Circular business models pay. The European business world could save 630 billion euros annually by using resources better. Discover more about this new way of doing business here.
At the core of the circular economy is the principle that nothing is lost: just like in the natural world, raw materials circulate endlessly in the system. This benefits all: the planet, businesses, and the people. The link between ecological and economic gain is the attraction of the circular economy: sustainability suddenly becomes an opportunity instead of something that just has to be done.
The number of companies that are seeing the advantages of the circular economy is increasing. Large companies are putting feelers out, bankers are studying their role, and start-ups are launching new concepts. The most innovative players fill a niche that is still small but no less important. They subject the circular principles that look so nice on paper to the harsh reality of the market. Does the consumer want to come along? Will we secure the financing? Is what we are doing actually more sustainable?
5 circular business models
Below we show how companies can take advantage of the circular economy in the real world. Each time, we give an example of a Belgian frontrunner. An enterprise can generally embark upon five routes towards more circularity:
Raw materials recovery
Extension of working life
Product as a service
The figure below, borrowed from Accenture, shows the different business models. The thick ring in the middle represents the chain or life cycle of a product: from raw material to sale, to end of life and return. Different loops or extra circuits can occur along the chain. For example: a product that becomes defective during use/consumption can end up in the same phase of use after repair.
1. Use of circular inputs
It all starts at the beginning: produce as much as possible using renewable energy and bio-based, biodegradable, or recyclable raw materials. Use less materials, dematerialise, or virtualise. Also buy circular.
Extend the functional life cycle of a product with repair, upgrading, and resale. Already calculate for the second and third life of a product in the design phase: choose a modular design, parts that can be removed, or parts that can be repaired easily.
The 'OVAM Cirkeltips' helps companies to develop a more sustainable material management step by step. On the basis of already known data, companies can compare their waste production with other similar companies, get tips to make their materials management more sustainable and they can discuss these topics. (only in dutch)
The Circular Design Guide is a guide from IDEO and the Ellen MacArthur Foundation, which aims to ask innovators, entrepreneurs and intrapreneurs new questions about value creation and sustainable business models, and to encourage them to apply circular principles in their own work.