Business models of the circular economy
A lot of people often think that an enterprise operating on circular principles isn’t financially sustainable in the long run. They couldn’t be more wrong. With the right tools and resources, any organization can be achieve both environmental and economic goals. To help out creative entrepreneurs, here are five of the most common business models of the circular economy:
You’re probably most readily familiar with this business model. In fact, it builds upon a form of financial and social empowerment of humanity since time immemorial. Today, ventures such as carpool, lodging, and crowdfunding apps encourage renting, selling, sharing, and reuse of resources. Dahlberg reports industry revenues to be about $30 billion yearly, and it’s even expected to grow by as much as 30% in the near future.
Product as Service
As the world becomes more service-oriented, this concept allows enterprises to sell services or benefits, with the product acting as a mere instrument for the transaction. This means that your customers would be enjoying enhanced support and less upfront costs. Solar panels, which are an efficient source of renewable energy, are usually bought in this manner. According to Statista, the global solar industry is expected to reach $422 billion in 2022.
People often fall into the trap of buying new things instead of reusing or repairing them. This model gives these consumers an opportunity to repair their products for multiple uses. Remanufacturers and refurbishers of second-hand items, both of which go against the harmful trend of planned obsolescence, fall under this category. PR Newswire estimates that global automotive parts remanufacturing alone amounts to a $33 billion industry.
This model invests in creating products out of recyclable and biodegrable materials in the true spirit of eco-design. Altum belongs to this category, of course! In a global survey conducted by DODGE Data & Analytics, almost half of businesses see themselves investing heavily in green building projects by 2021.
Last but not the least, this facilitates more effective recycling by tapping into side-streams as valuable raw materials. Sophisticated waste management facilities are equipped with the necessary machinery to turn waste into valuable resource! The European Commission underscored the value of resource efficiency in opening new markets, increasing competitiveness, and bringing more opportunities.