Based on the principles developed by Industrial Ecology, Cradle2Cradle and The Natural Step, the Circular Economy is a tool to achieve environmental sustainability by closing the material loops in the economy. In this way human wellbeing will be decoupled from resource use and environmental impact. Circularity is the result of applying system thinking to society and its relation to the natural environment.
Sustainability is not a state but a condition of a system since change is the only permanent feature of life. Finding a definition for this term has proven almost impossible, but this comes from a wrong approach to the problem. By thinking in terms of conditions or principles, societal activities can be assessed in terms of its sustainability. The conditions for sustainability were defined 20 years ago and are four: societal activities should not systematically accumulate substances from the lithosphere and human-made substances in the ecosphere, should not systematically undermine the natural stocks and should fulfil human needs in an equitable, fair and just way between and within generations. Using them as guiding elements is at the core of sustainability transitions.
Innovation at a societal level is defined as transition. Such process entails the transformation of socio-technical landscapes driven by top-down forces or bottom-up initiatives that are pulled by the market or pushed by innovation agents. Transformation and change processes require several things to be successful: a clear aspiration, an adequate analysis of the situation, creative solutions and a development path. In addition to this, transformation processes require engagement from the different participants, which in turns needs particular skills from organizations.