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Pay-per-use business models as a driver for sustainable consumption: Evidence from the case of HOMIE

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Pay-per-use business models as a driver for sustainable consumption: Evidence from the case of HOMIE

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Abstract

Pay-per-use business models where consumers pay for the unit of service (e.g. a wash) without gaining product ownership are often linked to increased environmental performance. Consumers would become more conscious about consumption patterns and companies would take responsibility for product life cycle issues. Such benefits can only be achieved when the business model is intentionally designed to deliver those impacts. Few studies focus on the environmental impacts of pay-per-use business models based on direct measurement of impacts. This paper investigates the following question: What positive environmental impact in terms of improving consumption patterns can be observed in a pay-per-use business model? Through an in-depth case of the start-up HOMIE, we investigate how its pay-per-use business model contributes to sustainable consumption. We use two samples of 56 and 21 customers in a longitudinal study to assess whether their consumption patterns of using a washing machine significantly changed after implementing a pay-per-use business model. It was found that pay-per-use business models have the potential to stimulate sustainable consumption. When customers started paying after the first free month, the total number of washes and washing temperature decreased significantly. Temperature reductions were mostly realized by customers who used to wash at higher temperatures. Future research could focus on mapping ideal sequences of experiments to achieve the greatest levels of sustainability impacts, and investigating other sustainable business models, such as renting and sharing.

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... They discovered a general interest in such CE alternatives, where service levels (such as free maintenance and upgrades) have the strongest impact on purchase probability. Bocken et al. through an action research approach investigated the positive environmental impact generated by the improvement of WM consumption patterns following the adoption of pay-per-use business models in a sample close to 50 Dutch households [39]. They found that WM pay-per-use business models stimulate sustainable consumption, given the fact that parameters like the washing temperature and the number of washing cycles carried out are optimized. ...
... In addition, the economic and the environmental impact of these CE alternatives may drive customer decisions and influence their acceptance rates. Nevertheless, even recent studies still do not explicitly address the consumer side in the eco-environmental assessment [35,38], while the need to use primary data to quantitatively assess the eco-environmental impact of CE alternatives in the WM industry is stressed by Bocken et al. [39]. Addressing the user acceptance of CE alternatives such as pay-per-use has been recommended also in Atlason et al. [30]. ...
... To assess the economic and environmental impacts of this CE scenario, Equations (1) and (8) of the evaluation model are adjusted to compute the TCO and the GWP of the pay-per-wash scheme. More specifically, instead of considering the purchasing price, the pay-per-wash fee (F ppw = 1.3 € per washing cycle, according to [39]) is taken into account. Moreover, a 10% reduction in detergent consumption DC is assumed, due to the automatic detergent dosing system. ...
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Circular economy is gaining attention in business and society to advance sustainability. This paradigm is particularly relevant for energy-consuming products such as washing machines, where alternatives to linear economy such as pay-per-use and refurbishment are gaining ground. To succeed, these business models should achieve consensus and acceptance among users. However, little attention has been paid to customers’ interest for circular economy business models so far. This paper aims to compare the economic and environmental impacts of pay-per wash and refurbishment business models, while investigating the degree of users’ acceptance and factors influencing it. A survey has been designed to collect users’ data regarding washing machine consumption patterns and acceptance rates of the circular business models. An evaluation model was developed to assess the economic and environmental impacts of pay-per-wash and refurbishment against a traditional linear model, fed with data from 279 Italian households collected through the survey. Finally, logistic regressions were carried out to investigate the influence of different customer, product, and usage factors on the acceptance rates of the two circular business models. Results show that, on average, pay-per-wash business models and washing machine refurbishment can guarantee environmental savings. However, only refurbishment generates economic savings for users. Moreover, only around half of the users’ sample shows a positive degree of acceptance of such alternatives. Respondent age has been found as a significant factor influencing the interest towards a refurbishment model, while the washing machine failures experienced by users and the relevance of the environmental gains achievable influence the acceptance rate of pay-per-wash models. Thus, when offering pay-per-wash schemes, suppliers should emphasize the information on the environmental benefits of this alternative, and that with such models they take over the responsibility and costs for maintenance and repair. On the other hand, providers of refurbished products should target younger consumers, who are less affected by a bias against second-hand goods.
... Recently, subscription models have started conquering another auspicious market: durable consumer goods. Start-ups, as well as established incumbents already offer subscription models for smartphones (Poppelaars et al. 2018), washing machines (Bocken et al. 2018), clothing, tools, bicycles , furniture (Gullstrand Edbring et al. 2016), or even baby strollers (ING 2018). Instead of purchasing these durable goods, consumers pay for temporary access. ...
... Thereby, products transfer to smart services as described by Kabadayi et al. (2019), intelligently fulfilling customers' needs while preventing breakdowns. Following the success of subscription services for consumable goods, innovative companies recently started targeting the market for durables (Bocken et al. 2018). Transferring traditional durables to smart services thus represents the next step on each axis. ...
... However, several companies are starting to offer pay-for-use business models for home appliances, such as Homie from the Netherlands (Wasserbaur et al. 2020;Homie 2021). Washing machine subscriptions were addressed in publications on sustainability (Bocken et al. 2018), circular business models (Sigüenza et al. 2021), and access-based consumption (Wasserbaur et al. 2020), among others. ...
... According to a number of authors, PSS and sharing systems systems are often acknowledged to reduce environmental impacts and provide differentiation from competitors. However, while such PSS systems and circular use of products are promoted as sustainable alternatives, their environmental implications are rarely accounted for and are often confined to qualitative reviews of the potential of these systems (Bocken et al., 2018;Lindahl et al., 2014;Salazar et al., 2015). ...
... (Amasawa et al., 2020;Firnkorn and Müller, 2011;Nijland and van Meerkerk, 2017). Furthermore, as outlined by several authors, consumer products have received little attention, despite the potential for reducing the environmental impacts of household consumption (Bocken et al., 2018;Martin et al., 2019;Skjelvik et al., 2017). ...
... Furthermore, many studies of PSS systems have been retrospective accounts of marketed products and services, while explorative studies of emerging technologies have received little attention in the literature. As such, it is important to assess the emerging technologies and business models in order to ensure that environmental considerations are taken into account early in the development (Bocken et al., 2018;Cucurachi et al., 2018;Sutcliffe, 2011). ...
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o address increasing environmental sustainability concerns among consumers, many companies have developed approaches to provide functions, rather than products through product-service systems (PSS).This study evaluates a use-oriented tool rental service from Husqvarna, called‘Tools for you,’ with theaim to identify critical processes to improve the sustainability of the offering. The environmental implications of the system are assessed using life cycle assessment for the annual service of one electric chainsaw and compared with a conventional sales alternative. The results suggest that rental service isinfluenced extensively by the location of the rental depot. Furthermore, while the impacts of the productand accessories, infrastructure, waste management, and use are reduced compared to the sales alter-native, their contribution is only minor compared to environmental impacts from transportation. Theresults are also sensitive to the methodological choices, where the lifetime of the products, data choices,transportation assumptions, maintenance intervals, and other user related variables for the use of theproducts have a significant influence on the results. The conclusions confirm and extend previous as-sertions on the challenges of applying LCA to PSS and add to the emerging literature on sustainablebusiness models through empirical evidence from a case study. Thefindings also point to the holisticinsights required to optimize the potential environmental sustainability of the services for Husqvarna and other retailers interested in adopting use-oriented business models. Future research could focus onthe geographical differences of the rental lockers worldwide, models for optimizing their location, inaddition to further input on user behavior, and the role of refurbishment and remanufacturing for morerobust analyses of the sustainability of PSS offerings.
... Thus, PSS examples can be framed as sustainable business models which can help providers with approaches for a transition to the circular economy and provide differentiation from competitors (Amaya et al., 2014;Michelini et al., 2017). However, while such PSS systems and circular use of products are promoted as sustainable alternatives to conventional sales, their sustainability implications are rarely accounted for and are often confined to qualitative reviews of their potential (Lindahl et al., 2014;Salazar et al., 2015;Bocken et al., 2018). Furthermore, PSS research has tended to focus on the use of electronic equipment and manufacturing, with no studies related to food production systems, or services related to plant production. ...
... Despite the expansion of the field, insights on the implementation, adoption, and reasons for PSS business models are still very limited (Baines et al., 2007;Gaiardelli et al., 2014;Reim et al., 2015;Annarelli et al., 2016). Furthermore, as outlined by several authors, consumer-oriented products have received little attention, despite their potential (Skjelvik et al., 2017;Bocken et al., 2018;Martin et al., 2019aMartin et al., , 2021. ...
... As such, further design developments and business model iterations may be necessary. Similar assertions are also highlighted in Kambanou and Lindahl (2016) and Bocken et al. (2018). ...
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To secure sustainable and resilient food systems, new approaches, innovations, techniques, and processes are needed. In recent years, urban farming firms have been developing and experimenting with innovative approaches to expand their offerings and connect with consumers in new ways. New business models are being developed to provide functions and services instead of traditional products to meet demands from consumers, retailers, and users. As such, modular growing systems are increasing in popularity to provide fresh produce, visual appeal, transparency, and other tailor-made functions and services in so-called “growing-service systems” (GSS). Using GSS approaches, firms are developing and providing modular and small-scale farms in restaurants, residential spaces, supermarkets, and other commercial spaces, often including a large degree of automation and optimization of digital solutions to remotely control their operation. Using qualitative methods, the aim of this study is to explore and analyze the development of these novel GSS systems, highlighting different strategies, business models, motivations, and challenges. The results illustrate the divergence in approaches to GSSs for vertical farming. This includes different scales of modular units and varying business models for capturing value from the combination of products and services. All of the systems include varying degrees of automation and digitalized solutions to ensure the services are monitored, which is done to improve growing conditions and improve the experience for the users. Business-to-business systems are being developed as both market expansion and awareness-building strategies, where modular units are provided as a rental or subscription model that includes a number of services. Business-to-consumer systems are being introduced as an alternative for consumers, particularly in urban areas, to have greater control and access over growing their own fresh produce. The modules are purchased by consumers, which includes a number of ongoing services from the GSS firms. By categorizing and exploring these systems, this article offers novel insights and a first endeavor to distinguish these new GSS systems in the growing segment of urban agriculture, controlled-environment agriculture, and product-service system literature. Keywords: vertical farming (VF), product-service system (PSS), business model, in-store, urban agriculture, modular farming, hydroponic agriculture
... There is a knowledge gap about the resource benefits of changing business models in order to cater to a CE. Such shifts are, for example, the shift from mainly selling products to providing services (Lindahl et al., 2014), and known examples are mobility as a service instead of selling cars (Polydoropoulou et al., 2020), washing as a service instead of selling washing machines (Bocken et al., 2018), or heat as a service instead of selling heating devices (Schroeder et al., 2020). The interrelations that should be considered are, for example, the impact of policies (e.g., regulations, subsidies, or taxes) on the provision of services or on product properties or the impact of business model designs on value retention strategies, for example, remanufacturing, repair or recycling (Sundin and Bras, 2005). ...
... For decision-makers, it is especially interesting to understand how measures on one societal system level affects things on another level. It is, for example, crucial to know how governmental policies affect product emissions (Liu and Xiao, 2018) or how business model changes affect consumer decisions (Bocken et al., 2018). From a modelling perspective, this is a challenging problem because model variables usually need to be on the same level of abstraction, such as population growth and unemployment rate. ...
... In laundry washing, Bocken et al. (2018) found that pay-per-use-models support sustainable consumption and environmental sustainability, as customers reduce the number of washes and decrease the washing temperature. From a social perspective, whereas this aspect deserves more research in the context of the pay-per-use model (Ockwell et al. 2019), some contributions point to positive impacts of this model on social justice. ...
... As our causal loop diagrams are inspired by the professional printer case study in the B2B field, the models may have to be slightly adapted or extended when applied to B2C. In B2C, Bocken et al. (2018) found that servitization of laundry washing through a pay-per-use model can drive customers toward a more sustainable consumption by reducing the number of washes and washing temperatures. Thus, customers tend to optimize their product usage with servitization, and this aspect is captured in model (4) through the variable "customer's productivity in product use". ...
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This paper investigates the link between servitization and sustainability. Extant literature assumes a positive effect of servitization on sustainability, while limited contributions report that, under certain conditions, servitization can also have negative effects. Through a case study on the professional printer supply chain, we show that the positive relationship between servitization and sustainability does not always hold true, and we clarify the nature of the links between servitization and sustainability. By drawing on causal loop diagrams based on system dynamics modeling, we differentiate between “built-in sustainability in servitization” and “sustainability potential in servitization”. With the former, we refer to the inherent sustainability effect that result from the mere application of servitization. For example, servitization leads, ceteris paribus, to the reduction of the number of required printers to achieve the printing jobs required by customers. The latter shows, however, that there is a latent sustainability potential that can be released, only if refurbishing and component recycling activities take place to extend the product life. The case study also highlights that a systemic view is essential for assuring the overall positive impact of servitization on the environment. If manufacturing firms or institutions cannot track the way printers are disposed, e.g., outside of the borders of a country, the full potential of sustainability embedded in servitization cannot be achieved.
... Consumer products, such as clothing, have been found to have a large potential to reduce the environmental implications of personal consumption, though much of the literature on circular business models have not focused on consumer products ( Bocken et al., 2018 ;Zamani et al., 2017 ). While many of the previous studies on circular production methods for clothing document theoretical examples and potential for such systems to contribute to the circular economy, creating expectations for their potential ( Lazarevic and Valve, 2017 ), few studies provide empirical evidence of the sustainability of circular business models compared to conventional supply chains. ...
... While many of the previous studies on circular production methods for clothing document theoretical examples and potential for such systems to contribute to the circular economy, creating expectations for their potential ( Lazarevic and Valve, 2017 ), few studies provide empirical evidence of the sustainability of circular business models compared to conventional supply chains. As such, it is important to assess these developing systems and business models in order to ensure that considerations to improve their sustainability are taken into account early in the development and realization of supply chains ( Bocken et al., 2018 ;); in addition to focusing on all three pillars of sustainability ( De Angelis et al., 2018 ;Merli et al., 2018 ). ...
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The clothing industry has been active in recent years to develop more sustainable and circular business models, with extensive attention to fossil fibers and cotton, although wool has received little academic attention. This study follows the valorization process of conventionally discarded wool from a sheep farm in Sweden to produce a wool sweater. The aim is to highlight important environmental and social hotspots for valorizing the waste wool in a new supply chain for the clothing company. The study employs life cycle assessment (LCA) and social life cycle assessment (SLCA) with the PSILCA database to assess different supply chains. The LCA results illustrate that the supply chain valorizing waste wool significantly reduces environmental impacts compared to conventional supply chains of merino wool. The processing of the wool and sweater assembly contribute to the largest share of the environmental impacts and are sensitive to the choice of electricity mix employed for processing and manufacturing. The results from the SLCA suggest that the supply chains involving primarily European producers have fewer social risks than the conventional supply chains for wool. Large social risks are present in the shipping between production sites in Europe, and manufacturing facilities for the wool garments, pointing to the care required to ensure social responsibility along the supply chain. The SLCA results are sensitive to the cost assumptions made for activities along the supply chain. The results provide empirical evidence and highlight areas to improve the environmental and social implications for developing a new circular supply chain.
... In this business model, users are subscribed to a service in which the service supplier installs a washing machine in the home of the subscriber and the subscriber pays only for each time the washing machine is used. In a longitudinal study with 56 subscribers, Bocken et al., (2018) found that subscribers of the pay-per-wash business model adopted different washing patterns to. The subscribers reduced the average temperature of the washing cycles by 5% and the monthly number of cycles by 20% compared with standard levels, which can in turn reduce the environmental impacts of the use phase. ...
... In this business model, the users do not own the washing machine. Subscribers to this business model wash 20% less and they wash at lower temperatures ( Bocken et al., 2018 ). Due to the reduced number of cycles per year and included maintenance services, we assumed that these washing machines can last 2.5 years longer than the average. ...
Article
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Among European countries, The Netherlands is boosting the transformation to a circular economy creating and deploying circular business models across different sectors, including the home appliances sector. Although in recent years shared access-based business models have attracted the attention of the scientific community from a sustainability perspective, a very different family of circular business models are in fact being deployed in other markets and have not yet been studied from a sustainability perspective. These circular business models are product lease and pay-per-use, which are now offered by more than ten companies in the Dutch market. However, whether these business models represent environmental and material benefits is still in question. In this article, we apply a dynamic life cycle assessment modelling framework to study the material use and climate change impact implications of the long-term and potentially large-scale adoption of these two circular business models in the Dutch market of washing machines towards 2050, considering the energy transition of three regions: The Dutch, European, and global regions. Of nine scenarios modelled, the large scale and quick adoption of product leasing will represent the largest material use benefits, followed by the pay-per-wash model, both comparable to the material benefits obtained by other well studied shared-access business models. In climate change impact mitigation, the benefits of the circular business models are dwarfed by the benefits of a decarbonized electricity. Yet, with a successful energy transition, we could expect a re-prioritization of the life cycle of energy intensive appliances regarding climate change impacts in the future, from the use phase to the use and production phase, equally.
... On the other side, sharing models in EEE have been overlooked by literature, addressed by 5 articles only. Lastly, only 10 articles addressed result-oriented SBM, where customers pay for achieving a pre-defined and agreed result, such as a pay-per-wash SBM in the case of washing machines (Bocken et al., 2018). Overall, servitised strategies are seldom investigated together: only two articles out of 115 investigate all the three (product-oriented, use-oriented, and result-oriented) options. ...
... Lastly, we found that users have an active role especially in enabling SBM (56%) and circular product design (48%). In fact, literature strongly suggests the consideration of the users' preferences and their changing needs in the design of SBM and circular products (Bocken et al., 2018), also to avoid rebound effects and unintended consequences of circular offerings e e.g., in laundry services, users may start to have their laundry done more often due to an increased convenience, leading to higher resource consumption and costs for the service provider (Kjaer et al., 2019). ...
Article
Circular Economy in the Electrical and Electronic Equipment (EEE) supply chain has a significant (and still unexploited) potential. This paper aims to systematically review the knowledge emerging from the literature at the intersection between Circular Economy and the EEE supply chain, with a special focus on enablers, levers, and their potential environmental, economic and social benefits. An original framework is developed to categorise Circular Economy enablers, levers and potential benefits. Companies in the EEE industry aiming to implement Circular Economy can exploit several enablers (grouped into digitalization, government intervention, and users’ active role) and levers (grouped into circular product design, servitised business models, and supply chain management) to generate economic, environmental and social benefits. Based on the framework, 115 articles were scrutinised. The analysis led to the definition of a research agenda, with policy and industry implications. To advance Circular Economy research in the EEE supply chain, future studies should address: (i) the enabling role of digitalization, particularly within blockchain, 3D Printing, augmented and virtual reality; (ii) design strategies focused on ‘reduce’; (iii) servitised business models based on result-oriented offerings; (iv) collaboration in the EEE supply chain; (v) the assessment of social and economic benefits to users. Future research should also investigate the systemic interrelations between enablers, levers and benefits.
... Ahvenharju (2020) x Alexander (2013) x x x x Bocken et al. (2014) x Bocken et al. (2018) x Bocken et al. (2020) x Bocken and Short (2016) x x Boulanger (2009) x Brown and Cameron (2000) x Cherrier et al. (2012) x Cohen (2019a) x x Cohen (2019b) x Cooper (2005) x x de Bakker and Dagevos (2012) x x x Freudenreich and Schaltegger (2020) Lorek and Fuchs (2013) x x x x Lorek and Spangenberg (2014) x x x Marchand (2009) x McGouran and Prothero (2016) x Pettersen (2016) x x x Sandberg (2018) x Sch€ apke and Rauschmayer (2014) x Spangenberg (2014) x x x x Spangenberg and Lorek (2019) x x x x x x Speck and Hasselkuss (2015) x Spengler (2016) x x Swilling (2011) x Tunn et al. (2019) x Welch and Southerton (2019) x Total number of publications 7 13 9 5 3 12 14 6 3 3 to transformations in the economic system, such as changing systems of provision (Cohen, 2019a), challenging the economic growth paradigm (Gossen et al., 2019), and suggesting degrowth as an alternative (Alexander, 2013;Lorek and Fuchs, 2013). Specific changes to the economic system in the sufficiency literature include redistribution of economic resources (Spangenberg, 2014;Welch and Southerton, 2019) and minimum and maximum incomes (Spangenberg, 2014). ...
... Researchers studying the role of businesses in sufficiency transitions have been particularly interested in how business model innovations can advance transitions. This body of work has been driven mainly by Bocken and colleagues, including both conceptualizations of business model innovations for sufficiency (Bocken et al., 2014;Bocken and Short, 2016) and empirical studies in various contexts, including plant-based diets (Bocken et al., 2020), clothing (Tunn et al., 2019), and washing machine use (Bocken et al., 2018). Several different frameworks have been suggested to categorize business model innovations that companies can implement to advance sufficiency through, in particular, increased product longevity and support for sharing practices (see Bocken et al., 2014;Bocken and Short, 2016;Freudenreich and Schaltegger, 2020;Tunn et al., 2019). ...
Article
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It has been argued that halting environmental degradation requires an approach of sufficiency, which entails substantial changes in consumption patterns for high-consuming classes, including a reduction in consumption levels. This article reviews the literature on sufficiency, asking two main questions: What are the specific consumption changes that the sufficiency literature suggests to reduce ecological footprints, and how can such consumption changes be advanced? The article uses a combination of semi-systematic and integrative review methodologies. The article shows that sufficiency may entail four types of consumption changes: absolute reductions, modal shifts, product longevity, and sharing practices. It provides an overview of sufficiency practices across four consumption categories: housing, nutrition, mobility, and miscellaneous consumption. In addition, the article identifies barriers and actors that can prevent or advance sufficiency transitions. Barriers to sufficiency transitions include consumer attitudes and behavior, culture, the economic system, the political system, and the physical environment. Actors include businesses, policymakers, citizens, NGOs, and educators. The article advances our understanding of sufficiency as a concept and the multidimensionality of sufficiency transitions.
... Business models need to be designed to achieve the desired impact and avoid negative rebound effects (e.g. Tukker, 2015;Bocken et al., 2018a). Experimentation is needed to understand which business models work in practice, what the impacts are on the environment and society, and how to initiate transformations within business Bocken et al., 2018b). ...
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The circular economy has become a prominent core concept to drive sustainability transitions in business. However, there is still significant uncertainty associated with the implementation and impacts of the circular economy. Experimentation with circular business models is needed to understand which propositions work in practice and what the impacts on the environment would be, and to kickstart transformations within business. This study first frames the types of innovations in a circular economy, followed by the concept of experimentation and focus on circular business models. Through empirical case analysis of two multinational companies with publicly expressed circular economy goals, H&M and Philips, this study reveals different types of practices and processes, as well as the importance of experimentation as a potential lever for change in business.
... Furthermore, literature suggests that user behaviour can become less responsible when a product is not owned, leading to reduced efficiencies and increased wear of the product. Because people do not own the products in an access-based service, it is unlikely that they forge strong attachments to these products, and consequently, they may take less care of these products ( [41][42][43]). This is less likely to happen in the case of professional users, as they need EEE for their business to run. ...
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Nowadays, high expectations are set for a digitally enabled circular economy (CE), to enhance resource efficiency. Tracing, tracking, and storing information is most important for this. In this paper, the application of Internet of Things (IoT) and Distributed Ledger Technology (Blockchain) are hence discussed by presenting the case of professional Electrical and Electronic Equipment (EEE) in Italy. Within the context of CE, prevention of electronic waste (WEEE) is extremely relevant as it is a fast-growing waste stream, and the products contain environmentally damaging substances as well as valuable and rare materials. The use of a proper combination of IoT and blockchain can help the producers to keep control on products until EEE end-of-life, while promoting CE strategies and supporting decision-making. Based on the outcomes of five interviews conducted in 2019 to companies of the EEE sector, potential improvements in the EEE end-of-use management are discussed. After providing the definition of requirements for both the technical solution and its testing are provided, three solution variations and the related business models are created and presented, as well as considerations on their environmental and economic impacts. The study shows how digital technologies can support the appropriate and circular management of EEE products and WEEE.
... One alterative way to reduce laundry impacts could be to move from private ownership of laundry products, to a community-based system (CBS) or a product service system (PSS) for laundry activities (Mont and Plepys 2007;Tukker 2015). Such alternative systems for laundry have been gaining popularity in circular economy thinking, with articles examining pay-per-use (Bocken et al. 2018) as well as customer preferences for owning, renting, or pay-per-use solutions for washing machines (Lieder et al. 2018). Since CBSs and PSSs (from here on called "shared systems") require fewer laundry machines, it is argued that these types of systems could limit environmental impacts, just as collaborative consumption of the clothes themselves can (Zamani et al. 2017). ...
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Purpose Previous studies on environmental impacts from domestic laundry have tended to focus solely on private washing machines and detergent. However, public procurement guidelines about the construction of laundry spaces may also be important. This article aims to expand the scope of previous work so that it also includes tumble drying and the building space. By doing this, we examine the potential for shared systems (which are common in Sweden) to reduce the environmental impacts of laundry activities, in comparison with consumer choices associated with machine operation (i.e., wash temperature and amount of detergent). Methods An LCA model was created using product information data from the European Union. Emissions from building use were taken from Swedish cradle-to-grave reports on energy-efficient buildings. The resulting model was run with additional sensitivity analysis of the variables, and the associated emissions from each of the scenarios were calculated. Results and discussion On average, greenhouse gas (GHG) emissions for private laundries in Sweden were estimated to be 190 g CO 2 eq./kg laundry (washed and dried). If a shared laundry was used instead, the resulting emissions decreased by approximately 26%. The greatest contribution to GHG emissions was the use of detergent (22–33% of total emissions), followed by capital goods (11–38% of total emissions). Conclusion Deciding to construct shared laundries in newly built apartment buildings in Sweden, rather than in-unit machines, would reduce the emissions from domestic laundry for these tenants by approximately 26%. This is because materials used for manufacturing whitegoods, as well as the emissions associated with the building itself, play a much bigger role than previously thought. Additionally, since the cleaning efficiency of warm water and some of the components used in detergents rises with temperature, emissions from domestic laundering could for some consumers be reduced further by washing at higher temperature but with less detergent. This pattern could be seen in Sweden within regions with hard water, where the emissions from domestic laundry could be reduced by 6–12%.
... In the United States, 80 percent of the companies have signed a lease contract with one or more businesses, of which 90 percent will extend the lease at the expiration of the contract (Giddy, 2004). Bundles and Homie in The Netherlands, which offers high quality washing machines via pay-per-use, is a leasing example of individual consumer goods (Bocken et al., 2018;van Loon et al., 2020). For medical equipment, leasing is also common. ...
Article
Lessees may abuse equipment during the lease period since lacking of ownership, thereby increasing lessors’ repair cost and lessees’ downtime losses. This study integrates lessees’ effort to protect leased equipment during the lease period with lessors’ preventive maintenance (PM) into maintenance service strategies. It is proved in a non-cooperative game, neither party achieves the cooperative game’s ideal revenue, but improvement in the lessee’s effort level and lessor’s PM degree can increase the other party’s revenue. A cost-sharing contract model is designed to achieve the maximum revenue as in a cooperative game and ensure Pareto improvement of the leasing parties. In the contract, the lessor grants the lessee a rental discount, and the lessor’s PM cost and lessee’s effort cost are shared with cost-sharing coefficients. Conditions under which the ideal revenue and Pareto improvement can be achieved are discussed. Numerical examples are provided to illustrate the effects of contract parameters, unit penalty on the effort level, and revenue. Managerial insights are finally proposed for leasing parties. The results show: the effect of the effort level and PM degree on equipment failures is marginally diminishing; proposed cost-sharing contract model can achieve the ideal revenue and Pareto improvement; the rental discount has a greater impact on the lessee, while the cost-sharing coefficients have a greater impact on the lessor; and increasing the unit penalty decreases (increases) the lessor’s (lessee’s) revenue but maintains the effort level at constant.
... In some cases, there is no doubt that the indicators or tools can be useful for non-experts as a proxy indicator to aid design, but further research is needed to understand and provide guidelines on the circumstances where they are appropriate to use. Previous research has also suggested that while circular business models are highlighted as being sustainable, few review the sustainability of these ( Bocken et al., 2018 ;Tukker and Tischner, 2006 ;Kjaer et al, 2016 ;Tukker, 2015 ). ...
Article
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The Circular Economy (CE) concept is receiving increasing global attention and has captivated many disciplines, from sustainability through to business and economics. There is currently a strong drive by companies, academics and governments alike to implement the CE. Numerous “circularity indicators”have emerged that measure material flow or recirculated value of a system (e.g. product or nation). However, if its implementation is to improve environmental performance of society, the action must be based on scientific evidence and quantification or it may risk driving “circularity for circularity’s sake ”. This paper, therefore, aims to review the recent circular economy literature that focuses on assessing the environmental implications of circularity of products and services. To do this we divide the system levels into micro (product level), meso (industrial estate/symbiosis) and macro (national or city level). A scoping literature review explores the assessment methods and indicators at each level. The results suggest that few studies compare circularity indicators with environmental performance or link the circularity indicators between society levels (e.g. the micro and macro-levels). However, adequate tools exist at each level (e.g. life cycle assessment (LCA) at the micro-level and multi-regional input- output (MRIO) analysis at the macro-level) to provide the ability to adequately assess and track the CE performance if placed within a suitable framework. The challenge to connect the micro and macro-levels remains. This would help understand the link between changes at the micro-level at the macro-level, and the environmental consequences. At the meso-level, industrial symbiosis continues to grow in potential, but there is a need for further research on the assessment of its contribution to environmental improvement. In addition, there is limited understanding of the use phase. For example, national monitoring programmes do not have indicators on stocks of materials or the extent of the circular economy processes (such as the reuse economy, maintenance and spare parts) which already contribute to the CE. The societal needs/functions framework offers a promising meso-level link to bridge the micro and macro-levels for assessment, monitoring and setting thresholds.
... Furthermore, CE-oriented BMs also add uncertainty and complexity to conventional BMs. New variables have to be considered, for instance, reverse on top of forward logistics; quality, quantity, and timing of the return of resources; and customers' perceptions and preferences for "as new" [102]. This requires a systemic and transdisciplinary view, which has been reflected in recent publications exploring the interfaces of CE-oriented BMs with other innovation perspectives, such as product design, value chain, and digital technologies [17,87]. ...
Article
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By referring to the European Green Deal, this paper analyzes the “intrinsic value” of cultural heritage by investigating the human-centered adaptive reuse of this heritage. This implies questions such as how to improve the effectiveness of reuse, restoration, and valorization interventions on cultural heritage/landscapes and how to transform a cultural asset into a place, interpreted as a living ecosystem, to be managed as a living organism. The autopoietic characteristic of the eco-bio-systems, specifically focusing on the intrinsic versus instrumental values of cultural heritage ecosystem is discussed in detail. Specifically, the notion of complex social value is introduced to express the above integration. In ecology, the notion of intrinsic value (or “primary value”) relates to the recognition of a value that “pre-exists” any exploitation by human beings. The effectiveness of transforming a heritage asset into a living ecosystem is seen to follow from an integration of these two values. In this context, the paper provides an overview of the different applications of the business model concept in the circular economy, for a better investment decision-making and management in heritage adaptive reuse. Matera case is presented as an example of a cultural heritage ecosystem. To conclude, recommendations toward an integrated approach in managing the adaptive reuse of heritage ecosystem as a living organism are proposed.
... Business models need to be designed to achieve the desired impact and avoid negative rebound effects (e.g. Tukker, 2015;Bocken et al., 2018a). Experimentation is needed to understand which business models work in practice, what the impacts are on the environment and society, and how to initiate transformations within business Bocken et al., 2018b). ...
Chapter
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The circular economy has become a prominent core concept to drive sustainability transitions in business. However, there is still significant uncertainty associated with the implementation and impacts of the circular economy. Experimentation with circular business models is needed to understand which propositions work in practice and what the impacts on the environment would be, and to kickstart transformations within business. This study first frames the types of innovations in a circular economy, followed by the concept of experimentation and focus on circular business models. Through empirical case analysis of two multinational companies with publicly expressed circular economy goals, H&M and Philips, this study reveals different types of practices and processes, as well as the importance of experimentation as a potential lever for change in business.
... The circular economy is considered holistic and adaptive; in this sense, the use of Product Service Systems (PSS), a model that uses eco-efficient services with the potential to replicate and compete with the 'fast-fashion' industry, has been increasingly observed (see e.g. (Bocken et al., 2018b) (Fernandes et al., 2018)) and these systems have been pointed as great enablers of a circular economy (Khan et al., 2018). Moreover, PSS have been signaled as a path for greater sustainability (Tukker, 2004). ...
Article
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Circular economy can play an important role towards sustainable business management and it can be seen all throughout an organization. Although the current literature regards the circular economy as a guide for more sustainable business models, it is not clear the main implications to key business areas. Therefore this study aimed to present the key impacts of circular economy practices within different business areas that help guide a sustainable management of businesses. To that end, it was identified, by means of a systematic review of the existing literature, the business areas impacted by circular economy practices within an organization. The business areas identified were strategic planning, cost management, supply chain management, quality management, environmental management, process management, logistics and reverse logistics, service management, and research and development, allowing a discussion on the main contributions of the circular economy to each area. A key-impact map was provided summarizing the most influential changes in each area that assist in the management of businesses towards greater sustainability. It is important that organizations understand and accurately internalize circularity principles within their strategic plan. On that note, adopting a circular thinking might enable an organization to obtain more sustainable (economic) results while reducing impacts.
... Additionally, due to its networked nature and its potential support to sustainability transitions, it can also contribute to systemic changes Gorissen et al., 2016 ). The subset of the literature focusing on measuring the outcomes of CBMI is currently emerging, and even though several articles highlight the relevance of measuring the final sustainability and/or systemic change CBMI effects ( Antikainen and Valkokari, 2016 ;Geissdoerfer et al., 2018a ;Gorissen et al., 2016 ;Hofmann, 2019 ;Parida and Wincent, 2019 ;Salvador et al., 2020 ), our review only identified two publications assessing economic, environmental and social outcomes in multiple cases ( Chiappetta Jabbour et al., 2020 ;Jensen et al., 2019 ), two assessing both economic and environmental of alternative CBMI strategies ( Asif et al., 2016 ;Palmié et al., 2021 ), three articles evaluating the environmental performance of a CBMI ( Bocken et al., 2018a ;Manninen et al., 2018 ;Whalen, 2019 ) and only one publication conceptually developing the effect on systemic change . ...
Article
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Widespread adoption of sustainable and circular business models is required to accelerate the transition to a more sustainable society, however, the literature supporting the process of Business Model Innovation for the Circular Economy - or Circular Business Model Innovation (CBMI) - is currently emerging. Several publications on this field have been published since 2014, nevertheless, there is still a lack of understanding on the process of CBMI, particularly for incumbent firms; and, as most of the literature is theoretical, further empirical insights are required. Furthermore, there is a need for an updated and comprehensive review of this fast-paced field, and a need to further integrate the CBMI field with the conventional Business Model Innovation (BMI) domain. The present research aims to first, map and frame the field of CBMI, building upon the structure of the conventional BMI field; second, to assess the current state of research of the field, proposing a future research agenda; and third, to explore the most relevant elements of the CBMI process in the practice. The article uses a combined literature and multiple case study approach. It begins by synthesizing a BMI framework, which is then combined with the findings of a systematic literature review (n=84) on the emergent CBMI field, to propose an original framework that structures the field. The review includes an assessment per article on the state-of-research. The framework is then illustrated through a multiple case study on ten incumbent firms that have implemented a substantial CBMI, revealing which topics are more relevant from a practice perspective and offering valuable empirical insights. We suggest that future research should prioritize those topics that are very important from the practice and still un- or under-researched in the CBMI field (i.e. organizational culture and structure as moderators of the CBMI change process, sustainability strategy as an antecedent of CBMI and top management role as key elements of the CBMI process) and to those identified as important though under-researched (i.e. organizational change management as a key element of the CBMI process; organizational inertia, ambidexterity and CBMI uncertainties as moderators of the CBMI process; and systemic change as an effect of the CBMI). The literature on Sustainable BMI is integrated to propose contributions to the identified gaps. This research contributes by framing and assessing the field of CBMI, proposing a future research agenda, providing a detailed literature state-of-research assessment and by further integrating CBMI with the conventional BMI field.
... While 'design' is equally treated in both literature bodies (58% CE, 42% SE), 'product design', 'eco-design' or 'DfX' show a unanimous affiliation with CE and 'service design' is only mentioned in SE articles 13 SMEs are examined only in a few small studies (<10 N, regionally limited cases; e.g. Bocken et al., 2018; Fischer, Pascucci, 2017; first large-N study by Henry et al., 2019). Bibliometrically, 14 out of the 16 articles from the SE library that feature the term 'incumbent' in their abstract mention it in the context of new market entrants' disruptive impact on incumbents and industries (e.g. ...
Article
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Circular economy (CE) and sharing economy (SE) are much discussed concepts but potential links between them have not been examined systematically so far. The concepts’ popularity coupled with a lack of definitional consensus may hinder their potential to advance sustainability transitions. Hence, the first comparative bibliometric study of these two concepts was carried out. It was found that they share notable links in the fields of sustainability, business models, sustainable consumption and governance. Business model literature reveals links mostly in the realms of platform- and service-based activities. The field of SE has a strong consumer focus but, unlike CE, barely addressed rebound effects so far. Governance literature shows a general top-down dynamic driving CE, while SE is considered to be bottom-up. SE is conceptualized as a subset of CE which opens possibilities for mutual enrichment. The findings aim to provoke more dialogue between the CE and SE communities.
... Lindahl et al. (2014) for instance, found that some product-servicebased CBMs could achieve CO 2 -eq emissions reductions between 30% and 90% due to a more efficient use of the assets. Similarly, Bocken et al. (2018) analyzed the impacts of the application of CBM for washing clothing. They found that compared to traditional home washing, subscribers to a pay per wash business model of washing machines with a charging system based on type of cycles and temperature, reduced the number of cycles of high temperature, leading to a reduction in energy consumption. ...
Article
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Circular business models (CBMs) and their potential environmental benefits have been widely assessed by using life cycle assessment (LCA). However, most LCA studies consider static systems and assume instant and full technology adoption, limiting the analysis of the implications of circular transitions. Considering technology diffusion in LCA models may bring a better understanding of the environmental implications of the adoption of CBMs. Nevertheless, diffusion is also related to stock dynamics, which are difficult to represent in classic LCA models. To overcome these issues, we propose a modeling framework that integrates three modeling families to assess the environmental impacts and material implications of the adoption of CBMs: diffusion of innovations, product stock dynamics, and LCA. We present a method of application and illustrate it with a theoretical case study. This framework might be useful in the socio‐economic analysis of systems transitioning to CBMs, especially in systems that involve long‐lived products.
... Additionally, due to its networked nature and its potential support to sustainability transitions, it can also contribute to systemic changes Gorissen et al., 2016 ). The subset of the literature focusing on measuring the outcomes of CBMI is currently emerging, and even though several articles highlight the relevance of measuring the final sustainability and/or systemic change CBMI effects ( Antikainen and Valkokari, 2016 ;Geissdoerfer et al., 2018a ;Gorissen et al., 2016 ;Hofmann, 2019 ;Parida and Wincent, 2019 ;Salvador et al., 2020 ), our review only identified two publications assessing economic, environmental and social outcomes in multiple cases ( Chiappetta Jabbour et al., 2020 ;Jensen et al., 2019 ), two assessing both economic and environmental of alternative CBMI strategies ( Asif et al., 2016 ;Palmié et al., 2021 ), three articles evaluating the environmental performance of a CBMI ( Bocken et al., 2018a ;Manninen et al., 2018 ;Whalen, 2019 ) and only one publication conceptually developing the effect on systemic change . ...
Thesis
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In recent years, the circular economy has gained traction as a promising contributor to sustainable development. However, the implementation of sustainable and circular business models remains relatively low. Although the related literature is rapidly evolving, there is still a lack of understanding of the complex process of circular business model innovation, a need for concrete guidelines for firms and calls for more empirical studies. This thesis explores three related questions: what is known about circular business model innovation? how does it happen? and how to facilitate it? To this end, first, a systematic literature review on the emergent field of circular business model innovation is combined with a multiple-case study on ten firms. A summary framework of present and future research is offered, framing and assessing current literature and identifying major research gaps. Secondly, building on the theory of dynamic capabilities, the multiple-case study data is abductively analyzed to identify 26 best practices for circular business model innovation. These are grouped in twelve microfoundations of dynamic capabilities, and highlighting practices such as the adoption of a lifecycle perspective and ecosystem collaboration. Thirdly, 21 innovation cases are analyzed to identify 10 drivers and 25 barriers that affect the different types of circular business innovations. And finally, following an action design research approach, a design thinking-based process framework for guiding the design and implementation of circular business models is developed, including twelve specific tools. This thesis provides an improved understanding of business model innovation for the circular economy, offering concrete guidance for practitioners and a set of context-adaptable tools to support firms in their sustainability transformations.
... In these situations one alternative might be to use a private pay-per-use services (e.g. where you do not own the machine in your apartment and only pay when using it) since these alternative business models seem to push consumers towards fewer washes at lower temperature (Bocken et al. 2018). However, it should be noted that the extent of reduced environmental impacts associated with these services have not yet been clarified and further research for these types of services are warranted. ...
Thesis
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Today’s washing appliances are much more efficient than those of a decade ago, yet the environmental benefits of this efficiency are counteracted by changes in consumer behaviour. This thesis presents two alternative ways to limit emissions from domestic laundering, as well as to better understand consumer behaviour related to the practice of keeping clothes clean. More specifically, it examines the potential for shared systems (which are common in Sweden) and finds that this setup could reduce climate impacts by at least 26%. Concerning behaviour, the results presented acknowledge that any final laundering practice is influenced by an intricate interaction between technology, social conventions, and individual concerns. Three overarching principles can be identified using current research literature concerning domestic laundry: 1. Technology changes laundry conventions, while social context dictates market acceptance of new cleaning technology. 2. Technological solutions are often suggested to influence laundry behaviour, but individual concerns seem to override the effect of the interventions. 3. Consumer laundry practices are guided by social conventions that are also rooted in intrapersonal dynamics. Hopefully these principles (as well as the detailed results from the LCA model) could be used to better understand the possibilities and limitations of domestic laundering, and guide any future interventions aiming for a more sustainable society
... Opportunities for measuring the impact were seen in the use of IT and data tracking, for instance in measuring water or energy use. Such a measurement system was successfully trialled with the HOMIE pay-per-use washing machines described in Bocken et al. (2018) . Most interviewees stated the only way they have to assess the impact on their customers' behaviour is through return customers, surveys and the large interest in sufficiency strategies such as Support for repair (e.g., repair guides, spare parts). ...
Article
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The breaching of planetary boundaries and excessive extraction of natural resources requires a revisited approach to consumption and production. The concept of sufficiency, which advocates meeting human needs within the planetary limits by curbing excessive consumption levels, is gaining increasing attention. Businesses are drivers of consumption, yet they have been largely overlooked as potential leaders towards a sufficiency-based economy and research on businesses driving sustainable consumption strategically is still a niche. The methods applied here are a literature and practice review and interviews to understand the state-of-the-art in sufficiency-oriented business strategies and develop a framework for future research and practice. Merging English- and German-language research, a base matrix of the waste hierarchy and the four lessens is presented. This matrix is populated with business sufficiency strategies, condensing existing work and creating the ‘Business for Sufficiency’ (BfS) framework. Empirical research with businesses already employing sufficiency strategies refines and validates the framework and sheds light on the viability, desirability, feasibility and sustainability of such offers, highlighting barriers and opportunities. The most prevalent strategies fall into the Rethink framework dimension which require the least radical changes. In addition, interviewees highlighted obstacles in reconciling more radical strategies such as Moderating sales with their financial sustainability. Yet, all interviewees stressed the need for reduced consumption and the role that business should play in enabling sufficiency, demonstrating the relevance of this topic for future research and practice.
... [20] In pay-per-use BM the customer is paying based on usage (used time) of product instead of buying the product (e.g. pay-per-wash) [3], [16]. For commercial success, pay-per-use services depend on modularizing products and services and effective enforcement resources [3]. ...
Chapter
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The overall purpose of this study is to understand how manufacturing companies have so far made use of and can make use of pay-per-x (PPX) business models (BMs) largely in capital product markets, and which mechanisms have helped them in the implementation. Through systematic literature approach this study analysed 14 research publications which exclusively focused on PPX business models. The differences between PPX business model patterns were studied from three perspective, namely criticality of product, need of process knowledge and complexity of the process and its output. We find out that the pay-per-outcome business model, is more prevalent for products which are critical, needs extensive process knowledge and are rather complex. In contrarily, pay-per-output business model is more prevalent when these conditions are not met. However, none of these three factors prevents implementing other type of PPX business model but rather specific business model is more feasible when specific conditions are met. This paper contributes a much more in-depth qualitative view on the patterns and related qualitative arguments for the useful application of PPX models in equipment manufacturing industries and helps to understand the differences between PPX business model types.
... From the perspective of transaction price formation, the price of data transactions can be determined through bilateral negotiation, usage measurements (statistics such as the number of data accesses and data flows, etc.), public auctions, and listing transactions [80][81][82]. Bilateral negotiations, public auctions, and listing transactions are widely used and are applicable to the three types of subject matter transactions mentioned in Section 5.4.2. However, price formation based on the use of statistics is typical on a per-time basis and is applicable to repeatable transaction scenarios. ...
Article
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With the development of the Energy Internet and the Internet of Things, diversified social production activities are making the interactions between energy, business, and information flow among physical, social, and information systems increasingly complex. As the carrier of information and the hub between physical and social systems, the effective management of energy big data has attracted the attention of scholars. This work indicates that China’s energy companies have carried out a series of activities that are centered on energy big data collection, as well as development and exchange, and that the energy big data ecosystem has begun to take shape. However, the research on and the application of energy big data are mainly limited to micro-level fields, and the development of energy big data in China remains disordered because the corresponding macro-level instructive governance frameworks are lacking. In this work, to facilitate the sustainable development of the energy big data ecosystem and to solve existing problems, such as the difficult-to-determine governance boundaries and the difficult-to-coordinate interests, and to analyze the structure and mechanism of the energy big data ecosystem, data curation is introduced into energy big data governance, and a paradigm is constructed for sustainable energy big data curation that encompasses its full life cycle, including the planning, integration, application, and maintenance stages. Key paradigmatic issues are analyzed in-depth, including data rights, fusion, security, and transactions.
... Palma et al. (2014) comentam que as demandas socioambientais estão presentes no cotidiano das empresas e isso implica na utilização de estratégias de negócios sustentáveis para que os recursos sejam gerenciados de tal forma que não fiquem indisponíveis no futuro e com o intuito de minimizar o impacto social e ambiental oriundo das atividades produtivas. Sob esse enfoque, Bocken et al. (2018) acrescentam que novos modelos de negócio são muitas vezes considerados como um dos principais impulsionadores da sustentabilidade. ...
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RESUMO A sustentabilidade não deve ser vista como algo incompatível com o desenvolvimento, por isso, é necessário que práticas e modelos que tratem de ambos em conjunto sejam cada vez mais discutidas. Dentro desta proposta, a remanufatura se sobressai como uma alternativa que permite criar negócios mais sustentáveis. Neste contexto, o presente artigo teve como objetivo realizar uma análise preliminar da literatura sobre modelo de negócio voltado para a remanufatura utilizando recursos bibliométricos. Sendo assim, os dados foram obtidos por meio de um estudo descritivo, o qual adota como método a bibliometria. A análise da literatura apontou que se trata de um tema emergente no meio acadêmico, com um visível interesse por parte dos pesquisadores em torno do assunto. Contudo, no ranking de publicações por países apurou-se que o Brasil aparece na 12ª posição (com apenas 05 publicações entre 1999 e 2018), trazendo à tona uma lacuna importante para que mais pesquisas e iniciativas em prol da preservação do meio ambiente tendo como escopo a remanufatura sejam desenvolvidas no país. Palavras-chave: Sustentabilidade. Modelo de negócio. Remanufatura. ABSTRACT Sustainability should not be seen as incompatible with development, so it is necessary that practices and models that deal with both together be increasingly discussed. Within this proposal, the remanufacturing stands out as an alternative that allows to create more sustainable businesses. In this context, the objective of this article was to carry out a preliminary analysis of the literature on a business model focused on remanufacturing using bibliometric resources. Thus, the data were obtained through a descriptive study, which uses bibliometry as a method. The analysis of the literature pointed out that this is an emerging theme in the academic environment, with a visible interest on the part of the researchers around the subject. However, in the ranking of publications by country it was found that Brazil appears in the 12th position (with only 05 publications between 1999 and 2018), bringing up an important gap so that more research and initiatives in favor of
... Interestingly, this focus on lowering costs might be utilized to facilitate changed behavior, at least for consumers open to alternative business models such as pay-per-use laundering. In a small test group with consumers from the start-up HOMIE (a private pay-per-use laundry service), participants exhibited a reduction both in the number of washes and the average wash temperature as soon as they started to pay for each wash compared to the initial first free month [102]. ...
Article
Today’s washing appliances are much more efficient than those of a decade ago, but the environmental benefits of this efficiency are counteracted by shifts in consumer behavior. Initiatives to reverse these shifts have often proven futile, indicating a basic lack of clarity on why we clean our clothes. This article is an explorative review with the aim of identifying dominant factors that shape how we do our laundry. The results can be used both as an introduction to laundry research in general, as well as a baseline for future interdisciplinary research. Three guiding principles are presented that describe the most influential factors underlying laundering: (1) technology changes conventions, while social context dictates technology acceptance; (2) technological solutions are often suggested to influence consumers, but individual concerns seem to override the effect of such interventions; (3) consumers are guided by social conventions, rooted in underlying psychological dynamics (e.g. moral dimensions of cleanliness). Looking at these principles it is understandable why interventions for sustainability are failing. Many interventions address only a part of a principle while disregarding other parts. For example, consumers are often informed of the importance of sustainability (e.g. “washing at lower temperature is good for the environment”), while questions of social belonging are left out (e.g. “many of your neighbors and friends wash at lower temperature”). To increase the possibility of a lasting change, it would be beneficial if instead all of the three principles could be addressed given the specific consumer group of interest.
... [20] In pay-per-use BM the customer is paying based on usage (used time) of product instead of buying the product (e.g. pay-per-wash) [3], [16]. For commercial success, pay-per-use services depend on modularizing products and services and effective enforcement resources [3]. ...
Conference Paper
The overall purpose of this study is to understand how manufacturing companies have so far made use of and can make use of pay-per-X (PPX) busi- ness models (BMs) largely in capital product markets, and which mechanisms have helped them in the implementation. Through systematic literature approach this study analysed 14 research publications which exclusively focused on PPX business models. The differences between PPX business model patterns were studied from three perspective, namely criticality of product, need of process knowledge and complexity of the process and its output. We find out that the pay-per-outcome business model, is more prevalent for products which are criti- cal, needs extensive process knowledge and are rather complex. In contrarily, pay-per-output business model is more prevalent when these conditions are not met. However, none of these three factors prevents implementing other type of PPX business model but rather specific business model is more feasible when specific conditions are met. This paper contributes a much more in-depth quali- tative view on the patterns and related qualitative arguments for the useful appli- cation of PPX models in equipment manufacturing industries and helps to under- stand the differences between PPX business model types.
Chapter
Nancy Bocken is Professor in Sustainable Business at Maastricht Sustainability Institute (MSI), Maastricht School of Business and Economics, at Maastricht University, The Netherlands. She is also Visiting Professor at the International Institute for Industrial Environmental Economics (IIIEE) at Lund University, LUT University Finland and Delft University of Technology, and Fellow at the Cambridge Institute for Sustainability Leadership. Related to her research, she co-founded Reduse Ltd (commercialising the first paper unprinter) and HOMIE (circular and sustainable home appliances). She co-authored over 125 publications including the books ‘Circular Business: Collaborate and Circulate’ and ‘Innovation for Sustainability: Business Transformations Towards a Better World’. Her recent focus is on Business Experimentation for Sustainability to tackle urgent climate and resource issues through research and practice.
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The circular economy has become a popular paradigm in the business and policy spheres. It can support sustainable development by aiming to safeguard the resources to mitigate negative impacts on the climate and the environment and to sustain our current and future generations. Yet, despite progress with circular economy initiatives, there is a risk of focusing on incremental innovations with little real impact, and possibly even creating serious negative rebound effects. This study suggests that the concept of “sufficiency” is inadequately represented in the current circular economy discourse and innovations, and this may be undermining real progress. In this paper, the Sufficiency-based Circular Economy paradigm is introduced. We investigate the following questions: What is the role of business in the sufficiency-based circular economy? What are the institutional limitations to the role of business as a driver for the transition and how might these be overcome? We conduct a “practice research” by analyzing company cases of sufficiency practices in a business context. We analyse 150 business cases to identify how their organizational strategies support sufficiency and what type of innovations they exemplify within this transition. We investigate seven core business elements for economic transformation (purpose, ownership, governance, finance, networks, scale-up and impact) of these businesses to understand how they drive the value propositions and their impact on the wider transition. This is followed by a discussion on a broader business and policy perspective of the Sufficiency-based Circular Economy.
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Circular economy principles are usually dissociated from strategic planning practices, and there seems to be no guidance on how to decide on competitive strategies to establish circular business models. Therefore, this article aimed to propose a strategic planning decision framework oriented to circular business models (SPDF‐CBM) and test it by conducting a case study of a Brazilian company from the cosmetic sector. The SPDF‐CBM framework comprises five stages: (A) circular trends analysis; (B) circular vision and goals definition; (C) current circular business status; (D) competitive strategy for a circular economy definition; and (E) competitive strategies for a circular economy prioritization. Based on a number of tools to assist going through Stages A, B, and C, businesses get to know their current circular status and define their desired future state. In Stages D and E, businesses define their competitive strategy and spot circular business models (and strategies) they can pursue. After testing the proposed framework in a Brazilian startup from the cosmetic sector, results from SPDF‐CBM suggested that the startup pursues a competitive strategy based on differentiation and a CBM aimed at promoting renewable options. It was also pointed out that other CBMs in decreasing degree of fit with the business were maximizing material and energy efficiency, extending resource value and product life, pursuing sufficiency, and delivering functionality rather than ownership. By using the SPDF‐CBM framework, organizations can increase both their competitiveness and circularity at the same time.
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Circular Economy strives for economic, social and environmental value creation in every part of the system. In Healthcare, both environmental and economic values are seen as the most important values for a manufacturer. Little is known about customer values in a circular economy and the underpinning environmental, economic and service benefits. This study shows that customer value creation and-activities must be connected within a circular business model. These relationships built on six moments when customers and manufacturers can make choices to participate in a circular economy coined as Circular Touch Points. In our approach, Circular Touch Points are developed as pivot points between customer values (proposition part of business model) and supplier offerings (fulfilment part of business model, i.e. circular activities) resulting in (multiple) value creation. Our empirical study focuses on the customer perspective, and shows that customer values are paradoxical in a Circular Economy and need to be studied per Circular Touch Point. In addition, customers have to prioritize Circular Touch Points hierarchically. Economic value is measured, environmental value is more perceptive and service value proves to be unimportant. This research can be used by medical suppliers to better understand customer values. Hospitals as customers can use this research to develop their circular strategies. Further research can elaborate on the role of the insurer and the government. Also the supplier side of the business model could be further investigated in practice. Other sectors and other target groups can also be looked at, as well as perceived versus actual values for both suppliers and buyers.
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The implementation of Circular Business Models (CBMs) represents a key step for a successful transformation of the global economy towards circularity. The establishment of CBMs is therefore actively promoted and demanded by the European Commission according to the EU Circular Economy Action Plan 2020. To support their implementation, one of the basic building blocks is the application of innovative technologies that enable the analysis and control of material flows deriving the necessity of object identification and corresponding automatic identification (Auto‐ID) technologies. The verification of this statement is the research object of the study presented. Based on the results of two systematic literature reviews, the overall relevance of object identification in CBMs is confirmed. Additionally, the application potentials of certain Auto‐ID technologies are proposed. This paper examines the role of object identification and corresponding technologies for implementing circular business models (CBMs). Based on two conducted systematic literature reviews the relevance of object identification in CBMs is confirmed and the application potentials of specific technologies for the automatic identification of objects are proposed.
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The making of sustainable economies calls for sufficiency in production and consumption. The discussion, however, lacks a shared understanding on what it means to operationalize sufficiency. In this article, we review and analyze the concept of sufficiency with a focus on its linkages to different economic scales (with a focus on micro- and macroeconomics) and economic actors (particularly consumers and producers). Altogether 307 articles were screened, resulting in a final data set of 94 peer-reviewed articles. In addition to the core assumption of ‘enoughness’, we found three premises describing the concept: (1) complementarity of capitals, (2) social metabolism, and (3) altruism. In the reviewed literature, sufficiency is understood as both an end in itself and a means for bringing consumption and production within ecological limits. By conducting the first systematic literature review on sufficiency, the study explicates a more integrated understanding of sufficiency and highlights the need to treat sufficiency across economic scales and actors. In future research, empirical work should be emphasized to grasp the contextual varieties in the operationalization of sufficiency.
Chapter
The circular economy has been proposed as an answer to the call for decoupling economic growth from resource extraction, waste generation, and climate-change issues. Companies should thus implement circular business models, leveraging such strategies as product redesign, servitisation, or supply chain management. While their role has been addressed by previous literature, enabling factors such as government intervention or user engagement have received limited attention. This becomes more relevant since geographical contexts affect how these factors enable the circular economy. Thus, this chapter aims to explore the role of geographical contexts on the enabling factors of circular business models. Two case companies that have run circular business models in two different geographical settings (the Netherlands and Italy) are investigated. Users played a major role in both cases, even though their behaviour differs significantly. This can be explained by the geographical context in which the cases are located. In Northern Europe, citizens are less reluctant to adopt circular business models focused on servitisation, while, to the best of the authors’ knowledge, no attempts to introduce similar solutions have happened in Italy. This chapter also emphasises the critical role that national government plays in enabling (or unintentionally delaying) the introduction of circular business models.
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The business model of as‐a‐service is rapidly spreading in the energy industry. This study aims to examine how servitization in the energy sector is progressing, what sectors are in the spotlight, and what their implications are. By understanding the servitization aspect of the energy sector, it is possible to gauge the direction of change in the energy industry. This study has reviewed various as‐a‐service types in the energy sector through new articles analytics. For a total of 6 years from 2015 to 2020, news articles containing keywords related to the energy industry and the term “as a service” were extracted from Google News using the R package. As a result, well‐known as‐a‐service models such as software‐as‐a‐service and platform‐as‐a‐service are being emphasized in the energy sector. Also, new types of services such as zero‐carbon‐as‐a‐service and resilience‐as‐a‐service have been emerging recently. With the spread of as‐a‐service, the value chain structure of the energy industry is expected to shift towards various types of services and platforms. Servitization, represented by as‐a‐service, is becoming a trend in the energy industry, and policy and regulatory support to foster the data industry and expand opportunities to demonstrate innovative technologies and services is required. This article is categorized under: Policy and Economics > Governance and Regulation Policy and Economics > Research and Development Under the intensifying competition and environmental regulations, various types of as‐a‐service models are emerging as new growth engines in the energy industry, demanding a data‐driven business environment and regulatory changes.
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This study aims to review the state of the art on the topic of business models for sustainability. The paper screens 1744 peer‐reviewed papers with no temporal limitation and undertakes three stages of literature review analysis of a final set of 134 papers with a combination of systematic, bibliometric and multivariate techniques. The first output is the identification of six wide different but interconnected research streams of business model for sustainability: namely, elements and structure; applications; different types of business model for sustainability; transition process; circularity as sustainability; and technical aspects of innovation. A theoretical framework that allows to understand the themes explored by the literature so far and gives an interpretation of the evolution of the literature has been produced. Finally, the analysis provides opportunities and research directions for future research. The paper originality lies in providing the first co‐citation analysis of business models for sustainability with a descriptive and critical study by identifying main research trends and relevant gaps in the literature and by providing future research directions.
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A transition towards circular manufacturing systems (CMS) has brought awareness of untapped economic and environmental benefits for the manufacturing industry. Conventional manufacturing systems already present a high level of complexity in terms of physical flows of materials and products as well as information and financial flows linked to them. Closing the loop of materials and products through multiple lifecycles, as proposed in CMS, increases this complexity manifold. To support practitioners in implementing CMS through enhanced decision-making, this research studies CMS from a complex adaptive systems (CAS) perspective and proposes to exploit methods and tools used in the study of CAS to characterise, model and analyse CMS. By viewing CMS as CAS composed of autonomous, interacting agents, this research proposes a multi-method model architecture for modelling and simulating CMS. The different CMS stakeholders are modelled individually as autonomous agents by integrating agent-based, discrete-event, and/or system dynamics modules within each agent to capture their diverse and heterogeneous nature. The applicability of the proposed multi-method approach is illustrated through a case study of a white goods manufacturing company implementing CMS in practice. This case study shows the relevance and feasibility of the proposed multi-method approach as a decision support tool for the systemic exploration and quantification of CMS. It also shows how a transition towards CMS necessitates a lifecycle approach in terms of costs, revenues and environmental impacts to identify hotspots and, therefore, design circular systems that are viable in both economic and environmental terms. In fact, the analyses of the simulation results indicate how decisions in terms of business models, product design, and supply chain affected the CMS performance of the case company. For instance, implementing a service-based model led to a high number of usecycles (on average six usecycles per washing machine), which, in turn, led to high lifecycle costs and emissions due to more frequent transportation and recovery operations. Similarly, the deployment of long-lasting washing machines, which is a core principle of CMS, led to high manufacturing costs. Due to the high initial costs and a time mismatch between revenues and costs in the service-based model, it required a longer time for the company to reach the break-even point (approximately 23 months). Overall, the case study shows that multi-method simulation modelling can provide decision-making support for a successful implementation of CMS.
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This Research-in-Progress paper presents a preliminary design of a maturity model for assessing the internal readiness of business-to-business equipment manufacturing companies implementing new, service-based pay-per-x (PPX) business models. By using existing maturity model design guidelines, action design research methodology as well as PPX-related literature and analogous maturity models in fields such as servitization, digitization, Industry 4.0, data-driven manufacturing and product-service systems, this paper explains how the creation of a maturity model could enable a systematic approach to implementing the new PPX business models. The paper will also provide the basis for the PPX maturity model development and validation in the future, while aiding the equipment manufacturing companies in assessing their current as-is situation in the most critical areas of PPX implementation as well as formulating a roadmap towards the implementation.
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The aim of this article is to identify both the circular economy strategies with the most influence for managing each business model building block in circular businesses; and the business model building blocks that are most affected by circular economy strategies. A systematic literature review was conducted to identify potential circular economy strategies, resulting in sixteen such strategies. Thereafter, a survey was conducted with experts to indicate how important the strategies were for managing each building block (business model Canvas) using a Fuzzy Logic approach. The survey, using fuzzy linguistic variables, was sent to specialists in circular business models worldwide. The circular economy strategies that influence business modelling to a greater extent are developing strategic partnerships for circularity and engaging stakeholders along the value chain, and digital technologies (e.g. Industry 4.0) to enable circularity. The building blocks most influenced by circular economy strategies are customer segments, customer relationships, and key partnerships. The analysis made in this research indicates where companies should focus their efforts towards managing their businesses when implementing/managing different CE strategies.
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Dominant unsustainable consumption patterns in developed countries have led to increasing climate and biodiversity issues. Through consumption-based accounting, at least 70% of the environmental footprint (carbon emissions, blue water extraction, resource use, land use) can be attributed to food, housing, the use of appliances and transport. Total consumption of dominant consumer goods such as clothing and electronics is only on the rise, also leading to increasing levels of waste. Given these adverse trends, and the key role of business in society, this chapter focuses on a potential positive role by business and investigates the following question: Can business have a positive role in supporting or even driving sustainable consumption, and if so, how? First, a Business for Sufficiency framework is introduced-based on the top strategies in the waste hierarchy and the four 'lessens'-to map possible business-driven strategies. Second, this framework is applied to the sectors of food, housing, appliances, and transport. Based on this analysis, it was found that business indeed has a plethora of options, including green alternatives, service-driven business models, platforms, and strategies to moderate consumption. However, green alternatives were most prevalent. While some businesses also operate in the refuse (do not overconsume) option, it is likely that new policies are needed to drive sustainable consumption. The EU Circular Economy Package is an important lever for policy change, but a specific focus on sufficiency may help guide even more stringent policies to curb unsustainable consumption patterns that are detrimental to the environment and ultimately society itself.
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Business model experimentation has been identified as a key driver for business competitiveness but is underexplored in the sustainability and circular economy spheres. What is business model experimentation for the circular economy? This study follows a two-step approach: a literature analysis followed by a qualitative practitioner study. Based on these, circular business model experimentation is defined as an iterative approach to develop and test circular value propositions in a real-life context with customers and stakeholders, starting with a shared goal. It involves rapid learning based on empirical data to provide evidence on the viability of circular value propositions. Iterations involve increased complexity of experiments. There is a learning focus on initiating wider transitions, such as transforming consumer behaviours for the circular economy. We visualise the emerging research landscape, including research streams from business, transitions, engineering, and design. Practically, we illuminate how practitioners view the concept and current experimentation tools and approaches.
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Faced with a scarcity of materials, increasing quantities of waste, and low rate of recovery, the electrical and electronic equipment sector has become a key focus in the drive for a transition to the circular economy. An increasing body of work has addressed the integration of the circular economy at a business model level but there is a limited understanding of a sector-wide approach to circular economy business model innovation. Additionally, no studies have been identified that endeavoured to develop a circular economy business model innovation process for electrical and electronic manufacturers. To address this gap, this research adopted a qualitative approach via seven iterative workshops with key stakeholders in the electrical and electronic equipment sector to inform the development and refinement of a Circular Economy Business Model Innovation Process Framework. The resulting Framework, which has five-fold interconnected layers, provides electrical and electronic equipment manufacturers with a comprehensive layered process for developing and implementing a circular economy business model tailored to their business offerings. Using the manufacturer’s business strategy as a starting point, the developed Framework prompts the integration of the circular economy into business practices. Influencing factors affecting the circular economy business model innovation process are addressed by identifying the associated challenges and opportunities and related policy. Finally, the Framework proposes circularity indicators relevant to electrical and electronic equipment, helping to ensure that the proposed circular economy actions are measurable and informed.
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Many companies have innovated their business models in their attempts to transition towards a circular economy. However, the label ‘circular’ does not necessarily mean better for the environment. How do companies measure the environmental performance of their business models? And as they alter them for a circular economy, how do they forecast the potential environmental impacts? These questions are important to better understand the impacts of circular business models. This study sets out to answer these questions through 29 semi-structured interviews and 39 survey responses, with business developers, managers, product designers and consultants from more than 10 industries. The results reveal that while most participants measure the impact of their current business models, they do not forecast the future impacts of their circular business ideas before implementation. The most popular measurement method was rules of thumb, followed by life-cycle assessment (LCA) or LCA-based tools. A lack of data, increased uncertainty during experimentation and a lack of knowledge are the common barriers that keep the participants from measuring environmental impacts. We also found that startups give a lower priority to measuring impacts than large corporates. However, despite the latter having more resources to measure impacts, results from impact assessment might not lead to direct design improvements in the same design cycle. An overarching finding was that the extent of positive impact of circular business models remains uncertain for many participants. Future research can work on developing methods or frameworks that resolve these issues.
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A key principle of the circular economy is to fundamentally reconsider the nature of the transaction between producer and consumer. To facilitate circularity and enhance sustainability, producers retain ownership of a product throughout its lifetime, and consumers lease, rent, or share the product. This paper examines the feasibility of leasing instead of buying a product from both the consumer's and manufacturer's perspectives. We focus on repeated leasing with refurbishment in‐between for the specific case of washing machines. Through an online experiment, we assess the preferences of consumers among the alternatives of purchasing a new machine and leasing a new or a used machine. The results reveal that the market is segmented and consumers have distinct preferences driven by psychological antecedents such as disgust, pride of ownership, and convenience of leasing. While there is some demand for leasing new and used machines, there are also barriers to the transition from selling to leasing: a significant number of consumers prefer to buy instead of lease at any price that would sustain a manufacturer's profitability. Moreover, there appears to be an imbalance in the consumer demand for leasing new and leasing used—a mismatch that poses an obstacle to the economic feasibility of a circular economy.
Digital trends in product-service system (PSS) development focus on developing win-win solutions for both companies and customers, particularly when considering human behavior issues. It is useful for the PSS provider to know the PSS value creation mechanism when customers are buying and utilizing a PSS, particularly in the service-dominant logic (SDL) and cognitive neuroscience perspective. This study solved the PSS implementation that satisfied the demands of both customers and manufacturers and the value cocreation mechanism during product and service configuration with the impacts of consumer learning and the service experience. The proposed neuroscience methodology is based on an ERP (event-related potential) experiment using PSS stimuli, representing the perception value creation process during customer decision making and the PSS configuration process. The effectiveness of the service experience is more important than customer knowledge during PSS value perception due to positive emotions with pleasant memories for the service experience and the conflicting cognition process of customer learning. The combination of service science and neurology may measure and observe human behavior and psychology through the brain science method and effectively solve the human factors in service science. The findings suggest a more objective and personalized understanding of PSS value perception, particularly the practical requirements of a resulted-oriented PSS and an application-oriented PSS.
Purpose This article aims to analyze the specific indicators of the circular economy (CE) in terms of analytical aspects, scope and breadth of metrics and levels of innovation associated with CE. Design/methodology/approach A literature review was developed with a sample of 125 articles, extracted from Scopus, Web of Science, ScienceDirect, Emerald, Google Scholar, Online Library, Sage, Springer, Taylor and Francis and JSTOR databases. Findings The results indicate the lack of integration of the social dimension and predominance of environmental indicators, lack of indicators for the meso level and concentration of metrics for the product level. Methodological criteria of validity and reliability for measurement studies are recommended, as well as paths and proposals for future research in the CE. Research limitations/implications The study’s limitations are linked to the content and method aspects. Although the search was performed in several databases, with a significant number of articles returned compared to other reviews of the topic, the possibilities are limited by the data source and the impossibility of a broader review. The theme is not yet consolidated and this affects the linearity of the revised results. As for the method, the analysis and coding in systematic reviews involve the authors’ capacity for exploration and cognition. Practical implications The article proposes six theoretical propositions and the theoretical framework that portrays the main findings of the study and questions to drive future research in the topic. Social implications The article points out opportunities for companies, universities and the government regarding the possibilities that can be explored to develop knowledge and practice about the field. Originality/value This research advances the CE literature by means of providing a review of the indicators, metrics and tools oriented toward the CE literature that contributes to the improvement and consolidation of the various researches in the field.
Article
Circular business models are increasingly seen as enablers for the transition towards a circular economy. Perceiving financial benefits is an important driver for companies to make this transition, which is why knowledge of financial performance is required to support decision-makers. However, a lack of understanding of financial performance for circular business models has been identified as a barrier to transitioning. Therefore, this paper uses a systematic literature review to identify the state-of-the-art of how financial performance and its underpinnings are addressed concerning circular business models for each transition phase (i.e., ideate and design, implement and test, evaluate and improve). By analyzing the extent, context, and content of the financial performance discussions in relation to circular business models, the review identifies reasons for perceiving the transition as financially challenging and suggests specific research paths for each phase of the transition, to pinpoint where more efforts are needed. First, there is a lack of studies on prospective financial performance evaluation in the ideate-and-design phase. Second, retrospective evaluation of prototypes for circular business model experimentation lacks guidelines, and evidence and further investigations are needed on upscaling outcomes. Third, although retrospective evaluation gains more interest in the literature, guidelines and empirical evidence on selecting and designing prospective and retrospective indicators are still needed. Fourth, setting the evaluation scope is a key area for future studies. This involves having a long-term perspective and considering the offering from a business model level.
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Sustainable business models are often viewed as a key driver for sustainability. In a sustainable business model, positive value creation is sought for the customer as well as the wider society and environment. Product Service Systems (PSS) as an archetypical example of sustainable business models could result in better alignment of the customer's (and society's) needs with those of the manufacturer by breaking the link between profit and production volumes. PSS could contribute to reducing resource consumption and motivating the consideration of through-and end-of-life issues, improved usage efficiency and product durability. Despite rising popularity, there is insufficient evidence on the generated impact. How can sustainable business models achieve measurable positive impact? This paper explores how companies can contribute to sustainable consumption through business-led sustainable consumption strategies. This paper presents the case of HOMIE, a start-up company that aims to reduce the environmental impact of domestic appliances, by offering appliances on a "pay per use" basis. Through pay per use, circularity and sustainable consumption can be offered. The study builds on predicted laundry behaviour by HOMIE customers collected through interviews; actual washing behaviour; and changes in behaviour after implemented interventions based on literature on sustainable behaviour change (e.g. providing information and social comparison). It was found that customers do the laundry more often than they think when comparing estimates of their behaviour to observed data. In addition, the average temperature per cycle dropped after introducing pay per use (compared to a free month). The study demonstrates the potential as well as limitations of sustainable business models. It includes insight for future research in sustainable consumption and business models, as well as practical insight for sustainable entrepreneurs and intrapreneurs.
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This article reflects on the current state of the dynamically growing research and practice related to sustainable business models (SBMs), motivated by the question of whether dealing with SBMs is just a passing fancy or an emerging field, maybe even a field in its own right. We follow Ehrenfeld (2004), who asked a similar question for the field of industrial ecology in this journal, and reflect on the major beliefs and concepts underpinning SBM research and practice, tools and resources, authorities and the related community of actors. These elements are considered characteristics of a field and must be institutionalised in academia, industry and government for a field to emerge and progress. We therefore also identify some institutionalisation tendencies. As a result, we conclude that SBM research and practice show traits of an emerging field. It is however too early to foresee if it will develop as a sub-field within already established domains (“sub-field hypothesis”) or as a stand-alone field (“stand-alone hypothesis”). We argue that the sub-field and the stand-alone positioning may hamper the unfolding of the field's full potential. Instead, we propose that the SBM field needs to assume the role of an integrative field to break existing academic niches and silos and maximise practical impact (“integration hypothesis”). Our observations indicate that the SBM field is indeed developing into an integrative field and force. But we need to better understand and strengthen this development, for example by crafting a dedicated SBM research programme. A series of critical reviews could be a starting point for such an endeavour.
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This article is available open access under: http://dx.doi.org/10.1007/s00170-017-0610-9 The recent circular economy movement has raised awareness and interest about untapped environmental and economic potential in the manufacturing industry. One of the crucial aspects in the implementation of circular or closed-loop manufacturing approach is the design of circular products. While it is obvious that three post-use strategies, i.e. reuse, remanufacturing and recycling, are highly relevant to achieve loop closure, it is enormously challenging to choose ‘the right’ strategy (if at all) during the early design stage and especially at the single component level. One reason is that economic and environmental impacts of adapting these strategies are not explicit as they vary depending on the chosen business model and associated supply chains. In this scenario decision support is essential to motivate adaptation of regenerative design strategies. Main purpose of this paper is to provide reliable decision support at the intersection of multiple lifecycle design and business models in the circular economy context to identify effects on cost and CO2 emissions. The development of this work consists of a systematic method to quantify design effort for different circular design options through a multi-method simulation approach. The simulation model combines an agent-based product architecture and a discrete event closed-loop supply chain model. Feasibility of the model is tested using a case of a washing machine provided by Groenje d.d. Firstly, design efforts for reuse, remanufacturing and recycling are quantified. Secondly, cost and emissions of different design options are explored with different business model configurations. Finally, an optimization experiment is run to identify the most cost effective combination of reused, remanufactured and recycled components for a business model chosen on the basis of the explorative study results.
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Although circular economy is usually indicated as a way to reconcile economic growth and sustainability, circular business models and related product-service systems are not implemented on a large scale yet. Providing information about how to develop circular business models and methods to evaluate their expected impacts, can support stakeholders to embrace this transition. To this regard, the aim of this paper is to propose and discuss the actions required for reshaping the washing machine industry towards a circular economy scenario. The paper, based on a recently launched research project, describes a set of actions and develops very preliminary computations of their expected impact. Results show that customers could benefit from an average yearly saving of almost 30% of the current washing cost, while country total electricity generation and water consumption could be reduced of about 0.6% and 1% respectively. Albeit they are only preliminary estimates and further research and empirical validation are certainly needed, these outcomes gives an idea about the order of magnitude of benefits gathered by a circular economy transition for a mass durable consumer goods industry such as washing machines.
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The sudden rise of the sharing economy has sparked an intense public debate about its definition, its effects and its future regulation. Here, I attempt to provide analytical guidance by defining the sharing economy as the practice that consumers grant each other temporary access to their under-utilized physical assets. Using this definition, the rise of the sharing economy can be understood as occurring at the intersection of three salient economic trends: peer-to-peer exchange, access over ownership and circular business models. I shortly discuss some of the environmental impacts of online sharing platforms and then articulate three possible futures of the sharing economy: a capitalist future cumulating in monopolistic super-platforms allowing for seamless services, a state-led future that shifts taxation from labour to capital and redistributes the gains of sharing from winners to losers, and a citizen-led future based on cooperatively owned platforms under democratic control. The nature and size of the social and environmental impacts are expected to differ greatly in each of the three scenarios. This article is part of the themed issue ‘Material demand reduction’.
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Purpose To mitigate negative human-induced impact on the planet, consumption patterns need to be changed urgently. The purpose of this paper is to investigate how companies can drive sustainable consumption patterns. Design/methodology/approach The paper discusses six illustrative cases of sustainable consumption initiatives by companies: their strategies, initiatives and impacts. Findings A “business-led sustainable consumption strategies framework” was developed to analyse the cases. It was found that companies apply individual, social and wider contextual influencing tactics to encourage sustainable consumption. The case initiatives emerged without regulatory pushes. It was found that collaborative initiatives could be impactful, because multiple stakeholder influence helps normalise new behaviour. Regulation helps to level the playing field in an industry and potentially force absolute consumption reductions. Practical implications This work provides insight into the potential of business-led sustainable consumption initiatives and the strategies to be used. Companies are making important steps to encourage sustainable consumption, but initiatives have not yet achieved the scale to significantly transform consumption patterns. Further business experimentation with social marketing type of techniques is recommended. Future work is required to map out the most suitable strategies to encourage sustainable consumption by industry. Originality/value This paper has given new insight in the potential future role of companies in sustainable consumption. Businesses are positioned as the initiators of sustainable consumption patterns: their expertise can be used to stimulate and adopt sustainable consumption patterns with customers. This work sheds light on how businesses can use social marketing-type techniques and business model innovation to drive sustainable consumption. Finally, it contributes to the understanding of the scale and effectiveness of business-led sustainable consumption initiatives.
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While the terms Circular Economy and sustainability are increasingly gaining traction with academia, industry, and policymakers, the similarities and differences between both concepts remain ambiguous. The relationship between the concepts is not made explicit in literature, which is blurring their conceptual contours and constrains the efficacy of using the approaches in research and practice. This research addresses this gap and aims to provide conceptual clarity by distinguishing the terms and synthesising the different types of relationships between them. We conducted an extensive literature review, employing bibliometric analysis and snowballing techniques to investigate the state of the art in the field and synthesise the similarities, differences and relationships between both terms. We identified eight different relationship types in the literature and illustrated the most evident similarities and differences between both concepts.
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The transition within business from a linear to a circular economy brings with it a range of practical challenges for companies. The following question is addressed: What are the product design and business model strategies for companies that want to move to a circular economy model? This paper develops a framework of strategies to guide designers and business strategists in the move from a linear to a circular economy. Building on Stahel, the terminology of slowing, closing, and narrowing resource loops is introduced. A list of product design strategies, business model strategies, and examples for key decision-makers in businesses is introduced, to facilitate the move to a circular economy. This framework also opens up a future research agenda for the circular economy.
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This research paper shows how a firm pursues innovation activities for economic, social and environmental value creation in the context of time sensitivity. We make a conceptual link between lean startup thinking, triple bottom line value creation, and organizational capabilities. The case study firm uses a novel experimentation approach to pursue the goal of diverting all of its sold clothing from landfill through a two-year project. This requires substantial changes to the current business practice because in 2012, the clothing retailer recovered 1% of all garments sold. The fibre input value for all garments sold in 2012 exceeded $7m. We found that despite a stated need for fast learning through project experiments, the experiments were not executed quickly. (1) The desire to plan project activities and the lack of lean startup approach expertise across the whole project team hampered fast action. This led to the extension of the project timeline. However, project team confidence about learning by doing increased through privately executed experiments. (2) Some project experiments were not fit to meet the triple bottom value creation project goal and were dropped from the project. Overall, the corporate mindset of economic value creation still dominated.
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The paper explores the evolution of Design for Sustainability (DfS). Following a quasi-chronological pattern, our exploration provides an overview of the DfS field, categorising the design approaches developed in the past decades under four innovation levels: Product, Product-Service System, Spatio-Social and Socio-Technical System. As a result, we propose an evolutionary framework and map the reviewed DfS approaches onto this framework. The proposed framework synthesizes the evolution of the DfS field, showing how it has progressively expanded from a technical and product-centric focus towards large scale system level changes in which sustainability is understood as a socio-technical challenge. The framework also shows how the various DfS approaches contribute to particular sustainability aspects and visualises linkages, overlaps and complementarities between these approaches.
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The fear that human consumption is causing climate change, biodiversity loss, and mineral scarcity has recently prompted interest in reuse because of the intuitive belief that it reduces new production and waste. The environmental impacts of reuse have, however, received little attention—the benefits typically assumed rather than understood—and consequently the overall effects remain unclear. In this article, we structure the current work on the topic, reviewing the potential benefits and pitfalls described in the literature and providing a framework for future research. Many products’ use-phase energy requirements are decreasing. The relative importance of the embodied impacts from initial production is therefore growing and the prominence of reuse as an abatement strategy is likely to increase in the future. Many examples are found in the literature of beneficial reuse of standardized, unpowered products and components, and repairing an item is always found to be less energy intensive than new production. However, reusing a product does not guarantee an environmental benefit. Attention must be paid to restoring and upgrading old product efficiencies, minimizing overspecification in the new application, and considering whether more efficient, new products exist that would be more suitable. Cheap, reused goods can allow many consumers access to products they would otherwise have been unable to afford. Though socially valuable, these sales, which may help minimize landfill in the short term, can represent additional consumption rather than a net environmental benefit compared to the status quo.
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The transition to more sustainable production and consumption patterns and levels requires changes in mainstream business models. These are typically based on linear production processes and the throwaway mentality. Alternative business models are often based on ideas of circular flows of products and materials, in both production and consumption phases. Alternative modes of consumption include models for extending the lives of products (e.g. through reselling of second-hand goods), access-based consumption (e.g. renting and leasing), and collaborative consumption (e.g. sharing platforms). Consumers are crucial in the success of these models. However, knowledge about consumer attitudes towards alternative consumption models is scarce, particularly for furniture and home products. Therefore, the goal of this study was to examine consumer attitudes, motivations and barriers relating to the three models, with particular emphasis on furnishing products. Data was collected through interviews with experts and an online survey of consumers, and the study was conducted in collaboration with IKEA, furniture retailer. The results demonstrate that consumer attitudes vary greatly to the consumption models and depending on the product group. Attitudes towards buying second-hand furniture and short-term renting are largely positive, while attitudes to long-term renting are negative. Collaborative consumption has higher acceptance for seldom-used products.
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Business model innovation is an important lever for change to tackle pressing sustainability issues. In this paper, ‘sufficiency’ is proposed as a driver of business model innovation for sustainability. Sufficiency-driven business models seek to moderate overall resource consumption by curbing demand through education and consumer engagement, making products that last longer and avoiding built-in obsolescence, focusing on satisfying ‘needs’ rather than promoting ‘wants’ and fast-fashion, conscious sales and marketing techniques, new revenue models, or innovative technology solutions. This paper uses a case study approach to investigate how companies might use sufficiency as a driver for innovation and asserts that there can be a good business case for sufficiency. Business models of exemplar cases are analysed and insights are gained that will contribute to future research, policy makers and businesses interested in exploring sufficiency.
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The public perception of shared goods has changed substantially in the past few years. While co-owning properties has been widely accepted for a while (e.g., timeshares), the notion of sharing bikes, cars, or even rides on an on-demand basis is just now starting to gain widespread popularity. The emerging "sharing economy" is particularly interesting in the context of cities that struggle with population growth and increasing density. While sharing vehicles promises to reduce inner-city traffic, congestion, and pollution problems, the associated business models are not without problems themselves. Using agency theory, in this article we discuss existing shared mobility business models in an effort to unveil the optimal relationship between service providers (agents) and the local governments (principals) to achieve the common objective of sustainable mobility. Our findings show private or public models are fraught with conflicts, and point to a merit model as the most promising alignment of the strengths of agents and principals.
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According to one perspective, organizations will only be sustainable if the dominant neoclassical model of the firm is transformed, rather than supplemented, by social and environmental priorities. This article seeks to develop a "sustainability business model" (SBM)-a model where sustainability concepts shape the driving force of the firm and its decision making. The SBM is drawn from two case studies of organizations considered to be leaders in operationalizing sustainability and is informed by the ecological modernization perspective of sustainability. The analysis reveals that organizations adopting a SBM must develop internal structural and cultural capabilities to achieve firm-level sustainability and collaborate with key stakeholders to achieve sustainability for the system that an organization is part of.
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Every day, we make decisions on topics ranging from personal investments to schools for our children to the meals we eat to the causes we champion. Unfortunately, we often choose poorly. The reason, the authors explain, is that, being human, we all are susceptible to various biases that can lead us to blunder. Our mistakes make us poorer and less healthy; we often make bad decisions involving education, personal finance, health care, mortgages and credit cards, the family, and even the planet itself. Thaler and Sunstein invite us to enter an alternative world, one that takes our humanness as a given. They show that by knowing how people think, we can design choice environments that make it easier for people to choose what is best for themselves, their families, and their society. Using colorful examples from the most important aspects of life, Thaler and Sunstein demonstrate how thoughtful "choice architecture" can be established to nudge us in beneficial directions without restricting freedom of choice. Nudge offers a unique new take-from neither the left nor the right-on many hot-button issues, for individuals and governments alike. This is one of the most engaging and provocative books to come along in many years. © 2008 by Richard H. Thaler and Cass R. Sunstein. All rights reserved.
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Sustainable design takes into account environmental, economic and social impacts enacted throughout the product lifecycle. Design for Sustainable Behaviour (DfSB) is an emerging activity under the banner of sustainable design which aims to reduce products' environmental and social impact by moderating how users interact with them. This paper presents the results of research investigating the application of Design for Sustainable Behaviour in two product case studies, one examining social impacts of mobile phones and the other environmental impacts of household refrigerators. It analyses selected behaviour models from social-psychological theories and highlights the barriers to sustainable consumption. A model is developed to illustrate the factors stimulating changes in behaviour, and design intervention strategies are highlighted and their application within Design for Sustainable Behaviour discussed. The two case studies are used to illustrate how Design for Sustainable Behaviour could be applied to enable users to adopt more sustainable patterns of use. Conclusions are drawn as to the potential for designers to change use behaviour; the appropriateness and acceptability of the strategies presented; and the ethical considerations related to their selection.
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