Closing the Loop: Circular Economy Through Sustainable Innovation Lens

Abstract

Circular economy is an innovative approach to operationalize principles of sustainability management. The concept is based on the ‘closing the loop’ of product lifecycles and is expected to bring benefits for environment and economy as well as to contribute to the responsible business conduct. These benefits refer to reduced usage of resources, lower impact on the natural environment, cost savings and jobs creation. The implementation of circular economy has a disruptive impact on company operations and leads to the need of establishing new business models. While the concept remains significantly unexplored, few studies outline a practical approach to implement principles of circular economy in companies. We would like to add to this literature examining the practice of business models. The concept of circular economy remains an emerging approach in business practice and relates mainly to changes in production and consumption. We discuss how companies adopt the concept of circular economy and how it affects their business models. The business model redesigned may be a key to the radical improvement of sustainable performance as well as the creation of greater environmental and societal value. Simultaneously, it is expected to deliver positive financial results. We offer the case study analysis to illustrate the innovative approach to sustainable value creation and formulate implications for further practice of circular economy.