Why are circular economy solutions needed in business?
A linear economy characterized as “take-use-dispose” leads to intensive use of natural resources and growing consumerism, as well as polluting global supply chains that are highly resource-intensive and lack flexibility to respond to disruptions such as the COVID-19 pandemic or military conflicts. Therefore, circular economy solutions should not be limited to the areas of waste management and efficient use of resources. As a practical implementation strategy for sustainable development, the circular economy emphasizes the necessary changes in today’s dominant business models, starting with the value proposition – products and services, value creation, and value created. This is influenced by the institutional environment, the dynamic cooperation of companies and other participants in the value chain, and the technological readiness of the industry.
In a circular transformation, companies should rethink the products and services they develop and their business models. It is important to gain a systematic understanding of the basic concepts and practical tools for circular economy decision-making in business enterprises.
What are the benefits of circular economy solutions for business?
Designing of circular economy solutions is focused not only on environmental protection but also on economic benefits. The aim is for companies to choose circular economy strategies that enable them to achieve win-win environmental and economic goals. As an umbrella concept, the circular economy can encompass many different but related areas, such as eco-design, responsible resource management, circular business model innovation, cleaner production, product remanufacturing, waste management, and sustainable consumption.
Therefore, the added value for the business is created by thinking not only about consumers but by including a wider network of participants in the value chain. Designing circular economy solutions allows companies to:
- Create or improve their products or services by integrating the principles of the circular economy;
- Optimize resource and waste flows;
- Manage energy use efficiently;
- Systematically integrate the principles of the circular economy into operational processes.
