Building Circular Economy Capabilities in Community-Based Organizations

Abstract

Existing models for circular economy are typically designed for firms, often overlooking alternative governance structures, traditional knowledge, and collective decision-making that shape community-based organizations. Yet these organizations are key to conserving fragile ecosystems and supporting sustainable production, as their products and raw materials integrate into industrial value chains. This article examines how community-based organizations develop dynamic capabilities to engage in circular economy initiatives through a multiple case study of two regions in the Brazilian Amazon. The findings reveal that sensing is often grounded in collective, traditional, and place-based knowledge; seizing is driven by community needs and experimentation with external knowledge; and reconfiguring occurs through collective governance arrangements, internalizing circular economy practices and maintaining autonomy. This article extends the literature beyond firm contexts by showing how circular economy capabilities can emerge through polycentric and collaborative governance and have strong ecological embeddedness, making their capabilities less dependent on firm-based structures and knowledge.