Unlocking Barriers to Circular Economy: An ISM-Based Approach to Contextualizing Dependencies

Despite it being imperative to a sustainable development, a circular economy remains scarcely adopted by companies. Barriers towards this are extensively explored yet with little focus on their mutual dependencies. Neglecting dependencies is argued to cause suboptimization and lead to unsuccessful circular projects. To counter this and strengthen companies in assessing dependencies among context-dependent barriers towards a circular transition, this study proposes a practice-oriented approach based on an interpretive structural modelling methodology. This is validated through a case study with a Danish mechatronics manufacturer with which fourteen semi-structured interviews, a survey, and a workshop were conducted. Findings reveal an interwoven network of barriers with numerous chain mechanisms across managerial, market-related, financial, technical, and regulative aspects, which underpins the need to approach the circular transition systemically. Furthermore, the study demonstrates the ability of the methodology to facilitate discussions and assist industrial practitioners, both on a strategic and operational level, in systematically untangling the complex interrelations to identify root causes for inertia and prioritize mitigation measures.