Within the series of special content on circular design, today we write a very basic article to understand what exactly circular business models are.

When we think of circularity, we may immediately think of sustainable products, but what exactly does it mean to have a circular business model?

In this article, through a simple analysis, we explain what a circular business really is, providing a clear idea of what it would mean to transform a linear model into a circular one.

About the circular economy and circular business models

To understand what a circular business is, it is first important to understand what circular economy means.

The main objective of this model is to reduce both the acquisition of virgin material resources from our planet and their waste. In other words, it seeks an ethical and sustainable way to obtain resources and find ways to reuse them, extending their life cycle:

So, what characteristics define a circular business model?

At Lúcid, we have created a visual representation to show what circular companies look like, along with key points that help deepen the understanding of how to transform a company in each of its phases.

As seen in the infographic, circular models are based on transforming the traditional linear model, which follows a take - make - use - dispose approach, into a circular process.

And how can this be achieved? Essentially, by finding ways to recycle, repair, reuse or return the resources involved in the process.

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Fast fashion: an example of a non-circular model

To better understand this infographic, it is very helpful to look at the fast fashion industry. Recently, it seems that fast fashion brands are striving for sustainability. But have they really transformed their business models?

It is common to see sustainability labels on fast fashion products referring to sustainable sourcing of materials, but to be considered truly circular, they must answer the following questions:

• Do all the resources used by these brands come from recycled or natural materials?
• What happens to your products once they are no longer in use, and is there any incentive to return them?
• Where and under what conditions are these products manufactured?
• Do you encourage reuse and repair of your products?

If these questions cannot be answered, it is not a circular model. Creating a circular business model requires an in-depth analysis of the current business to achieve a total transformation, in which design plays a crucial role.

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At Lúcid, we love these kinds of challenges and we would love to be part of your journey to transform your business into a circular model. Do you want our help? Don't hesitate to contact us to explore solutions for a better world.

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