Circular Economy: Transforming Business for a Sustainable Future

The circular economy is the opposite of the traditional "take, make, dispose" model. Its goal is to keep products and materials in circulation for as long as possible while preserving their value.

When discussing circular economy business models, we refer to five different ways of producing goods or services to keep materials in circulation longer (Sitra). These models increase your company's cash flow while simultaneously reducing your environmental footprint. In this post, I will briefly introduce these models.

Product as a service

The customer does not buy the product to own it; instead, they pay for its use or for the results it provides (e.g. leasing or renting). The company retains ownership, which incentivizes manufacturing durable and easily maintainable products.

Circular inputs

Renewable, recycled, or biodegradable materials are used instead of virgin raw materials. This reduces dependence on depleting natural resources and lowers the environmental footprint.

Resource recovery

Waste is viewed as a raw material. In this model, side streams and end-of-life products are utilized by recycling them into new materials or energy.

Product life extension

A product's lifespan is extended through maintenance, repair, updates, and remanufacturing. The longer a product remains in use, the fewer new resources are required.

Sharing platforms

Platforms enable the shared use of goods and resources, allowing underutilized assets (such as cars or tools) to be used more efficiently.

By utilizing these business models, a company can evolve to meet sustainability challenges while generating new ways to conduct profitable business. Circular economy models can be applied to all business operations, regardless of the industry or company size. Research shows that by leveraging these models, companies can significantly increase cash flow while reducing their environmental impact.

Ready to evolve? If you need strategic development for your business, book a "Circular Economy Business Models" workshop from our expert. This workshop is designed to trigger strategic innovation among your company’s key personnel or even your entire staff.