Identifying potential drivers to implement circular business models in the sun shading industry

Zuzana Prochazkova^1,*, Jordi Roviras Miñana¹, Carmen Jaca², Nancy M. P. Bocken³

¹1Universitat Internacional de Catalunya, Barcelona, School of Architecture; ²University of Navarra, TECNUN School of Engineering; ³Maastricht Sustainability Institute, School of Business and Economics, Maastricht University

*[email protected]

Introduction

The construction sector is responsible for a large proportion of human-induced environmental impacts (Achell and Pérez, 2019;  European Commission, 2020). The embodied and operational carbon footprint of the buildings, resource efficiency and waste across the value chain have to be tackled (European Commission, 2020; Eberhardt et al., 2020; Gorecki, 2019). Circular business models may provide an efficient mechanism to achieve a more sustainable built environment (ARUP & Ellen MacArthur Foundation, 2020; Leising et al., 2018; Nußholz et al., 2020; Yang et al., 2018).

One of the success factors for the circular economy and circular business models specifically, is collaboration (Brown et al., 2019; Leising et al., 2018). Value chain engagement, new business models, long term relationships and partnerships and systems thinking were some of the main enablers of the circular economy identified by Hart et al. (2019). Yang et al. (2018) pointed out that (evidently) a circular value chain cannot be achieved by a single firm alone. Nußholz et al. (2020) add that circular business models in the building sector involve a range of stakeholders, starting with value chain partners. Value chain integration was identified as one of the key requirements to improve competitiveness against linear business models. Leising, Quist and Bocken (2018) add the importance of supply chain collaboration in the built environment for all life cycle phases.

This research focuses on the mobile sun shading systems. They are important enablers of energy efficiency in buildings. By being mobile, they are adaptive to the changing conditions in heating and cooling periods (Ballarini et al., 2019; Carletti et al., 2014) and can constitute an important part of the building energy management system (de Luca et al., 2019).

Purpose and scope

This paper is focused on analysing collaboration across the value chain of mobile sun shading systems - elements integrated in the façade of buildings at the interior or exterior of the windows with the main function to provide shade. The hypothesis is that the mobile sun shading systems can largely benefit from circular business models, in which the producer retains the ownership of the product. That is important not only for closing the loops at the end of life as per the post-consumer closed loop (Schenkel et al., 2015; Wells & Seitz, 2005) but also in the use/ operational phase of the product, when maintenance, repair and component replacement are needed. In the case of complex products that include mechanical parts, such as motors in the mobile sun shading systems, circular business models are considered to have even greater importance. The results will provide guidelines to design circular business models for sun shading systems, extendible to other complex construction products.

Method

Two producers of solar shading systems with interest in circular economy were identified for this study, one in Spain and one in the Netherlands. After the initial interviews, strategically important stakeholders in the value chain were identified by the producers. In the Spanish case, one of the largest providers of motors and smart home solutions for solar shading is considered on the supplier side, and an installation company with more than 30 years of experience as the client. In the Dutch case, a provider of innovative textiles for shading blinds was interviewed on the supplier side, and a distribution company forming part of the largest Dutch sun shading network on the client side. Additionally, a provider of sustainable technologies was interviewed for the Dutch case. In total, 7 companies were interviewed.

Despite significant interest in the building sector, no articles dedicated to implementation of circular business models in the sun shading industry have been identified as a specific value chain of interest. Hence, grounded theory (Glaser and Strauss, 1967) was used to obtain qualitative data about the value chains of two sun shading producers. The aim is to understand their current business models and determine their potential to adopt circular business models, in particular product-as-service, reverse logistics and product lifecycle extension. The company representatives were asked to fill in questionnaires including tables dedicated to the business model canvas (Tiemann and Fichter, 2016), and then interviewed using semi-structured interviews. Interview data were organized using NVivo to identify the most important drivers and barriers in the adoption of the circular business models in the sun shading industry. 

Findings

This study identified drivers to circular business model implementation. The main factor identified is the involvement of value chain actors along the complete life cycle of the product, while other important drivers are enforcement by legislation and a potential to upgrade the product.

The main success factor for circular business model implementation identified is the involvement of the main value chain actors across the complete life cycle of the product. This can happen in two typical ways: (1) a company provides all the services related to the product, such as installation, maintenance, repair, end-of-life recovery, (2) collaboration and even contractual relationships appear between the companies throughout the value chain. The interviewed companies prefer to collaborate like in option two.

The legislative push for circular economy implementation was mentioned multiple times, on the example of the new European regulation concerning eco-design and packaging. On the other hand, the customers do not seem to be concerned with the circularity or resource efficiency. There were exceptions when companies discussed piloting projects for certain circular strategies, but these were exceptions. The clients, representing the demand side of the value chain, cannot currently be considered as a driver.

Furthermore, opportunities were identified when considering resource efficiency strategies. While reuse was not considered a feasible strategy, given that the dimensions of the shading systems are not standard and they need to coincide with the building openings, a product upgrade seems to have potential. Some of the system components could be replaced, for example with new colours or patterns, to tackle situations like change of owners or cultural obsolescence. In this case, a continuous relationship between the producer and the user needs to be established, supporting the first finding described above. 

Future work will include guidelines for development of more specific circular business models for sun shading, based on the insights gained in this study.

Keywords 

Circular business models, Supply chain collaboration, Sun shading systems, Circular value chain, Built environment 

References 

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