Circular Economy Business Research Articles

Sustainability indicators to achieve a circular economy: A case study of renewable energy and plastic waste recycling corporate social responsibility (CSR) projects in Thailand

To promote their public image, a growing number of companies have adopted corporate social responsibility (CSR) projects that benefit various social interests. As such, it is imperative to audit the social, environmental, and economic dimensions of CSR projects for their sustainable development. This paper presents an assessment of three CSR projects undertaken by the energy industry (renewable energy) and commercial sector (plastic waste recycling) in Thailand to transition towards the circular economy (CE) business model. A set of CE indicators were selected from the World Business Council for Sustainable Development: WBCSD 2018 European Commission 2018, and British Standard Institution 2017 and compared with the sustainability indicators listed in the ISO 26000:2010 (referenced in the Global Reporting Initiative (GRI): G4 Guidelines). These indicators were established to assess the readiness of companies to implement sustainable CSR projects. The assessment results showed that the CSR projects in the case study were conducive to the CE model, as most of the CE concepts evaluated by the performance indicators were already in place. This study aimed to support the implementation of CSR projects that contribute to adopting a CE business model and determine key performance indicators (KPIs) to measure and monitor CSR projects in terms of their CE concepts. The sustainability KPIs proposed in this study can serve as a set of guidelines to drive CE strategy adoption and allow for the identification of sustainable CSR projects that can simultaneously offer more value creation and satisfaction for all stakeholders, including society and the companies, while reducing environmental impacts. This paper integrates CSR into a CE approach that results in business sustainability and contributes to Sustainability Development Goal (SDG) targets.

Circular economy business models: Towards achieving sustainable development goals in the waste management sector—Empirical evidence and theoretical implications

AbstractThis paper investigates how and whether circular economy (CE) business models affect the implementation of sustainable development goals (SDGs) in the waste management sector. A case study is used to determine the relationship between CE business models and SDGs. It shows that CE business models, potentially, can contribute directly to achieving a significant number of SDGs. The strongest relationships are between the CE business model and the targets of SDG4 (Quality education); SDG 5 (Gender equality); SDG 7 (Affordable and Clean Energy), SDG 8 (Decent working and economic growth); SDG 9 (Industry, innovation and infrastructure), SDG 11 (Sustainable cities and communities) SDG 12 (Responsible consumption and production). After a narrative literature review on the intersection between CE and SDGs, the paper performed a case study on Contarina SpA, a firm that developed a business model to recycle wastes into recyclable materials under a CE approach. The case findings could stimulate further research into how this and similar types of business models will help societies to change from the ‘use‐it‐once‐and‐throw‐it away’ mentality of linear business models to the integrated, holistic, CE model that seeks to emulate nature's cyclical systems, and achieve the implementation of sustainable development goals (SDGs).

Aiming for bullseye: a novel gameplan for circular economy in the construction industry

PurposeThe paper aims to provide managerial recommendations for implementing circular economy (CE) principles in both organizational and interorganizational contexts, including when using digital tools, such as building information modeling (BIM) and blockchain. Drawn from the construction sector in the Netherlands, the findings can be generalized to similar sectors where a company may receive multiple inputs as part of its supply chain augmented by digital technologies.Design/methodology/approachDesign addresses the research question: what are the strategic and tactical approaches of organizations on the CE pathway? Sub-questions target initiatives pursued by participants, and look toward information, roles and functions for supporting the CE process. Applying a multiple-case study approach (21 semi-structured interviews with 29 participants) the paper explores strategic initiatives of construction companies implementing CE pathways. The strength of the research design comes from facilitation of rich and deep qualitative insights from Netherlands-based managers embedded within global supply chains contributing to conceptual mapping. A limitation is data from one country (though representing both national and multinational companies).FindingsInterviewed managers share guidance for production-related construction companies anchored in materials and product design. Recommendations include to (1) develop both internally and externally the awareness of CE amongst leaders, (2) communicate with internal and external stakeholders for shared vision across the supply chain, (3) start with pilot projects, and (4) ensure product data-integration for CE business models through computer modeling and blockchain for decision-making processes, choices of materials, business model coordination and product (re)design. Continuous learning about CE roles and responsibilities amidst organizational process restructuring is required throughout linear to CE transitions. Extending the time for the CE principles evaluation process would allow for reconsideration of decisions made for CE implemented projects.Originality/valueA novel CE gameplan with a hurdles and recommendations checklist provides an operational interface with decision making points between internal factors for the host organization and external supply chain partners.

From Linear to Circular Ideas: An Educational Contest

This work proposes a framework with which to analyse Higher Education Institution (HEI) students’ knowledge and understanding of circular economy (CE) concepts and the potential of the CE to promote sustainability, using a contest. The framework integrates CE principles and business models with sustainable indicators, and it was applied to the accepted projects by the contest jury. The contest was launched in 2021 by the CE Working Group of the Portuguese Sustainable Campus Network to encourage creativity and the development of CE projects at HEIs. HEIs can play an essential role in promoting environmental education and creating partners with new visions for society and the economy concerning sustainability, developing knowledge, values, attitudes, and behaviours regarding the CE. The projects were mostly based on the recovery of secondary raw materials/by-products, the CE business model, and the CE principle of value optimisation. In addition, a strong relationship with environmental indicators was observed, but social and economic indicators of the CE were only marginally considered by the students. Therefore, students considered the CE as mostly mainly being related to product recovery/optimisation; thus, the CE concepts and principles and their relationship to sustainability implementation require reinforcement and transversal approaches to increase this knowledge and its dissemination.

What will lead Asian consumers into circular consumption? An empirical study of purchasing refurbished smartphones in Japan and Indonesia

Although smartphones are small mini-computers, their impact on the environment is no longer small. In terms of e-waste, the challenges faced by many nations in Asia, where limited recovery and recycling practices exist, include sustainable choice and consumption habits. This study investigated the factors that affect Asian consumers' behavioral intention in purchasing unbranded third-party and original equipment manufacturer (OEM)-branded refurbished smartphones, respectively. Through online surveys and analysis of a representative sample of 1200 mobile phone users in Japan and Indonesia, the findings showed that in both countries, perceived risk, consumer innovativeness, and (to some extent) price are all vital factors affecting the participation of consumers in circular consumption. The study also examined mobile phone/smartphone markets and the related legislation in Japan and Indonesia to develop field-driven hypotheses and identify the salient characteristics of the circular economy (CE) for refurbishment in both countries. In Japan, the difference in purchase intention (PI) between unbranded third-party refurbished and OEM-branded smartphones is much smaller than in Indonesia. The demand for refurbished smartphones supplied by an OEM in Indonesia is relatively higher than in Japan. The findings from this cross-cultural study can yield rich insights for CE business practitioners who seek to grasp overall patterns across the two countries and identify the salient features of each country, improving their regional marketing initiatives.

RETRACTED: Engaging the citizen in the circular economy: Transcending the passive consumer role

The transition to a resource-efficient and effective circular economy (CE) requires the active engagement of all societal and economic actors, including business, civic society, and political actors. Research, so far, has mainly focused on business solutions and policy approaches that enable these solutions. However, very little knowledge has been developed regarding the role of citizens in the CE (e.g., sharer, repairer, or buyer of quality products or second-hand products) and the transformations to everyday life that circularity may require. Therefore, there is an imperative to fill this knowledge gap and provide the insights needed to drive the adoption and upscale of circular practices in the everyday life of citizens. To go beyond existing approaches of consumer research, this contribution proposes the expansion of the methodological arena by integrating theories of socio-cultural (e.g., practice theory, consumption work) and psycho-social (e.g., peer-influence, social proof) nature to complement existing approaches of “behavioral” scope, which have been widely used in economics and policy studies. By identifying the way people relate to CE in their everyday life and the conscious and unconscious actions they are likely to take toward a CE transformation, it is possible to complement the existing knowledge on CE business model innovation and policy interventions so that the “consumer” aspect is better incorporated and not taken simply for granted, as a CE adopter.

Leveraging Blockchain and Smart Contract Technologies to Overcome Circular Economy Implementation Challenges

Adopting a circular economy (CE) has rapidly emerged among policymakers and business community stakeholders to promote material circularization and ensure sustainable development. While the inclination for a paradigm shift away from the linear economy is evident, many challenges have been quoted in the literature regarding its implementation. Lately, it has become common to propose Information and Communication Technologies (ICT)-based approaches to address these challenges. However, they do not question the practicality of the solutions in the context of CE. This paper aims to find an appropriate digital solution for CE implementation, which is not possible without a complete understanding of the existing challenges. A thorough literature review broadly classified the challenges under five barrier categories: Technological, Financial, Infrastructural, Institutional, and Societal, which was followed up with an investigation into the failure of ICT solutions to address CE challenges. Among the various technologies, blockchain and smart contract technologies show some promise as data-driven decision-making tools; however, they are not without their limitations when applied in the context of CE. This perspective explores the role of blockchain smart contract technology-scape in overcoming CE challenges and presents a circular economy blockchain (CEB) architecture development. The findings suggest that CEB may enable CE business models that improve trust and transparency in supply-chain networks, shared and performance economy platforms, stakeholder participation, and governance and management of organizations. Ultimately, this study highlights critical areas for research and development for the blockchainification of CE.

Energy management to foster circular economy business model for sustainable development in an agricultural SME

The role of energy management (EM) capabilities in enhancing circular economy (CE) business models of agricultural small and medium-sized enterprises by way of developing dedicated organisational competences is an under-investigated topic. In addition, the contribution of CE business models to the sustainability performance of agro-energy businesses deserves further investigation. To cover these gaps, a case study was conducted within an agricultural firm that exploits a high-tech hydroponic system to cultivate tomatoes. Interviews were conducted with top management of the firm and technicians to identify the EM capabilities that foster the development of organisational competences to implement a CE business model. The framework of dynamic capabilities was used to discuss the results. Results indicate that EM and auditing capabilities play pivotal roles in enhancing knowledge of sustainable production methods and accountability, and constitute the microfoundations of dynamic capabilities that are needed to sense, seize, and reconfigure the business model around CE, which allows the achievement of sustainability performance. EM, along with the promotion of an organisational culture of energy conservation, also enhances the knowledge and implementation of CE business models. Implications for SMEs’ agricultural managers relating to EM implementation are discussed, given its pivotal role in the implementation of CE business models.

Upscaling circular economy in foodtechs businesses in emergent countries: Towards sustainable development through natural resource based view

AbstractThis work adopts sustainable entrepreneurship as its scope of analysis, focusing on sustainable success through startups with operational excellence, technological innovation (TI) and whose business model aligns with the assumptions of circular economy (CE). By applying certain characteristics of the natural resource‐based view (NRBV) in the context of foodtech startups, this study assesses both TIs and CE assumptions adopted by Brazilian foodtech startups. We interviewed managers and owners of foodtech companies operating in the Brazilian economy. Thus, this study relates to CE business models, how well companies manage natural resources, and the influence of TI in promoting CE. After conducting an exploratory case study in Brazil with 15 startups, in addition to exploring the adequacy of four future research proposals, this article suggests that: (a) among the foodtech startups studied, the companies that are most disruptive and innovative also demonstrate a more efficient and optimized management of natural resources; (b) based on these units of analysis, a less proactive CE tends to compete with companies in the traditional segment of operation, not differing in terms of products and services offered to society, thus generating only a small contribution to sustainable development; (c) while our study shows that NRBV illustrates a relevant theoretical framework to confirm the progress of the CE supported by TI, the integration of these theoretical constructs in a startup proves to be original and unprecedented.

Value creation in circular economy business for sustainability: A stakeholder relationship perspective

AbstractA circular economy (CE) requires companies to rethink their value creation and stakeholder relationships. While value creation in a CE business is typically understood from a company‐centric perspective, this article utilises stakeholder theory to conceptualise value creation as a relational, systemic activity involving multiple stakeholder relationships. We conduct a case study of the CE business development of a Finnish energy company and offer novel insights by identifying five joint value creation activities: sharing the CE story, co‐constructing knowledge for political decision‐making, developing the industry, creating local CE ecosystems and refining the business model. Additionally, we define the concept of multidimensional value, which acknowledges multifaceted, subjective stakeholder value expectations and enables the engagement of stakeholders in joint value creation activities. We conclude that the stakeholder relationship perspective on CE business value creation allows for the creation of the synergy necessary to advance CE business and sustainability.

Customer Experience in Circular Economy: Experiential Dimensions among Consumers of Reused and Recycled Clothes

The textile and clothing industry is undergoing a sustainability transition, pushing related businesses to adapt to circular economy (CE) models, such as recycling and reuse. This shift has been extensively studied from industry and business model perspectives, but we lack an understanding of the customer perspective, i.e., how circulated products, such as reused and recycled clothes are experienced among consumers. This understanding is crucial, as customer experience plays a significant role in the adoption of CE products. Therefore, we conducted a qualitative interview study to explore how consumer-customers experience recycled textiles and reused clothes. We used an established experience dimension model and mapped how the five dimensions of customer experience—sensory, affective, behavioral, cognitive, and social—present themselves in the sustainable clothing industry. The data comprised 16 qualitative semi-structured interviews analyzed with a coding framework built on the basis of customer experiences, customer values, and the CE business model literature. The results revealed that diverse sensory (e.g., scent), affective (e.g., pride and shame), behavioral (e.g., developing new decision-making rules), cognitive (e.g., learning and unlearning), and social (e.g., getting feedback from others and manifesting own values) aspects shape how consumers experience reused and recycled clothes. We also compared and analyzed the results of the reuse and redistribute model and the recycle model. Our study contributes to the literature of CE business models and customer experience by providing a structured map of diverse experiential triggers and outcomes from the five experiential dimensions, which together reveal how consumers experience circulated products of the clothing industry. These findings enhance our understanding of customers’ motivation to use recycled and reused products and adoption of CE products.

Developing Architecture for Platform-based Circular Economy Business: An Exploratory Study

A number of platform-based businesses using digital technologies are increasing toward achieving a circular economy (CE). However, it is less systematized on how to design successful platform-based CE businesses. As the first step to address this problem, this paper aims to develop an architecture to represent the relationship between a target CE business and functional requirements for building a digital platform. For this purpose, we applied Industrial Internet Reference Architecture (IIRA) to clarify the features that need to be considered for developing an architecture in the context of CE business. A case study was conducted for a container reuse business. By applying IIRA, we described two scenarios, i.e., as-is scenario where the current business model is assumed and proposed scenario where additional digital technologies are introduced. Results showed that IIRA is useful for describing the relationships among stakeholders and the functions required for a digital platform. Moreover, describing the two scenarios helped to execute the improvement cycles of extracting problems and suggesting solutions for the target CE business.

Are food supply chains taking advantage of the circular economy? A research agenda on tackling food waste based on Industry 4.0 technologies

This article proposes a means of exploring the use of circular economy (CE) business models to deal with losses and waste in food supply chains. First, the current state-of-the-art application of CE in the food waste area was identified through a systematic literature review. The main findings concerning the current debate around this topic were: (a) the Regenerate and Loop business models are the most studied models in analyzing methods of reuse and recycling of food waste through biological cycles; (b) focal companies and customers are the most often investigated tiers of supply chains; and (c) the investigation of CE and food waste has so far focussed on how to efficiently manage the waste already generated by the system, instead of how to avoid waste generation. Second, in terms of managerial contributions, based on the findings from the systematic literature review, this article proposes an expansion of the application of CE business models to deal with food losses and waste, considering the role of the retail tier, the use of Industry 4.0 technologies and the shift away from the waste reuse approach towards reducing waste generation using CE business models, such as Optimize and Share. Additionally, in terms of academic contributions, this article presents a comprehensive agenda for future research and extends the body of knowledge with regard to the synergy between CE and Industry 4.0 by integrating these two topics with the issue of food waste and loss, a sustainable development target.

Building a Circular Economy Model for Managing Exploitation of Household Used Devices on the Example of Washing Machine Driven by DC Motor Along with Components

Abstract In the article, the authors describe, using the example of a selected class of technical means, their concept of replacing the “classical” linear management (exploitation) model with a circular economy (CE) model. An example of an object for which the authors plan to test the feasibility of the concept presented above is a household washing machine driven by a DC motor. The description of this object included in the article considers its complexity and multiplicity of assemblies, sub-assemblies, and elements. The DC electric motor driving the washing machine was considered the most important from the point of view of the created model, especially in terms of the possibility of maintenance and repair. For such an engine, the article presents the maintenance and disposal model as elements of the concept of building a ‘circular’ business model. The authors assumed that the formal basis for such a model would be the so-called circular model. The methodology and plan of the research carried out at Super Asia washing machine company in Pakistan were introduced, and the research results were shown. With the use of these results, an attempt was made to assess the requirements that the application of the CE business model places on manufacturers of a selected class of devices, both in their manufacture, repair, sharing and dematerialization. The concept of further research is described at the end of the article.

Does finance as usual work for circular economy transition? A financiers and SMEs qualitative approach

Transitioning to a circular economy (CE) particularly challenges small- and medium-sized enterprises (SMEs), and a deeper understanding of CE financial barriers is needed. We draw on SME and financiers’ views to qualitatively study the risks associated with CE, how such risks limit access to financial resources and how financial institutions perceive those risks. We find that transitioning to a circular economy entails regulatory, cultural and market risks and that CE business success does not depend solely on SME resources or capabilities. Contributions include combining business model perspectives with transition theories and showing that new circular business models entail major reforms to political, regulatory, and market structures, including financial markets. From a practical perspective, to accelerate CE transition, we recommend reducing fragmentation, uncertainty and incoherence in regulation of the remodeling of information and risk assessment systems and new co-financing mechanisms and alternative instruments such as blended finance or “circular finance.”

Policies as Drivers for Circular Economy in the Construction Sector in the Nordics

A circular economy (CE) represents the key alternative to the linear ‘take-make-consume-dispose’ economic model, that still predominates in the construction sector. This study investigates how policies support CE-focused businesses in the construction sector in the Nordics. A literature review, the creation of a database, a review of Nordic actors with a CE focus, and targeted interviews with actors across the value chain of the construction sector in Denmark, Finland, Norway, and Sweden enabled us to benchmark the CE policy landscape and assess how CE policies at different levels support CE business models in the construction sector. The results show that the construction sector is well represented in the CE policy frameworks and that many business opportunities are created when national and local policies are put into practice. The implementation of policies is mainly done via three key concepts, i.e., planning, requirements for sustainable constructions, and requirements for public procurement. It can be concluded that policies are drivers for the implementation of a CE and support CE business models in the Nordics.

The Green Blockchains of Circular Economy

Eco-friendly systems are necessitated nowadays, as the global consumption is increasing. A data-driven aspect is prominent, involving the Internet of Things (IoT) as the main enabler of a Circular Economy (CE). Henceforth, IoT equipment records the system’s functionality, with machine learning (ML) optimizing green computing operations. Entities exchange and reuse CE assets. Transparency is vital as the beneficiaries must track the assets’ history. This article proposes a framework where blockchaining administrates the cooperative vision of CE-IoT. For the core operation, the blockchain ledger records the changes in the assets’ states via smart contracts that implement the CE business logic and are lightweight, complying with the IoT requirements. Moreover, a federated learning approach is proposed, where computationally intensive ML tasks are distributed via a second contract type. Thus, “green-miners” devote their resources not only for making money, but also for optimizing operations of real-systems, which results in actual resource savings.

Residue Valorization in the Iron and Steel Industries: Sustainable Solutions for a Cleaner and More Competitive Future Europe

The steel industry is an important engine for sustainable growth, added value, and high-quality employment within the European Union. It is committed to reducing its CO2 emissions due to production by up to 50% by 2030 compared to 1990′s level by developing and upscaling the technologies required to contribute to European initiatives, such as the Circular Economy Action Plan (CEAP) and the European Green Deal (EGD). The Clean Steel Partnership (CSP, a public–private partnership), which is led by the European Steel Association (EUROFER) and the European Steel Technology Platform (ESTEP), defined technological CO2 mitigation pathways comprising carbon direct avoidance (CDA), smart carbon usage SCU), and a circular economy (CE). CE approaches ensure competitiveness through increased resource efficiency and sustainability and consist of different issues, such as the valorization of steelmaking residues (dusts, slags, sludge) for internal recycling in the steelmaking process, enhanced steel recycling (scrap use), the use of secondary carbon carriers from non-steel sectors as a reducing agent and energy source in the steelmaking process chain, and CE business models (supply chain analyses). The current paper gives an overview of different technological CE approaches as obtained in a dedicated workshop called “Resi4Future—Residue valorization in iron and steel industry: sustainable solutions for a cleaner and more competitive future Europe” that was organized by ESTEP to focus on future challenges toward the final goal of industrial deployment.

Generic Product Lifecycle Model: A Holistic and Adaptable Approach for Multi-Disciplinary Product–Service Systems

The linear economic model behind contemporary product lifecycle representations contradicts planetary boundaries and the idea of sustainability. At the same time, Circular Economy (CE) driven models lack consideration of profound technological insights. Based on observations in research and the application of projects of different industries, a quantitative and qualitative literature analysis is applied to identify both strengths and shortcomings of current lifecycle models. These findings are used to create lifecycle model portfolios and to derive a generic Product Lifecycle model (gPLC). The gPLC is validated by three industrial cases based on collaborative research projects. In practice, resource and energy consumption as well as waste production and emissions can be minimized with the help of established methods not only by economists, but also by engineers. Transparency of material and information circularity practically implies the opportunity to implement, for instance, Minimum Viable Products and DevOps approaches. The originality of the gPLC is characterized by three main aspects: first, material and information flows of multi-disciplinary product–service systems are recognized as the foundation for a modern CE; second, a differentiation between product classes and instances is elaborated to stimulate sustainable design of material core products and digital CE business models; and third, the stakeholder perspective is expanded from manufacturer and consumer/user to further perspectives, such as recycler and society.

The development of CE business models in firms: The role of circular economy capabilities

This paper investigates how the capabilities that are related to the circular economy (CE) affect the development of products and processes that are compatible with CE business models. From the dynamic capabilities perspective, we assume that the development of CE in the firm implies the use of firm capabilities and the alignment of these in the development of a dynamic process of innovation towards the development of CE in firms. The analysis is based on a cross-sectional database from the EU survey on the Circular Economy in the year 2015, including 870 respondents. Our study extends the current literature on the factors that affect the development of CE business models in organisations. Our results suggest that CE-related capabilities have a positive effect in the implementation of CE business models in the organisation. In particular, we find that competences, standards and information are important in the context of the CE, playing a key role in the developing CE product and process.