Policymakers need to know where the social externalities of products occur in order to act at the macro level. The Social Life Cycle Assessment (S-LCA) method can contribute to the assessment of the social externalities of products; a necessary method supporting the European Union while they transitioning to a circular economy. This study follows the type I approach that explores how the S-LCA results of products manufactured by circular systems can be interpreted. A hypothetical case of industrial water production was designed comprising two product systems: a linear and a circular one. The S-LCA results are calculated using the Subcategory Assessment Method and aggregated or normalized to the number of organizations involved. Furthermore, allocation and weighting were applied to the circular system. The results show that the number of organizations involved in the system boundaries is crucial for the social performance score. Circular systems are expected to comprise more organizations than the existing linear systems. When the results are normalized by the number of organizations, the circular system provides social benefits, but the score values of each involved organization fall outside the score value range of the Subcategory Assessment Method, and they become challenging to interpret. Weighting the contribution of organizations to S-LCA results provides valuable insights, but it is unclear whether it should be performed on characterized inventory data or aggregated results. The application of the type I approach requires development, especially now that the circular economy systems are designed and constructed. The type I approach can be useful to organizations when selecting suppliers, but it is unclear how it can provide useful information to policymakers.