Circular Economy as a Catalyst for Sustainability: Modeling Connections in Mega‐Construction Initiatives

ABSTRACT The circular economy (CE) is a transformative approach to achieving sustainability in mega‐construction initiatives, yet its adoption remains limited. This study develops a framework to identify critical success factors (CSFs) driving CE adoption and their impact on sustainability in large‐scale construction projects, focusing on developing countries. Using a systematic, multi‐stage methodology, the research includes a literature review to establish theoretical foundations, expert interviews to refine key factors, a survey to collect empirical data, and analysis via Exploratory Factor Analysis (EFA) to categorize the factors. The framework is quantitatively validated using Partial Least Squares Structural Equation Modeling (PLS‐SEM) to test relationships between constructs and sustainability outcomes. EFA reveals 27 CSFs grouped into three primary constructs: Digital Lifecycle Systems (DLS), Policy‐Driven Capacity (PDC), and Economic‐Market Enablers (EME) as key drivers of CE integration. PLS‐SEM analysis revealed that these 27 CSFs across the three constructs explain 57.3% variance (R 2 = 0.573) in the sustainable pillars of megaprojects. The proposed model, tested through PLS‐SEM, highlights the significance of DLS in optimizing resource management and material reuse. PDC highlights the critical role of regulations and institutional frameworks, while EME underscores financial incentives and market demand as key enablers. This study provides actionable insights for policymakers and industry practitioners, emphasizing the need to integrate digital tools, enforce supportive policies, and foster economic enablers to drive CE adoption. By addressing these critical factors, the research offers a replicable framework to embed CE principles in construction megaprojects, accelerating progress toward sustainability goals and resource efficiency.