The relationship between the circular economy and sustainability

Contents

• Chapter 1: Introduction
• Chapter 2: Literature Review
• Chapter 3: Methodology
• Chapter 4: Results and Findings
• Chapter 5: Conclusion
• References

Chapter 1: Introduction

There is an urgent need to address the development and implementation of more sustainable production and consumption processes to find a solution to the economic, societal and environmental challenges which these processes are creating and sustaining (Geissdoerfer et al 2017; Mulvihill and Harris Ali 2017; George et al 2016; Markard 2012). These challenges include addressing environmental problems which includes issues such as loss of biodiversity; water, air and soil pollution; the decreasing level of finite resources and excessive land use through deforestation (Eggleton 2013; Galaz et al 2012; Rockstrom et al 2009). Societal  challenges include a lack of work opportunities and access to education in many parts of the world; poor working conditions including child labour and long working hours; increased levels of poverty; inter- and intragenerational equity; and increasing levels of inequalities between rich and poor societal stakeholders (Mulvihill and Harris Ali 2017; Dobson 2016; Crane and Matten 2016). Economic issues include increased levels of risk in the supply chain; the liberalisation of trade; market deregulation and the pursuit of short term profits (Mulvihill and Harris Ali 2017; Dobson 2016; Crane and Matten 2016; Sachs 2015).

These environmental, societal and economic challenges are all components of sustainability which stresses the need to address these through re-designing and innovating to ensure higher levels of intra and inter-generational equality and equity (Geissdoerfer et al 2017; Crane and Matten 2016). This concept of sustainability has been the basis of global initiatives such as the United Nations Sustainable Development Goals and has seen an increasing number of stakeholders, including businesses, engage in this process (United Nations Sustainable Development Goals 2019).

One of the business models and innovations which are perceived as being able to address these challenges is the Circular Economy which undertakes a restorative and regenerative approach to resource use (Ellen MacArthur Foundation 2017a; Pauli 2017; Braungart and McDonough 2009).  The adoption of the Circular Economy is being undertaken on both a national level such as with the European Circular Economy package and at a business level by individual businesses (European Union 2019; Ellen MacArthur Foundation 2017a). There has therefore been an increased level of awareness, both amongst academic researchers and businesses, of the opportunities of the Circular Economy (Geissdoerfer et al 2017; Moreno et al 2016).  However, whilst there is an increased level of awareness as regards sustainability and the Circular Economy, there is a lack of research in two key areas. Firstly, there is the need to evaluate the similarities and differences between sustainability and the Circular Economy; and secondly, there is the need to explore the relationship between sustainability and the Circular Economy which includes both the academic underpinnings and the practical application of this (Geissdoerfer et al 2017; Moreno et al 2016). This research seeks to provide a contribution to both of these areas, and this has led to the development of the following methodology which uses both a literature review and examples of business case studies to explore these topics (Cresswell and Cresswell 2018; Saunders et al 2016). Firstly, this will undertake a literature review to ascertain the similarities and differences between sustainability and the Circular Economy. Secondly, a case study approach will be undertaken to explore the relationship between sustainability and the Circular Economy by examining the practical application of these concepts by businesses. By undertaking this process, there is the opportunity to address current research gaps in the understanding of the concepts of sustainability and the Circular Economy and to explore this relationship and the challenges inherent to this (Geissdoerfer et al 2017; Moreno et al 2016).

Chapter 2: Literature Review

This dissertation topic will therefore seek to build on the current level of research to explore the relationship between the circular economy and sustainability by considering its impacts on business models and innovation (Geissdoerfer et al 2017).

The two main concepts which will be examined in this piece of research will be sustainability and the Circular Economy which will firstly be evaluated as separate concepts before the relationship between the two is further explored.

2.1 Sustainability

The concept of sustainability has led to a plethora of definitions which include the concepts of the  conservation of finite resources, biodiversity and ecosystems (Lewis and Maslin 2018; Galaz 2012; Rockstrom et al 2009); the need to address current levels of production and consumption to deliver a quality of life for both current and future generations; the issue of inequality and how economic growth needs to be achieved within the parameters of ecosystems and become less exploitative of these (Mulvihill and Harris Ali 2017; Galaz et al 2012; Rockstrom et al 2009).

The concept of sustainability can therefore be presented as the tensions which occur between population, consumption and technologies which has an environmental impact (Lewis and Maslin 2018; Dobson 2016; Moreno et al 2016; Eggleton 2013).  The use of these variables of population, consumption and technologies supports a range of perspectives as regards sustainability which not only include the relationship between these, such as the relationship between growing population and its impact on consumption, but may also undertake a particular area of focus such as the increasing breadth of research regarding the role of science and technology in decreasing social inequalities and increasing environmental resilience (Lewis and Maslin 2018; Braungart and McDonough 2009; Beder 2006).  The complexity of the relationships between these variables of population, consumption and technologies relates to the dynamics and interdependencies between these and these may see the concepts of sustainable development and environment being depicted as trade-offs (Lewis and Maslin 2018; Moreno et al 2016; Sachs 2015). However, this inherent difficulty in the approach to sustainability was addressed by the Brundtland Report (1987) which states that sustainability should not be seen as a trade-off between economic and societal development and the environment, but rather as a boundary as to how these issues can be addressed without creating detrimental harm to the earth and thus negatively impacting future generations (Mulvihill and Harris Ali 2017; Crane and Matten 2016; Blowfield and Murray 2014).

The concept of sustainability can therefore be presented as supporting a process of complex problem-solving as regards the current challenges but also encourages and promotes the needs to address multiple stakeholders and their expectations (Feil and Schreiber 2017; Proctor 2014; Beder 2006).  This is underpinned by principles such as participation and equity which have been developed within disciplines such as environmental management to increase the sharing of knowledge and collaboration amongst stakeholders (Lewis and Maslin 2018; Feil and Schreiber 2017; Mulvihill and Harris Ali 2017; Beder 2006). This requires an approach which supports increasing intragenerational prosperity and quality of life but also undertakes a restorative approach to safeguard intra and inter-generational needs (Mulvihill and Harris Ali 2017; Beder 2006).

In terms of its acceptance as an issue which needs addressing by government, business and societal stakeholders, sustainability has become increasingly institutionalised within these areas and have shaped different behaviours and decision-making to a greater degree (Lewis and Maslin 2018; Mulvihill and Harris Ali 2017; Geissdoerfer et al 2017).

2.2 The Circular Economy

The Circular Economy has gained increased levels of attention through the work and support of institutions such as the European Union and the Ellen MacArthur Foundation (European Union [EU] 2019; Ellen MacArthur Foundation 2017a). The concept of the Circular Economy and its application to production and consumption processes has developed to include different features from a range of concepts which include the shift to a closed loop system (Moreno et al 2016; Braungart and McDonough 2009). The range of theories relating to the circular economy include the shift from the cradle-to-grave to the cradle-to-cradle approach (Braungart and McDonough 2009); biomimicry (Benyus 2002); looped economy (Stahel 2010) and the blue economy (Pauli 2017) and these provide a variety of models and a process of continuous improvement which can be adapted to the contexts of businesses. The circular economy undertakes a methodology of continuous improvement which includes the application of increased knowledge, which may be gained through collaborations with other stakeholders, and the motivation of businesses to apply these changes (Pauli 2017; Moreno et al 2016).

The main components of the circular economy relate to its restorative and regenerative design which aims to reduce the amount of waste and energy by closing loops and thus reducing the level of leaks and emissions (Ellen MacArthur Foundation 2017a; Moreno et al 2016; Braungart and McDonough 2009).  This requires a production design which assesses where these leaks and emissions occur and how these can be reduced or eliminated (Ellen MacArthur Foundation 2017a; Pauli 2017; Moreno et al 2016). In addition to this, issues such as maintenance, repair, reuse, remanufacturing, refurbishing and recycling are made more robust to not only ensure that these take place but to ensure that there is a higher volume of activity in these areas (Ellen MacArthur Foundation 2017a; Pauli 2017; Moreno et al 2016; Braungart and McDonough 2009).

The academic research as regards the circular economy has included an evaluation of specific areas of this concept such as closed loop value and supply chains (Govindan et al 2015); circular business models (Bocken et al 2016; Moreno et al 2016); and circular product design (Pauli 2017). These different approaches to the Circular Economy arguably mirror the different approaches to operations management where there is a drive towards the reduction of waste in the operations process through continuous improvement and focusing on the business priorities (Jacobs and Chase 2017; Slack et al 2016). The development and adaptation of the Circular Economy into these variations on the approach also provide the opportunity for a business to find a model which is contextually appropriate for its operations and this may assist a business in becoming more motivated to apply this to its operations (Pauli 2017; Geissdoerfer et al 2017).

2.3 Similarities and differences between the concepts of sustainability and the circular economy

The concepts of sustainability and the Circular Economy share a number of similarities and differences. Firstly, these similarities are based upon the global nature of the concepts due to the activities of one country having an impact on another, for example, the shipment of waste from the developed worked to the developing world (Lewis and Maslin 2018; Mulvihill and Harris Ali 2017; Moreno et al 2016).  Secondly, these similarities also extend to concerns with the current model of production, consumption and technology which are not only having a negative impact on this generation, but, based upon these current patterns, will also detrimentally impact on future generations (Lewis and Maslin 2018; Geissdoerfer et al 2017; Moreno et al 2016). However, these production and consumption patterns also provide the opportunity for areas of competitive advantages which have yet to be fully explored (Geissdoerfer et al 2017). These areas may also be supported by global initiatives such as the Sustainable Development Goals which provide activities for businesses to address as part of its strategic operations which may assist in supporting development areas (United Nations Sustainable Development Goals 2019). Thirdly, these similarities also emphasise the importance of the need to provide higher levels of integration between the environment, society and economy which will require a systems-led approach rather than merely seeing the issue of sustainability as being an add-on or a tick box exercise (Lewis and Maslin 2018; Mulvihill and Harris Ali 2017; Geissdoerfer et al 2017).

In contrast to these similarities, the concepts of sustainability and the Circular Economy also have differences based upon the different contexts and the different purposes applied to each (Geissdoerfer et al 2017; Moreno et al 2016). The concept of sustainability is far broader than the concept of the Circular Economy and can be applied to a far broader scope of stakeholder commitments and initiatives and areas of risk, such as resource security, and opportunities, such as addressing different market needs (Lewis and Maslin 2018; Geissdoerfer et al 2017; Pauli 2017).  The circular economy undertakes a more specific approach towards sustainability and is therefore part of this concept, providing a potential framework for the increased use of sustainable production and consumption methods (Ellen MacArthur Foundation 2017; Pauli 2017; Braungart and McDonough 2009).

2.4 The relationship between sustainability and the Circular Economy

The relationship between sustainability and the Circular Economy is based upon the approaches towards increasing the awareness of the interdependencies between the economy, society and the environment but these may undertake different approaches, perspectives and methodologies (Pauli 2017; Geissdoerfer et al 2017; Moreno et al 2016). These concepts also have conceptual differences, such as sustainability being focused on the integration between economy, society and the environment presenting thee as equal factors (Lewis and Maslin 2018; Geissdoerfer et al 2017). In contrast to this perspective, the Circular Economy prioritises the economic perspective which then has a direct benefit on society and the environment and can be seen as a more business-centric approach (Pauli 2017; Geissdoerfer et al 2017). However, as contexts change and technological innovations are developed, there is a focus on how these can impact upon sustainability and the Circular Economy and these may provide a greater synthesis between the two concepts. Technological innovations, such as the Internet of Things, enable higher levels of data collection and analysis as regards issues such as the use of products, such as household goods, to support greater efficiencies and improvements (Trott 2017). The use of this data may assist in tracking the lifecycle of products and to support higher levels of recycling and reuse (Lewis and Maslin 2018; Pauli 2017; Trott 2017).

2.5 Research gaps

Whilst there is a relationship between these two concepts, there has been a lack of academic research into this relationship and the aforementioned similarities and differences remain under-researched (Geissdoerfer et al 2017). This research gap therefore provides an opportunity for an increased level of understanding in terms of increasing conceptual clarity and the rationale for the definition and use of these concepts by stakeholders including government, business and societal stakeholders (Feil and Schreiber 2017; Geissdoerfer et al 2017).  By undertaking this research gap, this dissertation aims to address how the concepts of sustainability and the Circular Economy can be more successfully integrated to support social equality and inclusion; increase environmental resilience and support economic prosperity (Lewis and Maslin 2018; Geissdoerfer et al 2017; Moreno et al 2016).

This research gap also needs to address how the relationship between sustainability and the Circular Economy is being perceived by policy makers and businesses in order to gain a better understanding of the influence of this relationship on business models, supply chains and innovation systems (Geissdoerfer et al 2017).  This also needs to consider a widening of the concepts of sustainability and the Circular Economy to include emerging concepts such as the Performance Economy (Stahel 2010) and the Sharing Economy (Bocken et al 2014). There is also a need to evaluate how the actual impacts of the Circular Economy are being evaluated and analysed against performance measurements, such as the triple bottom line; the strength of the sustainability and the impact on consumption, such as slowing down resource use (Bocken et al 2016).

2.6 Research aim and objectives

The aim of this research is to build on the current level of research to explore the relationship between sustainability and the Circular Economy by considering its impacts on business models and innovation.

Based upon this research aim, the research objectives for this research are therefore:

Objective 1: To examine the similarities and differences between sustainability and the Circular Economy.

Objective 2: To investigate the impacts of sustainability and the Circular Economy on business models and innovation.

Objective 3: To evaluate the relationship between Sustainability and the Circular Economy.

Chapter 3: Methodology

3.1 Research paradigm and assumptions

The selected research paradigm is the interpretivist approach which supports the evaluation and exploration of complex relationships which contain a range of variables (Cresswell and Cresswell 2018; Saunders et al 2016; Bryman and Bell 2015). Interpretivism allows for a range of perspectives to be undertaken and, in the context of this research, supports the range of perspectives which are explored in both the literature review and the findings chapter (Saunders et al 2016; Neuman 2013).

This range of interpretations which form the basis of the interpretivist paradigm are also related to the selected philosophical outlook and assumptions of the researcher (Cresswell and Cresswell 2018). Within this research, these assumptions include both the ontological and epistemological outlook (Cresswell and Cresswell 2018; Saunders et al 2016; Bryman and Bell 2015).  The ontological (nature of reality) assumption within the interpretivist paradigm enables the development of multiple meanings which are gathered from the research process and thus require a flexible approach to ensure that these meanings are communicated (Cresswell and Cresswell 2018; Bryman and Bell 2015). The epistemological (validity of knowledge) assumption within the interpretivist paradigm is addresses the potential reductionist approach which may occur if the research is focused upon a specific theory or concept, and thus enables the research to develop different interpretations which can support the creation of new knowledge and a greater understanding of a concept (Cresswell and Cresswell 2018; Neuman 2013). Given the subject matter of this research, and the need to evaluate current levels of understanding and how these can develop new levels of understanding, the ontological and epistemological assumptions within the interpretivist paradigm were selected as the most appropriate research methodology and this was further emphasized by the evaluation of other research methodologies, such as positivism (Saunders et al 2016; Gill and Johnson 2010).

In contrast to interpretivism, positivism undertakes a linear cause and effect approach which seeks to establish a relationship between a small set of variables (Saunders et al 2016; Bryman and Bell 2015). Within the context of this research, the positivist approach can be applied to some areas such as the impact of increased regulation upon businesses and the approach to sustainability (Bryman and Bell 2015; Collis and Hussey 2014). However, the disadvantage of this approach includes its reductionist perspective which would entail ignoring some of the more complex issues such as the differences in the rationale for an increased level of sustainability (Saunders et al 2016; Bryman and Bell 2015). In this context, it was decided that the positivist approach would be too narrow to adequately evaluate and investigate the research aims and objectives.

3.2 Research approach

The research approach will employ an exploratory approach by exploring the general themes of the literature review and drawing out the similarities and differences between sustainability and the Circular Economy and then exploring the relationship between these (Cresswell and Cresswell 2018; Bryman and Bell 2015).  The exploratory approach assists in increasing the level of understanding of a particular issue or problem by providing the researcher with a flexible approach to the research process which allows for the research to evolve and change as new information is discovered and analysed (Saunders et al 2016; Collis and Hussey 2014; Gill and Johnson 2010).  The methodology will also undertake an inductive approach which relates to the context of the data which will be explored in the case studies of the selected businesses (Cresswell and Cresswell 2018; Yin 2018; Saunders et al 2016).

3.3 Criticisms of the selected interpretivist approach

Whilst the strengths of the interpretivist approach include its flexibility and ability to support the exploration of the development of a range of meanings based upon the complexity of the research subject, the criticisms of this approach also need to be acknowledged (Cresswell and Cresswell 2018; Gill and Johnson 2010). The criticisms of interpretivism include the lack of research conventions, in comparison to the positivist approach, which may lead to difficulties in areas such as reliability, validity and generalisability (Cresswell and Cresswell 2018; Saunders et al 2016; Lee and Lings 2008). This lack of research conventions requires the researcher to develop a framework which not only addresses any potential weaknesses in the research process, such as bias, but also presents the data findings and analysis to ensure that the these address the research aim and objectives (Neuman 2013; Gill and Johnson 2010; Riley et al 2000). In this piece of research, the methodology will include a literature search to provide the similarities and differences between sustainability and the Circular Economy (research objective 1) and a case study approach to explore the impacts of these on business models and innovation (objective 2). Both the literature review ad the case study approach will be used in the response to objective 3 which seeks to evaluate the relationship between sustainability and the Circular Economy. The presentation of the data findings will therefore undertake a thematic analysis based upon the research aim and objectives (Yin 2018; Saunders et al 2016; Bryman and Bell 2015; Dul and Hak 2008).

3.4 Data collection

The data collection will only include secondary data from academic websites, including Google Scholar, and publicly available websites, including industry, business and news sites. This secondary data will be predominately qualitative in nature although some quantitative data may be included. It is acknowledged that the use of secondary data is a limitation for the research, but this is addressed by using both academic sources to support the exploratory approach and real-world case studies to support the inductive approach and thus using the mixed methods approach (Saunders et al 2016; Bryman and Bell 2015; Molina-Azorin and Cameron 2010).

3.5 Mixed Methods approach

The use of the mixed methods approach has been applied to this piece of research for the following reasons (Cresswell and Cresswell 2018; Saunders et al 2016). Firstly, by using a number of secondary sources, bot academic and real-world, there is a reduced risk of bias which can occur if only one data source, or a mono-method approach, is utilised (Molina-Azorin and Cameron 2010; Tashakkori and Teddlie 2010). Secondly, the mixed method approach allows for the data to be analysed in a number of ways including the sequential approach which has been utilised for this research (Cresswell and Cresswell 2018; Molina-Azorin and Cameron 2010). This sequential approach sees the data from the academic sources analysed first and then this is followed by the data from the real-world case studies. This allows for the examination of both areas to be explored individually and to then undergo a process of synthesis to support the inductive approach (Cresswell and Cresswell 2018; Bryman and Bell 2015). Thirdly, the mixed methods approach is often utilised and has become increasingly popular in business based research, for example strategic management studies, as it supports the development of practical solutions to address contemporary business challenges, such as the issue of sustainability and the application of frameworks, such as the Circular Economy (Molina-Azorin and Cameron 2010; Tashakkori and Teddlie 2010).

3.6 Sample

The sample for the secondary data collection was initially purposive and for the literature review needed to include the following search parameters: sustainability; Circular Economy; and sustainability and the Circular Economy (Cresswell and Cresswell 2018; Bryman and Bell 2015). It was essential for each academic source to have a minimum of one of these search terms in order to be included in the results and findings chapter.

The academic journals which have been used to evaluate the similarities and differences between sustainability and the Circular Economy also provided the opportunity for snowball sampling due to the initial academic source providing references which could then be used as additional sources of information (Saunders et al 2016; Bryman and Bell 2015).

The sample for the case studies were based upon the application of sustainability and the Circular Economy. The case studies for sustainability were based upon organisations who had applied and were reporting the use of the United Nations Sustainable Development Goals. The case studies for the Circular Economy were selected from the case studies which are publicly available on the Ellen MacArthur Foundation website (Ellen MacArthur Foundation 2017).

3.7 Reliability and validity

The issues of reliability and validity are dependent upon the research paradigm, in this case interpretivism, and the data collection and analysis decisions which include the use of secondary data and the mixed methods approach (Cresswell and Cresswell 2018; Saunders et al 2016; Bryman and Bell 2015). Within the interpretivist paradigm, reliability is lower in comparison to the positivist paradigm due to the research being context-specific making it difficult to fully replicate should the same research be carried out at a future point in time (Cresswell and Cresswell 2018; Bryman and Bell 2015; Neuman 2013). Validity, however, is often greater in the interpretivism, in comparison to positivism, due to the research being context specific thus providing a richer source of data on areas such as different business approaches to the integration of sustainability and Circular Economy principles (Cresswell and Cresswell 2018; Saunders et al 2016).

The selection of the mixed methods approach also has an impact upon reliability and validity and this is dependent upon the type of data which is collected and analysed (Cresswell and Cresswell 2018; Neuman 2013). The issue of validity in greater in the collection and evaluation of qualitative data due to it being context-specific; whilst the use of quantitative data supports higher levels of validity as this data can be replicated in future research (Saunders et al 2016; Bryman and Bell 2015).

3.8 Research ethics

Research ethics need to consider what is being researched and how the data is being collected and to ensure that this process does not create any harm for any of the research participants, including any those who may be providing primary data; the researcher and the university (Cresswell and Cresswell 2018; Saunders et al 2016; Bryman and Bell 2015; Resnik 2015). Research ethics often follows an established code of conduct and includes the addressing of potential ethical concerns such as informed consent; data confidentiality and anonymity and the right of research participants to withdraw from the process (Cresswell and Cresswell 2018; Jankowicz 2005; Lee-Treweek and Linkogle 2000).  Whilst these ethical issues are particularly important in the collection and analysis of primary data, there is also a need to evaluate these in the collection and analysis of secondary data which has been undertaken for this piece of research (Saunders et al 2016; Bryman and Bell 2015). It is therefore incumbent upon the researcher to ensure that the secondary data collected and analysed for this piece of research is presented in an accurate and fair manner and also includes the original source of this data in the reference list. In addition, the original secondary data can also be provided in the appendices to support further verification, if required (Collis and Hussey 2014).

Chapter 4: Results and Findings

The literature review for the results and findings chapter was based upon the following key search terms: ‘Circular Economy’; ‘Sustainability’ and ‘Circular Economy and Sustainability’. Due to the longevity of sustainability and its broader approach, the majority of articles were related to the issue of sustainability, followed by circular economy and the lowest number related to articles which included both ‘circular economy and sustainability’. However, there is also evidence that there is a growing number of articles on the Circular Economy as this process is being increasing supported by national governments and being implemented by large businesses such as Google (Geissdoerfer et al 2017; Ellen MacArthur Foundation 2017a; Pauli 2017).  This increase in the number of articles may also relate to the increased level of interest in the Circular Economy as a potential solution or approach to implement higher levels of sustainability within an organisation which thus requires an increased level of understanding as regards its concept and application.

4.1 Objective 1: To examine the similarities and differences between sustainability and the Circular Economy.

4.1.1 Similarities between Sustainability and the Circular Economy

This objective undertook a literature review of academic sources to evaluate a number of similarities between the concepts of sustainability and the Circular Economy.

The similarities between Sustainability and the Circular Economy include the following:

• Both concepts include the need to address intra and intergenerational commitments (Mulvihill and Harris Ali 2017; Geissdoerfer et al 2017; George et al 2016).
• Both concepts include integrating non-economic aspects such as the environment and society (United Nations Sustainable Development Goas 2019; Lewis and Maslin 2018).
• Both concepts undertake an approach which has a global focus such as the Paris Agreement and a national focus (United Nations Climate Change 2019; Blowfiedl and Murray 2014).
• Both concepts include the need to undertake a systems-led approach to develop and implement changes in processes and to innovate (Pauli 2017; Moreno et al 2016 Braungart and McDonough 2009).
• Both concepts have arisen from a multi-disciplinary research including environmental studies; entrepreneurship; operations management; business; social policy and other areas (Mulvihill and Harris Ali 2017; Geissdoerfer et al 2017; Beder 2006). 
• Both concepts include the issues of risk and potential cost which include both the potential threat of not undertaking any activity in this area and the opportunity of undertaking activity in this area (Pauli 2017; Moreno et al 2016). These concepts also include diversification in areas such as material and resource use and the value creation and capture which may be produced by this to create competitive advantage (Johnson et al 2018; Crane and Matten 2016). 
• Both concepts stress the importance of stakeholder collaboration and co-operation to both support the level of knowledge and address uncertainty (Mulvihill and Harris Ali 2017). This stakeholder collaboration includes policy-makers; members of the scientific community; business stakeholders and societal stakeholders (Geissdoerfer et al 2017; Crane and Matten 2016).
• Both concepts include the role of regulation and incentives as being fundamental implementation tools (Lewis and Maslin 2018; Crane and Matten 2016). Examples of these includes the UK legislation regarding single use plastic waste which has seen a tax on single use carrier bags to reduce the level of waste created by these (Gov.UK 2018).
• Both concepts are presented as being the central role of private sector businesses due to the level of control and use of resources and capabilities (Crane and Matten 2016). However, the issue of stakeholder collaboration also infers that public sector organisations also need to be part of this drive towards increased implementation of sustainability and the Circular Economy.
• Both concepts present the issue of business model innovation as the key driver for transformation of industry process. This process of innovation will include the need to undertake complex problem-solving (Proctor 2014); innovation (Trott 2017) and the development of new business models (Osterwalder and Pigneur 2010; Teece 2010). The issue of business model innovation will also draw from business research into entrepreneurship and business models supporting a multi-disciplinary approach to the concepts of sustainability and the Circular Economy (Lewis and Maslin 2018; Pauli 2017; Geissdoerfer et al 2017).
• Both concepts agree that technological solutions are important but that these also present implementation problems (Geissdoerfer et al 2017). For example, complex human activities such as those undertaken in logistics are difficult to replicate based on the current level of technology (Cosimato and Troisi 2015). Furthermore, the materials required for technology may also create harm for both the environment and for societal stakeholders due to the issue of mining and the exploitation of workers in developing countries to acquire these minerals (Blowfield and Murray 2014). 

The secondary data also indicated that there was also a time lag between expected activities to address increased levels of sustainability and the Circular Economy and the actual level of activities. One of the global initiatives which has been implemented to encourage the increased level of sustainable practices in businesses is the United Nations Sustainable Development Goals [SDGs] which provide a number of targets for businesses to take on board and work towards (United Nations SDG 2019). These have seen organisations adopt targets which are important and specific to the organisation and to be able to undertake and report on the organisational performance on these areas (United Nations SDG 2019; Blowfield and Murray 2014). An example of an organisation undertaking the SDGs is Unilever which has set itself a a target of improving the health and well-being of 1 billion people by 2020 through a range of initiatives including education on hygiene and providing its products in underserved markets (Unilever 2019).

4.1.2 Differences between sustainability and the Circular Economy

The differences between sustainability and the Circular Economy can be based upon a range of issues including the different held perspectives such as a focus on the environment; the goals and motivations of the stakeholder; the priorities of the business; the benefits to stakeholders; the timeframes and the acceptance of responsibilities (figure i) (Lewis and Maslin 2018; Geissdoerfer et al 2017).

Figure i) Selected differences between Sustainability and the Circular Economy (adapted from Geissdoerfer et al 2017).

There are also differences in the goals of sustainability and the Circular Economy (Geissdoerfer et al 2017). For example, the secondary research indicates that the goals of sustainability tend to be open-ended and require the need to adapt to changes in the environment and societal needs (Blowfield and Murray 2014). In contrast to this, the objective of the Circular Economy is to develop a closed loop based upon the regeneration and restoration of materials (Ellen MacArthur Foundation 2017a; Braungart and McDonough 2009). This perspective of the Circular Economy may therefore present it as benefitting businesses first and undertaking a narrower approach than that of sustainability which considers the impact on a wider range of societal stakeholders and environmental goals (Geissdoerfer et al 2017; Crane and Matten 2016; Moreno et al 2016).  However, whilst the Circular Economy undertakes business-centric approach, it also provides the opportunity for the impacts of this business model design and innovation to benefit other stakeholders and this will be explored in more detail in the second and third research objectives.

4.2 Objective 2: To investigate the impacts of sustainability and the Circular Economy on business models and innovation.

The impacts of sustainability and the Circular Economy on business models and innovations can undertake a number of impacts.

Firstly, the business model and innovation may be based upon the creation and capture of value which has a wider value proposition for the organisation and its stakeholders (Geissdoerfer et al 2017).  This includes the ability to undertake a different business model based upon the use of technological developments such as the Internet of Things (Conner 2015). The Internet of Things provides a business with the opportunity to undertake a higher level of connectivity between itself and its customers which supports improvements in communication and performance (Trott 2017; Conner 2015).  One business which is currently using the Internet of Things as part of its business model is Bundles which operates a pay-per-use business model which enables customers to gain access to household goods, such as washing machines (Gilbert 2014). Bundles provides a household good, such as a washing machine, for free and charges its customers for its use which is monitored using the Internet of Things (Gilbert 2014).  This business model addresses the concept of sustainability in the following ways:

• Provides access to a washing machine which is based upon the use of this, rather than the traditional ownership model. This shift from use-only from ownership addresses sustainability issues such as reducing the level of waste which may be created by the disposal of the machine or the failure of the owner in getting it repaired.
• In addition to this, the monitoring and advice as to how the washing machine, or other household good can be used provides better energy use and lowers any potential emissions (Ellen MacArthur Foundation 2015).
• Provides a higher level of access to households who may not be able to afford a high specification washing machine due to the initial costs of these. This addresses societal inequalities. 
• Supports increased levels of sustainability due to the machine being repaired rather than replaced.

This business model addresses the circular economy in the following areas:

• Bundles is able to restore and regenerate the household goods and thus the materials and resources of these remain within its business model (Braungart and McDonough 2009).
• It also works with other business partners, such as Miele, which have the opportunity to receive household goods which are no longer being used, and to either provide to other households or to reuse the materials in other washing machines (Ellen MacArthur Foundation 2015). 
• The circular economy model is also supported by Miele washing machines being 100% recyclable or reusable materials and this demonstrates the need for collaboration between business stakeholders (Geissdoerfer et al 2017; Ellen MacArthur Foundation 2015). 

4.3 Objective 3: To evaluate the relationship between Sustainability and the Circular Economy

The relationship between Sustainability and the Circular Economy presented a number of different aspects. Firstly, for advocates of the Circular Economy, such as the Ellen MacArthur Foundation, there is the portrayal of a strong and interdependent relationship between sustainability and the Circular Economy and this is presented through the concept of the Circular Economy and the case studies of the organisations which have, or are trying to, implement these principles (Elllen MacArthur Foundation 2017a). The concept of the circular economy has been actively promoted by the Ellen MacArthur Foundation which has acted as a hub for increased levels of collaboration and information sharing between stakeholders (Elllen MacArthur Foundation 2017a). The foundation has also acted as a hub for examples of good practice and the adaptation and adaptation of Circular Economy principles by a variety of businesses undertaking a variety of approaches (Elllen MacArthur Foundation 2017a).

For some organisations, there are areas of the business where there are higher levels of sustainability and the use of the Circular Economy than others and often this has seen a business undertake a remodelling of its business model (Pauli 2017). For other businesses, there is a model which has been built around the concept for the Circular Economy and Sustainability to directly address the pursuit of a competitive advantage, such as serving an underserved market or ensuring that its resources are reused and thus provide value for both the business and its stakeholders and an example of this can be seen in the case study of Natura Brazil (Elllen MacArthur Foundation 2017aa).

4.3.1 Natura Brazil

Natura Brazil is a large cosmetics company and is reliant upon the biodiversity provided by Brazil’s natural resources (Elllen MacArthur Foundation 2017b).  Unfortunately, the demand for agricultural land has created social and environmental harm as large areas of forests are cleared and this has had a negative impact upon the levels of biodiversity; climate change and indigenous people who have been displaced from their lands (Elllen MacArthur Foundation 2017b). To address the risk of the loss of the access to natural resources for its products, Natura Brazil have undertaken a strategy which uses the knowledge held by local communities as regards the benefit of the natural resources as part of its cosmetics production processes and also demonstrates the value of these natural resources, such as trees, as being greater if left, rather than being destroyed (Elllen MacArthur Foundation 2017b).  The economic benefits of this activity include employment for local communities and the protection of the natural resources which are fundamental to the sustainable success of Brazil Natura (Elllen MacArthur Foundation 2017b).

4.3.2 Renault

The case study of Renault is focused upon a particular aspect of its manufacturing processes which addresses the need to address the use of recycled plastic to both reduce the costs of this resource and to provide higher levels of supply chain resilience whilst also reducing the environmental impact of the production of plastic and the waste products from this (Ellen MacArthur Foundation 2017c). To address this issue, Renault collaborated with a number of stakeholders to develop a closed loop process to retain plastics within its manufacturing processes (Elllen MacArthur Foundation 2017c).  This closed loop undertook a process of adapting existing systems, rather than developing a new one, and was therefore relatively straightforward to implement (Elllen MacArthur Foundation 2017c).

The different approaches undertaken by these selected organisations indicate some of the decision-making processes which are undertaken by an organisation in response to issues of sustainability which include resource security and the prevention of environmental degradation (George et al 2016; Bocken et al 2016). The application of the circular economy can therefore provide a means to increase the level of sustainability within a business activity, but this may undertake a business-centric approach by increasing the level of security within the supply chain (Jacobs and Chase 2017; Slack et al 2016). This implementation of the circular economy for Renault undertook an operations approach by seeking to reduce the amount of waste and arguably has elements of operations and quality management initiatives such as Total Quality Management with its focus on zero waste production and manufacturing (Jacobs and Chase 2017; Slack et al 2016).  These case studies show how the focus on resource security to ensure that a vital resource is protected for the organisation thus focusing on the economic perspective and the environmental one, but also the additional value which this created for societal stakeholders in the area, such as the focus on the environment and societal stakeholders undertaken by Brazil Natura (Elllen MacArthur Foundation 2017b, 2017c).

Chapter 5: Conclusion

5.1 Research aim

The aim of the research was to build on the current level of research to explore the relationship between sustainability and the Circular Economy by considering its impacts on business models and innovation. This was addressed by providing an overview of the concepts of sustainability and the Circular Economy which focused on the economic, societal and environmental challenges which these concepts needed to address (Lewis and Maslin 2018; George et al 2016).

5.1.1 Objective 1: To examine the similarities and differences between sustainability and the Circular Economy

The similarities and differences between sustainability ad the Circular Economy were evaluated to assess the overlaps between the two concepts, but to also clarify the different approaches (Geissdoerfer et al 2017). One of the main differences between sustainability and the Circular Economy relates to the focus of the concepts (Geissdoerfer et al 2017). It was found that the focus of sustainability relates to the push for an increased level of integration within the relationship between economy, society and the environment (Lewis and Maslin 2018; Geissdoerfer et al 2017). In contrast, the Circular Economy undertook an economic perspective which had a subsequent impact upon society and the environment, although both f these factors were evaluated during the decision-making process (Geissdoerfer et al 2017).

5.1.2 Objective 2: To investigate the impacts of sustainability and the Circular Economy on business models and innovation

The investigation of these impacts included a range of business initiatives with some businesses focusing on undertaking more sustainable practices which delivered higher levels of value to its economic, societal and environmental responsibilities, such as Unilever (Unilever 2019). Other case studies demonstrated how business models had been adapted to become more sustainable, in terms of resource use, such as the closed loop recycling at Renault (Elllen MacArthur Foundation 2017ab). Both of these case studies revealed that there was a willingness and motivation to develop and change business models and to innovate to improve sustainable practices and to implement models such as the Circular Economy.

5.1.3 Objective 3: To evaluate the relationship between Sustainability and the Circular Economy

This relationship can be seen as being context-specific to the organisation in terms of its strategic priorities and this is reflected in the business-friendly SDGs and the business focus of the Circular Economy (United Nations SDGs 2019; Pauli 2017). This relationship is seen as important for businesses to address, and for some researchers this is becoming more time sensitive given the scale and the urgency of the economic, societal and environmental challenges being faced (Lewis and Maslin 2018; George et al 2016).  However, this relationship has a number of tensions including the perceived trade-offs between economic, societal and environmental factors and the concept of time (Lewis and Maslin 2018; Geissdoerfer et al 2017; Rockstrom et al 2009). Whilst there is a recognition of the need to undertake some form of activity, there are different levels of willingness and this may see sustainable practices being undertaken which may not use Circular Economy principles and vice versa. In this context, the relationship between sustainability and the Circular Economy maybe weaker or less defined. This relationship may therefore be different across a range of contexts, but these relationships can also demonstrate how a negative relationship between business activities and the impact of these on society and the environment can also become more positive (Lewis and Maslin 2018; Elllen MacArthur Foundation 2017a).

5.2 Research limitations

The research limitations include the lack of primary data which could have sought to gain a more detailed perspective of the relationship between sustainability and the Circular Economy by addressing issues such as the motivational factors for this. Another research limitation relates to the scope of the dissertation which has undertaken a snapshot of the current level of academic activity and business implementation in this area. Given the long-term view of sustainability and the Circular Economy, any future research may want to undertake a longitudinal approach to assess how the relationship between sustainability and the Circular Economy evolves and develop over time. This would also include addressing the time lags between innovations in sustainable practices and the implementation of these by businesses and any regulatory or political changes (Lewis and Maslin 2018; Trott 2017; Dobson 2016).

5.3 Future research areas

The future research areas include a number of potential areas. Firstly, further research is needed on the relationship between sustainability and the Circular Economy and this will need to address how this can be better understood to help support innovation in business models and supply chains to deliver higher levels of positive impacts and value for a greater number of stakeholders (Lewis and Maslin 2018; Mulvihill and Harris Ali 2017; Geissdoerfer et al 2017; Pauli 2017). Another future research area includes the need to assess emerging concepts relating to the increased level of sustainability and the adaptation of the Circular Economy and these are being supported by government stakeholders and being implemented by businesses (European Union 2019; Geissdoerfer et al 2017; Bocken et al 2016). The potential of this increased level of activity as regards sustainable practices and the Circular Economy will also need to include how these activities are being evaluated and measured using tools such as the triple bottom line and assessing the changes in production and consumption patterns (Geissdoerfer et al 2017; Bocken et al 2016).

The final area for future research is related to the role of the public sector in undertaking higher levels of sustainability and the Circular Economy and this is currently underexplored as the emphasis of sustainability and Circular Economy research has been on private businesses (Mulvihill and Harris Ali 2017; Crane and Matten 2016; Blowfield and Murray 2014).

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