Over the past decades, capitalist economies have experienced significant growth, leading to increased production and consumption (King, 2021). Indeed, during the last half-century, the environmental cost of this growth has become more and more evident (Acheampong & Opoku, 2023). We are increasingly depleting our limited natural resources (water, raw materials) (Donner, Gohier, & Vries, 2020). With a population estimated to reach 9 billion people by 2050, the current ‘take-make-dispose’ model is no longer sustainable.

Such “take-make-waste” approaches are often called linear business models and have led the world into an enormous cycle of waste production and extreme shortages of resources (Guldmann, & Huulgaard, 2020). In contrast, nature follows circular processes where nothing goes to waste. This stark contrast highlights our current situation: urbanisation and population growth have continuously demanded more resources without replenishment. As a result, we now face shortages of critical supplies like water and have put certain materials on track for exhaustion in the near future. For example, if we continue using Indium (used in touchscreens, flat-screens, etc.) at the current rate, we will deplete it within 50 years (Masterson, 2022).

The Circular Economy: An Emerging Concept

Circular business models (CBMs) have been introduced to move businesses toward a more circular economy (CE) (Pietrulla, & Frankenberger, 2022). They do this by decreasing waste, as well as reusing, recycling, and retaining materials. The CE is a closed-loop system that maintains a continuous flow of technical and biological materials within a value cycle. Keeping products, components, and materials at their highest level of use maximises efficiency while minimising waste. Businesses can help us to achieve a true CE if they adopt circular business models, either fully or partially.

The economy and the environment are deeply interconnected, and a truly thrivable system maintains a balance between the two. In many ways, the Earth serves as the ideal closed-loop system. A CE follows this principle by being inherently restorative and regenerative. The system keeps products, components, and materials at their highest utility and value for as long as possible. The CE achieves this through activities that prioritise reusing materials, and recycling resources across production, distribution, and consumption. This results in reduced waste and minimisation of resource depletion (Geissdoerfer, Pieroni, Pigosso, & Soufani, 2020).

Circular opportunities

The circular economy is still an evolving concept, and in literature, it remains largely theoretical. That is, stakeholders do not agree upon a single definition. Notably, the circular economy has been driven more by policies and legislation than by academic frameworks (European Commission, 2024). Multiple schools of thought have influenced its development across various disciplines. This makes the implementation of circular business models challenging.

At its core, the circular economy seeks to slow resource flows by extending the lifespan of products. It can achieve this either by using products for a longer period or by maximising their usage before the end of their lifecycle. Once a product is no longer functional, the CE recovers and reintroduces its materials into the production system (Linder, & Williander, 2015). This creates a closed-loop cycle.

Challenges in Implementing CBMs

Many existing companies attempt to implement circular economy principles by adopting a cradle-to-cradle logic (Frishammer, & Parida, 2018). That is, the company abandons non-renewable energy, embracing the idea of reusing, refurbishing, and recycling its products. However, business model research tends to focus on sustainable niche-market pioneers rather than larger, mass-market companies (Bocken, Schuit, & Kraaijenhagen, 2018). Despite this, large companies recognise the need for business model innovation to remain competitive. In this way, they ensure that they can respond to external challenges to maintain their market position.

As regulations tighten, businesses are adopting circular economy strategies to meet growing consumer demand for sustainability. Many companies first approach sustainability through corporate social responsibility. However, circular principles require deeper changes beyond surface-level initiatives. Structural and financial challenges make implementation difficult. Companies must rethink supply chains, product design, and consumer engagement. Despite these hurdles, businesses see circularity as more than ethics—it’s a strategy for long-term success (ICCWBO, 2023).

As companies increasingly view sustainability as integral to their success, this shift toward circularity aligns with sustainable business models (SBMs) (Nosratabadi, Mosavi, Shamshirband, Zavadskas, Rakotonirainy, & Chau, 2019). Organisations are defined by their commitment to social, environmental, and economic outcomes. However, transitioning to a sustainable business is not without challenges. Companies must navigate conflicting values and trade-offs when shifting operations. However, these challenges present opportunities for learning and innovation. To embed a thrivability mindset, businesses must integrate social, environmental, and financial indicators into internal performance systems. This ensures that thrivability becomes a core driver of strategic decision-making, not a secondary consideration.

Thrivable Circular Business

In contemporary business practices, the linear business model has often been characterised by “Lean Startups” (Bocken, Schuit, & Kraaijenhagen, 2018). Companies rapidly experiment to test processes and understand customer needs. This approach uses minimal viable products (MVPs) to test assumptions with minimal time and financial investment. These models typically focus on profitability, with little to no emphasis on thrivability. In contrast, a CBM shifts the focus toward thrivability by prioritising the entire product life cycle, resource efficiency, and waste reduction. Unlike the linear approach, which often drives businesses to extract, use, and discard resources, the circular model emphasises creating value by keeping resources in use for as long as possible, reducing environmental impact.

The lean startup model focuses on fast testing and low costs. But businesses can face problems when it’s unclear how much value they can create and deliver—or when. They might test small ideas, but it’s harder to predict how everything will work together in a full product or service. For example, if new laws require companies to change their business models, they might have to adjust in ways they didn’t plan for. This can make things more complicated. However, circular business models are flexible, making it easier for companies to adapt and stay successful when rules change. (Wang et al., 2022)

Experimenting with the CBM

Bockena, Schuit, and Kraaijenhagen have pointed out that there is no universally accepted framework for thrivable circular business models in the literature (Bockena, Schuit, & Kraaijenhagen, 2018). As a result, they developed a combined framework based on insights from eight experimental case studies, alongside subsequent action research on those cases. The key findings from this research offer valuable guidance on how companies can transition toward thrivable and circular business practices. By examining real-world examples and integrating research findings, businesses can navigate the complexities of adopting thrivability-driven circular models. This helps address both immediate and long-term challenges.

The process starts with their ‘business purpose’ for a sustainable business model:
– Why is the business there in the first place?
– How can we embed environmental and societal concerns in the business purpose?

The next aspect considered the ‘value proposition‘ to the customer(s), the partners, society, and the environment.

Value delivery was the next step as it is closely related to the customer. It is focused on:
– Customer relationships.
– Customer segments and channels.

The cycle then moves to operational aspects often involving stakeholders directly by following value creation and value capture experiments and then finally, it ends with a field experiment or a large pilot. Other stakeholders, who represent ‘society’ or the ‘environment’, such as community-based organisations (CBOs) or NGOs can get involved in these experiments for test purposes (Bockena, Schuit, & Kraaijenhagen, 2018).

Circular Business Experiment Cycle.
Source: Bockena, Schuit, & Kraaijenhagen, 2018

Key Lessons in Transitioning to Circularity

This study concluded with valuable lessons learned about CBMs. The experimentation highlighted the importance of building internal capabilities within organisations to support the transition to more sustainable practices. A key finding highlighted the need to foster an entrepreneurial atmosphere internally, especially when organisational activities focus on making a significant shift towards circularity. The research also revealed that internal resistance to such transitions is common, but organisations can effectively manage it by incorporating learning loops throughout the process. These loops allow for continuous feedback, enabling organisations to adapt and evolve their strategies as they move towards a more sustainable and circular business model.

Establishing a reverse supply chain

A key feature of a CBM is the establishment of a return flow from users back to the producer, although intermediaries can sometimes be involved in this process (Linder, & Williander, 2015). This concept closely aligns with closed-loop supply chains, which always incorporate activities such as recycling, remanufacturing, reuse, refurbishment, renovation, and repair. Among these options, companies often prefer reuse and remanufacturing over recycling for economic reasons, as they preserve more original value. This reduces the need for new resources. Furthermore, reverse supply chains can create new revenue streams through the resale of refurbished products or the sale of recovered materials.

However, the benefits of a reverse supply chain are more readily available to organisations already operating under linear models who are looking to transition toward a circular business model. Building a circular model from the outset, with an integrated reverse supply chain, remains outside the scope of most current business models. Companies seeking to transition to a circular approach face a variety of challenges, including organisational resistance, cultural barriers, economic constraints, and the need for technological expertise (Oghazi, & Mostaghel, 2018). These obstacles can make the shift toward a fully integrated reverse supply chain difficult, yet they also highlight the importance of comprehensive planning and phased implementation for companies that wish to embrace circularity.

Moving Towards a Thrivable Future

From the above discussion, it is clear that to achieve a truly thrivable economy, we must deepen our efforts with both established and emerging businesses. This transformation must account for rising production and consumption while aligning with the principles of the UN’s Sustainable Development Goal 12 (SDG12), which emphasises responsible resource use and waste reduction.

This challenge is arguably one of the greatest of our time, as it involves a broad array of stakeholders, each with their own distinct and often conflicting agendas. Our examination of the sustainable CBM framework shows that it remains a largely emerging concept, with widespread acceptance yet to be achieved. More academic research in this field would be a critical first step toward informing all relevant stakeholders, particularly governments, about the opportunities and challenges of transitioning to circular models. Such research would not only contribute to a deeper understanding but also pave the way for broader implementation(Geissdoerfer et al., 2020).

However, research alone is not enough. Businesses must take action by integrating circular strategies, redesigning their models, and fostering collaboration across industries. Consumers play a crucial role as well—demanding responsible products and supporting businesses that prioritise sustainability. Policymakers must create incentives and regulations that accelerate this shift, ensuring that economic growth aligns with ecological boundaries (Jensen, 2024).

Ultimately, this work is crucial in achieving the long-term goal of a thrivable world for all. THRIVE Project stands to play an important role by providing stakeholders with valuable insights and frameworks, helping to drive the CBM forward and address the pressing challenges we face.

A Thrivable Framework

THRIVE Project is dedicated to advancing a future where humanity flourishes in harmony with the planet. Moving beyond traditional sustainability, THRIVE emphasises regenerative solutions that support long-term ecological and social well-being. Through its research-driven THRIVE Framework, the project identifies key challenges and opportunities, offering actionable insights that promote a balanced and resilient world. We aim to go beyond the “sustainability” towards true “thrivability“.

A Regenerative Economy is an important foundational factor in this transition. This THRIVE focus factor ensures that economic activities restore and enhance natural and social systems rather than depleting them. By prioritising regenerative principles, we can create systems that replenish ecosystems, support equitable social structures, and build economic resilience.

Equally crucial is the recognition of Finite Resources as a limiting factor in global development. This THRIVE Foundational Focus Factor recognises that thrivable progress depends on responsible resource management, efficiency, and innovation. Understanding and addressing the limitations of finite resources allows us to develop strategies that balance consumption with planetary capacity, ensuring future generations inherit a Thrivable world. These Foundational Focus Factors, part of the THRIVE Systemic Holistic Framework, are key in moving away from the linear economy towards a circular economy.

A circular economy is essential for achieving SDG12 (Responsible Consumption and Production), which emphasises sustainable resource use, waste reduction, and the shift away from the traditional “take-make-dispose” model. Transitioning to circular systems requires rethinking supply chains, designing waste out of production, and maximising the value of materials through reuse and recycling. By embedding circular economy principles into business strategies and policymaking, we can reduce environmental impact while fostering long-term economic resilience.

To learn more about how circular economy principles contribute to a thriving future, explore our website for research articles, whitepapers, and insightful webinars. Follow THRIVE Project on LinkedIn to stay updated on the latest developments in sustainability and innovation. We’re always open to collaboration—if you’re interested in working together to drive meaningful change, reach out to us. Let’s build a future where people and the planet don’t just sustain but truly thrive.