Material-Traceability-as-a-Service: Positioning the role of digital product passports in realizing circular economy performance

Abstract

Industrial firms face growing pressure to reduce their material intensity and carbon emissions. The Circular Economy (CE) offers a promising pathway toward sustainable and regenerative practices, yet translating CE principles into actionable strategies remains complex. Despite increasing attention, little is known about how interdependent organizational and institutional conditions combine to deliver CE performance. This study addresses this gap by identifying configurational strategies for enabling circular outcomes. Drawing on survey data from Dutch construction firms, this study employs fuzzy-set qualitative comparative analysis (fsQCA) to investigate how six conditions, including Digital Product Passport (DPP) readiness, inter-organizational cooperation, business model innovation, government support, formal controls, and social controls, combine to achieve high CE performance. The findings reveal that DPPs are not stand-alone drivers but become strategically significant only when positioned within constellations of business model innovation, social controls, and cooperation. To conceptualize this role, the study introduces Material-Traceability-as-a-Service (MTaaS), a digitally-enabled service logic, through which DPPs evolve from static compliance tools into dynamic infrastructures for value-chain coordination. Five distinct, equifinal pathways to CE performance are uncovered, advancing causal-complexity theory in CE and digital servitization research, challenging linear, one-size-fits-all assumptions about circular transitions. This study contributes to theory by clarifying how digital infrastructures acquire value only through systemic alignment and by extending digital servitization with the MTaaS concept. For practice, it outlines strategic pathways that managers can tailor to organizational contexts, while offering policymakers direction on governance frameworks that enable and accelerate, rather than merely regulate, the transition toward a CE.