Integrating Circular Economy and Industrial Green Total Factor Productivity: a CIGTFP Model for Industrial Sustainable Development and Environmental Management

Global resource depletion necessitates sustainable environmental management for ecosystem conservation as the basis for sustainable industrial development based on strong sustainability. The absence of an economic strategy for effective environmental management and an innovative industrial model for strong industrial sustainability were the gaps identified by this research. This research elucidates the significance of Industrial Green Total Factor Productivity (IGTFP) in managing the environmental impact of industry by incorporating natural capital accounting into productivity evaluations. IGTFP complements circular economy (CE) in industrial systems based on its endogenous Industry 4.0 Technologies that generate sustainable productivity, ecological preservation, and optimal profit maximization. Based on the synergies between IGTFP and CE, this study proposes an integrated Circular IGTFP (CIGTFP) model to promote eco-efficiency, cleaner production, and responsible resource consumption and facilitate collaboration between businesses and researchers to accelerate the transition to strong sustainability. This model synchronizes productivity with environmental, social, and governance principles, thereby enhancing ecological resilience and yielding socioeconomic advantages such as job creation and resource stewardship. The pragmatic applications of the CIGTFP model incentivize entrepreneurs to adopt restorative activities to reduce associated costs of environmental input by internalizing optimal pollution tax. This research contributes to theoretical discourse by clarifying the triadic synergy among technology, industry, and CE and incorporating strong sustainability into industrial sustainability evaluation. The government should enact robust environmental regulations based on the IGTFP framework, and stimulate innovation in CE through incentives, infrastructure development, and public–private partnerships to support the application of the CIGTFP model to accelerate strong sustainability in the industry.