Do circular economy business models capture intended environmental value propositions?

Abstract

The circular economy (CE) can be a driver for sustainability and CE can be promoted and supported by the creation of new and innovative business models, which embed CE principles into their value propositions throughout the value chains. This study focuses on the environmental value propositions of the CE business models. The term environmental value proposition refers here to an absolute value being a promise of environmental improvement, which a company provides to the environment by its impacts throughout the whole value chain. The aim of this study is to outline a framework for evaluating the environmental value propositions of CE business models. The framework consists of an environmental value propositions table (EVPT) and a step-by-step approach towards an evaluation process. The framework was tested in three CE business model cases. The outlined framework enables a better understanding of circular economy principles, combining them with the environmental value proposition. With the framework, companies can plan and design new CE business models or they can verify intended environmental benefits and analyse their contribution to sustainability. The biggest challenges, when applying the framework, were related to the estimation of environmental benefits gained from the environmental value propositions at the system level. In the future, intensive scientific work should concentrate on developing environmental assessment methods specifically for companies developing new CE business models.

Investigating the Current Business Model Innovation Trends in the Biotechnology Industry

“…On the other hand, business models can only function efficiently if they apply circular features. Manninen et al (2017) support this statement and claim that the recent academic activity shows an increasing interest towards circular business model development. However, they also find that this unilateral focus leaves a gap in the literature for the assessment of such models.…”

“…The second most intense group was the "Value Proposition" by featuring 6 ReSOLVE components. This aspect is the most essential regarding circular businesses because it gives the purpose of a firm (Manninen et al, 2017). The rest is rather a collection of mechanisms around that value.…”

Designing business models in circular economy: A systematic literature review and research agenda

“…For example, circular business models' design requires the involvement and interaction of a high number of actors for value creation. Therefore, scholars should investigate how companies' partnerships influence the creation of value in a circular business model (Manninen et al, ). In other words, we call on management scholars to explore the existence of new approaches of stakeholders' involvement and management in circular business models initiatives and projects (Leipold & Petit‐Boix, ).…”

Circular economy in corporate sustainability strategies: A review of corporate sustainability reports in the fast‐moving consumer goods sector

“…Geissdoerfer, Savaget, Bocken, and Hultink (2017) suggest a typology of relationships between CE and sustainability to illustrate the variety of views: a conditional relationship means that CE is considered as a condition for reaching sustainability; a beneficial relationship means that CE is considered as one way, among others, to progress toward sustainability; and a trade-off relationship means that CE is considered to lead to sustainability trade-offs (both benefits and negative outcomes). There are academic efforts to conceptually link circular business models and environmental value creation (Manninen et al, 2018). Nevertheless, scholars emphasize the need for methods to assess the environmental, social and economic sustainability performance of circular products and business models (Bocken, de Pauw, Bakker, & van der Grinten, 2016;Elia, Gnoni, & Tornese, 2017;Pauliuk, 2018) and a lack of circularity indicators at the microlevel (Linder, Sarasini, & van Loon, 2017).…”