Circular Business Models Research Articles

An overview of technological challenges in implementing the digital product passport in the textile and clothing industry

Abstract The textile and clothing industry is undergoing a shift towards a circular business model, driven by new European Commission regulations, which mandates that by 2030, textile products available on the European Union (EU) market must be recyclable and sustainable. To facilitate data collection, storage, and sharing throughout the entire product lifecycle and ensure product traceability and sustainability, the use of Digital Product Passports (DPPs) will be required. This article presents an analysis of the most commonly known digital data technologies from the perspective of their use in digital garment labelling, describing their advantages and limitations. The analysis is complemented by practical insights gathered from semi-structured interviews with garment producers in the Baltic Sea region. The survey revealed that producers prioritise sustainability and are prepared to digitise product information but are awaiting EU’s clear guidance. Despite the challenges posed by DPP implementation from the global, producer, and customer perspectives, upcoming regulations are seen as providing new competitive opportunities for products and services. Both the technology analysis and the expert survey indicate that QR (quick response)-based smart tags are potentially the most straightforward solution for the initial phase of DPP implementation.

Evaluating the adoption barriers of circular business models in the Ghanaian construction industry

PurposeTo transition into a green/circular economy (CE), both academics and industrialists have undertaken research into various areas of circular business models (CBM), yet despite numerous studies conducted, the ensuing discourse contains scant information regarding the barriers to CBM adoption in the built environment. Therefore, this present study explores the critical barriers hindering the adoption of CBM in the Ghanaian construction industry (GCI), establishing the criticality of the principal barriers identified.Design/methodology/approachThe mixed philosophies of interpretivism and postpositivism were adopted to deductively analyse primary data collected via a survey questionnaire. A comprehensive literature review was first conducted to identify the barriers of adopting CBM in the construction industry. Data gathered from professionals with knowledge of CBM and the green/CE were then analysed using descriptive statistics and inferential fuzzy synthetic evaluation.FindingsEmergent barriers to CBM adoption in the GCI were identified as institutional barriers (i.e. inadequate technology development and transfer, insufficient green incentives in the industry and lack of institutional framework that promote); proficiency barriers (i.e. lack of understanding of circular business models, inadequacy of expertise amongst construction professionals, unfamiliar techniques associated with circular business models and fear of greater investment cost) and cultural barriers (i.e. cultural reluctancy of clients to embrace circular urbanization, inadequate measurement tool, lack of a culture that encourages community engagement in environmental decision-making, inadequate performance information and database, lack of prior experience of stakeholders, inadequate government policies, low public awareness and lack of manufacturer and supplier support). The fuzzy synthetic analysis confirmed all the principal barriers as critical. These barriers had a respective criticality index of 3.66, 3.59 and 3.39. Evidently, the CBM adoption in the GCI faces major challenges and consequently, sector stakeholders must strategize their organizational undertakings to transition their traditional business models towards innovative circular ones.Originality/valueThis study provides a novel and thorough evaluation on the barriers to CBM adoption and establishes the criticality of the identified barriers. The study's findings offer essential direction to GCI stakeholders and policymakers to facilitate the shift towards a CE in accordance with the United Nations' Sustainable Development Goals (SDGs).

The challenges that remain: The role of innovation intermediary‐led training in implementing circular business models

AbstractCircular business model innovation is critical in the transition to the circular economy, often requiring businesses to undergo significant internal changes. One intervention to better support businesses in this process is circularity training, often provided by an innovation intermediary. However, little is known of the impact on internal barriers and drivers for circular business model innovation after circularity training has been completed.This research tackles this question through a qualitative exploratory approach, using a multiple‐case study, collecting semi‐structured data from businesses after their completion of a circular training course. We find that even after the circular training, a range of barriers continue to influence circular business model innovation, including issues related to the availability of resources, company acceptance, and technology.The research concludes with recommendations for future training programs and the role of innovation intermediaries, based on the internal barriers and drivers that the companies encountered when working toward circularity implementation and circular business model innovation.

Knowledge-based dynamic capabilities for managing paradoxical tensions in circular business model innovation: an empirical exploration of an incumbent firm

PurposeThis paper aims to gain insights into the paradoxical tensions emerging from circular business model innovation (CBMI) and how to overcome them by developing a theoretical framework drawing on two theoretical streams: firstly, the paradox theory for shedding light on the often “invisible” contradictions generated by the implementation of circular economy (CE) principles in business model transformation; and secondly, the dynamic capability theory that can contribute to the investigation of how to manage these contradictions.Design/methodology/approachThe study uses a longitudinal case study approach to gain an in-depth understanding of the transformation and challenges faced by an incumbent firm in adopting a circular business model. Qualitative research methods are used to explore the paradoxical tensions and dynamic capabilities involved in the process.FindingsThe study finds that incumbent firms face numerous challenges and paradoxical tensions in the CBMI process. These tensions arise from difficulties in implementing organizational changes, balancing competing priorities and managing conflicting goals. Dynamic capabilities are crucial in managing these tensions and facilitating the transition to a circular business model.Research limitations/implicationsThis paper contributes to the theoretical development of paradox theory by applying it to the new field of CBMI which is currently slightly investigated and responds to the call for studies looking at more fine-grained types of sustainable business models. The study adds to previous literature that how the firm handles paradoxes and tensions influences the pace and results of the process. If the firm becomes discouraged during the early stages of identifying new opportunities, the pace slows down, and the firm becomes hesitant to collaborate more with partners. Furthermore, the ability to capitalize on these opportunities is affected by these tensions and contradictions.Originality/valueThis paper contributes to the literature by empirically investigating the process of CBMI in incumbent firms. It fills the gap in existing research by examining the existence of paradoxical tensions in a real-life setting and exploring the role of dynamic capabilities in managing these tensions. The findings provide practical insights for firms seeking a transition towards a CE and highlight that the ability to sense the external context should be developed as the new business model entails a central role of external actors.

Implementing circular economy principles: evidence from multiple cases

With an orientation on sustainability and economic growth, the concept of circular economy (CE) emerges to tackle socio-environmental challenges. Current literature has provided important frameworks from CE operations and business model perspectives. However, in practice, companies are still facing the challenges of insufficient knowledge, lack of standard procedure, and resource constraint. Thus, this paper aims to answer the research questions: how can companies effectively implement CE principles in their operations? And how can such implementation result in value creation such as new products or service solutions? Through conducting seven case studies mainly in Wales, UK, our paper identifies the key activities of CE implementation projects, proposes a holistic process model, and further addresses three different CE scenarios. Our study contributes to the understanding of CE process and circular business models with empirical evidence. Findings can provide future research direction as well as implication for business and policy makers.

Research trends in innovation ecosystem and circular economy

Understanding innovation ecosystems and the circular economy is crucial for systemic change in business and industry, fostering eco-innovation and advancing sustainable development. This study uses bibliometric analysis to uncover the research trends, patterns, and collaborations, revealing a significant gap in understanding the interactions between innovation ecosystems and the circular economy and offering potential avenues for future research that align with sustainable development. The analysis was carried out with the help of Biblioshiny and VOSviewer on the final selected documents of 2981 from the Scopus database through a search query and the SPAR-4-SLR stages of filtration. The key findings of the study are as follows: collaboration among countries involves accessing countries’ resources, knowledge, markets, and location. The study explores research trends in the innovation ecosystem and circular economy, focusing on five key clusters: the circular economy for eco-innovation and resource recovery, circular business models for fostering sustainable innovation in the bioeconomy, sustainability through renewable energy and sdgs, the sustainable business model for enhancing green innovation through entrepreneurship, and Artificial Intelligence (AI) and the circular business model in Industry 4.0. The bibliometric analysis identifies trends, research gaps, and collaboration patterns, revealing potential avenues for future exploration in industrial symbiosis, energy transition, and the system of innovation. The study analyzed only the documents available in Scopus. The exclusion of papers based on the search period, language, document type, and incomplete details are the limitations of this research and open the scope of potential future research. The findings will help existing researchers in this field as well as new researchers interested in this field by clearly understanding trends and further research scopes. The study also offers actional recommendations and practices to policymakers. Practices, and entrepreneurs for the attainment of global sustainability goals. The novelty and originality of this study rely on a thorough literature review that describes the state of the art in the innovation ecosystem and circular economy.

The Circular Game: The Impact of Gaming on Sustainable Behaviour

The main objective of this paper is to assess the impact of The Circular Game use on participants' sustainable awareness, learning and behaviour. The Circular Game is a strategy board game to learn about sustainability, improve environmental awareness, apply circular economy strategies, and train to design innovative and circular business models. Researchers will analyse changes in participants' sustainable knowledge, awareness, and behaviour before and after participation in the game with ad hoc questionnaires. The results of this analysis will allow us to test whether the emotions generated during the play-based learning process can condition their environmental awareness, learning and behaviour towards greater sustainability in the future. The game can generate emotions in participants and work teams, promote collaborative and green knowledge acquisition, and help bachelor and master students and employees apply theoretical knowledge to real-world situations. Similarly, companies and entrepreneurs need a relaxed environment to present their ideas and proposals for improvement. This methodology uses game elements in academic or working environments to stimulate and challenge participants to incorporate sustainable business choices. The Circular Game is a game in which participants compete to be the company that applies the most circular economy strategies in its business model. The groups advance through a circular board where, depending on the squares they land on, they can earn money, invest in circular economy strategies, and add or reduce CO2 emissions. The winner will be the one who has completed all the circular economy strategies set out in the game with the minimum of CO2 emissions. The social impact is substantial as it is a methodology that can be applied in any field, educational or business. The impact will be more significant if the game's objective, to be more sustainable, is translated into the participants' real lives.

Barriers to circular economy adoption are diverse and some are business-model specific: Evidence from the Australian cheese manufacturing sector

Achieving Sustainable Development Goal (SDG) 12.3, aimed at halving food loss and waste by 2030, requires private firms to adopt circular economy practices, which may include different types of circular business models (CBMs). This study examines four interchangeable CBMs—in-house (IH), third party (TP), joint venture (JV), and focal company (FC) models—focusing on the Australian cheese manufacturing sector and its liquid by-product, ‘whey’. Through semi-structured interviews with 43 participants from 42 firms, we analysed how barriers differ across CBMs. Some barriers are consistent across all CBMs, such as economies of scale and operational costs. Others are absent in one or two CBMs (e.g., capital costs in JV and competing priorities in TP), while some are unique (e.g., low or inconsistent demand in IH, payment expectations in TP, conflicting values or personalities in JV, and upstream product specifications in FC). Findings indicate that while IH models are feasible for all production scales with sufficient time and resources. TP models are suitable for firms with time constraints, provided there is agreement on compensation with the recipient. JV could work for firms lacking volumes or capital but require local collaboration and transparent business plans. Utilising existing infrastructure of firms already repurposing by-products can be effective but requires upstream firms meeting product specifications. By exploring multiple CBM options, the willingness to explore circular economy approaches increases markedly when considering multiple CBMs (79%) versus IH approaches alone (33%). This highlights the necessity for diverse strategies to achieve SDG 12.3, as a one-size-fits-all approach is insufficient. Firms may need to partner with others for repurposing, and those already repurposing can enhance efforts by enabling others to repurpose waste, though multiple pathways also increase potential barriers.

Are innovative firms more circular when women hold upper positions?

The circular economy paradigm demands immediate and significant adjustments and changes in management and production business processes to maintain adequate to good ecosystem conditions for the use and development of human life. In this context, we analysed the impact of female leadership in the business environment and its relationship with the conservation of planetary health. This empowers women in the transition toward circular business model within the planet's capacity.For a panel data sample of the world's largest companies, we find that active female participation in high business positions leads to significant changes toward a model that protects the natural and endemic wealth of different ecosystems around de world. Additionally, we found that the active presence of women in the decision-making process concerning the protection of the environment, human development, and economic prosperity is strongly associated with the prospective knowledge that female independent directors possess, and to a greater extent, with the knowledge spillover that the presence of female executive directors entails.

Towards digitalization of the circular economy in the furniture industry

Fashionable, cheap furniture of questionable quality is often used for short-term economic gain. If the furniture is not liked, it is quickly discarded. The need to reduce CO2 emissions, dwindling resources and social and political demands contradict this practice and require the implementation of closed-loops material cycles and the introduction of circular business models. A systematic literature review and a case study were conducted to provide a comprehensive overview of current circular economy strategies (e.g. reuse, refurbishment and recycling) implemented in the furniture industry in relation to various key activities of platform companies. As part of the case study, interviews were conducted with stakeholders and experts from the furniture and interior design industry. The European Circular Economy Stakeholder Platform was also consulted. The literature review and the case study show that the furniture industry is in a state of transition. By incorporating designs that allow for improved remanufacturing, refurbishment and reuse, companies in the industry are increasingly starting to consider circular economy patterns. Increasing digitization and servitization are driving new circular business models. Another key finding is that digital platforms are suitable for connecting stakeholders such as manufacturers, service providers and consumers, taking into account the relevant business models. The study also identified motivations, barriers and requirements for the implementation of circular and digital business models in the furniture and interior design industry. There is still a large gap between what can be achieved with a circular economy and its actual implementation.

Exploring the Sustainability Performance of Circular Business Models in the Built Environment

Abstract The Circular Economy (CE) emerged in the last decade as an imperative path to transition towards more sustainable practices and go beyond carbon neutrality. Applying CE principle in the built environment has been investigated and recent research advocated for positive impacts if the sector embraces the paradigm shift and moves away from linear towards more circularity. Similarly, the literature regarding Circular Business Models (CBMs) has witnessed substantial growth as the latter holds the promise of providing a blueprint on how to make a financial profit while applying CE principles. Nonetheless, a gap remains in understanding the actual impact of CBMs in the built environment from a sustainability perspective. This paper will explore current literature regarding the environmental, economic, and social impacts of CBMs in the built environment to address this gap and provide a clearer understanding of the dynamics of circularity and sustainability. This exploratory research will provide valuable insights into the effectiveness of CBMs in fostering sustainability within the built environment.

The utilization of Industry 4.0 technologies to enhance the circular economy through the engagement of stakeholders in Brazilian food technology companies

AbstractSustainable business models tend to have greater potential for the transition to the circular economy. The present study aims to investigate how Brazilian startups in the food segment foodtech are integrating Industry 4.0 technologies to boost the circular economy, emphasizing the importance of stakeholder engagement in the process. The choice of this unit of analysis is associated with companies that were born recently, with a high chance of having sustainable and circular business models. The research involved eight food technology startups, using questionnaires, interviews, and content analysis to collect data on circular supply chain practices, Industry 4.0 technologies adopted, and the level of stakeholder engagement. The results indicate that foodtech startups are progressively incorporating technologies such as automation, big data, biotechnology, and the Internet of Things, to promote circular economy initiatives. The active participation of stakeholders has been fundamental, contributing to innovation and efficiency in processes. However, the complete transition to the circular economy and the full adoption of Industry 4.0 technologies are challenged by obstacles, including high costs and regulatory barriers. The study found that startups play a crucial role in this transition, due to their agility and capacity for innovation, which can serve as an example for larger companies. Collaboration between businesses, regulators, academic institutions, and society is essential to overcome these challenges and facilitate effective transformation. This work offers valuable practical insights for foodtech startups looking to adopt circular practices, highlighting technologies, and practices that can result in economic and environmental benefits. Startups emerge not only as adopters of new technologies but also as agents of change in industrial practices, shaping a more sustainable future for the food sector. It is recommended that future research explore the impact of regulatory policies and incentives on accelerating the adoption of these technologies by startups, in addition to evaluating the long‐term economic viability of these technological innovations in promoting a more circular economy.

How can managerial practices for Circular Business Models contribute to achieving carbon neutrality? A taxonomy of their preventive and corrective role

The implementation of managerial practices for Circular Business Models (CBMs) can significantly advance a sustainability transition pathway of companies, particularly in addressing environmental issues. However, there is a lack of studies investigating how these practices can contribute to achieving carbon neutrality. This research gap is addressed in this study using a mixed-methodological approach: the Decision-Making Trial and Evaluation Laboratory (DEMATEL) and the Delphi methods. From the literature, we identified a set of eight prevalent managerial practices for CBMs implemented by companies across various industry sectors. The experts involved in the empirical analysis assessed this set of practices using first the DEMATEL, and a preliminary taxonomy showing the contribution of managerial practices to achieving carbon neutrality was proposed, considering their preventive (i.e., avoiding carbon emissions) and corrective (i.e., capturing and storing carbon from the atmosphere) role. The preliminary taxonomy was subsequently refined through the Delphi method to reduce its degree of subjectivity and enhance its effectiveness. Our results show how managerial practices for CBMs can play both a preventive and corrective role in achieving carbon neutrality, with ‘Product Design for Circularity’ and ‘Energy efficiency and usage of renewable energy sources’ standing out as contributing more than the others. Companies aiming to pursue a decarbonization strategy can also leverage a range of managerial practices for CBMs.

Sustainability and circularity assessment of biomass-based energy supply chain

Climate change and other environmental consequences of socio-economic activities require a more sustainable and circular growth. At the same time, the limitation of the earth resource demands industries to improve resource efficiency and increase the rate of recycling of materials. There are several sustainable and circular alternatives that the industries may adopt. However, the question is that among these alternatives, which one should be selected for implementation for the highest sustainable and circular benefits. This study introduces a novel tool for assessing the sustainability and circularity of biomass-based energy supply chains, integrating multi-criteria decision-making methods with life cycle thinking approach. It evaluates five alternatives using a sustainability and circularity indicators, offering new insights into the deloyment of circular business models at companies in biomass-based energy supply chain. The tool is also applied to a specific rice straw supply chain in Italy, to assess the sustainability and circularity of five alternatives and outrank them. The results indicated that not all the alternatives are better in terms of supporting sustainable development and circular economy, compared to the baseline business model. In this supply chain, the extended lifetime for digestate from the aerobic digestion plant is the most ‘sustainable and circular’ alternative, while the capture of carbon dioxide from the same plant and its use for microalgae cultivation is the least ‘sustainable and circular’ alternative. A sensitivity analysis was conducted on different weighting sets during the assessment. It indicated that the priority of the decision makers can slightly change the outrank of the alternatives and the magnitude of the outranks.

Beyond Sustainability, Toward Resilience, and Regeneration: An Integrative Framework for Archetypes of Regenerative Innovation

AbstractWicked problems of climate change, extreme weather events, pandemics, and rising inequality are pushing businesses to explore the next frontiers of resilience, innovation, and sustainability. Although previous studies have examined diverse aspects of resilience, innovation, and sustainability independently, attempts to integrate all three are limited. Further, in the literature, there is a growing need to adopt an interdisciplinary approach to regeneration for solving wicked problems. We aim to address this gap by combining a systematic literature review with practice review methodology to unearth evidence and research themes that integrate resilience, innovation, sustainability, circularity, and regeneration. In this paper, we present 10 cases, including diverse businesses and Net Zero Cities that have adopted business practices for regenerative, sustainable, and circular value creation. In doing so, we extend the discourse on sustainable or circular business models by proposing a definition of regenerative innovation and developing four archetypes of regenerative innovation (urban transformation innovation, technological innovation, responsible innovation, and business model innovation). We draw from the theoretical lens of socio-ecological systems to present nature as the key stakeholder for regenerative businesses. We make novel contributions to theory, practice, and policy by highlighting a new system-based paradigm of regenerative innovation for future resilient products and services.

Revolutionizing Entrepreneurship: Circular Business Models for a Sustainable Economy

This study delves into the implementation of circular business models within the entrepreneurial sector as a means to foster a sustainable economy. By conducting a qualitative review of the literature, the analysis includes academic publications and case studies that examine the principles, advantages, and challenges associated with the circular economy in entrepreneurship. The methodology involves synthesizing pertinent literature to identify effective strategies and common obstacles in adopting circular practices. The results indicate that, despite encountering financial constraints, a lack of expertise, and logistical difficulties, the circular economy presents substantial opportunities for innovation and environmental sustainability. These opportunities enhance competitiveness and contribute to long-term economic success. The discussion emphasizes the necessity of cross-sector collaboration, supportive policies, and educational programs to address these challenges. In conclusion, the research underscores the pivotal role of circular business models in transitioning to a sustainable economy, advocating for cooperative efforts among entrepreneurs, policy-makers, and academics to promote sustainable business practices that benefit both the environment and the economy.

A STRATEGIC ANALYSIS OF CONSTRUCTION ORGANIZATIONS DURING THE INDUSTRY'S TRANSITION TO A CIRCULAR ECONOMY

Current production methods have serious environmental impacts, which concerns the world. This concern has led many authorities, individuals, and organizations to prevent irreversible environmental damage. In response to this issue, the circular economy is revolutionizing production by adopting circular business models that minimize environmental impact. Numerous studies have found construction activities to be environmentally harmful. Mineral raw materials from natural sources are used in most construction procurement and production. Once their useful life is over, these mineral resources are irreparable, non-reusable, and non-recyclable. This scenario violates circular economy principles. This study predicts that the construction industry will become more circular in response to demands, obligations, and directives that encourage environmentally friendly production strategies like the circular economy. Thus, construction companies and design consultants must adapt to the circular economy. PESTEL analysis is used to predict macroenvironmental changes for construction organizations. According to the PESTEL analysis, construction companies must make changes to succeed and survive in transition to a circular construction industry. Integration into more complex business networks, adapting to a service-based economy, improving management skills, and improving workforce capabilities are among these changes.

Heterogeneities in willingness to pay for circular affordable housing: insight from young users

Circular affordable housing (CAH) is crucial to advancing sustainability, but the lack of empirical evidence on users’ active attitudes towards circularity limits its applicability. To fill this gap, this study utilizes discrete choice experiments to thoroughly explore young users’ preferences and willingness to pay for a circular business model (CBM) in affordable housing by considering Dutch and Taiwanese cultural contexts. The analyses highlight the four key attributes that an acceptable CBM for young users in affordable housing should possess: the incorporation of a certain proportion of reused materials, provision of green facilities, availability of furniture services, and effective energy-saving and waste management. Furthermore, young users are willing to allocate 2.5–5% of their monthly income to support the implementation of CBM, which is beneficial for the adoption of CBM in ongoing affordable housing projects worldwide. The attribute preferences of young users in Taiwan and the Netherlands differ due to varying socio-economic characteristics, sustainability attitudes, and distinct cultural patterns within both societies. Consequently, this paper offers recommendations for governments to expedite the development of CAH.

Hierarchy and cause–effect relationship of barriers to circular business models in food systems: a Fuzzy-DEMATEL analysis in the Berlin-Brandenburg area in Germany

ABSTRACT Food systems face significant environmental challenges, necessitating a shift towards sustainability and resource efficiency. Implementing circular economy principles and adopting new business models can significantly contribute to more sustainable food systems. These approaches address major issues in the linear economic model, such as excessive food loss and waste, resource depletion, and market volatility. However, due to various barriers, adopting new circular food systems confronts sluggish progress. This study identifies the hierarchical structure and cause-and-effect relationships of these barriers using the example of selected food systems in Berlin-Brandenburg, Germany. Employing the Fuzzy-DEMATEL analysis approach, this research identifies four primary causal barriers and four effect barriers classified across market development, finance, technological availability, knowledge management, as well as institutional domains. Furthermore, the study ranks these barriers based on their significance. It reveals that the top barriers are poor product design and waste management infrastructure, insufficient quantity and quality of material flow, and a lack of collaboration in the supply chain. In addition, weak policies, along with their inadequate evaluation and monitoring, act as the most influential causal barriers. These findings hold significant implications for practitioners and policymakers striving to promote the transition to circular food systems through innovative business models. Practitioners are advised to prioritize collaborations with different stakeholders to ensure proper waste management, by-product valorization, and resource efficiency. Concurrently, policymakers should enact supportive policies and effective governance structures based on the needs of the businesses and its stakeholders.

Circular Economy: Research in the Maritime Domain

The maritime domain is a very broad domain encompassing ship design, construction, transportation, export–import, port management, energy, ocean, and waterways management. The assumption that the marine industry is less flexible for a transition from linear economy to circular economy (CE) is being challenged. A ship is a factory/city in motion, and therefore, CE principles may be applied to a ship. CE principles can be applied to ports, energy, and waterways management. Successful implementation of CE requires a comprehensive mapping of business models, projects, products, and services; identification of all stakeholders; and using biomimicry in manufacturing. CE can help in the regeneration and restoration of natural capital. The circular business models can help in increasing revenue, reducing costs, and saving the environment. CE can be extended to include reimagining, realigning, reworking, and reaching out to different players in the maritime domain. The marine industry faces the challenges of decarbonization and end-of-life vessel management.