Why the Circular Economy Needs Systems Thinking

Leyla Acaroglu
Disruptive Design
Published in
11 min readJun 30, 2023


There has been a steady growth in interest in actioning a circular economy, which is critical to us living sustainability on this beautiful planet we all share. But in order to achieve a transition from the current linear, polluting and wasteful economy to a circular and sustainable one, a systems thinking approach is fundamental.

Circularity is about changing the way we value things that have come from and will return to nature. It requires us to think in cycles, to work within nature’s systems and to eliminate waste and pollution. Thus, being able to adopt an expansive and systems mindset is one of the core skills required to create a truly circular economy.

In this article, I will lay out what circular systems thinking is, why systems thinking is a must when approaching circularity and how you can ensure that you are not creating tomorrow’s problems with today’s solutions.

Redesigning the Linear Economy

The current linear economy is based on extraction and exploitation, and this economic model has enabled a system of value extraction that ignores collective losses that result from continually taking resources from nature, making products and then wasting them. We are thus in an economy that is constantly operating at an ecological deficit, eating into the future generation’s resources today and pushing us to the outer edges of the planetary boundaries.

In order to make changes that will enable us to live sustainably on this planet, we need to restructure the way our economy works, whereby we eliminate waste, ensure that things created last longer and actively restore and regenerate nature. These goals of the circular economy are all systems-level changes; therefore systems thinking is the tool needed to ensure that the decisions made today are achieving the full-systems solutions needed to usher in a better future.

What is Systems Thinking?

I’ve written extensively on this and you can explore my full series on systems thinking here, but in summary, systems thinking is a way of seeing the world as a series of interconnected and interdependent systems rather than lots of independent parts. As a problem-solving and thinking tool, it seeks to oppose a reductionist worldview — the idea that a system can be understood by the sum of its isolated parts — and replace it with expansionism or wholeism, which is the view that everything is part of a larger whole and that the connections between all elements are critical to understanding the way systems and the world at large works.

For many of us, we’ve been taught to think in reductive and linear ways through the mainstream education system, as this helps us manoeuvre our way through the structured world we humans have created to make life easier for us all. But this restricts our ability to understand and interact with complex systems and apply divergent actions to help make change in the world around us. This creates issues for developing the innovations and approaches needed to enact a circular economy; as Einstein said, “We can not solve our problems with the same level of thinking that created them.” So, unless we actively overcome the reductionist worldview, we indeed continue (inadvertently) approaching problems — such as climate change and the waste crisis — by using the same linear mindset that led to their creation in the first place.

Systems thinking is actually very intuitive for humans, as we are systems ourselves, we live and rely on systems and we create them. I’ve taught applied systems thinking for nearly two decades and found that once open to the ideas of interdependent systems, it comes very naturally to people (if you want to get started right now, I have a 30 Days of Systems Thinking course that helps you develop the practice of a systems mindset).

Systems are essentially networks made up of nodes or agents that are linked in varied and diverse ways and can be defined by their relationships and performance. This is known as systems dynamics. This approach is about identifying and understanding relationships and the impacts that these have on different parts of the whole system so that you are in constant exploration of the larger systems at play (causal relationships). You start with the whole, then identify the parts and next seek out relationships that reinforce the system’s dynamics. From there, you can identify areas of intervention to shift the status quo of a system.

Systems are all around us; we are interacting, depending, transforming and contributing to systems every second of our lives. The natural world in which we live, and that we are a part of, is made up of beautifully complex, chaotic, and deeply interconnected systems. All of nature’s systems work harmoniously together to achieve the magic of our life-sustaining planet Earth. It is the disruption of these systems through human economic activity that has created many of the issues that sustainability, climate action and the circular economy are seeking to address.

We now know that when one system is damaged or removed, it can negatively affect the rest of the systems that rely on it. If you were to remove critical systems in your body such as your neurological system or cardiovascular system, then you would destroy the whole. Nature is the same; many of the systems interventions created to fuel our modern economy are at the expense of the whole system. This is what we are seeking to rectify, and therefore, we need to start with understanding the systems at play.

When looking at the transformation of our current economy from linear to circular, we have to ensure that we start with the whole system, understand the critical parts and work within these to create solutions that meet human needs, but not at the expense of the wider systems that sustain life.

In summary: to think in systems is to see the often invisible, unobvious parts of the world around us. It’s about starting with the whole, seeking out relationships, embracing complexity and chaos, and being comfortable with not knowing the full system unless you have immersed yourself within it. Systems are everywhere, and seeking to understand the flows within them is intuitive once you start to open up to the practice.

Circular Systems Thinking

The shift from the linear economy, which is fueled by reductive industrial thinking, to the circular economy, which is fueled by creative and regenerative systems thinking, needs to happen rapidly if we are to continue to prosper on the planet.

The possibility to design solutions that make old polluting systems obsolete and to create a future that works better relies on our ability to redesign the systems created to facilitate human needs. The products, businesses, services, societies and economies that rely on extraction and exploitation to function need to be redesigned so that they can meet human needs, without the expense of the planet.

Circular systems thinking shifts the way we approach these problems from issues to opportunities because it enables us to see the full picture before the parts, and the relationships that reinforce the problems are identified so that effective interventions can be implemented that shift their status quo. It’s generative, approaching the problem from the positive possibility that all systems hold their own solutions and that by exploring the system that sustains the current status quo, we can unlock the potential to create a new system.

Circularity is, in part, about mimicking and respecting the way nature solves problems. Embracing circularity means finding ways of creating products and services that meet the objective of cycling through systems that are intentionally designed to eliminate waste and pollution, preserve resources and still result in desirable and functional products.

There is no such thing as a single circular business or product; all aspects of the economy exist in relation to other aspects, and thus to transform to a fully circular economy, we need to approach the design and development of such interventions through systems change.

Circular systems design is a way of approaching problem-solving that starts with the whole system, defines the functionality and objectives of the system, and then creates interventions that deliver on these goals without negatively impacting the wider social and environmental systems. By taking a systems approach to designing circular solutions, it ensures that unintended consequences are explored before actions are taken, and it also enables the practitioner to be open to more creative and systems-level solutions.

A Full Systems Perspective

Historically, addressing environmental concerns has been approached in often simplistic or one-dimensional ways, such as labeling products as biodegradable (often resulting in greenwashing), pushing (the broken) recycling system as the main solution, and touting carbon neutral status (instead of carbon positive, which is the goal of full systems sustainability).

But as our understanding of the scale and size of the problems we face has evolved, so too has our need and ability to address them. The issues we are presented with require systems-level interventions.

By approaching problems like climate change, ecosystem destruction and the waste-based economy from a full systems perspective, we can dramatically shift the status quo of unsustainability and develop innovative solutions that create long-lasting and significant change. Why? Because a systems perspective lays no blame; it is constantly looking for opportunities for interventions that shift the status of the system. A systems approach is about working within and not against the natural processes and cycles that create a healthy and thriving planet. A systems mindset is adaptive, works within complexity and finds unique ways of solving problems.

As you develop a systems thinking practice, it shifts the way you see the world and enables a deeper understanding of the relationships and dynamics that make up the world around us, and this enables us to find points of intervention that change our culture and create solutions that work within and not against the systems at play.

So whenever you are seeking to address a challenge, consider the systems that are at play first. Start by mapping the relationships, looking for the new insights and applying the systems mindset to identify the areas of intervention that will enable the greatest change.

Sustainability and regeneration require a willingness to go beyond the obvious, to look at redesigning the many facets of business, the relationships between companies and consumers, and the values that we have in the economy.

All circular economy solutions have to be system-level interventions because they are working to shift values and relationships. Circular solutions don’t exist in isolation, they require different agents to work together to develop diverse outcomes, and circularity is by its very nature a system that we are seeking to foster within the economic system that we as humans have created!

By taking a systems approach to sustainability, climate action and the circular economy, you move beyond the superficial and dive into creating more substantial sustainability solutions. This activates the full systems transformation that is needed to ensure all aspects of your business, including the cultural aspects, have taken on this great challenge as an opportunity for change and will grow through that.

Product Service Systems

Humans create linear systems and nature creates circular ones, so let’s design products, services and systems that fit within circular systems. This is the concept of a product service system model, or “product as service”.

This is one of the main approaches of the circular economy, to transition away from single end-consumer product delivery to Product Service System (PSS) models. This is when a product is designed as part of an integrated system that delivers the full service, and thus maintains the value of the materials within the system. The producer takes responsibility for the product across its entire life and shifts its business model to enable this. PSS requires the creative to re-conceptualize meeting functional needs within a closed system that the producer manages in order to minimize losses (waste) and maximize value gains (cycle of materials) after each cycling of the product (if you want to dive deep into circular business models, take my new class on this at Swivel Skills).

PSS approaches offer a completely different business model where the product becomes a part of a service, but it’s critical that this is done within a strong ethical framework and not used to manipulate or coerce people into signing up to something that still delivers them elements that will be lost within the system, such as food box delivery services that increase packaging waste for individually-packaged items, or cell phone contracts that force upgrading even if the customer still wants to maintain the original phone.

Tools Needed to Enact the Circular Systems Approach to the Circular Economy

There are many tools that foster a circular systems approach; here are 6 that are crucial:

  1. Systems Mapping
  2. Life Cycle Hotspot Analysis
  3. Systems Dynamics
  4. Life Cycle Thinking
  5. Systems Interventions
  6. Circular Systems Design

These are all tools we teach at the UnSchool and now Swivel Skills, our corporate sustainability training platform. With any practice set, it requires a bit of work in the beginning to gain the knowledge and practical aspects to then be able to apply it well, but it’s definitely worth the effort, as systems thinking is a tool that applies to everything — life, work and the world!

One thing I know for sure is that no one who starts a systems thinking journey regrets or reverses the learnings they gain, and that systems thinking has a long way to go in being embedded into government, business, education and individual mindsets as a source tool for critical solutions setting; filling that gap requires each of us to adopt a systems mindset.

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Want to keep advancing your systems mindset? Try one of our systems thinking online courses!

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  • Efficient daily practice: Expect to budget just 10–20 minutes daily to read and do the mind-boosting activities

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Interested in learning more about the circular economy? You can download my guidebook Swivel to Sustainability here or order a hard copy here. I also have more comprehensive online courses in Systems Thinking on the UnSchool and at Swivel Skills; we have a new Systems Thinking course and leadership program on the Circular Economy here.

I’m also running some live Circular Redesign Workshops in Australia and am open to in-person requests; find out more here.



Leyla Acaroglu
Disruptive Design

UNEP Earth Champ, Designer, Sociologist, Sustainability & Circular Provocateur, TED Speaker, Founder: unschools.co, disrupdesign.co & circularfutures.co