the punong barangays must be prepared with the necessary capabilities. they should observe not only the orders but also practice morally upright actions. one argued that competency measures of the local barangay officials are monitored rarely (caldo 2015). in some cases, it is evaluated subjectively through intuitions and their impressions and feeling to the barangay officials, and therefore this process is not helpful to the elected barangay officials. at the same time, capuno (2005) said to formalize simple yet realistic citizen-feedback systems to let clients express their agreement or disagreement with barangay officials’ quality of service without fear and with the guarantee to address the issues of concern. the self-assessed survey tool for barangay officials suggests identifying performance gaps. that includes administration, social services, economic development, and environmental management. the issues posed in the present study may awaken awareness and commitment to perform duties and functions expected to the barangay officials (medina-guce et al. 2018). their political ideals and governing procedures is a significant indication of active local community building (nalbandian et al. (2013). the community development depends on the capability of leaders at the national level and, more particularly, on lgu to the lowest political unit of governance, which is the barangay. it is then essential that we look at the barangay level’s leadership aspect through the barangay captains. the european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 104 formulation of an intervention mechanism reveals a significant concern for good governance (nalbandian et al. 2013). there also suggests creating additional funding in barangays considering minimal budget allotment (medina-guce et al. 2018) that may help the kind of governance and performance of the barangay officials’ duties. the study on the development of barangay legislators’ leadership scale in davao city determined that to become a good leader, one should set directions on good and personal qualities and primary values (padilla & eguia 2010). further, studies revealed that the punong barangays have a satisfactory performance level in implementation, legislation, peacekeeping, planning, and fiscal management (noble-nur 2018) and “very competent” in barangay governance. nevertheless, the respondents identified the community residents’ lack of planning and decision-making as one of the significant problems that affected good governance (noble-nur 2018). another study on barangay governance concluded that the majority of the barangay chairpersons deliver very satisfactory public services in their barangays, which indicated that governance core values are being fair, transparent, and accountable (boysillo 2017). one proposed that the local officials stay self-reflective or aware of their accountabilities in the barangay to maintain barangay governance (nalbandian et al. 2013) to provide vital services and increase the excellence of their capability to render community services (flores 2019). the different contentions of the authors mentioned guided the discussion of the present study. yet, they are challenged further to increase their impact on other local and international academic communities through information dissemination for an effective research output. 3. theoretical framework this present study anchor on constructivism theory and human capital theory to further discuss barangay governance. constructivism is a knowledge theory that originated in the field of psychology, explaining how individuals obtain knowledge and learn from it. it involves a european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 105 participatory process, contemplation, deliberation, collaboration as a way of discoveries, and learning (yoders 2014). the theory indicates that individuals build knowledge and their meaning based on experiences. while human capital theory implies that people compensate human capital ventures through excellence in intelligence and skills of the labor force. productivity enhancement among the labor force serves as an essential part of economic development (zeynalli 2020). the lack of skilled human resources is one of the main obstacles for the social entrepreneurs’ development yet they could create positive social impact to ensure profit despite the lack of managerial skills (urmanaviciene & arachchi 2020) with the given context, constructivism theory; and human capital theory harmonizes with the problems posed by the present paper since the respondents-barangay-officials are considered human capital who are always learning through their experiences and enhances their barangay governance capabilities. 4. methods 4.1 nature of research this study used a quantitative-qualitative type of research intended to look into the barangay governance capabilities among barangay captains in northeast of catanduanes, philippines. this investigation is quantitative since it collects, analyzes, and interprets the present phenomena while qualitative because it collects and reports data that differs from traditional-quantitative methods. this study is also a descriptive type of research since it describes the honest responses of the respondent-barangay officials about barangay governance indicated in the questionnaire that depended much on the correctness of the gathered data. 4.2 research the northeast of the island province comprises the municipalities of bagamanoc, panganiban, and viga in catanduanes, philippines. it is roughly 63 kilometers away from the municipality of virac, catanduanes that is considered as the principal town or city-to-be of the province. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 106 4.3 sampling design the word 'population' refers to an assembly of people, events, or things of interest that the researcher wants to examine or investigate. in the present study, this considers the barangay officials of the northeast of catanduanes. moreover, it is presented in table 1 the 73 respondentbarangay officials from bagamanoc; 82 respondents from panganiban; and 118 respondentbarangay officials from viga, catanduanes. there are 273 respondent-barangay officials from the northeast of catanduanes, or 38.61% participation. table 1. population of the study source: developed by the author there were two sampling techniques used in the study; the quota sampling and complete enumeration. the quota sampling was applied to identify the barangay councilor's sample size, while for the barangay captain, barangay secretary, and barangay treasurer, a complete enumeration, was used since there are only one of them for each of the barangay. the quota sampling is considered a non-probability method that aims to make the sample representative of the population by setting and filling quota control. this researcher found the most appropriate procedure in determining the respondent-barangay councilor in the barangays of the three municipalities of the northeast of catanduanes. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 107 4.4 survey instrument the study's primary instrument is a set of researcher-made questionnaires formulated to gather data to answer the research questions posed in this inquiry. the part-i of the questionnaire is the profile of the respondents that includes the name of the respondent-barangay officials, the barangay; age; sex; educational attainment; position in the barangay; and the number of years as barangay the official that includes their previous term/s). the part-ii of the questionnaire are the 16-item barangay governance indicators categorized into legislation; program/project implementation; barangay justice system; and barangay fiscal administration. the study used the five-point likert scale in determining the barangay governance capabilities are raging from fully capable of not capable. part iii of the instrument is an open-ended question about the problems the respondents they considered that affects the barangay governance capabilities of the barangay captain done in a semi-structured interview. the instrument was shown to former barangay officials to solicit comments and suggestions along with barangay governance indicators that made the questionnaire to be revised and improved. with the establishment of the questionnaire's validity, the researcher ensures clarity, completeness, and acceptability of the instrument using a comprehensive and realistic formulation of items/statements included in the questionnaire. to establish the instrument's reliability, this researcher got 0.96 cronbach's alpha coefficient from the 16-item questionnaire, and therefore, the research instrument was considered "reliable." the researcher first sought approval from the office of the mayor of the three (3) municipalities before floating the questionnaires to the respondents. upon the mayors' support, the float of the questionnaire has been administered to the targeted respondents in the third quarter of 2019. 4.5 ethical considerations the respondents are fully informed and free to participate in the conduct of research. ethical considerations for human participants were strictly followed (gajjar 2013). the study did not include respondents-barangay officials who refused to participate during the data gathering. duly signed informed consent form was obtained individually for every respondents-barangay european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 108 officials. the study observed the utmost confidentiality of the gathered data. only this facultyresearcher has access to the collected data to ensure data privacy. 4.6 statistical treatment in computing the replies, a five-point likert scale was used. every answer was given value and was tallied through frequency count to determine the degree of capability of the barangay officials in barangay governance. the anova f-test was used as statistical tool to test the significant difference in the summary responses of the respondent-barangay officials in northeast of catanduanes regarding their barangay captain’s governance capabilities in terms of their position in the barangay. 5. results and discussion 5.1 respondents table 2 shows that most of the respondents were aged ranged from 36 to 50 years old. in terms of their sex, the male is higher in figure than female. in terms of educational attainment, most of them are at the college level. in terms of position in the barangay, most of the respondents are the barangay council three years and below as barangay officials. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 109 table 2: profile of the respondent-barangay officials in northeast of catanduanes source: developed by the author figure 1 presents the bar-graph view of the barangay captain’s governance capabilities to show that the barangay captains are fairly capable (in higher degree’) in ‘barangay fiscal administration’ while fairly capable (in lower degree’) in ‘legislations’ in barangay governance. given this finding, it generally shows that the respondent-barangay officials can still initiate, establish, disseminate, and implement barangay ordinances, but the struggle to discharge their duty along with legislation. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 110 figure 1: over-all barangay captain’s governance capabilities source: developed by the author table 3.1. the perception of the respondent-barangay officials in northeast of catanduanes regarding their barangay captain’s governance capabilities (a) legislation source: developed by the author table 3.1 presents the perception of the 273-respondent-barangay officials in northeast of catanduanes regarding their barangay captain’s governance capabilities in terms of legislation. all four statements have the same average response (avr) of 4.25 and qualitative response (qlr) of fairly capable and they are: (1) initiates the implementation of barangay ordinances; (2) establishes barangay policies for better community development; (3) disseminates properly barangay ordinances; and (4) implements fairly barangay ordinances. 4,15 4,2 4,25 4,3 4,35 4,4 4,45 le gis lat ion pr og ra m/ pr oje ct… ba ra ng ay ju sti ce sy ste m ba ra ng ay fi sc al… (1 ) n o t ca pa bl e ï ð fu ll y ca pa bl e (5 ) barangay governance capability indicators european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 111 in terms of program/project implementation (table 3.2), among the 4-item statements, the following three (3) statement garnered avr of 4.40 and they are also presented with their corresponding item number before the number indicated in the questionnaire: (5) encourages the community residents to participate in planning activities of the barangay; (6) monitors and evaluate the implementations of programs and activities in the barangay; (7) participates and represents the barangay in the municipal level activities while the item statement (8) consults the community residents in decision making and other barangay undertakings got the lowest avr of 4.10 with a qlr of fairly capable. table 3.2. the perception of the respondent-barangay officials in northeast of catanduanes regarding their barangay captain’s governance capabilities (b) program/project implementation source: developed by the author given the findings, the research data shows that the barangay captains find difficulty in involving the community residents in decision making and other barangay undertakings which following aquino et al. (2017) study revealing that the punong barangay is “not competent” in encouraging the community residents to participate in planning activities of the barangay and do not encourage the participation of the community residents in decision-making. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 112 the given finding is challenged by ur rehman et al. (2020) arguing that sustainable development that is mainly influenced by the organizational hierarchy internal polices and strategies and their operational implementation that is purely dependent on the top management. if the barangay captain manifests lack of skills along project implementation particularly involving the community in decision making and any other barangay undertaking, sustainable development may be difficult to achieve in the barangay level. table 3.3. the perception of the respondent-barangay officials in northeast of catanduanes regarding their barangay captain’s governance capabilities (c) barangay justice system source: developed by the author moreover, in table 3.3 which in terms of barangay justice system, given the 4-item statements, they all garnered a qlr of fairly capable and are presented below arranging from highest to lowest avr with their corresponding item number before the number indicated in the questionnaire: (11) shows good leadership in the implementation of barangay justice system. (4.42); (12) observe neutrality in settling conflicts. (4.29); (10) keeps himself available when conflicts arise in the community. (4.25); (9) settles conflict among community residents. (4.24). given the findings, the research data shows that the barangay captains are fairly capable in their discharge of duty along with the barangay justice system and are considered to possess good leadership in its implementation. as labawig (2011) and padilla and eguia (2010) argued also european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 113 that the development depends on the capability of leaders and barangay leaders must be monitored to ensure that proper leadership skills are being impost and exercised not only in the justice system but also in other aspects of barangay governance. table 3.4. the perception of the respondent-barangay officials in northeast of catanduanes regarding their barangay captain’s governance capabilities (d) barangay fiscal administration source: developed by the author ultimately, in table 3.4 which in terms of barangay fiscal administration, given the 4-item statements, they all garnered too a qlr of fairly capable and are presented below arranging from highest to lowest avr with their corresponding item number before the number indicated in the questionnaire: (13) shows accountability in allocating the barangay budget. (4.49); (14) observe transparency in public fund disbursement. (4.45); (15) apportions budget efficiently based on the needs of the community. (4.41); (16) implements tax collection/revenue raising as sourcing fund for the development of the barangay. (4.27). with the findings, it proves generally that the barangay captains are fairly capable in their discharge of duty along with barangay fiscal administration. and their strengths are being manifested in being accountable in budget allocation and transparency observance while their weakness is on the implementation of tax collection and/or revenues. the statement ‘implements tax collection/revenue raising as sourcing fund for the development of the barangay.’ that garnered the lowest ar among other statements on european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 114 barangay fiscal administration indicates the constraints of the barangay officials is obtaining money to support the programs and activities in the barangay. this finding aggravates incapability of the barangay captains in their discharge of duties as divulged in the interview since how are the programs and activities if they lack budget which is also the same with the contentions of guce et al. (2018) and boysillo (2017) papers saying that barangays lack funds because of not raising enough own-source revenues in their localities and improving their use of corporate powers. de nichilo (2020) reveals the issues of budgetary constraints that may affect future policies and thus suggests budgetary operations that follows a clear logic of decision-making, research, analysis, drafting and reporting. policy-makers may focus on issues of performance in audit and financial issues to support the programs in a certain organization. and with this finding of the present study that the barangay officials are ineffective with the implementation of tax collection and/or revenues, the challenge of de nichilo (2020) and the suggestions of guce et al. (2018) may be considered. the collection of barangay fees and taxes that may be implemented on the use of barangay properties and facilities; peddlers; breeding of fighting cocks; use of barangay roads, waterways, bridges, and parks; parking; clearance/certification; fines/penalties for violation of barangay ordinances and among other fees may be imposed such as commercial breeding of fighting cocks and on cockpits and cockfights; places of recreation with admission fees; billboards, signboards, neon signs and other outdoor advertisements and among other fees. in summary, the present study discovered that the barangay captain's governance capabilities is 'fairly capable' is substantiated by noble-nur study (2018), revealing that the punong barangays have a satisfactory level of performance in areas of implementation, legislation, peacekeeping, planning, and fiscal management. the study of boysillo (2017) entitled governance of the barangay chairpersons in the municipality of ubay bohol revealed that the barangay chairmen's level of performance of governance on the three indicators namely the executive functions, legislative functions, and judicial functions indicated that the majority of the 44 barangay chairpersons were able to deliver a very satisfactory public service in their barangays. hence they were able to cope up with all the roles and responsibilities. however, when the weighted mean of european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 115 the responses was looked into, among the three functions, the legislative and judicial functions are lower than the executive function. the reactions may infer that the barangay officials themselves need to capacitate in legislative and judicial functions, following the present finding that among the indicators of barangay governance capabilities, 'legislation' is the lowest weighted mean, among other signs. the general finding of the present study that the barangay captain's governance capabilities are 'fairly capable.' the given finding was validated through unstructured interview among the subordinates of the barangay captains i.e. barangay kagawad, barangay secretary, and treasurer. generally, they claimed that their barangay captains are capable of barangay governance, which is actually in conformity with the quantitative data gathered by this researcher. however, when the researcher asked them what problems do they considered that affects the barangay governance capabilities of the barangay captain, three themes appeared in the common responses presented below: the first theme is related to the incompetence aspect of the barangay captain. other barangay officials and selected constituents verbalized the following comments: 'inadequate knowledge about the ordinances'; 'lack of pieces of training.'; 'not firm in the decision-making.'; 'favoritism'; 'lack of technical knowledge.'; 'family problem'; 'barangay captain does not listen to suggestions'; 'the barangay captain does not agree with the suggestions or proposals of constituents'; 'lack of education'; 'political party affiliation.'; 'lack of training and expertise.'; 'lack of knowledge / not correctly oriented.'; 'not capable.'; 'focus on the next election.'; 'disrespectful to the barangay kagawad.'; 'mismanagement'; 'lack of capabilities'; 'barangay captain – no action'; 'miscommunication….do not follow official protocol in communication…using the verbal mode of communication in the conduct of special meeting'; 'lack of proper communication and making decisions on her own without consultation with the barangay officials.'; 'poor communication by not following steps and processes'; 'do not care about the works in the barangay.'; 'barangay captain is not a resident in the barangay of his jurisdiction'; and 'lack of budget.' european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 116 the second theme is about non-cooperation of the residents or the constituents themselves, and most of the respondents mentioned the following observations: -'no cooperation among community residents to participate in the planning activities of the barangay.'; 'less cooperation of the constituents'; 'constituent lack of interest to participate.'; ‘lack of participation of the constituents in the planning activities'; 'lack of community participation.'; 'residents do not follow the rules and regulations'; 'negative thinking, constituent.'; 'constituent negative attitude.'; 'barangay constituents do not follow barangay ordinances.'; 'hard-headed constituents' and 'constituents are not concerned with the welfare of the barangay.' the third theme identified was being a non-cooperative barangay kagawad aspect that affects the capability of the barangay captain. the respondents mentioned the following remarks: -'barangay kagawad are disrespectful to the barangay captain --they have no plan during the meeting.'; 'lack of awareness of the barangay ordinances'; 'lack of quorum'; 'no unity between and among barangay officials and residents'; 'lack of discipline.'; 'lack of education'; 'poor cooperation. the barangay has excellent programs for the welfare of the barangay as a body. but the punong barangay cannot carry out all the implementation process due to lack of cooperation by other members of the sanguniang bayan'; and 'some barangay kagawad members are not participating in the barangay activities.' from the ideas shared by the barangay kagawad, barangay secretary and treasurer-respondents on their perception of the governance capability of barangay captains. particularly the factors that affect their governance capability, it can be deduced that truly barangay captain is relatively capable in barangay governance considering the quantitative data yet with the qualitative data established from the statements mentioned above hinders the barangay captains' capability in governing the barangay. we can genuinely conclude that the different themes discussed above, such as the incompetence aspects of the barangay captain; the non-cooperation of the residents; and the noncooperative barangay kagawad aspect truly affect the efficiency and effectiveness in the discharge of duties and functions of the barangay captains. the above discussions that are attested by medina-guce et al. (2018), padilla and eguia (2010) on the argument that monitoring european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 117 and assessment of barangay officials may maximize the potentials of local officials in collaboration with the various groups or organizations to addresses the different concerns in the barangay that impedes the performance of the barangay officials. the idea of positive role expectations to the general public is quite unclear, resulting in passive and non-cooperative residents and inactive barangay officials are participating in barangay concerns and activities. the research of padilla and eguia (2010) on the development of barangay legislators' leadership scale in davao city determined the appropriate leadership scale. these are the setting directions, qualities, personal qualities, full scanner, and primary values that the local government should take concrete actions to develop and establish a continuing professional leadership education program for barangay councils to cope with increasingly complex demands of the environment and other constraints within their barangays. with these arguments, the barangay officials' ineffectiveness and inefficiency, particularly the barangay captain mentioned above, may be considered to address the present study's issues. therefore, the over-all barangay captain's governance capabilities that is 'fairly capable rests on perceptions of the barangay officials themselves because, in reality, all the limitations and inefficiencies of the barangay captains revealed in the interview, as mentioned above. a bar-graph view in figure 2 shows how confident the barangay captains about their governance capabilities while other barangay officials show fairly capabilities of their barangay captains' governance. given these findings, it generally indicates that the respondent-barangay officials proved the difference in perception-rating since it manifests self-confidence on the barangay captains' part about their 'full capabilities' in barangay governance. in contrast, other barangay officials show 'fair capabilities' of their perception of their barangay captains' barangay governance. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 118 figure 2 presents the barangay captain's governance capabilities as perceived by different barangay officials. source: developed by the author table 4. test of significant difference in the summary responses of the respondent-barangay officials regarding their barangay captain’s governance capabilities in terms of their position in the barangay source: developed by the author utilizing anova f-test in table 4, it proved that there is a significant difference in the summary responses of the respondent-barangay officials in northeast of catanduanes regarding 3,8 3,9 4 4,1 4,2 4,3 4,4 4,5 4,6 4,7 barangay captain (n=52) barangay council member (n=122) barangay secretary (n=52) barangay treasurer (n=47) (1 ) n o t ca pa bl e ï ð fu ll y ca pa bl e (5 ) positions in the barangay legislation program/project implementation barangay justice system barangay fiscal administration european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 119 their barangay captain's governance capabilities in terms of their position in the barangay given the f (3, 60) = 33.32, p≈0. the data demonstrates the difference of the perception-rating of the respondent-barangay officials since it manifests confidence of the barangay captains about their fully capabilities in barangay governance. in contrast, other barangay officials show the fair capabilities of their barangay captains' barangay governance. this finding aligns with caldo (2015) paper that revealed that selected respondents are uncertain of their punong barangay competence. the research data may infer that the barangay officials except for the barangay captain themselves are also hesitant about their respective barangay captain's ability. 6. conclusion and recommendation the outcomes of the baseline information study revealed that the barangay captains are relatively capable in barangay governance. furthermore, looking at the indicators of governance, barangay captains showed that they are more equipped with barangay fiscal administration than in legislative and judicial functions; hence they needed to be capacitated in the weak areas of their governance. the responses according to the type of respondents revealed differences, showing the confidence of the barangay captains about their full capabilities in barangay governance. in contrast, the rest of the barangay officials demonstrated the perception of being fair capabilities of their barangay captains' barangay governance. with the different results, the study further validated through an unstructured interview among the barangay kagawad, barangay secretaries and treasurers with an open-ended question about the problems they encountered on their respective barangay captains' governance capabilities. it arrived with the three common themes revealing the incompetence of the barangay captains; the non-cooperation of the residents or the constituents themselves; and the non-cooperative barangay kagawad that genuinely affects the capability of the barangay captain. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 120 given the situation, the study recommends that all barangay officials, particularly the barangay captains, are urged to attend barangay governance capability training program and seminar to improve and enrich their barangay governance capability skills and strategies. intensive monitoring and assessment of their barangay performance may be regularly to awaken their awareness and commitment to perform their duties and functions expected of them is also considered. the study may find a proposed training package where all catanduanes state university panganiban campus faculty-extensionists will be involved in the extension services program. the programs and activities geared towards strengthening more their barangay governance capability skills and strategies. the results of this study will be presented in a research fora, be discussed with all concerned for information purposes, and published for widest dissemination. lastly, the conducted extension-based research in the future is in line with the programs of the catanduanes state university – panganiban campus, such as bachelor of elementary education, bachelor of technical and vocational teacher education, and bachelor of science in agriculture. further, future researchers may consider research-based extension programs that the community needed. this study has limitations: first, the interpretations of the gathered data rely purely on the answers of the respondents in the questionnaire, where this writer relies on their honest replies. second, the present study results may not be generalized in provincial or regional levels because it only represents the three municipalities of catanduanes i.e. viga, panganiban, and bagamanoc. in future research, this writer will consider specific aspects of barangay governance, specifically on education and literacy aspects, in the barangay level since the faculty extensionists are experts in education. conflicts of interest this researcher declares no conflict of interest in this manuscript. fund this writer personally funded the research. no internal or external funding agencies financed the study. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 121 references aquino, i. p., agustin, c. p., & guadamor, m. l. 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(2013). ethical consideration in research. education, 2(7), 8-15. labawig, m. c. (2011) leadership effectiveness of barangay captains: its implication to barangay development, unpublished thesis, saint louis university, baguio city layug, a. s., pantig, i. d. m. t., bolong, l. e., & lavado, r. f. (2010). do barangays really matter in local services delivery?: some issues and policy options. philippine institute for development studies. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 122 medina-guce, c., galindes, a. m., salanga, v., & sanders, r. (2018). problematizing the strengthening of philippine democratic institutions. nadeem, m. (2016). analyzing good governance and decentralization in developing countries. journal of political sciences and public affairs, 4(3), 209-220. nalbandian, j., o'neill jr, r., michael wilkes, j., & kaufman, a. (2013). contemporary challenges in local government: evolving roles and responsibilities, structures, and processes. public administration review, 73(4), 567-574. noble-nur, v. (2018). socio-demographic profile and performance of women punong barangays in selected municipalities of maguindanao. in international conference on responsive education and socio-economic transformation (icreset). padilla, c. b. t., & eguia, r. e. (2010). leadership scale of barangay legislators in davao city: an application of structural equation model. 11th national convention on statistics (ncs), october. porio, e. (2012). decentralisation, power and networked governance practices in metro manila. space and polity, 16(1), 7-27. rubio, j. a. m. a., pentinio, c. v. p., ascan, j. c., mendoza, m. c. d., vito, j. v., & encio, h. a. (2016). involvement in community extension program of business administration students in one higher education institution in the philippines. asia pacific journal of multidisciplinary research, 4(1), 109-122. shore, c. (2011). ‘european governance’ or governmentality? the european commission and the future of democratic government. european law journal, 17(3), 287-303. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5058 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 123 urmanaviciene, a., & arachchi, u. (2020). the effective methods and practices for accelerating social entrepreneurship through corporate social responsibility. european journal of social impact and circular economy, 1(2), 27-47. https://doi.org/10.13135/2704-9906/5085 ur rehman, u., shafiq, m., ali, h., & abdullah, m. (2020). green and sustainable construction practices impact on organizational development. european journal of social impact and circular economy, 1(2), 1-26. https://doi.org/10.13135/2704-9906/5068 viray, j. r. followership modalities and big five factor personality dimensions of local (barangay) government officials of sta. mesa, manila. yilmaz, s., & venugopal, v. (2013). local government discretion and accountability in philippines. journal of international development, 25(2), 227-250 yoders, s. (2014). constructivism theory and use from 21 st century perspective. journal of applied learning technology, 4(3). zeynalli, l. (2020). the impact of stimulating the development of human capital on economic development. european journal of social impact and circular economy, 1(1b), 38-52. https://doi.org/10.13135/2704-9906/4562 microsoft word 1 rehman.docx http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 1 green and sustainable construction practices impact on organizational development ubaid ur rehman1, muhammad shafiq2, hasan ali3, mohammad abdullah4 1 project management, szabist, islamabad, pakistan, 2 assistant professor, szabist, islamabad, pakistan 3 project management, szabist, islamabad, pakistan 4 project management, szabist, islamabad, pakistan e-mail:1ubaidq1993@gmail.com; 2dr.shafiq@szabist-isb.edu.pk; 3hasan582@gmail.com; 4abdullahaijaz82@gmail.com received: 30/08/2020 revised: 01/10/2020 accepted for publication: 02/10/2020 published: 26/10/2020 abstract green marketing plays important role in the organizational performance irrespective to the industry and the type of project. however green construction research lacks in the field of construction project. basic purpose of this work was to highlight the impact of modern techniques such as green construction on the organizational performance through the adoption of sustainable practices in business strategies in construction industry. data was collected from 132 organizations, working on different construction projects located within the city of rawalpindi and islamabad, through online questionnaire survey in two strata in terms of consultant and contractors. data was analyzed through different tests, included pearson’s correlation coefficient as well as regression using ibm spss statistics version 20. study indicated that green construction has a strong correlation and positive impact on organizational performance, and this correlation partially mediated by the sustainable development. the research findings have practical implications both in organizational and project manager’s perspectives. this research was limited to specific geographic area due to time and cost constraints. future researchers may opt to conduct the study in other geographic areas of pakistan and in different industries. moreover, additional or different mediating variables can also be used in the future work. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 2 keywords: sustainable development; organizational performance; green construction; environment protection; project success. 1. introduction worldwide, construction industry contributed approximately 9% in gdp with 7% employment rate. the industry contributed significantly to socio-economic development and open different avenues of common interest for different stakeholder to work together. the asian policies also have tended to keep construction industry busy as governments spend on infrastructure as a way of protecting jobs and boost the economy. (saenz & brown, 2018). heavy civil engineering have built infrastructure of country through the construction of highways, bridges, tunnels and other national or international level construction project. population have increased due to gradual increase of birth rate which have created burden on economy, resulting in the increase in the demand of houses with the passage of time. (zampese, moori, & caldeira, 2016) increment in population not only disturbed economy but also imposed burden on urban infrastructure through the migration of people due to lack of resources in rural areas. (farooqui & ahmed, 2008). however gradual change in infrastructure development involves complexities such as, required extensive area of intervention and excavation service are large construction work generators. it is important to change strategies to reduce environmental impacts on construction stage in development of urban infrastructure. hence, in modern development construction with less environment degradation preferred (bedrunka, 2020). pakistan is a developing country having construction as the second largest sector in pakistan’s economy after the agriculture. construction industry have contributed 13.1% in industrial sector and 2.74% in gdp. roughly 30-35% in employment sector are directly or indirectly affiliated with the construction sector. (malik & wahid, 2014). in construction industry, protection of environment is a major challenge, and an alarming situation towards sustainable development in which waste management is a big issue. it is not possible to control the fully waste while reuse of recycling and waste. gradual change in climate and deposition of waste pollutants affect our environment very badly as well as our agriculture production, quality of life and tourism. (huang et al., 2017) industries and companies of such good production are more responsible as compared to any other sector, being environment vulnerable and need quick action to more towards green practices. product consumption and effectiveness depends on consumer through http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 3 market value, the market behavior including consumer demand and consumer awareness, appreciate the companies practices towards “green” (biasutti & frate, 2017). green marketing has influenced the organizational performance quite strongly. however, there is gap in the literature about the impact of green construction on organizational performance and research lack in the field of construction project (zampese et al., 2016). according to zampese et al. (2016) every construction project either residential or commercial have broader impact on the organizational and industrial performance after its completion. impact can be either as a good practice or bad, particularly by examining the project impact related to environment by studying companies’ legal, economic and technological skills aspect which may also cause deep impact on industry. though, literature is available about green marketing but it weakens the relationship between supply chain management and company’s performance. construction project performance directly affect the organizational and industrial performance. in construction industry it is important to understand the pitfalls and challenges which can be incorporated. this paper highlighted the importance of green construction project with the adoption of sustainability techniques and their impact on organizational performance. basic purpose of this study is to examine the impact of green construction project in organizational performance by analyzing empirically the different factors such as reuse of old material, reduce waste production and environment preservation. other purpose is to find out either any positive impact may occur in construction industry by considering the mediating role of sustainability techniques includes environment protection, climate change and sustainable urbanization which may help to enhanced the organizational performance. many researchers highlighted the positive impact on organizational performances. a study done by shi, zuo, huang, huang, and pullen (2013) in china which explored the positive impact of sustainable construction on community and environment through the properly management of overheads, time and availability of sustainable materials which can enhance the organizational performances and also reduces the industry barriers. another usa based study by riley (2004) on toyota motor corporation (tmc) real estate expansion project found that, green building popularity evolving worldwide in construction sector which involve quick change in design stages but also found that construction organizations can play important role through the adoption of sustainable practices in their business strategies. the implementation of green concept in company’s strategies can bring significant positive changes in profitability, marketing values and cost performance through the facilitation in consumption, production, promotion sector and also resolve ecological problems. in construction industry, organization have to deal http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 4 with different operation on regular basis, industry have diverse characteristics such as high fragmentation, vision of project, instability and mainly dependence of work force with high level of uncertainty. in this industry, mostly project relate to the on-site production and directly expose with environment. (huang et al., 2017). green supply chain management including green construction, green product, and corporate practices towards sustainable development directly linked with organizational performance. (rego & figueira, 2017). climate change, and environment protection policies’ implementation, were the great moderator to increase organizational performance. researcher studies the exploratory model for the better understanding with companies and industries in which they operate and particularly examine the impact of environmental by studying their legal, economic and technological skills of companies. (zampese et al., 2016) developing countries as like pakistan do not have strong construction industry, major challenges faced by organizations in pakistan construction industry were found to be lack of expertise, resources, poor team management, employee’s commitment, quality, safety and risk management. significant changes may occur with the strong coordination, teamwork, training and awareness, can improve organization performance as well as industry performance. proceeding section, relates the previous research and literature on the organizational performance, sustainable development, and green construction followed by the hypothesis before the methodology part described in section 3, while results and analysis shown in the section 4, conclusion, discussion and limitations in section 5 respectively. 2. literature review in this section, detailed review of previous research is expressed with respect to the variables of this study including green construction, sustainable development and organizational performance followed by the hypothesis according to the objectives defined from the gap for this research study. 2.1 organization performance organization performance is depended on the successful completion of the project while next allocation of project or contract mainly based on the organization performance related to previous project. (gunasekaran et al., 2017). in construction industry, emerging concept of “green” that means to adopt such strategies at organization level which make project sustainable through less environment degradation, better economic impact and preserve natural resources. purpose of the strategies to enhances organization http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 5 performance and fulfil current demands in a better way without compromising future demands. according to darko and chan (2016), in construction industry, organizational performance evaluated through various factors included: sale increment, market chare, corporate image, water consumption building, energy efficient building parameter, reuse of old building material, increment in revenue, risk reduction factor and financial result. (zampese et al., 2016). 2.2 green construction project construction build urban and rural infrastructure by providing developmental facilities through the execution of different commercial, residential or any kind of development projects. green construction consists of six main factors such as; management of construction, protection of environment, conservation of material, water, energy and land utilization. (shi et al., 2013). every construction project involves through five basic aspects which is necessary for completion, including manpower, machine, material, method and environment project success of any project mainly depend on the successful completion of project to meet triple triangle constrains including cost, scope, schedule and quality (lin, 2015). green construction involves on-site practices which reduces environmental impact of construction. these practices mainly related to contractor, and sub-contractor but modern researchers claim it is more responsibility of designer to introduce such practices so that alternative can be adopted during construction such as use of prefabrication structure which is time saving and environment friendly but it is more responsibility of designer to introduce such alternative in market which can be adopted by contractors. (fawaz et al., 2016). green construction involve; less waste production during construction on site, replacing toxic substances such as paints solvents etc., less liquidated waste, alternative energy efficient sources, and use of efficient sustainable practices. (yigitcanlar, kamruzzaman, & teriman, 2015). the benefits of green construction project can be summarized as: enhanced quality of life, improved safety of residents, improved health and aesthetics, reduced household expenditures, creation of new employment opportunities and enhanced neighborhood vitality. (bedrunka, 2020) 2.2.1 impact of green construction on organizational performance. according to the darko, zhang, and chan (2017), green construction mainly relates with green supply chain management process and involves three areas: importance, corporate practices, green design and operation. these areas involve saving resources, improving productivity and control waste production. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 6 these practices may be more reactive if adopted in strategies in form of rules and regulations, or proactive, and proper ban harmful practices. through this way integration of environmental activities was the scope of business strategies. (huang et al., 2017). according to darko and chan (2016) green construction practices are the source of cost efficiency and profitability, it not only increase in market share but also reduces extra rework and engage logistics through optimizing resources. latest innovation strengthens the organizational market values with their strategies and profit values without considering their size and capital. researchers including wei and miraglia (2017) reported that, in chinese manufacturing practically found that there is positive relationship exist between environmental management and organizational economic performance, while other researcher’s including, lin (2015) found significant positive changes between corporate green practices and industrial financial performances through the implementing of green practices in electronic industry of taiwan. 2.3 sustainable development practices this basic concept of sustainable development covered three important features include, economical, environment friendly and preserve natural resource for future generation. interpretation of sustainable development vary with industry such as sustainable construction, sustainable business, sustainable technology, sustainable agriculture, sustainable economic etc. (bedrunka, 2020). in project management scenarios, sustainability techniques brought positive impact in different dimensions of project which built interest of researchers and professionals towards sustainable project management which inter link multiple prospective such as social, environmental and economical. (bocchini, frangopol, ummenhofer, & zinke, 2014) as per literature the concept of sustainable development is to meet present challenges without compromising future demands (holden, linnerud, & banister, 2014). 2.3.1 impact of green construction in sustainable development in last five years, climate change awareness rises through various sources of medium either educational or cultural; researcher johns‐putra (2016) highlighted the awareness of climate through the medium of literacy including novel, theater and other media sources. there has been a growing trend, too, of climate change poetry, known as ecopoetry which exhibits the social and ecological awareness towards the environment degradation. human interaction with environment poses sever risk on natural climate system. although many impacts are already observed for the climate action in terms of toxic gases in air, rapid http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 7 melting of glacier, rise in sea level and ocean degradation since 1950s. however more scientific evidence is required to respond climate changes. (linnenluecke, birt, & griffiths, 2015). according to pedersen (2018) the united nation sustainable development goals, climate change mainly related with the environment protection policy which practically relate with construction industry development. the environment or climate protection regards the development of an awareness about alternative resources, mainly depend on the physical environment, and how human activity and decisions affect it, with a commitment to factoring environmental concerns into social and economic policy development including preservation of natural resources, climate change, rural development, sustainable urbanization, disaster prevention and mitigation (ricart, olcina, & rico, 2019). before implementation into construction industry, it’s important to introduce alternative resources with their social economic impact. (zampese et al., 2016). researchers including secinaro, brescia, calandra, and saiti (2020), also emphasizes on the adoption of climate mitigation sustainable practices at business level by indicating that international level firms adopted environmental practices in their business strategies to reduce the environment risk and bring significantly result in terms of increment in profit and organizational performance. climate change practices mainly relate with protection of environment while construction project activities directly expose with environment and major cause of environment contamination through toxic gases, and increment in temperature which causes rise of earth temperature and depletion of ozone (huang et al., 2017). modern concept of green building through green construction is a major alternative source to deal with climatic changes. in design phase, architecture is the main source of greenhouse gas control and important constituent to deal with climatic change. green buildings formulated after the green construction are energy efficient with low emission of toxic gases with less conservation of natural resources and make environment healthy. hence, green construction practices make environment healthy and build better climate through environment protection with less degradation. (darko & chan, 2016) 2.3.2 sustainable development and organizational performance process of sustainable development depends on the organizational hierarchy mainly internal polices, assessment criteria, strategies plan and their operational implementation. according to bedrunka (2020), environmental management system bound the organizations to formalize the policies in such a way that they can assess effect of their activities on environment, interaction of project with climate and find out http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 8 alternatives to cater the climatic challenges through different operational activities which causes less environment and natural resource degradation. organizational performance mainly depends on the successful completion of project with good practices. (biasutti & frate, 2017) every project causes social, environmental and economical after the completion, following these parameters, researchers found that sustainable product development through different alternative practices bring positive impact not only in organizational development but also at industrial level as a good lesson for other developers. we focus on climate change protection factor mainly include, environment protection policy and economic affect.(gunasekaran et al., 2017). 2.4 mediation role of sustainable development practices researchers including, yee, ismail, and jing (2020), indicated the, adoption of environment protection and sustainable policies with their implementation bring significant effect at industrial level with their significant social and economic impact. organizational development or performance basically deal with the parameter how can an organization achieve success by defining their milestone, performance indicators, and certain limitations, which based on their production. (akram, goraya, malik, & aljarallah, 2018). social and economic challenges relate the organizational performance which cater by the sustainable practices by adoption of alternatives strategies at organizational level which not only enhance the organization performance but also help to introduce latest modern practices in the industry. this is a step towards joint organizational and industrial revolution with the help of sustainable development. (sormunen & kärki, 2019). in order to preserve environment, it’s important to formulate policies at organizational level which cater these industrial challenges which may create disastrous effect for future generation. new research related to the sustainable development and their application introduce many alternatives of materials, which are energy saving and promote green building materials, standardization, high energy consumption construction to develop low energy consumption, effectively cope with climate change. it has been commonly accepted that green construction through sustainable development focuses on prevention of unnecessary consumption of natural resources (especially non-renewable ones) and mitigation of harmful emissions. (bedrunka, 2020). green construction resource material mainly seems limited to waste, toxic gases, industrial waste etc., but at broader level it involves coal, steel, electricity and chemical industry such as industrial waste can demolish natural resources. mega project involves huge amount of resources while sustainable techniques preserve the environment by providing alternative tools http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 9 and techniques. (rahmawati, utomo, anwar, setijanti, & nurcahyo, 2014). the emerging modern concept of “green building” in sustainable development, directs itself towards creation and use of models which are intended to be healthier as well as a more resource efficient. these models include construction, operation, renovation, maintenance and finally demolition (holden et al., 2014). 2.5 summary of literature through the literature studies we have studied about the green construction practices in the field of environment and economic which play vital role in organizational development. if there are strong green construction practices adopted on site during the construction project, it causes better organizational and industrial performance, hence sustainable development can play important role to strengthen the relationship. in this study we used organizational development and natural resource-based view theory to study the overall relationship between variables. hypothesis and conceptual framework for this research study listed as; fig. 1. conceptual framework of research model source – developed by the authors h1: green construction has positive significant impact on organizational performance. h2: green construction has positive impact towards sustainable development. h3: sustainable development has positive impact in organizational performance. h4: sustainable development mediates the relationship between green construction and organizational performance 3. method research was carried out to find how the impact of green construction relate with the organizational performance of the construction companies. from literature questionnaire selected which cover all http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 10 variables. a five-point likert scale was utilized to judge the severity indices of different criteria adopted for the respondent selection evaluation and further descriptive analysis (armstrong, 1987). employees working in construction industry either as a consultant, contractor, designer, or builder or in any other relevant department was selected 3.1 research design and data collection in this research study the population was the organizations employees working in the construction field either as a consultant, client, government, or contractor related to any project such as residential or commercial project located in urban areas across the twin cities rawalpindi and islamabad. sample selected by using the g-power software and found 120 organizations across the population of 507 organizations as listed by the pakistan engineering council. non-probability (proportionate convenient sampling) was used, data respondent includes, individual organization such as single employee for single organizations. we stratified our research study into two strata’s consultant and contractor and according the statistics of pakistan engineering council (pec). we proportionate the questionnaire and then distributed conveniently. 12% questionnaire distributed with contractors while 88% distributed with consultant’s working in twin cities of rawalpindi and islamabad. 250 questionnaires circulated out of which 30 questionnaires shared with contractors and 220 shared with the consultant. during the survey, unit of analysis was the employee per organization working on public or private construction project from islamabad and rawalpindi. in this study, data collected from the companies working closely with the construction project related to either commercial or residential mainly including housing project shopping complexes or any similar project. organizations either currently working or done such projects in recent or in last two years were selected for this study. for descripting analysis, a five-point likert scale, was used for measuring the response (boone & boone, 2012). questionnaire selected from literature such as; organizational performance and green construction (zampese et al., 2016) and sustainable development practices (biasutti & frate, 2017) respectively. 3.2 data analysis after the collection of data, 132 responses were recorded, as per our stratified methodology and on the basis of responses we have 14 questionnaires from contractor while remaining 118 respondents was consultant as per the defined percentage. out of 132 (125 respondents were related to the construction and http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 11 planning sector of construction industry working in different organization while other 7 was related to the other sectors of construction). for analysis and interpretation of data and hypothesis we used statistical software ibm spss. analysis of data including, distribution frequency demographics, reliability, correlation, linear and multiple regression. multiple regression is used to check the indirect path in overall total effect. it often provides better and easy approach over simple linear regression. overall multiple regression highlights the influence, strength and contribution of more than one variable and overall contribution of variables in total effect. furthermore, in multiple regression data was analyzed by using regression and process by andrew f. hayes model 4, with data coded according to an analysis framework based on a literature review, the questionnaire guide, and experience from similar research. the analysis was conducted by the authors in statistical package for the social sciences (spss) and checked with key actors. the survey was made clear and simple in order to encourage the participants so that they could respond quickly. furthermore, the survey questionnaire was designed on the basis of existing literature of researchers. 4. result research survey questionnaire attached with the demographic scale such as the gender, age, qualifications and experience of the respondents. 96% respondent was male, 62% respondent holding bachelor degree, 79% respondent have experience between 1 and 5 years, and 95% respondent working on planning and execution of construction projects. reliability test for the selected scale found as green construction (0.824). sustainable development (0.745) and organization performance as (0.898) respectively which is above 0.70. descriptive analysis give the detail about the mean, standard deviation, skewness and kurtosis of data extracted from the questionnaire survey which help to defined the normality parameter. after analysis the results shows the mean of green construction (gc) is 2.0038, sustainable development (sd) is 1.9970, and organization performance is 2.1341. according to gronemus et al. (2010), the data is considered to be normal if skewness values lies in the range of +2 and kurtosis in range +7. the results of skewness & kurtosis respective to each variable independently green construction, sustainable development and organizational performance are, skewness as, 0.668, 0.277, 0.049, and kurtosis are -0.037, -0.570, -0.601 respectively, which fall in the defined range. in order to validate the scale, according to the hair jr, sarstedt, hopkins, and kuppelwieser (2014)., http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 12 acceptable range of validity is 0.30. all of our question factor loading value is above 0.30 and no one question found less than 0.45 which lies within acceptable ranges. 4.1 variable relationship correlation analysis was led to discover the variables – independent, dependent and mediator or moderator variables mutually related with each other or not and to find out the strength of this relationship in quantitative terms. correlation relate the intensity of the relationship between different variables used for the analysis which are listed below: table 1. correlation analysis gc sd op green construction (gc) pearson correlation 1 sig. (2-tailed) n 132 sustainable development (sd) pearson correlation .207* 1 sig. (2-tailed) .017 n 132 organization performance (op) pearson correlation .522** .319** 1 sig. (2-tailed) .000 .000 n 132 132 132 source – developed by the authors the relationship between green construction and organization performance found strongly positive relationship as pearson correlation value is positive 0.522 with the highly significance level 0.000 (less than 0.05). the relationship between sustainable development and the organization performance found moderate and positive relationship at value 0.319 at high significance level. similarly, relationship between green construction and sustainable development is positive at 0.20 and statistically significant at 0.017 (less than 0.05). therefore, summarizing the correlation analysis, it is concluded that strong positive correlation exists between the predictor and outcome variables as well with the mediator variable. 4.2 linear regression the regression analysis is used to understand the causal relationship of the predictors and outcome variables and the form of these relationships. the analysis is used to test the established hypothesized http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 13 relationship to determine the causality direction and quantitative magnitude between the model’s variables. linear regression indicate about the direct relationship path between independent and dependent variable table 2. linear regression: model r r square adjusted r square std. error est 1 .522a .272 .267 .51919 a. predictors: (constant), gc source – developed by the authors table 3. anova test: model sum of squares df mean square f sig. regression 13.113 1 13.113 48.647 .000b residual 35.043 130 .270 total 48.157 131 a. dependent variable: organizational performance (op) b. predictors: (constant), green construction (gc) source – developed by the authors in first step analysis carried out to control the influence of demographics on the relationship between variable while in second step the regression analysis (anova test) was carried out. according to the statistical result of analysis it is found that one-unit increase in iv i.e. green construction will tends to increase in the dv i.e. organizational performance by the 0.522 units while total effect is 0.445. f test value also above the 4.0, in our case we have 48.647 which indicate the acceptance of our hypothesis. the value of “adjusted r square” indicate the value of relationship between iv and dv. in our study variation exist between the green construction and organization performance is 26.7% (0.267). adjusted r square has smaller value as compared to r square. standard error of estimates how much change is not elaborate by the model and for this model its value is 0.51919. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 14 table 4. coefficient of anova test a. dependent variable: op source – developed by the authors table 4, indicate the result of linear regression analysis for independent and outcome variable. result indicate the positive relationship between the green construction and organizational performance. after analysing results, it is clear that independent variable significantly impacts dependent variable. hence all above result of anova test of linear regression lies under the defined ranges which indicate that, green construction (iv) bring positive significant changes in organization performance (dv). we can narrate as the one-unit change of green construction can bring 0.445 unit positive and significant change in organizational performance. first hypothesis of this research study or direct path relationship in conceptual framework is accepted. 4.3 multiple regression for mediation 4.3.1 impact of iv on mediator table 5. model summary of iv on mediator r r-sq f df1 df2 p .2071 .0429 5.8243 1.0000 130.000 .0172 source – developed by the authors result indicate the multiple regression for indirect path as defined in conceptual framework, indirect path further have two direct patches from iv to mediator and from mediator to dv. initially for direct relationship of green construction (iv) and sustainable development (mediation) without consideration of outcome variable (organizational performance) statistical result as follow: significance level p=0.172<0.05, variable variation r-sq=.0429 (4.2 percent). since value of p is less than 0.05 and f test value lies above 2.0, therefor overall model is significant. model unstandardized coefficients standardized coefficients beta t sig. b std. error constant 1.242 .136 9.153 .000 green construction .445 .064 .522 6.975 .000 http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 15 table 6. result of impact on mediator coeff se t p llci ulci constant 1.6243 .1638 9.9169 .0000 1.3002 1.9483 gc .1860 .0771 2.4134 .0172 .0335 .3385 source – developed by the authors result highlighted the impact of independent variable (green construction): per unit variable change or coefficient (beta value) = 0.1860, t model test (t) = 2.4134, (above 2.0), significance level p = .00172 (less than 0.05), boot value are non-negative, null fall outside the strapping value so confidence interval also lies between non-zero. hence; for every 1-unit increase in green construction, we get a 0.186-unit increase in sustainable development. hypothesis –ii; accepted. 4.3.2 direct effect on outcome variable table 7. model summary of organizational performance r r-sq mse f df1 df2 p .5648 .3190 .2542 30.2135 2.0000 129.0000 .0000 source – developed by the authors table 7, indicated the direct effect from independent variable and mediator variable on outcome variables. analysis result shows as, significant value p<0.05, variable change r-sq=.3190 (31.9 percent) variance exist due to two predictors. since value of p is less than 0.05, and f test value is above 4.0, therefore overall model is significant. table 8. model of organizational performance coeff. se t p llci ulci constant .9010 .1746 5.1599 .0000 .5555 1.2465 gc .4063 .0634 6.4106 .0000 .2809 .5316 sd .2098 .0706 2.9740 .0035 .0702 .3494 source – developed by the authors http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 16 table 8, shows the overall result on outcome variable which is organizational performance from the sustainable development and green construction. the impact of green construction (iv) as; per item change through coefficient (beta value) = 0.4063, t model test value, t = 6.4106, (above 2.0) significance value, p = .0000 (less than 0.05), confidence interval also lies between non-zero from upper limit and lower limit interval secondly, mediation sustainable development impact on outcome variable as; coefficient (beta value) = .2098, t model test value, t = 2.9740 (above 2.0), significant value, p = 0.0035 (less than 0.05), and confidence interval also lies in positive ranges and no zero exist between interval. hence; for every 1unit increase of green construction, we get 0.4063-unit increase, and 1-unit increase of sustainable development, we get 0.2098-unit increase in overall outcome value. hypothesis iii accepted. 4.4 role of mediating variable: role of mediation analyzed through the indirect effect of multiple regression model of andrew hayes and preacher. mediating variable presence indicate that overall strengthen or weaken the relationship. for analysis model 4, used and mediation role indicated by the indirect path or effect from x to y. statistically result indicate as; confidence interval from positive boot strapping value interval as zero falls outside the confidence interval, (.0021 and .0948) hence the relationship is signification. effect indicate the beta value which means, change of 1 unit of mediator (sustainable development) brings .0390-unit change in the relationship between iv (green construction) and dv (organization performance). overall relationship has 0.4063 direct effect without mediation and 0.0390 indirect effect on outcome variable through the mediating variable. table 9. indirect effect of x on y effect boot se bootllci bootulci sd .0390 .0238 .0021 .0948 source – developed by the authors http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 17 table 10. direct effect of x on y effect se t p llci ulci .4063 .0634 6.4106 .0000 .2809 .5316 source – developed by the authors table 11: total effect effect se t p llci ulci .4453 .0638 6.9747 .0000 .3190 .5716 source – developed by the authors table listed above, indicated the result of mediating variable which is sustainable development in our research study. from the results of analysis, overall, with the mediation the effect is .4453 within the significant level (p=0.000<0.05) and lies under positive confidence interval (non zero). total effect of direct path through linear regression (anova) remains same from as through the multiple regression hence, from the mediation test it is concluded that the mediating variable which in this study is sustainable development is affecting the relationship of green construction and organizational performance to 8.75 % with (0.0390) per item change. therefore, in the light of the observation we conclude that there is partial mediation exist between the model, sustainable development practices partially mediate the impact of green construction on organizational performance. 5. discussion in this section, we relate our finding with the theoretical literature support. the current study tested the direct and indirect relationship between the green construction and organizational performance with mediating variable sustainable development practices. 5.1 green construction impact on organizational performance. this study is supported by some of the previous researches which also contributed the same results toward the organizational development in the construction industry. fahimnia, sarkis, and davarzani (2015), green construction mainly divided into two parts green design and green operation which means http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 18 planning and execution of green practices such as less production of waste and reuse of old material. the field which focus on the importance of corporate practices related to green construction focused on the preservation of natural resources, reuse and recycling of old building material. the adoption of such practices by the organization at corporate level help to reduce their expenses such as overheads and increase market share through the better business strategies with modern techniques. green construction involves the review of project life cycle and analyze project phases and convert them in to less economical and less environment degradation factors such as reverse logistics and network design in planning phase which involve review of policies and change the strategies while in execution phase involve waste management such as less use of pollution sources and material which can easily recycled. (brunner & rechberger, 2015) according to the chakraborty (2010), green practices at corporate level are the major source of cost efficiency, profitability, market share, preservation of resources and less causes for rework during the construction which enhance the organization performance by developing new market opportunities with higher profit and good practices for others in industry. statistical result of our research study also added in the favor of argument that adoption of green practices at construction industry bring positive consequences on the organizational performance. 5.2 green construction impact towards sustainable development somehow green construction is the part of sustainable development while sustainable development is a vast field of knowledge and vary with respect to the working industry. although it is a new emerging concept but it grows very rapidly in the construction sector in different country across the globe and bring significant results. (pedersen, 2018) sustainable development covers three main aspects as per the definition, preservation of natural resources, less cost consumptions resources and meet current demands without compromising future generation demands. in our study we focus on the environment and climate protection policy and result statistically indicate that green construction is helpful to protect the environment and climate protection while scientifically also sustainability techniques have been introduced across the globe which causes the less environment degradation. adoption of that tools and techniques during the construction causes the less degradation such as the variation of material used for the construction i.e. fabrication, steel and many others. these materials not only save the cost, and time but also causes less degradation which is helpful to preserve the natural resources. researchers including http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 19 (sarkis & zhu, 2018) indicate the role of less waste production through the green construction process which is the biggest relief in the environment protection. as construction industry is the major source of environment degradation and waste deposition is the emerging issue which is hard to control while new latest practices adopted during the green construction such as use of plywood which can easily reuse and recycle rather than the use of framework of natural wood which originated from the tree cutting. researchers also indicate the other green practices such as the reuse of old building material in partition or low load bearing structure in the form of solid aggregate is quite helpful from the financial aspect. our statistical research added in terms of green construction can bring significant positive changes in the sustainable development. 5.3 sustainable development impact on organizational development sustainable development and environment protection is major emerging challenge for the world. organizational have to deal with it during the project lifecycle and somehow their projects are the cause of this environment degradation due to lack of sustainable business practices. researcher (awadh, 2017) defined the concept of sustainable institute. world certified institute for green mark, known as leadership in energy and environmental design (leed) from usa, other institute of france emphasizes on their organization to develop and adopt green business strategies which based on the preservation of natural resources, long lasting and economical structure. on the other side organizations following the leed standard are strictly bound to adopt and implement the sustainable practices in terms of less carbon production in environment which also lead to the heavy penalty. other researcher including song, zhao, and zeng (2017) report the significant changes and positive relationship between environment management and the financial performance of the manufacturing companies located in china. research study found the significant evidence between green practices at corporate level and economical performances in electronic industries located in taiwan. implementation of sustainable practices is the responsibility of government stakeholder working at national and international project in terms of protection policies and penalties. government and organizations designed the alternative parameters and result shows that adoption of green practices not only enhance productivity and causes less degradation but also built standards for other industry at national and international practices. our research also strengthens the argument that adoption of sustainable development practices can bring positive change on organization performances. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 20 5.4 sustainable development relationship between green construction and organizational performance. project quality mainly based on the project designing team at the initial phases while financial performance based on the execution phase mainly and both play important role in the overall organization and project performance. green construction highly depends on the efficiency of the project designing team. as the sustainable development and green construction practices as well is the modern emerging concept and growing very rapidly, organization top management, and stakeholder must show their interest and update their business and hr development strategies towards the sustainable development. according to the awadh (2017) there are various sustainable material introduces for the construction industry which use as the alternatives and their result show as the good practices for others industry, such as the steel structure which save the time, cost and overhead of the organization and also control the amount of rework. organization working on the construction sector are the part of policy maker and agreed that long term degradation exerted in terms of usage of alternative resources such as hvac system, and pre-fabricated structure instead of concrete structure which rises the temperature of earth. researchers (tariyan, 2016) indicated that adoption of green practices not only enhance productivity and causes less degradation but also built standards for other industry at national and international practices. moreover, existing of sustainable development policy such as environment policy causes the better environment friendly green construction which also causes the organization to change their existing business strategies which ultimately enhance their productivity in terms of good practices, market share and project performances (nilsson, griggs, & visbeck, 2016). result of our study also strengthen the argument that sustainable development positively mediates between the relationship of green construction and employee performance. 6. conclusion finding of this study indicate that green construction and organizational performance are associated with each other positively. there is positive relation exist between the factors of green construction such as reuse and recycling of material and the factors of organizational performance such as the market share, and productivity. moreover, research result also indicates that mediator which is sustainable development including environment protection policies partially mediate the relationship which means organization working in construction industry can enhanced their performance through the formalization and adoption http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 21 of environment protection strategies during the construction projects. this research study filled the research gap about the sustainable development and green construction practices role in organizational performance. research focus on the organizations working in construction industry on twin city projects since last two years which to develop the better understanding about the relationship between green construction and organizational performance through the mediation of sustainable development. research has managerial and theoretical implications in the field of construction industry. green construction is the modern sustainable development and important for the organization to enhance its performance and meet international standards. organization top management must change their business practices and adopt knowledge sharing technique to enhance employee performance. moreover, this research gives a pleasant input toward s the enhancement of organizational performance change in construction process and standards is a long-time consumption and huge dispersion of competitive conditions such as company capital, standards, and technology advancement. this study helps to develop the understanding about the impact of green construction on the organizational performance and as well as the adoption of sustainable development policies in organization business strategies. it has been proven from findings that there is ample room for further research. one possible attempt could be studying the dependent variable which steam performance as dependent variable. and further studying the impact of green construction on the organization performance. basically, the analysis of the relationship between different can only be studied. further carried out research in longitudinal concept with different region (location) and projects (residential or commercial). increment in sample size and change in the sustainable development assessment factor such as economy may bring more significant changes in the mediating role. research can also have carried out as per emerging concept of green marketing which mainly depend on the organization and consumer relationship in better environment. the study can also be conducted on the relationship between sustainable development practices and green construction where green construction can be considered as a dependent and sustainable development as independent variable instead of a mediation variable, and an additional variable playing a moderating role, can also be introduced in the conducted study to broaden the scope of the research. considering all of the possibilities that this area of research lacks, one could conclude that there is always still a lot to discover in the following field. this research study has certain limitations, there was a shortage of time to conduct this research study. the questionnaires survey was limited to the employees working in construction based organized located http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 22 in the twin cities of rawalpindi and islamabad. so, time consuming questionnaires would not have been affordable. data was filled on the basis of their previous two-year projects. secondly, the study has been only conducted on the basis of employee working with last two-year project. this again does not represent the whole part of the population targeted initially. conflict of interest: there is no conflict of interest acknowledgement: author express his gratitude and thanks to szabist for their supervision, technical support and guidance in this research. in addition, also thanks for providing partial institutional support. funding: this research based on the academic point of view and receive no funding from any organization or institution. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5068 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 23 appendix a table 12: items of questionnaire in the last 2 years, the company has adopted the following practices in work execution green construction reduce waste of materials in construction site reusing materials on construction site replacing, reducing or minimizing the use of toxic substances (eg paints and solvents) actions to reduce liquid waste (e.g., leak containment or flushing with water) reduce energy use at the construction site actions to improve supply chain environmental efficiency (e.g. cooperation to reduce packaging, economic transport, technological synergie) please indicate the extent of your agreement/disagreement with the statements sustainable development when people interfere with the environment, they often produce disastrous consequences environmental protection and people’s quality of life are directly linked biodiversity should be protected at the expense of industrial agricultural production building development is less important than environmental protection environmental protection is more important than industrial growth in the last 2 years, there was an improvement in company’s performance organizational performance sales increase market share increase corporate image improvement environmental performance improvement in related businesses or buildings regarding to the reduction of water consumption environmental performance improvement in related businesses or buildings regarding to energy efficiency environmental performance improvement in related businesses or buildings regarding to the use of materials financial results improvement revenue increase reductions of risk of environmental legal penalties improvement in company operation (e.g., building efficiency indicators) source – developed by the authors references akram, m. s., goraya, m., malik, a., & aljarallah, a. m. 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(2016). green marketing as a mediator between supply chain management and organizational performance. ram. revista de administração mackenzie, 17(3), 183-211. microsoft word 2 audrone .docx http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 27 the effective methods and practices for accelerating social entrepreneurship through corporate social responsibility audrone urmanaviciene1; udara suwanda arachchi2 1. tallinn university, estonia; orcid id: 0000-0003-1621-0101; email: aurmana@tlu.ee 2. tallinn university, estonia; orcid id: 0000-0003-2618-6758; email: s.a.d.udara@gmail.com received: 12/09/2020 revised: 07/10/2020 accepted for publication: 08/10/2020 published: 26/10/2020 abstract the concepts of social entrepreneurship and corporate social responsibility have similar values from the social value perspective. social entrepreneurship focuses on solving social issues, creating a positive social impact in an innovative entrepreneurial way, and profit maximization is not the primary target. corporations focus on creating economic values and profit maximization; and use the csr concept as a tool to maintain socially responsible business conduct. both csr and social entrepreneurship concepts represent the same sustainable values in different ways. thus, finding effective methods for accelerating social entrepreneurship through csr activities will be fruitful for the betterment of the corporation’s stakeholders, social entrepreneurs, and society at large. this paper aims to explore the current csr activities of corporations that influence social entrepreneurship development and to identify the most effective methods/practices to accelerate social entrepreneurship. this study follows the qualitative inductive research methodology; and, the content analysis method has been used to analyze the collected data through the in-depth semi-structured expert interviews. it has been found that the current csr practices for social entrepreneurship development are comparatively less than other community development and philanthropic considerations. moreover, the challenges for social entrepreneurs and the expectations of corporations have been thoroughly discussed. the effective methods http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 28 and practices have been suggested for both corporations and social entrepreneurs to accelerate social entrepreneurship by csr activities with mutual benefits and creating social value; as a win-win situation. keywords: corporate culture, effective methods, social enterprise, social impact, social value creation, sustainability 1. introduction corporations support ngos, social organizations, and other small medium enterprises as their csr activities (fernando & lawrance, 2015). corporations expect to enhance the corporate reputation, gain employee loyalty and retention, maintain the trust, support, and legitimacy of the community and government, and business benefits from those csr activities (moir, 2001). accordingly, it can be considered the purpose of a corporation engaging in csr activities to act socially responsible while achieving its economic goals as profit maximization and maintaining competitiveness. moreover, there is a need to use more innovative models of using csr activities to maximize the benefits for both corporations and society (singh, 2016). hence, empowering social entrepreneurship through csr's influence would benefit both corporations to achieve their organizational goals and social entrepreneurs to make a positive social impact. it could be a ‘win-win’ situation for both while benefiting society at large. research has been done for effective csr by seelos & mair (2005), bonini, mendonca & oppenheim (2006), and galbreath (2009). moreover, empowering social entrepreneurship through the influence of csr for addressing social issues has been discussed by archana singh (2018), mahfoozur rahman (2018), michelle bredhammar & pia slesinski (2019), theoretically in their researches for the development of the concept. those findings and theories are essential to analyze the theoretical aspects of both concepts and practices. the companies adequately address social problems through csr will reap the rewards of competitive positions in the future while benefiting their stakeholders, and also society at large (galbreath, 2009). thus, companies should consider those social dimensions as opportunities, not risks (bonini, mendonc & oppenheim, 2006). simultaneously, support for social entrepreneurship development can be used as a powerful tool for corporations to gain loyalty in the market. moreover, serial social entrepreneurs european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 28 may be the best hope for both society and companies wanting to participate in new market development (seelos & mair, 2005). there is a need for identifying the most effective and practical ways of influencing social entrepreneurship development through csr activities of corporations because the reality is that social entrepreneurs and corporations still live in different worlds today (seelos & mair, 2005). there is a significant knowledge gap in the effective methods and practices of influencing social entrepreneurship through csr activities of corporations. accordingly, finding practical and effective methods for influencing social entrepreneurship development through csr activities will be fruitful for the betterment of the corporation’s stakeholders and society at large. this study aims to identify the most effective methods and practices that accelerate the social entrepreneurship development through the influence of csr activities of corporations. the objective of this research is to analyze the current csr activities of corporations that influence social entrepreneurship development. therefore, this research analyses the current practice of csr activities of corporations and identifies the most effective practices and methods of using csr activities of corporations to develop social entrepreneurship. moreover, the challenges for social entrepreneurship development has been thoroughly discussed. the recommendations have been given for the corporations and social entrepreneurs according to the findings of this study. 2. literature review corporate social responsibility is a broad concept that is discussed in different aspects of business literature. it can be considered as one of the first critical concepts that collaborating businesses and social associates for enlightening the society at large and business itself (jamali, 2007). the concept is famous as a voluntary principle that creates social value and welfare while maximizing profits in corporate governance. the significance of being socially responsible in business has been increased nowadays due to social and environmental issues. moreover, the external pressure is getting higher for corporations to address societal issues from the stakeholders (porter & kramer, 2011). the csr concept is being widely spoken in the global economy and has attracted worldwide acknowledgment; it has been developed over time through globalization and increase of international trade (jamali, 2007). the core value and purpose of csr are to maintain the organization's economic aspects while balancing the environmental and social facts. in other words, act as a socially responsible organization and create a positive impact on social, environmental, and economic factors. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 29 social entrepreneurship (hereinafter referred to as 'se') is an emerging concept to address societal issues innovatively. se's primary focus is to address social issues and create social value, not like focusing on maximizing profits as a usual business (dees, 1998). most importantly, social entrepreneurship is the process of identifying and exploiting opportunities in social problems, mobilizing resources, and acting innovatively for solving those social problems while creating social value and bringing positive social impact (singh, 2016). social entrepreneurship is standing beyond traditional entrepreneurship because it creates values for stakeholders and solving social problems. social entrepreneurs have trained to identify social issues. they use their creativity and entrepreneurial skills to solve those social issues effectively and innovatively (nicholls, 2006). they try to cure the real causes of social problems rather than dealing with the symptoms. thus, social entrepreneurs are identified as value creators and change agents (nicholls, 2006). social entrepreneurs are being motivated by their personality and the background, which concerns societal issues (cherrier, goswami & ray, 2017). the relationship between the concept of csr and se depends on the focusing objective and the purpose of implementation. csr is considered as a voluntary principle in corporate governance, which is used to create social value as well as maximize corporation’s profits through corporate goodwill, fair competition as well as build loyal customer groups (gallardo et al, 2019). as stated by the european commission swd (2019), it can be identified as responsible business conduct; as “the responsibility of enterprises for their impact on society.” csr is a set of guidelines to mitigate the negative social impact of the business, as well as integrating social, environmental, ethical, human rights, and consumer concerns in the business operation and core strategy. “companies should have in place a process to integrate social, environmental, ethical, human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders, with the aim of maximizing the creation of shared value for their owners/shareholders and civil society at large and identifying, preventing and mitigating possible adverse impacts.” european commission swd (2019). csr has been identified as a shared value creation approach of the corporation with the collaboration of stakeholders and detects, prevents, and mitigates negative impacts while running the regular business focuses on commercial value. according to carroll’s (1979) pyramid, csr activities may be philanthropic or charity; indeed, a discretionary decision of the management. the core of the concept of se is differentiated with the csr from its primary objective, which is focused on solving a specific social european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 30 problem in an entrepreneurial way. social entrepreneurs identify a social issue that affects a set of social groups or environment, then try to find an innovative solution for mitigating that problem or creating social value using an entrepreneurial approach, not like charity or philanthropic context. as claimed by the oecd (1999), se does not focus on profit maximization or taking competitive advantage from its social goals; instead, it attains specific social and economic goals by providing innovative solutions. “any private activity conducted in the public interest, organized with an entrepreneurial strategy, but whose main purpose is not the maximization of profit but the attainment of certain economic and social goals, and which has the capacity for bringing innovative solutions to the problems of social exclusion and unemployment” oecd (1999). the concept of csr has been widely discussed as a strategic approach in the 2000s by the smith (2001), lantos (2001), marrewijk (2003), werther & chandler (2005), porter & kramer (2006), husted & allen (2007), heslin & ochoa (2008) and gallardo et al. (2019). they have identified it as strategic corporate social responsibility (scsr), which is majorly considered as a sustainable competitive advantage. scsr can generate positive social impact while generating profits by improving customer loyalty and the company’s reputation. scsr will make the business environment for creating new products as well as new marketing opportunities in the global context. moreover, it has been identified as a ‘social contract’ between the corporation and society. scsr has been further developed as creation of shared value (csv), and it is being discussed in the academic context and the practice widely after the 2010s by the authors; most importantly, porter & kramer (2011), trapp (2012), and chandler (2016). these developments of csr have driven the standard definition towards the socially responsible business movement. the main purpose of using csr has been considered as a core value and the strategic principle of the corporate firms. porter and kramer (2011) have mentioned that corporations should redefine their purpose of profit maximization for the shared value creation. moreover, companies should focus on creating shared value using their expertise instead of economic benefits; by incorporating the principles of shared value to the corporate framework and culture through the decision-making process as well as using clear guiding principles (chandler, 2016). the concepts of scsr and csv have shifted csr's regular usage towards social value creation, which is the main purpose of se. accordingly, it can be seen a close relationship between csr and se in the main purpose and the objectives. table 1 depicts the relationship and the differences between csr and se within the scope of purpose, objective, target group, goal, motivation, and the operation. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 31 table 1 – relationship between csr and se variables corporate social responsibility social entrepreneurship purpose creation of economic value in an ethical, social and environmental friendly way creation of social value objective profit maximization and stakeholder satisfaction solving social and environmental issues target group pay nothing subsidized or market rate goal accountability and goodwill social impact motivation strategically decided emotionally charged operation charity or philanthropy through products and services source – developed by the authors the main purpose of csr is to create economic value and shared social value for maximizing its profits by taking a competitive advantage. moreover, the objective of csr focuses on profit maximization and stakeholder satisfaction. corporations try to minimize the social and environmental harm within the context of business; thereafter, consider ethical and philanthropic values. as stated by werther & chandler (2005), the implementation of csr policies to the corporation can be considered as a part of brand management to achieve and maintain legitimacy in the global context. se considers its purpose as the creation of economic and social value at the same time. the objective of se is to address social and environmental issues innovatively. in the opinion of tommaso & antonino (2014), the noble goal of social entrepreneurship is to save the world or at least make it a better place. hence, the main purpose and objectives of both concepts have some similarities as well as dissimilarities. within the scope of csr operation, it may be charity or philanthropy activity towards a specific social or environmental fact. the operation of se is conducted through its products or services. furthermore, the target group of the csr pays nothing, even though the target group of the se pays market rate or subsidized rate for the products or services. most importantly, the motivation for the csr could be strategically decided by the higher management of the corporation. social entrepreneurs are emotionally charged and performed by the sensitivity and empathy towards social vulnerabilities. in the european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 32 opinion of thompson et al. (2000), social entrepreneurs are social leaders who realize the opportunity to satisfy the unmet social needs and make a social change. creating social and environmental value can be considered as a common goal of both csr and se. it can be argued that the socially responsible business model and the long-term business sustainability are also similarities of csr and se. there are similarities and common goals between csr and se, as discussed in the previous chapter. both entities are focusing on creating social and environmental value and long-term sustainability. social entrepreneurs are emotionally motivated by social issues; thus, they tend to find entrepreneurial solutions. in csr, corporations try to minimize their negative effect and create social or environmental value for their brand management and stakeholder satisfaction. therefore, making a combination of csr and se would be more beneficial for addressing actual social issues and create social value while achieving their own commercial goals. social entrepreneurs face several critical challenges; social and cultural effects, lack of financial assistance, lack of human resources, and scaling up business with competitive disadvantages. if csr could support social entrepreneurs to face those challenges and obstacles, it will be a win-win situation for both corporations and social entrepreneurs. the following figure 1 shows the csr practices that can foster se development. figure 1 – csr practices for se development european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 33 source – developed by the authors supporting se education – corporations can invest in social venture capital and educational institutions to develop skills of the social change makers would be more beneficial for the social value creation and the corporation itself. as stated by nicholls (2006), se is still in a developing mode; even a few business schools conduct se courses. indeed, social enterprises are genuinely experimenting, and they could be the first of their kind; thus, the success of their projects will depend on their strategic and systematic approach (jhonson, 2000). hence, corporations can cultivate se education through scholarships, awareness programs, and mentorship programs to encourage social entrepreneurs. providing management training – lack of skilled human resources is one of the main obstacles for the se development. social entrepreneurs have emotionally charged strong feelings to solve social issues and create a positive social impact, despite the fact that they do not have enough managerial skills to maintain the enterprise for self-sustaining and generating profits. according to the seven universal principles of heslin & ochoa (2008), cultivate the needed talent can be considered as a greater approach european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 34 of scsr. thus, corporations can provide management training, internship opportunities, and accelerator programs to improve management skills. moreover, companies can provide management skills and resources for scaling up the se (seelos & mair, 2005). supporting financially and investing – social entrepreneurs face a lack of financial support when they initiate social enterprises. as dees and anderson (2006) stated, social entrepreneurs, find capital from either below-market and market-rate capital investments or donations; thus, se may face a financial struggle when starting the social enterprise as well as while running the business. corporations could financially support or make investments below the market-rate as their csr practices; it would be beneficial for a broader group of vulnerable people or the environment. mentoring and incubation – social entrepreneurs tend to identify the actual social issues and practical solutions for those effectively despite the need for clear guidance and mentorship to implement the strong business that can survive and compete in the existing market and alternative products and services. hence, incubation and mentoring support are needed for building a strong business model with a value proposition to being in the competitive market. corporations can share their knowledge and the expertise to mentor and incubate the social entrepreneurs to initiate and scale up their ideas for the long run. collaboration and partnerships – companies can support se through collaborations and partnerships, which can achieve the common goal of social value creation. in seelos and mair's (2005b) opinion, social entrepreneurs bring a lot to the table as partners for corporations. another way is conducting csr through a third party, such as social enterprise; if companies feel that they have less expertise in the field of competency for developing and csr practices, they can identify the existing social enterprises doing great work in their interest areas and support them financially or by providing partnerships and collaborations. “serial social entrepreneurs may be the best hope, both for the poor and for companies wanting to participate in new market development models.” seelos and mair (2005b). it can be seen that csr and se have common goals of creating social and environmental value. at the same time, csr focuses more on economic return, and se focuses on positive social impact. social entrepreneurs have expertise in identifying actual social issues, implementing solutions, and creating social benefits rather than purely economic corporations. however, social entrepreneurs face a set of european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 35 financial and human resources challenges when they implement their solutions. simultaneously, corporations spend a considerable amount of money on csr activities to maintain their strategy, competitive advantage, and corporate goodwill. therefore, it can be argued that if csr supports the development of se, it would be more beneficial for the society at large and the environment; while bringing economic value for the corporations itself. ultimately it will be a win-win situation for both business corporations as well as the social enterprise. 3. methodology this study follows a qualitative inductive research methodology; and, the content analysis method has been used to analyze the collected data. in-depth and semi-structured expert interviews have been carried out with experts representing three main categories; social entrepreneurs, scholars, and company representatives. the authors have selected experts according to these criteria: 1) social entrepreneurs, who have been supported by csr activities of a corporation and/or actively run/consult the social enterprise within the last five years; 2) scholars, who have actively contributed in teaching csr and se and/or have research experience in csr and se at least five years. 3) company representatives, who are managerial level representatives or consultants of the corporations which have done at least one or more csr activities within the last five years. the three main categories have been more explained in detail in table 2. table 2 : code of the interviewee, category, personal profile and remarks code for the interviewee category personal profile european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 36 s-1 scholars phd, associate professor at one of the estonian university. 18 years teaching experience in the fields of social policy, social work, social entrepreneurship, corporate social responsibility and social innovations. s-2 scholars phd, associate professor at one of the estonian university. 12 years teaching experience in the fields of management, social entrepreneurship, management in public, private and non-profit sectors and social innovation. c-1 company representatives communication manager at a leading bank in estonia, board member of csr forum, 19 years experience in corporate governance, sme and corporate communication. c-2 company representatives marketing manager at a leading telecommunication provider in estonia, 8 years experience in corporate governance and csr activities. e-1 social entrepreneurs 14 years experience in social entrepreneurship and impact management. e-2 social entrepreneurs founder and ceo of social enterprise, which is being supported by csr activities of several corporations. source – developed by authors these in-depth interviews assisted the researchers in collecting richly descriptive information. mainly, the researchers developed four interview questions that covered the research question. the questionnaire included the following questions: 1. how do you describe the concept of csr? how do you explain the socially responsible business conduct? 2. how do you define social entrepreneurship? what are the challenges for social entrepreneurship development? 3. how can csr support se to overcome its challenges? what are the ways that corporations use their csr activities to support se? are you satisfied with the current contribution of csr for se development? 4. what are the benefits of csr practices for both corporations and se? what are the most effective methods of using csr activities for se development? how to improve csr practices in order to foster se development? european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 37 the authors have sent invitations for participants via e-mails in the second week of april 2020. the interviews were conducted online in the period of 20th april to 10th may, using the zoom platform. each interview was taken 30 minutes to 90 minutes; all the online calls were recorded with the interviewees' consent. depending on the experts' request, the names of the experts are not provided, and when quoting the expert's statement, his/her code is indicated. the list of experts and the description of the characteristics supporting their competence are presented in table 2. it should be noted that when describing experts to ensure their anonymity, experts are described using the masculine gender, as accepted by reference to positions, degrees, or other depersonalized data. the study has some limitations. firstly, purposive sampling has been used; thus, the study does not represent the unknown proportion of the entire population regarding the subject matter as scholars, social entrepreneurs, and corporate representatives. moreover, the sample is selected based on the researcher’s accessibility and personal judgment; therefore, there could be a reasonable probability of having uncontrolled variability and possible bias in the sample estimating. hence, the findings could have a lower level of generalization compared to probability sampling. moreover, the empirical data collection has been conducted in estonia, though the study is not focused on any specific territory or region; therefore, it may cause a lower level of generalization in conceptual perspectives of the findings. 4. results and discussion the interviewee e1 defines csr as “csr is about three dimensions as workplace, environment and society” and s2 states as; “csr is a free choice; and, can be embedded in corporations mainstream activities by the process they deal with internally and externally in ethically and philanthropic aspects.” in the opinion of interviewee c1, the concept of csr is an everyday business strategy. it is more focused on doing charitable and philanthropic activities and expects marketing as the return. despite that, corporations do some charitable activities without even using the corporation’s logo for the satisfaction of the stakeholders (c2). moreover, their interests and priorities are being changed from time to time. many corporations are interested in supporting vulnerable groups of the community; even those are not in the scope of a corporation’s mainstream, and there should be a proper plan to implement csr activates (e2). the interviewee e2 further states, “most corporations don’t have any personal connection with the problem that they wanted to solve.” (e2). it can be seen the interviewees have identified the approaches of csr from distinctive perspectives. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 38 the interviewee s1 states that several corporations contribute to se development as part of their csr activities. most corporations organize events in their spaces for students, giving awards and grants while doing capacity-building activities related to se development (s1). corporations are supporting social initiatives as their csr activities without expecting anything in return (c1). as stated by the interviewee s1, large corporations seek social enterprises to invest and make a partnership. most of the corporations have a massive amount of budgets for their csr purposes, although they spend mostly on charitable and philanthropic activities; therefore, the current influence for se development is not at a satisfactory level (c2). in the opinion of interviewee s2, the current influence of csr for se development is not enough, and their focus and interest are changing (s2). the current csr influence for se development is comparably relatively small due to the lack of enthusiasm for the csr managers (c1). as believed by the interviewee s1, the current csr influence level is far from the satisfaction level. s1 further states, "i think we are at the beginning of a long journey. it's far from the satisfaction level." (s1). it can be identified the current influence of csr for se development from the interviewee's perspectives as above discussed. identifying the real-life challenges for social entrepreneurship is essential to find out the most effective methods of using csr activities for se development. as believed by the interviewee c1, social entrepreneurs have good intentions to make a positive social impact; but, they have a lack of skills in innovation and finance management. finding a good team and keeping the energy and the enthusiasm for the long run is one of the main challenges for social enterprises (s2). good team and human resources are critical for a successful social enterprise; but, it depends on managerial skills (s1). as stated by the interviewee e1, the cost of products and services may be more expensive than the alternatives in the market. “mostly the products and services of social enterprises are expensive, so it would be hard to sell those” (c1). the interviewee e2 points out as follows; “if it’s hard to get clients, it will be hard to get sponsors and investors.” (e2). most social entrepreneurs do not make enough money for the effort they put, and it is even hard to self-sustain within the current competitive market (e2). it can be seen that there are many crucial challenges for se development in the initiation and the scaling-up process. the most effective methods of influencing se through csr can be categorized into several themes; partnerships, education and mentoring, sharing knowledge, venture capital fund, and impact investment, and creating a market for social entrepreneurs. the interviewees have pointed out several recommendations and suggestions for the effective methods of influencing se through csr activities of the corporations. in the opinion of the interviewee e1, integrating social enterprises to the corporation’s supply chain would be a sustainable win-win solution. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 39 interviewees have stated that corporations can make partnerships with social enterprises as a channel for reaching their end-users of the csr activities. “corporations can use social enterprises as their channels to reach more vulnerable groups of people in the society which need help” (c1). providing necessary skills and practice by workshops, incubation programs, and mentoring would be a significant influence (c2 & c1). corporations can take leadership for creating support for social entrepreneurship as they do for startups (s1). in accordance with the interviewee c1; “csr companies and se can work together for better social impact. sharing ideas and knowledge will have benefits for both.” (c1). the interviewees suggest motivating venture capital funds, venture philanthropy funds, and impact investments would be useful to reduce the financial difficulties of social entrepreneurs. in accordance with the interviewee s1, corporations can take the lead of building the supporting ecosystem for se. as claimed by interviewee e2, public knowledge about se should be improved; corporations can make awareness about the se concept and the practice. as believed by the interviewee e2, social entrepreneurs face huge credibility issues in the market. this study aims to identify the current influence of csr on se development. in accordance with the findings, most of the corporations actively engage in supporting se development through organizing events in their spaces, giving awards and grants, doing capacity-building as their csr activities without expecting anything in return. furthermore, large corporations are actively seeking better social enterprises to invest and make partnerships; for the purpose of reaching their social impact indicators and goals. although the findings show that the current csr practices are mostly focusing on charitable and philanthropic activities; thus, the influence of se development is not at a satisfactory level. even though the corporations are willing to support social enterprises, the focus and the interest of the corporations are changing accordingly. most corporations are eager to support charity and philanthropic activities because of accessible marketing opportunities to gain public attention, as the ethical and philanthropic responsibilities can maintain if they only achieve the economic responsibilities successfully (carroll, 1979). findings show that most csr managers of corporations do not see huge benefits as a return from se due to their lack of enthusiasm and the understanding towards se. the contribution to se development is far from a satisfactory level compared with other sponsorship for sports and cultural events. therefore, much more effort is needed for se development from the csr activities to achieve a satisfactory level contribution. moreover, social enterprises are one subset of organizations focusing on positive social impact as charitable organizations and ngos; therefore, corporations may not be interested in social enterprises until their uniqueness and the sustainable business model attract the corporations. moreover, european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 40 corporations are willing to support those offering them much promotion, benefits, and feasibility because implementing csr policies are part of the brand management and maintain the legitimacy (werther & chandler, 2005). altogether, the findings show that even though the csr activities of corporations supporting social enterprises to a specific limit, the current influence of csr activities for se development is not at a satisfactory level. the study aims to identify the most effective methods of influencing se development through the csr activities of the corporations. it is essential to understand the real-life problems of social entrepreneurship to find development solutions. in accordance with the findings, one major challenge for se development is the intention of social entrepreneurs. mostly, social entrepreneurs are motivated by social issues; thus, they are focusing on solving those issues and creating social value. their ultimate goal is to save the world or at least make it a better place (tommaso & antonino, 2014). however, the findings show that most social entrepreneurs have a lack of skills in innovation, financial skills, and business knowledge. moreover, they have a specific resistance to marketing and business activities; thus, they do not have a controversial relationship with money. there is a shortage of expert human resources because of belowmarket-rate wages. mostly, social enterprises use a voluntary labor force; thus, it is hard to get people for voluntary activities. findings show that the general public mindset towards se is one of the significant obstacles to se development. the general mindset has been created to see social enterprises from charitable and philanthropic aspects. moreover, some cultural barriers and social norms prevent se development to the next level. most of the social enterprises are not interested in scaling up to outside the local territory because the social problem and the culture could be unique to that specific area (mair & marti, 2009). findings show that most of the products and services of social enterprises are more expensive than the alternatives in the market; thus, it is a barrier to attract customers. it is evident that if a business does not have clients, it will not generate income, hard to get sponsors or investors. moreover, it is hard for social entrepreneurs to be self-sustained within the market competition. accordingly, most investors and sponsors have less attraction to invest in social enterprises. altogether, there are significant challenges for se development according to the findings as; lack of financial skills and business knowledge of the social entrepreneurs; find human resources and keep the enthusiasm for the long run; lack of managerial skills and marketing skills; cultural barriers, and social norms for scaling up; higher price of products and services than the alternatives in the market; fewer investments and sponsorships; lack of expert support and general public mindset towards se. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 41 the findings show that, though the csr companies and social enterprises work separately, their mindsets are quite similar; there would be benefits for both by working together as one team. from the point of creating shared value, the collaboration of csr and se will be more effective. findings show that corporations and social enterprises can share their expertise in unique and unusual situations while contributing to society in a meaningful and sustainable way. furthermore, it is found that corporations have potential marketing opportunities by supporting se development to gain customer loyalty, social reputation, as well as employee satisfaction. altogether, there are unique benefits of influencing se development through csr activities, not only for se and society at large but also for the corporation itself. therefore, it can be considered a win-win situation for both corporations and society at large. the research aim of this study is to identify the effective practices and methods of using csr activities of corporations for the development of social entrepreneurship. in accordance with the findings, the most effective practices and methods can be categorized under several topics; partnerships, education and mentoring, sharing knowledge, venture capital fund, and impact investment, and creating a market for social entrepreneurs. the following figure 2 shows the challenges for se development and the effective methods of influencing csr to overcome those challenges; the ultimate goal of both social enterprises and csr corporations to create positive social impact or social value. figure 2 challenges for se development and effective methods for overcome those by influence of csr european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 42 sources: complied by authors findings show that corporations can influence se development by making partnerships with social enterprises. csr companies can buy the goods and services they need from social enterprises by integrating them into the corporation’s supply chain. furthermore, corporations can tender their projects or contracts to social enterprises. it will generate a regular revenue stream for the social enterprise; thus, social enterprise can overcome the challenge of self-sustaining in the current market. furthermore, corporations can enroll their employees for voluntary work at social enterprises up to two or three days per year; corporations can pay for voluntary work as their csr activity. in accordance with the findings, this option would solve the less voluntary workers and the human resource challenge for social enterprises. findings show that social entrepreneurs have the expertise in the field of identifying social issues and finding practical solutions; thus, they can be the actors to reach the end-users of csr activities of the corporation. furthermore, corporations can use social entrepreneurs as their channels to reach the most vulnerable groups which are needed help. it is found that the lack of business knowledge, lack of european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 43 managerial skills, and lack of financial skills are a significant threat to the se development. education and mentoring would be the best solution to fill that knowledge gap within social entrepreneurs. findings show that corporations can empower education by providing; training, spaces, physical environment, infrastructure, event funding, expert support, and mentorship. corporations have a wide variety of experts; they have immense experience in their fields; thus, it can be distributed within the social entrepreneurs. moreover, findings show that corporations can take the leadership for support se as it exists for the startups; by implementing incubation centers, innovation hubs, acceleration programs, hackathons, and internship opportunities. on the report of the seven universal principles of heslin & ochoa (2008), cultivating the needed talent can be considered as a greater approach of scsr. there is an opportunity for corporations to influence se development by empowering education and mentorship; it will help social entrepreneurs to overcome their lack of financial and managerial skills. in accordance with the findings, sharing knowledge with corporations and social enterprises will be fruitful for both corporation and se development as well as society at large. social entrepreneurs are considered path-breakers with a powerful new idea that combines visionary and real-world problem-solving creativity (bomstein, 1998). corporations and social enterprises can share the expertise and the knowledge for better performance of csr activities; eventually, it will create an efficient process of creating social value. it is found that social entrepreneurs face financial difficulties for scaling up and self-sustaining challenges. findings show that motivating venture capital funds and impact investments would help reduce the financial difficulties of social entrepreneurs. corporations can be social investors through their csr activities. furthermore, venture philanthropy organization is a better option for financial support for social entrepreneurs as investments, market below loans or donations. dees and anderson (2006) have mentioned that social entrepreneurs tend to find capital from either below-market and market-rate capital investments or donations. moreover, it is founded that corporations can take the lead of empowering sustainable investment through their csr activities. these venture capital funds and impact investment will reduce the financial challenges of social entrepreneurs; thus, it can be considered as an influence of se development. it is identified that the general mindset is a considerable obstacle for se development. also, social entrepreneurs are facing difficulties in self-sustain and create a market for them. findings show that corporations can be part of creating the market for social entrepreneurs. corporations can take the lead to build the ecosystem, which is supporting se by educating and awareness programs. marketing is needed to build up as a business nowadays; thus, corporations can market social enterprises by allowing them to european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 44 showcase their products and services. furthermore, corporations can plant the credibility of social enterprises within the general mindset by promoting them and stand behind their names as partners; if a social enterprise gets more partners, it will be trustworthy in the general mind. corporations can support social enterprises by creating a market for them; it will create a general mindset and opportunities to scale up businesses. altogether, there are several most effective ways of influencing se development through csr activities of corporations; as partnerships, education and mentoring, sharing knowledge, venture capital fund, and impact investment and creating a market for social entrepreneurs. 5. conclusion the study analyzed the effective approaches and methods of corporate social responsibility activities on social entrepreneurship development. as a result, the goal of this study, which was to identify the most effective methods and practices to influence se development through csr activities, has been achieved. the concepts of csr and se have similar goals from the perspective of creating a social value; though the different financial targets and the approach. moreover, social entrepreneurs can identify social and environmental issues and find solutions more innovatively and effectively; due to the expertise, enthusiasm, and the motivation they have. supporting social entrepreneurs to overcome the challenges they face by csr activities of corporations has much potential for the more effective and impactful social value creation. the current influence of csr to se development has taken a mixed approach of philanthropic, csv, tbl, and scsr aspects. even though the csr activities of corporations supporting social enterprises to a specific limit, the current influence of csr activities for se development is not at a satisfactory level; thus, much influence is needed to overcome the challenges of se development. this study has identified the real-life challenges for se development as; lack of financial skills and business knowledge; find human resources and keep the enthusiasm for the long run; lack of managerial skills and marketing skills; cultural barriers and social norms for scaling up; higher price of products and services than the alternatives in the market; fewer investments and sponsorships; lack of expert support and general public mindset towards se. it is found that supporting se to overcome real-life challenges would be more useful for se development. it will have unique benefits for both se and csr corporation; thus, it can be considered as a win-win situation. the most effective methods and practices of influencing se development through csr activities have been identified as; partnerships, education and mentoring, sharing knowledge, venture capital funds, and european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5085 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 45 impact investment, and creating a market for social entrepreneurs. these findings will useful for corporations to implement their csr activities to create higher social value through influencing social entrepreneurship development. social entrepreneurs can be used as channels to achieve the socially responsible goals of corporations while benefiting society at large. moreover, social entrepreneurs can use these findings to improve their positive social impact by the influence of corporations. the empirical data collection of this study has been conducted only in estonia, though the theories and concepts are not focused on any specific territory or region. thus, there is a future research opportunity to scale it up to the global context. moreover, this study is mainly focused on the influence of csr on se development from the perspective of social value creation. there is a future research opportunity to conduct research focusing on monetary value creation or mutual benefit creation. references bonini, s. m. j., mendonca, l. t., and oppenheim, j. m., (2006), when social issues become strategic?, the mckinsey quarterly, 2, 20-31. 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[google scholar] [crossref] 4608-article text-14561-2-9-20200624 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 19 public choice in european affairs: measuring election model stefano de nichilo department of economic and business sciences, university of cagliari, italy e-mail: stefanodenichilo1985@gmail.com received: 18/05/2020 revised: 20/06/2020 accepted for publication: 21/06/2020 published: 20/07/2020 abstract much of the accountability literature itself examines governance issues, be it decision-making and delegation, eu policy and decision-making mechanism, regulatory status, multi-level governance, executive power and bureaucracy. financial responsibility is at the center of political responsibility and, however, issues related to financial management have been marginalized in school discussions on the eu. audit and evaluation involve examining the development of policies, implementation procedures and their consequences to provide an assessment of the economy, efficiency and effectiveness of an entity or activity. from the sociological and discursive point of view of institutionalism, responsibility is "carried out" by the eu institutions, on paper and in meetings, each trying to define the standards of responsibility. special reports offer the opportunity to "account" for eu policy and thus "account" for the success or failure of the implementation of the commission and the member states. keywords: accountability methodology, paying-agencies election governance, performance human resource model, recruitment explosion and special report. 1. introduction to the analysis of the audit methodology auditing is a blurred concept that is difficult to define and is used in different ways in different contexts (denichilo 2019a). general concepts include audit, inspection and control: evaluation of eu cohesion policy functions under the general audit term (power 1994). to analyze eu reform, this work takes an equally broad approach to auditing, which includes (for cohesion policy): verification of the effective functioning of member states' controls, as undertaken by the commission services and bodies independent in the eu member states; and control of projects financed through desk-based controls and on-site inspections through the management and certification (i.e. payment) of the structural fund authorities in the member states. as an external audit body, the european court of auditors (hereafter the court) is not by definition part of the internal european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 20 audit / control framework under shared management, although administrative reforms in the commission have had an impact on audit activities of the court and, as will be discussed below, for the voice of this institution in the post-reform era. from a theoretical point of view, the fundamental functional properties of audit and control are well captured in the classical terms of the main agent (power 1994): a monitoring technology used to eliminate moral hazard and information asymmetries between an agent and its principal in order to restore or improve trust. the use of audit and control as political technology in government has grown since the 1980s represented as an explosion of audit by power (1994, 1997) with its roots in the erosion of society's trust and public sector management changes that require greater accounting, verification and control. in the eu context, similar factors explain the shift of the audit regime. an administrative reform program in 2000 was triggered by an eu financial management scandal and legitimacy crisis (balint et al. 2008). of primary concern here are the subsequent effects on policy implementation and the results in eu cohesion policy. the starting point is to specify the implications for the audit and how the process has transformed the scope and intensity of the audit, control and reporting activity (denichilo 2019b). the main questions are: what form did the audit explosion take and why? what are the consequences? and how effectively has it solved the underlying problems? the assessment of the form of the eu audit explosion can draw on comparative administration literature, which documents two distinct public sector audit models: the compliance model and the performance model (barzelay 1997; pollit 1999). the compliance model has its roots in the financial audit based on the accounting practices of private companies (power 1997) and the internal accounting in the government can be traced back to millennia. fraud and error detection was the original goal of the financial review and a close association remains. the compliance audit focuses on legal and administrative compliance and on the probity and correctness of the administration, financial systems and management control systems. performance auditing has developed since the mid-1980s (pollit 1999). it resembles evaluation in probing the efficiency and effectiveness of public programs, but is undertaken in a similar way to auditing (barzelay 1997). the easily quantifiable numerical indicators used in financial accounting are complemented by qualitative output-oriented indicators. the focus shifts accordingly from inputs to outputs and outcomes of public sectoral activities (pollitt 1999). the pace and extent of the transition to performance auditing varies internationally. the leaders are the united kingdom, australia, north america and scandinavia (barzelay 1997; pollitt 1999). countries that adopt performance-oriented management doctrines have generally been proactive in auditing performance. countries with a stronger tradition of administrative law and a strong rechtsstaat (e.g. france, germany and italy) have been more cautious. a similar correlation applies to internal audit and control experiences (pollitt and bouckaert 2004; power 2005). this literature suggests that an explosion of the eu audit should take or approach the shape of the performance model. after all, the new public management principles were the basis of the commission's administrative reform program (knill and balint 2008), which said it sought to improve effectiveness, focus on performance and provide more profitable training in financial management, audit and control. furthermore, more than other eu policy areas, cohesion policy has established monitoring and evaluation mechanisms for evaluating policy performance, creating pre-existing knowledge that would facilitate performance auditing (pollitt and bouckaert 2004, pollit et al. 1999). this leads to the second question relating to the behavioral impacts of the growth of the audit, for which the thesis of the explosion of power's audit highlighted several pathologies. the audit explosion (power 2002) may result in a priority decline european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 21 in the provision of public services due to resource costs. an organization that wants to survive an audit must invest in reporting, monitoring and control systems, rather than improving performance (power 1994). additionally, the growth of audit and control can aggravate mistrust (power 2000b). auditors can play elaborate games of non-compliance and the auditors' working methods can be questioned. furthermore, the unproven benefits of the audit tend to be accepted, when the effectiveness of the audit should actually be called into question (power 1997). finally, auditors or controllers can become de facto policy makers by repositioning competencies in the public management hierarchy (power 2005). and therefore, there is the question of whether administrative reforms in the field of audit and control are strengthening the commission's governance capacities. this concerns the commission's ability to manage policy effectively, as well as the effects of strengthening the legitimacy of administrative reform (cini 2008). before testing these propositions, it is necessary to corroborate the claim that an audit explosion occurred and that its origins lie in the commission's administrative reform (power 2015). the introduction and the background place the study within the audit and control of the european community on the different states. the elimination of moral hazard between different levels of government is properly debated according to literature and practice references. the literature identifies and coherently argues the issue of auditing by the european commission and cohesion policies, with a balance of powers by recalling the reforms that have taken place. the purpose of the paper is to provide evidence and reporting of european methodologies for the election of people who will have administrative, accounting and political responsibilities (denichilo 2020). for similar papers that use the same elaborations in public choice you can consider the following recent ones: berkowitz, monfort and pieńkowski (2020); courtney and powell (2020); pavić, turk, grgić and prišenk (2020) and van wolleghem (2020). 2. the explosion of recruitment as a performance model the audit explosion clearly led to significant changes in the commission's organizational, strategic and operational approaches (power 2011). the question is whether these changes were driven by ambitions to increase policy performance or ensure regulatory compliance. the previous account does not support the expected shift towards the performance model, but strongly points towards a compliance model. this is evident in the emphasis and strength of compliance-based measures implemented since the mid-2000s: faster suspension and correction procedures; member states' action plans and their corrective follow-up; an increase in the scope and intensity of the audits; and stricter closure procedures. seeking has been to improve the regularity and legality of expenditure, to support pressure from the court and parliament to reduce the error rate. noteworthy is the emphasis of the data on the sanctions instrument of financial corrections and recoveries, as underlined by the administrative reform program, the roadmap for internal control and the control plan and by the court and parliament on an ongoing basis. however, as claimed by one of the court's auditors: by their very nature, financial corrections can be applied alone in the event of proven violation of specific rules. they are therefore much better suited to sanctioning violations of legality and regularity rather than weaknesses in terms of sound financial management. another consequence of the commission's roadmap has been found in annual declarations including summaries of member states' audits and opinions on cohesion policy expenditure. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 22 again, this appears to be yet another compliance exercise with punitive characteristics rather than a real tool to stimulate learning about effectiveness, as the following comments from a hearing of the parliament indicate: when asked if these summaries had allowed them to learn something useful, the commission replied: "not yet" (which is, i believe, the commission's language for "no"). but when asked if all member states had complied with the request, the commission replied that germany had not done so and that the commission was initiating an infringement procedure. these are the early days, but there is something daunting in finding that these procedures add so far little value to the commission, but represent a new way for member states to find themselves in violation of a regulation. this interpretation is reinforced by evidence that the commission only checked whether the member states had submitted the annual summaries, had not undertaken any analysis of the content of the added value of the documents and paid little attention to the performance targets and methods. the priority given to obtaining guarantees from the member states was a key feature of the 2006 reforms for the audit and control of rules in cohesion policy. the main innovation was a "conformity assessment" exercise to ensure that all the management and control systems of the program "procedurally" comply with the requirements (power 2011). the process was conflicting, with the commission rejecting more than half of the first submissions of descriptions of audit systems and strategies; this includes countries that previously signed trust agreements with the commission. recent developments indicate a future step towards the performance model, even the key parameter of the performance audit attention to results and impact as part of the audit does not seem to be on the horizon (power 2011). in 2007-2013, greater emphasis was placed on the so-called "single audit model", which constitutes a clearer division of responsibility between the commission and the member states, with each level combining its security on the next during the various stages. of implementation. this promises less duplication of efforts, more cooperative relationships and greater trust, whether the model will work as promised remains to be seen. furthermore, in moving to a control approach, the commission may face another challenge: the economic and epistemic impossibility of direct control when it reaffirms control (power 2011). furthermore, the commission stresses that audit and control should be seen as a learning process. the goal is not only to identify problems (such as fraud or major errors), but also to propose solutions (in order to prevent minor errors), supported by a more bottom-up approach, oriented towards risk management (rather than driven by the sanction) approach (power 2011). one of these commission measures was the provision of a self-assessment tool to the member states in 2007. however, these softer measures were superimposed on the existing compliance model and are diminished by the scope and intensity of the compliance actions implemented by recent years. three key factors explain the nature of the audit explosion and the consequences. the first reflects a fundamental political choice by parliament, the court (in particular in relation to the discharge of the budget) and the council's budget group to prioritize compliance over performance (power 2011). furthermore, there is no specific council specific committee for cohesion policy which focuses on: assessing the concerns related to the performance of eu cohesion policy. this political dimension largely explains why the commission's administrative reform program had a strong logical bureaucratic impact (ellinas and suleiman 2008), despite claims about its ideals for new public management. secondly, the commission's financial crisis and the program of administrative reforms have led to a redistribution of power and resources, in parliament and in the court (in the post-santer era). in addition to strengthening the influence of the eu european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 23 budgetary authorities, it has enabled them to defend the new status quo, thus maintaining the ongoing administrative reform (cini 2008) of auditing and control more firmly on the compliance path. this growing pressure largely explains the injustice perceived by the auditors in the member states (see below). it also contradicts claims about administrative reform led primarily by the commission, at least in the field of audit and control. third, the current institutional structure of shared management where the commission's power to establish rules (based on its responsibility for the budget) is not accompanied by an equivalent power over the implementation of the budget necessarily implies a high degree risk of delegation, especially the highly devolved and dispersed delivery model of cohesion policy. as noted by the head of the audit department, it is not possible to provide member states with a blank check and to rely on member states' audit systems because when the court of auditors carries out its own checks in the member states, the commission will not blame the errors. member states. a more rigorous approach to compliance is needed to address the problem of high levels of irregularities (harber, marx and de jager 2020). 3. introduction to the concept of accountability responsibility has always been intrinsic to the research and practice of democratic governance. responsibility concerns "the construction of an agreed language or currency of speech on the conduct and performance and the criteria that should be used to evaluate them" (day and klein 1987). responsibility rests on a combination of structures and procedures, in addition to the socialization of public officials about what is appropriate in the conduct of public affairs. according to march and olsen, the traditions of democracy require political officials to account for their actions; report, explain and justify any exercise of authority; and sanction if necessary. public officials should act in anticipation of having to account for their actions. responsibility is based on regulation, the process, setting standards and presenting accounts for actions. peterson underlines the challenge the eu faces due to the coexistence of shared sovereignty and divided responsibility (de haan , schoenmaker and wierts 2020). the establishment of the european court of auditors and other audit institutions in the eu is an attempt to promote collective responsibility for coping with shared sovereignty. there are four forms of responsibility: a) administrative liability; b) parliamentary responsibility; c) election responsibility; d) judicial liability. interestingly, it did not include financial liability in its categorization. however, financial responsibility is an essential part of accountability in any democratic political system, given the importance of the public purse. financial responsibility or the audit process are related to both administrative and parliamentary responsibility (manes rossi, brusca and condor 2020). a key feature of the administrative budget processes is "to ensure responsibility, that the funds are actually spent for the intended purposes, that the programs are executed as planned and that the funds, coming from any source, are not spent on unauthorized activities" the budget processes also support managerial functions, linking the financial decision-making process to the performance of the program (köhler, ratzinger-sakel and theis 2020). in addition, the audits provide the raw material for the budget control committees of the national and european parliaments, hence the contribution to parliamentary responsibility. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 24 democratic theory underlines the importance of two mechanisms as a basis for accountability. this is information and sanctions. the court of auditors is not a judicial court capable of imposing sanctions on other actors. rather, its contribution to accountability in the eu. it is based on the provision of authoritative information to political bas institutions ate on audits that allow them to monitor and improve financial management. the european court of auditors was established in 1977 in response to the weakness of the pre-existing audit committee of the european economic community (eec) and the auditor of the european coal and steel community (ecsc). the change in the financing of the eu budget following the budget treaties of 1970 and 1975 created political pressure to establish a stronger external audit capacity in the eu. once established, the court worked to strengthen its mandate and influence the evolution of financial responsibility in the union. in addition to the functional tasks associated with the external audit, the court of auditors has acted to improve the regulatory framework for financial liability in the union. the court was part of a larger defense coalition for better financial management in the eu. as an external audit body, the court exercises its role by providing information on the management of the union's finances to the executive and parliamentary bodies of the union at eu and national level (march 1995). it has no judicial functions and does not impose sanctions on individual officials or institutions. so the basis of his contribution is based on the result of his audits as expressed in the reports. responsibility is promoted through the publication and dissemination of information on financial management systems and practices in the eu. the court increases accountability in the union by conducting its audits professionally and reporting on the results of its audits. the basis of the court's contribution to accountability in the union is based on two pillars of information and publication. in addition, the expectation of an external audit influences the behavior of public officials engaged in the deployment of eu funds at eu and national level. the fact that public officials know that their actions can be reviewed by an external audit body affects the way they deal with eu finances (fredriksson, kiran and niemi 2020). 4. organization settings of supreme audit institutions supreme audit institutions (sais), including statutory auditors, auditor courts and public or public sector certifiers, play an important role in strengthening government and public sector responsibility (marchesi 2000). this is done through their examination and reporting of government financial reports, including government agencies, authorities, companies and subsidiaries (i.e. audit of financial reports). not only performance or audits with a good quality-price ratio of the efficiency and effectiveness of the use of public funds, but also other judicial reviews, including environmental audits. this study extends the previous literature (de martinis and clark, 2007) by examining the enabling legislation of the sais of the 25 member countries of the european union (eu) and the european court of auditors (eca). the study examines the provisions contained therein that deal with the scope of parliamentary powers on the accountability of sais to parliament, as well as the independence, supervision, mandate and funding of sais. given the importance of the eu and the economic, political and social diversity of its member countries, it is useful to examine the enabling legislation of their sais (colella 2000). the wave of spectacular corporate collapses and frauds worldwide, including enron, hih, parmalat, tyco, worldcom and xerox, is well known, has highlighted the need for greater corporate and regulatory governance. all over the world and in the aftermath of these corporate collapses and fraud and, in particular, the disappearance of arthur andersen, the adequacy of the european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 25 auditor's legal requirements and professional standards for carrying out a quality audit have been subject to a greater control, in particular the auditor's independence. a significant achievement was in the united states, where the sarbanes-oxley act 2002 was issued, creating a stricter corporate governance and accountability regime, including a climate of stricter rules on independence of control. in other countries, government regulatory and professional bodies have also followed suit with changes (proposals) similar to legislation and / or professional standards for the purpose of improving corporate governance, including audit quality. interestingly, well before the entry into force of the sarbanes-oxley act of 2002, the european commission had proposed to improve the independence of auditors by setting minimum standards, in particular as regards the mandatory guarantee systems of the quality, since member states have been found to operate with voluntary or partial systems or without a system (caruana and kowalczyk 2020). 5. institutional challenges: review special report performance auditing is “a knowledge-based activity” and that owing to its “special features” it requires “special competences” (european parliament 2012). it is an “investigation discipline that requires flexibility, imagination and analytical skills. excessively detailed procedures, methods and standards may hamper the effective functioning of performance auditing. auditors traditionally have experience in public and private sector financial/compliance auditing but are not familiar with the appropriate methodologies for performace/value-for-money auditing (van der meer and edelebos 2006). the court’s management has been obliged to support the training of staff through professional education in performance auditing, for both auditors and members by developing a professional diploma course in public-sector auditing, finance and accounting as a qualifying tool. the court is now hiring auditors from a variety of academic disciplines. beyond accountants, economists and lawyers, its staff increasingly includes psychologists, linguists, social scientists, geographers and medics, policy expertise in performance audit requires professional qualification in, and in-depth practical knowledge of, a range of policy areas. it pushed through internal restructuring, creating vertical chambers with decision-making powers delegated to them away from the college. this brought efficiency gain but resulted in “silo-ing” with each chamber insulating itself, competing to out-perform the other in producing special reports. the court is now much more conscious of its external profile. a communication department was created around the president to “professionalise” and actively promote the court’s recommendations, with greater attentions paid to presentation. adopting private sectors norms, the court now talks of disseminating its “products” to its “clients” or “stakeholders” (see table 1). compliance audit work will likely always receive a bed press, its impact hard to ascertain in terms of improved accountability (homer and stephenson 2012). tab. 1 reports submitted to the court of auditors. 1. annual reports / statements of assurance. 2. up grade procedure services. 3. confort letters. 4. news. source: court of auditors annual report. 6. the audit of paying agencies: the agea case european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 26 the agency for withdrawals in agriculture (agea) is a non-economic body governed by public law, established by legislative decree no. 165 and subsequent amendments and additions (denichilo 2011). it is subject to surveillance by the ministry of agricultural, food and forestry policies. the organization, structure and functioning are defined and regulated in addition to the legislative decree of 27 may 1999, n. 165 and subsequent modifications introduced by the legislative decree n. 188 of 2000 and by law 21 december 2001, n. 441, by the agea statute approved by ministerial decree no. 736 of june 14, 2002, by the administration regulations approved by ministerial decree of june 14, 2002 and by the personnel regulations approved also by ministerial decree of june 14, 2002. pursuant to article 10 of legislative decree no. 165/99, as modified by law no. 441/2001, a monocratic office is entrusted with the exercise of the functions of paying agency, which has the task of ensuring the efficiency of the management and control structure of community aid, without prejudice to those of other paying agencies, through the adoption of procedures aimed at the most rational use of resources, tools and resources in full compliance with current community regulations (hada, luga and căruț 2019). the bodies of the agency are: president, board of directors, representative council, board of auditors, court of auditors. the executive structure of the agea, as required by the staff regulations (14 june 2002) and articulated with resolution no. 44 of 19 july 2002, is made up of: a) monocratic office, responsible for the paying body pursuant to regulation (ec) no. 1290/06 established with law no. 441 of december 21, 2001; b) coordination area, which performs the functions of coordination body pursuant to regulation (ec) no. 1290/06 and of the regulation (ce) n. 885/06. the two functions are distinct under the organizational, administrative, functional, managerial and accounting aspects pursuant to and in compliance with eu and national legislation. the monocratic office performs the functions of paying agency pursuant to regulation (ec) no. 1290/06 and coordinates, determines the guidelines and objectives, the following areas subordinated to it: a) administrative area, which is made up of the "general, financial and cash personnel affairs" office, the "national budget and management control accounting office" and the "community litigation" office; b) payment authorization area, which consists of the "pac, fodder and oil" office, the "rural development" office, the "single application and fruit and vegetable management" office, the "promotion, quality improvement and social aid" office, of the office of the "community litigation"; c) controls area, which consists of the "accounting" office, the "technical service", the "payments execution" office and the "relations with paying bodies and sian" office. d) the coordination area performs the functions of coordination body pursuant to regulation (ec) no. 1290/06; in particular: coordinates and monitors the activities carried out by the paying agencies recognized in compliance with regulation (ec) no. 1290/06; takes care of the harmonization of the operational procedures for the implementation of the community legislation relating; provides national aid, ensuring its compatibility with eu legislation. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 27 the types of intervention that the community internal control service can implement are the following: a) compliance audit: focuses on verifying the compliance of the procedures adopted by the paying agency with eu legislation, and verifying the compliance of the components with the internal rules and procedures, applicable to the context of the operating structures and operations under examination. b) operational audit: verifies / assesses the adequacy, regularity, reliability and functionality of systems and processes / procedures, methods (codification) and resources in relation to objectives, organizational structures. c) financial audit: these are actions aimed at verifying the adequacy of existing accounting, administrative and financial controls. their objective is to verify that there is a correct and timely recording in the institution's accounts (with particular regard to the eagf and eafrd accounts) and that the economic and financial statements present the results of the year in a "true and correct" manner and the financial and equity situation at the end of the financial year. systematically the purposes of a financial audit can relate to the reliability of the accounts, the legality and regularity of the operations and the verification of its financial management. d) follow-up (monitoring of corrective actions): these are interventions for verifying the effective implementation of the corrective action plans agreed with the process managers, in the face of the observations found during previous interventions, audits or process mapping , of the service and shared by the process managers themselves. at the date of this paper, the internal control service is organized into the following basic specialized units, identified by the homogeneous environment of action of the paying agency, as classified by the eu guidelines, aggregated into homogeneous areas by subject of verification: a) universe "eagf sigc / no sigc" divided into: eagf (european agricultural guarantee fund) schemes covered by the sig, i.e. the support schemes referred to in titles iii, iv and iv bis of regulation (ec) no. 73/2009 of the council including the agri-environmental, forestry, less-favored areas and areas with environmental restrictions, if the same sectors are included in the temporary instrument for rural development. in particular, this unit deals with the authorization procedures (administrative and on-the-spot checks), execution of payments, accounting that take place in application of the integrated management and control system in the eagf environment; eagf (european agricultural guarantee fund) schemes not covered by the sigc, i.e. any other support scheme paid by the eagf including any other scheme not covered by the sigc which is part of the temporary instrument for rural development. in particular, this unit deals with the authorization procedures (administrative and on-the-spot checks), payment execution, accounting, advances and guarantees that take place outside the scope of the integrated management and control system in the eagf environment. b) universe "eafrd sigc / no sigc" divided into: eafrd (european agricultural fund for rural development) schemes covered by the sigc, i.e. the support schemes borne by the eafrd referred to in article 6 of regulation (ec) no. 1975/2006. in particular, this unit deals with the authorization procedures (administrative and on-the-spot checks), execution of payments and european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 28 accounting that take place in application of the integrated management and control system in the eafrd environment; eafrd (european agricultural fund for rural development) schemes not completed by the sigc, i.e. the support schemes borne by the eafrd referred to in article 25 of regulation (ec) no. 1975/2006. in particular, this unit deals with the authorization procedures (administrative and on-the-spot checks) for payments and accounting that take place outside the scope of the integrated management and control system in the eafrd environment. c) universe credits divided into: credit management within the eagf; management of eafrd credits. d) advances and guarantees universe: deals with the procedures relating to the management of the amounts paid in advance and the guarantees given in favor of the paying agency. e) public storage universe: deals with procedures relating to public storage and community inventory management. 7. methodology 7.1 human resource performance model this paper analyzes factors that explain the increased use of special reports by the court, such as the accountability methodology, wondering if they resemble evaluation studies. their training examines their impact, as well as the institutional use implicit in the performance audit (denichilo 2013). what factors and circumstances explain the increased use of special reports? the work shows how the interpretation of the court has political implications and serves to promote its institutional interests in the battlefield to define "responsibility" and in what concerns it. evaluation in the eu is often conducted externally, offered to various consortia of academics, researchers and consultants who respond to assess the performance of political programs. several multilevel stakeholders will conduct their assessments and choose from a mix of qualitative and quantitative data (denichilo 2019b). for the executive, its main purposes are: to contribute to the planning of interventions, including providing input to establish political priorities; assist in the efficient allocation of resources; improve the quality of the intervention; and report on the results of the intervention. this presupposes feedback in the political cycle, although theory does not always extend to practice. audit is therefore an essential part of evaluation in the eu, contributing to the realization of financial responsibility, but also, maintaining the institutional legitimacy of the decision-making system (spaventa 2008) in short, audit and evaluation are both key elements in the process of democratic accountability, but the question of what is accounted for and who is taken into account is central to the debate and in the eu. like the audit, the performance assessment function is to allow for accountability, but there is also an emphasis on collective learning. however, securing both can "run into several complications when applied in complex multi-actor political processes (sposato 2010)." european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 29 7.2 data and sampling this study analyses the characteristic and the determinants of the legislative decree 286/1999 in quality of advisory body in 102 act’s director of paying agencies agea at 31.12.2013 (caiden 2000). in sampling process we lost 1,04% of total universe of investigation and analyzed 102 executive positions. tab. 2 identification of the survey sampling at 31.12.2013. total operational employees at 31.12.2013 64,96% total employees of the service organization at 31.12.2013 34% total universe of investigation at 31.12.2013 98,96% source: agea pwc audit reports 2011-2013 and agea pwc special report 2014 tab. 3 unavailable data. description data number of total advisory body act's director 120 unavailable data of advisory body % (qualification, number, independence) 15% number of advisory body object of analysis 102 source: agea pwc audit reports 2011-2013 and agea pwc special report 2014 our elaboration takes into consideration the year 2013 as there was the least amount of loss of data and with a minimum time span of five years to be able to evaluate the audit opinion in full independence (agea pwc audit reports 2011-2013 and agea pwc special report 2014). 7.3 research design: framework and hypothesis there are a number of theoretical arguments as to why corporate management might elect voluntary to provide particular information to parties outside the organization. these arguments were grounded within “positive accounting theory”, but there are some alternative theoretical perspectives that address this issue. these theories are: a) legitimacy theory; b) stakeholder theory; c) institution theory. legitimacy theory has become one of the most cited theories within the social and environmental accounting area. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 30 the author believes that legitimacy theory does offer a powerful mechanism for understanding voluntary social and environmental disclosures made by corporations, and that this understanding would provide a vehicle for engaging in critical public debate. the problem for legitimacy theory in contributing to our understanding of accounting disclosure specifically, and as a theory in general, is that the term has on occasion been used fairly loosely. this is not a problem of the theory itself, and the observation could be equally applied to a range of theories in a range of disciplines. follow there are the hypotheses of the paper that we have identified using the theory of legitimacy, in particular we have identified corporate governance hypotheses, assumptions of positive and negative potential audit evidence (rolle 2010). tab. 4 framework hypotesis h1: there is negative association between impact of debt register evidence and quality of advisory body. h2: there is a positive association between internal audit statistics evidence and quality of advisory body. h3: there is a positive association between squeeze-out audit evidence (external job positions) and quality of advisory body. source: agea pwc audit reports 2011-2013 and agea pwc special report 2014 7.4 dependent variable the dependent variable is directly observed by visiting and explores the corporate website. the characteristics of corporate report (cr) disclosure is classified in three categories: a) number of member of advisory body (num). b) qualification member of advisory body (qm). c) independence member of advisory body (ind). this three aspect determine the quality of supervisory body in italian paying-agencies. the concept of social disclosure means providing adequate information about the events of the organization and its activities for the users of that information in order to enable them to make and take the decision (costa 2009). s model = 𝑆! = "# [#%&(()#)],!-()# 𝐼𝑁𝐷 tab. 5 costruction data evidence first evidence: there is a positive association between number of advisory body (num) and quality of advisory body: the number of advisory body varies from 1 to 3 in an organization settings staff unit. second evidence: there is a positive association between quality member of advisory body (qm) and quality of advisory body: european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 31 a) l consist in legal affairs (lawyers) who demonstrate that they have significant experience in the criminal law of the economy over 15 years; b) ia consist of internal auditor staff and line (cyber audit) who demonstrate that they have significant experience in corporate compliance and in the analysis of corporate reporting procedures over 10 years; c) o is represented payment operator who demonstrate significant experience in audit evidence over 15 year. d) e consists of the category engineers in operational auditing and environmental impact assessment who demonstrate significant experience in re-performing audit evidence on site over 10 years. third evidence: there is a positive association between independence of advisory body (ind) and quality of advisory body: the variable independence ranges from 0 to 1. source: agea pwc audit reports 2011-2013 and agea pwc special report 2014 this three hypothesis introducing social responsibility legitimation role of legislative decree 286/1999 in italy (noe 2006). the quality composition of advisory body legitimates their quality of the audit to preventing fraud and corruption and legitimates trust in the “ritual of verification”(mendez 2011). tab. 6 corporate disclosure of legislative decree 286/99. examined disclosure dependent variable value at 31.12.2013 number of member of advisory body num (1;2;3) qualification member of advisory body qm (lawyer=4;internal auditor=3; engineer=2; other=1) qm=l+ia+e+o independence member of advisory body ind variance 0-1 indipendent members odv 𝑇𝑜𝑡𝑎𝑙 𝑚𝑒𝑚𝑏𝑒𝑟 𝑂𝑑𝑉 source: agea pwc audit reports 2011-2013 and agea pwc special report 2014 tab. 7 descriptive statistics of corporate disclosure of legislative decree 286/99. examined statistics number of member of advisory body qualification member of advisory body independence member of advisory body median 2,8 7 0,7 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 32 mean 1,5 5,5 0,5 variance 0,21 6 0,30 source: agea pwc audit reports 2011-2013 and agea pwc special report 2014 7.5 research model to tested the hypotheses we used the research model specified in the follow equation: 𝑆!= a0 + a1 (debt register evidence) + a2 (internal audit statistics) + a3 (squeeze-out audit evidence) + ξ where: symbols description value al 31.12.2013 a0 intercept external audit impact debt register evidence power of size @log𝐴𝑠𝑠𝑒𝑡 . /0! internal audit statistics inspection evidence ∏10!. log inspection squeeze-out audit evidence dummy [0;1] ξ residual residual funds access 7.6. results the table 8 contains the descriptive statistic of the independents variables. tab. 8 descriptive statistics. variable mean std. dev min max debt register evidence 12,5 2,59 1,05 20,35 internal audit statistics 1,5% 0,99% -2,50% 40,50% squeeze-out audit evidence 0,50 0,25 0 1 source: agea pwc audit reports 2011-2013 and agea pwc special report 2014 our sample covers a wide range of data: some very small, some very large. they have median debt register equal to 10,22; the median of audit statistics is 3,55%. they are generally not highly squeeze-out audit, considering that they have a squeezeout audit that is on median equal to 0,12. in table 9 there is the multivariate regression results using the equation 𝑆!, and estimate the coefficients and corresponding t-value. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 33 tab. 9 – multivariate regression regress model coefficient t value p>t intercept -1,8 4,50 0,01*** debt register evidence -2,4 2,5 0,99 internal audit statistics 0,2 4 0,01*** squeeze-out audit evidence 0,5 -2,5 0,45 r2 0,55 * ** *** significant at the 0.1, 0.05 and 0.01 level. source: agea pwc audit reports 2011-2013 and agea pwc special report 2014 the model is significant (0,01 level) and the adjusted r2 are 0,55. the independent variable has significant result (0,01 level) is internal audit statistics (h2). 8. conclusions this study analyses the characteristic and the determinants of the legislative decree 286/1999 in quality of advisory body in 102 act’s director of paying agencies agea at 31.12.2013. the multivariate analyses shows a positive significant related, to the companies have high internal audit statistics have high quality of advisory body, this fact is consistent to the legitimacy theory. to future research predicts increase the characteristics and analyses comparatively to other country so it is possible. some limitation should be considered, in particular the incidence of unavailable data of number, composition and independence of advisory body exceeding 10%. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 34 figure 1. control activities of organization settings (d. l.vo 286/1999). activities strategic evaluation and control management control evaluation of managers administrative accounting control recipients political bodies executives in direct contact with the political policy body executives in contact with the governing body political summits, managers and external control bodies object guidance documents, management documents of executives who interact with political policy bodies economy, efficiency and effectiveness of the organizational entity to which the manager is responsible performance and organizational skills of every non-top executive accounting administrative correctness source: agea pwc audit reports 2011-2013 and agea pwc special report 2014 in conclusion the paying agencies that have high profitability of internal audit statistics have high quality of advisory body, this legitimates their quality of the audit to preventing fraud and corruption and legitimates trust in the “ritual of verification” (denichilo 2019c). the increase in public debt in the euro area during the crisis, although more contained than that of the entire world of mature economies, has opened up a front that has not yet closed. the question of the possible negative effects of a high public debt is ancient. in general, there is a certain consensus on the idea that, through various channels, a very high debt may hinder growth, even if the relationship is very uncertain, and, above all, it is excluded that a threshold beyond which the effects may be identified negatives become particularly severe. the model dealt with in this paper is a starting point on the analysis of the immunization of public finance processes. the limitations of the work concern the difficulty in finding the data and the continuous updating of the data which in the stochastic processes of financial immunization represent the password (denichilo, pedone 2009). 9. discussion the court is transparent in the delivery of reports, publishing them online, freely accessible to stakeholders and citizens. however, it perceives accountability not as merely about visibility or transparency, but as ultimately resisting on parliamentary scrutiny and action, legislative responsibility underpins democracy. at the supranational level there is a “triangle of european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 35 accountability” between the european court of auditors (external controller), european parliament (principal, scrutinizer, democratically accountable) and european commission (auditee, non-elected, jointly responsible for managing and implementing eu funds). there is no clear-cut hierarchy among the institutions. furthermore, the approach to, and practice of, audit across member states continues to require harmonization and the adoption of common standards. the soundness and value of parliamentary scrutiny remains open to question, in term of both recouping funds and influencing policy redesign. nonetheless, performance audit itself, as a process of “accounting for” budgetary implementations, follows a clear logic of decision-making, research, analysis, drafting and reporting, thus constituting a series of sub-processes. policy-makers are increasing focused on issues of performance in audit, given budgetary constraints and the financial and political implications of audit for future policy. “performance”, though evidence-based and drawing on quantitative data, is about framing and institutional discourse, ultimately value-driven and normative (stephenson 2015). references agea pwc audit reports 2011-2013. agea pwc special report 2014. berkowitz p., monfort p. and pieńkowski j. 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(2019a), rituals of verification nei collegi sindacali delle società quotate italiane un analisi dei testi e quantitativa. university of cagliari edit 2019. denichilo s. (2019b), rituals of verification negli organismi di vigilanza delle società quotate italiane un analisi quali-quantitativa. university of cagliari edit 2019. denichilo s. (2020), metodologia di audit per il reclutamento negli affari europei: ritualismo contro pianificazione del fabbisogno di risorse umane. convegno annuale aipda roma. ellinas a. & suleiman e. (2008), the reforming the commission: between modernization and bureaucratization, journal of european public policy. european parliament (2012), committee on budgetary control, “future role of the european court of auditors: challenges ahead and possible reform”. favere-marchesi m. (2000), audit quality in asean. the international journal of accounting. fredriksson a., kiran a. and niemi l. 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(2011), auditing and the reiventation of governance. published to oxford scholarship on line october 2011. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4608 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 37 power m. (2011), audit, trust and risk. published to oxford scholarship on line october 2011. power m. (2011), fraud, expectation and rise of financial audit. published to oxford scholarship on line october 2011. power m. (2011), making audits work: auditees and the auditable performance. published to oxford scholarship on line october 2011. power m. (with yves gendron) (2015), qualitative research in auditing: a methodological roadmap. auditing: a journal of practice and theory (2015) 34(2): 147-165. rolle l., “ risorse umane e benchmarking. prassi eccellenti in aziende innovative”, franco angeli, milano, 2010. spaventa l. (2008), una crisi della nuova finanza. giuffrè editore. sposato p., “valutazione e selezione del personale. come scegliere e valorizzare il tuo staff ideale.”, bruno editore, roma, 2010. stephenson p. (2015), reconciling audit and evaluations? symposium on policy evaluation in the eu. van der meer f. and edelebos j. (2006), “evaluation in multi-actor policy process: accountability, learning and cooperation” in evaluation. van wolleghem p.g. (2020), does administrative capacity matter? the absorption of the european fund for the integration of migrants. policy studies. 5100-article text-16396-1-11-20201211 http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 58 regenerative post covid-19 recovery measures: the case of rwanda alaa ben abdallah1 and rudi michiel ackerman2 1 international business and trade, african leadership university, kigali, rwanda 2 international business and trade, african leadership university, kigali, rwanda 1a.benabdall@alustudent.com 2rudi.ackerman23@gmail.com received: 15/09/2020 revised: 12/11/2020 accepted for publication: 07/12/2020 published: 18/12/2020 abstract governments worldwide are scrambling to combat both the biological and economic effects of the global covid-19 pandemic. given urban unemployment and poverty induced by the global pandemic, this paper asks if developing countries could use regenerative agriculture as a form of poverty alleviation. by using rwanda as a case study, this paper analyzes two of the existent home-grown poverty alleviation initiatives for rural food security: girinka (have a cow) and akarima k’igikoni (kitchen gardens). we investigate if the rural akarima k’igikoni initiative could be implemented in urban areas. using descriptive statistical data gathered during the pandemic in rwanda’s capital, kigali, we found rainwater collection practices already well established. we find that many households already separate waste, but that only some households practice composting and home-gardening. we conclude with several recommendations on how the rwandan government’s commitment to sustainable development and urban agglomeration in the vision 2050 strategy can be achieved. using already well-established policy mechanisms like the “umudugudu” (=village) network and the akarima k’igikoni initiative, rwanda can better weather the economic effects of the global pandemic. these mechanisms present a valuable opportunity for rwandan businesses to invest in composting activities and regenerative practices in their buildings and waste management systems. other developing countries can also learn valuable lessons from an environmentally sustainable and home-grown poverty alleviation policy. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 59 keywords: sustainability; covid19; rwanda; vision 2050; regenerative agriculture; circular food systems; decentralisation 1. introduction the effects of the global coronavirus pandemic are yet to be fully quantified, but undeniably had a detrimental effect on the economy and its people (nicola et al., 2020). as many economies failed the people they are supposed to serve from health systems and education to sustenance and job security the pandemic has taught us that there is no option of going back to normal; sustainable practices are not just a nice-to-have but a must-have. the destructive scale of climate change is projected to far exceed the damages caused by the coronavirus since it endangers our own existence on earth. climate changeinduced temperature increase is “predicted to reach up to 3.25°c by the end of the century” (bendito and twomlow, 2015), which is 1.25°c above the degree limit to control climate change repercussions (2°c) (koch, 2014). because of their heavy reliance on rain-fed crop production, developing countries and more specifically african countries will disproportionately experience the disastrous effects of climate change such as the frequent droughts and floods and increasing wind speeds that affect, sometimes irreversibly, the crops as well as the initial poverty of the population and limits the capacity to adapt (mikova et al., 2015). ironically, while humanity struggled with the economic, social, and biological effects of the virus, the biosphere seemed to recover (nasa, 2020). it is disappointing that it had to take a global pandemic for us to pause our environmentally destructive economic activities. this pause gives us all a valuable moment to reconsider our actions and policies. in this paper, we will show the key role that sustainability can play in the recovery process after covid19 for developing countries. by using rwanda as an example, we will show in the literature review the historical efficacy of regenerative initiatives such as the girinka project. in sections four and five we will use data from a field research study conducted in the midst of the lockdown to show that kigali may be ready for expanding the akarima k’igikoni project (a more recent regenerative agriculture project launched in 2019) as part of a post-covid19 recovery process in peri-urban centres. finally, we present policy recommendations in section six and summarise our findings based on obstacles identified in our field research in section seven. there are various important solutions that rwanda has implemented to recover from economic and social hardship after the 1994 genocide against the tutsi in rwanda. one such solution was to implement a form of home-grown universal basic income called the girinka project a system by which all families http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 60 received a milk cow as a food source. after the food security brought about by the girinka project, and in order to further diversify vitamin intake, the akarima k’igikoni initiative was implemented a kitchen garden based on circular food system principles. both these initiatives were supported by the umudugudu1 network and umuganda an innovative and uniquely rwandan community service event that proved a very effective way of enacting national policies locally. our research builds upon these and other measures. however, our recommendations only represent one piece of the sustainability puzzle more research into the circular economy, biomimicry, green businesses and renewable energies needs to still be done to help develop a sustainable macroeconomy. we build upon the research done on circular food systems by the ellen macarthur foundation (2019). a more comprehensive review of terms such as regenerative agriculture, circular food systems and composting can be obtained from their comprehensive cities and food for circular economy report (see ellen macarthur foundation, 2019 and nijman, 2020). our solutions offer guidance around circular food systems that are home-grown, regenerative, and supportive of the urban agglomeration agenda of rwanda’s vision 2050 development strategy. it is important to realise, as kolinjivadi put it (kolinjivadi, in selby and kagawa, 2020:3); “[both covid-19 and climate change] are rooted in the same abusive economic behaviour, and both have proven to be deadly for humans”. it is therefore imperative that our economic recovery measures after the pandemic also address (and not further exacerbate) our environmental impact. 2. context of the covid-19 pandemic rwanda responded to international concerns around the novel sars strain by installing handwashing stations in and around public transportation hubs, restaurants, commercial centres and banks in its major cities by 11 march 2020. the government tested all incoming air travellers and confirmed the first case on 14 march 2020 a foreign national travelling to rwanda. on 16 march, the government declared all large gatherings, education and religious institutions to be closed in the country to limit the spread, and introduced social distancing, mask-wearing and hand-washing rules. these were strictly adhered to with 1 the closest translation for umudugudu is “village”, and is the smallest administrative division in rwanda. an umudugudu normally consists of around 200 1000 people, and come together on the last saturday of every month for umuganda, a collective community service event. some umuganda days are used for neighbourhood cleanup, repairing of houses or public infrastructure, or the planting of vegetable gardens (akarima k’igikoni). for more on the umudugudu and umuganda, see uwimbabazi and lawrence (2013) http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 61 penalties like spending a night in the local stadium while being recited the dangers of the virus, among others (asala, 2020). on 20 march, a full lock-down was implemented with all international flights suspended, non-cargo travel between provinces prohibited, all non-essential travel banned and all incoming travellers were subject to 14-day mandatory quarantine. only essential services businesses were allowed to operate and movement was strictly enforced with a daily curfew of 9pm-5am. our own data (figure 1 below) shows that income levels in our sample dropped by an average of 76 per cent in the sample taken for kigali during this time of lockdown mostly because of how hard-hit the informal economy was. gradually, the rwandan government relaxed certain restrictions and opened up segments of the economy most notably the tourism and hospitality industry which is rwanda’s largest source of foreign reserves (aoec, 2020). by 1 july 2020, most domestic business activities had been allowed to resume (people were asked to work from home if possible and strict social distancing and mask-wearing policies were in place for those who could not). by 1 august 2020, international flights and tourism had been allowed to resume, subject to strict quarantine and social distancing policies. for the purpose of this study, when we refer to ‘lockdown restrictions’, we generally refer to the period between march 2020 and july 2020. the data used in this study was collected in the first week of july 2020. as such, it shows the behaviour of households within the peri-urban areas of kigali after the worst lockdown restrictions have started to lift, as well as their responses during lockdown. our study shows that the right conditions are in place in kigali’s peri-urban areas to make use of decentralised regenerative agriculture as a way of poverty alleviation. most respondents have the right abilities and practices in place to use productive home gardens for sustenance. this is a particularly relevant insight following the depths with which the global pandemic has exposed the thin margin on which much of the informal economy survives. as a developing capital with large peri-urban areas and a large informal economy (ackerman, 2020), kigali is a good model for other developing capitals in subsaharan africa. it is also among the fastest growing economies, and the government has a strong focus on industrialising within environmental limits. our study therefore opens up an avenue for further investigation for developing countries who may also seek to establish regenerative agricultural practices. but it is only the start more research needs to be done to establish if this is an effective tool for poverty alleviation, and if it can be sustainably scaled in urban centres. our study merely shows that the potential for implementation exists. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 62 3. literature review 3.1. regenerative agriculture overview the agricultural industry is immensely diverse and has been one of the most defining activities of humankind’s development and our impact on the biosphere (kinahan, 2009). the most common form of commercial agriculture is what can be called ‘monoculture’, where a single crop is planted at a large scale; fauna and soil minerals are artificially controlled. the monocrop, once harvested, often leaves the fields completely barren, and artificial fertiliser is then needed to plant the next crop. this is contrary to natural regenerative systems where no external inputs are needed to ensure growth (anderson, 2019). by mimicking natural systems in agriculture, a regenerative circular food system does not need external inputs in the longer run. this may mean planting a diversity of crops that give and take different minerals from the soil, and integrating livestock in agricultural practices more efficiently to mimic natural fauna fertilisation. regenerative agriculture has emerged as a compelling field of research and an environmentally fit approach “to adjust our sight to the needs of the new ecology” (anderson, 2019:2). as such, ‘disrupting linear agricultural production’ has been a large focus within the research on the circular economy, which evolved into investigating the efficiency of circular food systems. a 2018 study done by lundgren and lacanne (2018:1) on corn production found that “regenerative fields had 29 per cent lower grain production but 78 per cent higher profits over traditional corn production systems”, which implies that “regenerative farming systems provided greater ecosystem services and profitability for farmers than an input-intensive model of corn production” (lacanne and lundgren, 2018:1). the ellen macarthur foundation report on cities and circular economy for food estimates that for a metropolitan city like são paulo in brazil to relocate its farming systems into regenerative practices will yield “usd 67 million cost saving in health due to reduced pesticide exposure and lower air pollution”, and “usd 25 million worth of soil saved from degradation in conventional farming practices” (ellen macarthur foundation, 2019:49), and help avoid 92,000 tonnes of greenhouse gas yearly among many other benefits on the individual and communal level (ellen macarthur foundation, 2019). this study hopes to contribute towards the efforts at expanding regenerative agriculture in cities. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 63 what then constitutes a circular food system, and how could we test its viability? nijman (2020) and the ellen macarthur foundation (2019) suggests implementing a circular system rests on three principles; 1) design out waste, 2) keep products and materials in use and 3) regenerate natural systems. nijman (2020) applied these principles to regenerative agriculture and considered three variables in a study on east african agricultural practices; 1) the propensity to use organic waste as compost, 2) the propensity to reuse agricultural materials (such as jerry cans and paper bags) and 3) the prevalence of regenerating natural systems (through practices like aquaponics or agroforestry). because our study is considering households, and not farmers, our study looked at slightly different variables to consider the same three principles. we looked 1) at the the propensity to separate waste (which is an essential step in designing out waste that ends up in a landfill), 2) what most households then do with the waste they separate (is it reused or does it end up in a landfill), and 3) we asked if households capture rainwater (which is a prerequisite for implementing a regenerative urban agricultural system and mimics natural water catchment systems). in addition to these three main areas of investigation, we also considered if alternative water sources are available to test the assumption that rainwater collection is a prerequisite in urban agriculture. 3.2. recovering from previous challenges; the girinka programme girinka, which translates to "have a cow," is a rwandan government initiative launched in 2006 that consists of giving one dairy cow to every low-income family as part of a poverty alleviation strategy. by june 2016, 248,566 cows had been distributed to poor households (mudingu, 2017). "one cow brings nutrition, sustenance, and employment, providing a stable income for a family and is a source of soil nutrients via manure to assist small scale cropping activity” (nyabinwa, 2018:1). the programme is also in line with the rwanda government’s priorities for the transformation of agriculture (psta). on the one hand, as income generated from milk production increases, farmers' abilities to invest in crop production have been on the rise as well as their ability to take loans and participate in development (unicef, 2012). on the other hand, new cattle breeds have been developed for higher milk yields, and manure was used for crop fertilization and biogas (unicef, 2012). girinka can be perceived as a form of a universal basic income (ubi). however, since it was non-monetary and culturally http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 64 appropriate (developed in rwanda, for rwanda), it is an interesting and regenerative approach to ubi for a country with limited fiscal ability. this program was not only created to serve economic purposes but also as a social project to reconstruct rwanda and reconcile communities after the tragic genocide against the tutsi in 1994. "if a cow is given from one person to another, it establishes trust and respect between the giver and beneficiary” (mudingu, 2017:2). girinka's social dimension has a profound impact on rwandans' perception of each other because it utilises the cultural significance around the act of giving cows in rwandan culture giving cows is traditionally reserved for marriage, where families are ceremonially linked together in the future. in addition, the programme also encourages the use of communal cow sheds as another aspect of fostering connection and knowledge transfer for beneficiaries who are not knowledgeable about cow breeding. the programme has also contributed to changing the mainstream rwandan mindset from "looking at cattle as a status symbol (the more cows one had, the better) to a source of income and livelihood” (mudingu, 2017:2). by changing this social perception, the negative effects of conspicuous consumption decried by veblen are avoided (veblen and banta, 2007) most notably that of conspicuous waste. this is an important point, as governments attempt to redefine consumption and consumerism in an effort to achieve decent living standards. rwanda has shown that by looking inward at its own cultural roots the negative consumption patterns that the developed world is now trying to redress, can be avoided. however, as rwanda gradually urbanises, it is becoming increasingly important to adapt this rural-suited initiative to a more urban setting. with limited land in urban areas, a more appropriate alternative for the future needs to be applied. 3. 3. the akarima k'igikoni programme in an effort to reduce malnutrition, rwanda's government launched the akarima k'igikoni initiative as part of a model village planning program in the whole southern province in 2019. child malnutrition is a prominent health issue in rwanda, with “only 18 per cent of children aged 6-23 months are fed in accordance with the recommendations for infant and young child feeding practices” (ahishakiye et al., 2019:1). akarima k'igikoni which translates to "kitchen gardens" hopes to provide food diversity especially to young children in order to address poor diets (kanamugire, 2019). not much has been written on this initiative because of its recent implementation. however, it forms part of a series of bigger grassroots strategies for poverty alleviation (such as the girinka programme, http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 65 among others). for akarima k'igikoni, the government provides staff, materials, and seeds to build kitchen gardens in each house of the village. there are 338 households sheltering a population of 1525 people who benefited from this program to-date in gishyushye village (kanamugire, 2019). the akarima k'igikoni program also invests in training people on gardening skills and general knowledge of seeding plants. since akarima k'igikoni uses a participatory approach to build communities, it is seen as building trust between civil society and government as both work together for the betterment of living conditions and self-sustained living. the government collaborates with the citizens to build the kitchen gardens in all the households of the model village by training them on gardening practices, so they can also help their neighbours in the process. it even involves the community in organising campaigns to collect seeding plants and gardening materials or funds to buy them. "the executive secretary of the rukoma sector, nkurunziza jean de dieu, urged the people that no one else should make the model a model village except for the people themselves” (kanamugire, 2019:1). the akarima k'igikoni is a practical biophilic solution to malnutrition that brings rwandans together and connects them to their agricultural roots. 4. research method we conducted a series of questionnaire-based interviews in the bibare, masoro and kinyaga cells, which fall under the gasabo district within kigali city province. these areas are all located around the newly developed special economic zone / innovation city, and as such, could be typified as peri-urban. all data is derived from completing these questionnaires through a verbal interview conducted in kinyarwanda or english by native speaking fieldworkers, who documented responses (for the full questionnaire, see appendix 1). a sample size of 151 was used, making the data statistically significant. where respondents declined to give information, the data point was excluded (see appendix 1 for the sample size of each question). in general, our sample reflects key similarities with the 2019 census data for kigali, making the data representative with three major exceptions. our data has an over-representation of people with secondary school education and above. it also has an over-representation of those working in wholesale and retail trade, repair of motor vehicles and motorcycles. those working in agriculture are underrepresented most likely because few farm holdings and many commercial centres were located in the areas where data was collected. in addition, gasabo has the 2nd highest labour participation rate of all districts in the country, explaining why we have a slight over-representation of labour force respondents http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 66 in our sample compared to the national average. (nisr, 2020:8). the data collection was funded by the african leadership university and remains the property of the university. table 1. sample comparison with kigali population, where available, from nisr data in 2019 indicator sample result source: own data kigali / *national population source: nisr 2020 unemployment* 12.6% 15.2% informal sector* (as percentage of total active labour force) 70.5% 75.8% sectors agriculture2 0.8% industry 11.4% services 87.9% agriculture 7.3% industry 19.29% services 73.4% industries agriculture (1.1 %) wholesale and retail trade, repair of motor vehicles and motorcycles (49.5 %) construction (8.6 %) manufacturing (3.2 %) transport and storage (14.0 %) agriculture (7.3 %) wholesale and retail trade, repair of motor vehicles and motorcycles (20.2 %) construction (10.8 %) manufacturing (1.0 %) transport and storage (8.0 %) education of labour force* none 22.0% primary 31.1% secondary 34.1% tertiary 12.9% none 47.2% primary 29.5% secondary 16.2% tertiary 7.2% source: nisr (2019) and own data (2019) we analysed the data using descriptive statistics only, mainly because that was sufficient to answer the research questions. more can certainly be done to better understand the full picture of the lockdown on kigali (see ackerman, 2020) 2 note that agriculture here refers to market-oriented agriculture only subsistence agriculture was excluded from the labour force entirely by both the nisr and this study in line with ilo practice. *kigali data not available; figure here is for rwanda nationally. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 67 figure 1 shows the average self-reported daily income levels of our sample, adjusted for purchasing power parity to us dollars. our data shows that there is a clear negative impact on income levels for our sample because of the coronavirus pandemic, which supports international literature around the negative effect of the pandemic on the economy. however, respondents self-reported income, and not expenditure, as is best practice for poverty research. as such, the data may not be useful in the literature on absolute poverty prevalence in rwanda which was not the purpose of this study. for a more comprehensive review of the poverty prevalence, debates and measurement challenges in rwanda, see fatima and yoshida (2018). for our study, we can only conclude that there is a negative effect on the income levels of our sample. more research should be done, using best-practice consumption-based surveys, to determine the full effect of the lockdowns on income levels during. figure 1. composition of average self-reported daily income levels of sample (adjusted for purchasing power parity) source: own data (n=121) 5. results & discussion 5.1 akarima k’igikoni  our first area of investigation is to determine the prevalence of these kitchen garden practices among the households in our sample. as an initiative only recently started primarily in the southern province, we did not expect to see many households make use of this regenerative agricultural practice in kigali. our findings confirmed this expectation only 5 per cent of respondents reported using their vegetable garden as a way to get food during the lockdown time. since only 1 per cent of respondents reported working in agriculture, it shows that more people have vegetable gardens at home than work in agriculture but only http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 68 by a very small margin. this finding highlights two points; firstly, that vegetable gardens and decentralised food systems are an underutilised form of subsistence in kigali, even in times of crisis. secondly, it shows the opportunity for expanding the akarima k’igikoni initiative in urban areas, since very few people currently make use of it. 5.2 waste categories after separation our second area of investigation was around the underlying social practices needed to make a success of decentralised, regenerative food systems. as outlined by the ellen macarthur foundation (2019), having a well-established waste separation culture is a key ingredient for successful implementation of regenerative agriculture. the second step after waste separation is the effective use of composting. thirdly, access to water is important for vegetable gardening, and finally access to skills and knowledge. in our study, we tested these practices3. considering the first step of waste separation, our data shows that around 21 per cent of the respondents separate their household’s waste from their general waste. this can be broken down into the categories shown in table 2. this means that the practice of separating household waste is already somewhat established (comparatively, only 7 per cent of households in copenhagen, denmark demonstrated a high waste separation potential (pedersen and manhice, 2019), while 8.13 per cent of south africans reported separating waste with a slightly higher involvement for urban households at 11.18 per cent (oyekale, 2017). in addition, respondents were also asked which common packaging items they frequently do not throw away but instead reuse for another purpose. respondents were given a list of options, and 55.4 per cent of respondents reported reusing packaging frequently for another purpose (table 4). this also points to a strong culture of reusing items, which is a part of waste separation as well. it shows that rwandan culture already includes aspects of reusing and recycling, which is only now starting to take root in europe and the developed world (see ellen macarthur foundation, 2019; broerse et al., 2014). table 2. percentage of respondents who separate their waste before disposal does not separate waste 78.81% separates waste 21.19% 3 we did not test for skills and knowledge in our study because of the complexity around reliably ascertaining the level of knowledge/skill. as a proxy for this, we consider simply the number of respondents who reported using their vegetable garden as a form of subsistence and support indicating that enough knowledge and skills exist in order to provide sufficient produce for subsistence. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 69 categories into which waste is separated4, as a % of total respondents glass 0.66% organic waste 17.22% paper 1.32% plastic 3.31% source: own data (n=151) respondents were also asked how they dispose of their waste (table 3). only 3.3 per cent of total respondents reported composting their waste5. however, the vast majority of people (72 per cent) depend on the government’s waste collection, where most of the waste goes through municipal channels and end up in landfills. we can therefore conclude that very few people in our sample made effective use of composting, and there is, therefore, a big opportunity for the akarima k’igikoni to expand this knowledge in urban areas in order to create more circular waste systems. since around 17.22 per cent of respondents separated organic waste, yet only 3.3 per cent used it for composting, it also represents an important business opportunity for waste management and compost creation businesses in kigali. the consumer behaviour already seems to separate out waste, but no value is currently being created from this practice. table 3. waste disposal methods used, as percentage of total selling waste 1.34% burning waste 2.68% composting 3.36% own landfill 19.46% waste collection 75.17% source: own data (n=149) 4 note that the categories do not add up to the total, because some respondents separate into more than one category, and were therefore counted in both categories. as such, this table can be understood to mean that 17.22 per cent of respondents separated organic waste from their general waste, while 1.32 per cent separated paper from their general waste. some of those who separate organic waste also separate paper, and so on. 5 this may under represent the total composting practices in our sample. the 3.31 per cent shown here refer to respondents who reported using their organic landfills as compost. however, of those who reported separating organic waste from their general waste 30.77 per cent reported making their own landfill with the organic waste, which is essentially an ineffective form of composting without using the compost itself. therefore, those who make organic landfills and those who compost make up 8.68 per cent of total respondents. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 70 table 4. percentage of respondents who reported reusing the below material for another purpose before disposing of it does not reuse packaging frequently 44.6% reuses packaging frequently 55.4% products frequently reused, as percentage of those who reported reusing products paper bags 50.36% cardboard boxes 12.23% plastic bottles 11.51% plastic containers 10.79% glass bottles 7.91% plastic bags 6.47% glass jars 4.32% paper cups 3.60% plastic cups 1.44% metal tins 0.72% source: own data (n=139) 5.3 water access and rainwater collection finally, we also tested the reliability of access to water. on a macroeconomic level, access to clean water is a prominent issue in rwanda despite the government’s efforts to date. 5.1 million people still lack clean water (wateraid, 2020), and approximately 60 per cent of rural households drink untreated water (world bank group, 2020:92). although rwanda has done much to remedy this in the face of the global pandemic by installing simple handwashing stations at most public spaces, these numbers are still concerning. the water problem was clearly observed in the respondents’ answers as well; 78.6 per cent reported that they experienced some water cuts for 4 of the days in the week or more6. it is possible that this high reported loss of access to water is as a result of the ongoing construction at the nearby special economic zone, but it still points to an underlying problem of consistent water access even in peri-urban areas of 6 respondents were simply asked how often they experienced water cuts in an average week. they were not asked about their source of water, but the phrasing implied the source being that of piped water from the rwandan water and sanitation corporation (wasac). it is common in the area for people to walk to a wasac well nearby to collect water in containers that is then used in homes. our study did not differentiate between respondents who had water piped into their homes, and people who collected water outside of their home from a wasac tap. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 71 kigali. it, therefore, suggests that expanding an akarima k’igikoni initiative in the urban centres necessitates fully addressing the water access issues. another alternative to the centralised water supply is decentralised water entrapment, primarily using rainwater. rwanda has a relatively high annual rainfall7, making this is a viable option for many households. our data reveals that most households (figure 2) already entrap rainwater in some way, making rainwater harvesting during covid19 a vital source of survival. as the government's efforts to expand access to clean drinking water materialise, it is essential that the practices of rainwater harvesting remain rainwater plays a critical part in the support of a further expansion of akarima k'igikoni. hence, it is a good time to introduce the practice of akarima k’igikoni while people still collect rainwater and as government efforts increasingly provide access to grid network drinking water. figure 2. rainwater management at the household level source: own data (n=151) 6. policy recommendation: expanding the akarima k'igikoni programme the very successful home-grown girinka project is unsuited for the growing urban agglomeration agenda of rwanda’s vision 2050. urban spaces host many malnourished children, with stunting in urban 7 see https://climateknowledgeportal.worldbank.org/country/rwanda/climate-data-historical http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 72 areas in rwanda documented at 27 per cent (bosteels and mcdonough, 2016). this paper recommends that the government boost the outreach of the home-grown akarima k'igikoni program after covid 19 as both a recovery measure and a way to address the malnutrition problem in urban areas. it is also a key ingredient for making the vision 2050 sustainable and equitable with further agglomeration and urbanisation of kigali and other cities, it is important for a circular food system to be well embedded in order to avoid the crippling environmental destruction experienced by the developed world (world bank group, 2020). other developing countries experiencing rapid urbanisation may do well to learn from the rwandan case balancing environmental concerns with development is an important global priority. as our data shows, there is a somewhat well established waste sorting culture, but not yet a well established composting culture in kigali. training should be done to teach people composting habits and ways to use organic waste. similar interventions have been done using umuganda, and we propose using this as a channel for large-scale education and changing of cultural practices. phasing out waste from these households and diverting it away from landfills is a valuable step towards circular agriculture. this aligns with the vision 2050 priority of investing in human capital. according to the strategy, human capital is a very “safe” investment, since “human capital is a portable asset that can have powerful effects on people’s welfare and mobility” (world bank group, 2020:70). apart from changing composting behaviour, it is also essential that the requisite spaces for gardens be incorporated into new developments. rwandans should be able to also integrate these kitchen gardens in corporate workplaces. the so-called ‘living buildings’ created by google and other larger corporations (ger, 2019) are an important trend to follow. google’s efforts to make their campus more waste efficient have "prevent[ed] more than 1 million kilograms (2.25 million pounds) of pre-consumer food waste in its cafés around the world, totalling over 3 million kilograms (6.6 million pounds) of food waste prevented since 2014” (ger, 2019:41). google keeps producing more innovative solutions towards sustainable business office spaces. translating the living buildings to a rwandan context could similarly enable rwanda to be a front-runner in green urbanisation. the newly built african leadership university campus in kigali’s innovation city has adopted measures to encourage reusable water containers instead of singleuse bottles, with plans to expand green spaces with food-producing plants for circular campus food production, among others. similar development should be done in other parts of kigali, and the government should take a more active lead in ensuring that the new developments in kigali innovation http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 73 city are representative of global best practice. the akarima k’igikoni should not only be limited to households but can be woven into the fabric of rwanda’s urban scene. rooftop gardens and green spaces is a great step towards building a rwanda at the forefront of green innovation. we propose that businesses pilot these green buildings for further analyses of their effect as part of a decentralised food system for urban centres in developing countries. incorporating these food systems into the industrial symbiosis of the eco-industrial parks proposed by caycedo (2019) in rwanda would be a great place to start. in a rising covid-induced business competition, green practices, sustainable buildings, and regenerative circular urban planning all reflect different models for corporate social responsibility; an excellent competitive advantage to businesses (urmanaviciene and arachchi, 2020). csr does not have to be limited by charity or philanthropy, the need for more innovative and strategic models is evidently urgent and pivotal (urmanaviciene and arachchi, 2020) to sustain the economic interests as well as the social and environmental commitment of rwandan businesses. in order to support this expansion of the akarima k’igikoni, the issue of water access needs to be addressed. several initiatives are currently being implemented to solve the water problem in rwanda like the wateraid rwanda initiatives or the delagua rwanda project, but their timeline is relatively long. the delagua rwanda project, for instance, aims to distribute 600,000 advanced water filters to the poorest 30 per cent of households over 20 years (delagua, 2020). wateraid rwanda has also resorted to training programmes in collaboration with the centre for science and environment (cse) for state and non-state practitioners (engineers, consultants, planners, academicians, and researchers) on sustainable and affordable rainwater harvesting (rwh) in rwanda. the purpose of this training overlaps with the vision of managing rainwater in a decentralized way for every household to become self-sustainable with consistent access to water. this paper supports the governmental push for a holistic decentralized approach to water access in rwanda through rainwater harvesting and treatment. the government should invest in equipping areas, where there is an existent culture of water collection, with domestic water filters and water collection tanks over the first phase and expand the project with training programs over the second phase. rainwater http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 74 harvesting practices have been implemented in some public institutions in rwanda and have proven to be very efficient in driving sustainability and water-sufficiency8. a note on the girinka programme as outlined before, the girinka project was a widely successful project for what was a very rural rwanda post-1994. all our recommendations support the unicef recommendation that the project should be upscaled with more donors and partners involved (unicef, 2012). the girinka program should be reintroduced in rwanda after the pandemic with a significant focus on government training and skilling activities on cow breeding, composting, and self-managing waste for more sustainable households. educating the population and developing its human capital is a key driver of economic growth (zeynalli, 2020); it establishes communication and ensures the alignment between the government’s vision and the people’s needs. although our study did not investigate the project or its application in rural rwanda, it is still part of regenerative agriculture, which is aligned with our recommendations. the production and use of cow manure also have considerable spillovers into the rest of the agricultural value chain. however, considering the grazing and land required to rear cows, it remains a rural solution. our recommendations aim to address the growing urban areas. the implementation of proper measurement systems diminishes the high risks of wasted time and resources (urmanaviciene, 2020). therefore, we advise that the implementation of these and the previous recommendations be coupled by social impact assessment measures that inform sustainable future governmental planning and policymaking. 7. summary and conclusions in this paper, we discussed the potential expansion of the akarima k’igikoni initiative into urban and peri-urban areas in rwanda. we investigated the past application of initiatives like the girinka project and the akarima k’igikoni initiative. we considered current cultural practices in the peri-urban area of kigali’s gasabo district. we found that although most people reuse packaging material frequently, only some portions of the population separate waste. we can conclude that more education should still be done to 8 for the full report on the potential of rainwater harvesting in the whole of rwanda, see matto and jainer (2019). http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 75 support a successful expansion of the akarima k’igikoni programme, starting with education around organic waste disposal and composting. very few people seem to use vegetable gardens for sustenance, and it, therefore, represents a vastly untapped opportunity for urban food security and circular, regenerative agriculture. we also recommend expanding the akarima k’igikoni in corporate spaces and office parks by adapting the ‘living building’ concept to a rwandan context. we found surprisingly prevalent rainwater entrapment practices that could support the expansion of akarima k’igikoni in periurban areas. sustainability can no longer be treated as an externality it should be a primary driver for policymaking. our recommendations contribute towards linking the various threads of food security, sustainable decentralised and regenerative agricultural systems, and urban agglomeration. limitations of the study it is important to note that our research was focused in the peri-urban areas of kigali’s bumbogo, masoro, kinyaga and bibare areas within the gasabo district. these areas are located in and around the new special economic zone and kigali innovation city developments. it, therefore, does not fully represent the more urban, affluent and densely populated areas of kigali city, nor rural rwanda at all. considering the literature on the akarima k’igikoni, the practice of kitchen gardening seems to be more widespread in the rural southern province. this study considers its application in peri-urban kigali in order to add to the discourse around sustainable agglomeration of urban centres, as outlined in rwanda’s vision 2050 document. finally, this study’s data was collected in the first week of july 2020. it is therefore located in the midst of an ongoing pandemic and as such, subject to change during this time. although questions concerning the topic of this study were phrased to elicit general responses and behaviours notwithstanding the pandemic, it is entirely possible that the time of collection may have skewed the results. we cannot yet know if respondents were more, or less likely, to practice regenerative agriculture during the pandemic time. acknowledgements we express our great appreciation to the african leadership university in rwanda for sponsoring this research and for the coordination support from its international business and trade, and operations departments. special thanks to all the research team members –who are also students at aluwho helped http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 76 in collecting data (blessing maima caine, christian nsengimana, euphemia nusone perkins, fiona uwase, hassan damafin sedekie jackateh, oluwasijibomi adesina, solomon mutagoma). we would also like to thank mr. aseda ohene-adu, a faculty at alu for his assistance in analysing the data. references ackerman, r. m. 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(2020). the impact of stimulating the development of human capital on economic development. european journal of social impact and circular economy, 1(1b), 38-52. https://doi.org/10.13135/2704-9906/4562 appendix 1. questionnaire note: the full questionnaire included questions relevant to the impact of the alu campus in that area, as well as questions related to environmental practices. since those questions were not used in this specific study, they are not listed below. for a full list of all questions asked, contact the authors directly. demographic questions 1. gender (n=151) ❏ female ❏ male ❏ other………………….. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 80 ❏ prefer not to say 2. age (n=141) ❏ ………… ❏ prefer not to say 3. nationality (n=151) ❏ rwandan ❏ other………………………... 4. if not rwandan, what are they doing in rwanda? (n=2) ❏ working ❏ visiting ❏ studying ❏ other…………... 5. where do you stay/live (cell and sector)? (n=149) ……………………… 6. highest level of education attained? (n=147) ❏ primary ❏ ordinary level ❏ high school or equivalent ❏ tvet, polytechnic institute ❏ associate degree/ diploma ❏ bachelor’s degree ❏ post-graduate degree ❏ did not attend school 7. what languages do you speak? (n=151) ❏ kinyarwanda ❏ english ❏ french ❏ kiswahili ❏ others………... 8. employment status (n=151) ❏ self-employed ❏ employed ❏ retired ❏ unemployed ❏ other………….. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 81 9. if employed, what is the nature of your employment? (n=42) ❏ permanent employment contracts (formal) ❏ fixed-term employment contract (formal) ❏ casual employment (informal) ❏ seasonal employment (informal) ❏ daily employment (informal) 10. what sector have you been working in for the past six months? (n=137) ……………………………………………………………………………... 11. how many people live in your household? (n=150) ……………………………………... 12. how many people depend on you? (n=150) …………………………. 13. what are the sources of your household’s income? (n=140) ……………………………………….... 14. what was the last monthly income before covid-19 lockdowns (feb 2020) for each source mentioned above? rwf (n=142) ……………………………………….... 15. what is the average monthly income during the covid-19 lockdown (mar-may 2020) for each source mentioned above? rwf? (n=133) ……………………………………….... 16. what is the average monthly income now after covid-19 lockdown(jun 2020) for each source mentioned above? rwf? (n=124) ……………………………………….... 17. did your business shut down due to the covid pandemic? (n=95) ❏ yes ❏ no ❏ partially 18. did you lose your job due to the covid pandemic? (n=84) ❏ yes ❏ no ❏ my pay was cut, but still employed 19. how did you manage to get income for survival during the time of lockdown restrictions? (n=151) http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 82 …………………………………………………………………………………………………………………… ………... ……………………………………………………… 20. how do you dispose of your garbage/trash? (n=149) ❏ waste collection ❏ burn ❏ own landfill ❏ composting ❏ other……. 21. do you separate your waste before putting it away? (n=151) ❏ no ❏ organic waste ❏ plastic ❏ paper ❏ glass ❏ dangerous waste ❏ general 22. how much does it cost to dispose of your waste? rwf? (n=126) ……………………………………………………………………………………………………………… 23. which of these things do you not throw away? (n=139) ❏ paper bags ❏ cardboard boxes ❏ paper cups ❏ plastic containers ❏ plastic bags ❏ plastic bottles ❏ plastic cups ❏ glass jars ❏ glass bottles ❏ aluminium cans ❏ metal tins ❏ other…………………….. 24. are you negatively affected by the industrial zone? (n=146) ❏ no ❏ air/smoke ❏ noise ❏ water ❏ garbage/smell http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5100 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 83 ❏ visual ❏ other……………………….. 25. how many days in a week do you not have water? (n=146) …………………………………………………………………………………………………………………… ……… 26. how does your household manage the rainwater? (n=151) ❏ no measure ❏ collect it ❏ redirect it into a ditch ❏ other…………………. 5516-article text-17221-1-9-20210223 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 45 management accounting in european finance for smart tourism and sustainable destinations: how organizations deficiency? stefano de nichilo1 1 department of economic and business sciences, university of cagliari, italy e-mail: stefanodenichilo1985@gmail.com received: 26/10/2020 revised: 06/02/2021 accepted for publication: 07/02/2020 published: 08/03/2021 abstract the research investigates the interplay of sustainable tourism, management, monitoring, destination life cycles and stakeholder involvement in sardinia destinations. management techniques are considered critical to the sustainable stewardship and competitiveness of tourism destinations, especially in an island context where tourism is business all year round and all seasons. the importance of tourism management and monitoring in destinations and organizations is particularly highlighted through an explanation of sustainable tourism indicator systems such as that created by the european commission. systems such as this will help position europe as the leading sustainable tourism destination in the world both now and in the future. the research followed an inductive approach. according to general principles of the inductive methodology, knowledge is gathered from detailed observation of facts. this study permits to adopt multiple research methods, both qualitative and quantitative. the analysis is grounded in documents, direct observations and questionnaires. in the first phase, only qualitative methods were utilized. this classification is supported by the assessor answers: high to moderate tourism impacts respectively on destination a (north sardinia) and b (south sardinia) and a level of contact between tourists and the local population that can be classified as low in the destination a and between low and moderate in destination b. the effects of public european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 46 policies and tourism development cannot be measured only in economic terms, this paper provides a qualitative-quantitative analysis of the phenomenon and possible proxies. keywords: management accounting, organization settings, smart tourism, sustainable destinations, tourism indicator systems and tourism management and monitoring. 1. introduction management accounting has a peculiar function with the broader accounting discipline. “management accounting is concerned with the provision of information to people within the organizations to help them make better decisions and the improve the efficiency and effectiveness of existing operations” (van der stede 2015). the peculiarity of management accounting is that it is a science dealing with decision-making, whereas the remaining part of accounting is basically the science of reporting accounting information (power 2009). the necessity to manage and control tourism and impacts at the local level (hannan & freeman 1977) has attracted attention to the basis of the tourism phenomenon: geographic areas defined by administrative boundaries that are perceived in the market through a specific image. sustainability is regarded as a science (kates 2001; levin and clark 2010; kates 2011) based on multi-disciplinary approaches. different disciplines: psychology, sociology, geography, and ecology, contribute to the growth of the field, which are comprised of various aspect included in the concepts of nature, human beings and organizations. the complexity of tourism phenomenon and sustainability topics enriches scientists’ investigation. sustainability is certainly a multifaceted field of investigation. in literature, an important research has been conducted on destination management and, specifically for our purposes, there is a branch of this research called adaptive management (larson et al., 2012; plummer et al., 2009; mccook, 2010; karatzoglou et al., 2010), which will be mentioned in the following pages, since it is considered related to sustainable tourism management. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 47 the postmodern period of management accounting was encouraged by the development of information technology and the view of the organization as a complex set of interdependencies and relationships (hopper & bui 2016). within a dynamic and competitive environment, in a business world of fast and cheap information flow, management accounting had to solve the problem involving the flexibility and competitiveness of production, while the academic discussion moved onto the question of how to implement management accounting systems in a such a complex and uncertain environment (biancone, secinaro, brescia, calandra 2020). the research paradigm followed in the study can be considered interpretative; the destinations represent a composite reality in which it is possible to address observation, investigation and possibly develop and define concepts for future evolvement in the fields (jones, t., atkinson, h., lorenz, a., & harris, p. 2012). management accounting (van der stede 2011) is nowadays at a turning point, as pressures from outside call for increased disclosure of information, which “before was mainly relegated to internal decision making” (power 2007). moreover, when the crisis happened, due to constrained finance, firm faced the issue of rethinking their decisions, sometimes including their strategic decisions, and “had to set their budgets aside at worst, or revise them at best” (palermo & van der stede 2011). tourism destination are complex systems that evolve overtime. in the dynamic of tourism demand and supply evolution, destinations can either encounter prosperity or decline. which type of development is appropriate for destinations? this is the general enquiry the study has considered in its initial formulation, based on the recognition of mass tourism as one of the global change syndromes (gordon & narayanan 1984). how can destinations became and remain sustainable over the course of their lifespan? this part of sustainable tourism is less developed in the tourism discourse as it appears less evident than protection of the environment (clarke 1997; swarbrooke 1999). considering the unwto definition (2004, pag. 7) related to management, it is stated “sustainable tourism development requires the informed participation of all relevant stakeholders, as well as strong political leadership to ensure wide participation and consensus building. achieving sustainable tourism is a continuous process and it requires constant monitoring of impacts, introducing the necessary preventive and/or corrective measures whenever necessary”. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 48 in this respect figure 1 is restructured below to evidence management as a mean to reach the goal of sustainability in destinations. the managerial environment has a broader significance and embraces institutions, organizations, associations, and business (swarbrooke 1999). each of these entities usually plays an active role in the management of tourism activities within the environmental boundaries of a destination. hence, sustainable tourism is a human-centred concept (mitchell, 1997), in which social groups participate and contribute to the realization of sustainable attributes of destinations. managing tourism also involves tourists, as the unwto definition (2004, pag. 7) points out “sustainable tourism should also maintain a high level of tourist satisfaction and ensure a meaningful experience to the tourists, raising their awareness about sustainability issues and promoting sustainable tourism practices amongst them”. international acknowledgement of the importance of the environment and its related issues and the relevance to tourism management are stated in the core message of the brundtland report, “our common future”. this document can be considered a main justification for declarations of political commitment to the environment. the key concept in this report is the compromise between present and future developments in order to preserve the primary resource of tourism: the destination. it is indicated that policy directions should aim to follow a sustainable path in development patterns. adequate management accounting systems (galbraith 1973) may be useful for detecting issues at an early stage and informing the management about the feasibility of any financial or economic inconvenience before it develops into an important risk and captures the attention of key stakeholders. following the previous considerations, the research questions this study aims to answer are: a) which kind of managerial tools allow destinations to preserve the current natural heritage to guarantee the conservation for future generations? b) are these managerial tools effective for sustainable management of tourism in destinations as to ensure the future existence of destinations? the underlying hypotheses of this study are: first, the effective management of tourism impacts in destinations requires adequate indicator systems; second, the effectiveness of indicator systems rely on destination stakeholders’ commitment; and third, that sustainability, area life cycle, and governance are intrinsically related in destinations. the main gap in the literature is the analysis of a particular case, but at the same time representative of an evolved civil society like that of the islands. this idea is true first of all for a certain degree of european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 49 independence from the central country system and then for the cultural openness to the limit of uniqueness that only an island can offer. the smart tourism destination in an island context is fundamental as regards aspects of work and the quality of life. our choice falls in sardinia where tourism is business all year round and all seasons. to answer these research questions and provide support for the related hypothesis, the methodology adopted in the study is inductive; overall, qualitative methods provide the core foundation for this research, as it is explained in the followings paragraphs. figure 1. outcomes of corporate social responsibility source: our elaboration 2. literature review 2.1 institutional settings: contingency theory and issues of financial pressure the activity of internal auditors, and the processes and control systems they deal with, are not predicable ex ante and are depicted contingently, they cannot rely on a “one-size-fits-all” procedure, but need to be adjusted to the specific context of a specific firm at a specific time. that said, management accounting as a discipline is able to identify specific procedures, which can better match specifically defined situations in which the organization may be involved. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 50 according to contingency theory (fischer 1995), situational factors (or contingent or contextual factors) influence the design of the management accounting system, while organizational performance and effectiveness depend on the quality of fit of the management accounting system, when designed ad hoc, and the specific situational factors that activated it. these characteristics of the discipline make it difficult to undertake big numbers-based empirical studies, as each organization is unique and the potential situational factors are infinite and nested with each other, while the effectiveness of the fit between the management accounting system and the situational factors is often not easily measurable. to simplify the application of management accounting to practical issues, theorists have variously tried to categorize the situational factors. the external environment and its level of uncertainty are relevant situational factors, related to change in the environment, which occur unexpectedly, such as the financial crisis of 2008. when the conditions under which the firm operates are more stable, the external environment will be considered as more certain. on the contrary, dynamic conditions are the premise for an uncertain external environment (eckles, hoyt & miller 2014). it is documented that firms operating in a more stable and certain environment adopt a formula-based approach to the measurement of management accounting systems effectiveness, whereas firms operating in a dynamic and uncertain environment adopt a subjective approach to performance evaluation. in the current situation, a formula-based approach, which presupposes the meeting of targets, will easily fail if the uncertain dynamics of the environment make the targets inappropriate. uncertainty (chenhal & morris 1985) is also correlated with the level of sophistication of the management accounting system, given that a certain external environment needs only internal, financial and historical information, whereas an uncertain external environment will require a more sophisticated management accounting systems, which can also gather information that is external, less finical and future-oriented, as well as generally requiring decentralization in the organizational (and decisional) structure. the competitive strategy adopted by the firm is also a situational factor, which is able to shape the management accounting systems (chapman 2006). a low-cost competitive strategy will require a formula-based approach, requiring significant attention paid to cost control mechanisms and frequent european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 51 and detailed quantitative reports on performance. on the other hand, a differentiation strategy will control costs less effectively and be mainly focused on non-financial measures of performance. destinations are the basis of tourism at local level; they are the primary resource of tourism business, and are the object of management strategies and policies aimed at adequately conserving it as a resource. this is the priority of sustainable tourism destinations, which, in a modern approach, cannot be implemented without being collectively addressed through stakeholders participation. it has also to be noted that an ideal equilibrium state is impossible to reach in composite systems as destinations, where complex system of resources, tools, management levels and stakeholders types are in place. sustainable destination can then appear in their holistic vision, as integrated, adaptive socioecological system. these are the elements that will be discussed: a. destination as an integrated systems; b. destination as a social system; c. destination as a socio-ecological system; d. destination as an adaptive system. a sustainable tourism destination is an integrated system characterized by a high degree of complexity. the notion of system is relevant to appreciate the elements that make up the concept of sustainable destination, and their value within the composite system. a system is not simply the sun of its elements, but is notably distinguished by a specific combination of elements derived from interrelation and exchange. the destination is a unique and original entity in comparison to its single attributes, and has a value that exceeds the potential of the distinct elements of which it is composed. in the paper, the destination has been identified through the attributes of attractions, amenities, human resources, accessibility, image and price. in the context of this paper, those same attributes will be highlighted as part of a destination system, in which they can play a role in qualifying and defining the destination profile. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 52 in pointing out the social system of a destination, the complexity of sustainable tourism destination systems appears evident. the destination is an entity with distinctive elements on the ground, such as beaches, buildings, roads, etc., comprised of people that are part of different social groups within the economic environment, families, enterprises, associations and public administrations. in tourism destinations this social clusters can be regrouped to represent the different parts of the society with interest in tourism. in this respect, the social groups are named, stakeholders, and though informed participation, the composition of their interests makes the social system sustainable (sautter and leisen 1999). the destination is a mix of society and nature, in which the composition of different stakeholder approaches is the real challenge for destinations committed to sustainable behaviors. in this sense, the last character of destinations as sustainable systems is the necessary to adopt flexible and adaptive forms of management that are able to face the continuous evolvement of tourism interest groups and society, and ensure the adaption of the natural and physical environment to global and local changes. specifically, the branch of tourism management know as adaptive management is defined in literature as, “the process of building resilience and coping with the uncertain inherent in complex systems through a continual process of experimenting, monitoring and social learning” (miller and twiningward, 2005, pag. 19). environmental crises related to climate change are constantly increasing, creating grater impacts on communities and vulnerable people, such as indigenous and poor populations. managing risks and developing mitigation and adaption planning approaches has been conceptualised and implemented worldwide (page 2010). the need to reduce vulnerability of the environment to crises, which can also impact on tourism, will require stakeholder involvement and collaborative management based on multilevel policies and programmes. finally attention on technology will also determine the appropriateness of the management accounting system, as formula-based approaches and process costings are able to measure the performance of process and mass production, whereas job costing are more relevant to batch production technologies. 2.2 stakeholder theory framework for tourism analysis the stakeholder theory is also employed to explain stakeholder relationship in business belonging to different sectors, including the tourism sector. the theory can contribute to regulating relationship european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 53 between tourism actors at the destination level. in particular, the principles of the theory are considered more significant in the case of destinations involved in sustainable tourism development, due to the role stakeholders should play. indeed, as described in previous paragraphs, international and european sustainable tourism organizations consider the involvement and the commitment of all stakeholders in planning and in the decision-making process at the destination level as a fundamental step in sustainable tourism development. many studies aim to identify stakeholder of tourism. sautter and leisen (1999), refer to workers, local enterprise, residents, tourists, public administrators, competitors, activists and international chains as the stakeholders involved in tourism planning at a destination level. ryan (2002), considering potential stakeholders of an hypothetical tour operator in an hypothetical destination, identifies government, travel agencies, local administrators, accommodation enterprises, natural and urban environment, workers, brokerage houses and other special interest groups. currie (2009) considers the mitchel (1997) categories and identifies local indigenous enterprises as dormant stakeholders, fishing and sailing enterprises as discretionary stakeholders, the water managing authority as demanding stakeholders, governmental authorities as dominant stakeholders, tourism and accommodation enterprises as dependent stakeholders, environmentalists as dangerous stakeholders, and natural resources managing enterprises as definitive stakeholders. byrd (2007) selects the current and potential community and tourists as the stakeholders principally involved in sustainable tourism development at the destination level. according to the traditional approach, the interests of the three stakeholder groups are incompatible. for example, actions aimed at the maximization of business profits could cause damage on the natural environment. expectations of workers could be conflicting with business profit objectives. environmental associations and local authorities could conflict in the management of natural resources. however, according to a different perspective, stakeholders interests can be considered complementary. in destinations focused on tourism development, and especially sustainable tourism development, business cannot pursue economic goal that negate the efforts to safeguard the natural and cultural environment. this is because natural and cultural attractions represent the core of tourism products and the most interesting destination features for tourists. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 54 their degradation entails a loss of destination value, a tarnished image, and other indirect negative consequence on the tourism industry. for these reasons, the involvement and commitment of all destination stakeholders in planning and developing strategies is recommended to define joint and balanced actions in sustainable tourism development (figure 2). figure 2. balanced sustainable tourism development source: our elaboration. the current variety of instruments used to protect and manage the environment and tourism is sophisticated and has been intensively developed in the last decades, following the environmental consciousness of stakeholder in destinations. over time, relevant decision-makers, organization and institutions, academia and professionals have contributed to develop programs, policies and systems to improve the sustainability of tourism, economies and societies. a first group of sustainable initiatives is related to land-use planning, such as zoning, quotas, and protected areas. these initiatives are specifically planned and coordinated within public tourism management. a second collection of sustainable efforts is related to the acknowledgment of unique sites of interest, which are promoted by international institutions. a third set of sustainable programs is focused on enterprises, including environmental management systems and the like. these can be european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 55 developed through private associations, such as tour operators, or other organizations and institutions with interest in sustainable tourism development. public policies, plans and initiatives play a strategic role in the sustainability of tourism destinations. in fact, the public sector has the power to legislative and use fiscal instruments that can determine and characterize a destination either toward exploitation or conservation of the natural, economic, social and cultural environment. this is true in different parts of the world where the state of nature and humans have been altered by tourism development. the positive and negative impacts of tourism need to be balanced through public intervention in order to regulate tourism investment, processes, decision and activities that occur in geographic areas governed by public institutions. undoubtedly, public stakeholders have different priorities for the governance of territories. these priorities are influenced by linked elements, such as the quality and nature of resource, the way of life of the area, stakeholder commitment, etc. additionally, debates over the compromise between economic growth and welfare and the consequences on the environment frequently engage policy makers. sustainability in the development of territories and population is aimed at reaching economic goals while preserving the value and identity of destinations for next generations. sustainability is the perspective requires financial resources to fund sustainable initiatives that protect the integrity of destinations. the more relevant and powerful public management capability is, the more limited land utilization options become. development is a long-term process that first calls for land-use planning through legislation that can be supported by appropriate analyses conducted on the ground, carrying capacity and limits of acceptable change, and then regulation on specific sites, including zoning, the creation of protected areas, quotas and the like. in regards to the funding mechanism for sustainability, several public initiatives can contribute to the economic support of sustainable tourism, eco-taxes, user fee and donations. in a hierarchy of main public concerns, legislation on tourism is positioned, according to the vision of o’riordan (1981), after a national commitment on security and economic growth, and immediately european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 56 after regional development and income distribution. the first national goal also encompasses community health and employment. in this context, the environment does not represent a priority but is seen as an instrument that supports the national goals. the second national goal is focused on a redistribution of wealth that guarantees equitable social opportunities. this is another instance where there is no specific interest in environmental protection but it is once again beneficial to national and regional policies. the degree to which attention is given to the environment as a national and sub-national goal depends on the value that public stakeholders attribute to nature, considering internal and external forces that place pressure on the side of preservation rather that consumption. recently, there has been increasing attention given to sustainable issues and the need to implement regulation. surprisingly, this consciousness has also been spreading into developing countries, which will have to pay costs that developed countries did not face during their stages of development in the past. the sophistication of sustainability tools that advice public policies in land-use planning can be analyzed through studies on carrying capacity and limits of acceptable change. 3. methodology the research employed different methods. in the first phase of the study, literature and documents related to private and public instruments for the management of sustainable destinations were considered (baxter & jack (2008). their principles, guidelines, procedures, purposed and indicator sets were examined in a qualitative and quantitative approach. the conditions for use, and their weak and strong points were also identified (brasini 2010). in this part of the paper an empirical investigation is employed to answer the research question and hypotheses, expressed as follow: a) which kind of managerial tools allow destinations to preserve the current natural heritage to guarantee the conservation for future generations?; b) are these managerial tools effective for sustainable management of tourism in destinations as to ensure the future existence of destinations? and hypotheses: first, the effective management of tourism impact in destinations requires adequate indicator systems; second, the effectiveness of indicator system rely european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 57 on destination stakeholders’ commitment; and third, that sustainability, area life cycle, and governance are intrinsically related in destinations (castellani & sala 2010). considerations have also been traced on the effectiveness of managerial and control tools in tourism sustainability on the comparison among indicator system with potential and value for tourism stakeholders (corbetta 2003). the empirical investigation adopts a multiple case study approach based on the analysis of two destinations that are participating in an international program. each destination represent a single case study. the program covers a limited number of destinations. questionnaires were addressed to destination assessor involved in the program, including all the destinations assessed for sustainability policies and practices (coyne, i.t. 1997). among these destinations, a purposed sampling, based on a subjective choice and not at random (guarte and barrios, 2006) was selected. the two destinations were chosen intentionally according to the following criteria: a. the life cycle stage of the destination. to address the third hypothesis that sustainability, life cycle area, and governance are intrinsically related in destinations, all the stage of life, ascertained through the destination assessor answer, needed to be included in the destination sample for the analysis (creswell 2013). b. the significance of the destination for the aims of the research. to investigate the relationship between tourism management and monitoring, destination life cycle, stakeholder interest and involvement, and the level of sustainability in destinations, the sample of destinations, representative of the population in the international program (battaglia 2011), is characterized as follows: geographical pertinence to the different world continents, inclusion of developed and developing destinations, variety of destination attributes, and relevance of tourism sector (miller 2001). the research followed an inductive approach. according to general principles of the inductive methodology, knowledge is gathered from detailed observation of facts. in the process of induction, observations are the starting point of the research, which lead to abstract generalizations as the outcome of the study (baltaretu 2011). compared to the deductive approach, the object of inductive research is not intended to test known theories but to build an abstraction. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 58 in accordance with this approach, the research questions arose from a real experience: the involvement in international and european programs of tourism impact monitoring at the destination level (thomas 2006). the direct participation in the programs brought her to reflect upon management and monitoring systems for sustainable tourism and their effectiveness in developing sustainability in tourism destinations (buckley 2012). based on these considerations, the research questions and the related hypotheses were established, specifically deriving from two sources related to a scientific interest in sustainable tourism themes, and an in-field experience on the subject. the research area of the study (bocken, short, rana & evans 2014) has focused on sustainable tourism at a sub-national level; this subject explains the chosen unit of analysis destination. research has been limited to the managerial aspect of sustainability through indicator systems (baltaretu 2011), involving stakeholders and the related organizations in the tourism sectors. observations on the local destination context, including the implemented sustainable tourism initiatives, the level of tourism development, the stakeholder’s management skills and approach, etc., have deeply contributed to the current study (berke & conroy 2000). this tries to investigate the possible relationships between tourism management and monitoring, progress in destination development, the stakeholder interest and involvement, and the level of sustainability in those territories. there is profound association among quality of life and quality of tourism destinations. after defining the purpose of the study, the research design was elaborated and methods were selected (tab 1, 2, 3, 4 and 5). tab. 1 template descriptive data sampling interviews 20 year 2014 object of investigations sustainable sardinia tourism associations, smart destination & digitalization data sampling random 50% north sardinia and 50% south sardinia source: our elaboration european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 59 tab. 2 north sardinia elaborations destination questions % reponse % positive relevance a north sardinia population 55 88 climate 65 77 attractions 44 33 amenities 32 67 accessibility 77 87 human resource 88 99 price 99 89 image 58 56 source: our elaboration. tab. 3 south sardinia elaborations destination questions % reponse % positive relevance b south sardinia population 77 67 climate 88 88 attractions 56 99 amenities 34 66 accessibility 66 44 human resource 77 33 price 89 45 image 67 43 source: our elaboration positive relavance = 100 standard value – x management rating issues tab. 4 management class issues management issue class value understanding 1-50 validating 1-40 forfaiting 1-10 source: our elaboration european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 60 tab. 5 valuation effect of management issue destination issues % understanding % validating % forfating a north sardinia 44 33 9 b south sardinia 34 23 7 source: our elaboration this study permits to adopt multiple research methods, both qualitative and quantitative. the analysis is grounded in documents, direct observations and questionnaires. the need to investigate different aspects of the phenomenon justifies the choice of mixed methodologies (cook & reichardt 1979). the research was developed into two phases. in the first phase, only qualitative methods were utilized. public and private management and monitoring instruments were analyzed through a review of literature, with particular attention given to their effectiveness in supporting sustainable development in tourism destinations. international and european sustainable tourism management and monitoring indicator systems for destinations were considered. in the second phase, qualitative and quantitative methods were employed and a case study approach was utilized. the application of a specific sustainable tourism management and monitoring system for destinations was observed in the context of different case studies. the choice of this specific sustainable system was primarily determined as direct experience, observing the implementation of the program in one of the destinations selected by the international organization. secondly, this experience allowed to develop an indirect knowledge of the other destinations involved in the program (adams 2020). the organization selected participants on the basis of their international significate in term of natural, cultural and social environment of the destinations and of image in the tourism market, and also of recognition of the sustainable tourism efforts in that territories. a case study approach entails an intensive and in depth analysis of a single case. a case can be a location, a person or an organization. in particular, case study research is utilized when a case is characterized by complexity and particular nature. when more than one case study is considered, a multiple-case study approach is employed (adelman, 2017). the utilization of more than one case european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 61 allows one to compare the findings derived from the analysis of each case. this research focused on case studies on international destinations that are currently involved in a sustainable tourism program. the destinations selected were evaluated by an internationally accredited organization according to recognized international criteria and indicators of sustainable tourism development. data related to the destinations was collected through virtual documents and a questionnaire. the collection of data through virtual documents is a qualitative method. in contrast, a self-completion questionnaire is a typical instrument of quantitative research. each case study was analyzed through the general information found in virtual documents and the specific information derived from the questionnaire responses. findings related to each destinations were systematized and compared. the comparison allowed for the realization of the final considerations. findings derived from the two phases of the analysis in conclusion of the study were analyzed. this conducted to conclusive reflections and permitted to answer to the research questions. finally, the two destinations for the aim in the study were chosen solely based on their stages of involvement, development and consolidation, totaling two case study destinations. 4. results the research employed different methods. in the first phase of the study, literature and documents related to private and public instruments for the management of sustainable destinations were considered. their principles, guidelines, procedures, purposed and indicator sets were examined. the conditions for use, and their weak and strong points were also identified. from the joint assessment of all the four systems, some reflections were expressed. in the second phase, the case studies were analyzed (gomm, hammersley & foster 2000). different kinds of information were collected. a first group of information relating to general data and the features of destinations were obtained through virtual documents found on destination’s website. in this research, the website considered were all update and appeared authentic and credible. the general data used to determine the case studies includes: size of the destination, morphology, population, climate and economy. this data is consistent with the composition of a destination profile. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 62 data about the selected destinations were summarized considering the principal attributes of a destination, as the first highlighted: attractions, amenities, accessibility, human factors, price, and image. another group of information relating to the stakeholder involvement and commitment to the management of the destination, the characteristics of sustainable development, and the area life cycle stage of each destination was collected through questionnaires, developed into different sections, addressed to international organization engaged in the sustainability assessment (battaglia 2011). the questionnaires were self-completed and then returned by e-mail. utilizing self-completed questionnaires that are disseminated through e-mail is a method that is cheap, quick, and simple to use, and assures the consistency of investigation techniques throughout all the case studies considered (kothari 2004). in this study the questionnaire is used to gather and compare information about key aspects of tourism management in the selected destinations, which have been investing in sustainable initiatives. the set of questions addressed to respondents is designed to obtain the desired information. in the construction of the questionnaires evaluations concerning wording, measuring scale of responses, sequence of questions and layout are conducted to favor useful and meaningful results, considering their nature of self-completed questionnaires as well. the questionnaire begins with an explanation of the object and the goals of the research (stake 1995). the first section, dedicated to the destination life cycle information, seeks to investigate some characteristics of tourism development level and tourism impacts on the destination. in the second section, dedicated to stakeholder involvement and interest, the level of stakeholder participation and some relevant aspects of destination governance were explored, such as the capability of stakeholders to manage the destination as a system, and the existence of a tourism plan (stake 2013). in the third section, focused on the level of sustainability in destinations, some significant features of sustainable development in the destinations, some significant features of sustainable development in the destination were investigated, including those relating to planning, monitoring, the reporting european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 63 instruments adopted, and the regulations and policies implemented to protect cultural and natural heritage and to combat seasonality in the destination. closed questions are exposed in the questionnaires using horizontal or vertical format. to show, observe and analyze the questionnaire data for the current study every question is coded through numbers (suri 2011). each questionnaire is processed coding the answers and, then, a destination survey data is fulfilled. the analysis of questionnaires was performed section by section, with a joint examination of destination responses for each question. in particular, the analysis of section one aimed to ascertain the stage of tourism development in the destinations. the analysis of section two intended to investigated the hypothesis that the effectiveness of indicator systems entails a significant commitment by destination stakeholders (alexis 2017). the analysis of section three investigated the hypothesis that adequate indicator systems are needed for the effective management of tourism in destinations. data analysis is conducted considering the aspects investigated and the results are shown through diagrams, measure of central tendency, and frequency table. to investigate the third hypothesis that sustainability, governance and area life cycle are connected characteristics in destinations, the quantitative and qualitative analysis developed aimed to explore the interrelation of the findings of the three sections. the data collected about destination background was utilized to frame, and if possible, explain responses. this classification is supported by the assessor answers: moderate to low development of tourism; partial participation of local community with some facilities provided to visitors; a clear tourism season and emerging tourism markets; high to moderate tourism impacts respectively on destination a and b; and a level of contact between tourists and the local population that can be classified as low in the destination a, and between low and moderate in destination b. with reference to the stakeholder approach, it can be observed that stakeholder self-interest in the destination is considered to a great extent. there are collaborative relationship between primary european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 64 stakeholders, and many of the group of stakeholder are involved, but in destination b a higher level of collaboration is necessary, as reported in the assessor answer (denichilo 2020). a governance board does exist, but considering the assessor answer, in destination b the organization was inactive at the time of the assessment and the destination itself intended to reinvigorate it . in both destination a and b, there are political efforts aiming to establish multi-year tourism plans and stakeholders responsibilities (denichilo 2020). regarding sustainability, both destinations have a solid legal and regulatory framework supporting the planning, implementation, and continuity of sustainable development practices. however destination b has not fully developed a program for enterprise awareness about changes in landscape (andriotis 2018). in addition, destination b lacks a multi-year sustainable tourism strategy, as will be discussed in detail. furthermore, an improved system for monitoring tourism’s direct and indirect economic contributions is necessary. according to the assessor, destination promoting is appropriate, including promotion of destination products as well. graph 1. tourism stage of development area in sardinia source: our elaboration of audit reports 0 10 20 30 40 50 60 high medium low tourism stage of development area in sardinia south north european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 65 graph 2. audit reports of sardinia environment assertions source: our elaboration of questionnaires graph 3. impact of sardinia cultural and environment heritage source: our elaboration of internal focus 5. conclusion and discussion sustainability is the consciousness of the uniqueness of the attributes found in destinations worldwide. sustainability also often reflect the quality of life present in destinations, existence and use of public transport and alternative transportation, cost of living, availability of services, education, 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% po pu lat ion cli ma te at tra cti on s am en itie s ac ce ssi bil ity hu ma n r es ou rce pr ice im ag e audit reports of sardinia environment assertions high medium low 0 10 20 30 40 50 envoirment cultural sustanability developpment labour intensive capital intensive impact of sardinia cultural and environment heritage low medium high european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 66 recreation parks, employment, security, access for all, governance, and healthcare facilities. consequently the sustainability of tourism is now much broader that just environmental considerations. it is commonly considered to be comprised of the three pillars: the environment, the economy and the community. sustainability and its basic assumption act as a philosophy that dictates the life phases of the destination. it is a way of being, culture that influences behaviors and a sum of ethical principles that inspire decision-makers. when the risk of failure approaches the role of internal auditing, and control systems in general, it becomes more and more evident and serious (birnberg 2000). new deals for management accounting, as academic discipline and as a professional tool, recently overcame the traditional vision of internal auditing activity, which today is also accountable to third parties. the traditional accounting discipline was settle with the aims of disclosing information on the organization, moving certainty and reliability about business contracts towards the business community. the postmodern view of management accounting discipline clarifies that the certainty of contracts in the business community is hardly believable. the best way to maintain environmental uncertainty is to smooth over the information and the requisites for the accounting of failure. accordingly, discussions on the organizational performance should move from statements of what happened towards projections on what will happen, supporting the reliability of traditional management accounting systems with a forward-looking strategy of “as-if” planning, thus evolving risks into opportunities. when the financial performance of the organization deteriorates, some important decisions are urgently required. a sudden but effective action should change the trend and mitigate the financial pressure. traditionally, responsibility for unsuccessful performance is attributed to the top management team by linking the roots of the crisis to unfortunate or inappropriate decisions made by executives, and to the willfully inefficient control exercised by non-executives. appropriate designing a management accounting system and related activities may help to manage the financial pressure issues, although not every event is predictable and not every consequence of uncontrollable situational factors can be concretely mitigated. the empirical side of this research is at evaluating the relationship between destination stakeholders commitments, sustainability, and life cycle phase through the employment of case studies. with regards to this purpose, the following section summarizes the critical points revealed in the analysis of the destination case studies. a first conclusion is related to the relationship between sustainability european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 67 and area life cycle phases (modica 2008). the analysis emphasizes the lack of case studies involving destinations in the first and last stage of development. none of the destinations participating in the sustainable development monitoring program are experiencing the phase of exploration or stagnation. it is probable that issues of sustainability are perceived as priorities when the tourism product is already developed and can still be designed according to sustainability principles. moreover, the empirical evidence highlighted that sustainability cannot be considered as being completely interrelated with area life cycle. indeed, high levels of sustainability characterize all of the destination examined. the preservation of natural and cultural heritage and the improvement of social and economic welfare in destinations can be pursued and achieved at any stage of tourism development. the area life cycle significantly affects the aspects in which sustainability is reached. destination amenities, accessibility and image are characterized differently at each stage of area life cycle. these attributes, in turn, have various impacts on sustainability at the destination level (modica 2012). the destinations examined are not rich in infrastructure. in destination a, amenities are almost entirely absent. in destination b, services for tourist are not distributed equitably throughout the island; there are some areas with few hotels and other with a wide variety of accommodation services that can offer all levels of comfort. both in the narrow and broad sense, accessibility level is high. in the destination at the involvement stage, sustainability is primarily based on respect for natural and cultural heritage. in general, the destinations image are recognized worldwide. in analyzing the relationship between stakeholder commitment and level of sustainable tourism, and between stakeholders involvement and tourism destination development, different remarks can be highlighted. the active involvement of public and private destination stakeholders occurs in all the case studies, and stakeholder participation is considered a fundamental condition for sustainable tourism development (modica 2015). the level of stakeholder commitment is not the same for all the phases of destination development. it seems to be more important in the initial stages of the development, and decreases with higher levels of the economic development. it is likely that young destination, where infrastructure and services are still insufficient, need more significant levels of involvement by private and public tourism actors to develop sustainable tourism. as limitation and future research our study can conclude that the destination in the first stage attribute more relevance to environmental preservation and to local culture and customs conservation. the destinations in advanced stage of development are focused on customer care and economic and european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5516 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 68 social welfare of local community. in other words, the area life cycle stage does not affect the quantity but the quality of sustainability. finally organizational should equilibrate the instruments adopted to control uncontrollable situational factors and adequately combine objective and subjective instruments for management accounting. excessive reliance on objective performance metrics leads to business as usual, while new opportunities are missed out on. while, in business life nowadays, there is no room for demonizing objective metrics and relying on a purely subjective approach to evaluations, which would likely be affected by hidden pitfalls and side effects, there is a general call to avoid myopic evaluations and look at performance dynamically, with a continuous approach to management accountants’ role as risk mitigators, while considering risks and financial distress as facilitators for turnaround activity, which is positively centered on innovation. references adams, c. 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(2015), management accounting: where from, where now, where to? journal of management accounting research. vol 27 issue 1,pp. 171-176. 5_urmanaviciene european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5487published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 59 challenges of cross-sectoral collaboration of social enterprises in baltic states audrone urmanavičienė 1; katerina chantzi 1; and beverly tambari1 1 school of governance, law and society, social entrepreneurship ma study program, tallinn university corresponding author: audronė urmanavičienėaurmana@tlu.ee received: 30/12/2020 accepted for publication: 14/06/2021 published: 19/07/2021 abstract social enterprises are a new phenomenon in the baltic states. to create a substantial social impact in society and scale their business, social enterprises in baltic states need to create partnerships and collaborate with different sectors. by forming partnerships with different sectors, social enterprises can provide effective solutions to social problems. the aim of this article is to identify the main factors for social enterprises to create successful collaboration and partnerships with private, and public sector organisations. the methods of research are an analysis of scientific literature, social entrepreneurs’ interviews, content analysis. the study also analyzed the main obstacles for social enterprises to collaborate with different sectors. the empirical findings of the study disclosed how to improve partnerships development with private, and public sectors. following the theoretical and empirical research, the article suggests possible means of improving and developing partnerships. keywords: social enterprise, cross-sector collaboration, private sector partnerships, public sector partnerships 1. introduction in 2011, european commission launched the social business initiative that aims to introduce a short-term action plan to support the development of social enterprises, key stakeholders in the social economy and social innovation focusing on helping social enterprises to obtain funding, increase their visibility and make the legal environment friendlier for social enterprises. however, the different traditions, public policies, legal and institutional frameworks that each member of european union follows for its interior affairs, do not promote the visibility of social enterprises. it is also quite common that even social enterprises do not identify themselves as so. considering the country reports, it seems that since 2014, social enterprises gain more visibility and have grown in numbers (european commision, 2020). specifically, the social enterprise sector in baltic states is very young and is still in the stage of development. there are currently about 120-180 social enterprises in latvia (oborenko, rivza, zivitere, 2018), in estonia about 125 (reimann, 2019), in lithuania it is indicated that such enterprises, which have the status by law of a social enterprise, are 186 (pranskeviciute, okuneviciute nevarauskiene, 2018). these enterprises usually are small and medium-size enterprises, which lack resources (urmanavičienė, raišienė, 2017, urmanaviciene, 2020). for social enterprises as young companies, cross-sectoral cooperation is particularly important as it can help to mobilize resources, gain complementary capabilities, and capture synergies in order to grow and increase the social impact they generate (schirmer, cameron, 2012). collaboration with private and public sector organizations can provide access to the financial and other resources needed for sustainable growth of this young sector. partnerships with the ngo sector give the opportunity to social enterprises to widen their network, build trust and scale their social impact that can benefit the european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5487published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 60 organisations involved and the society. as most social enterprises originate from the ngo sector in the baltic states (safege, 2020), the collaboration between social enterprises and ngos as part of social enterprises’ cross sectoral collaboration will not be part of the scope of the study. collaboration with different sector organizations also help to generate new ideas, feasibility and design thinking. however, social entrepreneurs do not sufficiently exploit opportunities for cross-sector cooperation and struggle to establish and maintain a collaboration. scholars are seeking to understand and theorize social enterprise collaborations (schirmer, cameron, 2012, sakarya, bodur, yildirim-öktem, selekler-göksen, 2012, fu, 2019, weber, haugh, göbel & leonardy, 2021). however, in the baltics, the social enterprises scientific findings started arising after 2014 (european commission, 2018). researchers of the baltic states in the field of social enterprises focus mostly on the concept and social business models (urmanavičienė, 2019), which is why there is a significant lack of research of partnerships in the baltic states. this paper aims to fill the gap in literature by answering the following research questions: -which main challenges do social enterprises face when establishing collaborations with the private and public sector in the baltic states? -what are the benefits of collaborating with the private and public sector for the social enterprise and the private and public organisation respectively from the perspective of the social entrepreneurs? -what are the best practices for establishing and maintaining successful collaborations according to social entrepreneurs in the baltics? the methods of research are an analysis of scientific literature, social entrepreneurs interviews, content analysis. this paper is organized as follows: the first section with the title “cross sector collaboration between social enterprises and private sector” will present the literature analysis regarding the collaboration between social enterprises and private sector. the second section with title “cross sector collaboration between social enterprises and public sector” refers to the theoretical framework of cross sector collaboration between social enterprises and public sector. the third section of this paper will describe methodology adopted by the researchers, the characteristics of the sample and the data collection methodology. additionally, the following section will reveal the main results of study. finally, the last section will present discussion and conclude the paper”. 1.1 cross-sectoral collaboration between social enterprises and private sector cross-sector collaboration assists in bringing solutions to address complex challenges as various actors with different perspectives collaborate. barth et al. (2018) identifies the variety of cross-sector collaborations between social enterprises and different sectors (private, public, and so-called third sector) in europe by presenting case studies. from the cases presented, social enterprises can collaborate with private sector organizations in many ways. private sector can establish collaborations with social enterprises by offering funding, as infrastructure partners, shareholders, philanthropic investors, delivery partners and beneficiaries, investors building knowledge and providing support and help for interventions. the collaboration between social enterprises and the private sector is oriented mainly around mutual benefit. by collaborating with the private sector, social enterprises can benefit from the scale, the expertise in manufacturing and operations, financing (volkmann & tokarski, 2012) as well as in scalable and sustainable development (reporter, 2012). also, their collaboration offers access to finance and capital for specific projects and developments. so, collaboration enables some social enterprises to maximize their chances of obtaining financial resources by combining their social purpose with a private sector partner’s business skill. working collaborations with private sector partners can be a catalyst for change, providing the means for social enterprises to grow, restructure or reshape themselves going forward as the private sector enables prompt change. collaboration with the private sector, strengthen the social enterprises’ market position by making them more competitive in the market, build up their network, as social enterprises are searching and planning to create further partnerships to create new revenue streams and improve their scale as well as attract management commitment and advice from their commercial partners. having improved cash flow is an advantage and for that reason social enterprises set up contracts with the private sector to provide greater flexibility to forward, plan and underpin the sustainability of their businesses. many of these collaborations involve either fixed-term contracts, fixed-price contracts, or both. working with commercial partners encourages greater business involvement and investment in the local community (can, 2005) as the capital flows are invested in the development and improvement of the local community by supporting social enterprises to have an impact in the community by solving current social problems. it brings together stakeholders, raises awareness and provides opportunities for further european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5487published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 61 involvement and participation in the community. a great example that proves the impact that a collaboration with the private sector can benefit the social enterprise, is the case of generationsbrücke bridging generations (hereinafter referred to as gbd) in germany. their mission is to connect young children with the growing elderly population in nursing homes to promote social inclusion for the elderly while creating awareness for young children on the challenges of current and future demographic changes. by establishing a partnership with bmw foundation and the german caritas, gbd developed benefits in terms of increased outreach, visibility, and access to networks. drawing on the networks of its partner institutions was the multiplier that gbd needed to grow its intervention quickly. with the initial help of the bmw foundation, gbd started building a partnership with the german federal ministry for family affairs, which is one of their main financing partners. gbd has since then experienced significant growth and adoption throughout germany. to date, gbd has successfully established 75 partnerships in which approximately 4,000 children and eldercare institutions are engaged. at the same time, it continued and established partnerships with many important german players (barth et al. (2018). besides social enterprises, the private sector businesses gain great benefits by establishing cross-sector collaborations with social enterprises. through collaboration with social enterprises, corporations can have access to markets and supply lines, that without the local know-how and deep understanding of customer’s needs wouldn’t be easy to enter. corporations benefit as they offer their staff a greater sense of useful engagement such as contributing their skills to problems in their own community and increasing their reputation in society. establishing collaborations with social enterprises is a great way for corporations to engage corporate social responsibility initiatives as corporations are called to take action to prevent or mitigate the negative impact that may be caused by their operations (seferian, 2019). pepsico for example, supports e-coins in costa rica, a virtual e-currency that gives value to sustainability. it is granted in exchange for recoverable waste that is taken to recycle through a system of incentives that can be exchanged for discounts on products and services of participating businesses (e-coins). even though pepsico is listed among the top global polluters (greenpeace philippines, 2019), by supporting eco-sustainable projects they mitigate the negative impact that they cause by their operation and make a positive impact in the communities. furthermore, it enables them to form a strategic alliance with a social enterprise partner who can ‘speak the language’ of the market or communities they are trying to reach and offers potential csr spin-offs (can, 2005). the problems that a social enterprise tackles affect the society as a whole and the environment and can benefit not only the beneficiaries but also the corporations that support these initiatives, as by tackling some of these social or environmental issues, their customer base will grow, and they will be able to lead them to their commercial mission by providing them their services or products (seferian, 2019). for instance, pwc in netherlands, has launched the social impact lab – an annual challenge for start-ups with a social or environmental mission. 100weeks, a social enterprise that fights against extreme poverty in africa by supporting women with microfinancing services, using an innovative technology and data-based business model, has won the pwc netherlands social impact lab award in 2016 and pwc pledged to support them for 24 months by offering their expertise. pwc offered numerous hours of professional services to 100weeks across the service lines of core audit, accounting advice, financial consulting, deals, digital, legal and tax (pricewaterhousecoopers, 2019). as with every collaboration and partnership, the relationship between social enterprises and private sector involves potential risks and challenges. social entrepreneurs should examine each collaboration with potential private sector partners by the criteria “cost and benefit” as they invest substantial time, energy, and resources into establishing relationships, which at the end do not necessarily contribute to creating social impact or to scaling a social innovation. the cost of maintaining the partnership must be analysed accurately. furthermore, for social enterprises, the social aims are primacy and collaboration with private sector partners should be assured that it won’t compromise the organisation’s social purpose. the comparability of the values of the involved organizations influences the success of a collaboration as well as the communication style should be compatible and not lead to misunderstandings that can affect the outcomes of the collaboration (can, 2005). there is always the risk that the other organization is using the know-how for its own gain; for example, using information of beneficiaries to market additional services or products which are not part of a collaboration. in order to achieve a successful partnership with the private sector, the social entrepreneur should be aware of cultural differences and ensure the outcomes of the collaboration by written agreements with defined deadlines and deliverables, including clear expectation management. in order to gain any business confidence, the social entrepreneur should be able to speak a business language and present a professional image (can, 2005). business leaders said the social enterprises most able to pitch a clear, concise and persuasive business case were the social enterprises with whom they would most readily partner (volkmann & tokarski, 2012). european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5487published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 62 cross-sector collaboration between social enterprises and private sector enterprises provides mutual benefit to the organisations involved as they work in a complementary way. in other words, social enterprises benefit from the expertise, the networking, and the finance that corporations and private sector can offer to them, to achieve their social mission easier than if they were acting individually. similarly, the private sector benefits from the knowledge regarding customer needs, access new markets where the corporation language does not apply and needs different treatment and facilitates the corporations to give back to the society by promoting csr policies. as in every collaboration, so that in cross-sector collaboration there are potential risks and challenges. the stakeholders have different goals and expectations from the collaboration they are establishing, and it should be clear why they are collaborating and what should be the outcomes for each side. the collaboration should be evaluated according to the balance between cost and benefit to identify if the collaboration is worth establishing and the expectations should be clear from the beginning so neither the social aim from the social enterprise’s side, nor the profits and the status from the private sector’s side will be harmed. 1.2 cross-sectoral collaboration between social enterprises and public sector cross sector collaboration between social enterprises and the public sector aims to solve social issues. the collaboration between social enterprises and the public sector is characterized by a mutual goal to provide goods or services (public sector) and to solve a social issue within the state or municipality (social enterprise). social enterprises' main goal is to make a social impact however, they need partnerships or collaborations to facilitate the actualization of their goals. establishing collaboration with the public sector is a gradual process with certain prerequisites the social enterprise must follow. this chapter analyzes the forms of collaboration between social enterprises and the public sector and the tools of collaboration such as public procurements, contractual agreements and delegation agreements. and the challenges associated with establishing collaboration with the public sector and the benefits of the collaboration. social enterprises contribute to economic growth and the growth of the european economy is dependent on its “ability to support the growth of enterprises” (bovis, 2015). collaboration between the social enterprise and the public sector can be in the form of long term contractual agreement. the social enterprise and the public sector share resources and risks proportionately (volkmann & tokarski, 2012). the basis for establishing contractual agreement is to provide better services for the citizens and individuals in certain social groups. the social enterprise and public sector can also collaborate even if there is no mutual interest directly related to a particular social issue the public sector would have it’s goals to achieve and the social enterprise would have their goals to achieve (volkmann & tokarski, 2012). an example of this kind of collaboration exists with discovering hands and the public health insurance company (volkmann & tokarski, 2012). discovering hands is an organization located in germany that creates social impact by providing services that contribute to the early detection of breast cancer. they collaborate with public health insurance companies by contractual agreement. the terms of the collaboration require that the public health insurance company covers the bills of the clients registered with the insurance company at a cheap rate, encouraging more women to get access to quality service at low cost. the benefit for the public health insurance company is they are able to acquire more customers to register for their service. social enterprises can also be owned by the public sector. when the social enterprise is owned by the government, the government recruits the services of the social enterprise for any project that will be carried out. such social enterprise usually gets first consideration when services are required. however, the government owned social enterprise can form some partnerships with either the private sector or the third sector depending on the project or service that is needed. government owned social enterprises are also referred to as state owned enterprises. these enterprises are under significant sector of the municipality and contribute to the economy of the state or country examples are electricity providing organisations which are responsible for train/ railway services within the municipality. social enterprise and the public sector initiate and establish collaboration by public procurement. public procurement is the process of purchasing goods or services between the public sector and social enterprises. the government makes provision regarding public procurements in their national budget. in the national budgets, public procurements account for an important share of national budgets (oecd/eu, 2019). public procurement is a means of revenue generation for social enterprises that european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5487published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 63 have a goal for making social impact and provide services in a cost-efficient manner (oecd/eu, 2019). public procurement is regulated by state laws and policy. the laws regulate the actions of municipalities (bovis, 2015). in germany, public procurement is acquired by social enterprises through the process of bidding. the body in charge are referred to as contracting authorities which are required to “split contracts” to smaller sub-contracts to allow smes bid for a position (bovis, 2015). the procurement process is orientated on mutual benefit for the social enterprise and the public sector. the public sector solves a social issue, and the social enterprise generates revenue. social enterprises have an edge over the public sector in relation to having access and full knowledge of some of the social issues individuals are facing within a society. with this knowledge they can create and render services that are innovative and efficient to solve these social issues. the public sector purchases the innovative products that are made available by the social enterprise to solve social issues through the procurement process. the financial resources acquired through the public sector purchase is used to keep the social enterprise financially sustainable and also the social enterprise can grow their market and customer base and generate more revenue. social enterprises establish collaboration with the public sector by bidding for government contracts for the purpose of executing specific projects. the contracts are made available by the public sector however, getting the right to execute the project attached to the contract requires the process of bidding. bidding for a contract by a social enterprise means that several social enterprises put in an application(bid) to be picked for collaboration and project execution within a country or specific municipality. contracts for the purpose of collaboration are done in accordance with the public procurement procedures within a state or under the requirements or directives put in place by the european union directive for contracting authorities and public institutions. contracts are usually issued or approved by a contracting authority to social enterprises. social enterprises seeking contracts have to go through the bidding process, the outcome could be that the contract could be given to a particular social enterprise for execution, or it can be split into several sub-contracts and divided among the bidders (trybus & andrecka, 2017). contractual relationships between the public sector and social enterprises can either be vertical or horizontal (lyon, 2009). lyon explains that vertical form exists between the commissioners of the contract and the enterprise that delivers the goods and services, and the horizontal exists between the two parties providing the service (lyon, 2009). furthermore, lyon (2009) identifies the two kinds of contractual agreements that exist between the public sector and a social enterprise. the contracts could be informal with no legally binding agreement. or could be formal with a legally binding agreement based on the european union procurement rules. the public sector and social enterprises contractual agreement benefit social enterprises because, when social enterprises are able to acquire long term contracts to render services to the public sector, financial revenue is constantly generated for the social enterprise. also, long term collaboration with the public sector improves the image and validity of the social enterprise. increased validity creates legitimacy and more opportunities for investors and funding for the social enterprise. with any collaboration, the partnership between social enterprises and the public sector has challenges. the challenges related to obtaining public procurement for social enterprises are lack of clarity concerning a public service (oecd/eu, 2019). the challenge with clarity is due to a lack of legal framework and policies that give legitimacy to social enterprises and the service they provide (reimann, 2019). when there is lack of recognition in a state for a new social enterprise, the public sector or potential collaborator may find it difficult to fully understand their purpose and what kind of service the social enterprises claim to provide. additionally, the smaller the social enterprise the lower the possibility of winning a bid for a contract compared to a higher more recognized social enterprise. also, social enterprises face challenges with contracting authorities. contracting authorities not recruiting the services of small and new social enterprises (oecd/eu, 2019). contracts awarded to the small social enterprises compared to the high enterprises are relatively low. (oecd/eu, 2019), therefore this creates an imbalance as most of the contracting is directed towards larger more established social enterprises. social enterprises also face the challenge of the possibility of contract termination from the contracting authority due to non-compliance to the clauses that are stipulated in the contract document (oecd/eu, 2019). the clause may be passed into the procurement specifications by the municipality. social enterprises need to take into consideration the clauses when bidding for a contract or rendering services through the procurement process. when the clauses are not met the process of collaboration and rendering of service to the public sector can be terminated. the termination can result in a loss of revenue for the social enterprise. the clauses are criteria for defining the nature of the product or service required by the public sector. an example is the specification of the individuals or groups that the product or service is directed at certain social groups (oecd/eu, 2019). when the social enterprises bidding for a contract to establish collaboration with the public sector meet the requirements and follow the guidelines for the clauses provided then they can proceed to bid. an agreement made by the social enterprises and european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5487published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 64 the public sector to collaborate is referred to as a service agreement or a delegation agreement. service agreement means that the social enterprise has a contract to carry out a particular project or provide a particular service based on what is required by the municipality for the recipients at a particular time. the second form of agreement is the delegation agreement. a delegation agreement between the social enterprise and the public sector means that and the social enterprise has a longer-term agreement to provide long term service to a particular area or particular recipients. cross-sector collaboration between the public sector and social enterprises provides mutual benefit to the public sector and to the social enterprise. social enterprises gain financial benefit from the public procurement process when the public sector purchases the goods and services they render. and the public sector benefits from the collaboration by having access to innovative service and ideas that can be used to meet social issues and improve legitimacy and trust with the recipients of the service. also, the collaborative process enables the social enterprise to achieve their goals and vision which is social impact. cross sectoral collaboration with the public sector has potential challenges for social enterprise. challenges such as lack legitimacy despite the services they provide. new social enterprises face the legitimacy challenge as the service they provide may not be viewed as relevant or beneficial. as a result, the challenge of being overlooked when contracts are awarded for project execution occurs. also challenges related to loss of revenue due to contract termination. a social enterprise that has been allocated a contract to execute a project through collaboration with the public sector has to follow the regulations binding the contract. non-compliance results in collaboration being terminated and difficulty regaining the trust of the public sector for future collaborations. the collaboration with the public sector will create opportunities for social enterprises to expand and grow while creating and offering solutions to societal issues. 2. methodology the aim of this research is to identify the main factors for social enterprises to create successful collaboration and partnerships with private, and public sectors by focusing on the challenges that social enterprises face in their collaboration with the private and public sector. to answer these questions, a qualitative research approach was followed. qualitative research was considered as suitable for the research as it focuses on the exploration and the understanding of the meaning that individuals ascribe to a certain problem (creswell, 2014). furthermore, a qualitative research approach facilitates inductive analysis that allows to focus on the meaning that the participants give to their experience, interpret their insights, and reach general conclusions from particulars (creswell, 2014). for this research, semi-structured qualitative interviews have been used via videoconferencing. qualitative interviews is a tool that elicits views and opinions from the participants (creswell, 2014) and seeks for meaning of central themes of the subjects’ lived world. in addition, it gives the possibility to the researcher to register and interpret the meaning not only of what is said, but also in the way that is said and register the reactions of the subjects. 2.1 sampling and data collection the paper is built on the analysis of scientific literature regarding the benefits and the challenges that cross-sectoral collaboration between social enterprises with private, public and third sector has and an empirical analysis of social entrepreneurs in baltic states. the study was conducted by using a sample of estonian, latvian, and lithuanian social enterprises as baltic states are the focus of this research. semi-structured interviews with social enterprises’ representatives were conducted to identify the differences between the three countries and the social enterprises’ cross-sectoral collaboration. the social enterprises’ representatives were invited to discuss about: • their collaboration with private, public (the motives that led them to establish collaboration with the specific sector, the benefits that they gain by collaborating with this sector, their strategic partners, and the most important partners they have from this sector, the goal of the collaboration and the initiators of this collaboration) • challenges for establishing and maintaining the collaboration with private, public or third sector (what they had to invest to establish/maintain the collaboration, what were the challenges that they had to overcome to establish a collaboration, if they were any obstacles that prevented them from having a successful collaboration or partnership with the private, public or third sector. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5487published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 65 • best practices and recommendations for young social entrepreneurs that will help social entrepreneurs to establish successful partnerships with the private/public/third sector. a total of 7 experts were interviewed, 4 of them with 20 to 40 minutes interviews via video conferencing and 3 of them conducted via email communication. table 1 gives more information about the interviewees. most of the social enterprises interviewed have past and active projects in more than one sector. however, we have focused only in one sector to be analysed per interview. the selection of the enterprises was done with the following criteria: • the social enterprises fulfil the prerequisites that the european commission social enterprise definition has “social enterprises are those type of businesses that the social or societal objective of the common good is the reason for the commercial activity, often in the form of a high level of social innovation, those whose profits are mainly reinvested to achieve this social objective and those where the method of organization or the ownership system reflects the enterprise's mission, using democratic or participatory principles or focusing on social justice“. • are part of their national social enterprise network. • have at least one cross-sectoral collaboration either with private, public or third sector. table 1: description of companies that participate in the research company’s name interviewee’s name position held in the company countr y crosssectoral collaboration found ed in edumus maria rahamägi ceo estonia private sector 2018 tagasi kooli teibi torm ceo estonia private sector 2012 visas iespējas gustavs mārtiņš upmanis ceo latvia private sector 2018 miesto laboratorija goda sosnovskiene ceo/ manager lithuani a private sector 2015 samaritan association of latvia andris berzins ceo/ manager latvia public sector 1992 communicare norman vester ceo estonia public sector 2019 socialinis taksi solveiga ratkevičiūtė ceo lithuani a public sector 2013 source: authors’ elaboration. (all the interviews were recorded with permission and subsequently transcribed for data analysis) european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5487published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 66 3. empirical findings the aim of the study is to find out the main challenges that social enterprises face to establish collaborations with the private and public sectors and the benefits of collaborating with them and to reveal the best practices for establishing a successful collaboration in the baltic states. firstly, the study presents findings about se partnerships with the private sector. secondly, findings about se partnerships with the public sector. finally, the study will provide the discussion based on the empirical findings 3.1 cross-sectoral collaboration between social enterprises and the private sector the collaboration between the private sector and social enterprises differs from country to country regarding the form of cooperation and the reasons that both parties come to an agreement to collaborate. in every form of collaboration, there are challenges for the social entrepreneur that can be classified in three different stages: • challenges prior to the collaboration; • challenges in the initial stage of the collaboration • challenges for maintaining the collaboration. the following table 2, describes the ways in which social enterprises collaborate with the private sector per country, the establishing factors that led to this collaboration for both parties as well as the challenges that the social entrepreneur faces in the 3 stages (prior to the collaboration, during the initial stage of the collaboration and challenges that he/she faces during the collaboration for maintaining it). table 2: empirical findings for the collaboration between social enterprises and private sector social enterprise forms of cooperation establishing factors challenges estonia edumus financial support and human resources. private company: -support an initiative that will benefit the social enterprise, their organisation and the society as a whole -increase the employees’ engagement level in society. social enterprise: funds. -human resources. -free marketing. prior: -find the right partners to establish collaboration to meet the social enterprise’s needs and goals. -ensure that the company will be financially sustainable in the near future and will not be constantly asking for financial support. maintaining stage: -keep them interested and encourage them to continue further with the project. -provide reports about what has been done and what is going to happen in the future. -keep reminding the benefits of the collaboration. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5487published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 67 estonia tagasi kooli strategic partnership based on financial support (but also marketing, communication support, legal support, usage of company’s resources e.g. buildings or advertisement spots). private company: -communication. -employees involvement and engagement. -contribution to the society. social enterprise: -funds. -human resources. -legal and communication support. -marketing support. -advertisement. prior: -find partners that address the topic in their agenda and scr policies. -get in contact with someone from the communication or scr department to test if the goals are matching. -get in contact with people who are on the boards as they are decision makers. -make a concrete, clear and interesting offer to them. -have established prior collaboration with the public or third sector to ensure trust. initial stage: -devote time and effort to gain trust. maintaining stage: -keep them involved, interested and informed. latvia visas iespējas provide services to companies, corporations and private organisations. and establish a relationship “business as usual” with them, as a service provider (social enterprise) and a client (private company). private company: socially beneficial image and marketing bonuses as they communicate the message locally and globally that they support social enterprises. social enterprise: credibility. -legitimacy. -marketing. prior: -get as much recognition as possible from other organisations (public or third sector) so that the social enterprise can use it in its marketing communication. -place the societal cause as a baseline for the collaboration. -invest time to talk with different companies and establish yourself in the environment. lithuania miesto laboratorija providing expertise, skills or products without asking something in return (this mostly happens in collaborations with small companies that private company: contribution to the local society by helping a local cause. social enterprise: prior: -make research in advance to find companies that match with the social enterprise’s goals. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5487published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 68 the owners can easily make personal decisions compared with big companies). -resources that are needed. -make a proposal that will be interesting and beneficial for both parties. initial stage: -be responsive and responsible in communication to ensure trust. maintaining stage: -being responsible and holding a good collaboration for the future deals that may come up for other social enterprises in the future. source: authors’ elaboration the key findings of the study regarding the challenges that the social entrepreneur needs to overcome can be divided in three chronicle stages: before establishing the collaboration, the initial stage of the collaboration and the continuance of the collaboration. before establishing the collaboration, the social entrepreneur needs to make a research and find those companies that are meeting his/her goals and create a proposal for them that would be interesting and beneficial for both sides. it is important to identify what motivates the potential partner to work with them. there are organisations that have certain corporate social responsibility agenda and focus on specific goals and would like to increase their positive impact in certain areas, organisations that focus on the social enterprises’ societal goal and do not seek to gain anything additional, just only to help them in their goal and organisations that look for long term partnerships and prefer to maintain a client-customer relationship. especially, in cases when the social entrepreneur asks for financial support, the offer needs to be very concrete and clear, time based and offer to the company something more than just communication. social enterprises receive a variety of different benefits from the private sector according to their demands. their benefits can be either financial support, access to expertise (lawyers, marketers, communicators) and human resources (people that volunteer from the company), products (supplies that they need for a certain goal) or even access resources of the company (offer free usage of company’s space to place social enterprise’s advertisements). apart from the importance of the proposal from the social entrepreneur’s side and the type of assistance he/she asks for, it is quite crucial to communicate and approach people who have decision making power in the organisation, so they can easily communicate their goal, their proposal and their request for collaboration and get clear answers. it was underlined that prior collaboration with ngos, public organisations can help the social entrepreneur to make a successful collaboration with the private sector as it gives recognition, validity, and credibility to the social enterprise. also, an established collaboration between private sector and social enterprise, gives credibility and legitimacy to the social enterprise and can be beneficial for the scalability of the enterprise. for initiating but also continuing the collaboration, the social entrepreneur needs to look and be trustworthy and maintain reliable communication and be responsible for the tasks that he/she needs to deliver to gain their trust and have a smooth collaboration. especially in the initial stage, the social entrepreneur needs to invest time and effort to report everything to the company regarding financing, planning, and project management. as the time passes and the trust is gradually gained, it is important to keep the interest up the motivation of the company to be involved and informed about the social enterprise’s progress. analysing the differences between the three countries and the social enterprise ecosystem, it can be concluded that each country presents some differences regarding the reasons that lead them to establish collaboration with the private sector and simultaneously the challenges that they face. specifically, in estonia, social enterprises seek to build collaborations with the european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5487published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 69 private sector to access capital and expertise and the main challenges that they face towards this, is how to make a clear proposal that helps them achieve their goal and be attractive for their partner and how they can maintain the collaborations. in latvia, social enterprises seek for scalability, legitimacy and validity from the private sector and their main challenge is how to help their partners to access markets and supply lines, that without the social enterprises’ know-how and deep understanding of customer’s needs wouldn’t be easy to enter. in lithuania, social entrepreneurs’ main challenge is how to create mutually beneficial collaborations, as mainly their collaboration with the private sector is characterized by philanthropic investments or services based on expertise or products instead of funding. to conclude, the social entrepreneurs recommend to the upcoming and fellow social entrepreneurs to invest their time and effort to search for partners from the private sector and seek for those organisations that fits their needs and match their goals. they need to make a clear and structured proposal that is based on mutual benefit and present it to people with decision making power within the organisation. furthermore, they need to invest time and effort to gain their trust and it is highly recommended to have prior recommendations from ngos and public authorities that previously have worked with. once the collaboration starts, the social entrepreneur needs to maintain the communication with the private sector company and encourage them and motivate them to stay informed about the social enterprise and its achievements. as social entrepreneurship is a quite recent sector, to gain more recognition and establish itself in the market, each social entrepreneur should act keeping in mind that he/she represents the whole social enterprise ecosystem and one bad experience from one organisation can cause a negative answer for collaboration for another social enterprise in the future. 3.2 cross-sectoral collaboration between social enterprises and the public sector the collaboration between the public sector and social enterprises occurs in stages. the collaboration is based on establishing factors that the public sector and social enterprise take into consideration before collaborating. the collaborative stages present some challenges for the social enterprises and the challenges can be divided into three stages. the stage prior to collaboration with the public sector, the initial stages of public sector and social enterprise collaboration, and the third stage the maintaining stage after collaboration has been established. table 3: empirical findings for the collaboration between social enterprises and public sector. social enterprise forms of cooperation establishing factors challenges estonia communicare -providing services based on long term contract basis. public sector: -providing support for a particular social group within the municipality. social enterprise: -funding and long term partnership through contracts. prior: -making research to find key stakeholders in the public sector for the purpose of collaboration. initial-stage: -time spent building trust and legitimacy with the public sector. maintaining-stage: maintaining trust, continuous communication to ensure european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5487published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 70 continuous long term collaboration. latvia latvijas samariesu apvieniba -providing services through delegation agreements and contracts. public sector -co-operation with social enterprises to solve social problems within the municipality. social enterprise -social impact. funding. prior stage; competition between social enterprises to acquire contracts. maintaining-stage; creating delegation agreements to continue to provide services on a long term contract basis. lithuania social taksi -selling services to the public sector. public sector -solving the problem associated with a particular social group. social enterprise -funding. -creating social impact through collaboration with the public sector. prior: -establishing contact with the public sector. -convincing the potential partners on the importance of the service being offered. maintaining-stage: competition against local organizations. convincing the public sector on the relevance of continuous funding through purchasing services. changes in the political spectrum may affect collaboration. source: authors’ elaboration. the findings of the empirical research show that each social enterprise presents differences regarding the reasons for establishing and maintaining collaboration with the public sector and the challenges that they face. in latvia the main challenge is competition. competition exists between social enterprises bidding for the procurement process to establish collaboration with the public sector. in estonia, the main challenge is time invested in the process of identifying the key stakeholders in the public sector for collaboration and making a proposal on the services they provide and why the service is needed to the public sector. in lithuania, the main challenge is proving validity. there is a lack of validation from the public sector when there is a european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5487published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 71 change in the political spectrum, due to the possibility the importance or need for the services provided by the social enterprise is deemed non-essential. social enterprises are an essential part of the economic growth of any country in which they exist. the older the social enterprise, the better chances of establishing collaboration. as a result, the owners are able to provide recommendations for new social enterprises that intend to establish collaboration. the ceo latvijas samariesu apvieniba (lv) suggests that when a social enterprise is new, the one of the main goals should be not to lose focus of their social aim and social idea or place emphasis only on marketing their products and services. social enterprise should function in a manner that shows balance. when there is a balance between achieving social impact and establishing collaboration through providing goods and services to the public sector social enterprises are more successful. also, with the challenges that social enterprises encounter with collaboration, social enterprises must remain optimistic and work with each other under the social enterprise network. as a new social enterprise, it is important to be registered under the social enterprise network established within the state/country. registration enables small social enterprises to acquire recognition and legitimacy from the public sector therefore increasing the opportunities to establish collaboration. collaboration with the public sector for social enterprises takes time to establish. the ceo/ owner communicare (est) suggests consistent and continuous marketing for new social enterprises. social enterprises should make use of all forms of advertising including social media, the importance of this form of brand marketing is to increase visibility. the public sector before making a final decision to collaborate with a social enterprise that is new is conducting background checks to see what services/ project have been executed successfully. making this information available online increases the possibility of establishing collaboration with the public sector also the managers and ceos of new social enterprises need to grow their network with key individuals within the municipality, creating a network of significant individuals increases the possibility of being recommended to the public sector when there is a need for a particular service or product. in the baltic states (estonia, latvia and lithuania) there is an organized social enterprise body that advocates and promotes the needs and the importance of social enterprises in solving problems within the state. however, a small social enterprise needs to put in the extra effort and time to be able to establish partnership with the public sector and be taken seriously. 4. discussion and conclusion cross sector collaboration for social enterprises with the private and public sector is a means for development for social enterprises as it allows them to scale their social impact and be economically sufficient. with the support of their partners, social enterprises can create effective solutions to the social problems they are addressing and contribute positively to the economic and social development of the local society. especially in the baltic states, that social entrepreneurship is a relatively new field, establishing cross collaboration with the private and the public sector is a driver for development, improvement, success, and business establishment for social enterprises. it is revealed that social enterprises cross collaboration is a form of collaboration that benefits equally both parties regardless the type of organisation (public, private). specifically, while collaborating with the private sector, social enterprises get access to financial resources, networks, expertise, gain credibility and legitimacy and it is a great way for them to market themselves and their services/products. on the other hand, as social corporate responsibility, sustainable development, and contribution to the local society become more and more popular among corporations and small and medium enterprises, the collaboration with social enterprises gives the opportunity to the private sector to contribute to the development of the local society, to increase its social image and reputation and engage its employees to take action and contribute positively to the development of the society. similarly, while collaborating with the public sector, social enterprises get access to funding, and it is a great opportunity for them to scale their social impact. also, the collaboration with the public sector is characterized by long term agreements that allow the social enterprises to sustain financially and organise their activities and resources without being insecure about having insufficient funds to operate, the financial security allows them to focus on their main activities and scaling their social impact. despite social enterprises, the public institutions benefit from their collaboration with social enterprises as they can provide to their citizens quality services and products and solve the problems that occur in their local community. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5487published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 72 despite the differences that the private and public sector may have in their organisational structure and operational functions, social enterprises seem to face similar challenges to establish and to maintain collaborations with any of the two sectors. the evidence from this study suggests that there are 3 different types of challenges that the social enterprises face to establish and maintain their collaboration with the private and public sector according to time criterion: prior to collaboration, initial stage of collaboration, and during the collaboration (maintaining stage). the study found that in the prior stage, social entrepreneurs face difficulties to identify the key contacts within the organisations (private or public) to start the collaboration. the competition is quite high, as there are many other providers and stronger competitors, so that social enterprises need to offer something that the others do not offer and to know the organisations’ needs, values and their social aims and interests. when the collaboration has officially started, the social entrepreneur faces different types of challenges regulated with spending time and efforts to ensure and gain the collaborator’s trust through frequent communication and detailed and analytical reports. despite the value that trust has at first place, it needs to be maintained and developed throughout the collaboration so that it can be further extended once their type of collaboration officially ends. the social entrepreneur needs to keep the collaborators involved and informed so that they will not lose interest, they can maintain their professional relationship and extend it if required regardless of the existing competition. from empirical research, interviewees gave their insights and suggestions of best practices for social entrepreneurs that can apply in these 3 stages so that they can enhance their results and establish successful and meaningful collaborations with the private and public sector. following again the scheme of the three stages, social entrepreneurs need prior to collaboration to find key persons within the organisations that have decision making power, and make to them a clear, interesting, and mutually beneficial proposal considering the organisations’ needs and goals without compromising their societal goal. one key aspect regarding this stage is to pitch the proposal to the organisations’ decision makers. interestingly, prior collaboration with the public sector (or third sector) gives trustworthiness and credibility to the social enterprise to establish collaboration with the private sector, as well as prior collaboration with the private sector gives a competitive advantage for a successful collaboration with the public sector, as it gives credibility and legitimacy regarding their operations. prior collaborations show professionalism, trustworthiness, network, and credibility to the social enterprise, increasing the possibilities of a successful deal. this practice confirms the importance that cross sector collaboration has for social enterprises and how the correlation between the two sectors can be beneficial for the success of the social enterprise’s upcoming collaborations. furthermore, in the initial stage of the collaboration, by devoting time and effort to communicate, be responsible and responsible while communicating, engage and involve their collaborators and keep reminding them the benefits of their collaboration and build a trustworthy relationship that can allow them to maintain and extend their collaboration further (third stage). as the director of miesto laboratorija, goda sosnovskiene, mentioned in her interview, “i am not just responsible for my enterprise but for the future deals for them (partners) as well. it is very important for social enterprises to understand that if you will do the deal fine, then other social enterprises will approach this company that it is more likely that they will have a positive answer and potential collaboration. you are doing a deal and you are responsible not only for yourself but also for the future”. that is a fundamental aspect that social entrepreneurs should take into consideration while searching for potential partners that they need to act responsibly and that with every collaboration and contact they represent the whole social enterprise ecosystem and by making successful deals, they facilitate the growth of social entrepreneurship and strengthen the cross-sector collaboration which is crucial for the development of this field. the evidence from the study suggests that there are no significant differences on the challenges that social enterprises face to establish collaboration with the private sector or public in baltic countries. however, it is important to highlight that in estonia and lithuania, social enterprises are more dependent on the changes that happen in the political spectrum, as they need to re-submit their offers and start the collaboration from the beginning if there are changes in the government. this study has gone some way towards enhancing understanding of the challenges that social enterprises face to establish and to maintain cross sector collaboration with the private and public sector and to reveal some practices that can help social entrepreneurs have adopted to overcome them. the study findings might be useful for any social enterprise that aims to overcome the obstacles they face and enhance their current and future collaborations. the methodological choices were constrained by limited sample size, but empirical research results are promising and should be validated by a larger sample size and even beyond the regional limits. it is beyond the scope of this research to analyse the challenges that social enterprises face to establish and to maintain cross sector collaboration with the third sector, but it can be considered as a very important aspect of cross sector collaboration for future research to have a better understanding of how social enterprises operate with each sector and provide social 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(2018). social entrepreneurship and business ethics: understanding the contribution and normative ambivalence of purpose-driven venturing. routledge. 5763-other-17673-1-4-20210425 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5763 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 29 opportunities and challenges of sustainable development and digital revolution: the italian case of toolery gloria fiorani1, federica bosco1 and alessandro biagetti2 1 department of management and law, faculty of economics, tor vergata university of rome, rome, italy 2 coo toolery, via dedalo 27, 00133 rome, italy e-mail: federica.bosco@uniroma2.it received: 25/04/2021 accepted for publication: 10/06/2021 published: 19/07/2021 abstract this article explores how digital transformation can provide support for achieving the sustainable development goals (sdgs) of the un's 2030 agenda. the article aims to provide a case study of the use of technology in a low-tech sector, the construction industry, in order to make the costs of reducing the positive impacts on the environment and people sustainable from an economic point of view as well. the article produces practical implications by describing strengths, weaknesses opportunities and major challenges of digital technologies for designing sustainable business models.. keywords: digital transformation, 2030 agenda, sustainable development goals (sdgs), start-up, case study analysis, ecommerce 1. introduction the growing attention to the themes of sustainable development and the strong push towards digitalization are affecting all sectors of our society, deeply changing its dynamics. the nexus amid both domains foreshows outstanding, yet untapped, opportunities to foster a transformation towards sustainable development (osburg e lohrmann, 2017). in fact, it is possible to consider the synergy between digital transformation (dt) and sustainable development a winning combination (atos, 2018) but still not potentially exploited (del rìo castro et al., 2020). digital transformation, understood as the set of changes that digital technology causes or influences in all aspects of human life; (stolterman & fors 2004) it is reshaping work, leisure, relationships, education and governance. at the same time, this revolution allows the transformation of entire sectors of society, directing business towards more efficient, productive and sustainable models. nowadays, digitalization is heralded to be one of the most promising transformations for sustainability (gouvea et al., 2018). in order to understand the possible positive implications of digitization for sustainable development, the above-mentioned work aims, therefore, to answer the following research questions (rqs): in order to accelerate the change process in a sustainable perspective, why governing dt is a challenge to take over? (rq1). why implementing more sustainable business models can represent an opportunity for italian growth? (rq2). the study is structured as follows: the first section introduces the topic, the rqs and the motivation of the european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5763 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 30 article; the literature review provides an overview of the digital transformation and a review of the main stages of sustainable development up to the adoption of the 2030 agenda. the methodology illustrates the chosen case study in order to analyze the implications of dt for sustainable development; the fourth section outlines the results achieved resorting to an impact assessment on the sustainable development goals (sdgs) from a multidimensional perspective. discussion aims to fill the gap between digital transformation and sustainable development answering the first research question. in conclusion, the second research question is answered by providing a s.w.o.c analysis of the case at hand, specifically linking the opportunities of the study with the national strategy. 2. literature review 2.1 digital transformation nowadays, when we talk of digital transformation we mean restructuring an organization to use any and all information and network-based technologies that increase its competitiveness, in a way that, over a period of time, excludes and outcompetes untransformed organizations (baker, 2014). digital technologies are disrupting across the economy and society. digital transformation (dt) refers to “a process that aims to improve an entity by triggering significant changes to its properties through combinations of information, computing, communication, and connectivity technologies” (vial, 2019). the process of digital transformation manifests in new institutional arrangements, bringing about novel values, practices, and structures impacting the established rules of the game and contesting contemporary logic constellations (hinings et al., 2018). digitalization brings novel cultural, holistic and multidimensional phenomena (boyd and crawford, 2012). digitalization is not a single entity or technology; rather, it is a highly interconnected system in itself. it represents the convergence and interplay of many fields, such as computer science, engineering, informatics, mathematics, biotechnology, nanotechnology, and manufacturing. (twi2050, 2019). one thing that is agreed on is that digital transformation, whether within a corporation or within an industry, is the largest change sweeping businesses and organizations today (baker, 2014). in this direction, the european commission through the “2021 commission work programme – from strategy to delivery”, aims to make europe healthier, fairer and more prosperous, while accelerating the transformation to a greener economy ready for the digital age. to achieve these goals, the commission will ensure in this digital decade of europe defined targets for 2030 in areas such as connectivity, skills and digital public services (european commission, 2020). the first pillar of the package announced by the president of the european commission, ursula von der leyen, is that of a digital economy deeply centered on people. the commission plans to invest heavily in digital skills development and training for all europeans, including a digital education plan for digital literacy and skills development. in addition, the strategy aims to accelerate investment in the ability to deliver high-speed data connectivity through an update of the european action plan on 5g and 6g. the actions proposed within the strategy have as a second pillar to foster a healthy and competitive transition of europe to the digital economy. this is ensured, among other things, through the establishment of an eu action plan for the industry facilitates the transition to digital for european companies and strengthen the rules of the single market. but where does italy stand in relation to this wave of global innovation? we are clearly answered by the commission's digital economy and society index (desi), which in 2019 placed us 25th in europe after croatia, slovakia, cyprus and hungary. an indicator of european digital performance, the desi analyzes the evolution of member states on the basis of five dimensions: the ability to provide a high-speed data connection (connectivity), advances with respect to the digital skills of citizens (human capital), the frequency of use of online services such as e-games, music, video, online shopping and online banking (use of internet), the degree of digitization of businesses and the spread of e-commerce systems (integration of digital technology) and finally the level of digitization of public services (digital public services). a comparison of the five dimensions of the index shows how the infrastructure for high-speed data connection has more than doubled since 2014 with investments in mobile broadband networks; however, this growth does not seem to have influenced the other dimensions which, since 2014, have suffered from a stagnant or profoundly slow evolutionary dynamic. finally, it emerges that the level of digitization of businesses is very low and the use of internet is still not widespread in our country. to weigh negatively on the digitalization of the industrial sector is above all e-commerce while, as far as the use of internet is concerned, online transactions are less widespread. public policies in favor of digital transition must therefore necessarily consider these shortcomings and act in this sense to allow italy to approach its european peers. reconciling technological innovation with social and environmental issues in order to design better societies and economies is the real historical challenge to be faced and may represent a unique development opportunity. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5763 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 31 2.2 sustainable development the notion of sustainable development has its roots in the distant seventies, when awareness began to spread that the fordist production model, characteristic of industrialized society (sebastiani, 2014), was having serious repercussions on natural systems. in particular, it was the oil crisis of 1973 that laid the foundations for the construction of a better future for all humanity. in fact, with the war between israel and arab countries, the price of oil increased which resulted in a consequent increase in energy costs and inflation. as a consequence, therefore, of the energy crisis, many countries of the world were forced to adopt drastic austerity policies in order to limit energy consumption. this event, represented for the west the first real opportunity to stop and think about the use of natural resources of the planet, now limited, as they considered the use of renewable sources as an alternative to oil and fossil fuels. the industrial community therefore began to question the consequences of its actions (petrini, 2012). we can therefore say that the idea of a model of responsible consumption began to take shape in the early 1970s, the decade in which the un conference on the human environment was held. to support this thesis, the report on the "limits to development" commissioned by the club of rome and carried out by some scholars from the massachusetts institute of technology (boudes, 2014). the document illustrated the results of a computer simulation of the interactions between industrialization, consumption of resources, population, food production, pollution and their exponential growth over time. although a tragic fact emerged, namely that in a short period of time all environmental and energy resources would be exhausted as a result of a careless growth in production, it also raised hopes that this catastrophe could be avoided by pursuing a type of development that would not cause the total consumption of the earth's resources (meadows et al., 1972). in order to achieve this type of development, however, it was necessary that attention to the environment be accompanied by the principles of economic growth and long-term improvement of living conditions. in order to have a complete vision of the steps that have been taken over the years in favour of sustainability, it is essential to retrace the most important stages of this path. the stockholm conference, convened by the united nations and held in sweden from the 5th to the 16th of june 1972, marks the beginning of the path towards sustainable development. following the conference was established unep “united nation environment programme”, a specialized agency of the un in order to protect the environment and raise awareness of the community to responsible behavior (lafratta, 2004). in 1980, the collaboration between unep, iucn and wwf resulted in the first document integrating conservation with the sustainable use of natural resources, “the world conservation strategy: living resource conservation for sustainable development” (iucn et al., 1980). nowadays, in order to define the concept of sustainable development, we refer to its most widespread and shared definition, elaborated in 1987 by the world commission on environment and development and contained in the brundtland report “our common future”, whose name derives from the then norwegian prime minister gro harlem brundtland who chaired that commission: “development which meets the needs of current generations without compromising the ability of future generations to meet their own needs” (brundtland, 1987). in 1991, the three organizations iucn, unep and wwf published “caring for the earth: a strategy for sustainable living”. with this document it is stressed how important it is to improve the quality of life of human beings, respecting the regenerative capacity of natural resources (iucn et al., 1991). in 1992, in rio de janeiro, brazil, was held the largest conference in history organized by unced: the "earth summit". it was attended by heads of government from around the world, representatives of 172 states and many spokesmen of non-governmental organizations, all gathered to discuss the future of humanity and the environment. (unced, 1992). in the same year, in brussels, the european union approved the fifth environmental action plan “towards sustainability” (eu, 1992). in 1994, the “aalborg charter” was approved during the “european conference on sustainable cities and towns”. through this document, european cities committed themselves to applying “agenda 21” and to promoting long-term sustainable action programs at the local level (lafratta, 2004). in 2000, the united nations millennium summit was held where the eight millennium development goals (mdgs) were defined, which all 193-member states of the un committed to achieving by 2015 (undp, 2015). eight goals were identified: reduce hunger and poverty, improve education, equal opportunities and empower women, improve the health of children and their mothers, combat diseases, ensure sustainable development and promote economic development (lafratta, 2004). 2002 was the year of the “world summit on sustainable development”, held in johannesburg. the document "plan of implementation of world summit on sustainable development" was drafted through which the importance of the millennium goals defined in the “millennium declaration” was reaffirmed; the commitment to promoting the principles for sustainability elaborated during the “earth summit” in rio was renewed and the implementation of “agenda 21” was continued (un, 2002). 2010 was the year of the “europe 2020” strategy: an action plan to ensure sustainable, smart and inclusive growth of the european economy for the decade 2010-2020 (eu, 2010). in 2012 the “united nations conference on sustainable development” (uncsd) took place, european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5763 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 32 also known as “rio+20”, because it took place twenty years after the “rio de janeiro earth summit”. from the conference emerged the document “the future we want” which addressed issues of fundamental importance for the future of the earth. the meeting was an opportunity for the governments of the countries of the world to take stock of the results obtained so far during the path undertaken a few years earlier and to establish new common goals to be achieved (un, 2012). on the occasion of the summit on sustainable development that took place, from 25 to 27 september 2015, in new york, the 2030 agenda was presented: an ambitious and innovative strategic framework of the united nations for the world, signed by the governments of the 193-member countries (un, 2015a). in fact, it represents a real program of action aimed at the planet, at people and for prosperity. the 2030 agenda is the result of a long and complex process, which started with the world conference on sustainable development “rio+20”; on that occasion, the un member governments took on the task of enriching the interventions in favor of sustainable development. among these, that of defining new development goals to take the place of the previous ones: the “millennium development goals”. thus, 17 new goals were born: “sdgs sustainable development goals” to be framed in the post-2015 agenda. the new goals start from the results achieved by the mdgs and complete what the mdgs failed to achieve, with 169 targets and more than 240 indicators. they are universal, i.e. they are addressed to both developed and developing countries; they are interconnected and at the same time they are indivisible and common: in this long journey all must advance in the same direction, without exclusions and distinctions with the signing of the 2030 agenda and the launch in 2016 of the sustainable development goals, the un countries have made themselves responsible for the future of the world for the next fifteen years. un secretary-general ban ki-moon says: "the new agenda is a promise by leaders to all people everywhere. it is an agenda for people, to end poverty in all its forms an agenda for the planet, our common home". all countries must therefore commit themselves to ensuring that these goals can be achieved at all levels of society. 3. methodology the case study focuses on the work carried out by the innovative startup toolery which aims to digitise the entire site procurement process for construction companies by offering the possibility to put leftover site materials back on the market in a circular economy perspective. the construction industry has been particularly affected by the crisis of the last few years and for this reason it needs more and more innovation. toolery's contribution aims precisely at underlining not only the infinite potential for building companies capable of bringing innovation to the market, but also a good response of the latter to an increasingly flexible and digitized vision of the building sector. toolery is a platform that allows companies to buy building materials online and have them delivered directly to the construction site, avoiding unnecessary waiting at building material retailers. toolery not only simplifies internal processes, but also provides an opportunity for construction retailers to bring their products online and tap into new customers and opportunities. in addition, the platform provides an opportunity for construction companies to re-circulate supply chain waste. according to ekanayake and ofori (2004), construction waste is defined as a material, other than the material of the earth, that is transported to another place on the project site or used on the project site and does not conform to the specifications of the project because it is damaged, excess and unused/unusable or a production of the construction process that is not according to plan. in construction, waste can be a delay of time, lack of security, reworking, excessive costs, unnecessary travel or transfer, long shipping distances, imprecision in the selection of operation methods or bad management tools and capacity-building measures. the aim is to revolutionise the construction industry by innovating purchasing processes through ecommerce and delivery. in this sense, this one is a start-up that can say they got a major boost from the pandemic. in the undeniable tragedy of the current situation, companies and citizens have found themselves necessarily having to exploit the means and potential of digital technology, which has propelled the country forward by five years in just under a year. for toolery, operating in the construction sector, the coronavirus has been a moment of reflection, strongly increasing building retailers' awareness of the importance of multi-channel sales and therefore the importance of digitalisation. with this in mind, the start-up strongly believes that the idea behind the project has taken on even greater value, which is why it is offering its customers the opportunity to access the service at a heavily discounted price to accelerate digitisation and increase the competitiveness of the sector. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5763 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 33 3.1 context there are 11,241 building material dealers in italy, specifically 4,548 wholesale building material dealers and 6,693 building material dealers. 45% of construction warehouses are located in the south of italy, although almost 60% of the sector's revenues are generated by companies in northern italy. the total turnover of the sector is around 18 billion. construction companies lose between 50 and 80 minutes in a row at the retailer's and, in the event of an unforeseen shortage of material on the construction site, they have to wait until the next day to replenish the necessary material, generating a further loss of time. in europe, there is as yet no specialised "last mile" service for building materials. large distribution centres such as leroy merlin, obi or bricoman only deliver within 5 to 7 working days. companies support the toolery service mainly in two ways: by going directly to the supplier in the morning, before starting the working day; or the day before, in the evening, by buying everything needed for the next day. with the toolery service, the time savings for companies are considerable, considering that an average company on arrival at the dealer has to queue to create or collect the order sheet, queue in the warehouse and queue again in the sales office to collect the transport document. 4. results a corporation's ultimate success can and should be measured not just by the traditional financial bottom line, but also by its social and ethical and environmental performance, according to a triple bottom line approach (norman &macdonald, 2004). many organizations have the desire to be more sustainable, but according to the organizations themselves, they lack the structures needed to proceed (vandenbrande 2019). a platform such as toolery, which digitizes the entire delivery process in the construction industry through the provision of a digital service, produces several positive impacts on the ground for the environment, people, and the economy. in this paragraph we highlight, therefore, some initiatives and interventions implemented by the start-up that, if shared and maintained in the long term, can represent a push for change in the italian construction sector in favor of sustainable development. in order to illustrate the effectiveness of the role of digital innovation in support of the aforementioned smart building platform in achieving the sustainable development goals, we have resorted to a multidimensional impact assessment (environmental, economic and social), both in the short and medium-long term, of the direct and indirect effects generated on the goals of the 2030 agenda, the action plan through which the un member countries have made themselves responsible for the future of the world for the next fifteen years after its signing (un 2015a). much has been accomplished since its adoption, but it is also well known that more action is needed to make the world's actors truly sustainable (laszlo et al., 2005). table 1 shows, therefore, the characteristics and areas of intervention adopted by the start-up in line with the sustainable development goals of the 2030 agenda. considering the characteristic of digital platform, using iot technologies allows to generate several benefits in terms of efficiency of resources, saving time and money and increasing the loyalty of customers and suppliers who want to protect the planet. table 1. “toolery sdgs mapping” affordable e-commerce digital document dispenser delivery efficiency algorithm source: author’s elaboration • affordable e-commerce: the potential contribution of toolery.eu in this direction is mainly expressed in the ability to increase the productivity of workers by enhancing and supporting the local economy, with clear benefits on economic growth and decent work for all. digitization, in this sense, can help smaller realities, which very often are at a disadvantage because of the large-scale retail trade, to get in touch with customers. another feature of the e-commerce platform with regard to the general positive social impacts concerns precisely networking and activating synergies by european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5763 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 34 implementing policies and mobilizing resources to support accelerated investments in actions to combat poverty. another feature that resides in its digital nature is represented by the potential capacity to achieve several sustainable development goals. in the specific case of toolery, which refers to the construction sector, the sdgs achieved on the basis of what has been analyzed are: 1 “end poverty in all its forms everywhere”, 8 “promote inclusive and sustainable economic growth, employment and decent work for all”, 9 “build resilient infrastructure, promote sustainable industrialization and foster innovation”, 10 “reduce inequality within and among countries”, 11 “make cities inclusive, safe, resilient and sustainable”, 16 “promote just, peaceful and inclusive societies” and 17 “revitalize the global partnership for sustainable development”. • digital document dispenser: one of the most obvious benefits of digital transformation is the fact that it’s scaling back on the use of paper such as books, files, magazines, contracts in lieu of digital communication and digital file management. cloud storage helps eliminate paper waste and the overhead costs of traditional storage and secure shredding. it also makes accessing documents from anywhere even easier (newman, 2017). in addition, the following feature enables employees, customers and suppliers to access documents from anywhere, decreasing waste and costs related to energy consumption, commuting emissions, and so on. all these elements allow, therefore, to meet the objectives: 7 “ensure access to affordable, reliable, sustainable and modern energy”, 9 “build resilient infrastructure, promote sustainable industrialization and foster innovation”, 12 “ensure sustainable consumption and production patterns”, 13 “take urgent action to combat climate change and its impacts" and 15 "sustainably manage forests, combat desertification, halt and reverse land degradation, halt biodiversity loss”. • delivery efficiency algorithm: although firms have recognized the importance of supply chain innovation, they still find it difficult to innovate in isolation. indeed, as sumo, valk, weele, and bode (2016) concluded, collaboration among partners is necessary to incorporate innovation into firms, and this involves integrating and exchanging information with others (cao and zhang, 2011). supply chain innovation refers to an interconnected set of processes which deal with uncertainties and disruptions in the firm's internal and external environment in order to provide novel and innovative solutions to end users (lee et al., 2011). in the long run, organizations achieve a sustainable competitive advantage by developing key competencies and, in this way, provide better services to their target customers than their competitors. srivastava, franklin, and martinette (2013) explained key competencies as a set of unique competencies developed in organizations’ key areas, including factors like innovation flexibility, customer service, quality and responsiveness which help organizations to outdo their competitors. thus, in this scenario, competitive advantage is a state where organizations possess better resources and implementation abilities in order to cut costs, get better business performance and create added value for customers in long-term competition with rival firms. the use of digital not only helps manage the supply chain but also allows for more efficient planning of shipping and transportation routes thanks to “driver correspondence” with direct benefits on decongesting mobility and reducing pollution. therefore, the sdgs achieved are: 9 “build resilient infrastructure, promote sustainable industrialization and foster innovation”, 12 “ensure sustainable consumption and production patterns", 11 “make cities inclusive, safe, resilient and sustainable”, 13 “take urgent action to combat climate change and its impacts” and 15 “sustainably manage forests, combat desertification, halt and reverse land degradation, halt biodiversity loss”. 5. discussion the potential contribution of digital transformation to the achievement of the sustainable development goals (sdgs) is increasingly evident and highlighted by scholars and practitioners (bonomi savignon, 2020). according to enrico giovannini (2020), the digital revolution is a necessary condition for the transformation of consumption and production models (epifani, 2020). this revolution allows, in fact, the transformation of entire sectors of society, orienting business towards more efficient, productive and sustainable models. but what are the possible implications of digitalization for sustainable development? undoubtedly, the digital component will represent a fundamental vector for the achievement of the ambitious sustainable development goals (sdgs) of the 2030 agenda; in fact, digital solutions can be considered the main enablers to support a green and long-term transition on a global scale. in order to bring the world on a path of sustainable development, the digital revolution assumes, therefore, a fundamental role. the objective of this work was to analyze the implications of digitization for sustainable development and for the 2030 agenda, through the description of the case study of toolery, an italian e european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5763 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 35 commerce platform operating in the construction sector, with reference to the achievement of the un sustainable development goals. in this direction, to innovate means to provide a digital service to create a positive impact for the environment, people and economy: from an environmental point of view, to improve, through the digitalization of procurement and distribution processes, the entire supply process in the construction industry, minimizing waste and co2 emissions; social, generating decent work and reducing the risk of loss related to territorial realities; economic, providing digital services for small retailers in the area that support the local economy against the large-scale retail trade. in this direction the use of online, can represent, therefore, not only a valuable ally to increase their productivity but allows you to create a culture oriented to sustainability and responsibility that surrounds the various business. the discussion, through the analysis of the case study, wanted to highlight why governing the digital transformation represents a challenge to be taken to accelerate the processes of change in a sustainable perspective. digitalization could accelerate sustainable transitions, particularly ecological and social shifts in the industrial domain (beier et al., 2017) as support human progress and reframe the business case for both investors and consumers (holst et al., 2017) and drive resource efficiency. this means for building a successful business, digital transformation and sustainability have to complement one another. for this reason, the digital revolution should not be viewed as being outside or separate from sustainable development and their convergence must be ensured to achieve solutions for the sdgs. it seems therefore right to make a consideration: the technology movement we credit with improving customer experience and changing the face of the modern business landscape (newman, 2017) can also make a large contribution in helping organizations, cities and nations better meet their sustainability goals. the case study of the toolery platform teaches us, therefore, that thanks to the use of technology, great results have been obtained, such as in terms of reducing pollution and waste; for this reason, sustainability must become an integral part of the companies’ mission. only through this attitude they can continue to survive in the long term, generating a benefit for their businesses and the planet. 6. conclusion for italy, the path towards the un 2030 agenda, which already appeared to be uphill before the crisis, has become even more difficult. for this reason, it is necessary to embark as soon as possible on the path towards a "just" ecological transition, capable of generating new employment and economic and social development, using eu and national resources in a coherent manner to relaunch the country with a view to economic, social and environmental sustainability (asvis, 2020). the advancement of the digital transition in this process of growth and improvement can help to meet this need. it seems fundamental, therefore, to perceive the use of digital as a valid support to the achievement of the sdgs. sustainable development and digital transformation represent, in fact, the strategic priorities also of the new national recovery and resilience plan (nrrp) aimed at providing italy with an answer to the main challenges it will have to face in the coming years, among which promoting, in line with the strategic objectives shared with europe, the green and digital transition (italian government, 2021). specifically, the strategy, aimed at giving concrete implementation to the nextgenerationeu program the tool designed to stimulate post-pandemic recovery for a greener, digital and resilient europe (european commission, 2020) through the resources allocated also intends to accelerate the pursuit of the 17 sdgs in order to proceed to an impact assessment related to the implementation of the missions, at national and territorial level. according, in fact, to current estimates, the nrrp will have a positive impact on the main macroeconomic variables and indicators of inclusion, equity and sustainable development through increased investment that will activate directly and indirectly and technological innovations that will introduce and stimulate. italy, especially thanks to the choices made by the european union, is becoming aware of the need for a change in the direction of sustainable development (asvis, 2020). for italian companies, therefore, taking advantage of incentives will represent a strategic opportunity to innovate in a "green" perspective. figure 1 shows the s.w.o.c. analysis carried out for the case study in question, which illustrates the strengths and weaknesses of a highly digital reality such as toolery, considering the italian context, the opportunities linked to the pnrr and the main challenges to be taken up with a view to long-term improvement. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5763 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 36 figure 1. “s.w.o.c analysis” source: author’s elaboration nowadays, the role of start-ups in italy is increasingly relevant on an economic level. in a world where it's difficult to keep old businesses afloat, the thought of starting new ones is distressing, but also an indication of great courage and inventiveness that is fundamental to the life of the country. for this reason, the pnrr can be an opportunity to implement more sustainable business models. how? through favorable funding, in line with the three strategic lines proposed by the plan: digitization and innovation, fundamental to make italy a protagonist in the global technological competition and strictly connected to the second pillar of the plan, that is the ecological transition. digitization is, in fact, essential to improve the management of energy consumption and resources, in agriculture as in sustainable mobility, feeding new production and research chains and generating employment. finally, ensuring social inclusion by reducing inequality and poverty, infrastructure and employment gaps and territorial gaps in accessibility to services and achieving gender equality, with action on the multiple dimensions of discrimination against women. sustainable development will be key to ensuring the structural reduction of asymmetries and inequalities, between geographic areas and between people (italian government, 2021). policymakers, researchers, companies, and all civil society actors will, therefore, need to intensify their efforts to understand and explain the multiple effects of digital change in order to guide the digitization process towards sustainable (twi2050, 2019) and forward-looking transformations. building enterprises extensive dealer network (close to construction companies); construction hopper (choice of pickup time/place); completely free of charge. construction resellers e-commerce (businesses order products directly) brings new businesses to residential customers; cloud-based web platform. s w o respond to the crisis in an innovative way; implement more sustainable business models; innovate sectors, such as construction, to transform the crisis into an opportunity for rebirth. related to pnrr digital growth of the country system; support innovation and competitiveness of the production system; supporting the digital and green transition and the socio-economic development of italy. digital business still not potentially exploited. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5763 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 37 references atos, (2018). journey 2018 your business technologists. powering progress the 3rd digital revolution. https://atos.net/wpcontent/uploads/2016/06/atos-ascentjourney-2018-whitepaper.pdf. baker m., (2014), digital transformation. digital edition, buckingham monographs. beier, g., niehoff, s., ziems, t., xue, b., 2017. sustainability aspects of a digitalized industryda comparative study from china and germany. int. j. precis. eng. manuf.-green technol. 2017 (4), 227e234. https://doi.org/10.1007/s40684-01700288. bonomi savignon a., (2020), tendenze in atto nella trasformazione digitale 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(2013). building a sustainable competitive advantage. journal of technology management &amp; innovation, 8(2), 47–60. https://doi.org/10.4067/s0718-27242013000200004. stolterman e., &fors a. c., (2004) information technology and the good life, in information systems research: relevant theory and informed practice, p. 689, isbn 1-4020-8094-8. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5763 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 39 sumo r., valk, w.v.d, bode c., (2016). fostering incremental and radical innovation through performance-based contracting in buyer-supplier relationships. international journal of operations & production management. 36. 1482-1503. 10.1108/ijopm-05-2015-0305. twi2050 the world in 2050 (2019). the digital revolution and sustainable development: opportunities and challenges. report 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agenda, the journal of strategic information systems, 28 (2), pp. 118-144. walker, j., pekmezovic, a., walker, g., (2019). sustainable development goals: harnessing business to achieve the sdgs through finance, technology and law reform. wiley, isbn 978-1-119-54181-3. september 2019. microsoft word 3 audrone edited.docx http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 48 wises’ social impact measurement in the baltic states audrone urmanaviciene1 1 school of governance, law and society, tallinn university e-mail: aurmana@tlue.ee received: 13/09/2020 revised: 09/10/2020 accepted for publication: 12/10/2020 published: 26/10/2020 abstract wises devote most of their time and resources to working with the target group not only organizing their employment activities and developing skills, but also adapting their work environment, improving the psychological climate, organizational culture, etc. thus, the implementation of the social mission of this type of social enterprise requires a particularly large amount of time and other resources. in addition, they have to take care of the financial sustainability of their organization. however, wises as all social enterprises face the pressure from the society and other stakeholders to measure their social impact. nevertheless, it is also important to note that scientists still disagree on the definition of social impact. it is noteworthy that there are no common criteria for measuring social impacts and there are many different methods and tools for impact assessment and measurement (arena et al. al., 2015; hadad and găucă, 2014). thus, it remains unclear what and how wises should measure their social impact. however, it can be argued that social impact measurement it’s very important for the wise itself. the aim of this article to identify what and how wises should measure their social impact in the organization. the methods of the research are an analysis of scientific literature and experts’ interview. the results of the research disclosed the possible measurement framework and indicators. ___________________________________________________________________________ http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 49 keywords: agent-based banking model; circular economy; financial inclusion; sustainability; transformation ___________________________________________________________________________ 1. introduction the initiatives of work integration social enterprises (wises) in europe date back to the 1970s, when civil society actors rushed to find ways to help people excluded from the labor market and unable to enter it (nyssens, 2014). the main purpose of such social enterprise is to help integrate persons experiencing exclusion and belonging to socially vulnerable groups through organized theoretical and practical professional training and/or development of work skills; this is common to all wises (cooney, 2011). training and educational process, through on-the-job training, other training, experimental training, mentoring, are the most important aspects of all types of work integration social enterprises (barraket, 2013). in eu countries, wises mainly work with people with disabilities, the long-term unemployed and the low-skilled, refugees and immigrants, those with extremely low employment opportunities for various reasons (davister, defourny, grégoire, 2004). such groups of persons are also called social enterprise target groups, i. y. groups targeted by integration programs and employment activities of wises. there are many models and forms of wises in the eu. it is one of the oldest forms of social enterprises in the eu. the origins of wises in the baltic states date back to soviet times, as at that time there were various “combines” of the disabled blind and deaf people which employed these target groups. after the restoration of independence of the baltic states, these organizations were privatized and some continued to operate. however, many of these enterprises have the priority of making a profit and, therefore, they are inconsistent with the modern concept of social business, according to which the integration of both social vulnerable groups and economic-financial sustainability should be equally important for a social enterprise. after the baltic states acceded the eu, in 2004, efforts were made to harmonize the baltics policy with the eu policy; this led to the adoption, in the same year, of the law on social enterprises of the republic of lithuania. this law encouraged the employment of persons with various disabilities (not only the deaf and blind) and other vulnerable persons; it thus expanded the potential target group by enlarging the list of vulnerable groups concerned. as a result, many social enterprises of this type http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 50 came into existence after the law was passed in lithuania. in latvia and estonia, no social law has been adopted to support companies that employ vulnerable people, so many wises have operated in the non-governmental sector. in latvia, only in 2018, the law on social enterprises entered into force, a private limited liability company (pllc) may be considered a social enterprise, if it is granted the status of a social enterprise by the law and which carries out economic activities with a positive social impact (e.g. provision of social services, the formation of inclusive civil society, promotion of education, support for science, environmental protection and conservation, protection of animals or contribution to cultural diversity). so far, no law on social enterprises has been adopted in estonia. thus, the practice has developed that de jure and de facto wises have started operating in the baltic states. de jure social enterprises can benefit from various privileges, such as tax advantages and subsidies. de facto social enterprises are usually non-profit organizations in the baltic states, having acquired the legal status of foundations and associations, and they try to apply various business models in their activities. it should be noted that such enterprises are not legally recognized, therefore they cannot enjoy the privileges provided for in the laws on social enterprises. such companies are forced to diversify their income to remain economically stable, i. y. seek additional sources of income, such as esf project funds, etc. it is important to note that the main goal of many de jure wises operating in lithuania is to make a profit, not the integration of persons belonging to the vulnerable groups, therefore these enterprises are not considered the object of this study. wises are not required to measure their impact, this obligation is voluntary, therefore the social value they create in society is not known, there is a lack of data on the impact of these enterprises in the baltic states. the social impact assessment is of particular importance for these companies, according to epstein and yuthas (2014), the implementation of measurement system in the organization is very important in its absence, there is a high risk that financial resources, time, and other resources invested in the activities of the organization are wasted. thus, for the resources invested in social business to be used purposefully – to implement the social mission and to create certain changes in society, it is important to monitor the social impact created by enterprises. also, it is important to mention the case of de jure social enterprises in lithuania, where state support is provided to enterprises (various benefits and subsidies), but no mandatory social impact measurements have been established. thus, in the absence of publicly available data on the impact of these enterprises, there has been a great deal of debate in the society about the loss of their social http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 51 mission and the dominance of commercial objectives. there were also several cases where these enterprises fictitiously covered up the implementation of a social mission to benefit from state support. therefore, it is considered that data from regular and systematic social impact measurements can help to ensure that commercial objectives do not become dominant, thus maintaining the dual mission of a social business enterprise. moreover, in post-soviet countries where social capital is not large enough, dual-mission organizations are still difficult for the public to understand, and various speculations about the activities of these organizations are possible. however, to avoid such situations, measuring the social impact of social business acquires an important role in creating a sustainable emerging social business sector and in building public confidence in the activities of these organizations. to ensure the sustainable development of this sector, the successful social integration of people belonging to vulnerable groups, it is important to determine how wises should measure their social impact. scientists from the baltic states study wises in their works: in lithuania (neverauskienė, moskvina, 2011), latvia (oborenko, rivza, zivitere, 2018), estonia (raudsaar, kaseorg, 2013). however, it should be noted that research on their effects and how to measure them in the baltic states is still lacking. there is a significant knowledge gap in the measurement of wises' social impact in the baltic states. accordingly, finding indicators for measurement will be beneficial for the wises and their stakeholders. the expert interview was selected to interview individuals who are experts in social enterprises, social impact measurement and its implementation, with exceptional specific knowledge and experience, and sufficiently detailed information on the research problem. the rest of the paper is organised as followed. the next paragraph will analysis literature review on wises social impact measurement. the third paragraph will describe methodology adopted by the researcher. additionally, the fourth paragraph will reveal the main results of study and present discussion. finally, the last section will conclude the paper. 2. measuring the social impact of work integration social enterprises wises differ in their objectives, size, target groups with which they work, employment and social inclusion programs, resources available, etc., for example, some wises take care of the temporary employment of target groups facing difficulties in the labor market and public life, so that they can integrate into the open labor market as soon as possible, others consolidate types which offer longhttp://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 52 term jobs to such unemployed people so that they can acquire social and professional skills and become independent, the third type is dominated by enterprises which main purpose is to socialize people through certain employment activities, etc. (neverauskienė and moskvina, 2011). yet, all of them are united by the aim of helping to integrate the people belonging to the target groups into society through organized work activities and/or internships, training, providing them with the missing work and social skills and/or profession. the creation of employment activities or jobs for such people often requires the creation and adaptation of a suitable working environment. there is a need to create an environment in which these people can successfully adapt and learn: the workplace needs to be adapted, the services of a personal assistant are often needed, and these enterprises often have to give time to train other employees. however, their activities are not limited to the development of work skills or vocational training. the problems faced by people in target groups are not just that people do not have a job but often cover a wide range of issues, from a lack of basic social skills to a lack of items such as clothes (krutulienė, pocius, gruževskis, okunevičiūtėneverauskienė, junevičius, 2017). of course, the difficulties of different target groups, for example, single parents, are different from other target groups, such as the homeless. they need constant support and attention to successfully integrate into the labor market. to successfully integrate people into the labor market, it is often necessary to motivate and counsel them, or provide other labor market integration services (e. g. job search). for a person to be fully integrated into the society, other services and constant support for target groups are also needed. such assistance often includes organizing the help of psychologists and social workers, providing other social services (accommodation, reimbursement of transport costs, work with families), the organization of sociocultural and leisure activities. successful integration of individuals into society requires additional resources and time from wises. it should be noted, however, that in recent years, as a result of declining eu support and gaps in national budgets, countries have increasingly reduced subsidies, such as moving from permanent to temporary subsidies or leaving only certain tax incentives to companies. wises are increasingly inclined to look for innovative ways to achieve financial sustainability by earning income from the goods created or services sold on the market and to be independent of the aids granted by states. so usually these organizations combine two different logics commercial and social. organizations that combine several different logics in the scientific literature are called hybrid organizations (battilana, dorado, 2010, iannaci, 2020). many wises are increasingly moving towards hybrid organizations (iannaci, 2020). however, often even when an http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 53 organization receives most of its market revenue, it needs state aid to successfully fulfil its social mission-enterprises need not only to organize employment activities for individuals, but also to provide additional resources for workplace and environmental adaptation, integration into the labor market or provision of other services as only complex assistance changes individuals’ values, attitudes towards life, strengthens motivation to integrate into the labor market and society. during the social impact assessment process, the organization measures, analyzes, monitors and publicizes the changes created by the planned activities of the social enterprise. the purpose of the social impact assessment process is to manage and control the impact created to increase or optimize it. the assessment process consists of the following stages: setting assessment aims, involving stakeholders, planning, measuring, collecting and analyzing data, presenting results and learning from them. the social impact assessment process in a social enterprise is a continuous process of learning and activity improvement, the result of which is setting new assessment aims and the improvement of processes in the organization. wises are often organizations with limited financial and human resources and devote most of their time to working with target groups and achieving financial sustainability. as a result, company managers and staff often lack time to measure their impact – to use quantitative or qualitative methods. there is a lack of a culture of measuring social impact in these organizations. managers often feel that they are helping people, so why some additional measurements are still needed. there is a lack of understanding that social impact measurements help to provide evidence to the public, funders, and other stakeholders. many wises do not implement social impact measurement because they simply do not know what to measure: their direct results, impact on beneficiaries or also wider impact on their communities and society; and how to measure: should they use quantitative or qualitative methods; what indicators should be measured; however, the implementation of measurement in the organization is very important because, measurement can help identify programs that are not effective in integrating vulnerable individuals into society. also, it can help to make better decisions in the organization. it should be noted that selecting the most appropriate measurement methodology and/or measurement indicators requires special knowledge and competencies, which enterprise employees often lack, and financial constraints prevent from hiring private companies to perform such measurements or additional human resources to do this work. the social impact is understood and described very differently by both researchers and practitioners (ebrahim and rangan, 2010). there is no common definition of social impact. according to zeyen, http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 54 beckmann (2018), some argue that impact should include only the target group (individual beneficiary perspective) whereas others argue that it should include their community and wider society (systemic context perspective). due to the sheer diversity of impact understandings, contexts, there are numerous impact measurement tools. all of them are very different in their goals, time perspective, orientation, perspective, micro-, meso-, macro-level (maas and liket, 2011). the lack of a single common methodology and the large number of tools available, according to grieco (2015), complicate the implementation of social impact assessment in an organization, as social entrepreneurs face obstacles in choosing the best approach for their organization from such diversity. many wises tend to use a storytelling method on social networks and websites to describe the success stories of their clients when the stories and impressions of program participants are told. such stories are communicated through discussions with clients, consumers, or through the observations of the professionals in the field. such stories are usually based on subjective opinions. thus, not all such stories are reliable, it is considered that storytelling is not sufficient for a comprehensive understanding of the organization's activities. according to epstein, yuthas (2014), when such a method is used by professionals, such stories can often provide valuable evidence of success or challenge. however, they lack to prove these stories by evidences. wises should seek to provide more systematic evidence of success, storytelling should be only the basis, and additional qualitative or quantitative research methods should be included. quantitative measurements should be performed by analyzing large amounts of data and reporting those data in numerical form. this usually includes direct measurements such as questionnaires. this approach is chosen most often because sponsors and investors require performance to be quantified and presented. quantitative measurements allow to better compare the activities performed by organizations and the achieved results. as a consequence, various impact measurement tools were adapted from business such as the social balanced score card, social cost-benefit analysis, or social return on investment (arena, azzone, and bengo 2015, biancone at al, 2020). the social return on investment (sroi) approach has emerged as a preferred quantitative social impact measurement tool (arena, azzone, and bengo 2015). sroi, as an example of a quantitative tool, has a high potential for comparability but poses challenges to social enterprises during implementation (biancone at al, 2020). quantitative performance indicators are widely criticized for several reasons not all benefits generated by an organization can be quantified or presented in financial terms (grieco et al., 2014). hadad and găucă (2014) point out that it is particularly difficult to financially http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 55 express psychological changes which occur in the lives of people belonging to vulnerable groups, such as increased self-confidence or greater dignity (hadad and găucă, 2014). wise’s activities are focused on creating change for vulnerable groups of individuals, so it is thought that it can be difficult to measure and assess only quantitatively. this is due to the qualitative nature of the social impact itself (mass, liket, 2011). moreover, mostly quantitative measurement methods are expensive, complex, time-consuming, and require special competencies. according to costa and pesci (2016), grieco (2017), quantitative methods for measuring impact are particularly demanding for large-scale internal and external data collection and statistical analysis. therefore, the scientific literature pays more and more attention to qualitative research – the applicability of theory of change and chain of change/logical model (hornsby, 2012; epstein, yuth, 2014; spiess-knalf and scheck, 2017; zeyen, beckmann, 2018). this methodology outlines the chain of change of an organization, and causally links the organization's activities with short-term, outcome, and impact results. theory of change helps determine which actions and interventions create the desired change (hornsby, 2012). this defines the problem, the target population, the assumptions on which the decision is based, and the intended results. it is first decided what changes are to be created, what activities are being carried out to achieve these aims, and finally, it is checked whether the activities will create the desired changes. the methodology of theory of change, compared to other standardized methodologies such as sroi or cost-benefit analysis, which require the application of complex statistical analysis, is based on the application of qualitative research (spiess-knafl, scheck, 2017; zeyen, beckmann, 2018), as well as provides a visual explanation of the process of change. this methodology allows you to provide detailed descriptions of how and why the desired change will be achieved. theory of change is implemented using a logical model/ impact value chain (ebrahim, 2019) (see table 1). measurement indicators are set using a logic model. this is often a major challenge for an organization. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 56 table 1. impact value chain inputs activities outputs outcomes impact what is put into the activity, i. y. resources, etc. activities performed by the organization (provision of services, production of goods) results that come directly from the activities carried out (direct achievements of the activity) changes (results of the activity) that occur for the beneficiaries during medium and long term activity of an organization changes (results of the activity) that occur for the community or society during medium and long term activity of an organization source: compiled by the authors based on ebrahim and rangan, 2010; epstein, yuthas, 2014; crucke, decramer, 2016; spiess-knafl and scheck, 2017 thus, the scientific discussion devotes a lot of space to the discussion on the definition of social impacts, measurement methodologies and tools, but there is little analysis of how much wises are able to perform the assessment and at what level (ebrahim (2014), crucke, decramer (2016). epstein and yuthas (2014) note that many enterprises measure outputs because it makes it easier for organizations to collect this data, i.e., how many trainings are organized, how many people are employed. ebrahim (2014) argues that in some cases a social enterprise should focus on measuring direct achievements rather than long-term outcomes because the enterprise may focus too much on the measurement process and intended outcomes and thus deviate from its direct social activities. other researchers argue that a social enterprise should measure impact, the ultimate change in impact value creation chain which occurs in the society or community in the long or medium-term perspective of an organization. for example, reduced unemployment, poverty, crime, fundamental changes in social norms and attitudes in the society. however, it is important to note that in many cases, such changes can only occur after a long period, making them very difficult to detect and assess. also, there must be a direct and clear causal link among all these elements of impact value chain (ebrahim and rangan, 2014). ebrahim points out that the causal link between outputs and outcomes is not always direct and clear, and that outcomes and impacts sometimes occur not as a result of the activities of a social enterprise, but because of other environmental factors, such as the activities of other organizations operating in the same field. in their research, ebrahim and rangan (2014) noted that social impact, created at the societal level (macro, meso-level) e.g. such as reduced unemployment and crime, is rarely achieved by one organization, usually, it is the collective impact http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 57 of several organizations. according to grieco (2015), to understand the social impact created by social enterprises, it is necessary to at least move from the measurement of the perspective of output in the logical chain to the measurement of the perspective of outcome (hehenberger et al., 2013). outcomes are already broader changes that occur in the short and medium-term of an enterprise's activities, which is the meaning of measurement to analyze how outputs affect individuals and broader environment groups of individuals and communities. thus, there are many discussions how and what wises should measure, however it is not clear what wises can measure according to their resources and capacity. the ambiguity of what should be measured often lead to a situation when wises are not implementing social impact measurement in their organizations. thus, it is therefore considered necessary to identify possible measurement framework to remove ambiguities as to what should be measured. the research, based on a logical chain, will analyze what wise should measure to implement an impact assessment in an organization. 3. methodology the selection of the research participants. in the expert interview to select competent respondents who can offer possible measurement framework, the informants of the research were selected using a targeted selection method (knowledge, work experience, relationship with the studied phenomenon is the most important). the population of the informants of the research consists of lithuanian, latvian and estonian experts, selected in similar proportions from each of the baltic countries, to objectively reveal how to measure the social impact of wises. according to nonprobabilistic target selection, three groups of experts were selected to participate, who differ in their experience, level of academic knowledge, nature of work and relationship with the research object (babbie, 2005). groups selected for the research: • the first group: representatives of the academic world, who have a degree of at least a doctorate, work in baltic universities, conduct research on social enterprise development, social innovation and social entrepreneurship, study aspects of social enterprise activities in the baltic states for at least three years. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 58 • the second group: representatives of the authorities in the baltic states, forming a suitable environment for social entrepreneurship and/or wises and implementing employment policies for the target groups in the baltic states, have at least three years of work experience in these fields. • the third group: representatives of umbrella (social business, organizations connecting social enterprises) and business innovation development, incubation processes (incubator) organizations working in the field of social business and social entrepreneurship development, with at least two years of work experience. during the expert interviews, 15 experts (5 from each of the baltic states) meeting the selection criteria listed here were interviewed. organization of the qualitative research. expert interviews were conducted using the methods of direct and distance interviews. the form of distance interviews was applied to latvian and estonian experts because they requested this method. interviews were conducted in the form of semi-structured interviews; i. y. possible questions were anticipated through which interviews with experts were conducted. the empirical research was conducted in 2018 mayseptember. the methodology of qualitative research recommends that the experts choose whether to remain anonymous or to publish their names (kaiser, 2009). depending on the request of many experts, the names of the experts are not provided, and when quoting the expert's statement, his/her number is indicated. the list of experts and the description of the characteristics justifying their competence are presented in table 2. it should be noted that when describing experts, to ensure their anonymity, experts are described using the masculine gender, as accepted by reference to positions, degrees or other depersonalized data. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 59 table 2. the list of respondents to the expert research lithuania expert‘s code characteristics substantiating the competence of an expert ex_lt_1 head of the lithuanian work integration state institution. management experience for this institution 3 years, professional experience in the field of work integration 12 years. ex_lt_2 professor of one of the lithuanian state universities. more than 10 years of experience in researching and teaching community development, ngo, social innovation, third sector disciplines. the expert has been researching the field of social entrepreneurship for 5 years. ex_lt_3 head of the lithuanian branch of the international organization working with the implementation of the activities of the social business incubator and head of the public institution implementing the social business promotion programs. work experience working in the field of social business 7 years. ex_lt_4 specialist of the ministry supervising the national economy, working with the formation of social enterprises and social business policy, work experience in this field 5 years. this expert also conducts research and is preparing a dissertation on social business in the field of law. ex_lt_5 project manager of an institution working with the development of social business and its enlargement in lithuania. professional experience in the field of social business 3 years. latvia expert characteristics substantiating the competence of an expert ex_lv_1 specialist of the ministry working with the european union funded social entrepreneurship project in latvia. work experience in this project 3 years. ex_lv_2 doctor of social sciences. lecturer in entrepreneurship at one of latvia's universities. manager of a creative business incubator. more than 5 years of experience in researching and teaching social entrepreneurship, social innovations, business incubation process disciplines. ex_lv_3 doctor of social sciences. professor at one of latvia's state universities. more than 4 years of experience in researching and teaching social entrepreneurship. defended a dissertation on social entrepreneurship in 2014. published a book on social entrepreneurship. ex_lv_4 doctor of social sciences, lecturer, innovation expert. project manager of the latvian centre for social innovation. developer and curator of many projects http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 60 in the field of social entrepreneurship. one of the most important projects being implemented is the platform of social business support institutions for the baltic states. work experience in the field of social innovation more than 10 years. ex_lv_5 head of umbrella social enterprise organization. work experience working with communication projects, non-governmental organizations, social enterprise projects not less than two years. estonia expert characteristics substantiating the competence of an expert ex_est_1 head of the employment policy department at the ministry. management experience for the department 3 years. experience in the sphere of employment 10 years. ex_est_2 board member and executive position in the estonian association of social enterprises. work experience in the association 6 years. since 2006 works with the concepts of social impact analysis. since 2015 until now is a member of the european commission's expert group on social entrepreneurship geces. ex_est_3 doctor of social sciences, professor. lecturer in social entrepreneurship at one of estonia's state universities. defended a dissertation on social entrepreneurship. more than 5 years of experience in teaching and researching social entrepreneurship. ex_est_4 doctor of agricultural sciences, founder of training and social entrepreneurship development companies in scotland and estonia, as well as training in social business development across the eu, works as a senior researcher at an estonian university. ex_est_5 doctor of social sciences, developer and head of the social entrepreneurship program at one of the estonian universities. 12 years of experience working in an ngo, social business sector. more than 5 years of experience in teaching and researching social enterprises in europe, asia. source: compiled by the author it is considered that the characteristics of the experts sufficiently substantiate their competence in researching how the social impact assessment of social enterprises should be implemented. formulation of research questions for experts. the expert interview consists of a partially structured questionnaire. how important is social impact assessment for wise and society? how do you think wise should measure its impact? what indicators should be used? http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 61 analysis and processing of the results of the qualitative research. qualitative content analysis was applied to the analysis of the data obtained during the expert interviews, as well as to the abovementioned management interviews (berg, 2007; žydžiūnaitė, sabaliauskas, 2017). during the qualitative content analysis, the features of the text were systematically examined, and then reliable conclusions were formulated. the data were processed using the computer program "atlas.ti", performing primary and axial coding (charmaz, 2006). primary coding is performed using action categories. in the second stage, axial coding was performed by constructing the relationships between the categories and their aspects, which are identified as important for the analysis of the investigated phenomenon, i. y. the created categories are joined into main categories (charmaz, 2006). 4. empirical research findings and discussion the scientific literature (grieco, 2015; epstein, yuth, 2014; zeyen, beckmann, 2018; iannaci, 2020) highlights the following main reasons why social enterprises need to implement social impact assessment in their organizations: building collaborative relationships; accountability to stakeholders; better management decision making, creation of a learning environment in the organization. during the research in the interviews, the baltic experts did not mention the creation of a learning environment in the organization and cooperation as important reasons for conducting a social impact assessment in the organization. experts emphasized that social impact assessment is an important means of communication for the organization with stakeholders: it is a useful tool for building the good reputation of a social enterprise in the society and for communicating with various stakeholders: the media, local authorities, investors, customers, etc. (ex_lv_3). respondents also indicated that social impact assessment can be used as a marketing tool to increase sales of organizations’ goods or services: i would rather order, or buy products from the enterprise which carries out the impact assessment, because i know that when i buy a product or services from that enterprise, i have an impact on society as a citizen (ex_lt_2). the other reason is to check whether the planned aims of the company have been achieved: social impact assessment is a verification whether i have achieved my aim, whether my mission has been achieved, whether my aims and visions are working (ex_lt_2). also, according to the respondents, social impact assessment is important for the organization for the financial reasons: it helps not only to account to the financiers for the provided funds, but also attract new investors, financiers: being transparent and credible can attract more investors (ex_lt_5); if you actually work very well and create a social impact, you can go to the http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 62 funders with that data and be able to present those results. this can help attract funding (ex_lt_3). respondents noted that impact assessment is important not only for social enterprises but also for their stakeholders. when providing funds to social enterprises, funders are often interested in how and to whom their funds are used, what impact is created: the financier wants to know if the money is disposed properly (ex_lt_3). lithuanian experts pointed out that often financiers of wises are not private individuals, but public authorities, who distribute national budget or eu funds, which mainly belong to the society, therefore, this stakeholder must be concerned with the use of public funds: society invests in social enterprises. that is, if i invest in something, i want to see what comes from my investment, whether there is or not the return, whether those enterprises actually do something good, this is what i truly care about as an active citizen (ex_lt_2); we are talking about subsidies, public money benefits or subsidies are granted for the enterprises. this is the money we pay and we want to see the impact that money creates (ex_lt_3). thus, in the opinion of the respondents, if an enterprise receives certain subsidies and funds, it must carry out social impact assessment and thus account for the financing provided to it, tax benefits, etc. the respondents also cite the possibility of stopping the mission drift as an important reason why social impact assessment is important for stakeholders. mission drift is presented in the scientific literature (battlilana and dorado, 2010; chambers, 2014; cornforth, 2014) as a complex problem when commercial rather than social aims begin to dominate in an enterprise. this phenomenon can have negative consequences, for example, enterprises may fictitiously cover up the implementation of a social mission, the allocated funds may not be used for their intended purpose etc. lithuanian experts provided an example of the mission drift of lithuanian de jure wises, when enterprises receiving certain state subsidies and benefits “lost” their social mission to help these persons and qualitatively integrate them into the society, and commercial aims began to dominate. in lithuania, when the legal regulations were created and the social impact assessment was not established, those social enterprises that became very different started to establish. some of them continued to focus on social impact, while others simply used that model for profit and the model became convenient, attractive, and useful to them, perhaps even when bypassing certain things. all that good idea became distorted (ex_lt_4). thus, according to experts, social impact assessment can help ensure that commercial aims do not begin to dominate, thus maintaining the dual mission of a social enterprise. the research also analyzed wise as a subject which carries out an assessment. opinions of the respondents were divided on social enterprise as a subject of impact assessment. some argued that a http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 63 social enterprise in the process of social impact assessment should be responsible for implementing the assessment process: this should be done by a social enterprise, as the results can help evaluate its performance, it can also help attract investment, show the contribution to the society (ex_lv_3); social entrepreneurs have a better understanding of the situation in the organization and can make an objective and comprehensive assessment (ex_lv_3). other respondents indicated that an enterprise cannot be solely responsible for the assessment for two main reasons: lack of competence and objectivity. respondents pointed out that managers and staff of the enterprises lack competencies and experience in this area: not all of them are strong enough to leave them carry out an impact assessment, their teams, their managers lack competencies (ex_lt_1); my experience is that social entrepreneurs do not indeed have experience in this area (ex_est_5). according to other experts, if an organization is responsible for carrying out the assessment alone, such assessment will not be objective: if an organization assesses its impact, it can lead to some controversy. it would be best to have an objective, third-party assessor (ex_est_5); in general, assessment and surveys of the whole society, i think, should not be done by social businesses, but by somebody else, it would be more objective if someone from the outside assesses (ex_lt_3); it would be best to have an independent and unrelated assessor (ex_est_1). however, it should be taken into account that the scientific literature (grieco, 2015; zeyen, beckmann, 2018) places special emphasis on the benefits of measuring social impact for the organization itself, as better management decisions are made, activities are improved, and the environment of a learning organization is created. it is therefore considered that a social enterprise must be the subject of the social impact assessment. also, the objectivity of the measurement of social impacts can be ensured in other ways, such as by involving stakeholders in the measurement (costa, pesci, 2016). thus, since the measurement of social impact can generate positive benefits for the organization itself, it should remain the subject performing social impact assessment. research participants were also asked what a wise should measure based on a logical chain outputs, outcomes or impact. experts pointed out that to measures changes in the society and community can be quite difficult due to the problem of data collection and availability, so this level of measurement should be carried out by other subjects: at the macro level, the enterprise itself cannot perform the measurement because it requires specific, large amounts of data (ex_lt_2); the macrolevel assessment requires the aggregation of data at the national level. the enterprise does not usually have this data, it cannot ask its competitor, "how many people did you employ" (ex_lt_2). http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 64 it should be noted that the scientific literature (barraket and yousefpour, 2013; noya, 2015; amati, bengo et al., 2017; hoos, 2018; grieco, michellini, 2018) identifies both financial and human resources as the main obstacle to implement social impact measurement in an organization, also, in the baltic states, most social enterprises are small and medium-sized and they lack resources (jurgelane, 2017). therefore, it can be assumed that only a few social enterprises in the baltic states would be able to perform measurements of the changes in the society and community – in the impact logic chain. measurement of this level would require a great deal of effort and resources on the part of the enterprises, they would focus on the implementation of the measurement and thus may not take time to complete the social and commercial mission, there would be a risk of mission drift. focusing on the measurement process and the results sought can distract the organization from the social activities which it directly carries out. it should be noted that many experts agreed that, to implement the social impact measurement, social enterprises in the baltic states now need to focus on measuring the changes created for the beneficiaries: the medium-sized company should focus strictly on the micro-level when carrying out measurements (ex_est_2); companies should at least focus on the micro-level, which means monitoring the impact on specific persons at the individual level (ex_lv_4); the organization itself can only measure at the micro level so far (ex_lv_5). according to the respondents, this would be a big step for the baltic states at the moment, as enterprises have a great lack of knowledge on how to perform the measurement, they do not have enough information about measurement tools, they generally do not know how to measure. thus, based on the insights of the experts, it can be concluded that wises in the baltic states are currently not able to perform measurements of the changes created for communities and society. according to the experts, wises in the baltic states should focus on how to measure the changes for the beneficiaries at the organizational (micro) level, and this corresponds to the outcome specified in the logical chain. this confirms the insights provided by ebrahim and rangan (2014) and crucke decramer (2016) that it may be pointless for an enterprise to focus on measuring the change in the community and society (impact in a logical chain) as it requires significant investment and time from the social enterprises. ebrahim and rangan (2014) also point out that a social enterprise should measure outcome only when it is possible to establish a clear causal link between output and outcome in the logical chain. thus, according to the experts, it can be stated that a wise has every opportunity to assess the causal link when assessing the changes created for the beneficiaries whom it directly http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 65 employs, therefore it is considered that wises should measure at the organizational level. however, it is considered that this does not mean that enterprises should not be interested in trends of measuring at the meso and macro levels, they should also improve their knowledge and competencies when assessing at these levels. during the research, the experts singled out that the measurement of social changes created in the community and society should be performed by public authorities, universities, and research centers. regarding the involvement of public authorities in the social impact measurement, the respondents from all three baltic states emphasized that the state must not only assist enterprises in carrying out the measurement, but also carry out the measurement at the meso and macro level, as public authorities have sufficient resources for that: it is very expensive for organizations to measure at this level themselves, and public authorities should collect data and carry out the measurement (ex_lv_5); this should be done at the level of the ministry, and at the national level considering what added value is created (ex_lt_2); the social impact created at the meso and macro levels should be assessed by public sector institutions (ex_est_2). in their research, ebrahim and rangan (2014) concluded that funders or public authorities should be responsible for the measurement of impact specified in the logical chain, as they have sufficient resources to carry out the process of measurement. it is also important to mention that public authorities usually have not only sufficient resources but also access to national data, which is often needed when conducting social impact studies at the macro and meso levels. therefore, based on these arguments, it can be concluded that public authorities should be responsible in the baltic states for the implementation of social impact measurement at the meso and macro levels. regarding the involvement of higher education institutions and research centers in the impact assessment, the experts stated that universities should also be the subjects which carry out social impact measurement: it is a scientific subject, universities, research centers could research why those changes took place (ex_lt_3); the assessment could be carried out by research institutes, looking at the national level what added value is created (ex_lt_2). universities and research centers should help public authorities monitor long-term impact in the society and communities, as this research often requires special competencies in data collection, analysis, change monitoring, and forecasting. noya (2015) points out that public authorities should fund research and experiments in the field of social impact assessment, so it is believed that macrolevel measurement should be carried out by public authorities in collaboration with higher education institutions and research institutes. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 66 the participants of the research were also asked about the measurement indicators that wise should measure. two main subcategories stood out in the participants' statements about the indicators of social impact measurement: indicators related to changes in the well-being of individuals (beneficiaries) (see figure 1). figure 1. indicators related to the well-being of individuals source: compiled by the author based on the software atlas.ti. in the research, the experts indicated that these common indicators should be used to measure changes of wises for the beneficiaries. improved health is mentioned among the changes in the health of individuals (ex_est_2; ex_est_3), as well as improved quality of life (ex_est_2; ex_est_3; ex_est_1). one of the experts pointed out that the quality of life could be related to the increased use of the services of these individuals, i.e., whether a person can afford more than before (ex_lt_3). the experts (ex_lv_5) associated the quality of life with better opportunities for these people to use science and culture. according to the respondent, perhaps the person has never been to the theatre, has never been shopping alone, has no friends, etc. (ex_lt_3). the experts also highlighted reduced stress (ex_lt_4; ex_est_3), self-realization (ex_est_2; ex_est_5). http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 67 moreover, the experts highlighted the improved social life (ex_lv_5), social networks (ex_est_3), social relations, increased social capital (ex_est_5). they emphasised the material well-being of the individual increased personal income (ex_lv_5; ex_est_5; ex_lv_3). respondents indicated that it is important to assess an individual's sense of happiness: it is important to assess the emotions of these individuals, whether they feel happier, how much unhappy they feel (ex_est_3); a sense of happiness can be an indicator of the assessment (ex_lt_3). but one of the experts (ex_lt_2) pointed out that when measuring increased sense of happiness, it is important to understand whether the person has become happier because of that job, activity, or other reasons. it is also possible to measure whether a person feels safer after a certain time, whether his/her selfesteem, his/her attitude to life changes (ex_lt_1); his/her experience, changed well-being, etc. (ex_lt_2). also, experts believe that behavioral changes must also be assessed; it is important to assess changes in individuals’ behavior (ex_lv_3; ex_est_2), whether the person has become more independent from other people, or whether his/her autonomy has increased (ex_lt_3; ex_est_1). thus, after analyzing the experts' statements, the following main common indicators of measuring individual well-being can be identified: improved health, increased sense of happiness, increased autonomy, increased material well-being/income, increased social capital, improved quality of life (better access to education and cultural services), self-realization, reduced stress. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 68 figure 2. indicators related to employment source: compiled by the author based on the software atlas.ti. during the research, the experts also singled out employment-related indicators (see figure 2), which can be further divided into activity, outcome and impact indicators. the experts say: it is important to assess the number of employees, the number of people involved in the activities (ex_lv_1); the organization should assess quantitative indicators such as the number of jobs created (ex_lv_5); it is important to assess the number of people who have completed the program (ex_lv_1); if a social enterprise provides services and products to disadvantaged people, they can assess how much they have provided (ex_est_4); material products and services, results that can be measured from operations carried out by social enterprises which can be measured directly, such as the number of people reached, the number of items sold, etc. (ex_lv_3). thus, as we can see from the statements, the respondents emphasize the measurement of the output indicators of the activity of the enterprise, i. y. the number of jobs created, the number of people involved in the activities, the number of services provided, etc. however, according to the social impact scientific literature (grieco, 2017; yuthas, esptein, 2014), impact measurement should be understood as a transition in the impact chain from the measurement of an organization's direct output to an outcome, so it is http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 69 considered that these activity indicators specified by the experts should not be considered as impact measurement indicators. it should be noted that wises differ in their aims, therefore, to establish common measurement indicators for them, it is necessary to choose those indicators that can be applied to all types of wises. for example, changes in an individual's employment status can be measured in all enterprises, as employment is a broad concept which includes not only a person's employment but also, for example, his or her enrolment in higher education or starting a personal business: the enterprise should measure created employment-related impact, such as changes in the employment status of the beneficiaries (ex_est_2; ex_est_5; ex_lv_3). some experts emphasized that there should be measured changes in acquired skills and working skills of an individual (ex_est_2), retraining, providing or restoring the necessary skills (ex_lt_4): social impact could be measured by showing that people acquire new knowledge and improve their skills (ex_lv_2); acquired knowledge and skills (ex_lv_3). it is considered that not all social enterprises aim to provide qualifications, but all enterprises focus on the development or re-establishment of new work skills, and it is therefore considered that this could be a common measurement indicator. the experts (ex_est_2; ex_lv_5) also pointed out that it is important to measure not only the acquired working skills, but also social skills and communication skills, because many people belonging to the target groups are usually long time unemployed, have lived separated from the society for a long time and, therefore, lack communication and social skills. the experts (ex_est_3; ex_lv_4) also emphasized the teamwork indicator. another important indicator which could be applied to all wises is career and professional growth of these people: it is important to emphasize not how many of those people are employed, but how long they remain in the company, what their further career development is if they leave the company, whether they are ready to further participate in the processes of integration and career planning. because one of the promises of a social enterprise is the promotion of social integration. it is both, promotion of integration and its means. it would be possible to truly measure the effectiveness of the means, how those people are prepared in the career planning process (ex_lt_1). according to this expert, this could be achieved by assessing the professional growth of a person, how his/her career changed over a while, 3 years, for example. the experts also mentioned another indicator increased work capacity. a person's work capacity should be understood in a broad sense (not only based on formal evidence the conclusions of the http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 70 medical commission) as a person's ability to work systematically in an organization, taking into account greater motivation to work and improved work results. in social enterprises which employ these people, this can be, for example, a lower number of days off or sick leaves, etc. (ex_lt_1; ex_lv_3). those enterprises which do not aim to employ such people can measure these parameters through the increased work motivation and the increased number of tasks performed, etc. the research revealed that wise in the baltic states are currently not able to measure their created impact on the community and society levels, so they should now focus on measuring the changes created for the beneficiaries. thus, after analyzing the data of the empirical research and based on the theoretical analysis, it is possible to present the framework for measuring wise in the baltic states. (see figure 3). figure 3. impact measurement framework for wises in the baltic states source: compiled by the author the research found that to implement the social impact assessment of wise in the baltic states, it is necessary to measure two categories of indicators: indicators related to the employment and wellbeing of the individual. these indicators can be measured together with the specific indicators set by the organization itself, which can be set separately according to the aims of each wise. 5. conclusions the implementation of the social impact assessment process in an organization requires a lot of effort and resources: to involve stakeholders, to choose appropriate measurement tools, to collect various data, to present the results of the assessment to the stakeholders. however, it does not mean that wises should ignore it. wises should take this opportunity to embrace social impact http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 71 measurement and adopt a framework that allows them to use data to make better decisions, improve operations, improve its programs, products and services for its beneficiaries. social impact measurement is one way to make a greater impact in the lives of the individuals and communities they are committed to serving. instead of debating social impact definition, impact measurement methods and tools, it is important to critically reflect what can be measured by wise itself, taking into account their limited time, resources, skills and capacity to collect and analyse data; the research revealed that wises in the baltic states are currently not in a position to conduct an impact measurement on the wider society on their own, as this requires the collection of large amounts of data and the continuous monitoring and analysis of long-term changes in the society and communities. however, it is considered important to ensure that research on long-term changes in the society and communities created by wises is carried out, because it confirms the need for the existence of social enterprises and helps to reveal how and to what extent they contribute to the solution of complex social problems in the society, such as poverty, unemployment, intolerance. it should also be emphasized that wises devote most of their resources and time to working with the target group, their needs, communication with their families, which deprives them of the time that could be spent on implementing impact measurements in organizations, therefore, it is quite difficult for them to make measurements of the changes created at all levels (beneficiaries, community and society). long-term changes in the society and communities could be measured by public authorities together with the institutions of higher education. they have much more resources than social enterprises, and the social impact created at the societal level (macro, meso-level) is rarely achieved by a single organization, it is usually a collective impact, making it more convenient for the public institutions to collect data and assess the impact of all organizations. it should also be mentioned that institutions often have better access to databases than wises, so they can collect the data needed for the research more quickly, they also have the conditions to collect and store the data, ensuring their security. therefore, for the reasons listed here, it is considered that wises should be responsible for carrying out the impact measurement on their beneficiaries. the research showed that to prove their impact to the stakeholders, wises should measure and monitor these indicators: indicators related to the employment and well-being of the beneficiaries. these indicators can be measured together with the specific indicators set by the organization itself, which can be set separately according to the aims of each wise. also, measuring these indicators would help identify the programs and activities that bring the greatest benefits to the beneficiaries. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi 10.13135/2704-9906/5091 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 72 the proposed measurement framework and a set of indicators removes obstacles to implement social impact measurement in an organization, and allows stakeholders to standardize and compare the impacts of wises on their beneficiaries. the paper also has some limitations. the purposive sampling has been used. since the sample is selected based on the researcher’s ascertainments and criteria, the sampling was judgemental. there was a reasonable probability of having uncontrolled variability and bias in the estimations of the sampling. despite these limitations, the experts’ interviews have allowed to receive meaningful information for the research in the specific research area. it should be noted that the empirical study was conducted several years ago, however, it should be noted that during this period there were no significant changes in wises measurements, policies in the field of social enterprise because of covid19 pandemic, so the results are unlikely to be different. future research should also include economic indicators of wises' activities because more and more wises performing as hybrid organizations. economic indicators becoming important in order to reveal the full impact‘s spectrum of wises. furthermore, more research studies are necessary to find effective methods and tools to measure wises’ social impact. references amati, t., arena, m., bengo, i., & caloni, d. 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(2013). an exploration of social entrepreneurship in estonia. international journal of business and management studies, 2 (2), 19–29. syrjä, p., sjögrén, h., & ilmarinen, a. (2015, june). performance measurement in social enterprises–a conceptual accounting approach. in 5th emes international research conference on social enterprise-building a scientific, helsinki, finland (vol. 29). spiess-knafl, w., & scheck, b. (2017). impact investing: instruments, mechanisms and actors. springer. zeyen, a., & beckmann, m. (2018). social entrepreneurship and business ethics: understanding the contribution and normative ambivalence of purpose-driven venturing. routledge žydžiūnaitė, v., sabaliauskas, s. (2017). kokybiniai tyrimai, principai ir metodai. vilnius: leidykla vaga. 5282-article text-17303-1-11-20210223 http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 for peer review (doi: 10.13135/2704-9906/5282 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 17 social indicators for businesses’ circular economy: multi-faceted analysis of employment as an indicator for sustainability reporting scarpellini, sabina1 1 department of accounting and finance, university of zaragoza, zaragoza, spain e-mail: sabina@unizar.es received: 17/11/2020 revised: 09/01/2021 accepted for publication: 10/01/2021 published: 08/03/2021 acknowledgements the writing of this article has been partially co-funded by the spanish ministry of industry and competitiveness project ‘eco-circular’ ref. eco2016-74920-c2-1-r and it has been conducted within the framework of the ‘socioeconomic and sustainability research group: environmental accounting, corporate circular economy and resources’ (ref. s33_20r) financed by the regional government of aragón. the empirical work was conducted within the framework of the study promoted and financed by the economic and social council of aragón (spain). i would like to express my special thanks to the experts and representatives of the bodies that collaborated through semi-structured interviews and played a fundamental role as ‘key informants’. i also acknowledge the contribution of prof. josé m. moneva, prof. pilar portillo-tarragona, prof. fernando llena-macarulla and dr. alfonso aranda-usón. abstract in recent years, the introduction of the circular economy's principles at the micro level is receiving attention in different areas of the business literature. although several studies have focused on the environmental or economic impacts of the adoption of the circular economy at a micro level, a detailed http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 for peer review (doi: 10.13135/2704-9906/5282 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 18 analysis of the social aspects of the circular economy in businesses is still necessary. from a triple bottom line perspective, social dimensions of the circular economy are one of the three pillars for sustainability accounting and reporting and must be considered in the relationship between firms and their stakeholders. thus, the main objective of this study is to reflect on the social impact of the business circular economy at the micro level by analysing job generation. to this end, this study' approaches the definition of specific indicators to measure different dimensions of the employment in a circular economy framework through the qualitative analysis of semi-structured interviews collected in a regional case study in spain. this article summarises different metrics to be applied to the measurement of the multi-faceted employment generated by companies in a circular model. furthermore, a contribution derived from the synopsis of this study is the definition of the linkage of circular businesses' and the sustainability accounting and reporting. keywords: social corporate responsibility; circular economy; social indicators; social accounting; social impacts 1. introduction in recent years, attention to the circular economy (ce) has been increasing in different domains, including business (centobelli et al., 2020; urbinati et al., 2017). notably, the ce model has gained ground among academics, policymakers, and practitioners as an effective way to manage the urgent issues related to climate change and sustainability (marco-fondevila et al., 2020). the concept of ce arises with the objectives of keeping products, components, and materials useable and useful to return to the cycles (rossi et al., 2020). in summary, the aim of a ce is to create circular (closed) loops in which raw materials and other resources are used repeatedly in different phases (yuan et al., 2006) while contributing to waste reduction (aranda-usón et al., 2018). at present, the ce is being implemented worldwide at the micro (company or consumer level), meso (eco-industrial parks), and macro (nations, regions, provinces, and cities) levels (ghisellini et al., 2016). in the european union (eu), a series of communications reports and plans have been implemented to expand the ce principles throughout europe (european commission, 2014, 2015, 2020). http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 for peer review (doi: 10.13135/2704-9906/5282 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 23 to date, the ce-related research has been mainly developed at the macro level (korhonen, honkasalo, et al., 2018; merli et al., 2018; pomponi & moncaster, 2017). at the micro level, the knowledge on the introduction of the ce model is still in an early stage of development (aranda-usón et al., 2020). studies have focused mainly on the competitiveness of firms, the implementation of circular business models (bocken et al., 2016; witjes & lozano, 2016), or the analysis of the ce in the general principles of sustainability (geissdoerfer et al., 2017; kravchenko et al., 2019). thus, the adoption of the ce by businesses requires the definition and measurement of the impacts generated by adopting circular business models in terms of social, economic, and environmental as pillars of the sustainability paradigm. moreover, the ce systems are considered beneficial for different sustainability dimensions such as resource productivity, job creation, and gross domestic product (european commission, 2020). however, little detailed analysis has been conducted on the impact of the ce on different business sectors, in particular, on the resultant social consequence of the introduction of the ce-related activities in firms. in particular, from the triple bottom line (elkington, 2001), companies must implement indicators that also capture the relationship between circular activities and their repercussions on the corporate sustainability report, which is the leading vehicle for communication through which companies transmit to stakeholders their core ideas and progress on the ce (marco-fondevila et al., 2020). additionally, the improvement of environmental impacts has been related to the closing of material loops espoused by the ec, and the economic aspects are considered intrinsic to the circular business model; however, social implications of the ec remain little explored in business literature. reports and studies have focused on the social aspects of the ce, and they reference mostly job creation as a positive externality of a transition to the ce, which is focused primarily on resource efficiency and recycling and on waste reduction (llorente-gonzález & vence, 2020). notably, the ce model can include generating new jobs, improving employees' quality of life, and linking a system's functioning with the social dimension of management in organisations (mathews & tan, 2011). ce implementation is a complex process, and the role of employees is crucial (khan et al., 2020). in particular, new employment opportunities are largely related to recycling and the reuse of waste, sectors that generate direct employment (european commission, 2015). studies that have analysed the impact of the ce on the labour market predict that the waste sector (classification and management of waste for http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 for peer review (doi: 10.13135/2704-9906/5282 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 24 reuse and recycling) will generate a large number of jobs and that most ce-related employment opportunities will demand mediumor high-skilled workers (morgan & mitchell, 2015). in summary, a sustainable future can be a reality only if the economies are rearranged on circular principles characterised by a balanced assessment of the economic, social, and environmental needs (momete, 2020) and employment is a relevant pillar for a ce for market and stakeholder's aspects (rossi et al., 2020). however, some questions emerge regarding the selection of social indicators to monitor progress towards a ce at the micro level. an analysis of the literature reveals two gaps. first, there is a general need for detailed knowledge of the implications of the ce on society because the majority of studies have not specifically analysed employment generation as a social impact derived from the business ce. in addition, the fragmented approach to this topic by scholars has made an enhanced analysis of the cerelated employment necessary. thus, this paper fills these two gaps by providing a joint approach to the definition and measurement of the social impact of ce, by analysing job generation at the micro level. as one of the contributions to the literature, this study reflects on the indicators inherent to employment and its different facets as the social impacts of firms in their relationship with stakeholders for sustainability accounting and reporting. to achieve these objectives, the remainder of this paper is structured as follows: the next section investigates the general background, the third section describes the methodological considerations, and the fourth section summarises the findings to state conclusions and reflects on future perspectives of and challenges for the measurement of social impacts of the ce at micro level. 2. background the adoption of the ce by firms contributes to more efficient use of raw materials and resources, to cleaner production, and greater efficiency by increasing the circularity of materials (aranda-usón et al., 2020; jun & xiang, 2011; li et al., 2010; liu et al., 2009; van berkel, 2010). currently, private sector initiatives include technologies and processes for closing the material loops and for circular business models, the introduction of related environmental standards, or specific actions in the framework of http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 for peer review (doi: 10.13135/2704-9906/5282 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 25 corporate social responsibility (csr). these initiatives are considered important drivers of the ce transformation in many european countries (european commission, 2020). different authors have pointed out that the concept of ce plays a role in sustainable development (ghisellini et al., 2016; korhonen, honkasalo, et al., 2018; marco-fondevila et al., 2020). some definitions of ce are evolving towards enhanced concepts based on the pillars of sustainability (environment, economy, society), and the measurement of these three dimensions in a ce model is a topic in business literature (kristensen & mosgaard, 2020; rossi et al., 2020),: (korhonen, honkasalo, et al., 2018; korhonen, nuur, et al., 2018). nevertheless, it has been argued that the ce literature has prioritised the economic system with primary benefits for the environment and only implicit gains for social aspects (padilla-rivera et al., 2020). besides, the analysis of the diversity and scope of existing ce indicators on all levels points out the prevalence of macro level indicators, while indicators on the meso and micro level are less prevailing. based on these premises, the introduction of the ce in businesses raises the integration of the sustainability paradigm into management practices claimed by the environmental and social-accounting scholars (adams & frost, 2008; adams & larrinaga-gonzález, 2007; adams & mcnicholas, 2006). notably, because conventional accounting seems most suited to the linear cause-effect relationships (bebbington et al., 2017), the introduction of the ce model in firms requires a radical transformative programme based on sustainability that responds to the of inter-locking of the social, environmental, and economic systems that have been pointed out for accounting practices (bebbington & larrinaga, 2014). moreover, despite the difficulties connected to sustainability and social accounting, their potentially significant benefits continue to attract the attention of scholars and practitioners (mauro et al., 2020) for reporting to the internal and external stakeholders through sustainability indicators to accomplish sustainability performance management (warhurst alyson, 2002). the relationship between sustainability accounting and the measurement of the social dimension of the ce is summarised in the synopsis of this study (figure 1). http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 for peer review (doi: 10.13135/2704-9906/5282 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 26 figure 1. synopsis of the study source: author's elaboration in a ce context, accounting indicators for internal or external reporting are being used in the framework of environmental management accounting to measure flows of materials and waste, for liability management, or the definition of accounting capabilities of firms for the introduction of circular business models (scarpellini et al., 2020). however, companies sparsely use micro level indicators for the social dimension of the ce and further research is necessary (elia et al., 2017; rossi et al., 2020; saidani et al., 2019). in particular, companies need to indicate to stakeholders the social impacts of circular investments and activities. the approach used in this study is not specifically theory-driven, and the research objective is to enhance the knowledge about how to measure the social impacts related to the introduction of the ce in businesses. nevertheless, different authors point out that the stakeholders play an essential role in the adoption by companies of ce principles (banaite & tamosiuniene, 2016; lieder & rashid, 2016; stewart & niero, 2018) and the links of the ce with sustainability accounting and reporting bring this study closer to the http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 for peer review (doi: 10.13135/2704-9906/5282 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 27 stakeholder theory in line with aranda-usón et al. (2020). from the perspective of the social impact, circular business models have been associated with a high potential in terms of job creation (burger et al., 2019; european commission, 2014; ghisellini et al., 2016; manninen et al., 2018; rizos et al., 2016). notably, the generation of new jobs is one of the most cited social impacts in the literature and is often presented as a measure of the positive social outcome of the ce (llorente-gonzález & vence, 2020). however, this requires further research. although the ce is now understood as a promising model for creating jobs in local infrastructures (fizaine, 2020), or elsewhere (larsson & lindfred, 2019; padilla-rivera et al., 2020), further attention must be paid to net job creation in the ce context. researchers have argued that the transition to a ce has helped create jobs in the last decade (sánchez-ortiz et al., 2020; yuan et al., 2006). an increasing number of authors have used the new jobs related to the ce as an indicator (coats & benton, 2015; hysa et al., 2020; kristensen & mosgaard, 2020; morgan & mitchell, 2015). aranda-usón et al. (2018) determine the impact on employment at the micro level in a region by using the volume of income of the ce-related activities in companies. girard and nocca (2019) define 'circular jobs' as those jobs related to the ce's principles, and rossi et al. (2020) highlight that employment is a social pillar. moreover, the job creation from circular business and different supply chain activities is an indicator of ce's social implications (pieroni et al., 2019). some authors have analysed the possible adverse effects on workers in sectors with environmental impacts, and there is broad agreement that adopting a ce could result in job creation in some sectors and in job losses in others (aranda-usón et al., 2018). also, morgan and mitchell (2015) consider that labour requirements of a growing ce are replacing elsewhere in the economy, for instance, in the production of virgin materials or new products. thus, new jobs are differentiated from those created by substitution or those resulting from the re-definition of redundant jobs. within this social dimension, some studies have also analysed the required skills and education related to a ce (burger et al., 2019; kravchenko et al., 2019). in this sense, education and training contribute to the development of these skills, increase labour productivity, and manage the latest technologies for closing the material loops (chiappetta jabbour et al., 2020), advancing sustainable development. stahel (2016) affirms that the remanufacturing and repairing of old goods, buildings, and infrastructure creates http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 for peer review (doi: 10.13135/2704-9906/5282 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 28 skilled jobs in local workshops. khan et al. (2020) highlight the relevance of recruiting employees for ce objectives and the need for technical training of production workers to operationalise new plants. additionally, skills and circular jobs remain too generic and difficult to adequately inform ce policy (padilla-rivera et al., 2020). thus, we can argue that the social performance of ce related to jobs also includes employee skills development and specific training (golinska et al., 2015). from another perspective, azevedo et al. (2017) include other factors that must be measured for cerelated jobs, including work accidents, precarious work, or percentage of contracted women. in addition, the harmfulness of the manufacturing process level of comfort at work has been analysed by golinska et al. (2015) and veleva & bodkin (2017). notably, the ce can also contribute to setting the disappearance of low-level occupations (padilla-rivera et al., 2020), and the social re-valorisation of circular activities could lead to an improvement in working conditions and should be considered from a social perspective (kirchherr & piscicelli, 2019). therefore, indicators applied to these impact categories should include more employment conditions to understand the real social dimension of the ce measured through employment (kravchenko et al., 2019). nevertheless, at present, the limited number of indicators considering the social dimension makes it difficult to determine a general approach to this dimension (kristensen & mosgaard, 2020). in some studies, the social goals of a ce have been linked to the sharing economy and participative democratic decision-making that increases the collaborative culture and the number of public partners involved (girard & nocca, 2019; rossi et al., 2020). in this context, sustainability culture must be promoted among employees and suppliers (khan et al., 2020), and the measurement of the employment in a ce context would include community relationships and user relationships (kravchenko et al., 2019). notably, the employee's engagement and awareness in circular businesses is a relevant factor (chiappetta jabbour et al., 2020) and veleva & bodkin (2017) and provides a starting point for developing specific indicators for ce strategies and employee engagement. another factor related to jobs in a ce framework is the innovative character of circular technologies (momete, 2020). rossi et al. (2020) argue that innovations required for new product designs and patents related to recycling and secondary raw materials are social indicators of a ce (golinska et al., 2015; hysa et al., 2020). therefore, knowledge for innovation should be promoted among businesses to develop http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 for peer review (doi: 10.13135/2704-9906/5282 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 29 intellectual capital for the adoption of the ce by firms, because some traditional jobs are likely to suffer in the transition to a circular model (eea, 2016). in summary, the ce-related activities introduced in businesses involve specific technical and organisational capabilities embedded in a sustainable, productive paradigm (llorente-gonzález & vence, 2020). thus, the measurement of ce-related employment should include more aspects than the number of new jobs. these specific facets that integrate circular employment and the main studies on this topic are summarised in table 1. table 1. ce-related studies classified by different factors of circular employment at the micro level jobs creation as the social indicator of the ce (aranda-usón et al., 2018; burger et al., 2019; girard & nocca, 2019; horbach et al., 2015; hysa et al., 2020; iacovidou et al., 2017; kristensen & mosgaard, 2020; llorente-gonzález & vence, 2020; mesa et al., 2018; momete, 2020; morgan & mitchell, 2015; pieroni et al., 2019; rossi et al., 2020; stahel, 2016; yuan et al., 2006) engagement in the ce principles (chiappetta jabbour et al., 2020; veleva & bodkin, 2017) collaborative culture (girard & nocca, 2019; khan et al., 2020; kravchenko et al., 2019; rossi et al., 2020) net balance of employment generation (aranda-usón et al., 2018; morgan & mitchell, 2015) skills and training (burger et al., 2019; chiappetta jabbour et al., 2020; golinska et al., 2015; khan et al., 2020; kravchenko et al., 2019; padilla-rivera et al., 2020; stahel, 2016) workers' conditions/safety (azevedo et al., 2017; golinska et al., 2015; kirchherr & piscicelli, 2019; kravchenko et al., 2019; padilla-rivera et al., 2020) knowledge for innovation (eea, 2016; golinska et al., 2015; hysa et al., 2020; llorente-gonzález & vence, 2020; momete, 2020; rossi et al., 2020) source: author's elaboration despite the studies listed in table 1, relatively little is known of jobs created by businesses through their ce-related activities. in particular, the analysis of other aspects of circular employment remains fragmented. thus, this paper aims to assist organisations in reporting on their social perspective of the introduction of the ce, and the following research questions are raised: rq1. how can companies measure ce-related jobs at micro level? rq2. what are the different dimensions of the employment related to the circular business model that could be reported by companies? http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 for peer review (doi: 10.13135/2704-9906/5282 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 30 in the following sections, these research questions are answered by reflecting on a different dimension of ce-related employment through a double-focus qualitative methodology. 3. research design this study is eminently reflective, and the methodology is mainly based on a desk research method. however, different aspects of the ce-related employment and other social impacts of the introduction of the ce in businesses were explored through a regional case study in spain. this study comprises three steps: first, to estimate the impact of the ce in the region, desk research was conducted with a set of specific indicators; second, to analyse perceptions of the adoption of the main cerelated activities in the region at the levels of society, public administrations, and the private sector, 21 semi-structured (in-depth) interviews were conducted; and third, to measure the ce's impacts, employment as a social indicator was analysed. semi-structured interviews have also been used in other ce-specific studies because they allow for processing information that otherwise could not be systematically collected through key informants (geng et al., 2009; uddin, 2020). specifically, the methodology for the analysis was adapted to fit the regional context in which ce was in an incipient state of implementation (everingham et al., 2013) and it is coherent with the methodological insights provided by previous studies (crowe et al., 2011; eisenhardt, 1989; yin, 2009). the ce in the region was measured through 21 interviews of experts selected by the authors as key informants according to the guidelines of the commitment. owing to confidentiality agreements with the interviewees, their identities remain with the authors; however, the list of their profiles is included in table 2. due to the general objective of the study, one-third of the interviewees represents the regional public administrations, one-third represents society, and one-third represents companies or the business sector, in line with the three main stakeholder categories pointed out by banaitė and tamošiūnienė (2016) for a ce. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 for peer review (doi: 10.13135/2704-9906/5282 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 31 table 2. profile of the experts selected as key informants type of organisation profile of the experts public administration four engineers, two lawyers, one economist industries and private companies five engineers, one economist, one other r&d institutes, ngos and other organisations one engineer, two lawyers, one chemist, one architect, one sociologist, one journalist source: author's elaboration the interviews, each lasting approximately 30 minutes, were recorded, transcribed and analysed for trends and patterns of response (dolowitz & medearis, 2009). all the interviews are analysed in an aggregated manner by using a qualitative method. in addition, experts were asked to assign a value to each opinion using a likert-type scale ranging from 0 to 10, with 0 being the score that expresses total disagreement or that the interviewee believes the statement to be of no relevance and 10 being the highest valuation, expressing total agreement, or that the interviewees believed the statement to be highly relevant. from the likert-type scale thus constructed, the opinions expressed are divided into three levels: 0–3 is slightly or not at all relevant, 4–7 is moderately relevant and equal to or greater than 8 is very relevant. the case is the spanish region of aragón, and based on the ce having significant economic, environmental, and social impacts at the territorial level (aranda-usón et al., 2018), the impact on employment of the introduction of the ce-related activities in businesses is analysed. this region was selected because of the regional government's commitments to the author that enabled an analysis of the territorial impact of the ce. in recent years, the selected region has experienced an increase in the number of local, small-scale initiatives to implement some of the circular principles (aranda-usón et al., 2018; portillo-tarragona et al., 2017; scarpellini et al., 2019). to date, these initiatives have been mainly adopted in the waste management sector, according to the recommendations for the introduction of the eu (european commission, 2020), the spanish government (gobierno de españa, 2020), and the regional planning for a ce. this study presents the results of additional analysis of the social impacts of business circular activities. as such, the next section attempts to summarise the perception of experts on the impact on employment from the introduction of the ce in regional businesses. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 for peer review (doi: 10.13135/2704-9906/5282 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 32 4. main results this study analyses the experts' perceptions of (1) the relevance of the barriers due to a lack of stakeholders' interest, (2) the relevance of the barriers because of a lack of specialised employees, (3) the effectiveness of subsidised training plans for employees, (4) the potential impact of the ce on society, and (5) the potential ce-related job generation. for each question, the average and the frequency of the answers are calculated. table 3 presents the main results. table 3. summarised results of the interviews lack of stakeholders' interest lack of specialised employees subsidised training plans for employees potential impact of ce on society mean 5.30 5.70 6.38 2.60 median 2.00 7.00 8.00 3.00 mode 5.50 6.50 7.00 3.00 sd 3.15 2.79 2.36 1.23 source: author's elaboration for social impact, informants considered that the implementation of a ce would generate different jobs but would not increase the total volume of employment in the region. they pointed out that the ce would require professionals trained in advanced techniques from different scientific backgrounds. in particular, chemists, biologists, physicists, specialised technicians, and specialised lawyers and economists were demanded in the future. the relationship between employment and ce was stated by most of the experts, but the general impact of the ce on society was not corroborated. in summary, from the analysis of the semi-structured interviews, the opinion of the experts interviewed differs according to the organisations they represent (table 4). table 4. summarised results of the interviews, according to the profile of the experts interviewed lack of stakeholders' interest lack of specialised employees subsidised training plans for employees potential impact of ce on society potential cerelated job generation private firms 4.6 4.8 6 2.5 6.8 public administration 4 6.2 7.7 2.4 7.2 society 7.1 5.8 5.5 2.8 6.5 total 5.3 5.7 6.3 2.6 5.8 source: author's elaboration http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 for peer review (doi: 10.13135/2704-9906/5282 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 33 the most remarkable differences between the respondents' opinions of representatives of public administrations, society, or private companies are detected in the interest of the stakeholders in a ce and the effectiveness of the subsidised training plans. the improvement of the employability of the workforce through training plans related to ce is one of the results obtained through the interviews. figure 2 summarises a schematic classification of the different factors related to employment in a ce context. figure 2. multi-faceted analysis of employment as a social indicator of ce in businesses. source: author's elaboration based on the results, the leading indicators linked to the employment generated by companies that adopted a circular business model companies are selected. however, table 4 shows some differences between the respondents' perception and the relevance of these different aspects of the employment and a hierarchic scheme cannot be elaborated for prioritising these dimensions. it could be argued that the concern of the respondents in this case slightly diverges from the interest expressed by researchers, to date. in particular, academics have widely approached the impact of the ce on employment, but the other specific factors of ce-related jobs are still understudied. figure 2 has been elaborated through the results obtained to outline the close relationships between the employment generated and the multiple factors that affect it. it can be seen how all the dimensions of the circular employment are considered connected to each other. however, its arrangement indicates the conjunctions between the various factors in terms of measurement. for example, innovation is closely http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 for peer review (doi: 10.13135/2704-9906/5282 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 34 linked to the skills of the employees, which in turn form the necessary engagement for the collaborative scheme required in circular environments. thus, the higher training supposes better work and employability considerations as new jobs generated that imply the net creation of employment that needs to be measured in this multi-faceted social impact in business ce models. 4.1 discussion this study is eminently reflective, and the methodology is mainly based on a desk research method. however, the results of a regional case study are summarised in this study with the mere objective of reflecting on the implications of this analysis from different stakeholders' perceptions of this topic. in addition, the approach used in this study is not specifically theory-driven, and the research objective is to enhance the knowledge on how to measure the social impacts related to the introduction of the ce in businesses. nevertheless, a summarised discussion is presented in next to outline the multiple facets of employment as an indicator of ce. generally, the social dimension of the ce addresses the identification, accounting, and management of the values and needs of different stakeholders of a company (kravchenko et al., 2019). notably, engagement of stakeholders is necessary to enable a transition towards a ce (rossi et al., 2020), in line with the results obtained for social and environmental governance of firms (ortas et al., 2019; rivera et al., 2017) and carbon disclosure (guenther et al., 2016). hence, the analysis of social impacts from the firms' view in a circular context advances the literature to be closer to the stakeholder' theory for reporting processes, in line with aranda-usón et al. (2020). notably, through the reporting, companies may attempt to maintain their licence to operate in a ce and reduce the possible gaps between their stakeholders' expectations in terms of sustainability (hahn & kühnen, 2013; rossi et al., 2020; stewart & niero, 2018). i acknowledge that it would be unrealistic to be unaware of the potential resistance within the institutions of accountancy that makes changes due to the multidimensional character of the ce difficult. nevertheless, i posit that over the years, accountants have evolved towards sustainability principles, and the presence of environmental accounting standards favours the integration of measurement and reporting in all the dimensions that a ce requires. since the critical debate initiated by moneva et al. (2006) on the possible camouflaging of social and environmental accounting and reporting by firms and csr, http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 for peer review (doi: 10.13135/2704-9906/5282 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 35 environmental and social accounting and the triple bottom line are now concepts more frequently used in the accounting fields, also in ce studies (urmanaviciene & arachchi, 2020). nonetheless, this study corroborates the arguments of kristensen and mosgaard (2020) on the scarcity of the measurement of social impacts in a ce context, an indication of the development of economic and environmental indicators through standards; notably, indicators for the social dimension have not reached the same level of consensus (kristensen & mosgaard, 2020). therefore, the path to the inclusion of the three pillars of sustainability must include moving towards the ce also through accounting and reporting practices. 5. conclusions the original purpose of proposing the concept of ce was to close material loops as a conjunction of economic and environmental improvements, and the interaction with society is a more recently considered aspect in the ce framework. notably, today's business literature has focused mainly on environmental and economic aspects of the ce, not its complex social implications that must be measured for sustainability accounting and reporting in the relationship of firms with stakeholders. this study highlights that experts scarcely consider the relevance of ce in society in the current phase of development of the ce introduction at micro level. the scarcity of social measurements of ce-related activities introduced by businesses is also corroborated, and it highlights the origins of the concept of ce, more focused on eco-efficiency and the economy versus the environment than on the social foundations of the model. undoubtedly, a ce provides substantial environmental and economic opportunities (raw materials saving, competitiveness, and business opportunities) that imply social benefits (jobs generation). however, the forecasted positive social impacts of a ce have not been demonstrated. for this purpose, the companies are required to implement a triple bottom line perspective in which social dimensions of the ce are integrated with environmental and economic aspects as one of the three pillars of sustainability. in this context, this study fills the gap in the literature by investigating the different aspects of the employment linked to ce-related activities introduced by businesses. the multiple facets of employment must be measured by companies to report social concerns to different categories of stakeholders. social http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 for peer review (doi: 10.13135/2704-9906/5282 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 36 indicators are a key pillar of sustainability accounting and reporting and have important legitimacy in reporting to the internal and external stakeholders to accomplish sustainability performance businesses' management in a ce framework. a contribution derived from the synopsis of this study is the definition of the linkage of circular businesses' and the sustainability accounting and reporting in a ce framework. moreover, these results claim that novel circular business models must enable an explicit analysis of social implications in a triple bottom line perspective. notably, conventional accounting seems unsuited to capture the introduction of the ce model in firms. thus, the integration of the sustainability paradigm into management practices, as has been claimed by environmental and social-accounting scholars, is claimed again regarding the introduction of the ce in businesses. one challenge facing practitioners is the enhanced measurement of social impacts derived by their ce by integrating specific circular indicators in sustainability reporting. therefore, managers seeking ce business investments should increase the engagement among employees to improve specific innovation and management capabilities within firms, with the participation of the accounting structures. similarly, policymakers can further promote ce by providing incentives to firms not only based on the number of new jobs generated but also on the net balance of derived jobs and other indicators for qualitative factors inherent to the employment in a ce framework. the limitations of this study suggest that further interdisciplinary work on this topic is necessary because of the systemic nature of the ce at a firm level. further research 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(2006). the circular economy: a new development strategy in china. journal of industrial ecology, 10(1–2), 4–8. https://doi.org/10.1162/108819806775545321 5098-article text-16397-2-11-20201211 http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 1 the potential of circular businesses in the postcovid era: a system dynamics view francesca costanza1 1 department of law (palermo campus), university of rome lumsa, roma, italy e-mail: f.costanza1@lumsa.it received: 15/09/2020 revised: 11/11/2020 accepted for publication: 04/12/2020 published: 18/12/2020 abstract the last decade has witnessed the flourishing interest of scholars and policymakers to the application of circular economy (ce) principles, which has been pointed out as a compelling goal for business and society at current times of coronavirus pandemic. this paper aims to describe the roles of companies and consumers in ce implementation, the basic mechanisms of circular business creation and diffusion, and their potential contribution to the recovery post-covid. for the purpose, it has been adopted a system dynamics (sd) view to build an insight model integrating selected literature inputs. distinguishing between “born circular” and “converted circular” businesses, model dynamics highlight the interplay of circular businesses and responsible consumers, postulating key feedbacks able to affect, respectively, the conversion of companies and people to virtuous productive and consumption behaviours. finally, the consolidation of such mechanisms contributes to the alleviation of specific socioeconomic and environmental issues ascribable to the coronavirus spreading. keywords: circular economy; circular business; covid; system dynamics. 1. introduction the coronavirus pandemic has been challenging global health care, economy and society. in order to minimize the loss of human life “in the face of an invisible contagion” (sarkis et al., 2020, p.1), previous life routines have been substituted or integrated by new ones (e.g. sanitation, social distancing, use of http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 2 disposable gloves and masks). the scenario observed in the early stage of covid spreading (first half of 2020) included congestion of health facilities, national lockdowns and a generalized deceleration of production and trade, especially as far as the international commerce is concerned. in this regard, the switch towards the circular economy (ce) principles, already felt as a compelling goal by policymakers in the pre-covid era (e.g. european commission, 2015, 2019; european environment agency, 2019), assumes a crucial importance at the time of writing this paper. in fact, once the initial shock was overcome, there is the need to cohabit with the virus in the medium term (until the development of a vaccine), balancing the urge to restore the economy with that of operating in safety conditions. with a longer period orientation, to be proactive and to avoid being caught unprepared by potential system shocks, it is called for a general rethinking of production systems in terms of sustainability and resilience (sneader & singhal, 2020; ellen macarthur foundation, 2020). thus, national and local systems should accelerate the transition to circular economy (blériot, 2020) attributing a central function to entrepreneurship, seen as a relevant change agent (neumeyer et al., 2020). indeed, the ce paradigm, subverting the traditional linear economy (summarized by the sequence of material extraction, transformation, disposal), introduces production and consumption practices devoted to resource recovery and re-circulation. this way, it promises to foster industrial efficiency and local supply resilience in an environmentally conscious way (ellen macarthur foundation, 2013; geissdoerfer et al., 2018). this paper seeks to address circular business generative paths and their impacts on coronavirus challenges by wearing strategic management lens, meaning that circular business development will be intended as a process involving firms and their environment (katz, 1970; mintzberg, 1987). so far, even in presence of extant contributions from the practitioners world (e.g. ellen macarthur foundation), some gaps have been identified in the strategic management research dealing with ce. in first place, the scientific literature originating the topic is not ascribable to the managerial and organizational spheres (korhonen et al., 2018), and only recently the strategic management domain started to pay attention to ce, conceiving it as a driving paradigm for product and business model innovations (linder & williander, 2017; urbinati et al., 2017). as a result, the research field is still young and not fully explored. referring to a systematic literature review recently conducted by centobelli and colleagues (2020), it was detected a research lack in providing a systemic view of circular businesses, considering multiple-actor interrelations and the contextual factors able to boost the transition. in addition, managerial http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 3 contributions to ce conceptualizations are narrowly focused: they pay attention to just one side of the coin (companies), underestimating the crucial role of consumer acceptance of the new paradigm (chamberlin & boks, 2018). this paper aims to concur in bridging the aforementioned gaps, seeking at the same time to make a contribution regarding some covid related issues. accordingly, three research questions have been formulated: (1) what is the role of companies and consumers in the implementation of circular economy principles? (2) what are the basic mechanisms of circular business creation and diffusion from a holistic perspective? (3) in which ways the circular economy can contribute to the recovery post-covid? in order to address the above queries, it was adopted a system dynamics (sd) view (forrester, 1961; sterman, 2000; wolstenholme, 1990) to build an insight model integrating relevant literature sources in a holistic and original manner. sd modelling approach was privileged because it provides visual and analytic tools to capture the feedback relationships among several variables. the paper is organized as follows: after this introduction, it is proposed a literature review about circular economy and its potential links with covid pandemic. then, the methodology section describes sd features, together with the modelling approach for this study. it follows an illustration of research results, whereas core model dynamics are presented and described. finally, the conclusion section summarizes the contents of the paper and the main contributions, highlighting limitations and future research avenues. 2. literature review the coronavirus pandemic has caused health facilities overload, national lockdowns and a generalized deceleration of economic activities. the crisis has disclosed the fragility of many global supply chains and the need of more resilient supplies at a local level (blériot, 2020). moreover, the impact on business closures exacerbated social inequalities, whereas “minority groups and individuals living in poverty, including the elderly, are disproportionally affected by the resulting health and economic implications” (neumeyer et al., 2020, p. 2). from the environmental perspective, together with a general call to preserve the environment as a precondition for public health (wuyts et al., 2020, p. 2), the large-scale economic slowdown was claimed to bring more specific – and contrasting – effects. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 4 on the one hand, it was registered an improvement of air and water quality (saadat et al., 2020), especially in more polluted areas. however, such advancements are to be considered temporary and destined to gradually disappear with the necessary restart of economic activities. on the other side, there have been highlighted indirect negative effects, such as an increase of waste (in particular for disposable plastic goods and for protective equipments) and a reduction of recycling (ragazzi et al. 2020). in this context, sustainable development and ce are two related concepts (geissdoerfer et al., 2017) assuming a crucial importance. sustainable development, meaning to satisfy actual needs without compromising the satisfaction of future generations (world commission on environment and development, 1987), is based on three pillars: economic growth, environmental protection and social inclusion (united nations general assembly, 2015). entrepreneurships plays an essential role in pursuing sustainable development (apostolopoulos et al. 2018), and, from a managerial perspective, the “triple bottom line” approach dictates for companies the joint consideration of economic, environmental and social performances (tullberg, 2012). circular economy, an approach postulating an economic system able to minimize resource exploitation, emissions and waste without compromising economic growth, is seen as a possible solution to address sustainable development (geissdoerfer et al., 2018). ce mitigates the environmental externalities associated to economic activities, by providing guidelines to invert the logic of traditional, linear models where raw materials are extracted and transformed in finished products, consumed and finally routed to waste (landfilled or incinerated). connaturated with this sequence are risks of material scarcity and negative environmental impacts: the ce paradigm overcomes such pitfalls by increasing product efficiency through new ways of production and consumption, where goods are conserved as long as possible and resources are iteratively circulated through closed loops (guldman, 2016, pp. 9-11). accordingly, it proposes the redesign of products, services and business models, incorporating durability, re-use, repair, refurbishment, and recycling (ellen macarthur foundation, 2013, 2015). in spite of many circular economy applications from the practitioners world (e.g. ellen macarthur foundation and accenture), the scientific debate about ce appears dispersive. on the one hand, natural sciences and engineering fields have developed an ample body of research, routed in different research streams, such as: industrial ecology, acknowledging the need of operational learning from cyclical, renewable and cascading natural flows (graedel, 1996); and cradle-to-cradle (mcdonough & braungart, http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 5 2003), a design strategy based on the consideration of products’ entire value chains and life cycles, in search of eco-effectiveness (braungart et al., 2007). on the other side, conceptualizations in business, organization and management are still in an infant stage (korhonen et al., 2018). specifically, recent studies intersecting strategic management and ce only focus on circular business models (cbms) (e.g. linder & williander, 2017; crainer, 2013), i.e. business representations on how companies create, transfer and capture value relating internal and external relations (zott & amit, 2010; osterwalder & pigneur, 2010) suitable to put in practice ce principles by incorporating elements that slow, narrow, and close resource loops (geissdoerfer et al., 2018). scholars contributions propose taxonomies of circular business models (bocken et al., 2016; urbinati et al., 2017), and highlight how cbms are source of competitive advantage through the recovery of the so-called “uncaptured value” (yang et al., 2016), that along linear business models is lost and not internalized. circular business models allow to create and/or modify organizational and interorganizational resource loops through three possible measures: (a) recycling, which allows to close loops instead of having open chains; (b) efficiency improvements (narrowing loops); and (c) use phase extensions, consenting to slow loops (ellen macarthur foundation, 2013; bocken et al., 2016). so far, the strategic management studies have not addressed circular business development in a systemic way (centobelli et al., 2020), i.e. taking into account factors affecting the circular business creation/conversion, and the relationships between differents actors, first of all the consumer, playing a crucial and overlooked – role in the acceptance of ce (chamberlin & boks, 2018). recently geissdoerfer and others (2017, p. 765) reported that the typical subjects of circular economy’s agency, i.e. entities needing to internalize and put in practice ce principles, are just government, companies and ngos, thus underestimating the responsible consumer behaviour’s role and its determinants. 3. methodology 3.1 system dynamics modelling the study addressed the research questions by adopting a qualitative system dynamics approach (sd) to create an insight model grounded in literature and representing a dynamic hypothesis about circular business spreading in relation to covid related issues. before illustrating modelling steps adopted for this research and describing the key model results, it is considered appropriate a brief introduction about system dynamics discipline and its building blocks. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 6 system dynamics is a computational methodology grounded in cybernetics and system science, initiated at the mit institute (boston) by forrester (1961). in the context of this work, it was judged suitable to deal with circular economy issues, since it captures the behavioral dynamics of complex (social, economic and/or ecological) systems through the feedback relationships among the parts (maier, 1998). the methodological choice was also supported by looking at numerous sd modelling efforts in the strategic minanagement field (e.g. morecroft, 1984; warren, 2005; wang, 2011). the sd modelling process (sterman, 2000) involves the construction of stock-and-flow diagrams (sfds) and causal loop diagrams (clds), paired with the formulation of differential equations allowing to simulate alternative policy scenarios. in this regard, the phase of construction (and subsequent analysis) of sfds and clds is acknowledged as a qualitative modelling branch of system dynamics (wolstenholme, 1990), able to provide interesting results both as a stand-alone methodology or as preliminary step before mathematic formalization. a stock-and-flow diagram is a map tracking networked processes of accumulation/depletion of material, information, and money (sterman, 2000). it is made of stocks, flows and auxiliary variables. stocks represent cumulated levels of resources or amount, are measured by quantities at a punctual time and are denoted by rectangles. flows are the rates causing stocks to rise/exploit over the time, are measured by quantities per time unit and are graphically represented by mean of pipes inflowing or outflowing the stocks. sometimes, especially in dealing with soft variables, modellers prefer to not keep inflows and outflows distinct, and to use bi-flow structures, expressive of stocks’ net rates of change in term of difference between inflows and outflows (sterman, 2000). in the simplified shop economy of figure 1, letter a), there are two stocks (‘cash’ and ‘customer satisfaction’). the first is fed by the inflow ‘revenues’ and depleted by the outflow ‘expenses’ (assuming all the transactions taking place in cash); whilst the stock of ‘customer satisfaction’ is affected just by ‘change in customer satisfaction’ which is a bi-flow with its specific graphic. figure 1. basic examples of stock-and-flow diagram (a) and causal loop diagram (b). http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 7 source: author’s elaboration. auxiliaries, denoted by circles, are supplementary variables with various function: to help calculus through ratios and other formulas, to bring constant or exogenous parameters to the model, to synthesize system’s partitions that the modellers decide not to focalize. stocks and auxiliaries can impact on the flows related to other stocks, directly or through auxiliary variables. in the example, the stock of cash, ceteris paribus, impacts on the auxiliary ‘investments in product quality’, which in turn has a boosting effect on the ‘change in customer satisfaction’ and then on ‘customer satisfaction’. the latter (together with other variables not included in this simple model), affects both ‘revenues’ and ‘expenses’ flows, and then the ‘cash’ stock. on the right part of the figure above (letter b), it is shown a causal loop diagram. it consists on a network of interacting loops, synthesizing the model dynamics through a compact scheme which does not distinguish stocks, flows and auxiliaries, and isolates just some variables from the ones belonging to the stock-and-flow structure. in the example, the cld shows the interplay of two loops, made of variables linked by arrowed polarities, whereas the positive and negative links mean that the cause-and-effect change goes respectively in the same and in the opposite direction. even loops have a polarity, resulting from multiplying all the links’ signs. loop r (positive polarity) is defined “reinforcing” because it shows virtuous or vicious mechanisms of continuous growth or decay: an increase of cash can induce new investments in product quality and thus sales, revenues, and ultimately http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 8 more cash. on the other side, a cash depletion frees up less resources for quality investments and thus reduces sales, revenues, and again cash. loop b (negative polarity) is “balancing” since it counteracts the above dynamics of growth/decay: more ‘sold products’ cause ‘expenses’ to raise, which in turn reduce the ‘cash’ stock. viceversa, a reduction in sales has a depleting effect on expenses and thus a boosting effect on cash. 3.2 research process the study was based on an iterative process of literature selection and analysis, accompanied by model building activities. the starting point was a literature research about topics directly descending from the research questions: circular economy, consumer’s role in circular economy, circular economy and coronavirus. as mentioned in the introduction, in line with research aims the analysis adopted strategic management lens. this means that every source was evaluated for its potential contribution to the circular business development discourse, treated as an interdependent process involving firms and their environment. however, the phase of literature search considered both the strategic management orientation and the novelty of ce topic for the field, whereas theoretical developments are far from being complete, and a systemic view is lacking. as a result, the searching approach was multidisciplinary to also explore candidate inputs from other fields, such as environmental sciences, industrial ecology and product design. scientific sources have been selected from google scholar (or gs) according to the following criteria: relevance to the study purpose, published in peer-reviewed international journals, written in english language. beside boolean researches on the database, other sources were identified by looking at papers’ references. the decision to use gs (instead of a subscription-based scholarly database, such as web of science, or wos) is due to the following reasons. first, like wos, scholar is multidisciplinary (de winter et al., 2014; mikki, 2009) and this fits the purpose to embrace publications from many research fields, with more direct links to open access publications. second, gs aggregates both academic and grey literature (haddaway et al., 2015), and this is useful given the actuality of the research and the fact that circular economy issues produce diverse types of output knowledge than just research articles. indeed, it was considered worth to review also non-scientific sources, such as best practice reports and other publications from practitioners and policy makers, when http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 9 considered coherent with the investigated objects and coming from authoritative and internationally recognized private/public institutions. the documents (49 in total, published in the last decade) were analyzed in-depth, progressively identifying key concepts in relation to the research questions. then, a series of candidate variables (retrieved from literature or elaborated by the author through inference from it) were listed, trying to hypothesize a modeling strategy for each, i.e. it was decided whether to represent every variable as a stock, a flow or an auxiliary, and key links have been identified. this phase was useful for a twofold reason: to create a preliminary understanding of the relevant system, and to drive the first modelling activity. afterwards, using a specific sd software, it was started the building of the stock-and-flow diagram. the modelling process was iterative and, starting from scratch, the model was continuously modified, adjusted and enriched in pace with new literature rounds and modeller’s progressive undestanding of the investigated objects. in the final version of the model (made of 31 variables: 5 stocks, 3 flows and 23 auxiliaries), it was decided to represent as stocks only variables ascribable to businesses and consumers, to remark accumulation/depletion processes regarding these key actors. all the flows were modelled as bi-flows to make the qualitative model more immediate and compact. auxiliary variables were used in two ways: to help in making feedback mechanisms explicit, and to show exogenous influences, i.e. not directly partecipating in any feedback circuit. once the sfd was completed, it was outlined a comprehensive causal loop diagram made of 11 interacting loops, providing a holistic view of the model dynamics and allowing a better analysis, discussion and communication of research results. 4. results 4.1 stock-and-flow diagram the first modelling output is the stock-and-flow diagram of figure 2. building on literature insights, the model postulates that the transition to ce is a process of “conversion” involving not only business companies, but also consumers. therefore, the model mirrors changing processes occurring in both categories, their interactions and their contribution to post-coronavirus recovery. in first approximation, the model area is divided in four sub-areas, indicated by rectangular labels. on the left side, there are depicted processes of ‘conversion to responsible consumption’, whilst the center of http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 10 the diagram is devoted to circular businesses and distinguishes two cases: the ‘circular business creation’, taking place when the company starts up with a circular business model from its own origin; and the ‘circular business conversion’, occurring whenever already existing companies decide to make investments to implement ce principles. on the right side, it is represented the ‘impact on covid related issues’: this part of the model infers on how circular business dynamics can help in alleviating some challenges deriving from the actual systemic crisis. in order to favor the model intelligibility, all the links connecting the variables are numbered, except for the ones pertaining to the ‘impact on covid related issues’, emphasized with letters. the following paragraphs provide detailed descriptions of the model areas and their connections. for explanatory reasons ‘circular business creation’ and ‘circular business conversion’ are addressed together. figure 2. model’s stock-and-flow diagram. source: author’s elaboration. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 11 4.1.1 circular business creation and conversion the model recognizes the role played by entrepreneurial action in reducing environmental degradation and fostering sustainable development (dean & mcmullen, 2007). three stocks within the model deal with circular business transitions. at first, it is made a distinction between ‘born circular businesses’, starting to be circular from the beginning of their lifecycle, and ‘converted circular businesses’, regarding previous linear businesses aiming to become circular. crainer (2013) argues the need of businesses to reinvent themselves according to the promising circular economy perspective, by designing corporate strategies to metabolize waste in the economy. to capture such shift, the stock of ‘converted circular businesses’ is preceded by another, ‘linear businesses’. the connecting flow of ‘change in converted circular businesses’ is affected by the ‘company willingness to go circular’ (link 22) and by ‘interfirm circular partnerships’ (link 23). this last variable is included since company partnerships are receiving growing attention for their ability to pursue shared sustainability and waste reduction goals (veleva & bodkin, 2018). in line with a shared value approach (porter & kramer, 2011), the variable helps to capture different kinds of collaborative processes helping the implementation of ce principles: born circular businesses-born circular businesses, converted circular businesses-converted circular businesses, converted circular businesses-born circular businesses. the ‘company willingness to go circular’ is affected by: ‘incentives’ and ‘regulations’ (links 15-16), the recovery of efficiency allowed by ce (variable ‘circular efficiency’) and the stock ‘responsible consumers’, representing the market demand for circular products and services. thus the model portrays both business and contextual factors influencing the willingness of companies to transit towards a circular economy, such as the regulation activity of policymakers and international institutions (centobelli et al., 2020). policymakers and governments’ responsibility is due to the fact that they can act as both drivers or barriers for company ce transition, can remove existing barriers and support production and consumptions changes (kirchherr et al., 2018), e.g. the eu circular economy action plan (european commission, 2015), renovated with new limph at the beginning of coronavirus crisis, presents interrelated regulatory packages “to establish a strong and coherent product policy framework that will make sustainable products, services and business models the norm” (european commission, 2020, p. 3). http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 12 on the other side, ce is not just an environment respectful paradigm mitigating the externalities of human activities, but it encompasses (directly or indirectly) all the dimensions of sustainability. at business level, circular business models (cbms) are a sub-category of sustainable business models (bocken et al., 2016), which indeed target solutions for sustainable development through circular value chains and stakeholder incentive alignment. according to geissdoerfer and colleagues (2018) the circularity of a business model, taking place whenever its constituting elements (value proposition, value creation and delivery, value capture; richardson, 2008) go circular, allows the achievement of optimal sustainability performances. as argued by esposito and others (2018), ce enriches sustainable paradigms by maximizing the product's lifecycle and converting unusable products in new sources of value in the same/differerent value chains (centobelli et al, 2020). still, cbms are invaluable sources of competitive advantage, promising to generate profits in a new and environmentally conscious way (guldmann, 2016, p.7), for at least two reasons. first, by increasing product efficiency (‘circular efficiency’ in the model) through the adoption of re-use, repair, refurbishment, and recycling practices for resource conservation and continuous circulation. according to a joint study of ellen macarthur foundation and mckinsey, the circular transition can determine a 3% increase of europe’s resource productivity by 2030, generating cost savings of €600 billion a year and €1.8 trillion more in other economic benefits (ellen macarthur foundation & mckinsey, 2015). such figure means that industries are not taking the economic opportunities that circular economy can disclose. the second reason is that incorporating enviromental and social values in products, they result to be differentiated and non-commodified (d’aveni, 2010) in the eyes of an attentive consumer. unfortunately, contemporary entrepreneurship education is still focused on linear business models (neumeyer et al., 2020). referring to the stock of ‘born circular businesses’, its accumulation is due to the flow ‘change in born circular businesses’, which in turn is boosted by ‘willingness to become a circular entrepreneur’ (link 17), and ‘interfirm circular partnerships’ (link 19). the ‘willingness to become a circular entrepreneur’ is influenced, again, by ‘incentives, ‘regulations’, ‘circular efficiency’ and ‘responsible consumers’ (links 13-16). however, in this specific case the presence of a responsible consumption’s base influences the new circular initiatives in two ways: it still represents a market demand to be satisfied by new entrepreneurship energies; and it also constitutes the ‘entrepreneurial humus’, a basin of personalities, stimuli and values from which circular entrepreneurial intentions emerge. in fact, it is reasonable that the http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 13 wannabe-circular entrepreneurs are responsible consumers in first place. recalling the above discourse about ce related competitive advantage, the circular entrepreneurship is a promising route either to empower economically fragile people in trying their hand at new start-ups; or to induce already existing entrepreneurs in low-income settings to develop innovative products with less price sensitive customer targets (morris et al., 2020). 4.1.2 conversion to responsible consumption the ce application is not a “quick win but a long-term undertaking” (kirchherr et al., 2017, p. 228), requiring awareness of its socioeconomic implications and key implementation barriers (de jesus & mendonça, 2018), among which it was highlighted the “lacking consumer interest and awareness” (kirchherr et al., 2018). for this reason, the stock-and-flow diagram shows changes occurring in consumers, who move from the stock of ‘non responsible consumers’ to the one of ‘responsible consumers’. the responsible consumer is not just a person deciding to buy circular products and services, but he/she is also involved in ce practices, such as extending the use of products as long as possible to delay waste production, collecting goods to be recycled, sensitizing other people to the importance of circular consumption. the idea is not just to look at consumers as recipients of green marketing campaigns aimed at aligning environmental benefits with consumer self-interest and subsequent purchasing (grimmer & woolley, 2012), but to adopt a “design for sustainable behaviour” view (chamberlin & boks, 2018), focusing on individual behaviors as resulting from several motivating factors simultaneously (bocken, 2017). thus, the flow of ‘change in responsible consumer base’ is movimented by various influences. first, the ‘conversion from incentives’ (link 4), showing the impact of extrinsic motivations on circular practices. this variable in turn results from the combined effect of: ‘discounts from the collection practices’ (link 1), taking place for example when old clothes are brought to public/private second-hand circuits or to clothing shops; ‘relative prices’ (link 2), considering the price ratio between circular and non-circular products; and ‘regulations’ (link 3), e.g. municipal obligations to separate waste collection, envisaging fees/fines for the non-collectors. the importance of consumer empowerment in ce transition has been recently acknowledged by policymakers (european commission, 2020, p. 5), and also in the scientific debate the attention starts not to be devoted just to cleaner manufacturing, but also on strategies http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 14 to educate consumers, to design eco-labels and to induce responsible consumption choices (matthias et al., 2016). another factor stimulating responsible consumption is the ‘conversion from word of mouth’, that could be a driving force for comsumption habits’ switch in two ways: by spreading information about circular product quality, and by transmitting the awareness about the importance to practice ce principles. this variable depends on the contacts among non responsible and responsible consumers (links 5 and 7) and by their contact rate (link 8). other influences on circular consumption strictly derive from the business sector. specifically, the ‘total circular businesses’ inherently boost their own demand by proposing new circular standards of products and services (‘conversion from circular product design’) and by promoting ‘awareness raising initiatives’ (links 28-29). the latter, together with other initiatives coming from the public and third sectors (link 30) are aimed at educating people about circular economy concepts (sharma, 2020). these links were included to acknowledge literature insights describing the calls for companies’s good practices with consumers (in quality of downstream stakeholders) to improve their awareness and engagement, and to sensitize purchase decisions (centobelli et al. 2020, p. 1744). actually, limited customer knowledge of circular opportunities can slow the ce transition, given the consumers’ familiarity with linear models and expectations of products and services based on it; then it is crucial to communicate with consumers and to convince them of ce benefits (guldmann, 2016, p. 51). as far as ‘conversion from circular product design’ is concerned, it is worth noticing that the ce narrative, based on product/industry macro-loops such as product-life extension, redistribution and reuse, remanufacturing, recycling (urbinati et al., 2017) is not just a company matter. in fact, product design practices, e.g. design for recycling, design for remanufacturing and reuse, design for disassembly (mayyas, et al., 2012), as well as practices of product return or subscription to product service systems, where companies maintain the ownership of goods and consumer pay for their use (tukker, 2013), are pivotal to both product engineering, commercialization to final customers (urbinati et al., 2017) and ultimately for ce principles put in practice (moreno et al., 2016). they act on channeling and educating responsible consumption behaviours, not just at the purchasing but also at the use phase (bocken, 2017), and require companies-consumers close collaboration (mendoza et al., 2017). http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 15 4.1.3 impact on covid related issues considering shifts to ce that may occur in the production and consumption spheres, it is possible to hint some wishful impacts on economic, social and environmental issues/challenges generated by the covid crisis. five arrows denoted by letters link circular businesses with selected challenges deriving from the pandemic. in two cases the link starts from a specific stock (respectively ‘born circular businesses’ and ‘converted circular businesses’); in the other cases the positive impacts of circular business are not ascribable to certain processes of business creation/conversion and thus are modelled as descending from the ‘total circular businesses’ in general terms. the coronavirus economic turbolence hit all industry sectors and many entrepreneurial ventures struggle to survive, while social disparities are exacerbated and financial conditions of weak social groups result worsened, limiting entrepreneurship and self-entrepreurship diversity (neumeyer et al., 2020, p. 2). in the stock-and-flow structure, link a) relating ‘born circular businesses’ and covid issues, expresses the concept that the start-up of circular initiatives can be a mean for the empowerment of low-income people and the reduction of ‘financial inequalitities’ in society; whilst link e) to ‘business revitalization’ represents the opportunity disclosed by the ce paradigm for the relaunch of pre-existing businesses hit by the systemic crisis. in this regard, the implementation of ce principles at business level could be a source of competitive advantage for its connaturated efficiency recovery (ellen macarthur foundation & mckinsey, 2015), its capacity to intercept less price sensitive customer targets (morris et al., 2020), and its perspective opportunity to educate more and more people to the principles of responsible consumption (matthias et al., 2016; centobelli et al., 2020). in any case, the need for new products and services strictly related to the current safety concerns (e.g. single-use gloves and masks) and the demand of medical devices market, expected to grow by over 10% a year between 2020 and 2025 (blériot, 2020), create new entrepreneurial spaces (neumeyer et al., 2020). the auxiliary variable ‘total circular businesses’, resulting from the sum of the stocks of born circular and converted circular businesses, is connected with three impact variables: à ‘environmental awareness’ (link b): the diffusion of circular business, with its educational and environmental consciousness, may contribute to respond to the coronavirus-driven call to preserve the environment as a precondition for public health (wuyts et al., 2020, p. 2); http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 16 à ‘waste management’ (link c): the circular entrepreneurship transition can actively contribute to address the waste management challenges imposed by coronavirus (neumeyer et al., 2020). in fact, beside the temporary pollution’s decrease due to lockdowns, other dynamics are rising the waste production and greenhouse emissions all over the world. sarkis and colleagues’ concern (2020, p. 3) looks at environmental evolutions once production and transportation will return to pre-covid levels. actually, without appropriate measures, the environmental situation in the post-covid era will be even worse than before (climate action tracker, 2020). indeed, the crisis caused a significant increase in waste production both in the medical (wuyts et al., 2020) and non medical sectors, and a decrease in separate solid waste collection and recycling practices (ragazzi et al., 2020). the environmental problem also concerns the dispersion of single-use masks, the increased plastic waste generation due to a new reliance on plasticpackaged food and the use of disposable utensils in the fear of virus transmission (vanapalli et al., 2020). à ‘local productive resilience’ (link d): in the early phase of spreading, the pandemic has caused a generalized deceleration/close of economic activities and international trading. in this context, the crisis has disclosed the fragility of many global supply chains, included the medical equipment one (ranney et al., 2020). even though in later stages of covid diffusion the movements of people and goods have been restored, these dynamics led to questioning the “overreliance on just-in-time and lean delivery systems” (sarkis et al., 2020, p. 2), showing the need for more resilient supplies at a local level (blériot, 2020). thus, ce transition becomes almost an imperative route to improve local resilience by building more localized supply, production and consumption systems (sarkis et al., 2020, p. 2). looking at the medical sector as a first illustration, it is possible to learn important lessons about the elasticity of bottom-up initiatives by private companies and individual citizens (e.g. production of sanitizing liquid and masks) to recycle locally available resources, thereby reducing the dependency from importations (wuyts et al., 2020). 4.2 causal loop diagram the causal structure hypothesized for the relevant system is based on complex chains of relations among variables, generating loops of different length and complexity. then the stock-and-flow diagram presented above was synthesized in the cld in figure 3, made of 11 interacting feedback loops. since each loop http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 17 cointains just positive links, all the loops are reinforcing and distinguished from each other with a number following the r notation. the internal composition of each loop is reported in table 1 below. as noticeable, loops r1-r3 are made of two variables, whilst the others are made of five (loops r4, r5, r8, r9) or seven variables (r6, r7, r10, r11). loop r1 describes responsible consumers’ self-reinforcing dynamics due to word-of-mouth, loop r2 illustrates the mutual reinforce of circular start-ups and interfirm partnerships: ceteris paribus, more ‘born circular businesses’ will increase the opportunities of ‘interfirm circular partnerships’, which in turn will stimulate new business creation through the spreading of examples, ideas, standard and opportunities. similar structure in loop 3, with the difference that the links are between ‘interfirm circular partnerships’ and ‘converted circular businesses’. the remainder loops show how responsible consumption and circular start-ups can influence each other according to different chains of causality, which take into separate consideration the effects of circular product design and awareness raising initiatives, as well as the impact of responsible consumers’ enlargement, respectively on circular business creation and conversion. in loop r4 a rise in ‘responsible consumer’ has a boosting effect on the ‘willingness to become a circular entrepreneur’ and thus on ‘born circular businesses’ and ‘total circular businesses’. with the increase of circular businesses, also ‘conversion from circular product design’ will be stimulated, thus increasing the stock of ‘responsible consumers’. a similar circuit is contained in loop r5, with the trait that in this case the consumers’ learning process takes place by mean of awareness raising initiatives. loop r6 has a more complex chain: rising ‘responsible consumer’ will induce circular business start-ups, forging more interfirm partnerships able to boost linear business conversions. this fact will result in the total amount of circular businesses, thereby enhancing consumers ‘conversion from awareness raising initiatives’. figure 3. model’s causal loop diagram http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 18 source: author’s elaboration. loop r7 repeats the r6’s structure but considers the separate effect of ‘conversion from circular product design’. loops r8 and r9 describe the responsible consumption and circular conversion’s reciprocal stimulus, trained respectively by ‘conversion from awareness raising initiatives’ and ‘conversion from circular product design’. loops r10 and r11 portray other reinforcing dynamics: more ‘responsible consumers’ will push the ‘company willingness to go circular’ and then the ‘converted circular businesses’, which will rise ‘interfirm circular partnerships’ and, by this way, ‘born circular businesses’ and ‘total circular businesses’. the latter feed back into responsible consumption, respectively through the influence of awareness raising initiatives (r10) and the circular product design (r11). loop groups r2-r3, r6-r7 and r10-r11 contain as a driving force the variable ‘interfirm circular partnerships’, whose connotation is actually different in each couple: in the minor loops r2-r3 there are portrayed the separate effects of partnerships among homogeneous businesses: born circular in loop r2 and converted circular businesses in loop r3. in all the other cases the partnerships mix born and converted circular businesses. specifically, loops r6-r7 show how born circular businesses participating into http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 19 circular partnerships contribute to the conversion of linear businesses stimulating their circular innovation, whilst loops r10-r11 illustrate the value added by ‘converted circular businesses’ to the ‘interfirm circular partnerships’ and their inspiring effect on ‘born circular businesses’. table 1. model’s loops internal composition loop variables r1. responsible consumer à conversion from word of mouth r2. born circular businesses à interfirm circular partnerships r3. converted circular businesses à interfirm circular partnerships r4. responsible consumer à willingness to become a circular entrepreneur à born circular businesses à total circular businesses à conversion from awareness raising initiatives r5. responsible consumer à willingness to become a circular entrepreneur à born circular businesses à total circular businesses à conversion from circular product design r6. responsible consumer à willingness to become a circular entrepreneur à born circular businesses à interfirm circular partnerships à converted circular businesses à total circular businesses à conversion from awareness raising initiatives r7. responsible consumer à willingness to become a circular entrepreneur à born circular businesses à interfirm circular partnerships à converted circular businesses à total circular businesses à conversion from circular product design r8. responsible consumer à company willingness to go circular à converted circular businesses à total circular businesses à conversion from awareness raising initiatives r9. responsible consumer à company willingness to go circular à converted circular businesses à total circular businesses à conversion from circular product design r10. responsible consumer à company willingness to go circular à converted circular businesses à interfirm circular partnerships à born circular businesses à total circular businesses à conversion from awareness raising initiatives r11. responsible consumer à company willingness to go circular à converted circular businesses à interfirm circular partnerships à born circular businesses à total circular businesses à conversion from circular product design source: author’s elaboration 5. conclusion tackling the current pandemic as a “black swan” (e.g. halliburton, 2020; deloitte, 2020), i.e. an unprendictable event carrying a massive impact (taleb, 2007), the post-covid scenarios for policy making and socioeconomic development can be summarised by two antipodes. the first is to treat this occurrence as a “history accident”, to be overpassed through stimulus packages restoring the pre-covid, business-as-usual mode (bleriot, 2020). in alternative, the pandemic may be considered as an opportunity to learn from the pitfalls and shortages being experienced, creating the conditions for systemic robustness and local supply resilience. this work confirms how circular economy, already considered a catalyst for reaching sustainability goals (geissdoerfer et al., 2018; esposito et al., 2018) can be a promising paradigm to deal with coronavirus related challenges, fostering virtuous development paths. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 20 in detail, the study contributes to the recent strategic management debate about ce, by proposing a system dynamics insight model to describe the basic mechanisms of circular business creation and diffusion, and their potential impact on covid issues. building on literature inputs, the model brings the novely to combine businesses and consumers’ perspectives together, postulating that the transition towards ce is a mirror process of “conversion” involving with specific features both actors. the resulting systemwide analysis completes and transcends the outputs of previous works on ce business applications, whose focus has been the separate analysis of these categories and the development of circular business models (linder & williander, 2017; bocken et al., 2016). the research also recognizes the relevance of consumer’s role, as well as the learning dynamics taking place in both consumers and companies (matthias et al., 2016; mendoza et al., 2017). the model building was iterative and the first research output was a stock-and-flow diagram stating a complex hypothesis about the causal structure of ce diffusion and its potential in alleviating the current systemic crisis. based on this, a comprehensive causal loop diagram synthesized self-reinforcing feedback mechanisms. making a distinction among “born circular” and “converted circular” businesses, the study has the merit to provide a holistic view about ce, integrating and inferring from multidisciplinary literature and emphasizing the interrelated key roles of circular entrepreneuship and consumption. according to the model, ce initiatives can be means to reduce financial inequalities and to revitalize existing firms through a recovery of efficiency (bocken et al., 2016; guldman, 2016), new opportunities to differentiate products (morris et al., 2020), and the perspective to “educate” their own demand to the principles of responsible consumption (matthias et al., 2016; centobelli et al., 2020). in addition, the stock of circular businesses has a boosting effect on environmental awareness, improves waste management, and stimulates productive resilience at a local level. although created by baring in mind the covid emergence, the model dynamics lay at a general level, and can be considered as valid insights to contribute to a more sustainable and circular economic system, less exposed to systemic risks. specifically, a number of self-reinforcing dynamics are described and disclose the potential triggering of virtuous loops, such as the enlargement of the responsible consumers’ stock due to word-of-mouth, circular product design and awareness raising initiatives, as well as the mutual stimuli of circular start-ups/conversions and interfirm partnerships. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 21 in the end, the model illustrates the importance of stakeholders to accelerate companies’ transition to circularity, highlighting both the importance of partnerships with other companies and consumers, together with the role of regulations and incentives. for the planning and implemention of effective interventions supporting ce applications, policymakers need in first place to be aware of circular business dynamics (kirchherr et al., 2018) and their networking impact on public value (milios, 2018). thus, a holistic view appears necessary at both national and local level, in order to create an infrastructural tissue favoring ce, with public/public-private agencies capable to intercept (and properly manage) funds and skills devoted to circular business development, interfirms partneships and sensitization campaigns. however the study presents a series of limitations. first, the underlying literature was retrieved through google scholar engine, chosen for its multidisciplinarity and attitude to also include relevant nonscientific literature dealing with a novel and contemporaneous research topic. however, some publishers are not indexed in the database and citation data are over-estimated (mikki, 200; shultz, 2007). future research could furtherly validate and enlarge this work by performing new literature rounds on other databases, such as wos or scopus. furthermore, the proposed model is not tailored to a specific sector or business case, and does not concern neither functional aspects (organizational, technical and operational features related to the development of circular products/processes), nor sociocultural and technological factors (e.g. the effect of digital technologies on ce transition). the representation of circular business creation and conversion processes just refers to net rates of change in businesses’ stocks (bi-flows). this is a simplification not capturing circular business closures or “returns to linear”, as well as the factors affecting them. moreover, the circular business conversion does not consider the process graduality of circular business model testing. even the concept of circular efficiency, treated as an exogenous variable in the model, may disclose more complex dynamics of company experimental strategies, learning by doing processes and skill formation. thus, later studies could tailor the model to address sector-specific dynamics or identified business case studies, also considering the mentioned aspects not covered by the present research. so far, the impact variables refererred to covid issues are exogenous, i.e. they do not feed back to other parts of the model and just receive impulses from it. next model advancements could enclose more variables and bidirectional relationships in this sphere, in pace with a better understanding of the socioeconomic and environmental implications of the pandemic. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5098 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 22 finally, the qualitative approach of this research calls for more investigations to test the model (or future versions of it) in the real world. references apostolopoulos, n., al-dajani, h., holt, d., jones, p., & newbery, r. 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(2020). circular economy as a covid-19 cure? resources, conservation & recycling, 162, 1-2. yang, m., evans, s., vladimirova, d., & rana, p. (2016). value uncaptured perspective for sustainable business model innovation. journal of cleaner production, 140(3), 1794-1804. zott, c., & amit, r. (2010). business model design: an activity system perspective. long range planning, 43(2), 216-226. 4486-article text-14460-2-9-20200703 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4486 published by university of turin ejsice content is licensed under a creative commons attribution 4.0 international license http://www.ojs.unito.it/index.php/ejsice/index 1 reporting tools for social enterprises: between impact measurement and stakeholder needs daniel iannaci department of management, university of turin, turin, italy e-mail: daniel.iannaci@unito.it received: 11/05/2020 revised: 12/06/2020 accepted for publication: 17/06/2020 published: 20/07/2020 abstract most people within the third sector and beyond would endorse the view that social economy organisations should report on what they do and how they work for the common good, and we, as a society, should require such reporting. there are several studies and research on the role of reporting for social enterprises hoping to communicate financial information and social impact. however, the gap that emerged from the literature is that the principles of transparency and accountability are defined, but there is a lack of determination of a key element that can put order and respond to the need of stakeholders in the best possible way. the author believes that a good reporting tool that is representative and that above all is understandable even to nonprofessional users only works if it can give an effective group representation if it puts the first place: the need. the author employs the methodology of the case study where data are collected by multiple means through qualitative research techniques such as interviews, and document analysis for acquiring a full understanding. the finding reveals that the focus on the need of stakeholders increase accountability, transparency, and stakeholder engagement. stakeholders would be able to better understand the strong values of good governance, leadership, performance, and social impact that the company possesses. through the research project conducted so far has been possible to demonstrate that in social enterprises to have an effective measurement of impact must use all possible tools to know and describe the company and the ecosystem that surrounds it and this is possible through timely reporting that it returns clear information for all. keywords: reporting tools, social enterprises, social impact, impact measurement, stakeholder needs, accounting http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4486 published by university of turin) ejsice content is licensed under a creative commons attribution 4.0 international license http://www.ojs.unito.it/index.php/ejsice/index 2 1. introduction pearce (2009) explain that most people within the third sector and beyond would endorse the view that ‘social economy organisations should report on what they do and how they work for the common good, and we, as society, should require such reporting’ (pearce, 2009). on a practical level, however, the basis of such reporting is perhaps less immediately obvious. the best-known approaches to social reporting, including aa1000 and the gri guidelines, may appear excessively complex, costly and better suited to large corporate settings, rather than smaller values-based enterprises. the business landscape currently existing in the entrepreneurial ecosystem in accordance with the literature defines a certain category of companies that can be the main players in the area of impact economy are the: social enterprises (ses) (bicciato, 2010; borzaga, 2002; borzaga & tortia, 2004; calò et al., 2018; farmer et al., 2012). the social enterprises have within their social object the characteristics that ethical finance seeks and above all they are the best structured companies of the whole panorama of the third sector (zamagni, 2013). the response to the need for comprehensible and effective reporting, introduced at an entrepreneurial level, is increasingly moving towards social enterprises that are currently considered in the scientific landscape hybrid organizations, business models aimed at maintaining the social mission along with business (billis, 2010; grossi & thomasson, 2015; haigh & hoffman, 2012). social enterprises make the social a strategic asset to regenerate resources of different nature: human, through the development of new knowledge and new skills; economic, through the possibility of aggregating a variety of types of sources precisely by virtue of the hybrid nature of the organization; physical, that is, linked to the process of transformation of spaces in places, where relationality becomes the key ingredient for the success of the process (garrow & hasenfeld, 2012; kleynjans & hudon, 2016; smith & phillips, 2016). the economic evaluation of the social impact of hybrid organizations becomes, therefore, crucial in the knowledge economy (meneguzzo, 2005; zamagni et al., 2015) and the debate focuses on the instruments of impact measurement (calderini et al., 2007). hybrid organizations are located in an intermediate section at the intersection of public, profit and non-profit (billis, 2010; grossi et al., 2015; secinaro et al., 2019; thomasson, 2009). reporting and communication for these realities becomes fundamental. in order to define the field of innovation and identify the social value that is returned to the ecosystem of the territory, it is important and helpful to define the business model as a tool that can facilitate (or not) the spread of innovation in the system. the value inherent in an innovation remains latent until it is put on the market or otherwise explicit and this can only happen through the use of a business model (chesbrough & rosenbloom, 2002). certainly, the accounting system is an important point within a company that can bring out information about good governance. governance involves a set of relationships between stakeholders and the distribution of rights and responsibilities between these different stakeholders (awotundun et al., 2011; fernández-fernández, 1999; freeman, 2010; freeman et al., 2010; mair et al., 2015; vining & weimer, 2016). as a result of good governance, the values that are passed on to stakeholders are experience and reliability, as the leaders of professional organizations in the field of ethics and compliance have a responsibility to feed the next generation of entrepreneurs. leadership skills increase the effectiveness of management and also tend to promote ethics (adams, 2000; alshammari et al., 2015; carroll, 1996; friedman, 2014; vining & weimer, 2016). the discovery reveals that with the se's best reporting practices within the well-functioning ecosystem it is possible to create new social projects. having accountability as a connecting feature with stakeholders gives you the credibility you need to create social impact through new projects. the benefit is perceived directly by the users of the service and indirectly by all the other stakeholders linked to the territory in which the impact activity is carried out (adams, 2000; alshammari et al., 2015; biancone et al., 2018b; carroll, 1996; kirk et al., 1986; lehner & nicholls, 2014; skelcher & smith, 2017; wainwright & manville, 2017). there are several studies and research on the role of reporting for social enterprises hoping to communicate financial information and social impact. however, the gap that emerged from the literature is that the principles of transparency and accountability are defined, but there is a lack of determination of a key element that can put order and respond to the need of stakeholders in the best possible way. therefore, the research aims to define and highlight one or more key factors and answer the research question "define the key factors that a social enterprise should have in order to obtain a reporting tool oriented to the communication of financial data and social impact and determine which factors stakeholders would like to know in order to be heard included". http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4486 published by university of turin) ejsice content is licensed under a creative commons attribution 4.0 international license http://www.ojs.unito.it/index.php/ejsice/index 3 the document is structured as follows: the second section illustrates the literary review, the third section the research methodology, the fourth section the context of the case study, the fifth section provides the presentation of the results and finally the sixth section concludes. 2. literature review 2.1. reporting tools the consolidated financial statements provide the information necessary to verify the degree to which the objectives for the entire aggregate have been achieved, with particular reference to the composition of the sources and the composition of the investments (fornaciari, 2017; pisoni et al., 2007). this context makes it possible to know the financial structure of the group, the degree of financial autonomy and the level of indebtedness, the participation or composition of the group, the total cost of the same, the structural composition of costs, especially those that constitute the most significant elements of production. the consolidated financial statements provide information and knowledge of the different composition of revenues. in addition, this document provides an analysis of the relationship between the income to be taxed and the capacity of the parent company. revenues generated by the exchange with subsidiaries, with the possibility of forecasting consolidated business units. this information allows the possibility of formulating more optimised programmes to identify the use of resources. national and international accounting standards converge with the aim of providing information from the consolidated group: accessible, comprehensible and transparent (ecchia & zarri, 2005). especially in the context of a corporate group, where several companies can be merged by nature and destination (profit and non-profit companies), it can intervene in support of popular financial reporting, a consolidated economic and financial reporting tool that integrates financial, economic, equity, quantitative and qualitative information of the consolidated group with a simple language that can also be understood by non-professionals, therefore addressed to all citizens and stakeholders (biancone et al., 2016, 2017b). the most widespread instrument in the municipalities and in the anglo-american states has been applied for the first time in italy with the realization of the popular budget of the municipal group of the city of turin. the instrument in its first definition represented all aspects of the public group. subsequent projects focus on the prevailing needs of the main stakeholder, the citizen, differentiating also the group's attention to gender needs (biancone et al., 2017b). the tool adapts well to the needs of the group through the representation of financial and non-financial aspects. since the accessibility of information by stakeholders is the key point of the pop reporting, the company works with them year after year to redefine the content to adapt to what are the requests and priorities for information. moreover, given the difficulty of reading the results with respect to the financial and non-financial contents related to the level of education, the tool is able to respond to the needs of workers but also to those of investors considering the possible gap and scope related to education (biancone et al., 2017a). the connotation and vision of the whole group allows a true representation of the real and trendy situation, giving the possibility to orient the planning by aligning the needs of the workers, and the objectives of the service contracts that social cooperatives often stipulate for the achievement of common public interests with local or regional authorities aimed at the satisfaction of the community. the definition of guidelines and suggestions to ensure transparency and ease of reading of data (hermann, 2011) responds well to the needs of the declaration of non-financial information, without the need to further adapt these accounting standards and guidelines in the context of financial representation. in order to better explain the section, the author has produced table 1 below. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4486 published by university of turin) ejsice content is licensed under a creative commons attribution 4.0 international license http://www.ojs.unito.it/index.php/ejsice/index 4 table 1. scheme for comparison between types of financial statements report economic-financial social sustainability integrated popular financial reporting focus • economic • financial • asset focus temporale past (final balance) future (budget or programmatic budget) past with orientation to the future • past • present • future main subjects -workers (politicians, professionals, auditors, researchers) -funders -central administration -media specialist -citizens -local companies -mass media -human resources -non-profit organizations -interested public -all stakeholders -all stakeholders with the focus of content according to the needs of the main stakeholders commitment level compulsory drafting voluntary implementation approach compliance based on principles function communicative • communicative • strategic report with economic and financial statements complementary incorporation of: • economic and financial statements • sustainability report • corporate governance information • possible focus on intangible capital incorporation of: • consolidated economic and financial statements • sustainability report • information on corporate governance with approach to gender need • non-financial group information • focus on intangible capital source: author’s elaboration the study shows that some social reporting tools (integrated and pop reporting) can give a correct perception and analysis of the service of public interest. through a study, it was observed that the effective use of intellectual capital (ic) by managers and the introduction of integrated reporting is able to facilitate the introduction of changes in the processes of management and measurement of the ci from the point of view of value creation (badia et al., 2018; biancone et al., 2018a). in particular, it has been demonstrated that popular financial reporting can be adopted with a view to greater transparency, accountability and sharing of results with stakeholders, responding to requests for information (biancone et al., 2018c, 2018d, 2019b). consolidated financial statements of a non-financial nature represent a useful tool for representing some important elements for the valuation of investments and the absorption of resources that are often not valued in the financial statements. there is no evidence or valuation of what human capital is, a resource on which companies have been investing more in the last twenty years. the social enterprise sees among its main stakeholders not only users and public bodies with whom it shares objectives to meet needs, but also investors and producers of services at the same time. the representation of the intangible needs a greater sensitivity to which the accounting principles and guidelines have not yet been able to respond. in the case study (biancone et al., 2018c), it is highlighted that the values linked to the employment of disadvantaged human resources not present in the consolidated financial statements of the group do not find an economic expression, but present a real added value with consequent cessation of costs http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4486 published by university of turin) ejsice content is licensed under a creative commons attribution 4.0 international license http://www.ojs.unito.it/index.php/ejsice/index 5 (which would not have been to use the subjects involved). business models and value reporting are the starting points for defining non-financial elements based on group values. a total representation can be given through the adoption of popular financial reporting which, thanks to the intrinsic characteristics of the tool, already meets the needs of group representation in a perspective of integrated sustainability, considering many aspects including representation through infographics and a scale of priorities related to gender, environment and various priority stakeholders. the elements of kpis allow for easy reading and comparison. the simple language of reaching everyone without distinction is a key element of the elements that must be present especially in those companies where investors are often the same disadvantaged members. popular financial reporting is a voluntary tool but can respond in a single document to information needs (yusuf et al., 2013). the need for transparency and responsibility in a period of reduction of available resources is met by popular financial reporting, which is also justified in purely legislative terms by the need to have an easy reading of non-financial results to attract new investors and explain to them the strategic structure and intrinsic value of the company (yusuf & jordan, 2015). 2.2. social enterprises a social enterprise (se) is an undertaking with a social or environmental mission as its primary goal, with profit having a lower rank and value than the success, effectiveness and impact of the mission itself. ses usually start projects or a business in areas which are of public importance, areas where governments and their public policies have been inadequate and where markets/industries operate only with short-term gain or profit as their aim (dart, 2004; mauksch et al., 2017; steiner & teasdale, 2016). social enterprises are drivers of economic and social inclusion for the territories in which they operate. the phenomenon influences company extensions (goldoff, 2000; rehn, 2008). the fate of companies is linked to that of their territory (zamagni, 2013). since the 1980s, non-profit organizations have slowly begun to incorporate hybridity, only occasionally questioning their public or private identity (billis, 2010; bryson & roering, 1987; grimsey & lewis, 2002; lan & hal, 1992; perry & rainey, 1988; stanton, 2004). there are factors, such as good governance, market leadership, that give the necessary confidence to funders from the moment they seek funds but are also the key factors that allow a social enterprise to be included among the main actors of social innovation (alshammari et al., 2015; ayob et al., 2016; caulier-grice et al., 2012; fernández-fernández, 1999; hubert, 2010; smith & phillips, 2016). as alter (2004) argues, se occupy a single space within the economy and can be positioned between profit and non-profit. borzaga and santuari (2003) argue that compared to profit organisations, social enterprises attach considerable importance to the social purpose. normally, the creation of economic value has a predominant position within the objectives of profit organizations over the social and environmental ones, which are often used to achieve the former. instead, for ses the main objective is to maximize the creation of social and environmental value and historically these are achieved through the right mix of social and financial performance. profit and se are distinguished by the fact that the latter in terms of economic sustainability must give strong guarantees of being achieved through market-oriented activities. on the contrary, the former, as austin argues (2000), focus only on some social results without the objective of competing on the market with profit-oriented companies and financing their activities largely (but not only) through donations and public contributions. another very important distinction is given by borzaga and santuari (2003), which claim that es design and sell a product or service, creating synergies between the financial and social objectives. the role of these types of companies is fundamental for the creation of social innovation of the ecosystem and enter with force to contribute to the current definition of impact economy given by calderini (2018). http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4486 published by university of turin) ejsice content is licensed under a creative commons attribution 4.0 international license http://www.ojs.unito.it/index.php/ejsice/index 6 2.3. social impact measurement when, in this research, reference is made to the social the reference is to life within the community, the ecosystem. the scientific disciplines that study the subject are sociology, economics and anthropology (calderini et al., 2018; marradi, 1992; rousseau, 2015; zamagni et al., 2015). as will often be used, the concept of social is accompanied by a tendency to improve the living conditions of less well-off citizens, to achieve greater equalization between the various components of a society. hybrid organisations are promoters of social innovation, generating widespread well-being and sustainable improvements in the living conditions of the community. it is precisely the community, thanks to the increasingly accessible communication technologies, that becomes not only the recipient of social innovation, but also the co-generator of innovative processes (corvo & pastore, 2018). when social enterprises and resource providers are involved in symmetric relationships, the purpose of measuring social impact seems to help social enterprises to improve their performance so that the parties can achieve their common goal of creating social impact for those in need (zamagni et al., 2015). a fundamental element of the evaluation process is attention to the effects generated by the action, including positive and negative effects, direct and indirect, expected and unanticipated (bezzi, 2001). evaluation should not be confused with monitoring, for which there are similarities and points of contact. in the first case, what has been achieved is analysed, verifying the validity of the results achieved; in the second case, the aim is to verify the progression with respect to the intervention planning, in order to identify any deviations (montesi et al., 2017). through the explanation of the chain of value creation, clark et al. (2004), as it can see in figure 1, deepens the concept of "social" outcome, as the value purified of what would have happened regardless of the intervention of social impact. figure 1. impact value chain source: (clark & rosenzweig, 2004) the impact assessment is based on counterfactual analysis, i.e. it questions the occurrence of a change not only with respect to the "before compared to after", but also to the "with respect to without" a certain involvement (clark & rosenzweig, 2004). there are projects where the "before vs. after" is sufficient to determine the impact generated, for example when no other factor is likely to have caused observable effects on the change generated: the reduction of time spent on drawing water from the installation of hydraulic pumps. in other cases, however, the cause-effect link is not so obvious and linear, requiring therefore an analysis that compares the "with respect to without" the intervention (clark & rosenzweig, 2004). there may be various reasons for measuring the impact, for example: (i) demonstrate transparency, accountability and legitimacy to investors to access resources because without impact, evidence and reporting, lenders do not see the value created for communities; and (ii) know and improve organisational performance to determine whether they should continue or change their current strategy to achieve their missions (nguyen et al., 2015). http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4486 published by university of turin) ejsice content is licensed under a creative commons attribution 4.0 international license http://www.ojs.unito.it/index.php/ejsice/index 7 as illustrated by nguyen et al. (2015), when social enterprises and resource providers are involved in symmetric relationships, the purpose of measuring social impact seems to help social enterprises improve performance so that parties can achieve their common goal: to create social impact for people in need. the budget tells us everything, the need is to know how to analyse it. spreading the data through a pop language is the challenge, starting from the needs up to the relapse on the territory (biancone et al., 2018c, 2018d; biancone & secinaro, 2015; brescia, 2019). 2.4. stakeholder theory originally the relationship between the stakeholder and the company was conceived following a "hub and spoke" approach, later models of interactive relationships were developed, in which the management and the interested parties agree on a management approach oriented towards transparency and responsibility (andriof et al., 2002; freudenreich et al., 2019; jiang et al., 2019). stakeholder theory scholars have sought to classify relational models between companies and stakeholders by taking a path of gradual growth in stakeholder engagement that includes the following steps (svendsen, 1998; waddock, 2002): stakeholder mapping (clarkson, 1995); stakeholder management (carroll, 1996; clarkson, 1995; donaldson & preston, 1995; mitchell et al., 1997; sangle, 2010); stakeholder engagement (se) (andriof et al., 2002; windsor, 2002). table 2. stakeholder involvement steps steps stakeholder mapping identify its stakeholders if possible to distinguish between primary (which determines the very survival of the company) and secondary (which affects or is affected by the company but does not affect its sustainability) (clarkson, 1995) stakeholder management manage the expectations of stakeholders and the social and economic issues they support, balancing positions (clarkson, 1995; hillman & keim, 2001) stakeholder engagement involving its stakeholders in decision-making processes, involving them in company management, sharing information, dialoguing and creating a model of mutual responsibility (manetti, 2011) source: author’s elaboration the stakeholder management model in corporate social activities (including social reporting) can be used by the company as a tool to negotiate its relationship with stakeholders (roberts, 1992; ullmann, 1985); suggesting that companies are interested in stakeholders because of the perceived benefit in terms of improved financial performance and that managerial relations with stakeholders are based on regulatory, moral commitments rather than on the desire to use these stakeholders exclusively to maximise the definition of stakeholders' profits defining a two-way relationship between the organisation and its stakeholders (berman et al., 1999; freeman, 1984). starting from the stakeholder theory, a conceptual structure for corporate social activity was defined by testing the ability to explain social reporting activity, finding stakeholder power, strategic posture and economic performance significantly correlated levels of social diffusion and the model were tested to ascertain a critical assessment of contemporary developments (berman et al., 1999; freeman, 1984; freeman & gilbert, 1988; owen et al., 2000; roberts, 1992; ullmann, 1985). it is important to get feedback from stakeholders on social and ethical performance. therefore, companies currently use the notion of "stakeholder engagement" as a means of legitimisation instead of a means to extend corporate accountability and transparency (civera et al., 2019; owen & swift, 2001; strand & freeman, 2015). this assertion can be supported by the fact that, as has been revealed above in this section, stakeholders are not identified in a clear and systematic way to involve them in the reporting process, the issues to be addressed are decided unilaterally and feedback from stakeholders is not included in the decision-making process (freudenreich et al., 2019; how et al., 2019; jiang et al., 2019). stakeholder theory has been widely used, both explicitly and implicitly, in non-profit research (nfpo) exploring accountability and transparency (dhanani & connolly, 2012; ebrahim, 2003; edwards & hulme, 2014; najam, 2002). the http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4486 published by university of turin) ejsice content is licensed under a creative commons attribution 4.0 international license http://www.ojs.unito.it/index.php/ejsice/index 8 stakeholder theory was born as a theory of organizational behaviour related to for-profit organizations (freeman, 1984), with stakeholders initially defined as "any group or individual who can influence or is influenced by the achievement of the organization's goals". it was argued that engagement with stakeholders, including giving and receiving information, would help organizations achieve their goals and gain a competitive advantage (andrews & van de walle, 2013). in addition to shareholders, there are many other interest groups that can influence or be influenced by the behaviour of the company such as employees, customers, suppliers, government and the general public (freeman, 1984). 2.5. the research model in the social impact assessment, as clark et al. (2004) has previously highlighted by a definition of the impact value chain in order to better understand the factors that determine value creation. an intrinsic factor that emerged in the literature analysed on reporting tools, social enterprises, social impact measurement, stakeholder theory is that to create stakeholder participation it is important that upstream there is a company with good governance, leadership, aimed at survival in the market through performance and orientation to social impact. this information is not important if it is not transmitted in the correct way through the correct reporting tool to increase the perception and consequently the involvement (al-khasawneh & futa, 2012; biancone et al., 2018b; fernández-fernández, 1999; freeman, 2010; strand & freeman, 2015). a good reporting tool must put the need of stakeholders first and through the principles of transparency and accountability communicate its corporate history to have the expected results that the ecosystem needs and try to promote ethics (adams, 2000; alshammari et al., 2015; biancone et al., 2018a; carroll, 1996; ebrahim, 2003; pestoff, 2014; vining & weimer, 2016). the discovery reveals that with best reporting practices for ses, it is about shaping the level of information about the various types of stakeholders, both professional and non-professional, so that the supply and demand for information meet (biancone et al., 2019b; biancone & secinaro, 2015). with the aim of answering the research question "define the key factors that a social enterprise should have in order to obtain a reporting tool oriented to the communication of financial data and social impact and determine which factors stakeholders would like to know in order to be heard included". the researcher believes that: a good reporting tool that is representative and that above all is understandable even to nonprofessional users only works if it can give an effective group representation if it puts the first place: the need. after a thorough analysis of the literature review, the study proposes that putting the need for a reporting tool first would increase accountability, transparency and stakeholder engagement. stakeholders would be able to better understand the strong values of good governance, leadership, performance and social impact that the company possesses. figure 2 builds the reference model proposed by the authors. to adopt a reporting tool and meet the needs of stakeholders, a social enterprise must have the four key factors listed above. through this guarantee and the most representative reporting tool they can have the involvement of stakeholders and increase the objective perception of them to create collaboration in new activities aimed at improving the ecosystem. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4486 published by university of turin) ejsice content is licensed under a creative commons attribution 4.0 international license http://www.ojs.unito.it/index.php/ejsice/index 9 figure 2. model to satisfy stakeholder needs source: author’s elaboration 3. research methodology this research employs a case study approach (eisenhardt, 1989; yin, 2014). the case-study approach is suitable for investigating why or how phenomena occurred and the relationships among these phenomena (yin, 2014). through case study, one may better understand a novel phenomenon and concept (eisenhardt, 1989). in line with the purpose of this article, the methodology was adopted by preparing a longitudinal and explanatory case study (yin, 1981, 2017). the case study highlights some relevant aspects and possible approaches of the elements of the model. the methods for collecting information use qualitative techniques and include interviews with managers and employees, analysis of internal documentation, observation of the reality and truthfulness of the data declared with a reworking of some data that ensure the validity and reliability of the information. the primary data were collected directly by one of the authors who for years has been carrying out research within the social enterprise, the secondary data were provided through a semi-structured interview to managers and employees. the validity is guaranteed by the triangulation of different resources with evidence of the key information collected. the evidence collected is guaranteed by a double check on the information through differentiated sources. research allows to record a phenomenon in a real environment, where the boundaries between the context and the phenomenon tend to be blurred (stake, 1995). leadership performance social impact social enterprise r ep or ti ng good governance trasparency accountability stakeholder involvement perception need http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4486 published by university of turin) ejsice content is licensed under a creative commons attribution 4.0 international license http://www.ojs.unito.it/index.php/ejsice/index 10 the literature allows to confirm and combine the information collected (yin, 2017). the transparency, the approach and the repeatability of the analysis and the method allow its reliability (leonard-barton, 1990). therefore the researchers believe that the case study defined by yin (2017) is the best way to answer the research question "define the key factors that a social enterprise should have in order to obtain a reporting tool oriented to the communication of financial data and social impact and determine which factors stakeholders would like to know in order to be heard included”. the research reflected its theoretical framework presented in figure 2, which consists of eight elements: accounting, good governance, reliability and experience, market leadership, security and compliance, technology and innovation, performance and stakeholder engagement; in the interviews conducted and in the semi-structured questions, also ensuring external validity (campbell, 1986). company and interviewees names and position are kept anonymous for privacy reasons , then they were transcribed and then encoded independently (curtis et al., 2010). however, researchers could mention that the surveyed members included the: ceo, cfo, and the participants who benefited from services. 3.1. interviews outline with the aim of answering the research questions, the research was organized to cover the topics needed to have the elements to proceed with the study. additional exploratory questions were considered to deepen the understanding of the answer, rather than closing a discussion and moving on to the next question. it was considered important to organise the questions by addressing the necessary issues from all points of view, from the most specific to the most general. the topic of reporting was addressed by trying to understand which information was considered understandable and which was not. also, to understand if social issues were considered important and if the information was more transparent if this would increase participation. it was necessary to have information on the reaction of the members trying to understand if the group believed in the social enterprise and if they fully understand the identity in which they work if it had increased the sense of belonging. since the tool would also be consulted by the users of the services, it was important to understand whether a better form of communication had changed the forms of behaviour. through a more discursive approach another topic that created interest was to understand if there were any obstacles to achieving the objective by trying to understand how it influenced the company. 3.2. case study – context the social enterprise in question puts the creation of employment for its members, who are among the types of people defined in the social context as "fragile" through the collection of waste, first. the company has historically focused on activities with characteristics aimed at simplifying work to promote the qualified workforce, to allow workers to keep pace with the market, monitoring the results, solid assumptions to ensure the economic independence of people, always placing employment and social repercussions of the territory of intervention at the center of their choices. the services related to waste range from paper collection to bulky waste, asbestos removal, collection and disposal of raee and plastic and glass reception and social housing service. the information was collected through interviews with members, staff, through the company's website and citizens who use the service. in addition, the financial report of the last five years has been analysed to support accountability. about accountability supported by financial statement data, it was possible to understand that the company is solid and stable from an economic point of view. revenues from service activities can be kept constant by always recording important profits reinvested in new activities. the company recorded a significant improvement in the ebitda, ros, roa, roa and roe indices and confirmed the company's solidity, as can be seen from the interviews that will be analysed in the section. 4. presentation of results this section summarizes the results of the case, showing the outputs of the respondents and the connections that emerged between the strengths of the social enterprise. the interviews made and the comments received confirmed the theory that literature has led to deepen (curtis et al., 2010). http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4486 published by university of turin) ejsice content is licensed under a creative commons attribution 4.0 international license http://www.ojs.unito.it/index.php/ejsice/index 11 respondents confirmed that the strengths of the company that has shown on several occasions has had the best results on the trust aspect. thirty years of experience and business leadership has shown that governance is solid and, above all, it is flexible to any unexpected event in the market, since thanks to their expertise they are able to adapt and shape business with the market, confirming the concepts of al-khasawneh and futa (2012) and alshammari et al. (2015). the concept of good governance as treated by fernández-fernández (1999) and norman (2014) is confirmed by saying that the governance structure is solid and has good internal management of responsibilities. the members of the company are aware of this because, in addition to seeing it from the numbers, they perceive the internal and external organisational strength. it was therefore possible to link to the literature that the search for daily innovation is a key factor within the studied organization. this factor is perceived and above all demonstrated. it was interesting to understand the differences in perception of social enterprise because there were opinions of strong trust from within. the externals were divided between those who knew the company and therefore appreciating the work of inclusion and those who used only the city service which are often linked by a prejudice of the category as studied by andrews and van de walle (2013). when it was explained that the social mission is to put the worker in first place and the great work is aimed at the welfare of members was shown to be the gap in the lack of that type of information as stated by freeman (2010). this type of perception prevailed over financial, non-financial and above all social impact data. those who knew the subject had a better perception, the non-experts did not have the full picture sometimes clouded by prejudice, as mentioned before, which did not even lead to deepen confirming what was said by adams (2000) and biancone et al. (2018d) about participation thanks to good reporting. for those who did not have clear concepts of social impact and therefore what was done for the ecosystem by the social enterprise underwent a change of attitude and a propensity to cooperate to participate in improving through their contribution by informing themselves of the ways approaching the concepts of adams (2000) and alshammari et al., (2015) about the cornerstones of ethical finance. as in the studies of biancone et al. (2017b, 2018d, 2019b) the idea of a group is strong and defines a point in favour of defining a good accounting policy in order to give the perception of being responsible and transparent. governance is aware that everyone has the right and the desire to know more about the company, both internally and externally, as confirmed by the studies of freeman (2010), carroll (1996) and biancone et al. (2016). as highlighted in the literature, mapping stakeholders increases the range of action of information and therefore becomes an effective reporting tool. in fact, valuable information has emerged that professional users believe is enough to existing accounting tools as they are able to read them and deepen through other analysis of information not in evidence. nonprofessional users, on the other hand, considered the existing tools difficult to understand and unrepresentative. clearly dictated by the incorrect channel of information. a user-friendly language is preferred and can be enhanced by innovative social media tools. consequently, it emerged that the use of social media was always present, confirming the theory of biancone et al. (2018a) in which citizen participation increases with the use of computer tools. in their studies they show that the factor that determines a participation of families is the simple connection to the internet because it has been shown that this element is enough to create in users an active participation in the digital world. therefore, an interesting starting point was the request to adapt "information in pills" that have accustomed to receiving social media. the territory is having a propensity to social orientation and social impact and therefore a good reporting tool can help to increase the propensity to social innovation of the ecosystem. summarizing the key factors that emerged from the literature and confirmed by the interviews, the company that was the subject of the case study confirmed the theoretical framework. good governance, leadership, performance and social impact are the information that stakeholders perceive as a translation of responsibility and transparency of the social enterprise, creating in them an increase in positive perception and consequently in active participation. figure 3 summarizes the concepts in this section. http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4486 published by university of turin) ejsice content is licensed under a creative commons attribution 4.0 international license http://www.ojs.unito.it/index.php/ejsice/index 12 figure 3. simplification of results source: author’s elaboration 5. discussion and conclusion 5.1. contributions to the literature in order to develop a sustainable approach to international growth, social enterprises must continue to learn from experience and adapt during their internationalization and connect all stakeholders with innovative reporting tools. as presented above, this process is the subject of this study. in this work, it defines the key factors that a social enterprise should have in order to obtain a reporting tool oriented to communicate financial data and social impact and determine which factors stakeholders would want to know in order to be heard included. in this way, it meets the need for transparency and accountability used for public authorities (hartmann, 2019; presenza et al., 2014) and the way they inform subsequent internationalisation practices (biancone et al., 2019a; owen et al., 2000). the results contextualize and extend the conceptual work by suggesting that social enterprises rely on their dynamic capacity to learn from their experiences and to adapt their practices in the process of solidifying good governance and leadership to generate performance and social impact and make the model replicable and scalable. it is found that this type of structure is able to perceive and manage the "need" of stakeholders and efforts would be in vain if they could not be linked to the company. a good reporting tool as presented in the literature can guide the right theory of change (castello & lévêque, 2016; kail & lumley, 2012). by responding to needs and communicating in the right way, the company generates transparency and accountability in its stakeholders by triggering a proactive form of these stakeholders who, through their participation, are able to improve the structure of the social enterprise which in turn manages the whole process described [figure 2]. therefore, having such key factors, however difficult to achieve, provides an initial basis for subsequent adaptation to the process. in this sense, the results add a nuance to the vision that structured reporting brings with it positive strategic effects for the company that uses it and for all stakeholders generating an evolution of all (calò et al., 2018; owen et al., 2000; zamagni et al., 2015). in essence, the transition from one phase of development of key factors to the next does not happen by default. instead, the study must take an active role in monitoring the management process aimed at selecting the appropriate human capital, engaging in continuous reflection, critical evaluation, adaptation of criteria for its requirements, adaptation of good practices. this http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4486 published by university of turin) ejsice content is licensed under a creative commons attribution 4.0 international license http://www.ojs.unito.it/index.php/ejsice/index 13 selection is also fundamental in the choice of the reporting tool that creates a mechanism of trust in all readers (professional and non-professional) (biancone et al., 2019a, 2019b). 5.2. implications for managers the results demonstrate that the benefits of a good company structure linked to an excellent reporting tool are not necessarily automatic and may require dedicated effort and procedures. based on the preliminary evidence of the study and if supported by further research, social enterprise decision-makers can improve the effects of their actions internally and externally, even when reflection on good practice is not perceived as urgent. the results suggest that these micro-processes can be supported by an entrepreneurial attitude that allows business managers to regularly take stock of the situation and to be ready to act quickly, being aware of the financial and non-financial data of their company, especially in a language that is certainly accessible. too often smaller companies that launch themselves on the market do not have the time and resources to make these assessments and this can lead to inefficiencies that last longer than necessary, resulting in waste of resources and poor returns, as well as reducing opportunities for learning and adapting practices. in the specific context, good reporting practices consist in using human capital with increasingly specific combinations of skills and know-how. the manager must select the human capital for the implementation of these activities, otherwise he or she will have to provide external professionals for the implementation. 5.3. limitations and future research the demonstrated scenario has a strong illustrative and exploratory potential and the phases that the study identifies can be adapted to other contexts (welch, 2012). the same applies to the transfer of context-specific notions of good governance, leadership, performance, social impact and especially reporting requirements. there may also be other companies that have similar characteristics to our context, but have different business models and industry regulations, so these results should be transferred to these contexts with caution. the purpose of our exploratory study is to provide insights that other scholars can draw on and explore further in the theory development process. therefore, this study invite scholars to investigate the transferability of our insights and provide several promising avenues for future research. first of all, the resercher ask ourselves whether the starting point from stakeholder needs and through a good reporting tool can generate in them transparency and accountability can be applied to all non-profit but also profit contexts, since the current literature provides us with further distinctions in this category: for impact and without impact(calderini et al., 2018; clark et al., 2004; meneguzzo, 2005). secondly, the results strongly suggest that the effectiveness of reporting increases the speed of stakeholder engagement with the company. third, to arrive at more general conclusions, the 2030 goals that the world is running towards seem to be set by large institutions and public bodies. social enterprises, which are the engine of social impact, can certainly contribute to this and trying to provide a dashboard of the sdgs business format can help generate global development from the local. i would welcome further empirical studies that investigate the impact of good reporting tools on the global goals that humanity must now aim for (biancone et al., 2018a; welch, 2012). in conclusion, with the aim of answering the question “define the key factors that a social enterprise should have in order to obtain a reporting tool oriented to the communication of financial data and social impact and determine which factors stakeholders would like to know in order to be heard included”, the research confirm that a good reporting tool that is representative and that above all is understandable even to non-professional users only works if it is able to give an effective group representation if it puts the first place: the need. this condition increase accountability, transparency and stakeholder engagement. stakeholders would be able to better understand the strong values of good governance, leadership, performance and social impact that the company possesses. in order to define the field of innovation and identify the social value of the company, which is returned to the ecosystem of the territory, it is important and helpful to define the business model as a tool that can facilitate (or not) the spread of innovation in the system. the value inherent in an innovation remains latent until it is put on the market or otherwise explicit and this can http://www.ojs.unito.it/index.php/ejsice/index european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/4486 published by university of turin) ejsice content is licensed under a creative commons attribution 4.0 international license http://www.ojs.unito.it/index.php/ejsice/index 14 only happen through the use of a business model (chesbrough & rosenbloom, 2002). through the research project conducted so far has been possible to demonstrate that in social enterprises to have an effective measurement of impact must use all possible tools to know and describe the company and the ecosystem that surrounds it and this is possible through timely reporting that it returns clear information for all. we must not forget that a tool such as popular financial reporting is also aimed at non-experts, generating responsibility, transparency and social impact. stakeholders, therefore, will need increasingly advanced tools because the economic evaluation of the social impact becomes crucial in the knowledge economy. references adams, c. 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(2015). valutare l’impatto sociale. la questione della misurazione nelle imprese sociali. rivista impresa sociale. http://www.rivistaimpresasociale.it/rivista/item/141-misurazione-impatto-sociale.html 02_ foschi_ejsice_rev european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7154 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 16 linking bioeconomy, circular economy, and sustainability: trends, gaps and future orientation in the bio-based and biodegradable plastics industry eleonora foschi1, selena aureli2, angelo paletta3, 1 university of bologna, department of business studies via capo di lucca 34, bologna italy eleonora.foschi3@unibo.it 2 university of bologna, department of business studies via capo di lucca 34, bologna italy selena.aureli@unibo.it 3 university of bologna, department of business studies via capo di lucca 34, bologna italy angelo.paletta@unibo.it received: 21/11/2022 accepted for publication: 20/07/2023 published: 28/07/2023 abstract bio-based and biodegradable plastics (bbps) are innovative materials, wholly or partially produced from biomass, with the potential to enhance the circulation of resources in the biological cycle of the ellen macarthur foundation’s butterfly diagram. although bbps are generally considered more environmental-friendly than conventional plastics, robust scientific evidence is still missing. the lack of tools and metrics to assess the circularity and sustainability of the bbps industry poses relevant challenges for its upscaling and contribution to climate neutrality goals in europe. it also calls for adopting system and life cycle thinking, guided by multi-level and multi-dimensional examinations, which are used in this paper to build a comprehensive picture of trends, gaps and future orientations that may boost a sustainable circular bioeconomy in the sector. the valuechain based and multi-faceted swot analysis that emerged from the intersection of system and corporate data reveals the need to establish a combined circular bioeconomy strategy where incentives to integrated local supply chain, dedicated epr schemes, eco-design guidelines, revised eol standards, new clear labelling schemes and harmonised sustainability criteria should be prioritized and conjointly pursued to accelerate the transition towards a sustainable circular bioeconomy of the bbps value chain. keywords: bioeconomy; circular economy; sustainability; bio-based and biodegradable plastics 1. introduction the exploitation of fossil resources has defined recent decades. the oil demand moved from 2,720 million tons in 1975 to 4,070 million tons in 2020 (ibrahim et al. 2021). the gradual rise of a fossil-based society has contributed to a massive increase in global greenhouse gases (ghgs) (center for international environmental law, 2018), accounting for 52.6 billion european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7154 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 17 tons in 2020 (jones et al., 2023). the chemical and plastics industries are responsible for around 7% of global ghg emissions (world economic forum, 2016). because of the demand for fuel as a raw material input in addition to energy, the chemical sector (including the production of ethylene, propylene, benzene, toluene, mixed xylenes, ammonia and methanol) was responsible for 935 million tons of ghgs in 2022, while 1.6 billion tons of ghg emissions were emitted in the same year in plastics production and conversion processes (oecd, 2023). indeed, oil and derivates are a leading cause of global warming (kweku et al., 2018), responsible for about one-quarter of the greenhouse effect (gleckman, 1995). to meet the climate neutrality mission by 2050, eu countries are forced to decouple economic growth from oil extraction. in this regard, the so-called bioeconomy plays a pivotal role (ronzon et al., 2022). bioeconomy is “the economy where the basic building blocks for materials, chemicals and energy are derived from renewable biological resources” (mccormick and kautto, 2013). converting biomass (e.g. crops, wood, energy plants, agricultural and forestry residues, municipal, industrial, and food wastes) into high-value end-products, such as food, bioenergy, biofuels, biochemicals, bio-based plastics (yang et al., 2021; mougenot and doussoulin, 2022), the bioeconomy model seeks to substitute fossil carbon with bio-based carbon and uptake biogenic co2 (leiplod and petit-boix, 2018). although bioenergy and biofuels are the most advanced applications (adamowicz, 2017; nazari et al., 2021), an acceleration in r&d for innovative materials under the bio-based plastics umbrella has been recently noticed. driven by the increasing awareness about marine littering (gold et al., 2013), the legislative commitment toward circular economy (ce) (foschi and bonoli, 2019), the green purchasing trend (filho et al., 2021; moorthy et al., 2021) and the multiplying challenges affecting global supply chains (arikan & ozsoy, 2015), the production capacity of bio-based plastics is expected to increase from 2.12 million tonnes in 2022 to approximately 6.3 million tonnes in 2027 (european bioplastics, 2022). however, while extant literature deeply scrutinises the influence of bioenergy and biofuels to climate neutrality, more is needed to know about bio-based plastics. indeed, bio-based plastics refer to a large range of materials (see section 2.1.) that may provide reasonable solutions to many environmental concerns. first, bio-based plastics may contribute to decarbonization because of their lower carbon footprint compared to fossil-based counterparts (boonniteewanich et al., 2014; muhammad shamsuddin, 2017; philp, 2014; piemonte, 2011; spierling et al., 2018; bishop et al., 2021). second, when compostable, bio-based plastics may solve the challenges faced by waste recycling facilities with regard to food contamination and complex product design (paletta et al., 2019). finally, when biodegradable, bio-based plastics may represent a panacea for microplastic generation, ecotoxicity and marine pollution in general (meereboer et al., 2020). yet, it has to be noted that many issues are still open when considering the contribution of bio-based plastics to circularity and sustainability. as bishop et al. (2021) pointed out, the lack of a holistic picture of the environmental impacts of bio-based plastic products makes lca studies unreliable. as a result, yan et al. (2021) highlight the risk of biased or misleading estimates of climate mitigation contribution. others have questioned the impact of bio-based plastics on resource preservation, as their production is still primarily based on virgin feedstock, thus creating pressure on natural ecosystems and increasing competition for land usage (d’adamo et al., 2020; imbert, 2017). in addition, the one-to-one substitution trend from conventional to bio-based plastics observed among converters could undermine the expected environmental benefits if the design process does not consider the specific conditions of use and disposal. indeed, these materials may not foster the loop closing if consumers are not well informed about the proper disposal pattern, dedicated waste infrastructures are not established, advanced biotechnological recycling technologies are not developed and more in general, when heterogeneity and fragmentation continue to characterize waste governance across europe (rosenboom et al., 2022). although the above-mentioned critics highlight that tighter integration between bioeconomy and ce is necessary (d’amato and korhonen, 2021), many additional concerns related to carbon sequestration, biodiversity, biodegradability in soil and marine environments and toxicology still exist and compromise the overall reliability of these materials (nessi et al., 2021; arantzamendi et al., 2023). as pointed out by the european commission (2018b) in the bioeconomy strategy “to be successful, the eu bioeconomy needs to have circularity and sustainability at its heart”. translating this intent into the bbps industry, the present work aims to investigate what hinders and enhances bbp materials' transition to a sustainable and circular bioeconomy. in line with leipold and petit-boix (2018), this study mobilizes the business community and policymakers, addressing the following questions: rq1. what legislative, economic, social and environmental trends may affect the circularity and sustainability of bbps? rq2. which are the key strenghts and weaknesses detected by business players and able to accelerate and/or hamper the circularity and sustainability of bbps? with the final objective of providing recommendations and future orientations for a more sustainable circular bioeconomy in the bbps value chain. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7154 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 18 given that circularity depends on the system in which materials or products are distributed (european environment agency, 2017), the analysis was contextualized to european countries. system and life cycle thinking were adopted in line with sustainability and circularity principles. moreover, multi-dimensional analysis was used to collect and intersect legislative, economic, social and environmental aspects, while multi-level examination (i.e. at system level and corporate level) supported the authors in identifying mutual impacts, moving from system dimension to business environment and viceversa. the paper is structured as follows: bio-based plastics value chain is reported in section 2, followed by research design and methodological framework (section 3). findings from the system (section 4) and corporate (section 5) analysis are summarized in the discussion and conclusion sections. 2. background 2.1 plastics and bioplastics value chain the term plastics reflects a wide range of materials, but it commonly refers to conventional plastics that are petroleumbased and degrade over hundreds of years. the term bioplastics, by contrast, still needs a valid and recognized definition. the term has been used to describe bio-based and/or biodegradable plastics, which has generated misunderstandings among scientists and consumers. under this consideration, the european commission started a massive informative campaign to recommend using specific terminology (filho et al., 2021) that could reflect both sourcing and biodegradability properties. bio-based plastics are mostly derived from renewable resources (álvarez-chávez et al., 2012; digregorio, 2009) where the bio-based plastics content is determined by cen/ts 16137:2011 standard. commercially available bio-based and potentially biodegradable polymers are polylactic acid (pla), polyhydroxyalkanoates (pha) and starch blends (see figure 1). as circularity, biodegradability is a system property (european bioplastics, 2015) that flows from the environment in which the material degrades. many factors influence the biodegradability of materials, including the type of microorganisms, the molecular polymers’ structure, and the product design (molenveld and zee, 2020). so, degradation in aquatic systems involves physical, chemical and biological processes and mainly depends on water temperature and polymer shape (volova et al., 2010); biodegradation in the soil is determined by the presence of bacterial biomass (adhikari et al., 2016) while experimental conditions influence biodegradation in industrial plants (thakur et al., 2018). figure i. commercially available bioplastics source: authors’ elaboration however, not all bio-based plastics are biodegradable. bio-based non-biodegradable plastics include bio-polyethene (biope), bio-polyethene terephthalate (bio-pet), and polytrimethylene terephthalate (ptt). biodegradable plastics but fossilbased, such as polybutylene adipate terephthalate (pbat) and polycaprolactone (pcl), are also considered bioplastics, but the use of this terminology is discouraged (pellis et al., 2021) since their production is still oil-dependent. in addition, renewability and biodegradability properties strongly affect the upstream and downstream sides of the existing plastics’ value chain. depending on the surrounding conditions, both properties can have a completely different characterization. while fossil-based plastics are mainly made in petrochemical refineries—where oil is subject to distillation, cracking, polymerization and blending processes—bio-based plastics are manufactured through either chemical processes (hydrolysis, dehydration, etc.) or biotechnological processes (fermentation, extraction, etc.) in biorefineries (ubando et al., 2020). based on the type of biomass used, bio-based plastics can be sourced from three different feedstocks: (i) 1st european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7154 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 19 generation, such as corn or sugar cane; (ii) 2nd generation, which can be either non-food crops (e.g., cellulose) or agroindustrial waste; or (iii) 3rd generation, sourced from algal biomass, which has a higher yield than 1st and 2nd generation feedstock. today, most bio-based plastics derive from crop-based feedstock (philp, 2014), while the 2nd generation is available in small volumes, and the 3rd is still in early development. figure 2. upstream and downstream sides of plastics and bioplastics source: authors’ elaboration the end-of-life (eol) opens the doors to a variety of waste management scenarios (see figure 2), leading to first distinguishing controlled and uncontrolled environments. industrial-scale facilities monitor and manage material recycling or energy recovery performances with the former. meanwhile, the latter generally refers to an open environment, mainly soil and marine ecosystems (european environmental agency, 2018; karan et al., 2019). notwithstanding that existing iso 17556 and astm d5988 provide criteria for the biodegradability of plastics in soils only and a standard for biodegradability in marine environments is under discussion (european commission, 2022), recent studies bring into discussion the validity of these standards outside of laboratory conditions which on one side do not reflect what is commonly expected in a natural environment and, on the other, do not capture the extreme variation of natural conditions (emadian et al., 2017; briassoulis et al., 2017; harrison et al., 2018; di bartolo et al., 2021). although bbps are mainly incinerated or landfilled today, mechanical, organic and chemical recycling are the preferred eol options in controlled environments (ramesh kumar et al., 2020). mechanical recycling is suitable for the management of the drop-ins (bio-pe, bio-pet, bio-ptt, etc.) since they have the same chemical composition as their fossil-based counterpart, which are widely present in europe for the treatment of traditional plastic waste streams (paletta et al., 2019). organic recycling theoretically treats bio-waste streams with compostable and biodegradable plastics certified by the european en 13432, en 14995, or the international iso 17088. organic recycling infrastructures include anaerobic digesters and/or composting plants (carlini et al., 2017). another emerging scenario is chemical recycling, which is based on hydrolysis, alcoholysis, glycolysis, aminolysis and ammonolysis (lamberti et al., 2020) and allows the extraction of highvalue chemicals/monomers from different biopolymers. however, chemical recycling infrastructures need to be wellestablished in europe, slowed down by the high costs of depolymerization (di bartolo et al., 2021). 2.2 bio-based and biodegradable plastics in the context of sustainable circular bioeconomy ce is a system where the value of products, materials and resources is maintained in the economy for as long as possible while waste generation is minimized (european commission, 2018a). in other words, ce is an economic system where the european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7154 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 20 eol concept is replaced with production, distribution and consumption processes that reduce, reuse, recycle, and recover materials in service of sustainable development. as less dependent on oil, bioeconomy is perceived as an opportunity to mitigate climate change while sustaining economic growth and human well-being (phil et al., 2018). however, combining ce with bioeconomy has prompted reflections on the circular bioeconomy. indeed, while ce and bioeconomy definitions are trending among practitioners and academics (kirchherr et al., 2017), circular bioeconomy has yet to be fully explored in the literature. even so, the residual research stream dealing with circular bioeconomy reveals conflicting opinions on the interlinkages between the two economic models: while some authors consider the bioeconomy to be “circular by nature” (sheridan, 2016), others express concerns about the risks of following a linear business-as-usual approach (bezama, 2016; stegmann et al., 2020; tan and lamers, 2021). the most recognized definition comes from stegmann et al. (2020), who defined the circular bioeconomy as “an economic model in which bioresources are used to make products with the highest possible added value in a sustainable way, with a cascaded use of materials and minimizing resource inputs and outputs to the natural environment”. in line with the biological cycle of ellen mac arthur foundation’s butterfly diagram, circular bioeconomy emphasizes the use of renewable resources, cascading the use of biomass and reintroducing biological nutrients in the biosphere (ellen mac arthur foundation, 2019; karan et al., 2019). applying this concept to bioplastics, only bbps, and consequently, compostable plastics, have the potential to circulate and recirculate in that cycle. from this, we can surmise that bbps are: h1. circular when added value is created and retained in further production and consumption cycles. h2. sustainable when natural resources are not depleted and environmental impacts are minimized. unfortunately, the analysis along the value chain reveals the emergence of a take-use-dispose model characterized by virgin biomass supply in the upstream stage and immature eol scenarios downstream. since existing circularity and sustainability metrics are still at the infancy stage for these applications (bishop et al., 2021; chioatto and sospiro, 2022; european commission, 2018b; yates and barlow, 2013), results are often contradictory and, consequently, inconsistent. moreover, the integration of economic, social and environmental impacts needs to orientate decisions towards a sustainable circular bioeconomy (blum et al., 2020; rosenboom et al., 2022). it follows that a major interplay between the circularity and sustainability of bbps needs to be investigated. to do that, a better understanding of what sustainable circular bioeconomy pragmatically means in the bbps industry is necessary. 3. method and materials 3.1 research design to scrutinize the circularity and sustainability of bbps, the research design has been informed by a combination of life cycle and system thinking. life cycle thinking is crucial in ce studies to assess the impacts of materials, products or services from raw materials supply to eol and make evidence of closing, narrowing or slowing resource loops (heiskanen, 2002). instead, system thinking is commonly used in sustainability transition theories (barbier and burgess, 2017) to understand how different parts of the system where firms operate are interrelated and evolve over time. multi-dimensional analysis contributed to examining system dynamics from multiple domains (meadows, 2009). coherently, multi-level investigation supported better identifying relationships between macro and micro levels. macro-level analysis has been conducted through a literature analysis of legislative, economic, environmental, and socio-cultural trends characterizing bbps. micro-level analysis has been advanced through the realization of semi-structured interviews with the key players of the bio-based plastics industry, including eu material suppliers, converters, end-users and waste managers. 3.2 data collection and elaboration precisely, a literature analysis was performed to reconstruct the legislative roadmap that framed the bio-based plastics industry and gathered qualitative and quantitative data on the market and community behaviours. then, an empirical analysis was run to collect insights at the corporate level by directly engaging business players. in total, 40 key players operating in the european market were invited by e-mail to participate in the research. specifically, the top five market players were european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7154 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 21 invited for each stage of the value chain. per each company, the sustainability or product manager was interviewed. the interview protocol is reported in appendix i. each interview lasted for about one hour on average. interviews were recorded, transcribed and manually coded. two researchers always participated in the interviews and jointly performed the text analysis to increase reliability. then, secondary data collected through a desk research of scientific papers, policy documents and research outcomes published by organizations outside of the traditional academic communication channels (i.e., the so-called grey literature), were intersected with the primary data obtained from interviews to get insights on the key elements driving a sustainable circular bioeconomy in bbps value chain. 4. system analysis: existing trends in the european bio-based biodegradable plastics industry 4.1 normative and legislative perspective the establishment of the eu strategy for bioeconomy in 2012—and its revisions in 2018—have served as a roadmap for european economies (ronzon et al., 2022). compared to the first version, the updated statement shows a better integration of environmental, economic and social aspects by promoting local bioeconomies and ensuring that the same legislative and financial efforts are applied to all sectors, including bio-based plastics (ronzon and sanjuán, 2020). this new approach has prompted european countries to build up their own orientations for a sustainable and competitive bioeconomy in europe (bracco et al., 2018; mccormick and kautto, 2013). concerning bio-based plastics, the key eu policy document is the circular economy action plan and its updated version published in 2020 that still allocates resources to these materials through a focus on sustainable sourcing and standardized labelling schemes (european commission, 2021). as part of the green new deal, this intention is operationalized in a public consultation aimed at examining the sustainability of the feedstock as well as the role of biodegradability and compostability in specific environments. from the legislative point of view, the directive 2015/720 (european commission, 2015) has compelled a solid push for the bbps market by introducing a progressive elimination of very lightweight plastic carrier bags and a transition to biodegradable and compostable singleuse bags and long-life reusable bags (foschi and bonoli, 2019). furthermore, the directive 2018/851 allocates attentions to epr schemes and their role to foster shared responsibility among packaging users, consumers and recyclers but their scope should be extended to industries (european commission, 2018b). almost simultaneously, the directive on single-use plastics (sup) introduced market restrictions to reduce the consumption of certain categories of sups like straws, plates, cutlery, food containers, beverage containers and beverage cups (eu directive 2019/904). alongside the market-based instruments, legislators introduced a plastics tax in 2021 on nonrecyclable plastic packaging waste (european commission, 2020) to accelerate reusable, recyclable and compostable plastic packaging, as promoted by the european strategy for plastics in a circular economy (european commission, 2015). the recent policy framework on bio-based, biodegradable and compostable plastics sets out the conditions that have to be met to ensure overall positive environmental outcomes from the production and use of these plastics, including a) supply of sustainable feedstock; b) use of bio-based plastics in long-lived products; c) use of plastics that biodegrade in open environments only wherein applications and contexts where the full biodegradability has proven under specific real, local conditions and timeframe; d) use of compostable plastics only in applications and contexts where a compatible waste collection and treatment system is in place (european commission, 2022). a comprehensive overview of the normative aspects is summarized in the following figure. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7154 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 22 figure 3. relevant eu policies affecting the bbps industry source: authors’ elaboration 4.2 economic perspective according to the statistics published by european bioplastics (2022), the 2022 european bioplastics demand can be estimated at slightly more than 2.2 mt, with a slight prevalence of bio-based and biodegradable compared to the nonbiodegradable ones. indeed, bio-pe, bio-pa and bio-pet and ptt contribute to 48% of the total share. besides the competition with r-pet, only a few beverage companies such as coca-cola, pepsi and nestle have launched bio-based bottles to the market (lamberti et al., 2020). among the biodegradable fractions, pla, pha, and starch blends are the most demanding biopolymers, accounting for 52% of the total share in 2022 (european bioplastics, 2022). even if these blends are predicted to increase in the following years, one of the most challenging elements characterizing the market of biodegradable and compostable plastics is the limited availability of the materials due to the small production capacity and the difficulties of reaching economy-of-scale. indeed, about 20 compounding sites are active in europe, some of which have multiple value propositions. they are generally backwards-integrated on intermediates and even base chemicals, while some are downwardintegrated on manufacturing semi-finished and finished goods. because of this situation, there are difficulties in collecting and sharing official data (castellano, 2018). however, among the leading companies, only a small-scale pla polymerization plant is located in europe while the key player is natureworks llc, with a manufacturing facility in nebraska and a new site in thailand, expected to be ready by 2024 (plasticconsult for assobioplastiche, 2020). the european output of thermoplastic starches (tps) is estimated at over 200,000 tons in 2019, with the highest capacity detected by novamont, recently acquired by eni-versalis, followed by minor dutch and german companies (plasticconsult for assobioplastiche, 2019 and 2020). pha is not commercially available in europe, but nearly 50% of the global production (estimated to be less than 100,000 tons) comes from metabolix, danimer scientific and rwdc industries, whose production sites are in usa and singapore (rosenboom, 2022). 4.3 social perspective about the circularity of bbps, end-users and consumers play a crucial role in preserving the intrinsic value of bbps, especially during consumption and disposal patterns. driven by the increasing awareness about the impact of plastics in worldwide oceans, consumers’ attitudes toward the proper use of plastics are massively growing. filho et al.’s (2021) survey of 16 european countries revealed that 74% of respondents segregate plastic waste and dispose of it properly in specific containers, per their country’s regulations. however, compostability and biodegradability properties are still confusing european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7154 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 23 (lynch et al., 2017). moreover, the distinction between conventional plastics and bbps for consumer packaging largely challenges european and international consumers (dilkes-hoffman et al., 2019). several studies have examined the general influence of consumers’ sociodemographic characteristics on the green purchasing trend (reinders et al., 2017). the study by klein et al. (2019) revealed that gender, age and education do not influence the purchase intention or bioplastic products; instead, values, attitudes, product experience and interest in information have the strongest impacts. several previous studies have identified a clear link between consumer psychological traits such as attitudes, perceptions and motivations, and consumer acceptance of alternative plastics such as those that are bio-based or biodegradable (fletcher et al., 2021, barbir et al., 2021, filho et al., 2022, stasiškienė et al., 2022). 4.4 environmental perspective although bbps are perceived as more environmental-friendly compared with conventional plastics (european commission, 2022), robust scientific evidence still needs to be included. existing lca studies need to be more comprehensive regarding methodology, data source and results, making comparability difficult. if cradle-to-gate studies laid down on the uptake of biogenic carbon through the feedstock, the ghg-emissions profile is acute when considering eol, comparative cradle-to-grave study analysed by spierling et al. (2018) on eight bio-based and conventional plastics shows negative impact categories for the first compared with the second, mainly due to energy consumption during the waste management (hottle et al., 2017). moreover, eol impacts are difficult to estimate because of the lack of traceability for compostable and biodegradable plastics today and, at the same time, the lack of estimation about biodegradability performance of different biopolymers in different environments first, and the impacts of biodegradation processes on the environment and human health then. additionally, most of the studies are based on examining the global warming potential impact category, underestimating other relevant impacts such as land use, water use and biodiversity (di bartolo et al., 2021). 5. corporate analysis: strengths and weaknesses influencing the sustainability and circularity of the bio-based and biodegradable plastics value chain data collected from the semi-structured interviews allowed the researchers to move from the system to the corporate level and identify strengths and weaknesses influencing the sustainability and circularity of the bio-based and biodegradable plastics value chain. sustainability and circularity are values that have pushed firms to invest in the sector (see table 1). however, challenges (see table 2) remain predominant and must be addressed. findings are categorized by a group of actors to let emerge their different perceptions in the value chain. table 1. strengths points emerged among the actors of the bbps value chain interviewees bbps allow to.../are attractive because.... material suppliers • “offering new solutions where renewability and biodegradability are valueadded (e.g. mulch films)” • “being recognized as innovative and green" • “increasing interest among our customers in offering green end-products” • “use of eu funds that are more oriented to bbps” • “acquisition of existing non-efficient or obsolete petrochemical plants that are converted to the bio-chemistry” • “use of marginal land for crops that are low-water dependent” • “with certification it is possible to attest compostability” • “cooperation with different actors of the value chain that increase intangible capital” • “allow the use of 2nd generation feedstock by valorizing lignocellulosic waste streams” • “create multiple value along the entire value chain that can be demonstrated with the use of life cycle-based tools” • “increasing cooperation with organic waste treatment plants to solve technical challenges at the eol” european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7154 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 24 converters • “major inclination toward bbps because it is the most eco-friendly solution” • “differentiate the product offer” • “with bbps it is possible to provide tailored solutions, often associated with consulting or training service” • “entering new markets” • “no need of high investments in machinery due to the possibility of processing to process bbps in the same machinery where conventional plastics are transformed” • “use of innovation labs to co-design and test new materials and applications” • “new collaborations with suppliers and new partners to manufacture highperformance products” end users • “customers and society at large have a rising need for greener end-products” • “proliferating interest toward compostable food packaging among brand owners” • “increasing interest toward eco-friendly and bio-based reusable goods” • “create partnerships with upstream players of the value chain to tailor and customize the solutions” • “increasing trend of green public purchasing” waste managers • “strengthen the local closed-loop supply chain to reduce disposal costs” • “closed collaboration with materials suppliers to test compostability and biodegradability performance and provide feedbacks to converters on product eco-design” • “creation of networks working on specific waste streams” source: authors’ elaboration table 2. weakness points emerged among the actors of the bbps’ value chain interviewees bbps are hampered by … material suppliers • “small production capacity and difficulties in reaching economies of scale” • “difficulties in investing in other countries because of the lack of harmonized policy and orientations across europe” • “difficulties in supplying a high volume of bio-waste to experiment with 2nd generation feedstock and so, minimize the purchasing costs of virgin feedstock, reduce the land occupation and decrease competition with food” • “need to make very large investments in r&d” • “high transportation costs of raw materials to the biorefineries and emissions to transportation” • “high production costs” • “lack of knowledge among stakeholders about the implications of biodegradability properties” • “lack of skilled workforce” • “need for more clusters focusing on bioplastics that allow dialogue between different subjects like institutions, companies, universities, and research centers” • “necessity to make policymakers aware of the lower total cost of ownership, i.e. the cost for the system related to bbps vs. fossil-based plastics” european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7154 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 25 converters • “discontinued materials supply” • “increasing competition because of the higher demand for bioplastics from high-value industry (e.g., medical, cosmetic)” • “challenging export because of different legislation and waste governance.” • “agitation derived by the measures imposed by the sups directive” • “investment on compostable tableware that is now banned by the sups directive” • “insufficient performance of bbps for certain applications” • “continuous need for higher r&d capabilities to improve bbps’ performance” • “high testing costs for eol performances” end users • “lack of efficient labelling scheme for better communication to the consumer” • “high testing costs for contamination and health security issues (especially in the food sector)” • “effort in understanding the different eol scenarios in place in exporting countries (e.g., home composting is different from industrial composting)” • “hostile disposition among consumers toward bbps because of the food competition, the land occupation and the use of virgin feedstock” • “customers' skepticism and/or preference for other materials, like paper, wood, algae, etc.” • “increasing customer orientation toward reusable applications” • “efforts in communicating the properties of the end-products and implications on consumption and disposal patterns” waste managers • “lack of harmonized waste treatment that is municipalityand country oriented” • “lack of adequate waste management plants to treat bbps” • “inefficiencies of lab-scale compostability tests • “difficulties of composting rigid products in composting plants” source: authors’ elaboration 6. discussions and concluding remarks key interesting findings emerge from the analysis of trends detected at system level with the perceptions collected ‘from the bottom’ by interviewing value chain actors (table 3). several elements contribute to the uptake of bbps; opportunities emerge from legislative/eu policy, economic trends, socio-cultural changes and environmental aspects. however, the same domains also embedd challenges that migh hinder the diffusion of bbps that really contribute to circularity and sustainability. a key element seems necessary to foster bbps: collaboration along the value chian. results reveal that despite being recognized as innovative and green when using bbps, material suppliers understand the potential to collaborate along the value chain to use alternative biological feedstock, with the resulting valorization of local economy and rural areas. however, no attention is currently paid to waste collection and valorization. looking at the conversion stage, value is generally captured in biowaste bags, food packaging and agricultural mulch films and collaboration is basically fostered to improve technical and mechanical performances. nevertheless, increasing interest is detected among end-users and brand owners intensively for using bbps in durable products. actors operating in waste management call for collaboration to test compostability and biodegradability performance in real other than lab conditions, thus trying to reduce the cost of uncompostable waste in composting facilities. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7154 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 26 table 3. value-chain based and multi-faceted swot analysis legislative perspective economic perspective social perspective environmental perspective s identification of endproducts where bbps may create added value exploitation of local and integrated supply chain based on the valorization of agro-industrial waste increasing awareness about marine plastic pollution compostability and biodegradability for specific applications w lack of clear policy orientations high price of bio-based plastics compared with the conventional ones lack of clear labeling scheme for bbps and relative disposal patter dependence of biodegradability and compostability performances from applications and contexts o introduction of epr scheme to manage compostable plastic applications across europe public funds for new integrated biorefineries increasing green purchasing trends renovation and/or introduction of new standards and eco-design guidelines assessing compostability, biodegradability, and more in general circularity t market bans on endproducts made of bbps introduction of the plastic tax skepticism behaviors and confusion among consumers lack of clear criteria to perform lca analysis source: authors’ elaboration more broadly, results reveal the urgency to develop a combined cbe strategy to capture and retain multiple values from biological resources. specifically, dedicated roadmaps should be established for each end-product, including bbps. from the legislative point of view, well-defined waste governance with a dedicated epr scheme would facilitate better value retention from bio-based, biodegradable, compostable but also mechanically recyclable plastics. from the social point of view, end-users and consumers should be better informed about the proper disposal of bioplastics, especially when compostable. harmonised labelling schemes facilitating consumers' choices and robust, informative campaigns stimulating demands are envisaged. to reduce scepticism among end-users, customized solutions that match the local conditions should be pursued case-by-case, especially for applications involving biodegradation in open environments. from an economic point of view, it is essential to develop an integrated and local supply chain to address the limited production capacity and, consequently, the high costs of raw materials supply. when the supply chain is based on symbiotic exchanges of residues among local farmers, it can also push the identification of valuable resource streams to valorize into 2nd generation feedstock while reducing the demand for pesticides, land and water to cultivate virgin biomass, thus contributing to more circularity and sustainability. the need to increase production capacity can be stimulated by investing in brownfield sites, thus providing an additional boost to the local economy and reducing the risk of land availability exacerbation. from the environmental point of view, since the key issues are detected at the eol, new eco-design guidelines and eol standards need to be provided and/or revised. it is possible by enforcing formulations that tailor the degradation timescale according to the products' purpose and expected life. eco-design guidelines can support identifying the correct application that, in line with circularity goals, can regulate the conversion processes. at the same time, the tendency to use bbps in durable products creates boundary conditions for a user-centric chain where lifetime extension strategies, like reuse, repair and refurbishment, can be exploited. standardised eco-design and strict eol measurement criteria may support the establishment of a harmonized lca methodology for these materials, thus stimulating comparability and benchmarking. to sum up, our study shows that although bbps are generally considered more environmental-friendly than conventional plastics, robust scientific evidence on their impacts compared to fossil-based plastics is still missing. the lack of tools and metrics to assess the circularity and sustainability of bbps industry poses relevant challenges for its upscaling and contribution to climate neutrality goals in europe. it calls for the adoption of system and life cycle thinking, guided by multilevel (system and corporate) and multi-dimensional (legislative, social, economic and environmental) analysis, which led european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7154 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 27 researchers to build a comprehensive picture of trends, gaps and future orientations that may boost a sustainable circular bioeconomy in the sector. to the authors’ knowledge, the paper is the first to discuss the value of bbps in the broader sustainable circular bioeconomy model. specifically, the paper makes several contributions to the bioplastics discourse. from the research point of view, it identifies the key area of investigation that needs to be explored in further research agenda. specifically, 4x4 significant topics have been identified for theoretical underpinnings. managerial implications include a list of recommendations for eu policymakers for an integrated circular bioeconomy strategy aimed at (i) adding value to bbps through alternative raw materials supply, (ii) retaining value through reuse and recycling, (iii) ensuring lower environmental impacts through cross-sector collaboration and well-functioning waste governance. data availability statement the datasets generated during and/or analysed during the current study are not publicly available due to their confidential nature but are available from the corresponding author upon reasonable request. references adamowicz, m., 2017. biogospodarka – koncepcja, zastosowanie i perspektywy. probl. 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what type of plastic resins (in general) does it use? 2. questions on how, when, why is a mature decision the introduction of biobased materials b. do you use compostable biopolymers according to the norm en 13432: 2002? do you use compostable biopolymers from renewable sources? c. when and why did you introduce bio-based plastics in your product/ process/product line? (interviews were prompted to indicate opportunities detected, main motivations, customer requests, etc) d. what were the problems or obstacles that generated doubts about the technical feasibility and/or economic feasibility of starting using bioplastics? how have these issues been overcome? 5687-article text-17579-1-6-20210411 european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5687 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 10 social impact of human resource management of hybrid organisations. an exploratory case study iannaci daniel1 1 university of turin, department of management corso unione sovietica 218, bis – 10134 – torino (italy) e-mail: daniel.iannaci@unito.it received: 29/03/2021 accepted for publication: 14/05/2021 published: 19/07/2021 abstract what defines an organization's social impact is its purpose, social and profit. the current business landscape in the entrepreneurial ecosystem in accordance with the literature defines a certain category of companies that can be the main players in the impact economy are the hybrid organizations. there are several studies and research on the role of hrm and incentive systems for companies in general, but not for hybrid organizations that seek to create high intentional, measurable and additive social impact. in this paper, through the method of the case study the researcher explores the hybrid organization abel nutraceuticals s.r.l, part of nonprofit group arcobaleno cooperativa sociale and define the key factors that hybrid missionoriented for-profit organizations with the propensity for social impact should have to have an incentive tool to value workers and determine what factors internal stakeholders would like to know to be heard understood. the research confirms that a good tool that is inclusive and above all listens to the well-being of workers only works if it manages to put the worker first, having an auditor who verifies that the social inclusion it is implementing is done in the right way. keywords: hrm, hybrid organisations, social impact, impact measurement, stakeholder needs, accounting 1. introduction what defines an organization's social impact is its purpose, the social purpose, and profit purpose. traditional businesses occupy one end of the spectrum, with their focus on profit and distribution of goods. third sector associations existing today not engaged in commerce do not have profit motives and are defined solely by their social mission, on the other hand, for impact companies strike a balance by taking different approaches in balancing social purpose and profit (borzaga, 2020; iannaci and aiassa, 2020; puddu, 1980). thinking about the twenty-first-century lengnick-hall et al. (2009) prospectively projected that human resources function will be freed from administrative shackles and can focus more on developing intellectual capital, social capital, and knowledge management to improve an organization's competitive advantage, anticipating that it will experience a strong change from old experiences (hrtel et al., 2008; lengnick-hall et al., 2009; lengnick-hall and moritz, 2003). they add that different people have different needs, one size does not fit all by combining what company needs to know about each individual employee's needs to be successful, and worker's awareness they must have about their own needs to be successful (lengnick-hall et al., 2009; lengnick-hall and moritz, 2003). the business landscape currently existing in entrepreneurial ecosystem in accordance with literature defines a certain category of companies that can be main players in the impact economy are hybrid organizations (agostino and arnaboldi, 2017; bicciato, 2010; borzaga, 2015; secinaro et al., 2019b). european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5687 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 11 social enterprises have within their social object the characteristics that ethical finance seeks and above all, they are the beststructured enterprises of the entire third sector panorama (zamagni, 2013) and therefore if a corporate group has as its parent a company of this type it transfers to entire corporate fabric its values indiscriminately if subsidiaries are for-profit or non-profit. decision support tools will become more numerous and more sophisticated, improving decision-making process of managers and employees in organizations (abdel-maksoud et al., 2015; boyett, 1996), making human resources take on new roles in value creation process. the response to the need for ever more advanced and effective incentives introduced at the business level is increasingly shifting toward considered hybrid organizations, business models aimed at keeping social mission along with business (apospori et al., 2008; arsić et al., 2017; billis, 2010; grossi and thomasson, 2015). hybrid organizations make social a strategic asset to regenerate resources of different nature: human, through the development of new knowledge and new skills; economic, through the possibility of aggregating a variety of types of sources precisely because of hybrid nature of organization; physical, that is, related to the process of transformation of spaces into places, where relationality becomes the key ingredient for success of process (garrow and hasenfeld, 2012; kleynjans and hudon, 2016; smith and phillips, 2016). the economic evaluation of social impact of hybrid organizations becomes, therefore, crucial in knowledge economy (meneguzzo, 2005; zamagni et al., 2015) and the debate focuses on impact measurement tools (calderini et al., 2018). hybrid organizations are located in an intermediate section at the intersection of public, for-profit, and nonprofit (billis, 2010; grossi and thomasson, 2015; secinaro et al., 2019b; thomasson, 2009). to define the field of innovation and identify social value that is returned to the ecosystem of the area, it is important and useful to define the business model as a tool that can facilitate the diffusion of innovation into the system. the value inherent in innovation remains latent until it is put on the market or otherwise made explicit, and this can only occur through the use of a business model (chesbrough and rosenbloom, 2002). certainly, accounting system is an important point within a company that can bring out information about good governance. governance involves a set of relationships among stakeholders and the distribution of rights and responsibilities among these different stakeholders (ansell and gash, 2008; awotundun et al., 2011; freeman, 2010; mair et al., 2015). as a result of good governance, values that are transmitted to stakeholders are experience and trustworthiness, as leaders of professional organizations in ethics and compliance have a responsibility to nurture the next generation of entrepreneurs. leadership skills increase management effectiveness and also tend to promote ethics (adams, 2000; alshammari, 2015; carroll, 1996; vining and weimer, 2016). finding reveals that with best practices incentivizing human resources within a well-functioning ecosystem, it is possible to create new social projects and be attractive within one's territory and internationally. having accountability as an element of connection with your workers gives you credibility you need to create social impact through new projects. the reflection of this policy will increasingly turn to perceptions of all other stakeholders connected to the area in which the impact activity takes place (adams, 2000; alshammari, 2015; carroll, 1996; iannaci, 2020a; kirk et al., 1986; lehner and nicholls, 2014; vining and weimer, 2016). there are several studies and research on the role of human resource management (hrm) and incentive systems for companies in general but not for hybrid organizations seeking to create high intentional, measurable, and additive social impact. however, the gap that has emerged from the literature is that the principles of transparency and accountability are defined, but the determination of a key element that can bring order and best meet need of internal stakeholders is lacking. therefore, the research aims to define and highlight one or more key factors and answer the research question "to define the key factors that a hybrid organization should have in order to achieve an incentive tool geared towards increasing accountability, transparency, and personal well-being thus generating social impact and to determine what factors internal stakeholders would like to know in order to be heard and included". the paper is structured as follows: second section outlines the literature review, third section the research methodology, fourth section the context of case study, fifth section provides the presentation of findings, and finally sixth section concludes. 2. literature review koprowski, (1981) in his studies wrote that managerial philosophy refers to the culturally embedded assumptions of managers in relation to human nature and human behavior that inform their managerial thinking and practice, defining that through european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5687 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 12 socializing and sharing their perceptions and behaviors they bring out these assumptions as inherent characteristics in individuals. in addition, it should be noted that it should be kept in mind that both workers and managers are influenced in their internal relationships among superiors, colleagues, and subordinates (campbell and tawadey, 2016; peck, 1994; singh, 2005). literature suggests that research on management philosophy should include three aspects: temporal, theory or doctrine of philosophy, and human behavior (abbas, 2020; chaudhary, 2020; hughes, 2017; kenny and meaton, 2007). the dissemination of management philosophy is one of the key functions of management (chaudhary, 2020; komarov et al., 2016; lee and clerkin, 2017); however, it is rarely addressed in academic research. many academics prefer management theory and motivation theory, or planning and organizational topics (aalbers et al., 2013; ahmed et al., 2010; aka, 1993; al-htaybat and von alberti-alhtaybat, 2013; andrews, 2016; chopra, 2019). academics and managers are very interested and concerned with visions, strategies, and plans (bahemia et al., 2018; cooke, 1989; du et al., 2014). however, most of these visions, strategies, and plans fail or are not successfully implemented. a key reason for these failures is that implementation of management philosophy and resulting impact on hr practices undertaken by managers is often overlooked (greenberg and bugden, 2019; peck, 1994). figure 1 explains the composition of academic field at the conclusion of the study. the topic map shows each keyword in the two-dimensional space explained by axes (noyons, 2001). the scale of points is proportional to the cumulative input of each keyword. by applying a clustering algorithm to a network of keywords, it is possible to highlight the various themes of a given domain. each cluster can be represented on a special graph known as a strategy or theme map. for example, centrality can be read as the importance of theme in the entire field of science, and density can be read as a measure of the growth of the theme. thus, considering the figure, in this research stream as highly developed and isolated themes, authors found stakeholder management and circular economy theme of social impact of hrm policies. as necessary and cross-cutting themes, the authors also found that sustainability on the studied theme was a highly repetitive theme associated you have key focuses of human resources, human capital, and human resource management. finally, as a declining theme, the sole focus of performance was reported. figure 1 thematic map in hr strategy on profit performance. source: authors’ elaboration european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5687 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 13 2.1. human resource management (hrm) a relevant positive correlation between hrm and organizational performance is found in literature (anselmsson et al., 2016; crook et al., 2013; gray et al., 1995), this indicates that the project outcome requires a good quality of performance management but especially team impact management. performance management is recommended as human resource management function through which team motivation and performance can be effectively addressed. by focusing on the key constituents of high-performance work systems (hpws) and monitoring their effects on organizational performance, through structural equation model techniques, top-performing companies have invested in more sophisticated hrm practices that primarily include employee performance appraisals, which have further improved organizational performance. the concept that is reinforced relates to the interpretation that hr performance and social impact management is a significant function of organizational success (cheng-hua et al., 2009; shih et al., 2006). seven main hr policies categorized as work-for-life policies are to be considered including recruitment, training, performance-related bonus system, teamwork, organizational culture, and pensions. important communication links between hr managers and management accountants are budgets, strategic plans, performance-related bonus system, and decisionmaking. selected functions have a significant impact on organizational performance reinforcing the perception that hr performance management influences organizational performance (kouhy et al., 2009). literature confirms that hr performance monitoring is the dimension of performance management that, along with all other necessary hrm functions, helps organizations increase their performance. this indicates that performance and social impact management for projects requires consistent performance monitoring throughout project life cycle. monitoring is a process that assesses the quality of internal control performance of resources involved in any task or project over time. monitoring is the most feasible mechanism for ensuring effective performance by hr resources or machines. a control system must be monitored to ensure that it continues to function effectively as intended. without continuous and effective monitoring, a control process can fall into a state of despair or not be executed at all (naqvi et al., 2011). the focus that the study give through this paper is on single aspect of performance and social impact management, namely hr monitoring and enhancement as it covers desired hr practices and functions. well-planned, frequent, and regular progress monitoring of project work and resources (fang and marle, 2012; wiersema et al., 2018). an effective way to control a project is to continually measure progress of its work and teams working on it; comparing that progress to the plan and then adjusting the development criteria to correct any deviation from project plan. project success can be achieved by declaring project management a strategic, yet complex activity. traditionally, a project is perceived as successful when it meets the objectives of time, budget, performance, quality, and impact (dvir et al., 2003; shenhar et al., 2002, 2001). several studies have used a combination of qualitative and quantitative methods having as results the identification of four main distinct success dimensions for operationalizing the project outcome: project efficiency, customer impact, direct business, and organizational success, and preparation for the future. customer impact could be interpreted through feedback on products or services the project provided. direct business and organizational success could be measured in terms of the profit and customer relationships any organization earns after completing a project. preparedness for future could be measured thorough documentation of project and lessons learned by team, and worker "happiness" through questionnaires reporting their mood and whether it made a change in their lifestyle. 2.2. hybrid organisations for-profit social enterprise organizations have historically been categorized within a single sector: most commonly, public, private, or non-profit. sectoral categories help to define shared understandings of beliefs, values, organizational identity, and assumptions that aid in aligning internal organizational goals and actions and establishing a basis by which to evaluate similar organizations (hsu and hannan, 2005). battilana and dorado (2010) have done extensive studies on hybrid organizations highlighting what will be the theoretical challenge of future. these organizations are the result of a combination of key elements from the profit and non-profit sectors. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5687 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 14 in another study battilana, et al. (2015) identify numerous challenges that hybrid organizations must face and among these arises the legal nature as they must choose a legal form, because, having to decide to be a profit or non-profit organization and therefore entrepreneurs can only claim one of the forms of value they create. with the studies done previously by hoffman et al. (2012) and later by holt and littlewood (2015) it is possible to describe hybrid organizations by identifying two main characteristics. their studies frame the hybridization first of all of business models between profit and non-profit and then of the mission driven as social mission is given priority without ever neglecting performance. the challenge that this research poses in accordance with the assertion of holt and littlewood (2015), is the recognition that these types of organizations pursue the impact and this mixed identification that distinguishes them leads to major challenges in seizing, assessing and communicating this impact. haigh and hoffman (2012) and later hockerts (2015) specify very well that when impact occurs it should not be linked only to social impact as hybrid organizations are primarily concerned with social missions but must be oriented towards achieving commercial revenue to support operations. rawhouser et al. (2015) in fact had already argued that latter the number of these organizations that integrate the two objectives described above has increased and therefore leads even more to the combination of features and tools by combining the features to encourage innovation, studies also carried out by reiser (2011) but from a legislative point of view. it is therefore important to be able to identify what are hybrid organisations. for example, reiser (2012) specifies that in the u.s. the following are considered: benefit corporations, low-profit limited liability companies (l3cs), social purpose corporations (spcs), and flexible purpose corporations (fpcs). these are identified as these legal forms draw their property from both profit-oriented legal forms (e.g. limited companies and partnerships) and non-profit legal forms (e.g. charitable and philanthropic organisations). about this assertion, ebrahim et al. (2014) consider that this cataloguing does not solve the identifying tension of hybrid subjects but is undoubtedly a good start to start inserting them into the system. leimsider (2014) explains that the term "hybrid organization" has recently established itself internationally as a broader term than "social enterprise", reflecting the heterogeneity of legal forms, missions and different contexts in which these different business models operate generating debate at scientific level. in addition to strengthening the concept, fowler (2000) that hybrid organizations that are considered must recognize within it the element of limited distribution of profits, always leaving in first place the social and/or environmental mission with nonprofit mode. returning to the characteristics that must be identified and therefore monitored without doubt, it is necessary to identify the distinguishing marks of a hybrid organization (holt and littlewood, 2015): • centrality of a social and/or environmental mission, with its primacy over the creation of economic value; • generation of income through trade, whether linked to the mission; • participatory governance structures with the active involvement of stakeholders, and relations with stakeholders based on mutual benefit and sustainability results; • limited distribution of profits with profits or surpluses reinvested for social purposes; • innovative solutions linked to the creation of a business model. it is essential to identify and regulate these organizations because, as demonstrated by rawhouser et al. (2015), the identification of hybrid organizations can be considered a threat to non-profit organizations because the status of no mutualistic purpose for a company that comes from profit can be difficult to prove and therefore the inclusion of hybrid social organization can be considered a threat to non-profit organizations. in line with the demand for research, it is essential to investigate what are the values that distinguish a hybrid organization because only later it will be possible to monitor, measure and finally communicate it to stakeholders. rawhouser et al. (2015) has shown that including elements within the business model such as alternative energy, recycling and pollution reduction captures the attention and influence of stakeholders like employees, consumers and entrepreneurs themselves. the "green" workforce category is coined to demonstrate in the case study by rawhouser et al. (2015) that increase in this use of internal resources also increases attention of legislation (scherer and palazzo, 2011), market and attracts work. a current which, if operated in current way, leads to success. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5687 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 15 2.3. social impact measurement in order to focus on hr impact assessment, it is necessary to fully understand the topic without considering it more generally and then go into the specifics of this corporate function; to do so, the researcher rely on literature that emerged in iannaci's paper (2020a). when, in this research, reference is made to the social, the reference is to live within the community, the ecosystem. the scientific disciplines that study the subject are sociology, economics, and anthropology (calderini et al., 2018; marradi, 1992; rousseau, 2015; zamagni et al., 2015). as it will often be used, the concept of social goes hand in hand with tendency to improve living conditions of less well-off citizens in order to achieve greater equalization between the various components of a society. hybrid organizations are promoters of social innovation, generating widespread well-being and sustainable improvements in the living conditions of community. it is precisely the community, thanks to increasingly accessible communication technologies, that becomes not only the recipient of social innovation but also the co-generator of innovative processes (corvo and pastore, 2018). when social enterprises and resource providers are involved in symmetrical relationships, the purpose of measuring social impact seems to help social enterprises improve their performance so that the parties can achieve the common goal of creating social impact for those in need anthropology (zamagni et al., 2015). a key element of evaluation process is attention to the effects generated by action, including positive and negative, direct and indirect, expected and unanticipated (bezzi, 2001). evaluation should not be confused with monitoring, for which there are similarities and points of contact. in the first case, what has been achieved is analyzed, verifying the validity of results achieved; in the second case, it is a matter of verifying the progression with respect to the planning of intervention, to identify any deviations (montesi et al., 2017). through the explanation of the chain of value creation, clark et al. (2004), as can be seen in figure 2, deepen the concept of "social" outcome, as a value purified of what would have happened regardless of social impact intervention. figure 2. impact value chain source: (clark and rosenzweig, 2004) impact assessment is based on counterfactual analysis, i.e., it asks about the occurrence of change not only with respect to "before versus after," but also with respect to "versus without" some involvement (clark and rosenzweig, 2004) there are projects where the "before versus after" is sufficient to determine the impact generated, for example when no other factor is likely to have caused observable effects on the change generated: the reduction in water withdrawal time from the installation of water pumps. in other cases, however, the cause-and-effect link is not as obvious and linear, thus requiring an analysis that compares the "versus without" intervention (clark and rosenzweig, 2004). european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5687 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 16 there may be a variety of reasons to measure impact, for example (i) demonstrating transparency, accountability, and legitimacy to investors for accessing resources, because without impact, evidence, and reporting, funders do not see the value created for communities; and (ii) knowing and improving organizational performance to determine if they should continue or change their current strategy to achieve their missions (nguyen et al., 2015). as illustrated by nguyen et al. (2015), when social enterprises and resource providers are involved in symmetrical relationships, the purpose of measuring social impact seems to help social enterprises improve performance so that parties can achieve their common goal: creating social impact for people in need. 2.4. the research model in social impact assessment, as noted by clark et al. (2004), it is necessary to define the impact value chain to better understand the drivers of value creation. an intrinsic factor that has emerged in the literature reviewed on hrm, hybrid organizations and social impact measurement is that in order to create stakeholder participation, it is important that upstream there is a company with good governance, leadership, aimed at survival in the marketplace through performance and social impact orientation. this information is not important if it is not conveyed in the right way through correct staff enhancement tool to increase perception and consequently involvement (al-khasawneh and futa, 2012; biancone et al., 2016; freeman, 2010). a good hr policy with high social impact must put the need of internal stakeholders first and through the principles of transparency and accountability communicate its corporate story to have the expected results that ecosystem needs and try to promote ethics (al-khasawneh and futa, 2012; beer et al., 2015; biancone et al., 2016; freeman, 2010; secinaro et al., 2019a). the finding reveals that with employee empowerment best practices for high social impact for-profit companies, it is a matter of shaping the level of information about various types of stakeholders, professional and non-professional so that supply and demand for information meet (biancone et al., 2019, 2018a, 2016; secinaro et al., 2019a). with the goal of answering the research question "to define the key factors that a hybrid organization should have in order to achieve an incentive tool geared toward increasing accountability, transparency, and personal well-being thereby generating social impact and to determine what factors internal stakeholders would like to know in order to be heard and included." the researcher believes that a good, understandable incentive tool that succeeds in creating engagement will create accountability, transparency, and well-being only if the policy is oriented to the needs of worker. after a thorough analysis of the literature review, the study proposes that putting workers' needs first by generating accountability, transparency, and happiness in the sense of personal well-being would increase stakeholder engagement. stakeholders would be able to better perceive the strong values of good governance, leadership, performance, and social impact that the company possesses. performance is seen as the focus that is pursued by monitoring the values of productivity, profitability, quality, efficiency, and innovation. figure 3 constructs the reference model proposed by the authors. to adopt an incentive tool and meet stakeholder needs, a hybrid organization must have the four key factors listed above. through this assurance and the most effective incentive tool possible, they can have stakeholder engagement and increase the objective perception of them to create collaboration in new activities aimed at improving ecosystem. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5687 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 17 figure 3. model to satisfy workers’ needs source: author’s elaboration 3. research methodology this research employs a case study approach for exploration (eisenhardt, 1989; yin, 2014). the case study approach is suitable for investigating why or how phenomena occurred and relationships between these phenomena (yin, 2014). through case study, one can better understand a new phenomenon and concept (eisenhardt, 1989). in line with the purpose of this article, the methodology was adopted by preparing a longitudinal and explanatory case study (yin, 1994). the case study highlights some relevant aspects and possible approaches to the model elements. the methods of information collection use qualitative techniques and include interviews with managers and employees, analysis of internal documentation, observation of reality, and truthfulness of the stated data with a reworking of some data to ensure the validity and reliability of information. within the company the author has a management control function, this allows him to have all the monitoring information of the mentioned key factors. the primary data were collected directly by the authors who has been conducting research within the enterprise for years, the secondary data were provided through a semi-structured interview with managers and employees. validity is ensured by triangulating several resources with evidence of the key information collected. the evidence collected is ensured by doublechecking the information through differentiated sources. research allows a phenomenon to be recorded in a real-world setting, where the boundaries between context and phenomenon tend to be blurred (stake, 1996). literature allows for the confirmation and combination of information gathered (yin, 1994). the transparency, approach, and repeatability of the analysis and method allow for its reliability (leonard-barton, 1990). therefore, the researchers believe that case study defined by yin (2014) is the best way to answer the research question of "defining the key factors that a hybrid organization should have in order to achieve an incentive tool geared toward increasing accountability, transparency, and personal well-being thereby generating social impact and determining what factors internal stakeholders would want to know in order to be heard and included". european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5687 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 18 the research reflected its theoretical framework presented in figure 3, which consists of eight elements: good governance, leadership, social impact, and performance; focusing on the last element as the focus that is pursued through monitoring the values of productivity, profitability, quality, efficiency, and innovation (campbell, 1986). stakeholders would be able to better perceive the strong values of good governance, leadership, performance, and social impact that company possesses. performance is seen as the focus that is pursued through monitoring the values of productivity, profitability, quality, efficiency, and innovation. the names and location of company and respondents were kept anonymous for privacy reasons, then transcribed and coded independently (curtis et al., 2010; secinaro et al., 2021). 3.1. interviews outline with the purpose of answering the research questions, the research was organized to cover the topics necessary to have the elements to proceed with the study. additional exploratory questions were considered to deepen the understanding of the answer, rather than closing a discussion and moving on to the next question. it was considered important to organize the questions by addressing the necessary topics from all angles, from the most specific to the most general. the topic of reporting was addressed by trying to understand what information was considered understandable and what was not. also, to understand if social issues were considered important and if the information was more transparent if this would increase participation. it was necessary to have information on the reaction of members by trying to understand if the group believed in the social enterprise and if they fully understood the identity in which they worked if this increased the sense of belonging. since the tool would also be consulted by service users, it was important to understand if a better form of communication had changed patterns of behavior. through a more discursive approach, another theme that created interest was to understand if there were any obstacles to achieving the goal by trying to understand how it affected the company. 3.2. case study – context the hybrid organization in question is called abel nutraceuticals s.r.l, part of non-profit group arcobaleno cooperativa sociale. the head of the group puts in the first place the creation of employment for its members, who fall among the types of people defined in social context as "fragile" through the collection of waste. the company has historically focused on activities with characteristics aimed at the simplification of work in order to encourage skilled labor, to allow workers to keep up with the market, monitoring results, solid prerequisites to ensure economic independence of people, always putting at the center of its choices the employment and social impact of the territory of intervention. the primary specialization of abel nutraceuticals s.r.l. is the design of extractive processes and the production of extracts for food supplement sector. information was collected through interviews with managers, staff, through company's website. in addition, financial report of the last five years was analyzed to support accountability. about the accountability supported by financial statement data, it was possible to understand that the company is financially sound and stable (iannaci, 2020a). 4. presentation of results this section summarizes the results of the case, showing the interviewees' outputs and the connections that emerged between the strengths of the company. the company showed that the government is solid and most importantly, it is flexible to any unexpected in the market, as due to their expertise they are able to adapt and shape the business with the market, confirming the concepts of al-khasawneh and futa (2012) and alshammari et al. (2015). the concept of good governance treated by fernández-fernández (1999) and norman (2014) is confirmed by saying that the governance structure is solid and has a good internal management of responsibilities. the members of the company are aware of this because, in addition to seeing it from the numbers, they perceive the internal and external organizational strength. therefore, it was possible to link to the literature that the pursuit of daily innovation is a key factor within the organization studied. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5687 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 19 the social mission and putting the worker first to achieve wellness is something that stakeholders would like to see results of once the tool is applied. the hope is that in the long run the application of this type of flow will create the effect stated by freeman (2010). this type of perception prevailed over financial, non-financial, and especially social impact data. the system of incentives that the company will introduce to measure the performance and well-being of its workers to grow within human resources a better perception sometimes clouded by biases, as mentioned before, which did not even lead to deepening confirming what adams (2000) and biancone et al. (2018c) said about participation as the context usually associate with good reporting practices. empowering workers would succeed in sensitizing them in the future on the issue of social impact, making them feel part of the actions that the company puts in place for the ecosystem by increasing the propensity to collaborate to participate in the improvement through their own contribution by informing themselves on how to approach the concepts of adams (2000) and alshammari et al. (2015) on the cornerstones of ethical finance. through the interviews conducted, within the company analyzed, the social impact mentioned is perceived as an indirect effect of processes. the case showed that holding firmly to the goals of productivity, profitability, quality, efficiency and innovation defines a point in favor of establishing a good corporate policy to give the perception of being accountable and transparent. governance is aware that everyone has the right and desire to know more about the company, both internally and externally, as confirmed by the studies of freeman (2010), carroll (1996), and biancone et al.(2018b). undoubtedly, using internal language that is accessible even to those unfamiliar with hrm issues becomes an effective communication tool in line with the pop principles of good reporting practices (biancone et al., 2019; biancone and secinaro, 2015). the territory is having a propensity for social orientation and social impact and therefore a good incentive tool oriented not only to accountability, transparency but also to the happiness of workers can help increase the propensity for social innovation in the ecosystem. the study, made possible thanks to the company abel nutraceuticals srl, has shown that it is possible to focus attention on human resource management through a value chain (figure 4) ad hoc for this function, capable of generating the best possible result and impact. the simplification of the results shows that, in addition to the reportable results, it is easy to see that an activity of this type would increase the skills of the people as well as their well-being, creating, in the long term, social inclusion and attractiveness in the territory. figure 4 summarizes the concepts of this section. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5687 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 20 figure 4. simplification of results source: author’s elaboration the proposed model tries to give a message: if a company has a structure focused on the key factors described and is oriented to the participation of internal and external stakeholders, through this model has a good chance to achieve sustainable results. it would be a good starting point for future research to analyze what results the adoption of this model has given. an added value that is given to the literature is the narration of an example of a for-profit company that is oriented to generate social impact. the entire company despite being legally set up as cited follows the rules of profit management as a nonprofit. this was possible because of the contamination it underwent from the parent company that has been socially oriented for almost 30 years. the literature has shown us that the trend at the international level is towards hybrid organizations, but as zamagni says at the conference la grande sfida del nonprofit, dan pallotta vs stefano zamagni (2021) the italian situation cannot be compared to those in america or outside europe. a company like the one analyzed can be defined as hybrid, but its social impact is generated because it has been contaminated by those who have made social impact their mission. it would be different if a for-profit company divided its profit among its members and the rest was donated for the purpose of marketing. therefore, a further result emerges from this discussion, a for-profit company can be defined as hybrid if it has as a guarantor one of the core corporate values, social impact, of a company with a social vocation as in this case is arcobaleno cooperativa sociale for abel nutraceuticals srl. consequently, this research contributes to the literature on business with specific reference to the factors that it must monitor entirely in order to orient itself with its sustainable model to innovation, namely social impact. for companies with a social vocation, the impact is inherent in their dna, while for all the others, a synergy must be created in order to have the companies in the first group guaranteeing through an impact audit activity as is the case for other company phases, just think of iso certification and accounting. the management within the company, abel nutraceuticals srl, is made up of members of the non-profit company with a social vocation, arcobaleno cooperativa sociale. ensuring that function of guarantor mentioned that will be represented in the next figure. figure 5 summarizes the concepts of this section. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5687 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 21 figure 5. simplification of results source: author’s elaboration 5. discussion and conclusion 5.1. contributions to the literature to develop a high social impact and innovation-driven approach, hybrid organizations must continue to learn from experience and adapt during their internationalization and connect all stakeholders with innovative incentive tools and especially through stronger and stronger synergies with societies that have always had a social focus (figure 5). as presented above, this process is the focus of this study. in this paper, we define the key factors that hybrid mission-oriented for-profit organizations with the propensity for social impact should have to value workers and determine what factors the company's internal stakeholders would like to know in order to be heard included. in doing so, it addresses the need for transparency, accountability, and personal well-being (hartmann, 2019; presenza et al., 2014) and how they inform subsequent internationalization practices (biancone et al., 2018b; owen et al., 2000). the findings contextualize and extend the conceptual work by suggesting that hybrid organizations rely on their dynamic ability to learn from their experiences and adapt their practices in the process of solidifying good governance and leadership to generate performance and social impact and make the model replicable and scalable. it turns out that this type of structure is able to sense and manage the need of workers and efforts would be in vain if they could not be connected to the enterprise. good incentive and inclusion as presented in the literature can drive the right theory of change (castello and lévêque, 2016; kail and lumley, 2012). through responding to needs and communicating in the right way, the company can generate transparency and accountability in its internal stakeholders by triggering a proactive form of the latter who, through their participation, are able to improve the structure of the company which in turn manages the whole process described (figure 3). therefore, having such key factors, however difficult to achieve, provides an initial basis for subsequent adaptation to the process. in this sense, the findings add nuance to the view that structured hrm carries with it positive strategic effects for the company using it and for all stakeholders by generating an evolution of all (beer et al., 2015; chaudhary, 2020; kouhy et al., 2009; zamagni et al., 2015). in conclusion, the transition from one phase of key factor development to the next does not occur by default. on the contrary, the company must take an active role in monitoring the management process aimed at selecting the appropriate human capital, engaging in continuous reflection, critical evaluation, adaptation of criteria to its needs, and adaptation of best practices. in addition, the firm must ensure that all of the key factors mentioned are monitored properly, and must also engage external auditors to audit the process. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5687 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 22 5.2. implications for managers one of the problems that our era is experiencing is generational turnover and we cannot think of doing innovation without young people, therefore an innovative incentive policy generates interest in new young people and stimulates other companies to use this tool prospectively. the results show that the benefits of a good corporate structure linked to an excellent incentive tool are not necessarily automatic and may require dedicated efforts and procedures. based on the preliminary evidence of the study and if supported by further research, corporate decision-makers can improve the effects of their actions internally and externally, even when reflection on best practices is not perceived as urgent. the findings suggest that these micro-processes can be supported by an entrepreneurial attitude that allows business managers to regularly take stock and be ready to act quickly by being aware of their company's financial and non-financial data, especially in a language that is certainly accessible. too often, smaller companies going to market don't have time or resources to do these actions, and this can lead to inefficiencies that last longer than necessary, resulting in wasted resources and poor returns, as well as reducing opportunities for learning and adapting practices. the manager must select the human capital to carry out these activities, otherwise, they will have to provide external professionals for implementation. managers through an effective tool will be provided with valuable information focused on risk assessments. these decisionsupport tools will also provide "predictive" algorithms that help managers anticipate and predict potential problems, such as turnover, recruitment, compensation, and labor relations. sensitivity analyses (or "what if" analyses) will allow managers to test different alternatives and evaluate the potential consequences of their decisions. decision support tools will also provide employees with step-by-step information on hr issues. effective hybrid organizations like these share some common characteristics. they tend to inherently choose a big problem. social impact enterprises don't think small. they start with something big like the environment, health care, equity, or underserved populations, and figure out how they can make a big difference. a social impact company that aims for something really big might not make it, but there's plenty of room to do good without a lofty goal. this type of company measures success based on business/financial and social metrics. most nonprofits do good while losing money, worrying only about impact; conversely, many other companies make money without doing good. each of these identities cares about impact or profits. in contrast, a social impact company sets goals for its impact priorities in the same way it does for sales and marketing by keeping track of everything the best share their experiences in framing and tracking goals so that others can learn from their successes and failures. large or small companies with a hybrid connotation focus on building a successful for-profit company by changing the world for the better and the companies that truly change the world are the companies that last. for this reason, this research has come to the conclusion of suggesting to the managers of the future to find a guarantor who can make sure that the key factor of social impact is taken care of as arcobaleno cooperativa sociale does with abel nutraceuticals srl. 5.3. limitations and future research the scenario demonstrated has strong illustrative and exploratory potential, and the steps that the study identifies can be adapted to other contexts (acquah et al., 2020; agyabeng-mensah et al., 2020; welch, 2012). the same is true for transferring context-specific notions of good governance, leadership, performance, and especially social impact into the development of good hrm policies. there may also be other companies that have similar characteristics to our context but have different business models and industry regulations, so these findings should be transferred to these contexts with caution. the purpose of our exploratory study is to provide insights that other scholars can draw upon and explore further in the process of theory development. therefore, this study invites scholars to investigate the transferability of our insights and provides several promising avenues for future research. first, whether the proposed model years later leads to the anticipated results and further, the researcher wonders if the starting point from stakeholder needs and through a good incentive tool can generate transparency and accountability in them can be applied to all for-profit but also nonprofit contexts, as the current literature provides us with further distinctions in this category: for impact and without impact (calderini et al., 2018; clark and rosenzweig, 2004; meneguzzo, 2005). european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5687 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 23 second, the results strongly suggest that the effectiveness of the tool described above increases the speed of stakeholder engagement with the company, but further analysis that can report the results after two years would be needed to verify that all is confirmed. third, to reach a more general conclusion, the 2030 goals toward which the world is racing seem to be set by large institutions and public bodies. social enterprises, which are the drivers of social impact, can certainly contribute to this, and trying to provide a dashboard of the sdgs business format can help generate global development from the local and oversee the social impact of hybrid organizations that are not born with a social vocation like the former. in addition this case study will need to be replicated with the results of this policy in a few years. it will be interesting to see if this leads to the results mentioned and also it may be of interest to see if this approach can work for other companies. at the moment, this variant is not included in this study. the researcher would appreciate further empirical studies investigating the impact of good incentive tools on the global goals that humanity must now aim for (iannaci, 2020b; secinaro et al., 2019a). in conclusion, with the aim of answering the question "to define the key factors that a hybrid organization should have in order to achieve an incentive tool oriented to increase accountability, transparency and personal well-being thus generating social impact and to determine what factors internal stakeholders would like to know in order to be heard and included", the research confirms that a good tool that is inclusive and above all listens to the well-being of workers only works if it manages to put the worker first, having an auditor who verifies that the social inclusion it is implementing is done in the right way. this condition increases accountability, transparency, and stakeholder engagement. stakeholders would be able to better understand the strong values of good governance, leadership, performance and social impact that the company possesses. in order to define the field of innovation and identify the social value of company, which is returned to the ecosystem of the area, it is important and useful to define the business model as a tool that can facilitate (or not) the diffusion of innovation in the system. the value inherent in innovation remains latent until it is put on the market or otherwise made explicit and this can only happen through the use of a business model (chesbrough and rosenbloom, 2002). through the research project conducted so far, it has been possible to demonstrate that in hybrid organizations to have an effective incentive of human resources it is necessary to use all possible tools to know and describe the company and the ecosystem that surrounds it and this is possible through corporate knowledge and mapping that goes from the measurement of impact always starting from the construction of value chain, only in this way it will be possible to know the full potential of company under study returning clear information for all. stakeholders, therefore, will need increasingly advanced tools because the economic evaluation of social impact becomes fundamental in the knowledge economy. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/5687 published by university of turin http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 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emf a, 2013; bsi, 2017; ilic et al., 2018). with the ce concept gaining traction in the last decade, companies and policymakers started directing their attention to what is seemingly a promising tool to foster sustainable development (jia et al., 2020), underlining the importance of ce transition. as a result, an increasing number of scholars and practitioners have focused on the progress of ce initiatives, and hence the development of circularity measurement tools. despite the growing interest in ce assessment methods, the lack of a standardized approach, a commonly agreed scientific basis, and the low applicability of these methods in organizational realities are often cited as fundamental barriers to their uptake (saidani et al., 2019; franco et al., 2021). ce transition currently concerns only a small fraction of organizations able to explicitly address ce in their business processes. for these reasons, extensive literature reviews on the approaches, methods, and tools to assess ce point to the potential usefulness of a more holistic measurement framework/method (sassanelli et al., 2019; walzberg et al., 2021; roos lindgreen, salomone & reyes, 2020). given these shortcomings in ce assessments, the goal of our study is to analyse the implementation of an innovative approach to standardizing the circularity measurement of organizations that uni/ct 057 – the technical commission of the italian body for standardization (uni) – proposed within the specific context of a public organisation, the university of piemonte orientale. moreover, the case study aims to identify the potential limitations of the metrics of the standard and the managerial difficulties in applying the standard itself. in this study, we analyse the implementation of the methodology drafted in the early stages of the development of the uni1608856 project “measuring circularity methods and indicators for measuring circular processes in organizations” by the university of piemonte orientale. this innovative approach is a first attempt to assess an organization’s circularity in view of the development of an international standard for measuring the circular economy1. the objective of this study is to critically discuss the framework of the methodology formulated within the uni1608856 project and its implementation in a public organisation from a managerial perspective. topics like the relevance of the proposed indicators list and data availability for application to the case study are fundamental for the definition of the methodology and need to be investigated. specifically, we focus on the micro-level of organisation circularity, focusing on improving the environmental performance of a particular organization (through different initiatives such as resources consumption reduction, waste management, etc.). the remainder of the paper is organized as follows. after this brief introduction, we review the literature to assess the circular economy measurement concept. the third section describes the research design and methodology adopted. section 4 presents the findings from our case study, section 5 discusses the results, and the last section offers some conclusions, limitations, and future research avenues. 2. literature review measuring circularity: a debated topic the eu ce program (eu com2015) explains that prolonging the value chain of products and services in the economy will generate a sustainable economic system that will benefit organizations, citizens, and the environment. due to the importance of achieving sustainability, the ce concept has in recent years garnered the increasing attention of governments, regulatory bodies, organizations, citizens, and scholars. the ce systemic approach is aimed at expanding the lifecycle of materials, design out waste, increase resource efficiency, and achieve a better balance between different critical issues regarding economic growth, environmental protection, and social wellbeing. a particularly interesting aspect of the circular economy concept is its compatibility and consistency with sustainable development through its three associated pillars. indeed, ce directly aims for not only economic benefits (e.g., value creation 1 iso 59020 “circular economy – measuring and assessing circularity” – cd stage. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7155 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 3 and savings by reducing raw materials), but also environmental benefits (e.g., impact reduction), and indirectly, social benefits (e.g., job creation) (mgi, 2015; accenture strategy, 2015). therefore, under the united nations 2030 agenda, a significant number of the sustainable development goals (sdgs) relate to ce practices (schroeder, anggraeni & weber, 2019; rodriguez-anton et al., 2019; netherlands enterprise agency, 2020). organizations and collectives are increasingly willing to move towards a more circular and sustainable economic and business model as a means of achieving commercial differentiation, competitive advantage, and potential growth with economic spillovers. however, the circularity gap report 2020 underlines that the world is only 8.6% circular, meaning that only this small percentage of all minerals, fossil fuels, metals, and biomasses are cycled back (cgri, 2020). while there is currently no standard ce definition, the different definitions proposed or established by major organizations and academics have much in common, tending to formalize and converge towards the same paradigm (carencotte et al., 2012). in short, the ce concept is aimed at systematically maintaining the highest value and use of products and components during their lifecycle through changing the linear loop of material flows (take-make-dispose) to a circular loop (take-make-reuse) (franco, almeida & calili, 2021). cui and zhang (2018) provided an extensive literature review about ce demonstrating the growing interest for the topic. ciraig (2015) performed an extensive literature review and inventory of key circular economy definitions, all of which oppose the linear “make-take-waste” model. in addition, ce implies better resource management throughout the lifecycle of systems, characterized by closed loops, promoting maintenance, reuse, remanufacturing, and recycling. the most popular definition that the ellen macarthur foundation proposed is that ce includes five fundamental characteristics (design out waste, build resilience through diversity, work towards energy from renewable sources, think in systems, think in cascades), and four building blocks (circular product design, innovative business model, reverse cycles, enablers and system conditions) (emf a, b, 2013). moreover, the ellen macarthur foundation butterfly circular economy model is one of the most acknowledged and used in businesses and academic circles (lieder & rashid, 2016). nevertheless, other studies have defined ce strategies and proposed useful frameworks (e.g., king et al., 2006; jawahir & dillon, 2007; allwood et al., 2011; emf, 2013a, 2013b, 2014; bakker et al., 2014a; 2014b; sihvonen & ritola, 2015; willskytt et al., 2016; potting et al., 2017; 2018; reike et al., 2018). for instance, the framework of potting et al. (2017) contains a set of r-strategies, grouped around three main circularity strategies: (i) smarter product use and manufacture; (ii) extended lifespan of products and their parts; (iii) the useful application of materials. the ten r-strategies are: (i) refuse (r0); rethink (r1); reduce (r2); re-use (r3); repair (r4); refurbish (r5); remanufacture (r6); repurpose (r7); recycle (r8); and recovery (r9). furthermore, the priority order indicates that smarter product manufacture and use (r0–r2) are preferable to product lifespan extension (r3–r7). the lowest priorities are material recycling and energy recovery from incineration and anaerobic digestion (r8–r9). in particular, system thinking is fundamental in the circular economy paradigm. indeed, according to balanay and halog (2016), it is central because designing out waste and closing the loop requires a holistic understanding, wide acceptance, and the success of circularity interventions. the international organization for standardization (iso) has enriched the international debate on ce by proposing four new norms to promote and accelerate the standardization of the circular economy. specifically, the aim is to provide a mainframe in which circularity can be measured, intended as the groundwork for future agreements between governments, companies, and society in general. the new iso standards imply developing indicators that measure the circularity of manufacturing processes, with the goal of reducing their environmental footprint. according to iso 59004 (circular economy – framework and principles for implementation), a circular economy system uses a systemic approach to maintain a circular flow of resources by regenerating, retaining, or adding to their value while contributing to sustainable development. in this study, we adopt the iso framework since it contains a well-defined concept of circularity measurement as the collection, calculation, and compilation of information and/or data to determine circularity performance. in this context, ce transitions require the ability to measure and evaluate circularity performance progress (ruggieri et al., 2016; ghisellini, cialani & ulgiati, 2016; kirchherr, reike & hekkert, 2017; potting et al., 2017; saidani et al., 2019). the quantification of the circular economy and sustainability is a relevant aspect at different levels of application: (i) companies need to evaluate and improve the environmental, economic, and social impact of their products and processes; (ii) financial european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7155 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 4 bodies must have quantitative information about the potential and risks of the different initiatives to select the optimal opportunity; and (iii) policymakers must be guided toward a coherent definition of strategies at the regional, national, and international level, setting realistic targets, and measuring their effectiveness. some authors underlined the need of studies applied to the public sector organizations, in light of the scarcity of research focused on the implementation of ce practices and strategies in this organizational context (klein, ramos & deutz, 2020). however, the lack of comprehensive and robust approaches to quantify the circular economy makes it challenging to apply quantitative methods and indicators in different contexts and compare the results, with the risk of limiting the practical implementation of circular initiatives due to their unknown and/or unclear potential and contribution. the ce implementation process can benefit from technology, since it plays as fundamental factor in increasing new practices and leading to more significant environmental development (massaro et al., 2021). moreover, the use of technology concerns not only the ability to reduce resources but also the capability to manage information thus increasing the ce's impact. circularity metrics description while there is broad consensus on the need for appropriate methodological approaches to monitor and evaluate the implementation of circularity strategies in business contexts, studies of indicators measuring the adoption of multiple ce strategies are still in the embryonic stage (an, maarten & veronique, 2018; janik & ryszko, 2019; saidani et al., 2019). indeed, measuring and assessing circularity is a complex process comprising several steps and their iteration. iso illustrates the process in figure 1. figure 1. iso framework for measuring and assessing circularity (source: iso standard 59020) the interest in these metrics lies in their ability to summarize and distil the great complexity of environmental dynamics and provide more comprehensive information. practitioners and scholars (e.g., balanay & halog, 2016; saidani et al., 2017; franco, almeida & calili, 2021) have proposed different levels of ce measurement: micro, meso, and macro. the micro level comprises products, companies, and consumers. the meso level refers to developing an eco-industrial network that benefits regional production systems and the environment. the macro level means circular economy development in global, national, regional, or local contexts. in particular, at the micro level, the ce paradigm introduces a new perspective to look at business ecosystems. in this regard, organizations must prepare for ce transition based on their circularity performance insights, thus needing measurement frameworks to assess their circularity from a transition perspective. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7155 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 5 studies on indicators to measure the adoption of multiple ce strategies in organizations are still in their infancy (an, maarten & veronique, 2018; janik & ryszko, 2019; saidani et al., 2019). in addition, existing guidelines and standards developed for businesses have been criticized for lacking monitoring c-indicators that link the circular economy with sustainability (pauliuk, 2018; bsi, 2017). moreover, a number of studies (e.g., an, maarten & veronique, 2018; saidani et al., 2019; iacovidou et al., 2017; corona et al., 2019; moraga et al., 2019; potting et al., 2017, 2018) record the absence of standard indicators to track circularity progress within organizations, leading to misunderstandings and contradictions in implementing ce transition. very few indicators capture the effect of strategies concerning smarter product use and manufacture or extending the lifespan of products. another concern is that, in general, cindicators focus primarily on physical parameters. social and environmental indicators are less well-defined and less frequently included in circularity performance measurement frameworks. the same is true for measuring the progress of implementing high-level circularity strategies (an, maarten & veronique, 2018; saidani et al., 2019; moraga et al., 2019; kristensen & mosgaard, 2020; rincón-moreno et al., 2021). in the words of moraga et al. (2019, p. 460), “most indicators focus on the preservation of materials. strategies focusing on materials, especially recycling, are well-developed, but they are some of the existing options to promote ce recycling even being essential to the economy is not the only aspect of a sustainable ce”. in this regard, potting et al. (2017) also point to the strong focus on recycling. even so, a more ambitious ce transition towards the significant reduction of resources, material consumption, and waste generation will be based on high-circularity rstrategies. ghisellini, cialani and ulgiati (2016) underline that the most indicators concern the macro (national) and meso (inter-firm) level, with few metrics at the micro level. moreover, the circular economy evaluations at the micro level are based on cleaner production and green consumption, which is not a full circular economy approach (geng et al., 2012). as such, this approach could lead to indicators claiming to be of circular economy type at the micro level but without encompassing the overall complexity of the circular economy and all possible end-of-life options to close the loop. despite considerable efforts in this regard, gaps are evident in current research concerning c-indicators for monitoring and assessing the progress of organizations towards a ce transition according to their circular strategic choices. circularity measurement indicators are aimed at providing a value expressing how circular a system is, so that these measures enable assessing the circularity of an organization. these indicators have been developed by defining the main attribute of ce (e.g., recirculated materials in a product) to then assign it a scale ranging from 0 to 100%, representing the degree of circularity. our literature review identifies a variety of circularity indicators. for instance, the new product-level circularity metric of linder, sarasini and van loon (2017) defines circularity as “the fraction of a product that comes from a used product” (p. 551). the authors argue that a circularity index should only be focused on the reuse of materials, while other values corresponding to the ce concept (such as environmental quality) should be measured with additional indicators. this argument indicates a divergence between their definition of circularity and the ce concept where circularity relates to only one of the ce goals (material reuse). other indicators, such as the circ(t) and the global circularity metric, are also based on a mono-dimension circularity concept, i.e., merely considering material recirculation, and covering only (and partially) the resource efficient ce goal. for instance, the global circularity metric measures global economy circularity with “the share of cycled materials as part of the total material inputs into the global economy” (de wit et al., 2018, p. 22), using data from input output statistics and projections from a computable general equilibrium model (hatfield-dodds et al., 2017). in turn, circ(t) provides a relative measure of the cumulative mass of a material present in a system over a certain time interval in terms of an ideal reference case where the material is kept functional throughout the entire accounting period t (pauliuk et al., 2017). although the focus is only on material circularity, the developers of these last indicators agree that other goals, such as material saving, value retention, environment conservation, and climate mitigation, should also be considered. the circularity index is based on material circulation, but includes the notion of quality in terms of the ratio of energy required for material recovery to energy required for primary production. this approach attempts to avoid the risk of achieving resource circularity by increasing energy use. the material circularity indicator (mci) that the ellen macarthur foundation (emf) and granta design developed is a micro-level index built on a more complex definition of product circularity expressed as “the extent to which linear flow has been minimized and restorative flow maximized for its component materials, and how long and intensively it is used compared to a similar industry-average product” (emf, 2015, p. 19). since this index does not european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7155 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 6 account for the environmental and socioeconomic risks of the analysed systems, additional indicators are proposed to cover the other ce goals. circular economic value (cev) and circular economy indicator prototype (ceip) both build on the mci concept. cev represents the system’s circularity by accounting for reduced use of virgin materials, reduced output of waste, increased use of renewable energies, and increased energy output during end-of-life (eol). the ceip index is calculated by choosing predefined answers to a series of 15 questions on product design, manufacturing, commercialization, in-use, and eol (cayzer, griffiths & beghetto, 2017). then, a final score (in %) is determined by aggregating the obtained scores for each answer. our literature review shows that ce measurement has some significant limitations in terms of the scale/level. in particular, the high diversity and fragmentation of approaches and metrics makes it difficult to compare the industrial applications in which such indicators and methods are used. this fragmentation has mainly two reasons. the first is related to the overall ce umbrella concept: hundreds of ce definitions exist, and the paradigm is developing without overall consensus regarding circular actions and aspects. this diversity in the theoretical background is reflected in the industrial adoption of ce, providing very specific case studies. consequently, these idiosyncrasies also require a tailored assessment framework, challenging replication in other contexts. the second reason that determines ce assessment fragmentation at the same scale/level is the lack of standards. the issues related to the aforementioned circularity measurement indicators highlight the need for a unique and validated reference (standard). therefore, in 2020 uni (the italian standardization body), proposed a project aimed at developing a standardized approach with the aim of defining a set of metrics that organizations could apply at different micro and meso levels. in this study, we analyse the implementation of the uni1608856 project that the university of piemonte orientale proposed. this innovative approach is a first attempt to assess an italian university’s circularity under a standardized framework. moreover, the case study aims to identify the potential limitations of the metrics of the draft standard and the managerial difficulties in applying the standard itself in order to improve the final standard. 3. research design and methodology since our aim is to investigate a first adoption of the standard, we employ a single-case study methodology to analyse the organization’s implementation process, providing an in-depth discussion of the phenomenon under study (yin, 2017). this methodology is useful to transcend the local boundaries of the investigated case, capturing new layers of reality, and developing new, testable, and empirically valid theoretical and practical insights (eisenhardt, 1989; eisenhardt & graebner, 2007). as mentioned, the issues related to above mentioned circularity measurement indicators highlight the need for a unique and validated reference. therefore, in 2019 the national standardization body, uni, nominated a technical committee subdivided in five working groups with the aim to develop a norm for the “evaluation of circularity in the organizations micro and meso level”. the technical committee was coordinated by the national agency for new technologies, energy and sustainable economic development (enea) and composed by several experts from academy, industry and national research bodies (e.g. the national research council). the goal was elaborating a standardized measurement approach that could be applied to a broad range of organizations (manufacturing companies, service organizations, public entities) at the different micro, meso, and macro levels. the first draft of this norm is the so-called uni1608856 project, later published as a technical norm titled uni/ts 11820. in order to identify hot-spots and potential weakness for the practical application of the developed methodology, accordingly to the implementation of an interventionist approach (grossi et al., 2021), in 2021 uni technical committee launched a call for volunteers for the preliminary application of the methodology. considering the relevance to conduct a first attempt to measure the circularity level of a public organisation at the micro level and the potential relevance of the findings in the improvement of the first draft of the uni1608856 project norm, authors submitted the application of the case study of the university of piemonte orientale (upo). upo has locations in three cities (alessandria, novara, and vercelli), around 15.000 students, and 7 (at that time, currently 8) departments that manage the teaching and research activities. in more detail, upo is a young university in northern italy that runs along three cities and eight departments, organized both for logistical ease for students and to take advantage of specific potential of different locations. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7155 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 7 more specifically, the departments are as follows: law and political, economic and social sciences; science and technological innovation; pharmaceutical sciences; economics and business studies; translational medicine and health sciences; medicine; humanities; sustainable development and ecological transition upo has been accepted by the technical committee and upo was enrolled in the list of contributors of the experimental phase of the uni1608856 project (pilot study). methodology: circularity measurement of organizations under uni1608856 in response to the need for a unique and validated reference, the uni technical committee ct/057 “circular economy” thus drafted a first version of the uni1608856 project norm. this norm is highly significant as the first standardized framework for organizations to measure and assess circularity, and a reference in the development of a future international iso 59020 standard2. the project defines a set of indicators to evaluate the level of circularity of a single/group of organizations. the measurement approach is based on a rating system that is neither linked to a sectoral benchmark nor a minimum level of circularity but only considers the actual level of circularity reached in respect of the maximum reference of 100 points. it also considers the opportunities to measure the circularity level over time. the methodological approach is based on the so-called “lifecycle perspective”, a holistic approach that aims at maintaining natural flows within systems to generate value for both the ecosystem and future generations. this theory is at the base of lca (life-cycle assessment), which is a standardized methodology to evaluate the environmental impacts of all the input and output flows of a process over its lifecycle. specifically, the methodology identifies six main lifecycle stages: design, supply-chain, production, distribution chain and selling activities, use-phase and consumption, end-of-life. the measurement methodology consists of a set of indicators that can be applied at the micro (single organisation) and meso level (group of organizations, industrial and local clusters, municipalities, cities, districts). the macro level is not considered in the analysis, although a list of indicators currently applied to regions and countries is included in appendix b3. the type of data to be collected and the definition of the so-called “system-boundaries” follow the standardized approach in figure 2. figure 2. flow diagram of the process of data acquisition (source: project uni1608856, revision under final public inquiry) data acquisition first considers the elementary components needed to identify the primary data (e.g., input and output flows) to be collected using an effective and individual approach. the network of relevant stakeholders and processes involved in the assessment can be represented graphically, such as with a flow-diagram, in agreement with the lca methodology. since the standardized approach to measuring circularity generally considers all private/public services, processes (bioprocesses included), and systems on two levels (micro and meso), it should be compliant with some measurement and 2 iso 59020 “circular economy – measuring and assessing circularity” – cd stage 3 uni1608856 “measuring circularity – methods and indicators for measuring circular processes in organizations” european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7155 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 8 evaluation criteria. in particular, the nine criteria followed are applicability, coherence, compatibility, transparency, completeness, traceability, data reliability, spatial and temporal coverage, and systemic interdependencies. these criteria are then assessed with data-quality studies that characterize, for instance, data reproducibility, accuracy, precision, availability, representativeness, and so forth. to evaluate all the different data describing the organization’s circularity, three types of indicators are defined: − qualitative indicators = non-numerical factors that set the level of progression or positioning in respect of a target, namely qualitative data based on personal opinions. − quantitative indicators = numerical factors that determine the level of progression or positioning in respect of a target based on numerical and objective evaluations. − semi-quantitative indicators = qualitative evaluation based on a mix of qualitative and quantitative indicators. these indicators are then grouped into six categories: 1) management of materials and components 2) management of energy resources 3) management of waste and emissions 4) management of logistics 5) management of products/services 6) management of human resources, assets, policy, and sustainability according to the expected timeline shown in figure 3, a preliminary set of 103 micro/meso indicators was defined. at the end of 2021, the ct/057 technical committee started a voluntary experimental phase of testing these indicators for applicability and validity, thus calling for volunteers to select a representative set of organizations, including manufacturing companies, service organizations, and public entities. figure 3. timeline (source: uni, italian standardization body) the findings allowed drafting a summary report for stakeholders and improve the methodology. the number of indicators utilized was then reduced to a set of 81, further classified as: − core indicators = indicators that are compulsory european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7155 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 9 − specific indicators, if at least 50% are to be assessed − rewarding indicators = facultative indicators that if evaluated and different from zero lead to a higher final score4. these indicators are further described using additional information: progressive number, description, type of measurement (qualitative/quantitative/semi-quantitative), data-measurement unit (mass, energy, economy, ad hoc), datatype (input, output, internal), numerator and denominator for its evaluation (if present), further definitions, type of evaluation (related to a product and/or service), type of indicator (core/specific/rewarding). all these data are organized in the format of a table (as an example, see table i). table i. example of indicators for the “human resources, assets, policy, and sustainability” category description type of measure u.m. data type indicator calculation related definitions eval. type indicator type numerator denominator 06. indicators related to human resources, assets, policy and sustainability 6 5 index of average energy efficiency of the organisation’s buildings for civil use in (n) year limits: class a (100%) class b-c (50%) class d-f (25%) class g (0%) semiquantitative limits interna l index of average energetic efficiency of the building for civil use in (n) year index of energy efficiency p/s 1 6 8 does the organisation disclose its sustainability and circularity performance (with a sustainability report, non-monetary declarations, etc.)? qualitative binary (y/n) output p/s 2 7 4 investments in sustainable reconversion of assets in years (n), (n-1), (n-2) in respect of investments in sustainable reconversion of assets in years (n), (n-1), (n-2), and building new assets in years (n), (n-1), (n2) quantitative economi c interna l investments in sustainable reconversion of assets in years (n), (n1), (n-2) (investments in sustainable reconversion of assets in years (n), (n-1), (n-2)) + (investments in building new assets in years (n), (n-1), (n-2)) assets reconversion of assets p/s 2 legend: datatype: input, output, or internal evaluation type: (s) service, (p) product, (p/s) product/service indicator type: (1) core, (2) specific, (3) rewarding source: uni1608856, revision under final public inquiry based on these indicators, the evaluation of products and services – separately or jointly – follows. since this is a differential approach based on experimental data, organizations must define the expected focus before the actual data-analysis and 4 uni1608856, revision under public final inquiry european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7155 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 10 measurement phases. in fact, the three different calculation schemas to evaluate are manufacturing companies and service organizations, only manufacturing companies, and only service organizations, as reported in table ii. table ii. calculation schema for the evaluation of a service industry, as applied in the upo case study. indicators type 04, 12, 17, 19, 20, 21, 22, 24, 65 core 01, 02, 03, 05, 06, 09, 10, 11, 13, 14, 15, 16, 18, 26, 29, 30, 31, 33, 36, 38, 40, 41, 47, 48, 49, 50, 51, 52, 53, 58, 59, 60, 61, 62, 63, 64, 67, 68, 71, 72, 73, 74, 75, 76, 77, 81 specific 42, 44, 66, 69, 70, 78, 79, 80 rewarding source: uni1608856, revision under final public inquiry for each, the core, specific, and rewarding indicators are summed up separately and then divided by the relative number of indicators employed. this allows calculating the general level of circularity, while a further evaluation of each of the six categories of indicators enables assessing the hotspots. the mathematical model consists in a standardized procedure structured in the following steps: -be: c number of core indicators s number of specific indicators p number of rewarding indicators -be: a ⊂ n ordered set a: {1, 2, ..., c-1, c} b ⊂ n ordered set b: {1, 2, ..., s-1, s} c ⊂ n ordered set c: {1, 2, ..., p-1, p} -be: d ⊆ b ⊂ n the subset of b of specific indicators used, which must include at least 50% of elements of b set in ascending order. d: {s1, s2, ..., st} -be: e ⊆ c ⊂ n the subset of c of rewarding indicators used, which could be void or corresponds to c, then set in ascending order. e: {p1, p2, ..., pf} -be: ai with i ∈ a the core indicators a1, a2, … ac bj with j ∈ d the specific indicators used bs1, bs2, … bst ck with k ∈ e the rewarding indicators used cp1, cp2, … cpt the level of circularity (lc) of an organisation is defined as: 𝐿𝐶 = ∑!"#$ ""#∑ %& '#%$ $'#∑ () *#%$ %* %#' 𝑖𝑓 𝐿𝐶 ≤ 1 otherwise, lc = 1 the result obtained consists in a numerical value (%) that assesses the organization’s circularity level. thereafter, the organisation can assess the conformity of the achieved level with respect to the level set by the norm. this assessment could be made by the organisation itself (self-evaluation), by a second party as an interested client (consultant), or european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7155 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 11 by a third-party, thus an independent institution that works in compliance with uni cei en iso/iec 17029. the requirements for this conformity evaluation are listed in detail in appendix a5. the results obtained with the feasibility studies led to the final draft project proposal uni 1608856 published online as a public inquiry. 4. results: project uni1608856 implementation in upo as discussed, uni1608856 enables overcoming the lack of precise metrics hindering the measurement of circularity of organizations at the micro level. the university of piemonte orientale (upo) was among the organizations that participated in the experimental phase to test the norm’s applicability. the university’s participation is a first attempt to measure circularity in the public sector at the micro level. as such, the feasibility study conducted at upo is an original case study aimed at implementing the innovative approach of uni/ts 11820 in the public sector. among the six categories listed, the “management of human resources, assets, policy, and sustainability” was further investigated due to the general academic structure under public management. the set of indicators assessed for this category comprise 30 questions. as an example, figure 4 shows the original indicators 81, 91, 105 and 106, as measured in the upo case study. 5 uni1608856, revision under public final inquiry european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7155 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 12 figure 4. example of indicators for the “management of human resources, assets, policy, and sustainability” category (source: questionnaire for uni1608856 early-stage revision) european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7155 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 13 in detail, 21/30 indicators are explicitly related to a specific lifecycle stage, namely use-phase and consumption (9/21), and 4/21 for other phases, such as design, supply-chain, and end-of-life, as shown in figure 5. figure 5. lifecycle stages of the “management of human resources, assets, policy and sustainability” category (source: own elaboration) figure 6 shows that data were recorded for half the answers in this category. figure 6. results of the “management of human resources, assets, policy, and sustainability” category (source: own elaboration) european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7155 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 14 5. discussion the uni1608856 project is a first proposal aimed at bridging several circularity measurement gaps outlined by scholars. importantly, it provides a framework to measure the circularity of organizations, considering that scholars, such ghisellini, cialani and ulgiati (2016), amongst others, lament the lack of circularity indicators at the micro level. moreover, the framework is in line with initiatives dedicated to measuring circularity progress in organizations. indeed, the methodology is based on metrics assessed at the organizational level with no reference to minimum scores but seeking desirable increases over time. this perspective is consistent with calls for indicators to measure progress in circularity (e.g., an, maarten & veronique, 2018; saidani et al., 2019; iacovidou et al., 2017; corona et al., 2019; moraga et al., 2019; potting et al., 2017, 2018). moreover, the norm distinguishes the metrics proposed according to the type of activity conducted by organizations. therefore, three different circularity calculation schemas are defined, respectively for manufacturing companies, service organizations, and manufacturing-service organizations. this distinctive feature of the norm allows properly measuring circularity, since the determinants can vary greatly depending on the type of business. important to note is that for this case study, only half of the indicators proposed for the category under investigation were applicable (15 out of 30), indicating the need to discuss the metrics concerning the specific industry in which the organization operates. considering the applicable indicators, the results show that the data collected mostly concern the processing phases (out of the six main phases recommended). specifically, most answers were recorded for the use-phase and the consumption lifecycle stage, and only a few for other phases. since upo declared that data were unavailable (“n.d.”) for many of the indicators analysed, it was impossible to obtain precise information. indeed, the answers recorded referred to different measurement units (binary, limits, economic). an obvious difficulty emerges: finding useful records that could be linked to the internal organisation of information within upo. in fact, data are not easy to access because they are gathered in many different archives. to overcome this issue, the data should be internally reorganized and better integrated with the related management activities. for example, data digitization could be enabled by the adoption of facility management systems. moreover, the answers related to the management of building stocks and assets highlighted a general lack of traceability concerning energy or organizational/functional interventions, likely because the collection of some data for traceability purposes is optional at the public level. these considerations draw attention to the need to assess and evaluate the overall information system of the entire organization to find the right solutions to satisfy divergent needs, from accounting to procurement, to facility management. some difficulties are also highlighted about human resources management. the results indicate a general need for knowledge of the circular economy principles at many levels, from education and the assignment of specific tasks to employees, to communication between stakeholders and students. the results also show a general need for knowledge of international certification schemes for energy and environmental management (e.g., iso 50001), as well as for sustainability reports and non-financial statements. therefore, a main recommendation is to include circular economy issues within the management of human resources, assets, policy, and sustainability at upo. to ensure successful circular economy transitions, organizations require qualified staff with specific skills. in addition, education and training systems focused on circularity are critical in the human resource management. 6. conclusions, limitations, and further research moving from the iso framework mentioned in the literature review, the upo case study highlights some critical points with regard to the methodology proposed to measure circularity according to the uni1608856 project. in view of similar problems emerging in other experimentations, some revisions were made to the first project of the norm. first, further categorizing the indicators as core/specific/rewarding, second, downgrading some from “core” to “rewarding”, thus facultative, which allows slightly mitigating the problem of the consistent number of “not applicable” (n.a.) answers, as highlighted by the upo case study. european journal of social impact and circular economy issn: 2704-9906 doi: 10.13135/2704-9906/7155 published by university of turin) http://www.ojs.unito.it/index.php/ejsice/index ejsice content is licensed under a creative commons attribution 4.0 international license 15 moreover, since the total number of indicators seemed ineffective, their number was reduced to a set of 81, further categorized with respect to “evaluation type”, namely service, product, or product/service (see table i). the distinction between evaluation type should be made before the actual data-analysis and measurement phase. in fact, when based on precise indicators, the description of products and/or services would be more detailed. for instance, in the revised norm, the number of indicators for the “management of human resources, assets, policy, and sustainability” category was reduced to 18, and further classified as core/specific/rewarding. therefore, the original indicators reported in figure 4 were re-elaborated as those in table i, so the number 81 became 65 in the final revision, number 105 and 106 were merged in number 68, and the 91 was renamed as number 74. however, the procedure described in the uni1608856 project to measure the level of circularity of organizations is expected to be applied on a voluntary basis. the analysis of manufacturing companies and service organizations at the micro and meso level is likely to be up-scaled if some criteria are to be assessed on a mandatory basis. for instance, this would help identify benchmarks and hotspots in respect of different life stages and categories, thus gaining meaningful data to improve the circular economy also at the national level. moreover, any activity of third-party evaluations of the conformity of results is highly recommended. this would set a proper basis to improve communications between stakeholders at the general level, as in the case of type iii environmental declarations (uni en iso 14025:2010), for example. in fact, these provide objective and comparable data related to the environmental performance of products and services, without setting minimum levels, similarly to the scope of the uni1608856 project with respect to the circular economy. as concerns the research limitations, this study is based on a single case of the implementation of a working draft of a standard. the results would benefit from measuring the circularity level of upo once the uni/ts 11820 norm is published. 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