Strategic Management and the Circular Economy

256 Pages·2018·5.78 MB·English

by  Marcello Tonelli

Strategic Management and
the Circular Economy
In recent years, the Circular Economy (CE) has gained worldwide
attention as an effective alternative economic system to the current take-
make-waste model of production and consumption. As more and more
firms begin to recognize the potential of this novel approach, the CE
quickly moves from theory to practice and the demand for a coherent
and structured strategic approach – one that companies can rely upon
when commencing their circular journey – grows accordingly. Strate-
gic Management and the Circular Economy aims to bridge the theory-
practice gap by putting forward a detailed step-by-step process for
analysis, formulation, and planning of CE strategies.
Starting from a solid framework of easy-to-grasp constructs (key prin-
ciples, business objectives and areas of intervention), the authors guide
the reader through an understanding of how conventional tools for stra-
tegic management can be re-programed under a CE perspective. To as-
sist learning and encourage circular thinking, the reader is constantly
prompted with examples of how forward-looking companies across
industries and geographies are already applying circular strategies to
future- proof their operations, boost innovation, penetrate new markets
and secure customer loyalty.
Dr Marcello Tonelli is the founder and Managing Director of Worl-
Dynamics Pty Ltd, an organization that promotes sustainable develop-
ment and green innovation. After obtaining his PhD degree in Business
Strategy in 2009, Dr Tonelli worked with the Australian Centre of En-
trepreneurship Research (ACE) in the fields of Social Innovation, Terri-
torial Strategies, and Poverty Alleviation generating growing academic
interest. He also practiced as a Certified Management Consultant and a
Fellow of the Australian Institute of Management.
Nicoló Cristoni is a sustainability professional operating at the inter-
section of Environmental Stewardship, Sustainable Innovation and the
protection of Human and Workers’ Rights. He is specialized in planning
and executing responsible sourcing programs for multinational brands
that are increasingly Circular Economy-inspired. Nicolò also provides
technical support to international human rights organizations.
Routledge Research in Strategic Management
This series explores, develops and critiques the numerous models and
frameworks designed to assist in strategic decision making in internal
and external environments. It publishes scholarly research in all meth-
odologies and perspectives that comprise the discipline, and welcomes
diverse multi-disciplinary research methods, including qualitative and
quantitative studies, and conceptual and computational models. It also
welcomes the practical application of the strategic management process
to a business world inspired by new economic paradigms.
1 Strategic Analysis
Processes and Tools
Andrea Beretta Zanoni
2 Strategic Management and the Circular Economy
Marcello Tonelli and Nicoló Cristoni
Strategic Management and
the Circular Economy
Marcello Tonelli and Nicoló Cristoni
First published 2019
by Routledge
52 Vanderbilt Avenue, New York, NY 10017
and by Routledge
2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN
Routledge is an imprint of the Taylor & Francis Group, an
informa business
© 2019 Taylor & Francis
The right of Marcello Tonelli and Nicoló Cristoni to be
identified as authors of this work has been asserted by them in
accordance with sections 77 and 78 of the Copyright, Designs
and Patents Act 1988.
All rights reserved. No part of this book may be reprinted
or reproduced or utilised in any form or by any electronic,
mechanical, or other means, now known or hereafter invented,
including photocopying and recording, or in any information
storage or retrieval system, without permission in writing from
the publishers.
Trademark notice: Product or corporate names may be
trademarks or registered trademarks, and are used only for
identification and explanation without intent to infringe.
Library of Congress Cataloging-in-Publication Data
Names: Tonelli, Marcello (Economist), author. | Cristoni,
Nicoláo Fabrizio, author.
Title: Strategic management and the circular economy /
Marcello Tonelli and Nicolâo Cristoni.
Description: New York : Routledge, 2019. | Series: Routledge
research in strategic management
Identifiers: LCCN 2018035273| ISBN 9781138103634
(hardback) | ISBN 9781315102641 (ebook)
Subjects: LCSH: Sustainable development. | Strategic planning.
Classification: LCC HC79.E5 T66326 2019 | DDC
658.4/012—dc23
LC record available at https://lccn.loc.gov/2018035273
ISBN: 978-1-138-10363-4 (hbk)
ISBN: 978-1-315-10264-1 (ebk)
Typeset in Sabon
by codeMantra
This book is dedicated to our awareness of
interconnectedness and the hope for a better future.
Special thanks to WorlDynamics Pty. Ltd. for providing the
necessary resources [www.worldynamics.org]
“As mankind is overusing many natural ecosystems, new and
rebalanced ways of doing business are needed. Moving towards a
circular economy could offer a solution. Tonelli and Cristoni present
a comprehensive framework to work on this solution from a strategic
management perspective. This book is a must read for scholars and
practitioners interested in actionable frameworks, business models, and
strategic approaches to developing circular businesses”.
Florian Lüdeke-Freund, Chair for Corporate Sustainability, ESCP
Europe Business School – Berlin, GERMANY
“Over the last decades our awareness of the limits of the use of natural
resources has become more and more embedded in evidence. However,
only awareness cannot solve this. What we need is a course of action
to turn this around. That´s what is offered in this book. The idea of the
Circular Economy is both timely and rather straightforward, but its
application comes together with many challenges and imperfections.
The beauty of this book is that it embraces these difficulties in order to
separate the rhetoric from substance. This proves to be very helpful in
creating practical guidance for the application of the principles of the
Circular Economy”.
Andre Nijhof, Professor Sustainable Business and Stewardship at
Nyenrode Business Universiteit – Enschede Area, THE NETHERLANDS
“Strategic Management and the Circular Economy opens with Victor
Hugo’s eponymous quote ‘you can resist an invading army; you cannot
resist an idea whose time has come’. With the increasing focus of neo-
liberal governments on downsizing, the role of sustainability stewardship
is increasingly moving towards the private sector. This book powerfully
makes the case for enhanced sustainability management through
the circular economy model in shaping the actions we need to take
to preserve our own future. It presents easy to understand business
models and strategies that will help to achieve the circular economy key
principles of improved waste and resource sustainability in a world of
finite resources and an ever-growing population”.
Michele John, Associate Professor, Director Sustainable Engineering
Group, Curtin – Perth, AUSTRALIA
“The Circular Economy is a potential key driver for sustainable
development. The concept has recently gained widespread uptake in
business, academia and policy. Strategic Management and the Circular
Economy provides an engaging overview for academics and practitioners
wanting to understand the concept of the Circular Economy, as well as
potential strategic approaches to start the transition from a linear take-
make-waste to a Circular Economy paradigm”
Nancy Bocken, Professor in Sustainable Business Management &
Practice, Lund University (IIIEE) – Lund, SWEDEN
“Nowadays circular economy has become a top priority in the political
agenda of most developed countries. Many initiatives have been put
forward by governments to switch to a circular model, but there is
still a poor understanding on how to support companies in adapting
to the new economic system. This book provides a thorough analysis
of how companies can effectively combine CE principles with business
objectives and an exhaustive list of concrete examples from different
countries and sectors is shared. All the information is presented from
the realistic perspective that we cannot demand companies to radically
change their business models and processes from one day to the next,
and this aspect represents one of the most important added values of
the book. The authors have succeeded in producing a helpful and clear
guide for companies and policy makers, while keeping scientific rigour
and solidity in their approach”.
Michelle Perello, CEO Consulta Europa Projects and Innovation – Las
Palmas de G.C., SPAIN
“Strategic Management and the Circular Economy (CE) has an
implication for the academia, practitioners and policymakers alike as
it offers theoretical approaches as well as practical examples. It starts
by arguing why enterprises can no longer rely on the linear economic
paradigm, before explaining how circular economy as a strategic
concept works. Through a series of in-depth and original discussions
the book offers a rich contribution to companies, highlighting their
interactions with stakeholders at various levels of society for the
creation of a better future for us all”.
Lara Johannsdottir, Professor, Environment and Natural Resources,
School of Business, University of Iceland – Reykjavík, ICELAND
“This is an inclusive, informative and appealing book on the
complicated subject of the circular economy and strategic management.
The way the circular economy is explained to replace the produce-
use-dispose approach and to bring this concept into reality through
strategic processes, policies, business models, and technologies is
amazing. The book has not only highlighted the fruits of the circular
economy, as repeatedly done in earlier books but rather practically
demonstrated how one nation or society can implement the concept of
circularity in its day-to-day activities and so boost its socio-economic
and cultural development. Undoubtedly, this book is a must-read for
all professions including academics, managers, engineers, scientists,
researchers, policy and decision makers. I am very confident this book
will have a positive and constructive impact in our understanding
and learning of how to move ahead with this sustainable economic
approach, in which waste becomes a valuable resource”.
Abdul-Sattar Nizami, Head of Solid Waste Management Unit, Center
of Excellence in Environmental Studies at King Abdulaziz University –
Jeddah, SAUDI ARABIA
“The book is an engaging and stimulating reading on the circular
economy paradigm, which has gained momentum in recent years. On
the one hand, it clearly and thoroughly explains how the adoption of
a circular economy framework can have positive implications not only
on the environment (e.g. saving scarce resources), which is what most
people would expect, but also on society (e.g. meeting the growing
needs of the middle-class) and on the economy (e.g. making industrial
processes more cost-effective). On the other hand, the authors, while
emphasizing the appeal and elegance of what could be described as
a win-win approach, do not shy away from the complexities that the
implementation of a circular economy model would entail. Indeed,
after defining a circular economy theoretical framework, they set out
a new and innovative methodology to allow practitioners to integrate
such framework with more traditional strategic tools”.
Matteo di Castelnuovo, Director of Master in Green Management,
Energy and CSR, Universita` Bocconi – Milan, ITALY

Contents
List of Figures and Tables xv
Preface xvii
Acknowledgements xix
PART I
An Overview 1
1 The Challenges of the Produce-Use-Dispose Model 2
1.1 Introduction 2
1.2 Exceeding Planetary Natural Thresholds 4
1.2.1 Boundary: Climate Change 6
1.2.2 Boundary: Loss of Biosphere Integrity 7
1.2.3 Boundary: Changes to Biogeochemical
Flows –Nitrogen and Phosphorus 8
1.2.4 Boundary: Freshwater Use 8
1.2.5 Boundary: Land Use Change 8
1.2.6 Boundary: Release of Novel Entities 9
1.2.7 Boundary: Atmospheric Aerosol Loading 9
1.2.8 Boundary: Ocean Acidification due to Fossil Fuel CO 9
2
1.2.9 Boundary: Loss of Stratospheric Ozone due to
Chlorofluorocarbons (CFCs) 10
1.3 Scarcity of Raw Materials and Price Volatility 10
1.4 Rising Middle-Class Population 13
1.5 Structural Inefficiencies of the Current Economic Model 15
1.6 Conclusions 19
2 An Introduction to the Circular Economy 27
2.1 Introduction 27
2.2 Biosphere and Technosphere Products 33
2.3 Technological, Regulatory, and Social Factors 36
2.4 Conclusions 38