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Business Models for the Circular Economy

Opportunities and Challenges for Policy

image of Business Models for the Circular Economy

Natural resources, and the materials derived from them, represent the physical basis for the economic system. Recent decades have witnessed an unprecedented growth in demand for these resources, which has triggered interest from policy makers in transitioning to a more resource efficient and circular economy. This report presents a typology of five circular business models that could support the transition to a more resource efficient and circular economy: circular supply, resource recovery, product life extension, sharing, and product service system models. It reviews the current market penetration and assesses the potential scalability of each business model. Environmental potential is also discussed, as well as risks and unintended consequences that could result from a more widespread adoption of these business models. The report provides a broad set of policy approaches that could help alleviate some of the barriers that currently hinder the widespread adoption of circular business models.

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Circular business models

This chapter focusses on circular business models, their key characteristics, and the main drivers for adoption. It begins by presenting a typology of the five headline circular business models that are discussed in this report: circular supply, resource recovery, product life extension, sharing, and product service system models. The key characteristics of each of these are then discussed, with a particular focus on the underlying business case. The chapter concludes with an overview of the higher level factors that could drive the adoption of circular business models in the longer term. Technological change and a range of emerging business risks are identified as being of particular importance.

English

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