To implement circular practices in your business, it is important to understand where your opportunities and limitations on this journey lie. To integrate circular economy practices holistically, all areas of your business will be affected and touched. Not only technical aspects are important, also the way your employees will be educated and trained about the topic. Map out all the different departments and people within your business (they are all internal stakeholders in this process). Once you have them all listed, think about what backgrounds and skills they already bring to the table. Where can you already build on existing potential and where will you need to raise awareness and provide training? Which people can take over responsibilities related to the implementation of circularity? Map out the different stages of your value chain. How do you provide products and services to your customers? Which materials are used? Who are your key suppliers? How do you reach your customers? What happens with your products once they get disposed? All this can be valuable starting points for developing circular strategies. Map out all activities that you are already doing in regards to more environmentally friendly and maybe even circular approaches. Where do you see yourself on this journey so far? Where do you see opportunities and where might there be barriers to implementing circular economy practices in your business?
EXTERNALLY
The road towards circularity highly depends on industry innovation and cooperation between business partners. In order to identify circular opportunities for your business, it is important to understand your external business environment. You need to know the world around your business. Map out all the different partners and people involved in your business operations outside your own company. Who are your customers? Who are your suppliers? Who distributes your products? Who disposes of your products once they cannot be used anymore? Which other entities have an impact on how your business is doing (for example government policy, media, local universities…) Think about how all these different external agents can play a role in facilitating your transition towards circular practices. Ormazabal (2020) gives the following overview of external stakeholders that can play a part in realizing a circular economy in its various fields of action:
| Field of Action | Stakeholders | Transversal Stakeholders |
| Take | Providers | Universities & Research Centers |
| Competitors | Investors and organizational leaders | Governments |
| Make | Universities & Research Centers | Governments |
| Design Schools | Standard Organizations such as BSI, AENOR, etc. | Industrial and commercial associations |
| Distribute | Logistics providers | Industrial and commercial associations |
| Use | Buyers | |
| Consumers and end-users | ||
| Used second-hand users | ||
| Clustered customers | ||
| The “responsible organization of the product” | ||
| Recover | Waste manager | Landfill managers |
[Table source: “Table 2.2 Identified Stakeholders by Field of Action”, in Ormazabal: Guiding SMEs towards the Circular Economy A Case Study (2020)] Map out trends you see for your industry. What are new technological developments and advancements? Are there certain regulatory changes underway? How are your customers developing in their needs and desires? What are your competitors doing? Are there industry best practices from your sector that provide insights into how circularity can be relevant for your business? Especially micro and small enterprises often lack knowledge and workforce to approach changes towards more environmentally friendly and circular practices. Research if there are already existing industry networks or associations that are concerned with environmental management and/or circular economy that you can connect to.
- Provide knowledge and training to your employees in order to develop a mindset and culture in support of sustainable business practices.
- Pay attention to sustainability-related skills and mindset when you hire new people for your business in order to foster a culture around sustainability.
- Think of ways to integrate sustainability-related aspects into reward systems of your business to create further incentives for circular transformation.
When you analyse your business with the aim to implement more sustainable and circular practices, it is important to understand the impacts your company has in the different stages of the value chain along with your product life cycle. The life cycle of a product entails everything from design, material sourcing, production, use phase and finally what happens to a product at its end-of-life stage. We are talking in more detail about the different life cycle stages related to the textile industry as one example here. Also, you can also find out more about the potential environmental or social impacts of businesses.
Whereas in a linear “take – make – waste” model the end-of-life stage mostly means the disposal of products, in a circular life cycle the end-of-life stage of a product opens up to multiple opportunities for product life prolongation (in sharing models) and resource collection, recovery, recycling or remanufacturing leading to circular input streams.
In order to better understand all the levers you have in regards to circularity, it is important that you map out all the impacts and processes related to your production along the life cycle. This needs to include also stages not directly related to your business operations, such as the supply chain of your material inputs, the use phase of the product and the end-of-life stage of your product in order to get a holistic and systemic view of the impacts your business and products have. Also, pay attention to all the by-products related to your business operations, such as e.g., energy, water, emissions and waste. They can be valuable sources for commercial partnerships or internal regeneration processes. Besides potential cost reduction through efficiency gains, in circular economy opportunities also lie in the discovery of new income streams. These can e.g., be achieved through selling waste products or by renting out unused spaces or transportation capacities. This will depend on the specific situation and processes of your business. However, before thinking about these new opportunities, analyse what is currently happening in your business. So, when measuring and analysing your value chain and operations think beyond only financial indicators and see what else you can measure such as e.g., amounts of waste materials, energy consumption, water usage, amount of recycled materials, etc.
If you have the capabilities, consider doing life cycle assessments for certain products or product ranges to get a deeper understanding.
As you can better manage what you can measure in your business operations, it is important to generate a sound data basis to work with. To establish circular opportunities, you need to make visible and measure all the material streams involved in your business model. What are your resource inputs and what are your outputs? Which by-products do accumulate throughout your production processes and how are they managed currently? Take a closer look at your production materials – how much do you need? Might there be a way to be more efficient with material input? Are there potential substitutes from renewable or recycled materials you could test out in your production? Are there material innovations happening in your industry currently that you can investigate?
Take into account not only a short term but also a long-term perspective and consider the long haul. When analysing potential circular opportunities make sure not to overlook long-term wins that might not become transparent from a first short-term evaluation.
Financial Aid / Funding Opportunities
The transition towards a circular economy is already anchored in national strategies and EU action plans. Therefore, you might find funding opportunities that will support your journey towards circularity on regional, national and EU levels. It will be worth researching these opportunities. To start, we put together an overview of different programs here.
Industry networks / associations
The transition towards a circular economy will need the collaboration of many different stakeholders along value chains. To get support and find like-minded partners will benefit your development towards the circular economy. Here you can find lists of initiatives and projects on national and EU level as well as on a more regional and national level. This can be a good starting point to connect to relevant networks and projects, however, you should also research what is going on in your regional environment in regard to the circular economy.
Innovations and technological developments
Research which innovations are currently researched and implemented in your industry. Are there cutting-edge technologies that companies are already using? Do you see innovative technologies that could be transferred to your industry? Even if at this point technology is not perfect yet or too costly to implement for you at the moment, it will benefit you to stay informed and know which potentials are out there to be considered in the medium- to long term.
When looking for circular opportunities do not limit yourself to rethinking existing processes of your business. How products and services are designed, is a key impact factor for circularity. Here, also pay attention to material inputs, both in terms of the material properties themselves as well as where they can come from. It is important to also think about how products can be redesigned at their core to be more circular or redesigned towards a service model. You can have a look at the different circular business models again to get ideas on how these could be considered in your own business context. When it comes to rethinking product and business model design, networks and partnerships can be of great value so think how partners could be involved in making your business more circular.
Saarinen(2021) clustered available implementation methods for circular economy along circular economy fields of action, which can give you a good overview and ideas, as follows:
| CE value chain stages / fields of action | Example implementation methods |
| Take 1. Material Sourcing | Life Cycle Assessment & Supplier AuditsUse of renewable energySourcing of sustainable materials |
| Make 2. Design 3. Manufacturing | SDS & Eco-Innovation: e.g. DfR, etc.Product/Service Customization Increasing energy efficiency & material productivityReproducible & Adaptable Manufacturing |
| Distribute & Use 4. Distribution and sales 5. Consumption and use | Optimized package design Sustainable logistic systemProduct as a service and PSSRe-sell and redistribute |
| Recover 6. Collection and disposal 7. Recycle and recovery | WTEBuilding “take back” systemsRecirculation of materialsUtilizing by-productsDowncycling |
| Industrial Symbiosis 8. Remanufacture 9. Circular Inputs | Sharing infrastructureUtilizing by-products / waste streams of othersCreating joint value |
[Table source: “Table 1. Summary of available implementation methods based on existing CE literature”, in Saarinen: Implementation of CE Projects Expectations Opportunities and Impediments in Finnish MSMEs (2021)]
Once you have identified a list of possible actions you can take, these should be evaluated regarding their expected benefits. You will need this in order to make a prioritization of the different actions in your action plan.
Hereby, of course financial aspects will be important. Ways these can be generated are e.g., “cost reduction through resource efficiency, increased competitive advantage and a possibility to expand to new markets” (Saarinen, 2021[17] ).
Next to obvious financial benefits, you should also consider further positive implications your actions can have. These could for example include stronger customer relationships or the increase of prestige and image from a higher environmental performance. With a circular economy approach, do not only look for cost reduction but also think about opportunities to generate new revenue streams, e.g., through selling of waste products.
Here, you should always consider the short-, medium-, and long-term horizon as some benefits might not show within a short period of time but really have an impact in the long term. You could consider dividing your action plan into “quick-wins” and “longer-term ideas” when you prioritize your next steps.
In accordance with your resources (financial, human, knowledge, etc.) decide which actions you want to tackle first. You do not need to implement everything all at once. This transition will be an ongoing process and you can grow from it if you stay in for the long haul.
In order to keep morale high and convince people from inside and outside the organization, try to start-off with implementing some quick wins from your action plan. These can help you to gain support for more long-term projects afterwards.
Once you chose the actions which you want to implement with your business, make sure to assign responsibilities for the tasks that need to be accomplished. Who are the people that are affected by the measures and who needs to be on board? Who has the required experience? Make sure to have an open and ongoing communication with your employees and all the people involved.
Map out the action and the changes it will create in different steps of the value chain of your offering and how it might impact other parts of your business and/or maybe enable other circular actions. Also, examine the financial viability of your action and look for indicators that can help you to show the financial impacts and gains of implementing that action.
It is important to measure your development and the effects of your actions. You can measure success in the following areas (Laubscher & Marinelle, 2014):
- Ecological impact (e.g., CO2 or material footprint; recycling rates…).
- Direct financial value through recovery of materials and assets.
- Top-line growth through new business models (e.g., you can enrich your value proposition to your customers, e.g., through additional services over the product lifetime).
Through evaluating your actions continuously, you will be able to adjust actions if necessary and to track your progress towards circularity. Analyse your evaluation and adjust your actions accordingly as you continuously approach new next steps and actions on your journey towards circularity.