Rethink the Business Model

Consider opportunities to create greater value and align incentives through business models that build on the interaction between products and services. Do we need to own products or is one satisfied by using it as service? Can the current business model, for example, be modified to lease its products? This also includes rethinking circular production processes (McDonough and Braungart 2002)

Framework

The various approaches to “circular” business and economic models have slightly different emphasis on the key components. They share several common principles aiming to

• extend the life of materials and products, where possible over multiple “use cycles”;
• use a “waste = food” approach to help recover materials and ensure those biological materials returned to earth are benign, not toxic;
• retain the embedded energy, water, and other process inputs in the product and the material for as long as possible;
• use systems‐thinking approaches in designing solutions;
• regenerate or at least conserve nature and living systems;
• push for policies, taxes and market mechanisms that encourage product stewardship, for example “polluter pays” regulations (Weetman 2016).

The many different “understandings” of the CE are evidenced by a recent review of 114 different publications. Some of the key aspects are outlined in the following.

Systems Thinking

System thinking is the ability to understand how things influence one another within a whole. Elements are considered as “fitting in” their infrastructure, environment, and social context. While a machine is also a system, systems thinking usually refers to nonlinear systems: systems where through feedback and imprecise starting conditions, the outcome is not necessarily proportional to the input and where evolution of the system is possible – the system can display emergent properties. Examples of these systems are all living systems and any open system such as meteorological systems or ocean currents, even the orbits of the planets have nonlinear characteristics.

Understanding a system is crucial when trying to decide and plan (corrections) in a system. Missing or misinterpreting the trends, flows, functions of, and human influences on, our socio‐ecological systems can result in disastrous results. In order to prevent errors in planning or design, an understanding of the system should be applied to the whole and also to the details of the plan or design. The Natural Step created a set of systems conditions (or sustainability principles) that can be applied when designing for (parts of) a CE to ensure alignment with functions of the socio‐ecological system.

The concept of the CE has previously been expressed as the circulation of money versus goods, services, access rights, valuable documents, etc., in macroeconomics. This situation has been illustrated in many diagrams for money and goods circulation associated with social systems. As a system, various agencies or entities are connected by paths through which the various goods etc., pass in exchange for money. However, this situation is different from the CE described above, where the flow is unilinear – in only one direction, that is until the recycled goods are again spread over the world.