Adesoji Adegbulu

Transitioning to Circular Business Models

circular business models

Circular business models are concepts built on Circular Economy which advocates keeping products, components, and materials at their highest utilities and value at all times, distinguishing between technical and biological cycles.

The circular economy is a regenerative new model inspired by nature. It offers businesses a way to deliver value and profitability in a sustainable way. Products are designed to be recycled, reused or remanufactured at the end of the first life cycle, reducing pressure on the planet’s finite resources.

It also calls for greater use of renewable energy, reducing carbon emissions and countering the threat of global warming. It promotes the development of healthy materials in products, promoting a non-toxic closed loop system.

Circular business models also ensure that resources used need to be kept in the system for as long as possible, extracting the maximum value from them while in use and then recovering and transforming products and materials to a new product at the end of their service life.

This model is estimated to give a global benefit of $2 trillion.

The demand for a transition to circular business models is increasing among businesses. The economic rationale for moving towards a circular economy is strong, as it increases the resilience of value chains and secures supply stability.

Now a high-traction topic among policy-makers, business leaders, and thinkers across the economy, circular economy thinking has begun to drive the development of circular business models in a variety of industries and in local governments.

DLL provided a white paper that guides dealers and manufacturers on how to make the transition to a Circular Business Model. It explains the 5 steps to a circular business model. These are;

1. READ about the circular economy;
2. LEARN about your company’s and partners’ awareness of this new approach;
3. TALK about product design: how we make things to be made again and again;
4. TRY to come to a service model redesign: discover how a new way of selling leads to more sustainable solutions and satisfied customers.
5. TEST how you can make this a profitable business model: details on how to make money in this brave new world.

Source: cop-23 and dllgroup