Globalization and unexpected technological upheavals have compelled manufacturers to seek new strategies to maintain the sustainability of their businesses. This research seeks to present a conceptual model that illustrates the significance of human resource management in promoting the adoption of a digital circular economy, which can subsequently impact an organization’s environmental performance. This study examines existing literature concerning the role of Industry 4.0 in circular economy practices and the influence of human resources on the adoption of circular economy principles in business. Following an extensive review, the literature is integrated into a conceptual model. The literature research indicated that only a limited number of frameworks incorporate Industry 4.0 technologies for circular economy activities. The function of HRM is overlooked in the move from traditional business management systems to the establishment of a digital circular economy. Integrating HRM practices that merge circular methodologies with the new technologies of Industry 4.0 facilitates the circular advancement of an organization while enhancing its environmental performance. The approach presented in this study integrates conventional HRM practices with the innovative concept of leveraging Industry 4.0 technology into the adoption of a circular economy to improve an organization’s environmental performance. The conceptual model provides theoretical and practical implications for optimizing human resources to improve organizational environmental performance via digital circular economy activities.