Circular Economy Business Modeling 

We support your business in transitioning from linear to circular value chains, with the intention of decoupling economic growth from finite resource usage. A circular business model is designed to mitigate escalating costs and diverse risks that are associated with traditional linear approaches. Moreover, it enables capturing unexplored value and promising opportunities – for your business, the environment and society. Leveraging our broad experience in innovation management and business model development across diverse industries, we help our clients to navigate through this circular transformation journey.

Recent developments indicate clearly: Companies that want to stay relevant in the future, must transform into a sustainable business. Across industries, market participants find themselves under considerable pressure from regulation and stakeholders, to align their operations to the demands of a sustainable future and society. Geopolitical shifts impose considerable risks on supply chains and establish new rules for companies.

The costs and risks associated with failing to adapt to new economic and regulatory conditions shaped by the macro-trend of sustainability are diverse and continuously rising. These can be summarized in:

• Erosion of market share and customer flight due to shifting customer preferences and disruptive advances of forward-thinking market rivals
• Impaired brand image due to negative consumer perception
• Constrained access to investor capital and disinvestments due to evolving investor priorities towards more sustainability
• Exposure to regulatory penalties from non-satisfying external reporting and non-compliance to emerging sustainability laws
• Increasing resource prices, high volatility and supply chain vulnerabilities stemming from dependence on finite resources
• Growing costs for carbon emissions and other detrimental externalities
• Decreased attractiveness for top talents and reduced employee retention

The core idea of the Circular Economy reflects the fundamental mechanisms that preserves our natural environment and regulates its balance. As a blueprint for our economic system, circular businesses are operating while considering our planetary boundaries. The underlying business model is defined by the following circular principles:

• Closed-Loop Systems: Differentiating from a linear “take, make, dispose” approach, a circular model excels by capturing end-of-use products and resources and recirculating them back into the system. In that way, it is creating a self-sustaining circle that avoids the accumulation of waste and the exploitation of finite resources.
• Resource efficiency and value preservation: Within the closed loops, products are designed to retain their value and usability for as long as possible. Different R-Strategies facilitate value preservation via repairing, reusing, refurbishing end-of-use products instead choosing recycling immediately. In the manufacturing process, respective operations are aligned to use resources efficiently. This entails optimizing energy consumption, cutting GHG emissions, improving resource employment via saving initiatives to avoid waste pools and value leakage.
• Use of renewable resources: Besides the efficient and mindful usage of precious resources, the shift to renewable energy sources and input material builds a core pillar of circular approach as they are inherently circular and avoid adverse externalities that create long term harm for the natural environment.
• Resource Recovery: Recovering activities extend the traditional waste management concept and turn value chains into value circles. Its purpose is to capture the embedded value of end-of-use goods by collecting, processing, and recirculating the recovered resources. Ideally, there is least value erosion possible (minimal “downcycling”), and the material quality remains the same or even increases. (maximal “upcycling”).