A Circular Economy Model for ESG-Driven Sustainable Management Practices: Lessons from Community-Based Irrigation Waste Management

Abstract

Increasing environmental pressure, resource scarcity, and  sustainability demands have intensified the urgency of adopting  alternative development models, particularly in waste  management practices. In developing countries such as   Indonesia, community-based irrigation waste management  continues to face complex environmental, social, and governance  challenges due to limited infrastructure, weak institutional  capacity, and low public participation. In this context, the  integration of circular economy principles with Environmental,  Social, and Governance (ESG) frameworks offers a promising  pathway to promote sustainable management practices beyond  purely technical solutions. This study aims to examine the role of circular economy  implementation in fostering ESG-oriented sustainable  management practices within community-based irrigation waste  management in Indonesia. A quantitative research approach was  employed using survey data collected from community members  actively involved in irrigation waste management. The data were  analyzed using Partial Least Squares–Structural Equation  Modeling (PLS-SEM) to assess the relationships between circular  economy practices, ESG dimensions, and sustainable  management practices. The findings indicate that circular economy implementation  has a positive and significant effect on ESG performance as well  as on sustainable management practices. Moreover, ESG  dimensions serve as a mediating variable that strengthens the  relationship between circular economy practices and sustainable  management outcomes. These results provide empirical evidence  supporting the integration of circular economy and ESG  frameworks at the community level. This study contributes to the  literature on circular economy and ESG by offering an applicable and replicable conceptual model for sustainable community    based environmental management.