Novel circular business models to enable the just transition to a sustainable and circular economy

Expected Outcome:

In supporting the implementation of the European Green Deal, and in particular the 2020 circular economy action plan (CEAP), the Waste Framework Directive and the Ecodesign for Sustainable Products Regulation (ESPR), successful proposals will contribute to the expected impacts of this Destination, notably to benefits for industry and consumers from new opportunities both through sustainable novel products in line with ecodesign principles, and to novel circular business models that have a mitigating impact on resource use and greenhouse gas emissions and contribute to increasing Europe’s sustainable competitiveness.

Project results are expected to contribute to all of the following expected outcomes:

• consumers obtain access to new circular products and services, such as reuse, repair and sharing, that encourage sustainable consumption and thus reduce the environmental footprint, greenhouse gas emissions, and the pressure on biodiversity;
• economic operators that want to introduce circular business models are provided with proved successful examples and recommendations how to do it;
• (re-)skilling programmes and new job opportunities emerge in the areas of re-use, preparing for reuse, repair, upgrade, refurbishment, repurpose, and remanufacture.

Scope:

The green transition and moving to a circular economy will require changes not only in the way materials are used and products are designed, but also in the way companies operate and business models are set up. The majority of current business models and the global economic and trading system are based on linear and unsustainable use of materials and products. This results in ever-increasing consumption, depletion of resources, increase in CO2 emissions and environmental deterioration, and undesirable generation of waste. The transition to a sustainable and competitive and circular economy necessitates transformative changes in material usage and corporate operations, with innovative business models able to trigger sustainable consumer behaviours and purchasing preferences. These models are pivotal in steering both industries and consumers towards sustainable practices, aligning with the comprehensive environmental objectives of the European Green Deal and the EU biodiversity strategy for 2030. The transition to a circular economy is key to reducing pressures on natural resources. It is also a prerequisite to achieve the EU’s 2050 climate neutrality target and to halt biodiversity loss.

Novel circular business models can affect business-internal practices as well as interactions with other businesses or civil society. Proposals should develop and demonstrate at large scale innovative business models to facilitate product reliability/durability, reusability, reparability, refurbishment, repurpose and remanufacture, including the preparation stage, as well as product-as-a-service business models.

Proposals should assess and quantify, including monetisation, when possible, the environmental, social and economic impacts of these novel business models on relevant stakeholders, i.e., consumers, social partners, private companies with a focus on SMEs, municipalities and regions. The assessment of environmental impacts should be done from a lifecycle perspective and build on rules set in the Environmental Footprint methods wherever possible. Impacts of the business models on the overall resource efficiency and material use should also be assessed, as far as possible. Proposals should analyse the ‘pull’ factors that shift consumer choices in the direction of products/services offered by circular business models, as well as what can encourage more to do so. Ecodesign requirements laid down in the ESPR and EU Ecolabel aspects, and the verification of green claims should be considered where relevant.

Proposals should contribute to the development of innovative business models, including social economy entities and social enterprises, to enable the transition towards a circular and sustainable ecosystem and to stimulate the uptake of sustainable consumption patterns. Proposals should address the opportunities of developing new business models in the context of the circular economy R-strategies (refuse, rethink, reduce, reuse, repair, refurbish, repurpose, remanufacture) as well as upgrade and product-as-a-service business models.

Proposals should include social innovation and explore understanding behaviours to identify routes towards an increase of demand for sustainable products and even towards an overall reduction of consumption and product/materials use, which includes products as a service. Proposals should also explore self-sufficiency approaches and promote regenerative practices aimed at restoring biodiversity, mitigating climate change, and strengthening local communities and social justice.

The proposals should address the different perspectives of all relevant actors in a proposed project, which could be actors involved in raw material sourcing, material processing and manufacturing, intermediate production, end-product manufacturing, as well as brand owners, retailers, enterprises, re-use and repair organisations, civil society/consumers, etc. Proposals should also reflect on how access to finance can be facilitated and how economic viability can be ensured, and how governance can promote the establishment of these new business models. Critical issues of change management, scaling and diffusion of solutions should be addressed.

Proposals should target specific social groups and their purchasing power while developing novel business models, in order to keep a fair transition to climate neutrality in mind. This includes possible questions of gender equality, diversity and inclusion. Also, proposals should assess the potential of and prerequisites for new job opportunities in the areas of reuse, preparing for reuse, repair, upgrade, refurbishment, repurpose and remanufacture, contributing qualitative and quantitative data to the reskilling programmes of the green transition.

For the development of novel business models, projects should include elements of fair and affordable pricing of services/labour within various R-strategies as well as upgrade and products-as-a-service models. In this context, projects should also analyse barriers to such models and possible regulatory, governance and economic solutions. Projects should also address possible unintended or rebound effects, both positive and negative, particularly for consumers and the environment, of such novel business models.

Proposals should explore the territorial and geographical dimensions of the establishment and success of new business models and aim at synergies with the New European Bauhaus and the Circular Cities and Regions Initiative (CCRI). Projects are strongly encouraged to organise joint activities, ensure synergies and undertake clustering activities with CCRI projects and the CCRI Coordination and Support Office. To avoid double-funding and to create added value, projects should seek synergies with projects to be performed under the LIFE-2024-SAP-ENV Call^[1].

This topic requires the effective contribution of SSH disciplines and the involvement of SSH experts, institutions as well as the inclusion of relevant SSH expertise, in order to produce meaningful and significant effects enhancing the societal impact of the related research activities.

[1] https://ec.europa.eu/info/funding-tenders/opportunities/docs/2021-2027/…