This chapter begins with an overview of the key challenges faced by society with a linear economy and proceeds to the concept of circular economy, its potential, and associated challenges. Key elements in circular economy will be addressed including issues like “refuse”, “reduce”, reuse”, “refurbish”, and “recycle”. I provide numerous examples to illustrate the different approaches in practice. The role of different stakeholders in the process of achieving a circular economy is discussed. Lastly, the transition from selling products to providing services is addressed.
- Linear vs circular economy
- Product vs service
- European Union (EU)
From the time humans made their first attempt to control the environment until industrialization accelerated, there has been a circular economy. Trees grew, shed their leaves in the autumn and decayed into organic matter, which would then fertilize the trees. Big fish ate small fish and when the big fish died, its remains underwent a biological process to become food for other small microorganisms, which were later eaten by small fish. Both these cycles continued. In the past, there was a balance of life in the ocean, but today, overfishing, so fishing at a rate at which the stock cannot replenish itself, has eroded that delicate balance. In 1990, 90 percent of fish stocks were at levels considered to be biologically sustainable and in 2017, this percentage dropped to 66 (Food and Agriculture Organization of the United States, 2020).
Wild animals are still part the natural ecosystem. One rarely sees a dead wild animal, unless it has been run over by a car. In most cases, when an animal dies, the carcass provides food and nutrients to other species. Nature takes care of it. In contrast, car wrecks are manmade, and cleaning them up is not taken care of by nature. Plastic is another example of how humans have a negative effect on nature. A plastic bag is used for an average of 12 minutes, only one percent of all bags are recycled, and it takes 500 years for them to degrade in a landfill. In the meantime, 100,000 marine animals are killed annually by eating plastic bags (Center for Biological Diversity, n.d.).
Before humans started depleting the Earth’s resources at an unsustainable rate, there was a circular economy. Today, the majority of the manmade economy is linear: Take, Make, and Dispose. Given the current situation in which human demand on nature is greater than its ability to regenerate, a difference referred to as an ecological “deficient” or “overspending”, it is imperative that we return to a circular economy.
As economic growth accelerates, consumption increases, and greater volumes of waste are accumulated. To provide perspective, waste generated daily in India amounts to 0.34 kg per person, whereas in the United States, it is more than seven times as much, at 2.6 kg per person. When looking at the composition of global solid waste, 44% comes from food and green waste, 17% from paper and cardboard, and 12% from plastic (The World Bank, n.d.). Of this, 33% is openly dumped, 25% is sent to landfills, and only 13% is recycled. In 2012, the average European used 16 tons of materials and only 40 percent of that amount was recycled or reused (Hannon, 2016). The fact that one third of the total global food production is either lost or wasted, while people are starving, shows that something is obviously wrong.
The problem of the linear economy is recognized across the world. It is a common understanding that recycling is the solution for what to do with waste. Much effort has been put in to increase recycling or in other words, avoid dumping waste into landfills. A circular economy, however, is a system in which there is no waste. Figure 6.1 illustrates the move from a linear to circular economy. In the middle of the model is the recycling economy where the products are partly remanufactured. The waste goes into other “lower level” products, before it is dumped. New products with elements of used plastic bottles are some examples of recycling, whereas reuse of plastic bottles is closer to a circular economy.
For a sustainable future, we need to transition from a linear economy to a circular economy. This involves changes in the whole production process: from design, logistical issues, shelf life of perishable food, customer behavior, government regulations, education, and the need for innovation.
In this chapter, I will address the key challenges of a society with a linear economy, the concept of circular economy, its potential, and associated challenges. I will provide numerous examples to illustrate each case. The role of different stakeholders in the process of achieving a circular economy will be discussed. Lastly, the move from selling products to providing services will be addressed.
6.1 Why Do We Have a Liner Economy: Generating So Much Waste?
The answer to why today’s economy is linear is found partly in the price of natural resources. These prices do not reflect its real costs. If external costs associated with for example correcting the environmental damage were included, the sales prices would have been much higher and the consumption resulting in much more efficient use of the resources—or replacement of the product. Take coal for example, the majority of electricity worldwide is based on this cheap commodity.
The life cycle process of coal includes extraction, transport, processing, and combustion. There are negative consequences linked to health and the environment, especially CO2 emissions at each phase. It is estimated that including the cost of these negative consequences would increase the price of electricity generated from coal with 17.8 cents/kWh (the low estimate being 9¢/kWh and the high estimate 26.89¢/kWh) (Epstein et al., 2011). Including the external cost of electricity generated from coal would thus make the price of electricity made from wind and solar energy much more competitive and at least financially make extraction less economical across most of the world.
One way to approach the issue is to claim that as long as there are wastes and negative environmental consequences of production and use, the price of the resources the product is made of is too low.
6.2 Key Elements in Circular Economy
The circular economy begins with design. Products have to be designed to last longer, reuse, repair and, remanufacture. We also need a change in peoples’ attitudes to reducing over consumption and willingness to use fewer products longer. We need regulators to include the negative environmental impact of resources in pricing. We also need regulations that motivate and support a circular economy. The concept of a circular economy is well illustrated in the circular economy system diagram, the Butterfly diagram. This diagram was developed by the Ellen MacArthur Foundation (Ellen MacArthur Foundation, n.d.). A simplified version of the diagram is presented in Fig. 6.2.
The middle of the butterfly diagram is the production process. The “wing” to the right is the technical cycle, products and materials such as metals, which are kept in the cycle for as long as possible. Products such as cars, tools, and construction should be maintained for as long as possible, then, when that is no longer possible to reuse, repair, or refurbish, it enters into the last phase, recycle.
The “wing” to the left concerns renewables, such as textiles, paper, food, and sewage. The goal here too is to keep the resources in the loop as long as possible. First, by extending the life of products, and thereafter to gradually to make use of the products through different treatments. It could be to make new dishes of leftover food; waste food becoming animal food; providing a second-hand market for clothing; making insulation of used newspapers or crab sticks from fish cut offs; energy generation from sewage and composting food waste and using it as fertilizer. The best, however, is to reduce the consumption of the products—and finish what is on the plate.
In the circular economy, there is a hierarchy of measures to attain indifferent orders. A number of elements in the circular economy are named with terms starting with the letter “R”. Some examples of these Rs in alphabetic order include re-assembly, recapture, reconditioning, recollect, recover, recreate, rectify, recycle, redesign, redistribute, reduce, re-envision, refit, refurbish, refuse, remarket, remanufacture, renovate, repair, replacement, reprocess, reproduce, repurpose, resale, resell, re-service, restoration, resynthesize, rethink, retrieve, retrofit, retrograde, return, reuse, reutilize, revenue, reverse, and revitalize, and all are relevant. Studies have mapped the popularity of the different Rs and debated how many should be included in the model (from 3Rs to 10Rs) (Reike et al., 2018). Instead for engaging in this discussion, I will address the circle economy as a whole.
6.3 Refuse and Reduce: Using Less
By far the most efficient approach to sustainable consumption is to reduce consumption—either by stopping to using certain products such as meat or reducing consumption of meat. In the industrialized world, we have so much we do not need and so much we do not even use. For example, Norwegians on average have 359 garments in their wardrobe and of these eight percent of these are never used (Dæhlen, 2016).
To make one pair of jeans requires 7500 liters of water. Considering that one in three people in the world do not have access to safe drinking water, this is definitely very unfair (World Health Organization, 2019). The same amount of water that goes into making one pair of jeans is approximately what an average person drinks over a period of seven years (United Nations News, 2019). Further, CO2 emissions from the textile industry are almost equivalent to that of the automobile industry (Doboczky, 2019).
Taking into account that people in the developed world generally have considerably more clothes in their wardrobes than they actually need, so even a small change in consumer buying behavior can lead to a large positive change. The carbon footprint and energy use associated with clothing mainly comes from the production process and transport. Keeping the garments longer and purchasing less can have a considerable impact. If each garment is used twice as many times, before it is thrown away, almost half on the negative impact of resource and production is mitigated (Sandin et al., 2019). Companies like Nudie Jeans and Patagonia facilitate repairs and have made sustainability part of their business model.
Still, there is a need for a major shift toward sustainability among all manufacturers—as well as customers. From 1995 to 2010, textile waste grew from 29,000 tons to 52,000 tons in Norway (Mayer, 2017). The growth of online shopping has also not been necessarily good for the environment.
Other positive initiatives from individuals, other than having less clothes and using them longer, are to change food consumption. Becoming a vegetarian has for example a significant impact on greenhouse gas emissions. Replacing red meat and dairy with vegetables just one day a week can reduce an individual’s carbon footprint to what is the equivalent of a 1000 mile car trip (McCartney, 2009). This is almost the same distance as from Paris to Africa, from California to Canada, and from Bangladesh to Thailand. Such initiatives as Meat-Free-Mondays that encourage people to reduce their meat consumption have a positive effect on both the environment and peoples’ health.
Most people in the industrialized world can reduce their consumption. Despite knowing about the rising levels of waste, pollution, and environmental degradation, people still continue to increase their consumption. Increased awareness is just not enough. However, what does change consumer behavior is price. Governments play a key role here with regulations. Increasing the price or passing some sort of deposit legislation would lead to less consumption. Adding a 5 pence charge on plastic bags in the UK resulted in an 85% reduction in the use of plastic bags (Smithers, 2016).
6.4 Reuse: Extending the Life of Products
Refundable deposit fees on products are an efficient tool to influence consumer behavior. Since 1902, Norway has collected deposits on certain types of bottles. When this deposit was increased from two to three NOK (approx. $0.24 to 0.36 USD) in 2018, 88% of plastic bottles and 84% of aluminum soft drink cans were returned for a deposit refund (Infinitum). Since safe drinking water is ubiquitous in Norway, the use of bottled water is less compared to other countries where it is not safe to drink from the tap. Now imagine the potential impact of a deposit system implemented in countries where safe drinking water is only available in bottles!
Car deposits programs are another good example of initiatives that promote higher recycling rates. In Norway, scrapping a car earns the owner a NOK 3000 ($360 USD in 2016) refund. When for a limited time this refund was doubled, the number of scrapped cars increased from what is typically 120,000 to 220,000 cars (Njarga, 2016). This scheme provides a motivation to properly depose of old cars, but, as it is typical for many environmental initiatives, there can be negative consequences as well. If the return fee is too high, owners are incentivized to replace their old car sooner than its useful life. However, if the car is replaced with an electrical car, it would be better for the environment to get the gas guzzler off the roads. On the other hand, if the old car is rarely used, it would be better to keep the old car and not replace it. A good environmental accounting system or Life Cycle Analysis (LCA) is necessary to capture the optimal environmental solution.
The best solution for a circular economy is however to prolong the useful life of products by providing such things as repair options. However, as of now, it is often too complex and expensive to repair or refurbish products. To illustrate the complex challenges of prolonging life of products, I will use mobile phones as an example.
Today, there are more than five billion mobile devices worldwide, and almost three billion are smartphones. People upgrade to a new phone about every 11 months. Two reasons to purchase new phones are that the old one cannot be repaired and/or a new model is released. A study conducted by Greenpeace found that more than three out of ten people bought a new phone in order to have a more up to date version (Boztas, 2016). Often, there are only very minor differences between the old and the new phones, but manufacturers need to launch new products in order to ensure turnover and profit.
Companies such as Apple claim to be concerned with reducing their negative environmental footprint, when it announced that all products will be “made entirely with clean energy by 2030” (Apple, 2021). Still, those reductions apply only to the production process, but in fact, the most negative impact on society is the accumulated electronic waste, when the phone is replaced (The Irish News, 2018). It is only through reducing the number of new models with minor changes and providing affordable repair services that manufacturers can reduce the aggregate negative societal impact. Customers are also critical regarding the continuous release of new models and not having access to repair services (Boztas, 2016).
In a typical mobile phone, there are 62 different types of metals. More than 25% of these are classified as rare-earth metals, found and refined in rural China (McMaster, 2017). Still, less than 10% of smartphones are recycled. One ton of iPhones would deliver 300 times more gold than a ton of gold ore and 6.5 times more silver than a ton of silver ore (Nogrady, 2016).
Retrieving these and other metals like copper, lead, zinc, and coltan would reduce the need for mining and refining. Most smartphones today are impossible to repair and valuable metals are not removed or reused. That throwing away used phones is an indication that the resources it is made of are priced too low.
Fairphone is a mobile phone manufacturer established in 2013 with the purpose and goal of delivering sustainable smartphones, taking both social and environmental issues into account throughout the entire life cycle process—circular economy. This includes reducing the negative social impact of mining by using conflict-free minerals. In design, they focus on delivering longevity and repairability. In the manufacturing process, providing safe working conditions and fair wages are in focus. Regarding the life cycle, Fairphones are for use, reuse, and safe recycling (Fairphone, 2016).
The company was launched by concerned citizens, who became aware that mobile phones generally contained conflict minerals from the Democratic Republic of the Congo. It began initially as a campaign against the use of conflict minerals, before taking a more constructive approach by establishing a company manufacturing sustainable smartphones. With a Fairphone, the owner can replace the glass screen if it is broken and replace the battery by simply removing the plastic back (Gibbs, 2020). By 2016, 100,000 Fairphones have been sold—which is a microscopic share of the total mobile phone market, still proof that more sustainable product solutions can be realistic.
Responding to market trends and consumer demand, mobile phone manufacturers have increased their focus on environmental and social issues. In 2018, Apple introduced Daisy, a robot that disassembles iPhones to recover valuable materials. Daisy can pull apart 1.2 million iPhones annually (Martin & Sherr, 2019). However, taking into account Apple sold more than 35 million iPhone 11s in the first half of 2020 (Gadgets Now, 2020), the robot may be a great start and generate a good image, but so far it makes a neglectable impact. To make a real impact, the circular economy approach needs to start at the design stage, developing phones that can be repaired and which are simple to take apart—not requiring it to be shipped to a fulltime robot to do the job.
Many companies make efforts to be part of a circular economy, but the main limitation is the lack of a reuse culture among customers. Renting cars when travelling and renting formal attire for events such as weddings are however something people in general are comfortable doing, because it tends to be practical and cost effective.
Such rental services have existed for decades, but what is new is that not only rental companies or services, but well-known brands are experimenting with such business models. At Filippa K is a “sustainable fashion brand”. At its stores, it is possible for customers to rent cloths for four days, paying only 20 percent of retail price. Upon returning the garments, the customer gets the remaining 80 percent of the value back (Sivertsen & Zakariassen, 2016).
Bergans, a Norwegian outdoor clothing and gear company, also offers rental services. Such renting schemes benefit customers in more ways than just saving money. Tents, for example, are not used very frequently, yet the quality of tents is continuously improving. Renting a Bergans tent for a trip, instead of using a purchased tent, will probably provide a tent of better quality on an annual basis. The company also offers repair services. It even has a service car driving around Norway collecting and repairing clothes. Though repairs by Bergan are less expensive than having the same job done at a tailor, it is still costly—even though the service is subsidized by the company. As of now, it is not a profitable business. A change in attitude and behavior among customers is a key in the pursuit of making circular economy good for business.
6.5 Challenges and Opportunities in a Circular Economy: The Impact of Law and Regulations
Alcohol and cigarettes are products that society is aware have a negative impact on public health. To deter consumption, many countries regulate sales and levy taxes on such products. In Norway, more than half of the price of a package of cigarettes goes to the government in the form of fees designed to capture the societal costs linked to smoking. So, in that sense, this is an example of full cost pricing. It is also interesting to consider that smoking leads to more sick-leaves, hospitalizations, and shorter life expectancies, so from an economic, societal point of view, smokers are actually net contributors to national accounts because they will draw shorter pensions, thus saving money for society. Some claim that smokers are funding the health of non-smokers (Edseth, 2009).
There are still several regulations, and new are launched, which actually decrease incentives to extend the use of a product. If an electrical car in Norway is less than five years and needs repairs, often for simple issues like broken light or a dent in the hood, owners prefer to scrap it and get a new car as that is part of the guarantee period. Laws like that do not motivate getting repairs done and keeping the car.
Another example of existing regulations actually working against sustainability is the sugar tax in Norway. When soda bottles and boxes are close to their expiration date or the box has a dent, it is less expensive for the producers to throw away the soda instead of donating it. As the law works now, producers only recoup the sugar fee if the soda is thrown away and not if it is donated. One of Norway’s largest soda producers pours out around 25,000 liters of soda daily (Grimstad et al., 2019).
There are several positive examples of positive effects of governmental initiatives. France was the first country to make it illegal for large supermarkets to throw away food. Up until 2016, foods that pass their best-before date were thrown away, but now it is donated to charities. Even prior to this new law, people would search waste containers of supermarkets, so-called “dumpster diving” and salvage these thrown away food items. Sometimes this became so messy that the supermarkets locked off the waste containers.
Although the law was advocated by a grassroot campaign, large supermarket chains welcomed the change (Chrisafis, 2016). Besides benefiting charitable food banks, business opportunities have also emerged. The Too Good to Go company is a mobile application, connecting surplus food from stores and restaurants to the general public. Taking into account that one third of all food produced in the world is thrown away, there is great potential for improvement (Mattilsynet, 2019). As what is available from stores today usually are part of international regulations, it is important that international regulations are first movers toward a circular economy. The European Union has taken such a role in the circular economy setting.
In 2015 the European Commission launched the first Circular Economy Action Plan. This was a very positive initiative, even though the path forward will take time. Key actions in the plan are:
Make sustainable products the norm in the EU.
Empower consumers and public buyers.
Focus on the sectors that use most resources and where the potential for circularity is high such as: electronics and ICT; batteries and vehicles; packaging; plastics; textiles; construction and buildings; food; water and nutrients.
Ensure less waste.
Make circularity work for people, regions and cities.
Lead global efforts on circular economy. (European Commission, 2020)
The EU made a concrete initiative in 2020 related to battery regulations and standards. All batteries in the EU markets are to be part of a circular economy throughout their lifecycle, from manufacturing to re-coverage of valuable raw materials. From 45 percent of portable batteries being collected and recycled, the goal is to raise this figure to 65 percent in 2025, and 70 percent in 2030.
Today, less than 40 percent of electronic waste in the EU is recycled. This is due to the fact that many of these electronic products such as hairdryers, shaving machines, dishwashers, and so on cannot be repaired, often because spare parts are no longer available. To change this, the Right to Repair bill was proposed in 2021. This is a law requiring companies to fix electronic goods for up to 10 years (Euronews, 2021). Still, others argue that this is not the source of the problem, rather the cost of repairing the goods is prohibitive and it is less expensive to purchase a new product.
Governments can have a great impact in setting the right laws and regulations. However, another key contribution from governments is to change its own consumption. The public/governmental sector is the largest consumer in most countries. If their purchasing policies required reuse of products, that would have a great effect—both on consumption and as a role model. Governments also have the responsibility to ensure that students are becoming familiar with the circular concept through education.
6.6 From Product to Service
So far, the main environmental focus has been to reduce waste from products. Whereas the focus on the purpose of the product, that is why we need the products, has received less attention. A move from the “end of pipe” to product purpose has a great potential in a circular economy. A popular anecdote to illustrate the move from cleaning up the waste to avoiding another generation of waste is the following. You come home and find water all over the kitchen floor. Do you start to clean up the water, or do you try to stop the tap from where the water is pouring out?
Instead of thinking about the product, companies are beginning to focus on services the products offer. What is the function of the product the company is selling—and is it necessary to attend to the need?
A good example of the difference between product and service is in the transport sector, sale of car versus sale of mobility as a service. This also illustrates the business opportunities in the circular economy. The purpose of the car is transport. However, an average European car is parked 92% of the time (Ellen MacArthur Foundation et al., 2015). So, instead of focusing on how to dispose of the car when it is obsolete, the focus should be on making its use more efficient during its life cycle. By finding ways to make use of the car during the time it would otherwise been parked has great potential. This way the need for cars could be significantly reduced.
Car sharers emit between 240 and 390 fewer kilograms of CO2 per person than car owners per year. 13 to 18 percent of CO2 emissions are attributed to car ownership (Nijland & van Meerkerk, 2017). Traditional car rental companies such as Avis and Hertz see this car sharing model as a new business opportunity, making it more convenient to car share through memberships, easy bookings, and more access points, all facilitated by digital solutions.
When it comes to larger modes of transport, such as buses, ferries, and planes, we are already comfortable with buying services as opposed to ownership. With these products, owners want them to last for a long time to reduce the cost per year. Furthermore, their customers are not very sensitive to whether or not the bus or ferry is the latest edition or not. So public transportation maintains products longer and behaves more circular than private ownership.
For companies however, it is often best for business that customers continuously replace their products. Therefore, many companies regularly launch new product models. The last version of products such as cellphones might only have minor differences from prior models. Still, marketing the new version and people wanting to have the last edition is a challenge for the concept of extending the use of products. Some products are even produced for planned obsolescence, that is, they are not made to last.
The case of lightbulb consumption is a good example of the positive environmental effect of moving from the product concept to the service concept. Today, there is one lightbulb that has lasted for 115 years. So, when that bulb was made, the producers might have had the knowledge to make bulbs that could last for a long time. However, this was not a good business for producers like Osram, GE, and so on. Through the “Phoebus cartel” in the 1920s, these companies agreed to reduce the lifetime of their products to 1000 hours.
EU regulations mandated a shift from incandescent bulbs in 2009 and phasing out halogen lightbulbs by 2016. People are required to use LED bulbs, which could last for 10,000–50,000 hours. Even though LED bulbs are much less expensive over the course of their lifetime, the price was significantly higher than traditional bulbs. That made customers prefer traditional lightbulbs until these were no longer sold in stores. This is a good example of the necessity for active use of laws to make changes, which dampen negative impacts on the environment.
If companies such as Osram and GE were offering lighting as a service when they started production over 100 years ago, lightbulbs would probably be engineered to last for much longer than they do now. Today, there are companies experimenting with this business model in this industry, such as Philips, offering tailor-made lighting services at a fraction of the energy cost (Philips, n.d.).
Another example of a service-based business model as opposed to selling physical products is copy machines. In offices today copy machines are often rented or leased from the producer. Xerox has provided this service since 1980 without naming it circular economy—it was its business model. If something goes wrong with the copy machine, maintenance personnel from Xerox come to fix it (EREK, n.d.). Since it is leased, Xerox wants it to last as long as possible. If the customer had purchased the photocopier, it would then be better business for Xerox to manufacture with planned obsolescence, so that the customer would purchase a new photocopy machine.
Carpet companies also provide services like floor coverage. Art companies rent out pictures. Corporations such as IKEA are testing the concept of leasing furniture. For students renting an apartment far from home, it is more convenient to rent furniture and cutlery/appliances for one year, instead of purchasing and later reselling them when they move. Construction stores are increasing the variety of tools and machinery to rent. With the ease of connecting with people on internet, privately sharing tools and goods like outfits are becoming increasingly easy and convenient. A change in attitudes will make a great contribution to extend the life of products and reduce the need for manufacturing. Still the same initiatives which are good for society might not be as good for companies because it leads to reduced turnover and sales. There is a conflict between the environment and profit part in the Triple Bottom Line model.
The major challenge for companies is that they want to be sustainable, but sometimes this is not in line with profitability. Repairing a phone is less profitable than selling a new one. Selling disposable products, requiring customers to make new purchases is good for business. Take the Nespresso company for example. The company’s business concept involves disposable coffee capsules. The company works toward sustainability by collecting the coffee capsules—often by providing free return postage—which is good. However, the best would be to sell coffee without disposable capsules. At the same time that would be the end of the business concept of Nespresso and thus the company.
Summing up, the key barriers for business and their circular economy are:
Products are not designed with circularity in mind. They are too complex and contain too many elements to be part of a circular economy.
Lack of access to used products. In order to reuse or repair of products there is a need for a minimum level of volume and access. If you only get refund for your bottles one place in the city, the likeliness of it being thrown away is much higher that if you can deliver your bottle for reuse at any food store.
Not available to refurbish or recycle used product in a cost-effective way. Too expensive to dismantle and lack of access to spare parts.
Customers discount the value of refurbished or remanufactured products. Quality of refurbished and manufactured products are perceived as lower quality than new products (Atasu et al., 2018).
Three approaches to overcome these abovementioned challenges to circular product economy are:
Implement modular product architecture
Lease instead of selling (at least some products)
Expand the refurbishing operations (Atasu et al., 2018)
The following are inspirational examples of initiatives which are circular and profitable presented by the European Circular Economy Stakeholder Platform and Ellen Mac Arthur Foundation case studies.
Fil&Fab has developed a technique to transform disused end-of-life fishing nets into plastic sheets, which are then used to create a series of new plastic products (France).
Bio2Materials is a company which makes a 100% biodegradable “leather” from apples, based in Poland, the largest producer of apples in the EU and third in the world.
I:CO is an international circular solutions provider for the collection, certified sorting, reuse, and recycling of clothing and shoes. They aim to support innovative new recycling technologies which help close the loop of production cycles.
Better World Fashion produces new quality products from waste materials. Their primary material, leather, is from discarded post-consumer products collected by NGOs (European Commission the European Economic and Social Committee, n.d.).
A proliferation of business models for the circular economy
Five New Business Models for Circular Growth
Recovery and Recycling
Product as a Service
Waste to wealth, The Circular Economy Advantages
The Circular Business Model—Three Strategies for Circularity
Retain product ownership (RPO)
Product life extension (PLE)
Design for recycling (DFR)
HBR The Circular Economy Business Model
Circular Economy Strategies
Business models describe the organizational and financial structures where an organization converts resources and capabilities into economic value.
Innovation is required to deliver business models that create value from cycling products, parts, and materials.
Strategies from three elements—circular value creation, circular value proposition and circular value network—can be combined to form a circular business model.
Circular Economy—Sustainable Material Management, IIIEE Lund University
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European Commission. (2020). First circular economy action planhttps://ec.europa.eu/environment/topics/circular-economy/first-circular-economy-action-plan_en
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Ditlev-Simonsen, C.D. (2022). Circular Economy: New Business Models. In: A Guide to Sustainable Corporate Responsibility . Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-88203-7_6
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