Typology in circular economy: a proposal based on resource value retention options and value chain perspective

Abstract

The application of the circular economy concept in organizations necessitates the implementation of a set of practices that help to retain the value of resources in the chain. However, merely applying these practices is not enough. Circular economy success requires models that help businesses monitor, assess, and improve their outcomes. Nevertheless, there is a lack of specific models for the circular economy, resulting in its nascent application within companies. This article aims to propose a typology for companies that integrates a set of practices across the entire value chain with strategies to retain the value of resources. This work draws upon theoretical models of the value chain and retention options, such as reuse, repair, and recycle, as well as insights from a review of literature on classification and evolution models. The result is a typology featuring seven categories within the circular economy. This typology classifies organizations based on their engagement with circular practices and their success in enhancing resource value, focusing on two main aspects. To verify the typology's applicability, the CVCP typology has been applied in two companies by interviewing three practitioner experts. The model not only categorizes and measures the extent of circular practices across seven defined areas but also outlines a three-step process for evaluating an organization's circular practices. This evaluation can help identify where a company stands, set goals for improvement, and support the enhancement of circular practices to elevate the company's overall level. Additionally, a practical tool accompanies the classification model. This research presents a step-by-step guide in the circular economy that aids in understanding how companies can integrate circular economy principles, focusing on practices that preserve resource value from a value chain perspective.