More and more companies want to contribute to the transition to a sustainable, circular economy. But in order to succeed, they must be able to link the ecological added value of a circular business model to economic added value.
Circular business operations involve much more than simply making a sustainable product – such as designer handbags made from recycled plastic waste – and then selling it on to environmentally conscious consumers. After all, most consumers have different needs other than buying a circular product. In order to prompt companies in the direction of the circular economy, it is therefore important to link sustainable innovation to business innovation.
Expedition Circular!
"It is crucial that we convince companies of the economic added value of circular business, but that they also do not lose sight of the sustainability value", explains Jeroen Gillabel of VITO. How exactly this should be approached was the subject of a project supported by the Flemish government (under the flag of Flanders Circular) that ran from the end of 2017 until the end of 2018. In 'Expedition Circular!', four Flemish companies with concrete cases were matched with four 'supporters' with expertise in different areas that are important in circular business: Agoria, Sirris, Start it@KBC and VITO.
"In this project, we looked at both an economic and a sustainability impact, at the level of the four companies behind the cases", Gillabel continues. "We did this by reaching a tipping point in the acceleration of their circular model". The business quartet that took part in the project is diverse: two SMEs, one medium-sized company and also one start-up. This also applies to both their main activity and their circular plans (see inset). "The participants differed in size, sector and concrete case, making this a very good opportunity to look at circular business from different perspectives of the business world. What is more, this diversity allowed us to bring the companies together around the table so that they could learn from one another – after all, they are not competitors."
Circular business models
VITO has extensive in-house expertise in sustainability and circular economy, in terms of technology, business strategy and business models. Gillabel explains: "We can answer some of the questions from companies regarding circular business ourselves, such as what needs to be done to create the greatest added value in terms of sustainability. But that is only part of the challenge. After all, the transition to circular business involves a lot of work. Strategic and operational management need to be redefined and there are also also implications at the legal and financial level, for example. Together with Agoria, Sirris and Start it@KBC, we were able to offer the four entrepreneurs a very wide range of substantive support."
Start it@KBC, for example, supports start-ups with mentoring and coaching. "This is indispensable, especially if you have the ambition to start a circular business", explains Dirk Lievens of Start it@KBC. "You can't do this alone, as circular business models don't actually exist yet in practice." Lievens and his colleagues primarily supervised the small company More, i.e. a start-up, in the Expedition Circular! project. They also organised a session on business pitching, and a discussion with KBC experts on financing circular business models. All four companies, as well as the other supporters, were invited to attend this.
More is hoping to collect and process plaster waste from plastering works into interior products – including designer lights. With the help of the VITO experts, this start-up quickly gained a first insight into the sustainability value of their case. "Recovering plaster waste by using it to make valuable products can result in added value in terms of sustainability", explains Gillabel. "After all, it does not end up on the landfill or construction site together with the other site waste. On the other hand, the sustainability benefits strongly depend on the transport of the residues to the More processing plant. As a solution, we therefore proposed organising the activities locally and decentrally, for example by providing a microfactory, alongside the construction site."
Companies wanted
Expedition Circular! only lasted one year, and it was not the intention to make the four participating companies fully circular in that time. "The transition to a circular business model is a long and complex process that is also dependent on a large number of external factors", explains Gillabel. "For example, just think of legislation or consumption behaviour. We wanted to have them force a breakthrough (that they had proposed themselves) and give them the insights and tools to allow further development. Companies can now learn lessons from the steps that they themselves have taken forward." This also applies to the four supporters. "Thanks to this project, we have a better insight into the needs of entrepreneurs in the field of circular business, and the role that VITO and other players can play in this. We are now elaborating on this further."
Interested companies can contact VITO for guidance in mapping out the way to a circular business model. From a first exploration of circular opportunities tailored to the company, to the development of a vision and strategy and the monitoring of added value in terms of sustainability. VITO links its sustainability expertise to its role as an integrator here. "We can draw on a great deal of knowledge regarding linking sustainability with economic added value. But we are also in a very strong network. We are therefore a point of contact for companies that want to make the transition to circular business", explains Gillabel.
Entrepreneurs who wish to gain inspiration in advance can rely on the Circulator web tool, which was co-developed by VITO. Here they can find information regarding circular strategies and business models, and how they can be concretely applied.
The four participants in Expedition Circular!
HaTwee
Activity: distributor of powder coating products.
Case: setting up a new value chain (and business model) to 'rent' surface treatment, instead of simply supplying coating powder.
VITO's role: assisting in focusing on the value proposition.
More
Activity: none (due to the fact it is still in the start-up phase)
Case: collecting plastering waste and recycling it into interior products.
VITO's role: assisting in developing a business case and providing insight into the conditions for sustainability benefits.
ETAP
Activity: designer, manufacturer and distributor of lighting for industrial buildings.
Case: operational roll-out of a circular LAAS (Light As A Service) model.
VITO's role: insight into the added value in terms of sustainability of a longer life span and repair/reuse of light fittings.
Out of Use
Activity: provider of business solutions for the recycling of ICT, electrical and electronic waste.
Case: structurally increasing the percentage of reuse of collected 'waste'.
