Improving Circular Economy Business Models: Opportunities for Business and Innovation A new framework for businesses to create a truly circular economy

The circular economy (CE) is aimed at closing material loops by reducing and recovering resources in production and consumption processes. Many studies have discussed how CE helps companies create business opportunities while bringing environmental benefits. The business case for CE involves complicated issues such as industrial symbiosis, governmental interventions and the transformation of company culture. It is important to consider the whole context of CE when changing policies or business elements to optimise resource efficiency and avoid unsustainable consumption. By reviewing industry research reports and academic studies, this article summarises important circular business models and strategies and indicates current major barriers to CE. In addition, we explore multiple business cases and point out three important considerations that, if not used correctly, can lead to improper policies and environmental degradation when designing circular business models. These are (a) the use of biodegradable materials, (b) modular design for product life extension and (c) upcycling for new production processes. We then present a framework for companies to clarify vital considerations for resolving these issues based on systems thinking. The implications for business managers and policy makers are also discussed. This article serves to provide a better understanding of CE and explores how companies innovate in line with CE trends.