Explore

S5V3

Top 10 Unique and Helpful Insights (with Fitting Emojis):

♻️ What is the circular economy? A sustainable economic model replacing "take-make-waste" with reducing, reusing, and recycling resources, creating a continuous loop of materials.

🪞 How does the circular economy differ from the linear model? In a circular economy, waste becomes a resource, extending material use and regenerating natural systems, unlike the linear economy that ends in disposal.

🛠️ What are the three principles of circularity? Eliminate waste, circulate materials, and regenerate natural systems—designing processes and products to ensure sustainability.

🦋 What’s the butterfly diagram? A visual representation of two loops: biological cycles (biodegradable materials regenerate nature) and technical cycles (reuse, remanufacture, recycle products).

🏡 How does IKEA embrace circularity? IKEA’s 2030 vision focuses on renewable materials, reusable product designs, electric delivery fleets, and green energy use, creating a fully circular system.

💡 How does circularity enhance product design? Products are designed for longevity—disassembled, repaired, and reused—minimizing waste while maximizing lifecycle efficiency.

🌍 What levels can circularity operate on? Circularity happens at the product, company, and economy-wide levels, fostering innovation through partnerships and industrial symbiosis.

🔄 What are innovative approaches to circularity? Reconditioning, remaking, circular sourcing, co-product recovery, access-based usage, performance guarantees, and resource recovery lead the charge.

🌱 How does circularity regenerate natural systems? Practices like soil restoration, biodiversity increases, and resource replenishment ensure that nature thrives alongside economic activity.

🚗 How do shared and performance-based models reduce waste? Car-sharing and "Pay per Lux" models show how access and performance guarantees replace ownership, cutting material needs and waste.

⁠

Key Stories, Symbols, and Archetypes:

The Infinite Loop (♻️): Picture materials endlessly circulating instead of heading to landfills, symbolizing the circular economy’s potential to sustain resources forever.

The Butterfly Effect (🦋): The butterfly diagram highlights how small shifts—like reusing a bottle or repairing a device—create ripples of positive environmental impact.

The IKEA Blueprint (📐): A modular table or electric truck at IKEA symbolizes the shift from disposable products to long-lasting, regenerative systems.

The Regenerative Garden (🌱): Just as a garden regenerates through composting and natural cycles, a circular economy rebuilds and sustains ecosystems.

The Repair Café (🔧): A place where broken products gain new life, embodying the circular spirit of mending, remaking, and minimizing waste.

These metaphors and stories breathe life into the core ideas of the circular economy, making them vivid and memorable.

⁠

How can organizations build a sustainable business model, and how can they ensure that their sustainability and responsible efforts are incorporated into their business model? In this video, we are looking at the term "circular economy" and examining how it is defined and how to include this idea in sustainable business models.

First, let's look at today's learning objectives. We want to:

Understand the fundamental concepts of the circular economy, including material circulation and the regeneration of natural systems.

Explore how circular product designs can extend product life cycles and reduce the need for new resources.

Identify key stages for implementing circular business models, from design to resource recovery.

Let's take a look at an example of how a circular logic in a firm could work. Consider IKEA. The important starting point is a vision. IKEA states that it aims to switch to 100% renewable and recycled materials by the year 2030. How do they plan to do this? They have outlined a pathway.

First, they want to design their products and processes so that the furniture they sell can be reused, repaired, or recycled. This has implications for the design and for the whole processes at IKEA. If you design products that can be reused, it means they can be disassembled and assembled again, transported easily, and repaired. You need spare parts and materials that can be recycled. During the sales process, they decided to use wind and solar energy exclusively to run IKEA stores. They also provide customers with the opportunity to return their furniture, encouraging reuse and recycling by IKEA itself.

They want to have a delivery fleet where you can buy furniture online, and this fleet should be 100% electric by 2025. Combined with the idea of only using wind and solar energy, the consumption of energy for these electric vehicles will be 100% emission-free during delivery. This is the idea of generating a fully circular business model using fewer materials during design, sales, and production, and also later at the end of the product life cycle.

What does the circular idea that IKEA is following really mean? To better understand it, we must first think about the linear economy as we know it today. A linear economy involves different phases: extraction of resources, production, distribution, use of the product, and disposal at the end. This is the currently predominant "take-make-waste" approach, where we take something and throw it away at the end. Natural resources are extracted and converted into waste through production and consumption, harming the environment by removing natural capital and creating pollution.

In contrast, a circular economy still starts with raw materials, but then we design the product, produce or remanufacture it, distribute it, consume it, use it, reuse it, or repair it, and then collect it and recycle or recover it. Instead of going from start to finish in a straight line, we use raw materials in a loop. Waste in a circular economy becomes a valuable resource. It's about eliminating or minimizing disposal by reusing, recycling, or recovering resources.

A more formal definition states that a circular economy describes an economic system based on business models that replace the end-of-life concept with reducing, reusing, recycling, and recovering materials in production, distribution, and consumption processes, aiming to achieve sustainable development. This implies creating environmental quality, economic prosperity, and social equity for current and future generations.

As we've seen, we don't design things just to minimize costs without considering lifespan, usage phases, and how much energy or resources are used. We don't simply dispose of everything at the end. Instead, we design in a way that products and their materials can be reused or recycled, or at least have their energy recovered. This can work at the product level, or at the level of a single company, or involve partners. For example, IKEA relies on partners providing green energy. There can be industrial symbiosis with other partners in an ecosystem, regionally or even internationally.

We have different levels at which circularity can occur: at the product level, at the economy-wide or meso-level across industries, or the entire economy combining different sectors. In a circular economy, there are three core principles:

Eliminate waste and pollution: By design, get rid of waste wherever possible. This requires innovation and rethinking the entire product and supply chain.

Circulate products and materials: Keep resources in use by reusing, remanufacturing, and recycling so that we don't need additional new raw materials.

Regenerate natural systems: Build natural capital by using practices that allow nature to rebuild soils, increase biodiversity, and restore resources taken from it.

A famous depiction of this is the butterfly diagram, which shows two cycles. On one side is a biological cycle with biodegradable materials returned to the Earth to regenerate nature. On the other side is a technical cycle, where products and materials are kept in circulation through reuse, repair, remanufacture, and recycling. The key question is how to design business models, products, and organizational logic so that material and resource flow follow this butterfly diagram.

We need improvement and innovation. There are seven approaches we can use during production, usage, and the end-of-use cycle to achieve a truly circular business model:

Recondition: Fixing faults or aesthetic issues of a product without a new warranty. For example, repair shops, Patagonia, or "iFixit."

Remake: Using manufacturing steps at the end of a product's life to return it to a like-new or better performance level, often with a warranty. For example, "As Good As New" or Apple refurbishing programs.

Circular sourcing: Using recycled or renewable materials that remain in or return to either the technical or biological cycle. Examples include recycling plastic bottles or Adidas and Parley for the Oceans.

Co-product recovery: Using residuals or byproducts from one production process as input for another, reducing waste across the whole economy.

Switching from production to product use, we have:

Access: Providing end users with access to functionality instead of ownership. For example, car-sharing services like Share Now.

Performance: Guaranteeing a certain outcome or level of performance as a product-service bundle. For example, Philips "Pay per Lux," where customers pay for the amount of light used.

Finally, at the end of the product cycle:

Resource recovery: Incorporating materials or products at the end of their cycle into different products or using them as feedstock inputs for other processes or value chains. For example, the recycling company Remondis.

In summary, with a growing population and material footprint, resources are becoming scarce, and the prevalent linear model ("take-make-waste") must be replaced to truly be sustainable. We introduced the circular economy approach as an alternative view, where waste becomes a valuable resource and end-of-life is replaced by reuse and recycling. Products and processes are designed to eliminate or minimize disposal.

We covered the three core principles of circular economy: eliminating waste and pollution, circulating materials and products, and regenerating natural systems. We also discussed how organizations can change their business models along the stages of design, production, use, and end-of-cycle to transform into circular business models.

Thank you very much for watching.

transcript

how can organizations build asustainable business model and how canthey make sure that their sustainabilityand responsible efforts are incorporatein their business model in this video weare looking at the term of circulareconomy and having a deeper look at howcircular economy will be defined andwhat are ways to include this idea intosustainable business models but first ofall let's have a look at our today'slearning objectives we want tounderstand the fundamental concepts ofthe circular economyincluding material circulation and theRegeneration of natural systems in asecond step we want to explore howcircular product designs can extend theproduct life cycles and reduce the needfor new resources and in the last stepwe want to identify the key stages forimplementing circular business modelsfrom the design to resource recoverylet's take a look at an example how sucha circular logic in a firm could looklike and here we want to takeuh look atIkea the important starting point hereis a vision and uh Ikea states that ithas the vision to switch to 100%renewable and recycled materials by theyear2030 and how to do this they haveoutlined a pathway first they want todesign uh their uh products andprocesses in a way that the furniturethat they sell can be reused repaired orrecycled so that this has implicationsfor the design but also for the wholeprocesses at Ikea if you design Pro uhproducts that they can be reused thatmeans that they can uh be dissembled andassembled again that they can betransported easily that they can rerepair that you also need spare parts torepair those and offer spare parts anduse material and design Furniture in away that material is used that you youuh canrecycle in order to um be alsosustainable during the uh the the salesprocess of this furniture they decidedto use wind and solar energy exclusivelyto run the Ikea Stores um and uh Pro uhprovide an opportunity for customersthat they can return theirFurniture um so that uh also reuse isencouraged but also the recycling of thefurniture by Ikea itself is uh isfostered they uh want to um also have adelivery Fleet where you can buy uhfurniture on the internet but also uhregarding the fleet that you can rentwhen buying something in the store umthis Fleet should be 100% Electric in2025 combined with uh the idea of onlyusing wind and solar energy then also uhthe consumption of energy of these umelectric vehicles will be 100% emissionfree during delivery so that's the ideaof generating a business model that isfully circular using uh lessmaterial uh during design the salesprocess the production process but alsothen um later when it comes to the endofuh the product life cycle so but whatdoes the circular idea or the circularum uh idea that Ika is following reallymean to better understand the ideabehind the circlular we have to take astep back in time so we're looking atthe linear um economy as we know it fromtoday so a linear economy means that wehave different phases for example firstof all the extraction phase of aresource um Then followed by productionthen by distribution then the use of aproduct and of course the disposal of aproduct so kind of a linear um processas we already know it this is thecurrently predominant take make wasteapproach so we take something and at theend we throw it away so naturalresources are extracted and canconverted into V waste VI production andconsumption this of course harms theenvironment because we are removingnatural capital and we are of coursealso polluting um the environmentthrough waste generation so this reallylinear from A to Z is then like um yeahthought in a kind of different way whenwe're thinking about the circulareconomy and the circular economy hasalso of course the starting point withraw materials so we're taking some rawmaterials we're designing a product weare then producing or likeremanufacturing um the product or theservice then distributed consume it butof course also use it reuse it or repairit and then collect it and of coursealso recycle or recover it so instead ofgoing from a to zed from taking to thenthrowing away um the idea in a circulareconomy is that we're using the rawmaterials and then they are convertedinto a circle including the recyclingand the recovering or of course alsowhen thinking about the collection of umyeah of products or waste at the end umto think about residualwaste so waste in this kind of umcircular economyis becoming a valuable resource so thisis then combined with value maximizationand the design and operate products andprocesses in such a way that disposal iseliminated or at least minimized this iswhat uh the circular economy is allabout so it's about replacing end oflife uh life while reusing and recyclingor recovering um a resource so this hereis a nice depiction of what circulareconomy means let's take a look at amore formal definition and here it readsthat the circular economy describes aneconomic economic system that is basedon business models which replace the endof life concept with reducingalternatively uh re reusing recyclingrecovering materials in production anddistribution and consumption processeswith the aim to accomplish sustainabledevelopment which implies creatingEnvironmental Quality economicprosperity and social Equity to thebenefit of current and future generationso as we already have seen um we are notdesigning things in a way that we yeahas a company minimize our cost and donot really think about the lifespan ofthe product the usage phase and how muchenergy or additional resources are usedduring uh that phases and theneverything is disposed at the end in alandfill or something but that wedirectly design things in way that uhyeah products um uh and their materialscan be uh somehow uh reused or recycledor at least the energy be recovered andthis can work on the level of a uhproduct itself but uh a single companythat has these products as our AAR ideabut even in the Ikea idea there will bepartners involved right so we said umthis companyuh is aiming for going100% uh renewable when it comes toelectricity and energy but perhaps theycannot produce all that energy on theirown right so they might use uh energyfrom Partners from energy producers uhand need to rely then on Partners whoprovide them with additional greenenergy right so uh there might be someindustrial uh symbiosis with otherpartners that uh are also part of thecircular circularity around our productsaround our resources that we use rightso we could perhaps design it in a waythat we as a company can provide thewholecircular uh yeah round so to say for theproduct but um it might be that we uh dothis also uh in an ecosystem with otherfirms um or uh that could be uh yeahregionally very close and a city or in aregion but also it could be that uh thiscircularity exists only um yeahNationwide or even Beyond a a nation sowe have these different levels on whichwe can think about a um uh a circularityin our economy being it directly on theproduct level it could be that theeconomy across Industries on the masolevel becomes more circular or yeah thewhole economy uh combining uh Industriescombining sectors uh becomes circular intheend in uh the circular economy there arethree major core principles that uh yeahelements of this circularity the firstuh principle is that we want toeliminate waste and pollution as much aspossible so by Design we want to get ridof waste wherever possible right sothat's a design principle here so thatmeans that we need to innovate andrethink uh the entire Pro product andsupply chain that we have the secondprinciple is that we um use products andmaterials in a circular way that meansuh that we keep materials that we yeahnatural resources that we want gain fromuh from uh from planet Earth that wekeep it in use and keep it uh and reuseit and recycle these materials so thatwe um do not need additional new rawmaterials from nature so um we uh asalready said we reuse it weremanufacture product and materials werecycleEtc and the third thing is in thecircular economy we try to regeneratethe natural system we try to buildnatural Capital by using practice thatallow nature to rebuild its soils toincrease biodiversity to rebuildresources that we took from it like woodor so um that we also return biologicalmaterials that we took from Earth uhlike wood after using it perhaps backinto uh the the circle of life so to sayum so that um although we have acircular economy it starts with gainingsome material some raw material fromnature and that's here the idea to yeahto somehow put things back into thenatural system and thereby regenerate umthe overallsystem so when we're deep diving now alittle bit in um how The Continuous Flowof materials is taking place there's avery famous so-called butterfly diagramso what do we see here on the one handwe see like we see two cycles here onthe one hand we see the biological cyclelike on the left it's um like nut frombiodegradable materials and they arereturned to the Earth to regeneratenature then on the right side we havethe technical cycle so products andmaterials are kept in circulationthrough processes such as reuse repairremanufacture and recycle so whenever weum yeah have a product or we have aresource put into um yeah intoproduction or into usage the product orthe service or the raw material will gothrough these two cycles and for examplein the biological cycle um will uh yeahwill be used for biogas or um yeah theextraction of biochemical fed stock orsomething like that so they are goingthrough the cycle um yeah parts of themanufacturer the product manufacturer orthe service providers and then again goback into the cycle however not only onecycle and this is why it's called thebutterfly diagram but both Cycles alsothe technical cycle so um yeah it'salways like circulating in these twocycles to then at the end um yeah thinkabout a continuous flow of thesematerials the key question is how can weuh design um our business model designour products and design our whole logicas a company as anorganization um in a way that uh yeahthe material and resource flow followsthe logic of this uh butterfly diagramwhere resources get into the process andget back uh into it through thetechnical but also the biological cycleso there is a need for improvement and aneed for Innovation so or we saidalready we need to design things in acertain way so that production usage andthe end of usage cycle is uh rethoughtso um we already outlined these designprinciples and they lead to sevendifferent approaches that we can use uhduring production usage and the end ofuh the usage cycle um uh yeah to to gainuh a really uh circular business modelhere so let's take a deeper look atthese um seven approaches the first oneis the recondition so um it's kind offixing a fault or aesthetic Improvementof a product but with no new or noadditional warranty on the product as awhole so this includes for example therepair so it's like car repair shops umor another example would be pagonia or Ifix it so the second approach isremaking right so it's aboutum having manufacturing steps um that weuse at the end of uh the the life cycleof a part of the product in order toreturn it um into like new or a betterperformance uh product where we uh caneven provide a warranty right so umthere are firms such as as good as newor um even uh prominent examples are umuh apple or other firms where you can uhhand in your used product so that theycan somehow refurbish them and even uhuh remake part of the product in a waythat they are resold laterthen the third possibility is circularsourcing and circular sourcing is asourcing of recycled or renewablematerials that can remain in or bereturned to either the technical cycleor the biological cycle so coming backat the butterfly diagram we alreadyspoke about the circular sourcing isreally thinking about how can we usethese two cycles to um yeah put in therenewable materials or um yeah return itinto so prominent examples are forexample most plastic in Germany so weare recycling these plastic bottles orum like a combination or a cooperationbetween Ed Adidas and parly oceanPlastics that are um yeah cooperating interms of uh yeah circularsourcing uh the fourth step when itcomes to production fourth and finalstep here is uh the uh co-productrecovery or we could also think aboutthis as a byproduct right so so if youhave some resid residuals or byproductsthat uh yeah come from the production umof our uh focal product or from a c froma specific value chain and we could usethis as an input for another productprocess or value chain uh and use itthere uh yeah in order to um yeah hashave less weight waste across yeah thewhole economy so these are fourapproacheswith which we could rethink productionitself right so how can we uh make ourproduction of our product more circularor how can we overall in an economyrethink the way how our productionaffects also the overall resourceconsumption of society to make it morecircular in some and now switching fromthe production to the use of theproducts there's for example thepossibility of exess exess means providend users with access to thefunctionality of products or assetsinstead of transferring ownership so forexample instead of like everybody needsa new car or we are selling our cars carsharing services such as share now areusing this exess approach where peoplecan use these cars uh in a shared mannerso they don't have to own their own carthere are also uh approaches aroundperformance right so we could guaranteea level ofperformance uh or a level of outcomethat could be done uh with our productas a functionality and guarantee it uhas a product service bundle in order touh yeah enhance the usage of theseproducts there's the example of Phillipspaper Lux so where uh we pay uh for uhyeah uh LMS and uh so on by uh theamount of light spent by them and thenswitch in again to the end of cycle soum there's the resource recoveryapproach so materials or products at theend of the cycle are incorporated intodifferent products or used as a feedstock inputs for other processes orvalue change so really that we are kindof recycling or recovering the productsand a very prominent example is ofcourse the recycling company rundaswhere they are using um products at theend of their cycle on the end of use andtransform them into either the differentparts or um yeah recycle them for thenof course also being used forpotentially otherproducts so what did we overall learn inthis session uh we talked about thatwith a growing population and growingmaterial footprint resources arebecoming scars um and that the prevalentlinear production and consumption modelin our society like we talked about thetake make waste approach is kind of orhas to be replaced in order to really besustainable approach and while replacingthis approach we already talked aboutIkea we introduced the circular economyapproach as an alternative view so inthat approach waste becomes a valuableresource and end of light light life isreplaced by reusing or recycling soproducts and processes are designed in away that disposal is eliminated or atleast minimized then we talked aboutthree core principles of circulareconomy the elimination of waste andpollution the circulation of materialsand products and third the Regenerationof natural systems and then at the endwe thought about okay if we know that wehave to change from the linear to themore cycle um or circular economy umprocess how can organizations change thebusiness models and we outlined thatthis change is necessary to reallyrealize along the stages of designproduction and use and end of cycle howorganizations can transform intocircular business models thank you verymuch for watching

Want to print your doc?
This is not the way.

Try clicking the ⋯ next to your doc name or using a keyboard shortcut (

CtrlP

) instead.