Does the Circular Business Model Still Make Sense in Different Industries?

The circular business model has been touted in recent years as a possible solution to the negative impact that certain business practices have on the environment. Yet, with doubts being raised over how effective it really is, what are the key factors to take into account?

What Is the Circular Economy?

The traditional business model works in a linear way, with materials being extracted and used to create a product or service that is discarded after it fulfils its purposes. With the circular economy, little or no waste is generated as products are designed reused rather than thrown away.

A description of the circular economy by the Ellen MacArthur Foundation points out that the three key principles of this process are: to eliminate waste and pollution, to circulate products and materials, and to regenerate nature. Examples on this site include edible food wrapping and a marketplace for second-hand clothing.

A business course being run by the Cambridge Judge Business School titled Circular Economy and Sustainability Strategies runs online for six weeks from December 12. They point out that there’s a “growing business case” for more sustainable ways of working and that over 50% of consumers are now more concerned with the sustainability of the businesses they use than they were a year ago.

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The Joint Initiative on Circular Economy to provide €16 billion to circular projects by 2025

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Where Is Working Well?

This research into what makes the circular model fail suggests that roadblocks such as cultural barriers, technical barriers, economic barriers, and regulatory barriers are the biggest risks. Each of these issues can ruin even the most impressive-sounding project. Some sceptics also suggest that the idea will be met with resistance from companies whose self-interests are better served by the linear economy with more waste leading to more sales.

However, there have been many success stories across Europe, such as the details collected from the Sustainable Synergies project. Covering a range of projects across Denmark, they include details such as how the Dansk Retursystem works, with this system of deposits and returns helping them reach a 93% return rate on disposable packing. In addition, The Circle House in the Danish city of Aarhus is a fine example of circular construction, with 90% of the materials suitable for resale after use without losing value.

In Sweden, the furniture giant Ikea opened its first second-hand store in Eskilstuna, as they attempted to get on track for their corporate climate targets. This runs alongside their buy-back program where customers can sell their unwanted furniture back to the store instead of disposing of it. A variety of schemes have started in other countries, such as Romania. Here, the International Finance Corporation is promoting circular economy strategies including advice and support to help drive sustainable economic growth in the country.

What Other Ways of Being Sustainable Are Working Well in Entertainment?

The move to online forms of entertainment has helped raise sustainability in certain areas too, as it introduces energy-saving measures and cuts down on the transport needed for customers to get to the cinema, theatre, or any other place where the entertainment is traditionally consumed in a live setting.

The thriving online casino market can be seen in this list of sites that offer free spins with no deposit needed. The competitive nature of this market can be seen with offers such as 100 free spins from MadCasino and Luck. This is a way of attracting new players to try games including roulette and slots from home or wherever they are, without making a cash deposit first.

Netflix has set a self-imposed target of having net zero emissions from 2022 onwards, as part of their Sustainability Strategy that’s built on the three pillars of Reduce, Retain, and Remove Carbon. They’ll be investing in carbon credit programs as part of this approach, as well as making the switch to 100% renewable electricity.

Traditionally, the movie business has been one of the industries with a poor record in sustainability, but things are changing now. The European Film Academy is dedicated to making the industry more sustainable and launched the European Sustainability Award – Prix Film4Climate, which is an award for a company or film that highlights sustainability. This prize was accepted in 2022 by Ursula von der Leyen on behalf of the European Commission.

The circular economy has been proven to work in numerous industries despite some challenges, but it’s also far from the only way of being more sustainable that European businesses should take into account.