Paving the way for the circular economy and more sustainable supply chains: Shedding light on formal and informal governance instruments used to induce green networks

Purpose Circular economy is an emerging concept which requires insights from a variety of disciplines, especially from sustainable operations management. Therefore, the purpose of this paper is to verify how formal and informal instruments of governance influence the induction of green practices in a green network located in Brazil, with implications for the circular economy. Design/methodology/approach Based on a review of the supply chain (SC), green supply chain management, and governance literature, proposals are made regarding the influence of governance instruments in inducing green practices. To investigate these propositions, a qualitative research was conducted using a single exemplary case study of a cosmetics supply network. Findings The authors present original research findings which have both expected and unexpected implications for the circular economy, due to the fact that the data analysis showed that the formal (contracts and environmental norms) and informal (trust and cooperation) instruments of governance positively influence the induction of green practices within the supply network. Originality/value This study contributes to supply network and governance theory by providing insights for better understanding of how governance instruments can induce green practices in a supply network, and it provides practical implications for SC managers, by showing the importance of considering different governance instruments. Implications for the circular economy are made.