Digital technology is regarded as providing a promising means of moving production and consumption towards the circular economy. However, it is still unclear which functions of digital technologies are most useful to improving circularity, and how these functions could be used to enhance different circular economy strategies. This paper aims to address this knowledge gap by conducting a systematic literature review. After examining 174 papers, creating 782 original codes and 259 second‐round codes, the study identifies 13 critical functions of digital technologies which are most relevant to circular economy strategies. The paper then proposes a framework which reveals seven mechanisms of how these digital functions can enhance different circular economy strategies. The framework also reveals which combinations of the digital functions and circular economy strategies have already been studied extensively as well as where there may be gaps. This indicates which digital functions are more mature in terms of possible implementation for circular economy as well as what missing links there are in the empirical and theoretical research. The study advances the synergies between digital technologies and the circular economy paradigm through the lens of digital functions. The proposed framework and mechanisms build a theoretical foundation for future research, and we highlight five research areas for further studies. This study also provides a structured way for managers to explore the appropriate digital functions for their CE strategies, so as to identify required digital technologies and new value creation through digital functions.

“Clean water and sanitation” is listed as one of the 17 United Nations’ Sustainable Development Goals and implementing circular economy principles in the water sector has been widely regarded as an important approach in achieving this goal. In the era of Industry 4.0, research and practice in the digitalisation of the water sector to create a smart water system have attracted increasing attention. Despite the growing interest, limited research has been devoted to how digital technologies might enhance circularity. In practice, smart water systems often fail to promote circularity in such aspects as water reuse and resources recovery. This paper aims to identify the main barriers to implementing circularity in the smart water management system in Zhejiang, China. The research adopts a mixed research method that includes a literature review to identify the potential barriers from the existing studies, a case study to determine the most critical barriers in practice, and a fuzzy Delphi method to reach a consensus on the crucial barriers. The research identified 22 main barriers to implementing circular economy in smart water management. The barriers are divided into three categories: infrastructure and economic, technology, and institution and governance. The results show that the barriers related to recycling technologies, digital technology know-how, and the lack of CE awareness raise the most concern. Our findings also indicate that experts are interested in the decentralized wastewater treatment system. This research provides significant insights that practitioners, researchers, and policymakers can use in developing and implementing digital-based CE strategies to reduce water scarcity and pollution.

Digital transformation in the energy sector not only changes how power is generated, delivered, and consumed but also urges firms to change their business model. Renewable energy is an emerging sector responding to the increasing demand for sustainable energy. There is limited understanding about digital business models in this sector. Therefore, this case study shows the digital business model innovation opportunities of NextGridVolt, a renewable-energy provider that designs, installs, and maintains renewable energy systems. Furthermore, this case study introduces a new toolkit focusing on data-driven business model innovation. It provides a structured way to identify a firm’s existing business model and the data it has, inspiring ideas on new business models leveraging existing data sources. Using the toolkit, managers from the case company identified that they have data about clients from previous contracts and solar panel usage data from real-time sensor readings. A data analysis platform that integrates all data sources can enable various business model innovation opportunities, including increasing internal process efficiency and service quality, and providing the platform to external users as a new service.