Achieving profitability and sustainability with circular business models

From linear to circular

The shift from linear to circular business models is essential but challenging. Industries like manufacturing and healthcare struggle to reduce waste while maintaining profitability. For example, the manufacturing sector accounts for 45% of global emissions, while healthcare generates significant hazardous waste. Many businesses face roadblocks when implementing circular strategies, often failing to scale them profitably.

Circular business examples

Leading companies have successfully transitioned by adopting circular practices such as product life extension, design for recycling, and retaining product ownership.

For instance:

1. Industrial industry: Mitsubishi’s marine-based CO? capture system enables ships to capture and store emissions directly, reducing the environmental impact of the shipping industry and supporting a circular approach to emissions management.
2. Consumer industry: Fairphone’s modular smartphones allow users to replace damaged parts easily, significantly extending product life and reducing electronic waste.
3. Manufacturing industry: Caterpillar’s remanufacturing initiative disassembles, rebuilds, and tests used equipment, cutting costs and emissions while enhancing longevity.
4. Healthcare industry: Philips’ “Circular Health” program provides refurbished medical devices as a service, ensuring cost-effective, sustainable access to essential healthcare equipment.

By shifting to circularity, companies can save up to 40% in material costs, demonstrating that sustainability doesn’t just protect the environment, it enhances profitability.

Advantages of closing the loop

Reduce costs: Circular strategies such as product life extension and recycling help cut material and operational costs.

Increase revenue: Offering products as services or through refurbishment creates new revenue streams.

Gain competitive advantage: Businesses that design for sustainability attract eco-conscious consumers and meet regulatory standards more easily.

Ready to explore more?

Dive into our latest insights and see how top brands like Siemens and Herman Miller are leading the charge. Read more about circular strategies and success stories here.

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