What is circular economy?

Circular economy is a systematic approach to economic development – to benefit businesses, customers, and the planet. It fundamentally challenges the consumerist mantra of “produce, use, and throw away.”

Consumption without an eye for recycling, sustainability, and long-term business strategies have for years been the rule amongst consumers – as well as companies.

As the undeniable consequences of large-scale consumption are taking their toll on our environment and climate, an alternative to this linear economy has gained traction: a sustainable alternative to our present throw-away culture. Enter circular economy.

In this article, we will give you a concise overview of circular economy as a concept as well as a guide through the different types of business models that have embraced this idea.

You will learn more about:

  • The nature of circular economy.
  • How circular economy works.
  • How companies can operate within circular economy.
  • How OMNI can make your company more sustainable.

What is circular economy? 

Circular economy is about using and reusing materials or products, so they remain functional and valuable for as long as possible. It is a business model that does away with a culture of disposability to make sure that we will have access to the same precious resources in the future.

For many years now, the global economy has been considered as a linear development. A large part of the economy is still structured in a way that entails an enormous loss of resources:

We extract raw materials, produce goods, and then consume these goods. When we no longer need them – or if we are bored with them – we throw them away. That goes for a wide range of products, including furniture, which no longer appeals to us in the same way that it used to. An exuberant amount of products are being used briefly, only to be thrown away. This is detrimental, not only financially, but especially for our environment.

How does circular economy work? The four principles.

In a circular economy, you minimise the loss of materials and resources by not throwing them away. Quality products and materials are designed to last until they are in need of service, rather than to be disposed of. 

We recycle and reuse products or the materials that these products are made of again and again. Moreover, the products in a circular economy are produced in a sustainable way, without using dangerous chemicals, but relying on renewable energy – all to minimise our impact on our environment and climate.

Circular economy is often associated with four basic principles:

1. Zero waste – nothing is thrown away. This is circular economy in its purest form. Products can be used repeatedly, because they can be repaired, and the materials can be reused.

2. Disposability or durability – products can either:

    • Be thrown away without negatively impacting the environment (if they are, say, biodegradable or can easily taken apart and reused), or
    • Last for a long time and be easy to repair without using materials that contribute to a significant climate footprint.

3. Sustainable production and energy – the product uses a minimum of resources and energy, all of which are renewable or sustainable.

4. Users, not consumers you rent products rather than buy/own them. This extends the life of products, because the products are easier to reuse and are responsibly disposed of by the manufacturer.

SourceEllen MacArthur Foundation

The circularity of an economy, then becomes a question of degrees and context.

Some products are part of circular economy, because they are made from materials that have been reused. Other products are of such high quality that they last longer, and also have the benefit of being serviceable, to extend their lifetime.

Different business models can be used to support circular economy.

How companies can operate within circular economy.

The unsustainable, linear economy is still the most widely used business model. However, companies, including those in the Western world, have begun developing sustainable, circular business models.

To operate in a circular economy, you can employ a few different kinds of business models.

These models can be divided into five categories:

  • Products as service means companies sell access to a product rather than the product itself – for instance, through a subscription model. This means that a product may be used several times by different users throughout its life span.
  • Sharing economy in which products, such as cars or washing machines, are accessible to more users at the same time. In this way, you avoid producing more than necessary.
  • Long-lasting products means creating high-quality products with extended life spans, so they remain in use for longer, thus participating in the circular economy.
  • Circular supply chain in which companies reuse bio-based materials or reusable materials in products.
  • Recycling and reuse of resources and materials from worn-out products to produce new products.

OMNI: a circular business model with sustainable furniture.

At OMNI, we are proud to offer a sustainable solution to home office furnishing.

Our entire business model is circular, meaning that when you rent your furniture through us, you don’t contribute to overproduction.

Most of our furniture has a very long life span. When we get the furniture back from a user, they go through a strict quality assurance procedure. Repairs are made where necessary, and the furniture is thoroughly cleaned before it is sent back out. In many cases, we will also reupholster the products. This means that the furniture you enjoy continues its life at another customer, when you are done using it. We don’t throw away, but reuse and repair. 

By subscribing or renting, you solely get what you need, and when you are done using a product, we come and collect it at the end of your rental term. Together, we can avoid throwing away great furniture, because a user no longer needs it.

While gaining access to just the right home office furniture for your needs, in the time you need it, we also strive to give you access to better designs and higher quality products. In that way, you have the possibility to access the best products on a monthly basis, that you typically might not invest in.

Read more about us here and about our circular business model here.

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