What’s next in the Circular Economy?

Ankita Das^1,* Nancy Bocken¹

¹ Maastricht Sustainability Institute, School of Business and Economics, Maastricht University, Tapijn 11 Building D, P.O. Box 616, 6200 MD Maastricht, The Netherlands.

*a.das@Maastrichtuniveristy.nl

Extended abstract

The circular economy is a maturing concept. It is a new paradigm for production and consumption where waste is eliminated, materials are recycled, and nature and societal structures are regenerated (Bocken & Geradts, 2022). One of the ways to characterize the key elements of a circular economy is through the resource strategies of slowing, closing, narrowing, and regenerating loops (Bocken et al., 2016; Konietzko et al., 2020). Slowing the loop is about using products for longer, closing involves reusing materials or recycling, narrowing entails using less materials and energy per product, and regeneration is about the regeneration of nature (Konietzko et al., 2020) as well as society within which the business operates. The circular economy focus to date has been criticized for a dominant focus on recycling (e.g., Allwood, 2014). More challenging business models around reuse and avoidance are only explored to a limited extent by business (Bocken et al., 2017). Regeneration, although part of the Ellen MacArthur Foundation’s definition of the Circular Economy from the start (Ellen MacArthur Foundation, 2013) is still an underexplored concept in a mainstream business context (Polman & Winston, 2021). However, because significant environmental (and societal) damage has been done so far, regeneration strategies are urgently needed to recover and regenerate this damage to nature and to allow for adaptation to climate change and its consequences.

Because of this urgency, in this study we focus on the following question: How can business be inspired to adopt regenerative business models?

Despite the need for regeneration, in business it may be seen as a challenging strategy: it requires new knowledge, capabilities, and forms of collaboration to tackle regeneration issues, because nature and social regeneration go well beyond conventional business skills. Partnerships with NGOs, nature conservation agencies, and local governments may therefore be envisaged to tackle regeneration of nature and society. Such collaborations are quite normal already in the circular economy (e.g. Brown et al., 2002), but are expected to become more important because regeneration is a novel activity where companies would take much greater responsibility of the wellbeing of nature and society. They move towards ‘net positive’ strategies, instead of just pursuing ‘net zero’ targets.

Yet, despite the business interest and need for regeneration and net positive strategies in practice (Polman & Winston, 2021) little is still know about positive examples and how to pursue them. In this study we specifically focus on sustainable, regenerative business models which provide a holistic concept about the way business may be done (Stubbs & Cocklin, 2008). We define regenerative business models as follows:

“Regenerative business models focus on planetary health and societal wellbeing. They create and deliver value at multiple stakeholder levels—including nature, societies, customers, suppliers and partners, shareholders and investors, and employees—through activities promoting regenerative leadership, co-creative partnerships with nature, and justice and fairness. Capturing value through multi-capital accounting, they aim for a net positive impact across all stakeholder levels. (They) recognize that nature is an irreplaceable foundation of human health and wellbeing, that human societies are deeply embedded in the biosphere, and that they depend on the health of the biosphere for their own health” (Konietzko et al., In press, p. 9)

To encourage businesses to experiment towards and adopt regenerative business models, the goal was to develop an openly accessible database of regenerative business model examples that have been adopted in practice. This database can then be used as an inspiration tool to foster further business model experimentation towards business ideas that don’t just stop at doing less harm to nature, and instead actively regenerate it. This idea emerged because of other open databases that are popularly used by business (e.g., the Business for Sufficiency database; Niessen & Bocken, 2022). A curated database would have the purpose of collating innovative examples and their characteristics, in an easy to navigate manner.

The regenerative business model database was developed as follows: an iterative literature and practice search of regenerative business model examples was conducted. This was based on academic literature, and databases Scopus and Google Scholar, using a combination of keyword strings such as: “regeneration”, “regenerative business models”, “business OR company OR firm OR enterprise”. In addition, a practice search was conducted of grey literature with the same keywords in Google. Business case examples found on the first page of each search query were included. Circular economy and regeneration websites, and blogs were also scanned. In particular, the Greenbiz business news channel was used, as a source of quality examples of sustainable business in practice. The Ellen MacArthur Foundation was used to identify companies committed to circular economy and scan for regeneration examples. Some examples were also added through snowball sampling. The primary inclusion criteria were that the business must identify themselves or their business practices as being ‘regenerative’, and must mention this in their website communications. The examples were then checked for concreteness of claims and then classified according to the types of regeneration more broadly (societal or natural) as well as the elements of the business model: the value proposition, value creation and delivery, and value capture mechanisms (e.g., Bocken et al., 2014; Richardson, 2008). For each example, the sources were retained in the database so that others (e.g., business, academia) may be able to trace the examples online. Where possible, the impact of the regeneration initiative was captured, but this information to date is still quite limited because of the limited knowledge about this new area of work.

This study presents the initial version of the curated regenerative business model database. Typical sectors for regeneration to date, such as agriculture and the built environment, are discussed. Future research may include longitudinal studies, studies which measure and trace the regeneration activities and impact of companies, as well as action-oriented research to support business in their transition to a regenerative business model.

Keywords 

Circular Economy; Regenerative business; Nature regeneration; Societal regeneration; Circular business experimentation.

References 

Allwood, J. M. (2014). Squaring the circular economy: the role of recycling within a hierarchy of material management strategies. In Handbook of recycling (pp. 445-477). Elsevier.

Bocken, N., & Geradts, T. (2022). Designing Your Circular Business Model. Stanford Social Innovation Review, 20(2), 34-39.

Bocken, N. M., Ritala, P., & Huotari, P. (2017). The circular economy: exploring the introduction of the concept among S&P 500 firms. Journal of Industrial Ecology, 21(3), 487-490.

Bocken, N. M., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of cleaner production, 65, 42-56.

Brown, P., Bocken, N., & Balkenende, R. (2020). How do companies collaborate for circular oriented innovation?. Sustainability, 12(4), 1648.

Ellen MacArthur Foundation. (2013). Towards the circular economy – economic and business rationale for an accelerated transition. Available from: https://www.ellenmacarthurfoundation.org/assets/downloads/publications/Ellen-MacArthur-Foundation-Towards-the-Circular-Economy-vol.1.pdf [Accessed 17th January 2023]. 

Konietzko, J., Bocken, N., & Hultink, E. J. (2020). A tool to analyze, ideate and develop circular innovation ecosystems. Sustainability, 12(1), 417.

Konietzko, J., Das, A., Bocken, N. (In press). Towards regenerative business models: a necessary shift? Sustainable Consumption and Production.

Niessen, L., Bocken, N. (2022) A Sufficiency Business Database as a Tool to Drive Sustainable Business Models. 7th International Conference on New Business Models, 22-24 June, Rome, Italy

Polman, P., & Winston, A. (2021). Net positive: How courageous companies thrive by giving more than they take. Harvard Business Press.

Richardson, J. (2008). The business model: an integrative framework for strategy execution. Strategic Change, 17 (5–6), 133-144

Stubbs, W., & Cocklin, C. (2008). Conceptualizing a “sustainability business model”. Organization & environment, 21(2), 103-127.