Circular economy (CE) is extensively discussed around the globe. Presently, discussions are mostly concerned with the importance of achieving CE and the benefits associated therewith, with the various barriers surrounding its implementation being less debated. Understanding the context in which circularity can flourish is a prerequisite in building the capabilities to deal with the multi-faceted challenges that currently hamper progress in closing the material, component and product loops. In this study, we discuss the importance of systems thinking in understanding the way resource recovery systems operate, and in promoting deep transformational change. We suggest that transformational change needs to go beyond closing materials, components and products (MCPs) loops, and promote sustainability in the way resources are exploited, used and managed throughout the system. By adopting a system of systems approach, we postulate that there are five interconnected sub-systems that need to be considered for supporting transitions to CE, namely, resource flows and provisioning service; governance, regulatory framework and political landscape; business activities and the marker; infrastructure and innovation; and user practices. This holistic approach provides a useful means to cutting through systemic complexity, and focuses on the dynamics between processes, values and actors in the value chain, and their dependence on cultural, spatial and temporal characteristics. We conclude that a systems-based approach can build up the capabilities required to identify and understand persistent linear trends and, in turn, support forward-thinking and time investment in enabling sustainable transitions. This, in turn, can help to align priorities and transform our current practices, speeding up the process of closing the MCP loops in a sustainable manner. Graphical abstract.
Keywords: Challenges; Circular economy; Resource recovery; Sustainable; Systems thinking; Value.