Understanding Circular Economy-Based Business Models

The circular economy is a model of production and consumption, aimed at eliminating waste and making the most of resources.

Rather than the linear system of making, using and then throwing products away, the circular economy model looks for new ways to cycle materials, products and value back into the system - using them again and again in multiple different forms.

This model focusses on designing products for multiple uses, for easy repair and maintenance and for easy disassembly. It also aims to manufacture products from non-toxic, renewable and recycled materials or using processes that design waste out altogether.

Here at CHG-MERIDIAN, principles of the circular economy are ingrained in our core values and have guided our business model for decades. Our IT lifecycle management solution enables us to extend each device's lifespan by optimising device usage. Comprehensive lifecycle management is the cornerstone of our business, with a focus on repair and reuse.

The key principles of a circular economy include:

Design for longevity

Products are designed to last longer and manufactured from durable, resilient materials that can be easily repaired or upgraded.

Closed-loop systems

The circular economy is a closed loop system, meaning materials circulate within the economy with increased recycling and reprocessing ensuring they don’t end up in landfill or go to waste.

Resource efficiency

Recycling materials, reducing energy consumption and minimising waste mean fewer resources are used in the design, production and use of products.

Regeneration of natural systems

By using renewable resources and prioritising sustainability, the model aims to protect and restore the environment and its ecosystems.

A circular business model focuses on designing, making, distributing and re-using or recycling materials and products within a business. The ultimate goal is to extend the life of products and keep materials within the economy. We believe scrapping IT equipment purely because it is no longer state-of-the-art doesn’t make sense, either financially or environmentally, that’s why we refurbish devices to give them a second life and reduce the amount sent to landfill. 

There are a number of different circular business models, including:

Circular inputs

Wherever possible, this model aims to use renewable, reusable or sustainable materials during the production process to eliminate waste and pollution.

Sharing economy

In the sharing economy model, businesses share assets with other companies. As well as reducing the need for businesses to buy their own assets and cutting costs, this approach also results in much higher usage of these assets.

Product-as-a-service

This model sees businesses purchasing products as a service for a limited amount of time, rather than investing in their own equipment. The company providing the goods retains ownership of the products.

Product use extension

This model takes the focus off making and selling as many goods as possible and instead sees businesses making products with repairability, upgradability, reusability, reconditioning and recyclability in mind. In this model, products are designed to make the replacement of parts easy - sometimes called modularity or de-constructability.

Resource recovery

This model involves the recovery of built-in materials, energy and resources from products that can no longer be used. Taking a similar approach to the products-as-a-service model, it incentivises users to return products so they can be recycled and reclaimed.

Adopting a circular business model offers a range of economical, environmental and operational benefits, including:

Environmental impact

Reusing and recycling products slows down the use of natural resources and helps to reduce waste. As well as limiting the loss of biodiversity, this also reduces the amount of greenhouse gasses produced in the product lifecycle, helping to preserve our collective environment.

Dependence on raw materials

The demand for raw materials is growing, but the supply of these materials is finite. Reducing our dependence on raw materials helps to mitigate the risks associated with limited supply, such as volatile pricing and dependence on imports.

Economic opportunity

A circular business model offers financial savings for businesses, reducing investment in products and technology, while reducing their spend on repair and maintenance. In addition to this, a circular economy also has the potential to unlock as much as 535 billion Euros per year in economic gains.

At CHG-MERIDIAN, we refurbish used equipment to make an active contribution to the conservation of natural resources. Through extensive remarketing, we have been able to increase the life of technology equipment and prepare it for sustainable reuse.

In fact, over 96% of our end-of-life products are refurbished in line with circular economy principles. And any equipment that can’t be reused is sustainably returned to our global network of certified recycling partners, who recondition our equipment to the highest standards.

To find out more about how we can support your business’ sustainability strategy and help you transition to a circular economy based business model, get in touch.