The Triple-Level Proposal of the Circular Economy: Circular Performance, Case Studies and a Design Workshop

Abstract

The conventional linear economic model has intensified global resource depletion and environmental degradation, underscoring the pressing necessity for a transformation toward the Circular Economy (CE). Currently, research generally segregates materials, products and services within the CE, overlooking their hierarchy and interactions in circular performance. Employing a mixed methodology of induction and deduction, this study constructs a triple-level proposal for the CE from a design perspective. The proposal integrates material recycling, product reuse and service circulation into a multi-hierarchical progression, clarifying the priorities of the CE and sustainable design. It not only enriches the theoretical basis of the CE and sustainable design, but also offers a transformative perspective for optimizing circular performance. Case studies in the deductive stage provide measurable criteria to assess the performance of each level, while a design workshop featuring the CE canvas and heuristics is adopted to test the effectiveness of our proposal in guiding practice. The results demonstrate the theoretical and practical feasibility of the proposal. This study emphasizes the progression from materials to products and services, exploring the potential of the triple-level proposal in guiding design and improving circular performance. By proposing policy recommendations based on the proposal, this study provides stakeholders with an actionable roadmap for CE implementation.

1. Introduction

As stated in the Global Resources Outlook 2024 released by the International Resource Panel, traditional production and consumption have led to a tripling of the planet’s natural resource extraction over the past 50 years. Without an urgent paradigm shift in economic development, the total extraction of raw materials, including metals, minerals, fossil fuels and biomass, could rise by 60% by 2060 compared to the 2020 levels [1]. This concern is generating strong global interest in the circular economy (CE) as a promising way to decouple economic growth from resource consumption [2]. CE practices help to improve sustainability performance and are increasingly becoming a basis for companies to maintain competitive advantages [3,4]. As Korhonen et al. argue, the CE is a complex concept that aims to improve resource efficiency and effectiveness by narrowing, slowing, closing and regenerating resource flows [5]. It has the capacity to address environmental challenges and sustainable development in the industrial sector [6].

Design plays a pivotal role in reshaping production and consumption patterns, which facilitates the transition toward a CE. However, few studies have clearly articulated the focus and priorities of the CE from a design perspective. The CE is initially formulated as a closed-loop system designed to recycle waste across the entire lifecycle of resource extraction, production and consumption [7]. With the advent of the “Industry 4.0” epoch, the scope of the CE has been further broadened to integrate sustainability. It is defined as “an industrial system designed with restorative or regenerative intent and capable of closing material loops within industrial ecosystems” [8]. Drawing on Doughnut Economics, the CE emphasizes economic, social and environmental sustainability and their performance [9]. The Steady State Economy, the Blue Economy and the Performance Economy have successively augmented the theoretical framework of the CE [10,11,12]. Practices such as regenerative agriculture, industrial symbiosis and “cradle-to-cradle” further integrate design strategies, thereby propelling the implementation of the CE [13,14,15].

Although CE models are gradually being proposed in various fields, their practice is still limited by unclear priorities and circular performance. The Ellen MacArthur Foundation’s “butterfly diagram” is conceptually groundbreaking but lacks practical guidance [16]. Delft University of Technology’s “TU Delft” model helps organizations integrate the CE into their business models but lacks a systematic consideration of materials and products [17]. EU Horizon’s “R2π-the route” highlights the recycling, reuse and access in the CE but fails to clarify the interactions between the dimensions [18]. In terms of assessing circular performance, Baratsas et al. develop the Micro Circular Economy Index framework to assess the process of CE development, while Drofenik et al. extend it to micro–macro–micro systems to harmonize their overall performance [19,20]. These approaches have facilitated the application of the CE in different industries, but systematic frameworks are still needed to generalize strategies and methods across dimensions.

Current CE research exhibits extensive but fragmented characteristics, with a notable absence of a systematic model to clarify its priorities and focus. By analyzing the titles, abstracts and keywords of the literature, we classify the CE strategies into three dimensions: material recycling, product reuse and service circulation [21,22,23]. This integration reveals the hierarchical nature of circular performance from a design perspective, with roots that can be traced back to Stahel’s three stages of CE development: the “D” (reduction) era, the “R” (reuse) era and the performance economy (products as services) [24]. Business practices in different sectors also fit into this framework, such as manufacturers’ material recovery strategies and companies’ durable product design and service system innovation. However, the successful implementation of the CE still needs further development. It necessitates not only a holistic framework to integrate the disparate dimensions of the CE, but also a well-defined prioritization of design and operational strategies to achieve optimal circular performance. To fill the above gaps, we intend to address the following research questions:

RQ1: How to integrate the knowledge of the CE and sustainable design to construct a comprehensive hierarchical model that clarifies the priorities of each level?

RQ2: How to use this model to guide CE implementation and design strategies to improve economic, social and environmental performance?

In response to these two questions, this study adopts a mixed methodology of inductive–deductive approaches to establish a generic triple-level CE model. In the first stage of our top-down literature review, we systematically review 205 academic articles published from Scopus and Web of Science over the last decades and use Google as a supplement. These articles are screened from an initial pool of 4784 articles. We pay particular attention to 23 of these review articles to ensure the comprehensive coverage of theories in the field of the CE and sustainable design. By screening and analyzing article titles, abstracts and keywords, we integrate three dimensions of the CE from a design perspective: materials, products and services. Second, to assess the validity of the hypothesis, we conduct bottom-up case studies to construct deductive arguments. Examples from different industries are included based on three key criteria: (1) thematic relevance to the proposed hypothesis; (2) the degree of CE practice maturity; and (3) the openness and accessibility of the data. Finally, we organize a ten-member workshop comprising seven volunteers and three assistants to apply the theory in practice. Driven by the structure of design thinking, the workshop incorporates CE heuristics and canvas to guide inspiration, ideation and implementation. The three-step approach develops and validates the theoretical and practical feasibility of the triple-level proposal. Figure 1 illustrates the framework of the mixed methodology and the pathway of the inductive–deductive approach to establish the proposal.

Design has come to be a crucial factor affecting the efficiency and cost-effectiveness of recycling and product lifecycle management [25]. Unlike previous frameworks, the triple-level proposal combines the CE with sustainable design to support efficient CE transformation. By emphasizing the escalating circular performance from materials to products and services, this study provides a transformative perspective for understanding and implementing the CE. The triple-level proposal clarifies the priority of sustainable design and enriches the theoretical foundations of both disciplines. It highlights the differences in resource efficiency and value creation at each level and evokes awareness of the hierarchical nature of the CE. A successful CE implementation is supported by stakeholder governance that promotes cooperation within companies [26]. Therefore, based on the triple-level proposal, we propose policy recommendations to furnish stakeholders with a tangible roadmap for advancing towards a CE.

The remainder of this study is organized as follows: Section 2 presents the triple-level proposal of the CE and its theoretical underpinnings. Section 3 employs case studies in business operations to verify the proposal’s feasibility and validity. Section 4 introduces a circular design workshop, aiming to show the potential of the proposal in facilitating the implementation of the CE and sustainable design. Section 5 provides a discussion and clear policy recommendations for stakeholders. Finally, Section 6 draws conclusions, acknowledges key limitations and looks to the future.

2. The Triple-Level Proposal of the CE

This study proposes a progressive triple-level proposal of the CE to explore the priorities and focuses of circular systems. It integrates three value-increasing dimensions from the perspective of design: material recycling, product reuse and service circulation. As illustrated in Figure 2, each tightening of the circle represents an escalation in resource efficiency and circular performance, with varying degrees of impact on the economy, society and the environment.

The triple-level proposal corrects the misconceptions of the CE from the perspective of performance leapfrogging, which refers to the advancement in economic, social and environmental value by shifting traditional equal improvements. In view of design methodology, the nested cycle of materials–products–services constitutes the three pillars of the CE, illuminating the interactions between the different levels in a circular system. The deepening green emphasizes the escalation of circular performance from materials to products and services. It clarifies the priority and center of the CE and sustainable design. The arrows further indicate the direction of material flows, illustrating that the key to the CE is source control rather than end-of-pipe treatment. In all, the triple-level proposal points to the direction and focus of the CE and sustainable design, revealing the interactions across materials, products and services to enhance economic, social and environmental performance. It adheres to the 3R principles and aligns with the design process. Building on this foundation, the triple-level proposal offers a transformative perspective for re-understanding the CE and sustainable design, outlining practical pathways and effective methods for their successful implementation. Therefore, by integrating the three closely related, interacting and evolving cycles of materials, products and services, stakeholders can use this proposal to develop and adapt strategies to achieve higher cycle performance.

2.1. The Basic Level: Material Recycling to Reduce Consumption

The CE requires a systemic shift in which all materials within economic processes are fully utilized or reintegrated into closed-loop systems [27]. As the basic level of a CE, the recycling of materials covers the widest possible range of sectors. It calls for actions to reduce material input, eliminate hazardous substances, explore renewable energy and improve waste recovery [28]. As the initial stage towards circular supply chains, recycling merely closes the loops between post-use waste and new production, without altering the speed of material flows [29]. Furthermore, the law of increasing entropy dictates a dual approach of source control and end-of-pipe recovery, with the priority of reducing inputs [30].

In that way, source control is responsible for controlling the utilization of virgin resources and their environmental impact throughout the lifecycle, while end-of-pipe management focuses on closed-loop systems that return waste to resources. They form the complete closed loop of material recycling and require a holistic approach to managing the use of resources, which is emphasized in the duopolistic model of Agliardi and Kasioum [31]. In this level, materials should be chosen to facilitate the regeneration of natural systems. This includes encouraging biomaterial adoption to make full use of natural resources, as well as avoiding the use of toxic substances and non-renewable resources. Moreover, Salehi et al. note the need for manufacturing to improve technology and develop renewable energy and materials [32]. The key to recycling is the non-toxicity of biomaterials and the ability of non-biomaterials to retain maximum utility value with minimum energy consumption, focusing on the reprocessing of end-of-life materials into renewable resources.

Material recycling mitigates pollution by managing the entire process of resource use. It conserves virgin resources, relieves pressure on landfills and reduces pollution from incineration [33]. However, recycling alone does not necessarily improve resource efficiency [34]. It is often constrained by economic and technical factors, including the difficulty of material degradation and processing, as well as cost and energy efficiency [35]. Material recycling is the first step in a multi-level process, which must be followed by more efficient reuse and service cycles to realize its full potential.

2.2. The Intermediate Level: Product Reuse to Extend Lifecycle

Product reuse is the second level of the CE, building a bridge from materials to services to achieve higher resource efficiency. It is the practice of refurbishing or reselling products to keep a product in use for as long as possible. The original intent of the CE clearly emphasizes maximizing the use of resources throughout the life of a product, making lifecycle management a key objective at this level [36]. On this basis, product reuse focuses on rethinking and redesigning products and services to enable multiple repeated uses of products and components [37]. By enhancing product performance and providing services for repair, replacement or upgrading, product reuse encourages continued use and delays the final disposal to save cost and resources. Compared to producing new products, redistribution and reuse are effective in reducing environmental impact and promise an improved CE [38]. From a resource efficiency perspective, product reuse goes beyond simple material recycling by maintaining the functional value of a product over time.

Many of the design principles and methods provide pathways for increasing the circularity of products and components. Focusing on tangible consumer goods, circular product design seeks to “green” old products and create new sustainable ones [39]. Specifically, green design and eco-design focus more on materials to improve the sustainability of products; modular product design is recognized to enhance remanufacturing to extend lifecycles and emotional design opens up new ways to retain old items and reduce the demand for new ones [40]. Moreover, the “Design for X” approach is highly regarded for dismantling, redesigning, refurbishing and upgrading products [41]. To increase product durability, companies can adopt after-sales services to sustain product use and second-hand trading platforms to promote resale. The reuse and resale of old items avoid resource inputs by extending the product lifecycle to reduce the need for new products [42]. It extends the useful life of products and components to avoid the need for new products [43]. Furthermore, product reuse is also concerned with creating added value through the transfer of ownership between consumers. The second-hand market makes a breakthrough in the field of business model innovation for product reuse. It extends the life of a product by transferring ownership at below-market prices and heralds a further shift in the CE towards a more advanced level of service circulation.

As an important medium linking resource utilization and service circulation, product reuse is playing an increasingly prominent role in the CE. Extending the lifecycle of products through reuse not only reduces the need for new production, but in turn eases the pressure on waste disposal. Through circular product design and sustainable business model innovation, product reuse transforms consumption habits to significantly reduce the need for virgin resources. However, this is not the ultimate goal of the CE, but part of an ongoing process of greater economic and resource efficiency. As a continuation of resources and a carrier of services, product reuse is a crucial step in the progress of the CE.

2.3. The Superior Level: Service Circulation to Enhance the Utilization Intensity

Service distribution is the most advanced but complex level of the CE. It shifts the focus from tangible physical products to intangible value-added services, gaining maximum advantage from the immateriality that transcends the dimensions of time and space. This level aims to maximize resource efficiency by providing utility to customers through functional outcomes rather than products. Stahel’s product–service thinking emphasizes the strong correlation between materials, products and services. Based on sustainable resources and products, circular services save costs, increase social value and maximize eco-efficiency.

The service-oriented business model breaks down the boundaries of ownership and transforms traditional consumer markets and business profitability models [11]. Based on the interactions of consumers and the temporary transfer of the right to use goods, service circulation allows companies to retain ownership of their products and ensure they are repaired, reused or recycled at the end of their lifecycle. It not only enhances the intensity of resource use to reduce the environmental footprint, but also delivers significant cost savings and creates social value [44]. For example, the sharing economy, such as bike-sharing services, allows multiple users to share a single product. It reduces the need for individual ownership and production and maximizes the scale and frequency of resource use. House-sharing services such as Airbnb create social value and avoid new resource inputs by revitalizing unused resources to promote and support employment. By offering more flexible and diversified options, the rent-to-own model avoids the desire to keep multiple products.

Service-based business models reduce the reliance of businesses on mass production, enabling the more sustainable use of resources and reducing waste. With little or no additional input of virgin materials, service circulation achieves the highest economic, environmental and social benefits. However, moving towards service circulation as the ultimate goal of the CE is still challenging. The success of a service-centered CE system requires a radical shift in business model and value creation [45]. Both theoretical research and practices in circular business model innovation are still in their infancy [46]. It is imperative to address the sustainability of materials and products, the construction of sound business models and the development of improved policy mechanisms.

In general, the three levels are not separate but interdependent. By emphasizing circular performance in terms of quantity, frequency and intensity, the triple-level proposal exposes the progressive nature of the CE. At the most elementary level, material recycling endeavors to reduce consumption and pollution. It is the basis for products and services and guarantees the closed loops of material flows. However, it is inevitably constrained by economic, technological and policy factors [47]. Based on this, the second level of product reuse focuses on extending a product’s lifecycle. This includes durable product design to facilitate repair, replacement, remanufacturing for longer use or second-hand trading to transfer ownership of the product. At the highest level, the circulation of services shifts the focus from physical products to service-based solutions. It is the only way to decouple economic activities from material consumption to maximize circular performance.

Each level builds on the previous level of evolution, with continuous improvements in ecological benefits and economic and social value. By systematically managing the multiple stages of resource input, product design, manufacture, sale, use, maintenance and end-of-life, these three levels logically connect and interact to deliver superior performance to achieve the triple bottom line. This progressive and nested structure can provide a clear canvas for systematic thinking about circularity, guiding the priority of various CE strategies and core elements of each level. Through a holistic and integrated view on circular performance across the material, product and service tiers, the triple-level proposal clarifies the keys to a successful transition to a CE. By considering the interactions and hierarchical relationships of the three levels together, stakeholders can prioritize design strategies to maximize economic, social and environmental benefits.

3. Case Studies

The literature review and observations of general phenomena constitute the framework of the triple-level CE proposal. Nevertheless, case studies are indispensable to verify its feasibility. In this section, we examine empirical cases across various sectors and classify them according to the triple-level proposal. The consistency of business operations with the proposal justifies the inductive hypothesis. In addition, the implementation outcomes at each level reveal their different performance within a circular system—an enhancement from materials to products and then to services.

3.1. Material Recycling

Material recycling is the most basic practice of the CE and is widely implemented, mainly in the primary and secondary sectors. This approach depends heavily on raw material inputs and energy consumption, making it more commonly used compared to product and service levels. As illustrated in Figure 3, BASF uses its unique ChemCycling technology for automotive coatings, which can reduce CO₂ emissions by up to 50% through the use of varnish made from recycled waste tires. In addition, BASF signed an agreement with Encina, a manufacturer of ISCC PLUS-certified circular chemicals, to declare its commitment to increasing the use of recycling-based raw materials to promote the CE [48]. In addition, the UAE aims to reduce the carbon footprint of its electricity consumption and to convert approximately 2 million tons of municipal solid waste annually into secondary raw materials through a waste diversion project [49]. Sustainable agriculture projects in Brazil increase soil carbon stocks and reduce greenhouse gas emissions through organic fertilization and crop rotation practices [50]. What is more, eFishery employs IoT technology to enhance aquaculture efficiency, achieving a 92% lower carbon footprint than conventional meat production [51].

Nowadays, more industries are making a positive shift towards the CE at the material level. The fashion industry is at the forefront of material innovation and processing. Its actions in organic materials, fabric regeneration and blockchain uphold the principles of material recycling. A typical example is Balenciaga’s commitment to sustainability. The brand applies eco-friendly fabrics and recycles waste tires to make new shoes [52]. Figure 4 features a sustainable handbag made from its plastic-free biomaterials. The food industry develops the circular bio-economy to minimize waste through the efficient recycling of organic waste and nutrients [53]. Moreover, manufacturers are upgrading their technology and equipment to increase production and reduce consumption [54].

However, CE strategies that depend entirely on recycling are often limited by profits, which compels companies to choose the more economical option of disposal. The waste management scenario in Brazil vividly illustrates this dilemma, highlighting the fact that recycling is largely limited by both cost and technology [55]. Therefore, while material management can reduce consumption and waste, its economic and social value is not always proportional to its environmental impact. As a result, to truly improve the performance of CE systems, the focus must be shifted from materials to a more advanced level of products and services.

3.2. Product Reuse

This level requires a full consideration of all aspects of product circularity at an early stage of design, including the potential to repair, upgrade, recycle and resell over the life of the product [56]. Many companies adopt modularization, remanufacturing and component reuse methods to promote repeated use [57]. Circular product design that enhances product durability and sustainability to support reuse is becoming more and more popular [41]. In addition, product–service system (PSS) and business model innovations can also extend product life [58].

Apple’s original iPhone design was criticized for its planned obsolescence against sustainability, sparking debate over the balance between product longevity and environmental impacts [59]. Nowadays, Apple actively participates in the trade-in policy, which offers repair, replacement and upgrade services to maintain product use [60]. Similarly, IKEA and Rolls-Royce strongly advocate for their customers to return old products for repair and maintenance to promote circularity [61,62]. In addition, creating a circular fashion system is one of the most important CE practices [63]. For instance, Patagonia launched Worn Wear Plan to control its environmental impact by promoting the responsible consumer behavior of reuse [64]. As shown in Figure 5, Nike is actively promoting a “Move-to-Zero” project that encourages users to recycle and reuse shoes to promote a CE.

In addition, moving from functionality to emotionality is another way to sustain product use [65]. Unlike traditional sustainable product design, positive user experiences offer new inspiration for maintaining product use, promoting consumers’ intentions to maintain a product [66,67]. Figure 6 shows a hot-selling novelty squeeze toy that is designed to relieve anxiety and inspire regular squeezing. Similarly, a human-shaped pillow named “Hugvie”, developed by Hiroshi Ishiguro Laboratories, can make people feel at ease and gradually fosters their attachment to it.

3.3. Service Circulation

Services are dematerialized expressions that emerge above tangible products. As the concept of CE continues to evolve, the scope of circular design has expanded to the organic combination of physical products and virtual services. Circular business models are expected to deliver more benefits than just a single product [27]. By emphasizing resource efficiency and intensity, service circulation transcends the general time dimension to become the pinnacle of the CE.

The global overconsumption of energy and materials seeks an urgent transition to circular service systems [68]. A PSS for a CE is a route to decoupling economic growth from resource consumption [58]. It can improve the frequency of transfer of product usage rights over multiple cycles. Inspired by the success of Google, IBM and Intel, the likes of Nestlé, Unilever and Walmart have all benefited from a PSS innovation [69]. The circular business model represented by leasing, renting and sharing services has the potential to significantly increase resource efficiency and to disrupt the traditional consumer market [70]. For example, space-sharing services such as WeWork reduce the operating costs of businesses by reducing office vacancies. Car-sharing services such as Car 2 Go have become an affordable and viable alternative to private car ownership, contributing to cost savings and social equity [71].

In particular, Tesla’s innovative business model clearly demonstrates the significant benefits of the service. By reusing complete electric vehicle battery packs, it minimizes time and labor expenses [72]. In addition, it extends product life by facilitating the trade of used parts through consumer-facing services. Ultimately, its shared service not only creates jobs, but also generates additional revenue by increasing the intensity of product use [73]. Through a comprehensive transformation from materials to services, Tesla successfully shifts to a CE and significantly improves its circular performance.

By replacing the sale of products with flexible usage, services in circulation enable the fulfillment of consumer needs without additional resource consumption. However, a necessary condition for the realization of this level is the integration of sustainable non-material services in the management of resources and in the design of recycled products. This makes the circulation of services the highest but most difficult level of the CE to operate and achieve.

4. Design Workshop for the Triple-Level Proposal

Design in a CE can extend product lifecycles to support material recycling and source reduction, as well as contribute to a sustainable PSS [74]. However, companies find it difficult to navigate the multitude of tools and fragmented design strategies [75]. In this section, we describe a circular design workshop that was conducted to test the utility of the model. Figure 7 shows a circular design canvas based on the triple-level CE proposal. It aimed to help integrate design into CE policymaking for better circular performance. The workshop task centered around a hot topic in the field of sustainability: CE strategies for fast fashion consumption, as exemplified by the case of jeans. It required participants to fully utilize their knowledge and tools of design and the CE to develop strategies for better performance.

To gather in-depth feedback, seven junior students from different disciplines were divided into two groups of three and four, respectively. All participants had previous knowledge of the CE prior to the workshop, although only one studied design. Design promotes the systematic thinking about circular value chains, products and business models [76]. In this project, Kawakita Jiro’s method was used to organize disparate solutions and identify potential links between strategies, while design heuristics helped to improve the diversity and novelty of ideas [77,78]. Figure 8 shows the heuristic cards applied in our circular design workshop, which include classic CE strategies, principles and examples related to design. Based on the procedures of design thinking, inspiration, ideation and implementation, the workshop was organized in three sessions around brainstorming, strategy developing and optimizing. Figure 9 illustrates the outline of the workshop and documents the inputs and outputs at each stage.

As a result, the triple-level model showed its capacity in shifting the perception of the CE and sustainable design. It helped to guide flexible CE solutions with higher circular performance by clarifying the priority in a circular system. The intervention of design in CE implementation promoted the diversity and novelty of CE strategies. In addition, most of the participants found the workshop “interesting” and considered the model to be “useful” in guiding CE solutions. It identified barriers to the understanding and application of the CE, validating both the theoretical and practical value of the triple-level model. Figure 10 illustrates the impact of the triple-level model in guiding sustainable design and enhancing circular performance systematically. Moreover, as a result of the design training, Figure 11 demonstrates a distinct prominence in both the esthetic allure and systematic characteristics of the program.

5. Discussions and Policy Recommendations

This study aims to construct a CE hierarchical proposal with a transformative perspective of design and circular performance. It contributes to improving resource efficiency and economic and social benefits by incorporating sustainable design to elucidate CE priorities. The triple-level proposal of material recycling, product reuse and service circulation exposes the hierarchy of the CE in terms of circular performance. By integrating design theories and synthesizing disparate strategies into a coherent hierarchy, the proposal not only enriches the theoretical foundation of the CE and sustainable design, but also clarifies the interactions and progressive relationships between materials, products and services. Through a two-step inductive and deductive process of literature review and case studies, the mixed methodology double-validates the viability of the proposal both theoretically and practically. In addition, the design workshop applying CE heuristics and a canvas bridges the gap between disciplines, providing stakeholders a viable roadmap for implementing the CE.

In terms of theoretical contribution, the triple-level proposal developed in this study outlines the CE hierarchy from a design perspective. The material–product–service proposal extends the theory of the CE and sustainable design by integrating dispersed strategies into a systematic framework, thus establishing a closer logical connection between the two fields. The CE embraces the non-economic aspects of development with systemic transformation [79]. Unlike previous models that focus on a single dimension, this study corrects the misconception about the eco-centered waste economy by emphasizing the outstanding benefits of PSS in enhancing resource intensity and efficiency. It not only presents an innovative perspective on identifying the focus and priorities of the CE as well as sustainable design, but also identifies the breakthrough point for maximizing circular performance.

In terms of practical implications, the vast majority of products’ environmental and economic impacts are dictated at the design stage [28]. Our integrated triple-level proposal is suitable for design activities related to the CE in any sector. Stakeholders can effectively utilize the CE heuristics and canvas developed in this study to purposefully design or redesign their products and business models, and thereby significantly improve circular performance to save costs and increase revenues. In previous research, the keywords most frequently identified were recycling, reduction, energy recovery, water recovery, emission recovery and resource efficiency. Meanwhile, the strategies most commonly adopted included recovery, recycling, reuse, remanufacturing, refurbishment, repair, repurposing, reduction, rethinking and refusal [80]. These studies were so focused on materials and products that they missed the huge advantage of value creation in non-physical services. In contrast, this study offers a practical tool for the comprehensive application of material, product and service strategies, which significantly contributes to the implementation of the CE and sustainable design by maximizing economic, social and environmental performance.

In order to accelerate the full implementation of the CE and improve circular performance, it is necessary for policymakers to adopt the triple-level proposal to steer the strategic transition towards the economic, social and environmental dimensions. The following priorities can be considered in making decisions: First, sharing services that enhance the intensity and frequency of resource use. Second, durable product design that extends a product’s lifecycle. Finally, material management that promotes recycling and reduces pollution.

In addition, based on the three-level proposal, this study presents the following specific recommendations at the material, product and service levels, respectively, with the aim of more comprehensively spurring policymakers into action: (1). For the basic level of material recycling, manufacturers can increase the renewable resource content of raw materials and avoid toxic and hazardous inputs, minimize factory waste in production and processing, adopt advanced technologies to increase conversion rates and integrate design methods into supply chain production to reduce pollution. (2). Building on material recycling, business can save costs by encouraging product reuse. This includes longevity design to improve product functionality and quality; modular design for better adaptability; detachable design to facilitate repair; emotive design to promote long-term ownership; a PSS design that supports upgrades and maintenance and business model innovation in second-hand transactions. (3). At the highest level of service circulation, companies should shift their services to a marketing focus and expand the coverage of the PSS to broaden supplier ownership. For example, by utilizing sharing channels in the business canvas, companies can boost the intensity of product use. They can also make use of renting or leasing platforms for idle items to prevent the need for new production. Additionally, there is a significant correlation between services and digital technology that seems to not be perceived by most manufacturers [81]. Therefore, governments should play their regulatory role to spur the adoption of digital services in business, for example, by formulating favorable policies or providing financial subsidies to support the development of relevant technologies.

The triple-level proposal offers practical instructions for clarifying priorities in complex design scenarios and helps to align diverse strategies to maximize circular performance. The innovation of introducing design strategies and methods into CE provides a practical way to make a leap from theory to practice. By emphasizing the different focuses of the three levels: services to increase resource intensity, products to extend lifecycles and avoid new production and materials to reduce inputs and emissions, this proposal can serve as a key indicator of the trade-offs for stakeholders.

While this study provides valuable insights into the integration of the CE and sustainable design, several limitations should be acknowledged. First, at this preliminary stage, the triple-level proposal as a conceptualized theoretical framework lacks quantitative metrics for comparing performance across dimensions. Despite the use of the literature review, case studies and workshop to qualitatively validate the theoretical and practical feasibility of the proposal, mathematical proofs are still needed to enhance its credibility. This limitation motivates future research to integrate quantitative methodologies—such as System Dynamics Modeling or material flow analysis—to enhance the proposal’s scientific validity and operational feasibility. Comparative analyses based on lifecycle assessment can be included in the next stage to provide datasets for mathematical modeling. Second, the small sample size of the workshop experiments can diminish the generalizability of the results, which should be further expanded in future studies. To further validate the effectiveness of the proposal in different scenarios, long-term observations with more extensive experimental data should be included in future research. Finally, more in-depth field visits to companies and factories can be conducted in future case studies to obtain first-hand information and enhance the authenticity of the desktop research. Despite these limitations, this study provides a solid foundation for clarifying CE priorities and guiding sustainable design to enhance circular performance. By addressing these limitations, the triple-level proposal has great potential to be developed into a robust scientific model.

6. Conclusions

Although receiving increasing attention, research on the integration of the CE and sustainable design is still in its infancy, particularly in terms of circular performance. The triple-level proposal offers a novel insight for understanding the CE from a design perspective, revealing the priority of the CE to maximize circular performance. Through the mixed methodology of a literature review, case studies and a design workshop, this study qualitatively integrates the three dimensions of the CE, materials, products and services, from a design perspective.

The inductive–deductive approach validates the theoretical and practical feasibility of the proposal, while the workshop demonstrates the importance of design in facilitating CE practices and improving circular performance. By making policy recommendations based on the triple-level proposal and providing CE heuristics and canvas guidance, this study not only presents a robust theoretical framework for a comprehensive understanding of the CE, but also makes a contribution to prioritizing sustainable design and guiding CE practices. As global interest in the CE and sustainable development continues to grow, this proposal has the potential to become a special guideline for the transition to a CE.