Business models of the future

17th of September 2019
Business models of the future

John Griep from VSR, ECJ’s correspondent in the Netherlands, tells us two interesting stories of businesses becoming involved in circular economy activities.

Are cleaning service providers the raw material managers of the future? If you asked two Dutch cleaning entrepreneurs, they’d say yes. Take WEPA. They furnish toilet areas and have been making toilet tissue for years. Nothing innovative about that, you might think - but you’d be wrong.

After spending years on a range of sustainability initiatives, they realised you can only make a real impact by re-organising your entire production process. And the company felt that meant they needed to start from scratch. What is my product? What do I need for it? Conclusion: “Our customers have our raw material at their disposal, namely waste paper,” explains the entrepreneur during the VSR Knowledge Event on circularity earlier this year.

Waste as a resource

WEPA developed a logistical process for collecting confidential paper from their customers, cutting it up and bringing it to the factory, where office paper becomes toilet paper. Old hand towel dispensers are also retrieved and processed into raw materials for new ones. “This is how we create fully circular toilet areas.”

A major component of this is the collaboration with supply chain partners. Returnity, which makes new products out of residue materials from buildings, discovered this too. Furniture, carpets, or – more short cyclic – coffee mugs and paper; no waste is wasted by this company. It has value and forms the raw materials for new products.

Another great initiative: at Returnity, you lease your printer paper. The director: “This is where you buy in 100 per cent recycled paper as an organisation and pay a fee per workplace per month for it. We keep track of how much you use and adjust the balance. If we get a lot of paper back (used or unused), then the fee goes down. It’s now even the case that companies collect extra waste paper to lower their fee.”

Need for change

This new economy is diametrically opposed to the rise of the linear economy, which has been depleting the Earth for many years. In the crisis years of the thirties, we made a conscious choice for planned obsolescence. This limited lifespan brought the economy back on track, or so it was thought. We experience the consequences every day.

Indeed, all speakers at the Knowledge Event on Circularity agree: this needs to change. We must take the restorative capacity of natural energy sources as our starting point and see waste as a raw material for a different product.

Different revenue model

The consequence is that organisations will begin to make money from the fact that a product lasts longer, whereby the producer remains the owner and earns from its maintenance. An example is purchasing the use of a lamp or a lift, instead of purchasing the lamp or lift itself. After all, it is then in the producer’s interest that products can be repaired, dismantled and their components re-used.
It is a different revenue model – earning from labour instead of from products – but one that retains a healthy economy and a healthy world.

 

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