Scholars, politicians, and practitioners have recently advocated that eco‐innovation (EI) is critical to achieve the circular economy (CE) vision. While much of the available body of knowledge on EI has predominantly focused on “eco‐efficient” incremental technological innovation, a successful CE transition requires systemic “eco‐effective” CE innovation. Yet, little is known about what barriers and drivers are stimulating systemic CE innovation in different sectors and regions. This research aims to deliver an identification of major CE barriers and drivers that impede or facilitate systemic “eco‐effective” CE innovation in the European polyurethane plastics industry. A hybrid research approach is applied using an original combination of the inductive GABEK method (“GAnzheitliche BEwältigung von Komplexität”—holistic processing of complexity) with deductive consideration of existing theories. Novel findings indicate that barriers to CE innovation largely materialize on individual firm and intra‐industrial levels, while drivers to CE innovation primarily manifest beyond immediate industrial boundaries (inter‐/cross‐industrial). The key contribution lies on revealing the necessity to reframe the focus from mere individual “optimization”, which has been primarily discussed in the contemporary EI literature, to a collective (horizontal) “coordination” challenge across industries to enable a functional CE innovation. In addition, five strategic deliberations are proposed to facilitate and further advance the management of systemic CE innovation activities.

Implementing the circular economy (CE) requires novel forms of stakeholder collaboration. While the contemporary literature on stakeholder theory is commonly characterized as “pro‐business‐oriented,” it remains ambiguous on how precisely stakeholder collaborations may pave the way for a systemic CE transition. By applying a qualitative‐empirical research approach utilizing semi‐structured interviews, this paper identifies three types of stakeholder governance for CE collaborations—(i) company‐centric governance, (ii) industry‐oriented governance, and (iii) cross‐industry‐oriented governance. Our contribution to stakeholder theory lies in examining how a systemic CE transition may bridge “the stakeholder‐system divide.” We emphasize the unique role of innovative governance in ensuring the success of stakeholder relationships while highlighting how systemic changes of the business environment may give an impetus to stakeholder collaborations. We contribute to the CE literature by gaining the following insights into stakeholder collaborations in the European chemicals and plastics industry: (a) successful collaborations typically feature a variety of different stakeholders maintaining close mutual interactions; (b) a systemic CE transition calls for managerial strategies that are collectively governance‐oriented rather than company‐centric. This article thus sheds light on the criticality of stakeholder collaborations and collective‐oriented governance strategies in fostering CE practices within the European chemicals and plastics industry highlighting that stakeholder collaborations for a CE need to be extended beyond immediate industrial and sectoral boundaries.

Recent scholarship has advocated a conceptual investigation of rebound effect theory in the circular economy (CE) context. While the available body of knowledge on a circular economy rebound (CER) is rather scant, this forum article proposes a conceptual view of existing CER approaches. Our analysis reveals that the CER literature has largely bypassed an appreciation of how firm behavior is embedded in and canalized by governance arrangements. This forum article contributes to the literature by reconceptualizing the challenges of mitigating CERs. It proposes to re‐focus the CER debate toward: (i) the innovation need of functional collective commitments for CE to address free‐rider‐problems; (ii) the criticality of effective management of decoupling through innovative circular governance; (iii) the critical reflection of calls for degrowth and “non‐optimization” behavior; and (iv) the recognition of optimization behavior and circular governance frameworks as complementary rather than substitute approaches for facilitating CER mitigation.

This forum article contributes to the prospering debate in the circular economy (CE) community discussing whether—and to what extent—the CE is reconcilable with economic growth. Within this discourse about a functional CE, there exist two contesting perspectives. One argues in favor of pro‐growth circularity, the other in favor of post‐growth circularity. The aim of this article is to develop a line of argumentation that helps in reconciliating the two seemingly antagonistic perspectives. Toward that end, this article applies the method of “practical syllogism” that is well known in moral philosophy, since it can enlighten how normative and positive arguments can be structured to enable the formulation of well‐justified moral conclusions. With the help of this interdisciplinary impulse, the article aims at detecting logical errors in current reasoning and fostering discursive learning processes. The ensuing arguments provide vital implications on the macro level by highlighting four critical elements to facilitate a CE transition, namely an intensive growth trajectory, an internalization of negative externalities through creating (missing) markets, an institutional encouragement of spreading positive externalities, and a diffusion of rents from innovation to society by taking the profit motive into service for enabling sustainability goals. Complementarily, the article provides implications on the micro level by highlighting the necessity to develop supplementary management competencies, namely governance competence to realize argumentative clarification and governance competence to (re‐)configurate institutional structures. This article may serve as an incubator to ease new ways of thinking into academia and practice.