Most conversations about the circular economy start with complex diagrams and end with people quietly checking their phones.
This guide is different.
If you run a business, work in operations, or make decisions about products and capital, you don’t need another climate slogan. You need to know three things in plain language:
- where the money comes from,
- what actually has to change inside your business, and
- whether this is realistic or just another ESG buzzword.
Let’s keep it simple, practical and honest.
What is the circular economy, in business language?
A traditional or linear business model is easy to recognise: you take raw materials, make a product, sell it once, and eventually it gets dumped. It’s the familiar “take–make–waste” story. Your revenue mainly comes from one sale per unit, and the product leaves your world the moment it leaves your warehouse.
A circular business model looks at the same product and asks: how do we take less, use it longer, use it again, and still recover value at the end? Instead of seeing products as “one and done”, it treats them as assets that can create multiple value loops over time.
In business terms, you can think of the circular economy as earning more value from the same resources across the life of the product, rather than squeezing everything out of a single transaction. The environmental benefit is real, but the logic is fundamentally economic.
Why should a business care?
If you strip away the green language, circularity matters because it can improve margins, create new revenue streams, increase resilience and deepen customer relationships.
When you refurbish, repair or reuse a product, you are working with something you’ve already designed, engineered and marketed. The heavy investments are behind you. Any additional revenue you generate – from a second sale, a service, or a subscription – often carries a higher percentage margin than the first sale.
Circular models also open up entirely new income lines. Think of certified pre-owned products, subscription models, extended warranties, buyback programmes, refill schemes, or rental offerings. You are no longer limited to “sell and forget”; you stay involved in the customer’s journey and get paid for keeping the product useful.
There is also a resilience angle. Companies that depend heavily on volatile raw material prices or sensitive supply chains gain when they can recover materials, reuse components, or better predict product life. Controlling what happens to your products at end-of-life reduces regulatory, reputational and operational risk.
Finally, circularity tends to pull customers closer. A business that repairs, upgrades, refills or buys back its own products sees the same customer again and again. Over time, that can mean higher lifetime value, lower acquisition cost, and far richer data about how its products actually perform in the real world.
A simple way to think about it: use, reuse, recover
You don’t need a ten-loop systems diagram to understand the circular economy. A simple three-stage idea is enough to get started: use, reuse and recover.
The first stage, use, is what you already do. You design, manufacture and sell a product, and a customer uses it for the first time. This is your core business today. Circular thinking doesn’t cancel this; it builds around it. The important question is: once the customer has bought the product and used it for a while, are you still part of the picture?
That leads naturally to reuse. This is where most of the interesting business innovation happens. Products can be repaired and refurbished instead of being thrown away. They can be resold as certified pre-owned, especially in categories like cars, electronics or furniture. They can be offered as a service or on subscription rather than sold outright: vehicles leased on long-term contracts, office equipment rented rather than owned, occasion wear hired instead of bought. In all these cases the same physical asset passes through multiple hands, and you, as the seller or manufacturer, can continue to earn from it.
Finally comes recovery, the stage everyone forgets until they are forced to care. Even when a product truly reaches the end of its usable life, it still contains value in the form of components and materials. Motors, batteries, screens, chips and mechanical parts can often be harvested from old units. Metals, glass and some plastics can be recycled. In some situations, waste can at least be used to recover energy. Treating this seriously can reduce disposal costs, soften the impact of raw material price spikes, and even create new business lines if it is done at scale.
Seen this way, a circular model is just a series of intelligent decisions about how long you can keep generating value from the same asset, and who gets paid for that value.
What actually has to change inside a company?
High-level speeches about circularity are easy. Changing day-to-day operations is harder. Most companies that move towards circular models find that four areas need attention: product design, supply chain, operations and data, and the way finance and incentives are structured.
Design is often the first constraint. A product that is sealed, glued and built to be opened only in a factory is very hard to repair or refurbish. A product made from complex mixed materials is hard to recycle. To unlock circular value later, you have to think about repair, upgrades, disassembly and material choices at the design stage. You are no longer designing just for the first sale; you are designing for future revenue events and lower end-of-life costs.
The supply chain then needs to support this vision. You may need reliable access to recycled or secondary materials, not just virgin ones. You need ways for products to come back to you, whether through collection programmes, drop-off points or partnerships. Contracts with suppliers and logistics providers might have to change so they can handle returns, refurbished components or recycled content. This is not simply a sourcing tweak; it can mean a different way of thinking about flows in both directions.
On the ground, none of this works without robust operations and data. Circularity requires you to know which product is where, what condition it is in, how many cycles it has been through, and what tends to fail. That in turn relies on better tracking – serial numbers, QR codes, digital product passports – and disciplined processes for inspecting returns, grading their condition, deciding whether to repair, refurbish, recycle or scrap, and then executing that consistently. For organisations that already run shared services or global capability centres, there is a natural role here: cataloguing products, managing information, building analytics, ensuring traceability, and supporting compliance reporting.
Lastly, finance and incentives have to catch up. If all your internal success measures are tied to quarterly sales numbers, the organisation will resist subscription models, rentals, or anything that shifts revenue over time. Circular models may mean keeping more assets on your balance sheet, pricing based on lifetime value and residual value, and rewarding teams for profitability over the life of the product rather than just the initial sale. Until finance, sales and HR agree on what “good” looks like, circular ideas will remain side projects.
Is the circular economy right for everyone?
Not every business can or should become a showcase of circularity. Some products are genuinely low-value, short-lived and hard to recover, at least with today’s technology and regulations. In some markets, infrastructure for returns, repair and recycling may simply not exist yet.
But almost every business can ask a few simple questions.
What happens to our product after the first sale, and do we know or care? Do we already earn anything from repair, service, resale or trade-in? Do we have enough data about product life and failures to spot patterns? Are we heavily exposed to material price volatility or to future regulation that will make waste more expensive? Are our competitors or new entrants quietly experimenting with more circular models while we stay linear?
The answer does not have to be a grand transformation programme. Often the first step is modest: a trade-in pilot in one city, a small refurbishment line for one product category, a refill or reuse scheme for a single packaging format, or a rental offer aimed at a narrow customer segment. The goal is to build learning and optionality, not to declare that the company has “gone circular” overnight.
A quick self-check for leaders
If you lead a business unit, a function or an operations team, you can treat the circular economy as a practical thought exercise rather than a moral test. Ask yourself:
- Do we still have a relationship with our product once it leaves the warehouse?
- Is there a realistic way to see it again—through service, repair, upgrade, trade-in or resale?
- Are we throwing away materials, time or customer relationships that could carry value if we designed for it?
- And internally, are there at least a few champions in operations, finance, sustainability or sales who are willing to run small, disciplined experiments?
Even a handful of positive answers suggests that circular ideas could be woven into your existing strategy instead of sitting in a separate sustainability report.
The bottom line: smart use of resources, not a halo
At its core, the circular economy is not a moral upgrade bolted on to capitalism. It is a smarter way to use resources in a world where waste is becoming expensive and visible.
Inputs are getting costlier or more regulated. Customers increasingly notice when products fail early or cannot be repaired. Investors and boards are asking tougher questions about risk, resilience and long-term value. In that world, treating waste as mispriced value and products as recurring revenue opportunities starts to look less like activism and more like common sense.
That is what Linking Sustainability aims to explore: not circularity as a halo, but circularity as intelligent business design. If that’s a journey you’re interested in, you’re in the right place.
Linking Sustainability 
Comments (moderated)