Circular Economy 101&nbsp;writes about circular economy, a model of production and consumption of sharing, renting, reusing, repairing, refurbishing, and recycling existing materials and products for as long as possible.<hr fr-original-style="" style="height: 0px; overflow: visible; border-bottom: none; clear: both; user-select: none; break-after: page; box-sizing: border-box;">What do future business models offer?Studies in the field of circular economy have become an increasingly widespread point of focus for governments, legislative institutions, the private sector and academia, especially in recent years. Circular economy is being addressed from different perspectives as people try to integrate it into daily and professional life. In this way, reducing the use of resources, designing the most efficient processes, preventing waste generation and reducing greenhouse gas emissions are of course among the primary goals.<p contenteditable="false" fr-original-class="custom-button-wrapper fr-deletable" fr-original-style="text-align:center" style="text-align: center; margin-top: 0px; margin-bottom: 1em; box-sizing: border-box;"><a bgcolor="#effe75" color="#090909" contenteditable="false" fr-original-class="custom-button-link" fr-original-style="background-color:#effe75 !important;color:#090909 !important" href="https://aposto.com/i/potential-impacts-of-circular-business-models" rel="noreferrer" style="background-color: rgb(239, 254, 117) !important; color: rgb(9, 9, 9) !important; text-decoration: none; outline: none; cursor: pointer; transition: color 0.3s ease 0s; touch-action: manipulation; user-select: auto; box-sizing: border-box;" target="_blank">Read more</a><p contenteditable="false" fr-original-class="custom-button-wrapper fr-deletable" fr-original-style="text-align:center" style="text-align: center; margin-top: 0px; margin-bottom: 1em; box-sizing: border-box;"><a bgcolor="#effe75" color="#090909" contenteditable="false" fr-original-class="custom-button-link" fr-original-style="background-color:#effe75 !important;color:#090909 !important" href="https://aposto.com/n/circular-economy" rel="noreferrer" style="background-color: rgb(239, 254, 117) !important; color: rgb(9, 9, 9) !important; text-decoration: none; outline: none; cursor: pointer; transition: color 0.3s ease 0s; touch-action: manipulation; user-select: auto; box-sizing: border-box;" target="_blank">Subscribe</a>

Aposto Digest

Studies in the field of circular economy have become an increasingly widespread point of focus for governments, legislative institutions, the private sector and academia, especially in recent years. Circular economy is being addressed from different perspectives as people try to integrate it into daily and professional life. In this way, reducing the use of resources, designing the most efficient processes, preventing waste generation and reducing greenhouse gas emissions are of course among the primary goals.The different perspectives of circular economy are of course considered as various perspectives aiming to transform social and economic structures. At the forefront of these are, due to their environmental, social and economic impacts, circular business models. Innovation-oriented circular business models are changing our daily lives, even if we are not aware of this. They are developed to accelerate the transition of the private sector, especially startups, to circular economy and to maximise financial returns.In this week's article, instead of the obstacles facing circular business models, we are discussing what kind of returns circular business models will bring regarding different dynamics.In this article, we are accompanied by the article<a fr-original-style="" href="https://link.aposto.com/click?uri=aHR0cHM6Ly9saW5rLmFwb3N0by5jb20vY2xpY2s/aXNzdWU9NjNiMmNlOTA3ZGY3ZTEwMDA2MjkwNTk3JnN1YnNjcmliZXI9NjJiMDMzOTA1ZDM3OTIwMDA2MWQ4OTM1Jm5ld3NsZXR0ZXI9NjAwMDQ5OTY1Njg2MGYwMDA4MDAzMzdkJnB1Ymxpc2hlcj02MDAwNDc4MzU2ODYwZjAwMDgwMDJmNmQmc291cmNlPWVtYWlsJnVybD1odHRwcyUyNTNBJTI1MkYlMjUyRm9ubGluZWxpYnJhcnkud2lsZXkuY29tJTI1MkZkb2klMjUyRjEwLjEwMDIlMjUyRmJzZS4zMzM5" rel="noopener noreferrer" style="color: rgb(9, 9, 9); text-decoration: none; background-color: transparent; outline: none; cursor: pointer; transition: color 0.3s ease 0s; touch-action: manipulation; user-select: auto; box-sizing: border-box;" target="_blank">&nbsp;'Drivers and barriers for circular business model innovation'</a>, which will shed light on our current discussion as it has just been published.<h2 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">Positive impacts of circular business models</h2><h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">💰Financial effects</h3>In addition to the sustainability of existing processes, circular economy prioritises economic return through new business models. This is basically possible through the realisation of innovative business models with various principles such as R-strategies. In this context, circular economy can first bring financial growth by opening new markets and innovative business development processes.In addition, it will be possible to both reduce costs and create new income models, especially by reducing the use of resources and ensuring that waste remains in the cycle. In this way, it can enable the business world to increase resilience, which is critical for managing different crisis periods with less damage.Finally, especially for a future scenario in which various materials, which are being rapidly depleted due to the use of too many raw materials, become completely inaccessible, circular business models may help avoid the problem of access to resources thanks to closed loops.<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">⚖️&nbsp;Legal impacts</h3>Due to the sustainability and circular economy studies that have occupied the global agenda, many countries are working on different regulations and legal arrangements. The Circular Economy Action Plan, integrated into the European Green Deal, makes transformation mandatory for European Union (EU) countries as well as non-EU countries.At this point, it is possible to foresee how important and at some point mandatory circular business models will be in the future. Many business models that do not seem possible at the moment may come back to the agenda thanks to new regulations that will emerge in the coming days and years. One of the biggest examples of this is the business models focused on preventing food waste, which are increasingly adopted in France after the regulation on <a fr-original-style="" href="https://zerowasteeurope.eu/library/france-law-for-fighting-food-waste/?utm_source=aposto" rel="noopener noreferrer" style="color: rgb(9, 9, 9); text-decoration: none; background-color: transparent; outline: none; cursor: pointer; transition: color 0.3s ease 0s; touch-action: manipulation; user-select: auto; box-sizing: border-box;" target="_blank">food waste</a>.New regulations expected to come into force in the future are critical for taking action and managing potential risks correctly. However, circular business models can be considered an important tool for today in order to comply with the regulations that have been intensively worked on in the last few years due to global studies such as the European Green Deal, United Nations Sustainable Development Goals, etc. In particular, circular business models are reappearing again at the point of compliance with innovative regulations that restrict the use of existing materials and support the use of recycled materials, or allow consumers to purchase or rent second-hand products.<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">🏪 Effects on the market</h3>In the process of transition to circular economy, various obstacles create negative effects on the transformation processes of stakeholders that constitute social and economic structures. The most important of these is market dynamics, which are much more difficult to transform since they do not have a direct interlocutor. You can reach our previous discussion article on this topic <a fr-original-style="" href="https://aposto.com/i/barriers-to-transformation-market-dynamics" rel="noopener noreferrer" style="color: rgb(9, 9, 9); text-decoration: none; background-color: transparent; outline: none; cursor: pointer; transition: color 0.3s ease 0s; touch-action: manipulation; user-select: auto; box-sizing: border-box;" target="_blank">here</a>.Market dynamics are not very easy or fast-changing unless there are extraordinary crises like Covid-19. Although technological developments cause a new product or service to be developed every day and existing products and services to become 'obsolete', market dynamics often change slowly within certain patterns. With circular business models, however, market dynamics can change and it may be possible for the business world to increase its market share.Circular economy can be expected to increase the share of companies in the market, especially thanks to the aim of taking product ownership away from the consumer and giving it to the manufacturer or, the company that carries out sales. In existing business models, after the product is sold to the consumer, the relationship between the manufacturer and the consumer ends, whereas, with circular business models, a much longer-term relationship can be established between the manufacturer who retains ownership of the product and the consumer who uses the product only when needed. In addition, thanks to the increasing demand of consumers for sustainable and circular products and services, innovative products to be added to the product portfolio may also enable the increase of market share and the creation of new markets.<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">💡Technological impacts</h3>Global problems such as combating the climate crisis, hunger, loss of biodiversity and greenhouse gas emissions are at the centre of technological studies. R&amp;D studies, innovation investments and incentives carried out within the scope of combating global problems are increasing day by day. Circular business models support the transformation of technological developments in this direction, with innovation at the centre.Circular business models aiming at the efficient use of resources expand the development areas of technologies such as data science and blockchain. On the other hand, innovative business models that will enable the recycling of waste into the economy, especially on the consumer side, also expand the scope of technological studies.Biomimicry studies, which have an important added value, especially in circular economy, prepare the environment to make technological developments more environmentally friendly with solutions inspired by nature.<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">🧭 Impacts on corporate governance</h3>Sustainability and the transition to a circular economy, in which companies are obliged to participate, especially as it has found its place on the agenda of the investment world, also have positive effects on the corporate governance strategies of companies. The decisions made by investors with a more sustainable/responsible investment perspective and the criteria set by large investment funds in environmental, social and governance areas prevent companies from ignoring these areas.Circular business models are also becoming an extremely important tool, especially for companies that are trying to enter new markets by transforming their existing business models, trying to create new revenue models or simply trying to respond to the demands of consumers.Corporate sustainability and circular economy studies, in which top management of companies are directly involved, are becoming indispensable issues both in the eyes of investors, in terms of the company's current operations and employees, and perhaps most importantly for customers. Circular business models can have a much more positive impact than expected for companies that put innovation at the centre of their corporate culture.🔎 Review of Circular Economy 101: Contrary to popular belief, circular business models do not aim to 'reinvent the wheel', but to make existing processes much more efficient according to circular economy principles. By doing so, it may be possible to minimise negative environmental and social impacts, while maximising the potential for economic growth through innovative revenue models that we are not even aware of at the moment. It would not be wrong to predict that especially consumers and market dynamics will create various obstacles in the near future regarding circular business models. However, considering the changing purchasing decisions, especially for consumers, it is possible to think that circular business models will spread to all areas of our lives in the next 5 years.The process of transition to circular economy can be handled from different perspectives. However, all these different perspectives should act together for a total transformation without forgetting that the ultimate goal is systemic transformation. While state support programmes, investments and new regulations are required for the dissemination of circular business models, different studies that will raise consumer awareness should be carried out in parallel. For this, as we have mentioned in every article, all stakeholders that make up the social and economic structures should carry out this transformation process together, integrating everyone, and clearly learning their duties and responsibilities.

🧭 Potential impacts of circular business models

What do future business models offer?

When circular economy is considered as a mindset that requires all systems to be designed from scratch, it is also subject to criticism on many issues due to its motivation to change the existing order. Of course, the aim of changing the existing economic and social structures from top to bottom is not a process that a single stakeholder can decide and realise alone. However, since circular economy is a concept that has not yet been properly understood as a concept and is not addressed at the macro level, not all stakeholders have this holistic systemic transformation motivation yet. This causes the transition to a circular economy, which prioritises environmental and social welfare but also puts economic welfare at the centre of transformation, to be hampered.In the process of transition to circular economy, as we have mentioned many times in our previous articles, the main stakeholders that make up the social and economic structures, namely governments, private sector, academia, NGOs and individuals, have duties and responsibilities. Since these stakeholders are considered as legal or real persons, they have to be involved in the transformation within certain metrics or roadmaps. However, there are also different stakeholders who carry critical importance in the transformation but do not have a clear interlocutor.The 'market', which is the most fundamental part of economic systems, where all stakeholders come together and trade is carried out, appears as a stakeholder without a direct interlocutor. The market, which can be considered as the environment where buyers and sellers meet in its simplest definition, can be named as the biggest obstacle in front of the transition to circular economy or most basic sustainability issues today.Although all stakeholders that make up the market have started to attach importance to welfare-enhancing activities on environmental and social issues in recent years, financial expectations, profit-oriented structures that do not like change are seen as the main reason for the loss of momentum in the process of transition to circular economy.So at what points do the expectations of the market and circular economy conflict?<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">🧰 Private property</h3>Today, private property is no longer limited to commodities such as land or real estate. With the development of mass production and technology, all products and services we use in our daily lives are handled within a system organised under the ownership of consumers or sellers/manufacturers.All products and services purchased in daily life (except for rental services) are completely owned by the buyers. Private property, which has a critical place in circular economy, is handled differently compared to its current setup. Circular economy advocates that product ownership should be taken from consumers and given to manufacturers/sellers in order to use resources efficiently.The instinct to own a car, a house, a smartphone, which is encoded in our mindset, inevitably opposes this idea. However, the basic motivation underlying the idea is as follows: In order to extend the lifespan of any product produced using many resources, the product needs to be included in the maintenance and repair processes. This can only be possible if the consumer who owns the product carries out these processes correctly. Thanks to mass production, the fact that everyone can access the desired product at any time, with alternatives suitable for their own budget, prevents the processes of preserving the value of the products. Of course, it is not realistic to expect a consumer who can access the same product at any time to carry out such maintenance and repair processes efficiently.At this point, the circular economy argues that the ownership of products and services should be left to the manufacturers and that all maintenance and repair processes should be carried out by the manufacturers . This would extend the life cycle of a manufactured product, while preserving the value of all utilized resources as long as possible. In addition, the fact that consumers can access products and services only when they need them has a positive impact on both cost and utilisation efficiency. Here, as an alternative to increasing profitability by selling more products, which is the expectation of the market, circular economy actually introduces innovative business models by suggesting the rental of products and services. Thanks to innovative business models such as rental, maintenance, repair, etc., consumers can have the product they want only when they need it. While purchasing costs are reduced, manufacturers can diversify their revenue models thanks to innovative business models.<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">🗑️ Planned obsolescence</h3>Planned obsolescence, which emerged in the early 20th century, means that products are deliberately and intentionally designed to cause them to lose their function.For our readers who want to get detailed information about planned obsolescence, we invite you to read our previous issue titled <a fr-original-style="" href="https://aposto.com/i/how-do-we-stop-planned-obsolescence" rel="noopener noreferrer" style="color: rgb(9, 9, 9); text-decoration: none; background-color: transparent; outline: none; cursor: pointer; transition: color 0.3s ease 0s; touch-action: manipulation; user-select: auto; box-sizing: border-box;" target="_blank">'How do we stop planned obsolescence?'</a>Planned obsolescence is another critical practice where the market is at odds with circular economy. The main application method of planned obsolescence is the use of products and services for a limited period of time determined by the manufacturers, after which they completely lose their function and are considered as 'waste'.Aside from preserving the value of resources, planned obsolescence, which causes them to be considered as waste in a shorter period than they should be, is used in many products today. This type of design, which aims to compress the lifespan of products to a certain period of time by reducing their durability, aims to make consumers buy the same or similar products continuously.Circular economy, on the contrary, aims to design products and services with the most durable technical and hardware features at the initial design stage and to maximise the value of resources by using them for a long time. This is, of course, the biggest indicator of why market dynamics do not accept the circular economy as it is. Current market dynamics cannot naturally accept products and services that offer long-term use and durability. Products with a longer life span, which create obstacles to more sales, cannot exist in a profitability-oriented system. However, extending the product life cycle and designing durable products can reveal different business models for manufacturers as mentioned above.Although the products are durable, they may need to be renewed at any time due to new technologies, user errors, etc. In addition to maintenance and repair processes, designing modular products that can be improved in parallel with updated technologies and with the replacement of a few minor parts, are alternatives that can contribute to the increase in profitability, which is at the centre of the business as the main motivation.To summarise, market dynamics unknowingly create much bigger obstacles in the process of transition to circular economy. The examples in this article are just a few of these obstacles. Many factors such as labour rights, product valuation and pricing, technical efficiency and market efficiency stand as obstacles to the systemic change proposed by circular economy because they have typical structures.The transformation of market dynamics is considered to be a very challenging process as there is no clear interlocutor. However, there is a point that should not be forgotten; those who determine the dynamics of the market are also the main stakeholders that make up our social and economic structures. For this reason, in a future where all stakeholders know their duties and responsibilities and adopt the circular economy as a mindset that will ensure prosperity in every field, the market may change the stereotypes that we say 'would never change' today.

Market dynamics: private property, planned obsolescence, appraisal

What challenges do market dynamics pose against transformation?

Circular economy is a system of thought that requires us to redesign all our economic and social structures, and needs to be embraced globally. This makes the issue of strategic leadership for the transition to circular economy even more critical. Simply renewing waste management systems, replacing raw materials used in production processes with reusable alternatives, introducing circular economy into the education curriculum or introducing innovative business models are not enough to unlock the true potential of the circular economy.We have mentioned in our previous articles that all stakeholders that constitute social and economic structures have various duties and responsibilities in the process of transition to circular economy. Although these duties and responsibilities are shaped within the framework of each stakeholder's own sphere of influence, some stakeholders also assume the role of leadership in this transformation process and take the role of guiding other stakeholders. This leadership role is sometimes observed on the basis of countries (the Netherlands), companies, and sometimes NGOs (Ellen MacArthur Foundation). However, it is also possible to encounter situations where the real goal of everyone who takes on this role is not really to lead the transition to circular economy.In this week's article, we focus on how leadership qualities should be shaped in the transition to circular economy, especially in terms of mindset. The chapter 'Circular economy leadership' in the book <a fr-original-style="" href="https://link.aposto.com/click?uri=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" rel="noopener noreferrer" style="color: rgb(9, 9, 9); text-decoration: none; background-color: transparent; outline: none; cursor: pointer; transition: color 0.3s ease 0s; touch-action: manipulation; user-select: auto; box-sizing: border-box;" target="_blank">'The Impossibilities of the Circular Economy: Separating Aspirations from Reality'&nbsp;</a>accompanies our discussion.<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">Professional humility</h3>Unlike other concepts that require sustainability or transformation, the transition to circular economy is a process that should not involve personal interests. Because it is not possible to transition to the circular economy only as an organisation or an individual. Collaboration, the adoption of circular economy principles by other stakeholders and the motivation to redesign all systems with the same mindset should not be associated with personal fame or brand reputation.Leaders who put innovation first by proceeding logically should consider the transition to circular economy as a long-term vision, first within the scope of their corporate strategies, then within the scope of the needs and realities of their region, and finally within the scope of their impact on global systems.<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">Commitment to right actions</h3>When it comes to the right action, we might question 'right according to whom?' This quality can be considered as a criticism of the steps taken in combating the climate crisis, which is also on the global agenda today. Within the scope of combating the climate crisis, decisions that were changed by taking into account economic interests, agreements that were not implemented or workshops that did not meet expectations come to mind.On the contrary, the people or organisations that will assume a leadership role in the transition to circular economy should take whatever is the right step for systemic transformation. Of course, this does not mean rejecting all other ideas or alternatives in line with a single decision. The steps to be taken today and in the future of transformation can change at any time. We can say that the most important feature of leaders here is to have a wide enough perspective to recognise the right steps on the way to the main purpose. This can be possible if we consider the definition of the right action as 'the right action required for transformation'.<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">360° thinking</h3>The abovementioned wide perspective is actually another critical characteristic that leaders should have in the process of transition to circular economy. Approaching circular economy, which requires systemic transformation, in terms of a single organisation, a single structure or a single city may, of course, be the result of a limited perspective. This would not be a suitable feature for the transition to circular economy, whose potential is much more than estimated, as it does not have a clear framework.The specific frameworks we have been accustomed to in all areas of our lives so far, our limited fields of action and our ways of thinking with a certain structure are among the main reasons that hinder the transition process. The correct understanding of circular economy comes into play at this point. Since circular economy is a mindset that cannot fit into certain frameworks, it should be defined in terms of the current situation of each stakeholder and should be considered as a vision that is open to continuous development in the light of current developments. Leaders with a 360-degree perspective should follow a leadership method with a broad perspective that is open to innovation at any time within the scope of a road map suitable for whatever structure they lead.<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">Being multi-faceted</h3>The main reason why the transition to circular economy is progressing relatively slowly - or even regressing - is that stakeholders are completely unfamiliar with this innovative system. Leaders who are accustomed to linear economy, which has been embedded in all our systems, ways of living and doing business for more than 300 years, sometimes willingly and sometimes unwillingly slow down the transition. For this very reason, circular economy leaders need to be leaders who have versatile skills, who have a diverse range of interests, who are constantly curious and who can think not only within the structure they are in, but also beyond it.In order to accept innovation, it is necessary to understand innovation first. For this reason, leaders in organisations that only focus on transformation within the scope of their activities or individual leaders who only try to change their own lives have difficulty adapting to the transition to circular economy. As a result of the realities of the current modern world, having expertise, knowledge and decision-making ability in many different fields instead of expertise in a single subject is among the most critical characteristics of circular economy leaders.<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">Supporting development</h3>The most common answer to the question 'What is the most important characteristic of a leader?' is usually 'guiding the team they work with correctly and supporting their development at all times'. This generic answer is much more critical for individuals or organisations that assume the leadership role in the transition to circular economy. The main reason for this is that the transition to circular economy offers a completely unknown future through innovation. In fact, this means the realisation of many innovations that we cannot think of, cannot even be imagined yer, or are not possible with existing technologies. In order to eliminate this uncertainty and shape our future with innovation, people working in the field of circular economy should be supported by their leaders and innovative ideas should be evaluated even if they are not suitable for existing processes.In order to support the development of teams, the main criterion should no longer be the suitability of an idea in existing processes, but its potential to shape the future. This, of course, can only be possible with leaders who are open to development and change in every way.<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">Inspiring</h3>The transition to a circular economy is much more challenging than any other idea due to the uncertainty it involves. Due to the linear thinking system we live in, which is present in every aspect of our lives, many people today either consider the circular economy in a limited scope or see it as an unattainable 'dream'.It is important for circular economy leaders to inspire the large audiences they influence to understand the circular economy in the right way, to realise that it is achievable if we act together, and to realise the true potential of the circular economy. The transition to a circular economy is a long, challenging and patient process that requires a shared vision where all stakeholders know why they have embarked on this journey. Although this vision may lead to the loss of some stakeholders in long-term processes, the task of leaders should be to bring all stakeholders together at the necessary points and inspire them to gain the same motivation.<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">Being natural collaborators</h3>Circular economy requires the establishment of a new system that is completely different from our existing structures. This requires a complete change in everything we have, and this change requires cooperation with as many different experts as possible (not only individuals who are experts in one subject, but also different institutions or organisations should be considered among these experts).Identifying areas along the value chain where resources are used inefficiently or piloting an innovative business model requires the views or expertise of different stakeholders. For this reason, as we have stated in every article, it is worth noting again that it is not possible to carry out a single transformation in the process of transition to circular economy. The wider the information flow, the more comprehensive a transformation is possible.In conclusion, the characteristics we have mentioned above are the characteristics that are included in different definitions of leadership today. These characteristics, of course, do not cover all the characteristics that individuals or organisations expected to lead the transition to circular economy should possess. As we can see, all the characteristics we have included in our discussion are shaped by the mindsets that leaders should have. These leadership qualities, which once again show that circular economy is not a waste management strategy, but an innovative way of thinking that proposes to redesign systems, should not be limited to an institution, a person or a government official.Every individual, every organisation, every brand is leading a separate transformation process. This leads us to assume the leadership role from time to time within our sphere of influence at different points in our lives. For this reason, it is becoming more and more important to understand circular economy correctly, to be more open-minded about the future with each passing day in order to be included in the transformation, and to direct the flow instead of getting lost in it.

🧠 360° thinking and other qualities of a leader in the transformation to circular economy

How to lead in circular economy?

Unlike the concept of sustainability, circular economy is a concept that aims to redesign existing systems, not improve them. This makes the transition to circular economy a much slower, and more challenging process. However, since circular economy not only has positive environmental and social impacts but also the potential for economic growth, it does not matter how challenging this transformation process is.Improvements in existing systems, repairing faulty areas or reducing negative impacts, unfortunately, do not have the expected impact in combating the climate crisis nor in issues such as social justice and equality. One of the most important reasons for this is that the private sector and governments want to keep their financial situation under control in this transformation process. The fact that making improvements to reduce environmental impacts is seen as costly actually sheds a light on our current situation in the fight against the climate crisis, which is progressing slowly based on scientific data.In circular economy, it is the opposite. Circular economy is a concept that differs from sustainability in that it creates new businesses, redesigns faulty systems and allows for the avoidance of mistakes that were previously made in the redesign process. In doing so, it also brings an innovative perspective to the cost part, which is actually ignored but, as mentioned above, is the biggest obstacle to the concept of sustainability. Economic growth is one of the most important benefits of circular economy. It provides this return with the new income and consumption models it embodies.In order for this transformation to proceed smoothly, all stakeholders need to act for the same purpose and fulfil their duties and responsibilities by adopting the principles of circular economy. However, in addition to this unity, different practices must also be implemented for the transformation that constitutes the main discussion of this week's article. These practices should be considered a part of social transformation as they affect the way we think and do business.<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">🧩 Data analysis and digitalisation</h3>Data science is now an indispensable part of our lives. In our daily lives, we interact with data science at every moment of the day, whether we are aware of it or not. Although this situation is handled under 'marketing activities', especially for consumers, it can be said that data science actually facilitates or streamlines our daily lives in many different areas. Data science, which has become more popular with the introduction of Industry 4.0 technologies into our lives, is also critical for circular economy.Circular economy basically aims to use resources efficiently. The main goal is to create less waste by consuming fewer resources. Although it seems very simple, this goal is very difficult to achieve due to the current linear economy. Data analyses come into play to achieve this goal.With innovative data analysis systems, we can use resources more efficiently, consume only when we really need to, and prevent waste generation. But this is of course an application that brings with it the digitalisation of all processes (in professional and private life) that you can think of today. Therefore, the first step towards the realisation of circular economy is the digitalisation of all processes and the inclusion of data science in this process.<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">🧩 Experience</h3>There is research on how circular economy has potential environmental, social and economic impacts. The most striking of these is, of course, how it has a positive economic impact. The potential of circular economy can be overestimated on paper, but this does not necessarily make it a 'profitable' concept. A process that is favourable on paper, in theory, may not have the expected effect in real life.For this reason, in order to complete the transition to circular economy with minimal damage, innovative circular business models should be implemented quickly and tested with pilot studies. It is critical to pay much more attention to initiatives with circular business models, especially at the point of providing financing, and to in-house circular pilot studies in the private sector.By correctly testing circular strategies and business models with high potential in these trial processes, the transition process of all stakeholders to circular economy will accelerate, while the abovementioned potential for economic growth will be tested.<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">🧩 Measuring impact</h3>In the current, linear economic system, especially financial data are of critical importance. Companies' balance sheets, debts, receivables, turnover, etc. are still among the most important indicators today. But this situation is the main reason for the establishment of the faulty system we are in. To avoid misunderstanding, it should be noted that we are not criticising the 'capitalist/socialist' systems.Systems designed in the light of financial metrics naturally put profitability at the centre of business models and mindsets. This causes the impact of the work done, regardless of the sector, company, country or region, to be ignored. As long as an X&nbsp;product brings the expected profitability, gender equality is not sought in the production process of this product, or how much natural water resources it pollutes is ignored.Although the situation in linear economy is unfortunately as depressing as we have mentioned above, of course, this situation is changing with the increasing awareness in recent years. Stakeholders in the value chain (especially investors and consumers) now demand that the private sector, and in some cases governments, share not only financial returns but also environmental and social impact analyses. This situation now makes it mandatory to measure not only the economic but also the environmental and social impacts of the work done, the step taken, and the decision made.This critical process, which is also very important in the transition to circular economy, should actually be addressed in the process of designing the systems from the beginning. In this way, possible impacts can be determined at the very beginning, at the design stage, and the negatives can be identified and prevented in advance.<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">🧩 Standardisation</h3>Since circular economy does not have a specific framework for the time being, its potential remains uncertain. This uncertainty can be seen as positive, especially as it paves the way for innovation and allows the potential to grow further. However, the uncertainty also leads to a misunderstanding of circular economy as a waste management system and therefore its potential is lost before it can be realised.Especially within sustainability, there are metrics used to measure the performance of the private sector in the areas of environmental, social and governance (ESG). This allows companies to make their sustainability journey in a controlled manner with continuous improvements.From this point of view, it is critical that the transition to circular economy is also monitored with some globally recognised standard metrics. However, it is useful to remind the distinction of innovation. Transformation within a certain framework will of course be limited and insufficient. For this reason, while preparing metrics for performance monitoring (or circularity rate) for circular economy, circular economy principles should not be limited and business models should not be handled within a certain framework. In this way, while the transformation process can have a specific roadmap, innovation, which is the most valuable building block of circular economy, may not be prevented.<h3 fr-original-style="" style="margin: 0px; color: rgba(0, 0, 0, 0.85); font-weight: 500; padding: 0px; box-sizing: border-box;">🧩 Mindset</h3>Circular economy is first and foremost a way of thinking that requires us to change the way we do business and our ways of thinking. Circular economy is a system that will enable us to live in touch with nature by changing our view of life and will allow us to redesign our systems in this direction. In doing so, it is a much more inclusive and broad concept as it focuses on economic development as well as environmental and social welfare.Even if we design all the applications that come to mind during the transition to the circular economy with circular economy principles, we will not be able to achieve the transformation we expect if we do not update our mindset as humanity in a way that adopts the circular economy.<hr fr-original-style="" style="height: 0px; overflow: visible; border-bottom: none; clear: both; user-select: none; break-after: page; box-sizing: border-box;">For this very reason, circular economy should be understood and adopted not only by waste management units of companies, but also by each stakeholder of social structures in a way to cover their own spheres of influence. Not only resource utilisation, waste management or responsible consumption, but also education systems need to be designed from the ground up to ensure that future generations continue their lives with circular mindsets. In order to get rid of the roots of linear economy in every aspect of life, we need to do more research, learn the right information and experience more circular business models.

Circular economy ile ilgili hikayeler