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.