CORPORATE SOCIAL RESPONSIBILITY, CIRCULAR CAPABILITIES AND ENVIRONMENTAL ACCOUNTING TOWARD CIRCULAR ECONOMY IN THE TEXTILE INDUSTRY OF SAUDI ARABIA

Abstract

With the increased climate change and environmental degradation issues, attaining environmental sustainability has become inevitable. Following this, the business sector has adopted a revolutionised shift from traditional business practices towards sustainable business practices. For this purpose, many firms have paid much focus on corporate social responsibility (CSR) and implemented circular economy (CE) principles, which aims to minimise waste and maximise the efficiency of resources through designing products that are directed towards reducing the environmental impact and fostering sustainability. This study aims to assess the roles of CSR, environmental accounting (EA), and circular capabilities (CCs) in the CE in the Kingdom of Saudi Arabia’s (KSA) textile industry with the moderating role of stakeholder pressure (SP). Theoretically, this study extends the Resource-Based View (RBV) by incorporating environmental capabilities like EA and CCs, showing how SP that framed by Stakeholder and Legitimacy Theories boosts sustainability strategies. A quantitative survey was conducted among owners and employees in management on a sample of 200 Saudi textile firms, and the data were analysed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results reveal that CSR, EA, and CCs have a significant positive effect on CE implementation. Furthermore, SP significantly moderates these relationships, strengthening the influence of internal practices on CE outcomes. Practically, these findings offer guidance for managers and policymakers in aligning resources with stakeholder expectations to advance CE goals under national frameworks like Saudi Vision 2030.