Circular business models grant economic, social, and environmental benefits to companies. But where to start to implement them? The R2Pi Consortium partners, developed 7 Circular Economy Business Model patterns to help business reconfiguring their business model while creating value. Join the conference “Transitioning to Circular Business Models” on 24 October to discover how circularity can be applied in your company.
Rethinking your company’s business model and the value of products at the end-of-life creates environmental, social and economic benefits. These can lead to the demand for new materials and less waste, contributing to lower pollution and waste management costs.
There are many ways in which companies can become more circular. Partners of the European project R2π - transition from linear 2 circular, identified seven Circular Economy Business Model Patterns based on how companies can retain the value of resources from each stage of the supply chain: production, consumption and end-of-life.
How do these patterns translate into practice? There is no straight answer to this question as it depends on the sector and business model of the company.
MUD Jeans, which operates in the fashion industry, was able to apply all the 7 patterns in its business model. The company leases jeans (access) for a monthly fee made out from quality bio-organic cotton (performance). If the jeans are torn through wear, MUD Jeans repairs them for free to extend their life (re-condition). However, if the customer does not want to keep the jeans once leased these are returned to MUD Jeans (circular sourcing) which sell them on the secondary market (remake). But, if these cannot be used any longer, they are transformed into yarns for new jeans (resource recovery), while another company reuses the metal parts from jeans (co-product).
Companies, however, do not necessarily need to implement all the 7 patterns to become more circular and sustainable.
For instance, Rockwool, an international company that produces insulation for buildings, ensured circularity by integrating 3 of the 7 patterns. Confronted by the problem of recovering used insulation material sent to the landfill, Rockwool tackled the issue by retrieving this material from their customers (resource recovery) to recycle it. During production, this is combined also with secondary materials originated from other products or industries (co-product recovery) to produce new insulation material (re-make).
Another example of successful integration of circularity is offered by Philips, which adopted the access, performance, re-condition, and resource recovery patterns. The international technology company provides hospitals with magnetic resonance imaging where the customers use the machine, but ownership remains in Philips’ hands (access). During the product lifetime, Philips optimizes the software and hardware (performance) and works on improving the capacity and functionality of the machines (re-condition). After years of use they take back the product and use its main components to make a new one (circular sourcing) while the rest of the components are used in other processes (resource recovery). Finally, if the machine is still in working condition it is refurbished and sold on the secondary market.
Identifying where to start in the implementation of circularity can be challenging for companies. Join the conference “Transitioning to Circular Business Models” on 24 October, to gain new insights on how companies are implementing one or more Circular Business Model patterns, contributing to the reduction of carbon emissions, attracting new customers, lowering the costs of production and reducing their dependency on raw materials.