Unpacking Policy Determinants for Circular Business Models: An Updated Comprehensive Review and an Actionable Analytical Framework

Cristina Galvão Ascenço () and Rui Ferreira Santos
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Cristina Galvão Ascenço: CENSE—Centre for Environmental and Sustainability Research, CHANGE—Institute for Global Change and Sustainability, Department of Environmental Sciences & Engineering, NOVA School of Science & Technology, NOVA University Lisbon, 2829-516 Caparica, Portugal
Rui Ferreira Santos: CENSE—Centre for Environmental and Sustainability Research, CHANGE—Institute for Global Change and Sustainability, Department of Environmental Sciences & Engineering, NOVA School of Science & Technology, NOVA University Lisbon, 2829-516 Caparica, Portugal

Sustainability, 2025, vol. 17, issue 20, 1-26

Abstract: The transition from linear to circular systems remains slow and fragmented, despite the increasing recognition of circular economy (CE) as a strategic pathway to sustainability. This review identifies and categorizes the main policy levers supporting the adoption of Circular Business Models (CBM) in an analytical framework comprising eight determinants: policy agenda, governance, regulation, standardization, economic incentives, information, cooperation, and digitalization. Based on a semi-systematic review of 95 scientific and grey literature sources, the study reveals persistent gaps in policy coherence, governance coordination, and support for high-circularity strategies. The proposed framework offers a practical tool for policymakers to assess existing policy landscapes, identify gaps, and design integrated policy mixes tailored to specific contexts. It also provides a foundation for future empirical research and benchmarking across jurisdictions. By highlighting the interplay between top-down and bottom-up initiatives, the study underscores the need for inclusive, stable, and digitally enabled policy environments to accelerate the circular transition.

Keywords: circular economy; circular business models; policy determinants; policy instruments (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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