Categorie archieven: Circular Business

The sufficiency-based circular economy

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The circular economy is now widely used as a concept to advance the sustainability transition in business, but is it enough? The circular economy has been criticised for over-emphasizing “easy” strategies such as recycling, and business progress towards the circular economy is still slow (Allwood, 2014; Ritala et al., 2018). At the same time, the impacts of climate change are already clearly visible, and the Intergovernmental Panel on Climate Change (IPCC) estimates that we have until 2030 to halve global carbon emissions and mitigate global warming and the further damaging effects of climate change. On average there is a nearly 70% decline in population sizes of mammals, birds, fish, reptiles, and amphibians. One of the key reasons is our growing global level of consumption: a growing, more affluent world population is consuming more and more and all these products and services have a footprint.

Together with Laura Niessen and Sam Short, we developed ideas on a future sufficiency-oriented circular economy that emphasises consumption avoidance over lower strategies in the waste hierarchy such as recycling. This builds on earlier ideas on sufficiency-oriented business models and a sufficiency-based circular economy. We focus on the concepts of “enough” and “sufficiency” in the article titled “The Sufficiency-Based Circular Economy—An Analysis of 150 Companies”. In the article, we analyse 150 leading examples of business seeking to pursue sufficiency as a business practice. The full database of business for sufficiency examples is available here.

We found that there are leading business for sufficiency examples in diverse sectors, from food, to clothing and mobility. However, policy and individual action need to supplement business practice to be more effective, because the number of businesses focusing on consumption reduction is still limited (perhaps unsurprisingly). In terms of policies, there could be new policies that focus on the product, business model, and (perhaps more controversially) individual consumption level. The EU Circular Economy Action Plan could be a useful starting point, focusing on issues such as right to repair, spare parts, and warrantees. At the individual level, we could learn more from practices and research in the areas of voluntary simplicity, downshifting and minimalism. You can find more detailed ideas on where to go next here.

As part of the project Circular X research agenda focused on experimentation with circular service business models, we are putting more emphasis on topics of sufficiency, but also regeneration as a way to mitigate and adapt to climate change. You can follow the project here.

Sources

Allwood, J. M. (2014). Squaring the circular economy: the role of recycling within a hierarchy of material management strategies. In Handbook of recycling (pp. 445-477). Elsevier.

Bocken, N. M., Niessen, L., & Short, S. W. (2022). The Sufficiency-Based Circular Economy—An Analysis of 150 Companies.

Bocken, N. M., & Short, S. W. (2016). Towards a sufficiency-driven business model: Experiences and opportunities. Environmental innovation and societal transitions, 18, 41-61.

Bocken, N. M., & Short, S. W. (2020). Transforming business models: towards a sufficiency-based circular economy. In Handbook of the circular economy. Edward Elgar Publishing.

Osikominu, J., & Bocken, N. (2020). A voluntary simplicity lifestyle: Values, adoption, practices and effects. Sustainability, 12(5), 1903.

Ritala, P., Huotari, P., Bocken, N., Albareda, L., & Puumalainen, K. (2018). Sustainable business model adoption among S&P 500 firms: A longitudinal content analysis study. Journal of Cleaner Production, 170, 216-226.

A call for action: The impact of business model innovation on business ecosystems, society, and planet

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Together with Yuliya Snihur we wrote a “call for action” for researchers interested in the area of (sustainable) business model innovation. 

You can find it here.

The problems we identified:

  • Business model innovation (BMI) research typically focuses on measuring “the wrong thing”: mainly economic performance of business
  • Sustainable business model innovation (SBMI) research is often quite action-oriented and does describe potential positive impact of innovations on society and the planet, but is highly qualitative with few studies focusing on actual measurement of positive impacts. 

This was based on an analysis of the most cited empirical BMI and SBMI papers. In the paper, we suggest a focus on understanding how new business models impact ecosystems, society and the natural environment. 

We suggest the following research directions (and more!):

Value destruction impact of (S)BMI 

  • What types of social or environmental value might be destroyed because of BMI and how can this be measured or mitigated? 
  • How can the positive societal and ecosystem impact of SBMI be retained when scaling and how can the negative impacts or rebound effects be avoided? 

Dynamics of (S)BMI

  • How can unsustainable vicious cycles of BMI (e.g., volume over value, addictive consumption, environmental or human resource exploitation) be broken down in favour of sustainable alternatives? 
  • Who or what are the catalysers of virtuous cycles of SBMI impacts on business ecosystems, society, and planet? 
  • How can businesses map their position in an ecosystem to better understand how to make an environmental or social impact?

Luckily we see that recent studies have picked up measurement of societal and environmental impacts of (sustainable) business models, so hopefully we can shift the focus to researching and measuring what matters. You can find some recent examples of papers assessing the environmental impacts of new circular business models in the Introduction section of this paper.

Sources

Das, A., Konietzko, J., & Bocken, N. (2022). How do companies measure and forecast environmental impacts when experimenting with circular business models?. Sustainable Production and Consumption, 29, 273-285.

Snihur, Y., & Bocken, N. (2022). A call for action: The impact of business model innovation on business ecosystems, society, and planet. Long Range Planning, 102182.

Developing Circular Business Model Innovation Tools

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The circular economy is now seen as potential driver for sustainable development by business, academia, and policymakers. In such a future circular economy, new business models need to be developed that slow, close and narrow resource loops to address key resource and climate challenges. However, this is not easy and new tools and methods are necessary to support the transition and development of such new business models.

In the new collaborative paper with Lars Strupeit, Katie Whalen, and Julia Nußholz, we map the field of Circular Business Model Innovation (CBMI) tools. We find that there are many generic tools and approaches that might be used, such as the lean startup approach by Eric Ries, or the business model canvas by Osterwalder & Pigneur. Also there are various sustainability focused tools such as the value mapping tool. However, few specifically focus on CBMI, and the generic tools and approaches might ‘dilute’ the circularity or sustainability message. We classify the tools according those that focus more on Ideation and Design, Implementation and Testing, and Evaluating and Improving circular business models, building on the work on business model innovation by Frankenberger and colleagues, amongst others. Finally we develop a checklist that could support future ’tool developers’ (Figure 1, below). This checklist might also be of interest to those developing sustainability tools, by replacing the first line with ‘The tool is purpose-made for sustainable innovation’.

Future work will involve collaborative development of CBMI tools and roll-out to help make circular business models more widespread.

Checklist for tool CBMI development

Figure 1. Checklist for CBMI tool development. Source: Bocken, Strupeit, Whalen, Nußholz (2019). 

 

Source:

Bocken, N., Strupeit, L., Whalen, K., Nußholz, J. 2019. A Review and Evaluation of Circular Business Model Innovation Tools. Sustainability, 11(8), 2210.  https://doi.org/10.3390/su11082210

 

 

 

Assessing the environmental value proposition of your business

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The Circular Economy is now regarded as a key driver for sustainability by business, policy makers, and academia.

Recently a special issue was dedicated to the phenomenon in Journal of Industrial Ecology , presenting tools, methods, opportunities and challenges associated with the Circular Economy as a driver for sustainability.

We investigated how companies pursuing circular economy as part of their business can quickly assess their environmental value propositions and verify impact. This would lead to the identification of improvement proposals to help refine the value proposition for sustainability.  The environmental value proposition framework can be found in Figure 1 below.

 

Environmental value proposition evaluation framework

Figure 1. Environmental Value Proposition Evaluation framework. Source: Manninen et al. 2018.  Note. BOL, MOL and EOL refer to Beginning, Middle and End of Product Life, referring to different stages in the product life cycle from material sourcing and extraction up until consumer use and reuse (and recycle etc). 

 

Start-up HOMIE, focused on driving sustainable consumption and pursuing circularity (e.g. long-lasting products, reuse, reparability and recycling) through a pay per use business model, starting with washing machines, is one of the case studies who applied the framework.

All cases as well as the framework and an environmental value proposition table (EVPT) created by the authors can be found here (free to download using this link the upcoming 50 days).

Sources:

Bocken, N.M., Olivetti, E.A., Cullen, J.M., Potting, J. and Lifset, R., 2017. Taking the Circularity to the Next Level: A Special Issue on the Circular Economy. Journal of Industrial Ecology.

HOMIE Pay per use website

Manninen, K., Koskela, S., Antikainen, R., Bocken, N., Dahlbo, H. and Aminoff, A., 2018. Do circular economy business models capture intended environmental value propositions?. Journal of Cleaner Production.

Product design and business model strategies for a circular economy

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The transition from a linear to a circular economy requires a range of strategic and practical practical challenges for companies. What are the product design and business model strategies for companies that want to move to a circular economy model?

The following paper (open access) discusses some potential design and business model strategies to support the move to a Circular Economy. Building on the work by Walter Stahel, the strategies of slowing, closing, and narrowing resource loops are introduced.

Slowing loops is about strategies to design long-life products and extend the useful life of products, for example through reuse and repair and new service-driven business models. It is about reuse of long-life products. Closing loops is concerned with closing the loop post consumer-use through recycling, resulting in a circular flow of resources. It is about reuse of materials. Narrowing loops is about resource efficiency, using fewer resources per product. It is about using fewer resources in the product design and production process phases.

Slide1

Figure 1: Strategies of closing, slowing and narrowing resource loops. Source: Bocken, de Pauw, van der Grinten and Bakker (2016). 

 

Different business model strategies and product design strategies are formulated to help slow, close and narrow resource loops. Figure 2 gives an example of the business model strategies which have been used as a framework for the book “Circular Business – Collaborate and Circulate”. 

With these strategies in mind, companies can start looking for new options to innovate their designs and business models to start the transition to a Circular Economy.

Slide1

Figure 2. Framework to assess circular projects and businesses in the book. Source: Kraaijenhagen, van Oppen and Bocken (2016),  p. 30. 

 

 

Sources:

Bocken, N.M.P., de Pauw, I., van der Grinten, B., Bakker, C. 2016. Product design and business model strategies for a circular economy. Journal of Industrial and Production Engineering, 32 (1), 67-81.

Kraaijenhagen, C., Van Oppen, C., Bocken, N. 2016. Circular business. Collaborate & Circulate. Circular Collaboration, Amersfoort, The Netherlands. Available at www.circularcollaboration.com

http://www.product-life.org

https://www.ellenmacarthurfoundation.org

BOOK LAUNCHED – ‘CIRCULAR BUSINESS – COLLABORATE AND CIRCULATE’

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The book Circular Business – Collaborate and Circulate explains how you can establish a successful circular business. The three authors, Christiaan, Cécile and myself, are working in the area of sustainability and aim to close the gap between theory and practice in the circular economy. The sustainably produced book was launched with a festive event in Amsterdam on 18 March 2016 attended by over 100 invited guests with a sustainability and circularity interest. A number of case companies from the book – Gispen, MUD Jeans and Interface – explained in interviews how they are putting the circular economy into practice.

The Circular Economy has become a hot topic with specialists in sustainability and beyond. While the interest in ‘circularity’ has increased, many companies are still struggling with how to come to grips with this concept and putting this into practice. This gap motivated us (Christiaan Kraaijenhagen, Cécile van Oppen and Nancy Bocken) to think: Why is circular thinking not yet common sense? How can we do contribute positively to closing this gap? We noticed that a lot of companies started to think about the technical aspects, or, sometimes, the business model. A third aspect of collaboration is equally important, but there is even less knowledge about how to tackle this. This is unfortunate, because a circular economy cannot be created in isolation and requires new forms of collaboration.

10 practical steps

The book guides the reader through a process of 10 steps to initiate circular projects within an organisation, find the right collaboration partners and (financial) incentives and contracts. We take a positive perspective by explaining each of the steps with illustrative cases that successfully started to implement circularity. Several well known but also less-known cases are included such as Interface, Patagonia, Vitsœ, Marks & Spencer, Riversimple, Desso, MUD Jeans, Gispen and G-Star. These cases form an inspiration for companies and professionals who want to make important steps towards the move to a circular economy.

SETTING THE EXAMPLE

In collaboration with Ecodrukkers and Paperwise the book itself has become a circular economy example: it is printed using biological ink, on paper made from agri-waste. Readers are encouraged to make notes in the book and pass it on to the next user. In this way, the sub title “Collaborate and Circulate” gets a double meaning.

MORE INFORMATION AND ORDERING THE BOOK

The book and more information are available at: www.circularcollaboration.com

 

Circular Business Book Slide1

 

 

Book launch celebration 18 March 2016