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:
- Circular input
- Raw materials recovery
- Extension of working life
- Sharing platforms
- 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.
Some examples:
For centuries, we have been making chocolate from cocoa beans, but did you know that 70% of the fruit surrounding it is thrown away? Cabosse Naturals, a start-up by Barry Callebaut, wants to upcycle …
2. Raw materials recovery
Recovery of raw materials and/or energy from discarded products or auxiliary flows (often from a different circuit than one’s own).
Some examples:
BIGH is building a network of aquaponic urban farms in major cities More and more people live in urban areas and the need for fresh and safe food is increasing every day. Intensive, integrated urb…
In order to move towards a circular economic model, it is important to improve the quality and repairability of products. A gap in this process is the lack of balanced and active communication betwee…
Industrial areas are major consumers of raw materials, but are also still largely virgin territory for the circular economy. Industrial activities are still often poorly coordinated with each other, …
3. Extension of working life
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.
Some examples:
A Baby Library is a handy lending system for baby stuff that is only needed for a short time. People who live on a small scale, have a limited budget, make a radical choice for less stuff or only hav…
KULeuven students who need a lab coat for their studies currently have to buy one themselves. The possibilities for the purchase of such a lab coat are very diverse and differ for each faculty, e.g. …
As a construction company, Groep Van Roey purchases a large number of building systems and products every year. Within our commitment to participate in the Green Deal Circular Purchasing (GDCA), we h…
4. Sharing platforms
Enabling more intensive use of products with shared use/access or ownership.
Some examples:
The childcare sector is under pressure. Low margins, high work pressure ... In addition to being care providers, day-care centres are increasingly becoming enterprises with staff and extensive admini…
Packaging is one of the biggest ecological problems of our time. The volumes produced annually, some 170 kg per capita in the European Union, overload current treatment capacities, leading to litter,…
OpenStructures (OS) is a design methodology for open modular and collaborative construction. It facilitates circular material flows and the reuse and repair of components. By allowing for future adap…
5. Product as a service
This entails offering access to a product while keeping ownership to enjoy all the benefits of a closed circuit.
Some examples:
Karen and Christophe became the owners of a terraced house in Mechelen on April 25, 2019. They have big plans for it: to turn it into a passive house in which they can live for life. Modular therefo…
Upcycle outdated (social) housing and create opportunities for families with limited financial resources to acquire their own homes. That's what the UP project is all about. Traditionally, outdate…
Innovation is most quickly picked up in the construction industry if it allows to offer an equivalent or higher quality for a lower or the same price. And that is exactly what SuReal is aiming for wi…
