2. Theoretical framework
2.2. Circular economy and sustainable development
Circular business model can in a deeper context belong to the field circular economy, which is a broader perspective. Characteristics of CE are minimising waste, using renewable energy resources, and to use system thinking above one-time activities, for creating economic and environmental benefits (MacArthur, 2013). In the study from Kirchherr et al. (2017), 114 definitions of CE were found and the authors concluded the concept into following summarised definition:
We defined CE within our iteratively developed coding framework as an economic system that replaces the ‘end-of-life’ concept with reducing, alternatively reusing, recycling and recovering materials in production/distribution and consumption processes. It operates at the micro level (products, companies, consumers), meso level (eco-industrial parks) and macro level (city, region, nation and beyond), with the aim to accomplish sustainable development, thus simultaneously creating environmental quality, economic prosperity and social equity, to the benefit of current and future generations. It is enabled by novel business models and responsible consumers.
(Kirchherr et al., 2017, p. 229)
There is a shift from consuming to using by adoption of the 3R’s, which create strong incentives for companies to start providing services instead of selling goods, according to MacArthur (2013). Circular economy enables wins for companies, customers, and economies. Furthermore, it is companies own choice to start operating circular, customers must change behaviours and be willing to purchase in new ways, and society at large have to set new rules and
frameworks to drive the development of circular economy (MacArthur, 2013).
In a bigger context, Elliot (2012) describes sustainable development to include the concepts social-, environmental-, and economic sustainability. These three concepts intersects with each other and must be considered at the same time and not challenge the others (Elliott, 2012). Sustainable development affects all parts of the society and is a common challenge, whereby the 17 goals in Agenda 2030 was created (UNDP, n.d. d).
Moving on, definitions of circular economy, Kirchherr et al. (2017) definition included, have gained criticism for being too naive. Geissdoerfer et al. (2020) have been inspired by Geissdoerfer et al. (2017) and revisited the definition from Kirchherr et al. (2017). First and foremost, the criticism of the naiveness appears since Geissdoerfer et al. (2020) claims that it is impossible to achieve a completely circular system. Instead, the authors focus on minimising aspects like waste, energy leakages, and emission. This can be accomplished by for instance extending and intensifying the use of a product. Further, comments regarding the shift from disposal to end-of-life is seen as a confusing change.
The definition from Kirchherr et al. (2017) has therefore been further elaborated by Geissdoerfer et al. (2020) which additionally consists of straight forward approaches (e.g. digitalisation, servitisation and maintenance).
More hands on, MacArthur (2013) lists advice on actions for coming closer to CE. One tip is that businesses that control large parts of its supply chain can map out leakages and push others into circular setups. To catch the wave at the very beginning is another tip to design the future business landscape.
Communicate and activate the network for driving change and getting the customers onboard is also highlighted. The last proposal to achieve CE is to utilise on imbalances between markets and in turn make profit out of the opportunities (MacArthur, 2013). Furthermore, Elkington (1999) coined the mindset TBL in 1994 which consists of three P’s: profit, people, and planet and is not a concept to adapt once. Pastoors et al. (2017) describes that companies can adapt to this mindset in order to strive towards sustainable development. It is important to measure sustainable activities in order to achieve them. What aspects that are decided to be measured is also the aspects that most likely will prioritised (Pastoors et al., 2017). Therefore, it is vital for an organisation to be clear of where the areas for improvements exist.
Attitudes about sustainability has been shifted from threatening, increasing costs, towards opportunities to do good in broader terms than accounting, as Pastoors et al. (2017) describes it. Historically, the management segment
considered sustainable activities as hampering the success and decreasing the profit and has mostly been performed to satisfy governments and non-governmental organisations. However, organisations have started to regard these different concepts as gainful also for the organisation itself (Pastoors et al., 2017). Summarising, the societal problem regarding sustainability throws everyone on board, including companies. Companies can measure and act on vital areas to contribute to sustainable development, by using the perspective of triple bottom line (Pastoors et al., 2017), which is presented in figure 4.
Nowadays companies have global and national goals to strive for and demands pushes the business area towards sustainable development (UNDP, n.d. c; n.d.
Figure 4. Illustration of sustainable development with including parts and important improvement areas for organisations to start the journey.
In this study, focus will be on minimising waste and therefore take the Geissdoerfer et al. (2020) definition of circular economy into account.
Minimising waste will be grounded in the use of the 3R’s which is mentioned in both Geissdoerfer et al. (2020) and Kirchherr et al. (2017) expressions.
Explanation from directive of the European Parliament and of the Council (2008/98/EC) of recycling will be used and is referred to as reprocessed waste materials that become new materials or products. It can be used for same purpose or other purposes. An important demarcation of recycling is that it does not mean energy recovery or materials used for backfilling. The concept reuse on the other hand, directive of the European Parliament and of the Council (2008/98/EC) presents as products that is not seen as waste, which by operations can be used again for the intended purpose. This distinction between
the two concepts is necessary to understand. The last R, namely reduce, focuses on minimising waste, energy and materials through streamlining production and consumption activities (Feng & Yan, 2007; Su et al., 2013).