This is a summary of the book titled “The Circular Business Revolution – a practical framework for sustainable business models” written by Manuel Braun and Julia Binder and published by FT Publishing in 2024. The authors encourage business to shift from the linear “take-make-waste” model of business to a sustainable circular, “net positive” model that aims at both business success and environmental and social good. They assert that the shift is both possible and necessary. Sometimes the shift might require redesigning the business model. That can be done by focusing on resource use, ecosystems, uses of waste, and product life for sustainability and by focusing on the value chain and operating environment for the business’ future. It’s also important to set the goals high in how the company can create a net positive impact. Both business and environmental aims must align with the company’s vision. Execution can be complex, but it focuses on integrating sustainability

The shift from a linear economy to a circular one is both possible and necessary. The current linear model, which starts with the extraction of natural resources and ends with waste, is inefficient and has negative environmental effects. A circular economy, which focuses on value creation through continuous use and reuse, is becoming more prevalent. This transformation is inevitable and can be achieved through three horizons: near, far, and mid-term. To transition, businesses should assess signs for change, create a vision for a circular, regenerative future, investigate business models that achieve good business outcomes and low environmental impact, and strengthen their readiness for change. The circular economy aims at "eco-effectiveness" and focuses on meeting human needs rather than just profit. Participants in a circular economy use nine strategies, called "R-strategies," to achieve circularity and reduce pressure on resources.

Circular business models are a type of business strategy that focuses on resource use, ecosystems, waste, product life, or servitization. They fall into five categories: optimizing resource use, restoring ecosystems, capturing waste value, extending product life, and bundling services and products. These models aim to make existing operations more environmentally sustainable, reducing waste and pollution, and promoting sustainable practices. They also focus on restoring ecosystems, such as the cultivation of the illipe nut in Borneo, which combats deforestation and supports local communities. They also recognize the economic value of waste materials, such as by-products, and create value by recovering them. They also focus on providing integrated solutions tailored to specific needs, often through sharing and pooling platforms.

To understand your business's future, consider your value chain and operating environment from two perspectives: inside out and outside in. The inside-out view helps identify inefficiencies in the linear system, such as overuse of resources, negative externalities, waste generation, underutilized capacities, and product losses. The outside-in view considers the business's operating environment, which will face disruption due to increasing resources scarcity, power dynamics, and other drivers. Maintaining your "license to operate" and "license to innovate" is crucial for gaining a competitive advantage.

To transition from linear to circular, start with a clear vision for achieving business success and environmental goals. Develop this vision from both an environmental and business perspective, building on existing values and mission. Backcasting helps determine what needs to be done to make the vision a reality. Companies like FREITAG are promoting circularity by focusing on intelligent design and employee development.

A successful strategy for implementing a circular business model should address both business and environmental aims and align with the organization's vision. This involves a pathway to implementing a chosen business model and direction for the organization. The transition to servitization often faces the balance sheet dilemma, but it requires careful cash-flow management. Active stakeholder involvement is crucial, and the business model pathway should align with the organization's future vision. The implementation of a circular business model has six major dimensions: customer-centricity, design, ecosystem, data and technology, organizational structures and processes, and tools, systems, and KPIs. Leaders must communicate authentically, avoid greenwashing and greenhushing, and maintain transparency to demonstrate commitment to the transformation.