Circular intellectual capital: integrating circular economy principles into intellectual capital frameworks

Purpose The increasing importance of the circular economy has highlighted the need to incorporate circular practices into companies’ intangible assets. However, academic literature has not yet fully explored the integration of circular economy principles within intellectual capital (IC) frameworks. This study aims to fill this gap by introducing a novel construct – Circular Intellectual Capital (CIC) – that integrates circular economy principles into the broader IC framework. Specifically, it seeks to explore the extent of CIC disclosure (CICD) in non-financial reports and identify the factors influencing the level of such disclosure. Design/methodology/approach This study develops a novel CIC framework that integrates circular economy principles into traditional IC. It then conducts a manual content analysis to assess the level of CIC information disclosed by 86 Italian listed companies from the MF Italy100 – Large and Mid Cap index through their non-financial reports. Finally, a regression model is employed to examine the determinants of CICD. Findings The empirical results indicate that Italian companies exhibit a low level of CICD. Moreover, the findings show that firm size and firm profitability positively influence the amount of CIC information disclosed, while financial leverage has no significant impact on CICD. Practical implications This study provides practical guidance for companies on how to strengthen their CIC by integrating circular economy principles into human, organizational, and relational capital. Doing so enables firms to enhance sustainability performance, embed circularity into their strategic processes, and build capabilities for long-term value creation. Moreover, companies should actively communicate their CIC to improve transparency, reinforce stakeholder trust, and strengthen their competitive positioning in the transition to circular business models. Originality/value The originality of this study lies in the development of CIC, a novel construct that integrates circular economy principles into traditional IC. This innovative approach bridges two key fields – IC and the circular economy – offering new insights into how companies can align their intangible resources with sustainable and circular practices. Additionally, this study contributes to the literature by analyzing the extent of CICD and its determinants, thereby offering a fresh perspective on corporate transparency in the context of IC and circular economy initiatives.