Exploring the Diversity of Circular Business Models: Towards a Classifier-Centric Model
In integrating different circular economy principles in their business model, companies implement a diverse array of strategic initiatives, resulting in a multitude of circular business models (CBMs). Academic research has sought to classify these models, developing various typologies and taxonomies, instrumental for theorisation and creating mid-level theories. This article conducts a critical review of academic research and identifies 32 distinct CBM classification schemas and 241 CBM classes. Our analysis reveals three common shortcomings impeding robust and effective classifications: (1) the use of unclear classification criteria, (2) the use of commonly used CBM terms with significant variations in meaning, (3) the inaccurate use of the terms 'taxonomy', 'typology' and other related terms blurring their distinctions. In addition, we contribute by providing a glossary with the 15 more frequent CBM terms, together with their definitions and relevant remarks, enhancing a shared understanding within the academic discourse. Finally, we propose a flexible classifier-centric model with 16 classification criteria allowing for the construction of different classification schemas depending on the classifier’s aim. This article contributes to enhance the clarity, coherence, and applicability of CBM classifications and classes, ultimately facilitating a more comprehensive understanding of CBMs benefiting both research and practice, and proposing further research avenues.
Circular business model innovation: Uncovering practices and patterns through the review of 63 cases
Transitioning to a circular economy offers an alternative to the current linear model. Research on circular business models is growing but remains at a nascent stage, leaving a gap in understanding how individual firms transition towards circularity. Using a business model innovation perspective, this article analyses how firms adopt circular economy practices and their interrelations, introducing a three-step process to analyse circular business model innovation (CBMI). From a sample of 63 cases, we identify 46 managerial practices in the three value dimensions of a business model, aimed at maximizing resource value retention. Our study proposes five CBMI patterns, consisting of combinations of practices to reshape one or more dimensions of a business model integrating circular principles. By integrating theoretical insights with practical observations, this study contributes by proposing a comprehensive three-step approach to analyse CBMI, and providing practices and actionable patterns for the successful transition to circular business models.
Circular Economy in the USA: A mapping of circular economy strategies and their financial impact
The necessity of limiting firms' environmental impacts has driven the adoption of circular economy models. Despite its importance, there is no clear mapping of the circular strategies used by companies and their financial impacts on firm value. Analysing over 2,000 ESG reports from 2007 to 2020, we identify these strategies and their effect on firm value. We show a growing emphasis on the circular economy, and a prominence of specific circular strategies, particularly recycling, reducing, and reusing. We further find that disclosing these strategies generally decreases firm value. However, when disaggregating the umbrella concept of the circular economy, differences emerge. Long-loop strategies increase value, medium-loop strategies decrease it, and short-loop strategies have no significant effect. We also show that the impact of circular economy strategies is stronger after the Paris Agreement, and for firms in Democratic states. Overall, this study offers the first comprehensive mapping of U.S. circular strategies and their financial materiality.