SOCIAL CIRCULAR ECONOMY

OPPORTUNITIES FOR PEOPLE, PLANET AND PROFIT

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This report is primarily intended for policy-makers, companies looking to engage in a more
socially and environmentally responsible economy, and practitioners of circular economy and/or
social enterprise. It aims to highlight the significant opportunities, insights and themes garnered
from dozens of social circular enterprises and to act as an information tool and showcase of
successful models and accelerate progress towards a Social Circular Economy, in line with the
UN Sustainable Development Goals.

Acknowledgements

Social Circular Economy aims to inspire people to rethink, redesign and pursue a positive
future with the belief that coupling the principles of the circular economy with social enterprise
gives the right conditions to foster innovation and creativity, for a world with local solutions to
meet societal, environmental and economic needs.

This report would not have been possible without the support of the Winston Churchill
Memorial Trust and The Frank Jackson Foundation.

Thanks also go to an extended group of organisations that provided input and expertise. Only a
portion of their contributions can be captured in this report, but further details will be available on
www.socialcirculareconomy.com. The organisations included Azzura Solar, Bali Recycling,
Beeconomics, Bio Fair Trade, BV Rio, Corong Galeri, ECHOstore, Eco Farm Asia, Ecotece, Flor
de Cabruêra, GK Enchanted Farm, GOMA, Good Food Community, Growbox, Habi Footwear,
Jacinto & Lirio, Kawil Tours, Liter of Light, Materia Brasil, Morada da Floresta, Mycotech, New
Hope Ecotech, Pelangi Nusantara, Rede Asta, REMBRE, Retalhar, Trama, Triciclos, Upasol,
Waste4Change and ZEBU.

About the author

Seigo Robinson is a consultant supporting organisations in tackling their environmental and social
challenges. These are diverse – from circular economy strategy for a European region to scaling small
charitable organisations.

Previously he was Head of the Centre for Remanufacturing & Reuse where he was an invited speaker
at international conferences on circular economy and remanufacturing. As Senior Consultant, he led
the Circular Economy division at Oakdene Hollins, and previously worked in New York and the Middle
East with strategy consultancies Marakon and Charles River Associates respectively.

He is a Fellow of the social enterprise leadership programme On Purpose, a member of the BSI 1
Sustainable Resource Management Committee that developed BS8001: Framework for implementing
circular economy principles in organizations, and provides strategic advice on several boards including
a London city farm and Open Source Circular Economy Days. He has a MEng degree in Chemical
Engineering from the University of Cambridge.

Seigo was awarded a Winston Churchill Memorial Trust Travel Fellowship in 2016 to explore the social
circular economy and disseminate its benefits.

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British Standards Institute

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Contents
Acknowledgements .........................................................................................................................2
About the author ......................................................................................................................... 2

Executive summary .........................................................................................................................4

Circular economy ....................................................................................................................... 4
Social enterprise ........................................................................................................................ 5
Social Circular Economy ............................................................................................................ 5
Potential shortfalls ...................................................................................................................... 6

The Concept .................................................................................................................................12

Circular Economy ..................................................................................................................... 12
Social Enterprise ...................................................................................................................... 14
Social Circular Economy .......................................................................................................... 14
Why is it needed? ..................................................................................................................... 16

How it works up close ...................................................................................................................18

Overview .................................................................................................................................. 18
Showcase of organisations ...................................................................................................... 20
Themes .................................................................................................................................... 32
Social Circular Business Model Canvas .................................................................................. 35
Reverse logistics ...................................................................................................................... 35
Conclusion ............................................................................................................................... 36

Recommendations ........................................................................................................................38
Government ............................................................................................................................. 38
Communities ............................................................................................................................ 39
Circular social enterprises ........................................................................................................ 39

Appendix .......................................................................................................................................40
Learn more ............................................................................................................................... 40
References ............................................................................................................................... 43
Disclaimer................................................................................................................................. 43

Glossary
B2B Business to business GK Gawad Kalinga
B2C Business to consumer KPI Key performance indicator
BMC Business model canvas NGO Non-governmental organisation
BOP Bottom of (socio-economic) pyramid OEM Original equipment manufacturer
BSI British Standards Institute OSCE Open source circular economy
CEBM Circular economy business models PSS Product service systems
CSA Community supported agriculture SCBMC Social circular business model canvas
CSR Corporate social responsibility SDG Sustainable development goals
EPR Extended producer responsibility SROI Social return on investment
United Nations Educational, Scientific
GDP Gross domestic product UNESCO
and Cultural Organization

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Executive summary Circular economy
The umbrella concept of the circular economy
The social circular economy unites the
has gained traction in recent years, even
circular economy and social enterprise
receiving its own strategy within the EU. It
concepts to deliver benefits for people, planet
typically refers to an industrial economy that
and profit. It allows a fully systemic view by
is regenerative and restorative by design,
drawing on the environmental principles of
keeping resources in use at their highest
the circular economy and the societal vision
value for as long as possible. It is an
of social enterprise, both of which are
economy where products, components and
underpinned by a pursuit for economic
materials are designed and made for ‘loops’
prosperity. It thus aligns well with enhancing
such as reuse, refurbishment and recycling.
wellbeing for people and planet and the UN’s
It replaces the linear economy based on
Sustainable Development Goals.
take3, make and throw away that assumes
the earth has infinite resources. Instead the
The circular economy is an industrial
economy that is regenerative and restorative circular economy is one where we:
by design, keeping resources in use at their 1. Put in only renewable and
highest value for as long as possible.
sustainable resources;
Social enterprises use business principles 2. Endlessly cycle technical and
to achieve societal good and seek to make a biological nutrients; and
positive change in the world. 3. Minimise waste and negative
externalities4.
To explore this concept further, site visits to
30 organisations across four countries were At its core, it requires resources, money and
performed. Emerging nations were selected informational flows to circulate, something
for the study for their lower labour costs, in that the linear economy does not do.
theory allowing more human-centred value Since the circular economy is an operating
recovery2 models to be initiated. They also model that describes the high-level basis for
tend to face more acute and widespread creation of value in an environmentally
social issues, increasing the chance for positive way, there are also a set of business
different social solutions to appear. models that describe how an organisation
Five key objectives for this study were to: creates and delivers this value. These are
termed circular economy business models
1. Generate a showcase of organisations (CEBMs) and fall into five broad groups:
to validate the concept’s range and
1. Dematerialisation: reducing the
viability;
amount of resource required to create
2. Identify key themes; products through digitisation, on-demand
production (made to order) and a move to
3. Test and enhance a social circular reusable products. Examples are Netflix
business model canvas (SCBMC) streaming content rather than producing
and sending DVDs, or each Kindle
developed to be more fit for purpose displacing hundreds of books.
than conventional frameworks in order
to capture how these organisations 2. Circular inputs: using renewable (e.g.
generate and deliver value; solar power), fully biodegradable (e.g.
untreated wood), sustainable (e.g.
4. Understand how organisations unlock properly sourced palm oil) and/or fully
the reverse logistics conundrum i.e. how recyclable (e.g. pure high density
are they retrieving products and polyethylene) for production.
materials to recover value from them in 3. Product life extension: extending the
a cost-effective manner; and life of products through design for
durability, design for modularity,
5. Identify the applicability of the social maintenance and repair, reuse,
circular economy to the UK context and reconditioning, refurbishment,
recommend how to maximise its remanufacture, repurpose and part
implementation and scale. harvesting. Examples are Patagonia that
(designs for) repair of their clothing and

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Reduce, recycle, refurbish, reuse, etc. Externalities: consequences (costs or benefits) of an
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Extracting raw materials from the planet e.g. oil, gas, activity which affect other parties that do not choose to
coal, metals, minerals and trees. incur those consequences.

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 Fairphone that designs phones built with It should generally be clear what groups of
durability and modularity in mind using people social enterprises support, and these
ethical supply chains. stakeholders are often called beneficiaries.
4. Resource recovery through recycling, They typically fall into the following groups:
bio-chemical extraction, anaerobic  Children and young people
digestion and composting. Examples are  Disabled
Toast Ale which uses surplus bread to
brew beer and the carpet manufacturer
 Ex-offenders
Interface, who through their Networks  Homeless
programme collect nylon fishing nets to be  Living in poverty
recycled into new carpet yarn.  Long-term health conditions
 Long-term unemployed
5. Product as a service or Product
 Mental health needs
Service System (includes Sharing
 Older people
Economy5) comprises leasing,
performance based payment (pay for  Refugees
success), sharing resources and peer to  Victims of crime
peer lending. Examples are AirBNB
(accommodation) and Uber (transport). Some examples of social enterprises include:
The circular economy is an operating model  The Big Issue: helps homeless and
to ensure that the economy does not harm long-term unemployed people to move
the environment and in fact benefits the from begging to working by producing
planet the more of it that occurs. magazines sold by vendors who buy
copies for £1.25 and sell them at £2.50.
Social enterprise  Grameen Bank: a microfinance
Social enterprises use business principles to organisation and development bank that
achieve social good and seek to make a makes small loans to impoverished
positive change in the world. There is no people without the need for collateral.
universally agreed-upon definition for social
enterprise, but key is a focus on making  Newman's Own: a food company
social impact as much as making money6. started by the actor Paul Newman
Social impact is the change delivered for distributes its profits to educational and
people by an organisation’s actions; these charitable organisations.
can be positive, negative, intended or
Social enterprise is an operating model to
unintended. Clearly the aim is to have a ensure that the economy does not harm
positive effect by tackling societal problems, society and in fact benefits society the more
improving opportunities for disadvantaged of it that occurs.
people and strengthening communities.
Social enterprises differentiate themselves Social Circular Economy
from charities and traditional non-profits by
building in financial sustainability meaning The social circular economy combines
they are not reliant on grants and continued these concepts to deliver benefits for people,
funding. They typically show the following planet and profit. It allows a fully systemic
characteristics: view by drawing on the environmental
principles of circular economy and the
 Have a clear social mission
societal vision of social enterprise, both of
 Generate majority of income which are underpinned by a pursuit for
through trading goods or services economic prosperity.
 Reinvest majority of their profits To articulate why social circular economy is
into their mission or organisation needed, it is best to highlight the potential
 Are independent and autonomous shortfalls, from a whole systems perspective,
from state that the circular economy and social
enterprise concepts can present when
 Are transparent and accountable
pursued in isolation.

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Sharing economy or collaborative consumption is an considered ‘impact ventures’ or ‘mission-driven
ecosystem based on sharing of physical, human and enterprises’ but do not fit within the ‘social enterprise’
intellectual resources. category since they do not focus on a specific social
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Some consider purely environmentally conscious cause. Rather, they focus on leaving a better planet
ventures as ‘social enterprises’. Here they are and are laudable examples of circular enterprises.

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Potential shortfalls Social enterprise
Social enterprises on the other hand focus on
Circular economy delivering social impact and therefore
Circular economy protagonists have looked to understand these types of social trade-offs
governments and corporations to support the i.e. the construct is a dual focus of
transition. This has meant a focus on the maximising social impact and profits.
economic benefits, with the implication that However, based on these ideals the
circular economy is still expected to play environment can potentially suffer i.e. the
within the current economic paradigm and negative environmental externalities
match or improve upon profitability, risk or created by a capitalistic model are not
growth metrics. It has thus focused on (necessarily) internalised by moving to
maximising material resources and labour social enterprise.
productivity to generate highly efficient
answers, but not always highly effective ones, For example, a social enterprise supporting
once a system greater than just the economic those with mental health issues gain work by
domain is considered. manufacturing soap and cleaning products
would always continue to increase production
What this means is that societal challenges if there is market demand to scale its social
can still be overlooked, or to be precise, the impact and make more profits. However,
negative social externalities created by a manufacture of these products may use toxic
capitalistic model are not (necessarily) chemicals, create harmful by-products and/or
internalised by moving to the circular produce difficult to deal with waste. Even so,
economy. the social enterprise better meets its
internal objectives by harming the planet
As an example, the circular economy would more. Social circular economy would instead
be a proponent for a business model using a use Cradle to Cradle concepts to formulate
robot that could repair mobile phones slightly products, likely with higher initial investment
cheaper than the current business model costs. However it ensures a sound ecological
where they are sent to landfill or partial supply chain and the product would enrich
recycling. However, it would still be a rather than contaminate the environment.
proponent for this robot if it was 1% more
economical than hiring five refugee women It can be concluded that the system redesign
doing the repairs. They would have using the purely social enterprise approach
livelihoods to support themselves, their comes to a different solution due to the
families and spend the money in the local different boundary conditions when compared
economy. We can see in this example that to the social circular economy. The latter
the circular economy has significant benefits allows a slight decrease in profitability8 to
over the current linear model but far less than preserve or even enhance natural capital and
the social circular economy approach. Put ensure a regenerative environment9.
another way, using the UN Sustainable
Development Goals7 perspective, the circular How it works up close
economy would primarily meet one goal (12: A wide variety of social circular enterprises
Responsible Consumption and Production)
were reviewed at different lifecycle stages
while the social circular economy approach
from start-up to well established. The
would meet three more (5: Gender Equality,
8: Decent Work and Economic Growth and following themes were identified as common
10: Reduced Inequalities). threads across these organisations:

It can be concluded that the system redesign Combining circular economy business
using the purely circular economy approach models (CEBMs): While some organisations
comes to a different solution due to different generate income solely through one CEBM,
constraints when compared to the social many organisations use several suggesting
circular economy. The latter allows a slight there may be synergy effects. In some cases
decrease in profitability8 to seed social a CEBM is used to generate income (e.g.
progress for a truly whole system recycling materials), while another allows it to
optimisation. reduce costs (e.g. reusing equipment no
longer wanted by others).

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The Sustainable Development Goals is a UN Social enterprises are values-led organisations and
initiative adopted by UN nations in 2015. They tend to consider environmental impact more than
represent a set of goals to end poverty, protect the other enterprises. Thus they often take some
planet, and ensure prosperity for all. mitigating steps for their activities. Understandably
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Or slightly higher business risk or lower growth. however, these tend to be operational fixes rather
than designing out issues at start-up.

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SOCIAL CIRCULAR ENTERPRISES UPASOL: Vicuña and La Serena, Chile
UPASOL operates a recycling centre in La
Retalhar: São Paulo, Brazil Serena, a coastal tourist town with patchy
Retalhar specialises in reverse logistics of municipal waste collection. The profits run a
used corporate uniforms to refurbish or disabled children’s rehabilitation centre in
repurpose them into new products. This is Vicuña, a town an hour inland in the Andes.
done on a contract basis to return the ‘waste’ The centre uses reconditioned / refurbished
back to the client that produced it. Retalhar medical equipment, repurposed carpets for
employ an ex-offender to triage the delivered wall insulation, old hospital beds as gates
uniforms and ensure company logos are
and an entirely reclaimed kitchen. There is
destroyed or returned, then uses a third party
even a Museum of Old Objects to highlight
for laundry. It then works with women’s
seamstress collectives to perform the the obsolescence of consumer products.
refurbishing or repurposing.

Corong Galeri: Coron, Philippines

Growbox / Mycotech; Bandung, Indonesia Corong Galeri operates an eco-tourism
Growbox sells oyster mushrooms to cooperative working together with local
consumers; these are in ‘Growbox’ format indigenous communities to move them into
that yield 2-3 harvests on spraying of water. decent work from dynamite fishing and
Growbox pays poor local farmers that use damaging coral reefs to make ends meet.
agricultural waste to help grow mushrooms They use former fishing boats with each tour
Mycotech has a proprietary mycelium method boat representing income for seven families.
to make a baked alternative building material, Corong Galeri provides market access,
used in interior design for tiles or furniture. customer support and training.

Interpretation: Organisations in the UK understand the corporate perspective,

looking to transition into the circular economy delivering consistent quality on time and
may be best placed not to start with a minimising trouble for the client, and another
particular CEBM but rather consider their to understand how to train, empathise with,
value proposition and select circular activities motivate and support the communities
that align with its core competencies. For performing the circular economy activities.
example, a bicycle safety advocacy group The role provides value to clients who get
could offer to take away abandoned bicycles access to responsible products via a
from its local council to run hands-on training professional transaction, while the
programmes that let people learn proper communities receive market access and
maintenance and repair skills, after which the much needed support. A key support function
repaired bicycles could be sold (Product Life is design; many provide design expertise to
Extension) while unrecoverable metal scraps ensure products are desirable to consumers
could be sold to an aggregator (Resource while still being cost-effective to manufacture.
Recovery). This approach empowers people
to maintain and repair their own bikes while Interpretation: many social issues stem from
generating income for further advocacy. a lack of opportunity often reinforced by
prejudices. This is in effect an underutilisation
Broker-enabler roles: Most organisations of social resource i.e. a person is seen as a
play the broker or enabler role between problem to fix rather than an untapped
disadvantaged communities and corporates / resource. Identifying these people and what
clients necessitating two skills sets; one to activities they could contribute to with the

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right support is a critical role. However, to be without proper focus, cost control may be
successful the majority of organisations need poor. Thirdly, the setup and running costs in
to find and develop a market to sell outputs the UK may be higher than in emerging
i.e. find demand. UK organisations should markets, while global market pricing often
thus develop these dual capabilities of dictates revenues for recycled material i.e.
supporting beneficiaries while stoking the costs may outstrip sales.
market in order to be the matchmaker
between supply and demand. There is an Small capital operations: Organisations in
opportunity for larger corporates to provide the study are typically low capital operations
this demand by altering their procurement. and scale somewhat linearly without need for
large jumps in capital spend.
Training provision: Most of the
organisations in this study empowered Interpretation: most organisations have few
disadvantaged people through employment fixed assets. This may be partly to do with the
rather than delivering a service or product to study design but also to do with the more
a beneficiary. In these instances a significant human-scale and thus distributed nature of
amount of training is provided, often on-the- operations. This suggests that there are low
job skills but sometimes through a set of barriers to entry for UK organisations looking
distinct courses built in-house. to transition. Most operations do not seem to
Interpretation: as many of the organisations have a minimum scale requirement meaning
are relatively small, there is a significant one person could in theory run the venture.
amount of duplication in basic training across This makes it amenable for pilot testing with
them e.g. business finance fundamentals, scale achieved by adding a human resource
business processes, computer skills, quality – useful for corporates to use an in-house
assurance. Clearly there is an opportunity for entrepreneur (or ‘intrapreneur’) approach or
a more centralised approach e.g. online pilot a new model with a social circular
repository of training videos that social enterprise partner e.g. to valorise non-
circular enterprises could access. continuous waste streams like office furniture.

Scaling impact: Organisations looking to Ad-hoc volunteer support: Some

scale their impact use three approaches: organisations suffered from the side-effects of
temporary volunteer support with inability to
1. Building a new marketplace, based on maintain website content and business
an online platform; processes due to lack of proper handover.
2. Automating manual operations to
remove themselves as potential Interpretation: access to volunteers is likely
bottlenecks to scale; and an enabler for scale, easing the transition
3. Social franchising. from micro to small, and small to medium
enterprises. Discretising tasks, ensuring their
Interpretation: UK organisations with an completion and proper handovers will make
established sustainable model should look to roles more rewarding resulting in more
scale using these three approaches. committed volunteers and better outcomes.

Cross-subsidy model: Some organisations Emerging markets focus: While the above
use a cross-subsidy model by generating themes have strong UK applicability, there
income one way to fund social impact in are areas of differentiation in emerging
another, rather than delivering social benefit markets. Waste management is an area
while performing a circular activity. For where the lack of formalised municipal
example, profits from recycling fund a collection presents more of an opportunity for
children’s rehabilitation centre’s operations. an informal (social circular) economy to exist.

Interpretation: not all CEBMs have to be Also, a significant amount of labour is

directly aligned to the core mission; if in required in some activities showcased here.
delivering this mission there is a circular This cost structure may be profitable in
opportunity and the capacity to deliver, then it emerging markets where wages are
is possible to generate profits and support the comparatively low but could be prohibitive at
core mission. However, this was atypical and UK living wages. Thus to allow those models
caution is advised before undertaking this to flourish in the UK there would need to be a
model. Firstly it may take away resources
from core into non-core activities. Secondly

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reduction in labour per unit (e.g. faster work The five return mechanisms identified:
or automation) and/or price increases.
 Collection as a service: generally used
for continuously generated mixed waste;
Interpretation: while UK organisations may be
occasionally done on a free basis for
more limited to participate profitably in
items with significant residual value e.g.
recycling than in emerging markets, there are pick-up of donated furniture for reuse.
still opportunities e.g. schools could ask their
students to bring in aluminium cans – this  Product price includes collection:
could be aggregated and sent to a processor Collection represents a significant
for close to £1,000 a bale, in turn funding activity of the business but differs to the
educational activities. Alternatively, an urban above as revenue is generated only
farm delivering plant growing programmes from product sales not collection.
could use its agricultural waste or local food The material is often homogeneous e.g.
waste as a growth medium to run a water hyacinth leaves, and generally
has value added to it rather than just
therapeutic mushroom growing programme
being triaged for recycling and
for those with mental health issues, then sell
processing. It is predicated on the value
the mushrooms for profit. per mass ($/kg) being high enough to
incorporate logistics costs as a small
Social Circular Business Model Canvas: part of the cost structure of the product.
The Social Circular Business Model Canvas
(SCBMC) proved to be a useful tool10 in  Part of a contract: typically for single
guiding conversation and drawing out type end-of-life products produced in a
information and insights, and concisely batch manner e.g. corporate uniforms
capturing how social circular enterprises every three years. The homogeneous
generate and deliver value. Areas like Unique nature of the material within each batch
is of high value as it does not incur
Advantage and Governance not captured by
triage and separation costs i.e. a purer
the traditional Business Model Canvas
and higher quality feedstock that justifies
proved to unearth information that would extra design work to repurpose the
have otherwise been missed. feedstock and add further value. This
and the mitigation of waste disposal
Interpretation: social circular enterprises (and
costs means that reverse logistics costs
those aspiring to be) should use the SCBMC can be recovered in the contract price.
to assess their activities at management
meetings and pivot or refocus as necessary.  Push to supplier: brokers push the risk
It is also useful as a concise visual and cost of reverse logistics back up the
communication aid to portray the purpose, value chain to suppliers who are
aims and approach of an organisation. typically productive groups and artisans.
These groups live close to the origin of
Reverse logistics: A key hypothesis tested the ‘waste’ (or ‘nutrient’) and therefore
was that for reverse logistics to work, it can source it for low or no cost.
requires user-powered collection i.e. the
previous product user delivers it. The five  Push to user or ‘waste producer’: not
themes identified did not corroborate this prevalent in emerging markets.
hypothesis in that return of an item by the However, it is widespread in developed
nations, where users who have no
previous user is in fact seldom seen in
further need for a product often drop off
emerging markets. Instead organisations the item e.g. charity shops.
‘price in’ the added logistics costs into their
product/service price or push the risk back to Interpretation: the five mechanisms are
their suppliers. The organisations in this study directly applicable to UK organisations to
mostly stick to collecting lower value highly develop their own reverse logistics systems
distributed materials e.g. recyclable waste. and enable circular economy business
Therefore mechanisms dealing with complex models to thrive.
and/or high residual value products (e.g.
medical imaging equipment) are not seen,
likely as assets are retained within
commercial service contracts.

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https://www.socialcirculareconomy.com/social-
circular-bmc.html

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Recommendations
An expanded version of these
recommendations can be found on page 38.

Government
1. Government to support more research
to quantify and evidence the potential
benefit of a social circular economy.
2. Government to take an active role in
encouraging and supporting social
circular enterprises.
3. Government to encourage the
development of an online platform to
connect and support these
organisations.
4. Government to recognise this report’s
definition of the social circular economy.
5. Government to improve consumer
awareness of social circular economy.
6. Government to procure products and
services from social circular enterprises.
7. Government to pursue enabling
legislation such as a tax breaks to
encourage the growth of social circular
enterprises.
8. Government to work with schools,
universities, training providers and other
stakeholders to create an educational
programme to ensure circular economy
and social enterprise knowledge is
embedded at a young age.

Communities
9. Circular economy and social enterprise
proponents to network with each other.
10. Community champions to develop local
communication and assets.
Circular social enterprises
11. Currently operating social circular
economy organisations strive to become
more relevant through scale and
professionalisation.
12. Start-ups should be encouraged to
utilise the framework to support the
transition to a social circular economy.

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How everybody wins
Collaboration with social circular enterprises
Society, Environment and Economy  Some of the of the benefits of going
(or People Planet Profit) circular such as reduced costs e.g.
Circular economy strategies capture and landfill costs
generate value while preserving the planet;  Some reputation enhancement from
combining it with the social enterprise supporting socially and environmentally
archetype transforms this value into social responsible products and services.
value (or impact) as well as economic profit.
 Can start with small steps: most
 Society wins with a reduction in companies have a waste management
inequalities and support for the solution for continual waste, but may not
disadvantaged with commensurate have an economically satisfactory
reduction in costs for governments. solution to batch wastes e.g. corporate
 Environment wins with far fewer uniforms, carpets, furniture. In these
emissions and raw materials extracted. cases, utilising a social enterprise to
 Economy wins with large net material collect, repurpose, repair, refurbish
savings, price risk mitigation, and/or recycle this ‘waste’ is a great first
employment and reduced externalities. step. This provides a better waste
management solution than landfill or
waste to energy. Further, ‘waste’ can be
repurposed into corporate gifts with a
Companies great story that can reinforce company
There are benefits from transitioning to a marketing efforts.
social circular enterprise or at least engaging
with and procuring from these organisations:  Attract new loyal customers and
employees: stakeholders and
Social circular enterprises beneficiaries engaged with social
 Deliver social impact while making circular enterprises are likely to be
profit. attracted to brands they see supporting
 Ensure positive environmental these organisations, meaning brands
impact. could develop a new base of loyal
customers with low customer acquisition
 All of the benefits from going circular costs, and act as a differentiator for
such as reduced material and waste potential employees.
management costs, mitigated risk of raw
material price volatility, less product  Public procurement should engage
complexity and increased customer more with the social circular
interaction. economy particularly in the UK, where it
perfectly aligns to the aims of the Social
 Reputation enhancement from Value Act 2012 to bring about wider
delivering socially and environmentally system benefits.
responsible products and services.
 Helps to attract consumers and
employees that are increasingly Users and Consumers
conscious of the social and  Innovative and unique products:
environmental impacts caused by their many of the products in the social
purchasing choices and also who they circular economy need innovation and
work for. Consumers look for the story design as they often work with non-
behind their products and services and homogeneous ‘waste’.
are willing to pay a premium for those  Products and services aligned to
that align best with their values, while values: consumers increasingly want to
employees share a similar sentiment for make a positive choice with their wallets;
their employers and are more motivated products and services delivered under
if they feel what they are doing is this archetype seamlessly matches the
making a positive difference. impacts ethical consumers seek.

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The Concept
The social circular economy unites the made for ‘loops’ such as reuse, refurbishment
circular economy and social enterprise and recycling.
concepts to draw on their individual strengths It replaces the linear economy based on
while counteracting their potential take11, make and throw away that assumes
weaknesses when viewed independently, in the earth has infinite resources. Instead the
order to deliver benefits for people, planet circular economy is one where we:
and profit. An overview of each of these
concepts is provided in the following sections. 1. Put in only renewable and
sustainable resources;
The limits and drawbacks of the current linear 2. Endlessly cycle technical and
economy and the social issues caused by biological nutrients; and
existing business-as-usual are not covered in 3. Minimise waste and negative
detail here; plenty of literature exists externalities12.
providing a rich evidence base on these
issues. This study seeks only to highlight the The famous ‘butterfly diagram’ below by the
clear case for change and propose an Ellen MacArthur Foundation encapsulates the
updated archetype, the social circular principles of a circular economy and the key
economy, to guide the system change. ‘loops’ that comprise it. The key tenet of
keeping resources at their highest value at all
Circular Economy times means focusing on tighter loops where
reuse (whole) is better than refurbishment
The circular economy is typically defined as
(parts) which is favoured over recycling
an industrial economy that is regenerative
(molecules). Therefore, while recycling is the
and restorative by design, keeping resources
most well-known ‘loop’ of the circular
in use at their highest value for as long as
economy, it is in fact the least beneficial in
possible. It is an economy where products,
terms of preserving embedded resource.
components and materials are designed and

Figure 1: Circular economy system diagram: 'butterfly diagram' (Ellen MacArthur Foundation, 2013)

11 12
Extracting raw materials from the planet e.g. oil, Externalities: consequences (costs or benefits) of
gas, coal, metals, minerals and trees. an activity which affect other parties that do not
choose to incur those consequences.

12
Growing popularity recycled into new carpet yarn by its
partner Aquafil.
This clear and compelling narrative has
become a popular mantra in recent years and 5. Product as a service or Product
Service System (includes Sharing
has been adopted as a strategy at the EU
Economy15) comprises leasing,
Commission13, has made it into G7 Summit performance based payment (pay for
Declarations and is making inroads into the success), sharing resources and peer to
US, particularly the Chambers of Commerce. peer lending. Examples are AirBNB
There are many advocates with the most (accommodation) and Uber (transport).
vocal champion being the Ellen MacArthur
Foundation14, its mission being to accelerate Benefits
the transition to a circular economy.
Financial and employment
Circular economy business The financial benefits of a circular economy
have been well highlighted and is estimated
models (CEBMs) to have the potential to unlock $630 billion a
Since the circular economy is an operating
year in the EU by 2025 (Ellen MacArthur
model that describes the high-level basis for
Foundation, 2013) and $4.5 trillion globally by
creation of value in an environmentally
positive way, there are also a set of business 2030 (Accenture, 2015). From an
models that describe how an organisation employment perspective, in the UK alone,
creates and delivers this value. These can be half a million people could be working in the
termed circular economy business models circular economy with over 100,000 of those
(CEBMs) and fall into five broad groups: as new jobs created (WRAP, 2015).

1. Dematerialisation: reducing the Environmental and Social

amount of resource required to create While an important foundation of the circular
products through digitisation, on-demand
economy is that it is an industrial economy
production (made to order) and a move to
reusable products. Examples are Netflix that benefits the planet, there is in fact a
streaming shows and films rather than limited amount of research into its
producing and sending DVDs, or the environmental impact; rather, it seems to be
Kindle displacing up to hundreds of books. taken as a given. This lack of information is
2. Circular inputs: using renewable (e.g. partly due to an emphasis on financial and
solar power), fully biodegradable (e.g. employment metrics to appeal to corporate
untreated wood), sustainable (e.g. and policy decision-makers, and partly due to
properly sourced palm oil) and/or fully the complex nature of calculating
recyclable (e.g. pure high density environmental impacts.
polyethylene) for production.
3. Product life extension: extending the From a social perspective, beyond potential
life of products through design for employment output metrics, there is again
durability, design for modularity, limited research. Similar to the environmental
maintenance and repair, reuse, impact, social impact is typically very difficult
reconditioning, refurbishment, to measure.
remanufacture, repurpose and part
harvesting. Examples are Patagonia that In essence, the circular economy is an
(designs for) repair of their clothing and operating model to ensure that the economy
Fairphone that designs phones built with does not harm the planet and in fact benefits
durability and modularity in mind using the environment the more of it that takes
ethical supply chains. place.
4. Resource recovery through recycling,
bio-chemical extraction, anaerobic
digestion and composting. Examples are
Toast Ale which uses surplus bread to
brew beer and the carpet manufacturer
Interface, who through their Networks
programme collect nylon fishing nets to be

13
http://ec.europa.eu/environment/circular- through space; our current approach is unsustainable
economy/index_en.htm and that a different, circular, system is needed.
14 15
Founded by Dame Ellen MacArthur who sailed solo Sharing economy or collaborative consumption is
around the world. She realised during her trip that all an ecosystem based on sharing of physical, human
that she had to live off was in her yacht. This struck and intellectual resources.
her as a nice metaphor for humans travelling on earth

13
Social Enterprise  Long-term health conditions
 Long-term unemployed
Social enterprises use business principles to  Mental health needs
achieve social good and seek to make a  Older people
positive change in the world. There is no  Refugees
universally agreed-upon definition for social  Victims of crime
enterprise, but key is a focus on making
social impact as much as making money16. Some examples of social enterprises include:
Social impact is the change delivered for
 The Big Issue: helps homeless and
people by an organisation’s actions; these
long-term unemployed people to move
can be positive, negative, intended or
from begging to working by producing
unintended. Clearly the aim is to have a
magazines sold by vendors who buy
positive effect by tackling societal problems,
copies for £1.25 and sell them at £2.50.
improving opportunities for disadvantaged
people and strengthening communities.

Figure 2: A spectrum of social enterprise forms1

Social enterprises differentiate themselves  Grameen Bank: a microfinance

from charities and traditional non-profits by organisation and development bank that
building in financial sustainability meaning makes small loans to impoverished
they are not reliant on grants and continued people without the need for collateral.
funding. However they come in a huge variety
of shapes and sizes with some that look like  Newman's Own: a food company
local charities and others like big corporations started by the actor Paul Newman
(Figure 2). They operate within a broad distributes its profits to educational and
spectrum of organisational forms (except charitable organisations.
pure commercial enterprise), but as a good
rule of thumb social enterprises show the In essence, social enterprise is an operating
following characteristics: model to ensure that the economy does not
 Have a clear social mission harm society and in fact benefits society the
more of it that takes place.
 Generate majority of income
through trading goods or services
Social Circular Economy
 Reinvest majority of their profits
into their mission or organisation The social circular economy combines the
two archetypes described above i.e. where
 Are independent and autonomous organisations operate commercially within the
from state circular economy and also have a social
mission. An example might be Organisation A
 Are transparent and accountable transforming corporate uniform ‘waste’ to
It should generally be clear what groups of bags made by economically-disadvantaged
people social enterprises support, and these people and providing them with a decent
stakeholders are often called beneficiaries. income in good working conditions.
They typically fall into the following groups: The social circular economy recognises that
 Children and young people the global system should be represented by a
 Disabled thriving economy embedded within a rich
 Ex-offenders society that is in turn part of a wider
 Homeless regenerative environment.
 Living in poverty

16
Some consider purely environmentally conscious enterprise’ category since they do not focus on a
ventures as ‘social enterprises’. In this study, these specific social cause. Rather, they focus on leaving a
are considered ‘impact ventures’ or ‘mission-driven better planet and are laudable examples of circular
enterprises’ but would not fit within the ‘social economy enterprises.

14
 Figure 3: Schematics of systems designed by the different archetypes

It also recognises that more local and The exact quantitative attribution of impact to
distributed solutions, or value creation, are industry can be debated, but what is clear is
key to achieving sustainability since there are that there are massive environmental and
costs to these system domains from social costs to how the current economy
exploitation and movement of resources. operates. One outlook is to say there are
Concentration of value creation engenders always winners and losers and the planet is
inequality economically, socially and here to be exploited and so it is worth
environmentally, since fewer people can be harming for the economic benefits accrued.
involved in that value-creating step. Yet with
traditional economies of scale models, Social circular economy posits that this is an
production occurs at massive scale in one unsustainable view and that there are ways
location with outputs distributed all over the to enhance personal wellbeing whilst
world. While this approach delivers improving society and environment. It is a
incremental economic benefits for the value principles-based approach, marrying circular
creator, it increases the risks of shocks to the economy and social enterprise together to ‘fill
system and tends to incur social and in the gaps’ potentially created when they
environmental costs that are not paid for. It is operate on a standalone basis (see Potential
clear that the economy is encroaching ever Shortfalls below).
more on the domains of environment and In essence, social circular economy is an
society ( operating model to ensure that the economy
Figure 3) with many examples where both are does not harm society or environment and in
subservient to the economy at huge scale fact benefits both society and environment
(Error! Reference source not found.). the more of it that takes place.

Figure 4: Overview of major environmental and social crises in recent years

15
A natural fit: the human-scale operating in a circular manner. It is indeed an
ambitious aim, because it prescribes pursuing
Much of the circular economy is about
both social and environmental goals and thus
recovering value from products, and products
incurring the cost of business of delivering
by their nature are widely distributed amongst
positive externalities, all the while competing
people. This then poses a challenge to
against other traditional economic actors that
transitioning to the circular economy from the
do not get penalised for the negative ones
current traditional economic model – in which
they create –activities effectively subsidised
one giant factory manufacturing products to
by society and planet. Consider the difficulty
gain marginal economies of scale would need
Organisation A mentioned above would have
to be collected at end of use, then sorted
competing on price with Organisation B that
and/or transported back to this mega factory
makes bags from cheap virgin cotton
to be made new again. Unless products have
(consuming huge amounts of water, fossil
high inherent value, this added complexity,
fuel fertilisers and toxic pesticides) with
and thus cost, in reverse logistics may not be
workers that have few rights (too often
recouped by the mitigated raw material costs
underage and under paid).
and labour. If instead the product value was
retained and recovered closer to the That said, it is a model that clearly works;
consumer i.e. circular economy at the local thousands of charity shops exist around the
human-scale, this could avoid the associated world that are the enterprise division of a
complexity and cost. For example, if charity (i.e. social enterprise) collecting
consumers dropped off a laptop locally for unwanted belongings or procuring second
refurbishment this would incur far less cost hand goods to sell again. Here value is
than sending a courier to pick it up, bring it to created through the ‘reuse’ loop of the
a national refurbishment centre and finally circular economy, with profits being directed
back by courier to the consumer. toward the charity’s social mission. Later
sections of this report will highlight many
Social issues reside by their nature with
more examples.
people and thus need localised and
distributed models to support them; for
example it is difficult to help an isolated Why is it needed?
elderly woman without having a local Both circular economy and social enterprise
presence. sound like worthy approaches to delivering
benefits to the world so why is the social
There is therefore a clear match in scale circular economy needed? This is because
between products (with people) and social neither framework takes a full systemic
issues (also with people). What if some or all view; there are instances where each model
of the collection, value recovery and could produce non-optimal outcomes from a
remarketing of products could therefore be global perspective; these shortfalls are
done at this local human-scale level? Could described below. Essentially the social
circular economy value creation then also be circular economy is a framework where global
utilised to deliver in-situ social value? system benefits are produced (economic,
This underpins the need for a local and environmental and social), not some benefits
distributed approach – local solutions for local at (potential) expense of others.
issues and building in resilience through
diversity to system shocks. Consider for Potential shortfalls of the
example the financial, environmental and circular economy
social value delivered by a network of To ensure continuing momentum for the rise
automotive component remanufacturing of the circular economy agenda, there is a
workshops across Europe supporting and trend within circular economy proponents to
training ex-offenders to get back into look to governments and large corporations
employment. Then consider how this to support the transition. This has meant a
potential would be undermined if one mega focus on the economic benefits of the circular
factory in Germany performed all the economy, particularly through the lenses of
remanufacturing for Europe. Consider also increased profitability and reduced risk.
the resilience the networked approach has to Higher growth (barring new activities) has
a flood in the vicinity of the factory meaning less prominence as it fits less well with
total EU remanufacturing shutdown. circular economy principles.
Not less bad, more good The argument goes that since products return
Social circular economy is not about to a company, it faces reduced costs of
minimising environmental impact while procuring raw materials by using these
delivering a social mission, nor is it just returned materials to produce new products.
providing equitable working conditions while This also decouples the company from

16
volatile pricing in commodity markets e.g. Potential shortfalls of social
steel, meaning lower financial risk. It also
means needing a closer relationship with the enterprise
customer leading to better follow-on sales Social enterprises on the other hand focus on
opportunities. All these factors appeal to delivering social impact and therefore
shareholders and thus corporate leaders. The understand these types of social trade-offs
implication of this is that the circular economy i.e. the construct is a dual focus of
is still expected to play within the current maximising social impact and profits.
economic paradigm and match or improve However, based on these ideals the
upon profitability or risk metrics. It focuses on environment can potentially suffer i.e. the
maximising material resources and labour negative environmental externalities
productivity to generate highly efficient created by a capitalistic model are not
answers, but not necessarily highly effective (necessarily) internalised by moving to
ones once you consider a system bigger than social enterprise.
just the economic domain.
For example, a social enterprise that supports
What this means is that societal challenges those with mental health issues gain work by
can still be overlooked – or to be precise, the manufacturing soap and cleaning products
negative social externalities created by a would always continue to increase production
capitalistic model are not (necessarily) if there is market demand in order to scale its
internalised by moving to the circular social impact and make higher profits.
economy. However, the production of these products
may use toxic chemicals, create harmful by-
As an example, the circular economy would products and/or produce difficult to deal with
be a proponent for a business model using a waste. Even so, the social enterprise better
robot that could repair second hand mobile meets its internal objectives by harming
phones slightly cheaper than the current the planet more. Social circular economy
business model where they are sent to landfill would instead use Cradle to Cradle concepts
or partial recycling. However, it would still be to formulate products, likely with higher initial
a proponent for this robot if it was 1% more investment costs. However it ensures a
economical than hiring five refugee women sound ecological supply chain and the
doing the repairs. They would have product would enrich rather than contaminate
livelihoods to support themselves, their the environment at end of use.
families and spend the money in the local
economy rather than it being sent to a It can be concluded that the system redesign
corporate bank account with no linkage to the using the purely social enterprise approach
local context of repair. We can see in this comes to a different solution due to the
example that the circular economy has different boundary conditions when compared
significant benefits over the current linear to the social circular economy. The latter
model but far less than the social circular allows a slight decrease in profitability18 to
economy approach. Put another way, using preserve or even enhance natural capital and
the UN Sustainable Development Goals17 ensure a regenerative environment19.
perspective, the circular economy would meet
one goal (12: Responsible Consumption and
Production) while the social circular economy
approach would meet three more (5: Gender
Equality, 8: Decent Work and Economic
Growth and 10: Reduced Inequalities).

It can be concluded that the system redesign

using the purely circular economy approach
comes to a different solution due to different
constraints when compared to the social
circular economy. The latter allows a slight
decrease in profitability18 to seed social
progress for a truly whole system
optimisation.

17
The Sustainable Development Goals is a UN impact more than other enterprises. Thus they often
initiative adopted by UN nations in 2015. They take some mitigating steps for their activities.
represent a set of goals to end poverty, protect the Understandably however, these tend to be operational
planet, and ensure prosperity for all. fixes rather than designing issues out at onset, where
18
Or slightly higher business risk or lower growth. typically 70-80% of environmental impact is decided.
19
It is noted that social enterprises are values-led
organisations and tend to consider environmental

17
 versions that focus on social enterprise,
How it works up close circular economy and lean start-up. The
different versions all have their merits, but
Overview when tested have not always fully captured
the finer points of a social circular enterprise.
Objectives Therefore, a new framework was developed
This study aims to be an information tool to to be tested on site visits to see its relevance
improve understanding of the social circular and use for social circular enterprises. The
economy and to enlist broad support for areas covered within the framework
putting it into wide-scale practice. It aims to effectively provided the interview guide on
highlight the themes, opportunities for, and site visits, primarily to frame the discussion
obstacles to the social circular economy and and ensure that all relevant facets of the
take the first steps to draw lessons for policy- organisation were covered in the research
makers, businesses and practitioners, and phase. Therefore a key aim was to further
drive a more systemic transition towards a develop and test this framework for capturing
social circular economy. how social circular economy organisations
generate and deliver value.
Showcase organisations
There are numerous case studies for circular
economy organisations and there are also a
large range for social enterprises, but scant
systemised information on organisations
combining both concepts. Thus a key goal is
to showcase social circular enterprises to
evidence that they can be successful,
scalable, sustainable and socially impactful.

There is a growing desire for forward-thinking

organisations to participate within this
framework but many are unwilling to invest as
first-movers. Consequently, proving the
concept with a showcase of a diverse set of
organisations is key to ‘de-risk’ the approach Figure 5: Social Circular Business Model Canvas
for other organisations. (SCBMC)

Themes Unlocking the reverse logistics

A review of the organisations is essential to
draw out common themes, such as what
conundrum
models are prevalent, what products, A significant hurdle to the implementation of
services, causes and beneficiaries do they the circular economy is reverse logistics. It is
focus on, and what opportunities and not within the core competencies of most
challenges exist for those pursuing the social organisations, can require significant
circular economy. While it is outside the investment and typically requires a large
scope of this study to develop a full strategic shift in the way the enterprise
framework for building organisational produces and delivers its offer to its
roadmaps toward a social circular economy, customer. Therefore, a major hypothesis to
these themes present a helpful guide for test is that reverse logistics is successful only
those looking for clues to make the transition. when costs are kept low by either getting the
previous user of a product to deliver it for
Social Circular Business Model value recovery, or when performed at local
scale so that transport costs are a minimal
Canvas part of the cost structure. An understanding
The Business Model Canvas (BMC) has
of working examples and potentially any
gained significant traction in recent times as a
identifiable mechanisms would facilitate other
simple yet robust mechanism to demonstrate
how a business generates and delivers value. organisations to become more circular.
It is a one page template with nine boxes20 to
be filled in to capture an organisation’s
business model. It has spawned other

20
Partners, Resources, Activities, Channels,
Relationships, Segments, Revenues and Costs

18
Approach more varied breeding grounds for innovative
models to be forged. With these criteria, the
Candidate Selection four countries selected were Brazil, Chile,
While the social circular economy is present in Philippines and Indonesia, representing a
developed national economies like the UK, a total population of almost 600 million people.
strong focus on labour productivity and higher They showed a good spread of GDP21 per
labour costs mean some previously human capita indicating a range of socio-economic
powered activities have been phased out. levels ranking 54th (Chile), 76th (Brazil), 99th
Consequently, the best learnings may well be (Indonesia) and 117th (Philippines) of 185
achieved in emerging markets (or ‘Global nations22.
South’) where labour costs are lower,
potentially allowing more human centred African nations were not included in this study
recovery approaches; concurrently these owing to a lack of critical mass in any given
areas are where social issues are more acute country23 (perhaps due to limited internet and
and widespread, presenting a greater media presence of organisations), time
opportunity for different models to appear. constraints and logistics; however they do
This sentiment was echoed in discussions with warrant further investigation. It is noted that
circular economy proponents from these African nations are found toward the bottom
regions who have also noticed a tendency for of GDP per capita rankings meaning that low
discourse in Europe and the US to omit wider labour costs could produce interesting
social implications and to fail to learn from models not seen elsewhere, but with the
models found elsewhere. Therefore this study corollary that the insights may have less
aims to plug that gap and focus on direct applicability to richer nations.
organisations operating in these regions.
Methods
A global log of social circular enterprises The log was screened to shortlist social
worthy of further study was compiled with a circular enterprises to approach for a site visit
bias toward small and medium enterprises with the majority accepting requests. The
(SMEs) that tend to be more operational than
research was thus principally primary, carried
strategic. This was a deliberate decision to
focus on ‘doing’ over ‘planning’ and also out by interviews with the organisation,
broaden the search to ensure a different combined with general observation and
perspective to the available circular economy shadowing of day-to-day operations. Typically
or social enterprise focused case studies. this involved a tour of the site(s), a discussion
about their business model, perceived
These organisations were grouped by barriers and opportunities, and the financial
geography to ascertain which areas had a and social impacts delivered.
‘critical mass’ i.e. high concentration of
candidate nations worth visiting. Further, to The interview was guided using the social
maximise the breadth of organisations it circular business model canvas (see
would be preferable to pursue a wide appendix) which was continually adjusted
diversity of working practices, cultures, with minor updates during the research
languages and religions. Finally, examining a phase to better capture the kind of
range of income per capita would provide yet information encountered:

21 22
Gross Domestic Product, monetary value of all Based on International Monetary Fund 2015 list of
finished goods / services produced in a country 185 countries. The bottom 20 are all African nations
which also make up 31 of the bottom 40.
23
Except perhaps South Africa.

19
Showcase of organisations with six women’s seamstress collectives to
perform the refurbishing or repurposing. The
There are many different ways to group the collectives are typically enterprising women
organisations reviewed, for example based that have learned sewing skills from a
on the ‘loop’ of the circular economy they weekend training course run by a local NGO.
participate in, the Sustainable Development The women have little access to market so
Goals (SDGs) they support or the Retalhar provides this, ensuring good regular
beneficiaries they serve to name just three. income for the women. A visit to one of these
This study focuses on business models to collectives, Costurando a Vida, showed the
highlight that these organisations are community nature of the group; on the day of
sustainable enterprises, specifically using the visit, a mother, two daughters and their
the five groups of circular economy business aunt greeted us. They related how the open
models (CEBMs) introduced earlier. relationship they have with Retalhar means
potential issues are headed off early.
Conspicuously many organisations end up
straddling multiple groupings whichever ‘lens’ The majority of the items are repurposed, as
is used, be it SDGs, CEBMs or other relevant the placement of logos and wear patterns
groupings. mean that full refurbishment back to the
original product format is often not
Dematerialisation practicable. This presents a challenge in that
Dematerialisation is typically a less prevalent repurposing means producing items such as
CEBM, yet notable examples were found. bags, smaller pieces of clothing and
accessories, which require a level of in-house
On-demand design expertise and generally more time-
One approach to dematerialisation is to consuming and intricate work. Further, it
create items only on-demand – several produces more off cuts which could become
organisations used this model in conjunction ‘waste’. Costurando a Vida in fact takes the
with the refurbishment or repurposing of offcuts to teach young women in the
corporate waste and so could also feature in community how to sew, propagating skills.
the Product life extension CEBM section.
Another challenge the bespoke nature of the
Retalhar: São Paulo, Brazil business presents is it is hard to develop a
Retalhar specialises in the reverse logistics of standard approach to the work, with a
corporate uniforms and then refurbishing or significant amount of effort going into each
repurposing them into new products. This is contract. A potential solution is to move
done on a contract basis to return the waste toward a more homogeneous product, such
(or rather ‘nutrient’) back to the organisation as shredded textile material for blankets or
that produced it in the first place. The potentially carpets. This would potentially
uniforms are delivered to Retalhar who help with scaling but has the down-side of
employ an ex-offender to triage the items and producing lower value product as less of the
ensure things like company logos are embedded work in the original product is
secured (destroyed or returned) and then use retained and recovered.
a third party for laundry. Retalhar then works

Figure 6: Retalhar's operations and products, clockwise from left: Debranded and refurbished high-vis
jacket; sewing machines; shredded textile; blanket for homeless in carry bag; bags from repurposed
uniforms; women's collective at work.

20
Table 1: Summary of organisations visited and the circular economy business models they utilise
Circular Product life Resource Product service
Organisation Dematerialisation
inputs extension recovery system (PSS)
Azzura Solar x x
Bali Recycling x x x
Beeconomics x
Bio Fair Trade x x
BV Rio x x
Corong Galeri x
ECHOStore x
Eco Farm Asia x
Ecotece x
Flor de Cabruêra x
GK Enchanted Farm x
GOMA x
Good Food Community x
Growbox x x
Habi Footwear x x
Jacinto & Lirio x
Kawil Tours x
Liter of Light x
MateriaBrasil x x
Morada de Floresta x x
Mycotech x x
New Hope Ecotech x
Pelangi Nusantara x
Rede Asta x x x
REMBRE x x
Retalhar x x
Trama x
Triciclos x x
UPASOL x x
Waste4Change x x
Zebu x x

Rede Asta: Rio de Janeiro required getting groups together and co-
Rede Asta sells artisan products, the vast producing items while assuring quality and
majority of which are made from secondary on-time delivery. Rede Asta records key
materials i.e. repurposed. A lot of its products performance indicators (KPIs) for sizable
are sourced direct from artisans but others projects like this, including tonnage of waste
are made on-demand on a commissioned recovered, how much $R are distributed
contract basis by companies looking to amongst how many seamstresses – in this
repurpose their corporate waste and take a case $R300,000 across 150 seamstresses.
step in ‘closing the loop’ on their operations,
Rede Asta has realised that while these
similar to how Retalhar operate.
contracts are satisfying to deliver, the ability
Both organisations play a broker type role, to scale their impact is limited. Thus it has
matching demand from corporates with developed an online platform to connect
supply from economically disadvantaged collectives directly with corporates looking for
collectives. However, they are much more their business waste to be repurposed. This
than brokers in that they must speak the allows larger complex orders to be met by
language of corporates and work with them in distributing production across collectives.
a multidisciplinary way. For example, the This needs a level of internal professionalism
budget may come from the Marketing and quality assurance from the suppliers
department while the business waste comes which means Rede Asta still has a role in
from Operations, all coordinated by the ensuring that they receive proper on-going
Sustainability Officer. They also need to training. The platform however decouples it
professionalise the collectives supporting on from the production process itself and thus
design, quality assurance, on-time delivery allows it to scale the impact of providing
and cost management. meaningful work to women living in poverty
while diverting waste to landfill or incineration.
Rede Asta has delivered large orders, for
example 30,000 items in three months
coordinating 19 productive groups. This

21
Azzura Solar: Jakarta, Indonesia
Azzura Solar delivers renewable solar
lighting24 to rural communities. The CEO
spent time living in rural areas of Indonesia
with these communities and understood
some of the key challenges faced with solar
lighting – particularly around durability,
functionality and ease of use. Having a
design background, he took to redesigning
solar lighting:

 Durability: often the solar lighting

market is driven by how many lights can
be delivered at lowest cost within a grant
budget. This sets up the incentive of
delivering more units but of cheaper and
flimsier construction meaning they only
last a short time before breaking and
becoming waste. Instead he created a
rugged system to increase the life time it
could be used.

 Ease of use: linked to the above, the

system was simplified, designing out
complexity so that anyone can be taught Figure 7: Azzura Solar's upgraded lighting
how to use it in a few minutes. system: durable, simple and functional

 Functionality: small design tweaks With this more innovative product, Azzura
were made that can have a significant pursues three tranches of business through
effect on continuing functionality. on-demand manufacture to deliver better
Typically, Indonesia gets very strong lighting for those with little or no access to
rain showers, therefore water can find its clean lighting:
way into the light and ruin the
electronics. Azzura’s lights have a large 1. A proposition to Corporate Social
lip and a better encased bulb to ensure Responsibility departments at large
that water does not get into the system. companies that want to engage their
Another modification is to produce the employees in giving back to society.
lights, wires and components in bright Azzura agrees a number of systems to
colours. Beyond being more fun, it also be delivered to a community and sends
combats the problem of dirt build up. in an order to their supplier. In the 2-3
Typically solar systems are a dark weeks that it takes to deliver, it performs
simple colour meaning dirt can a site assessment to ensure a smooth
accumulate without being noticed. A installation process. When the systems
significant number of systems stop arrive, more often than not Azzura will
working purely owing to this dirt covering arrange a corporate team-building away
up vital electrical connections or shorting day to install the systems. This avoids
parts of the circuit; bright colours allow labour costs and provides the client with
this build up to be seen and thus a closer connection to the communities
prompt a better level of care. Finally, the they are supporting, building empathy.
solar cell is more powerful than typical 2. Similar to the above, but instead working
solar lamp systems which often tend to with government entities to roll-out
perform well below their theoretical / systems on a larger scale.
technical specifications – in effect 3. Finally, a new business line is to work
capacity ‘redundancy’ is built in so that with trusted local community champions
performance is high in all solar that sell systems within their own
conditions. communities. Systems are again
manufactured once an order has come
through. Since the systems are so

24
Also fits into the Circular Inputs CEBM.

22
 simple, it is easy to train these consultancy support on governance for waste
champions to perform the installations. picker cooperatives or directly hiring
This helps scale Azzura’s reach and cooperative leaders – both relatively low cost
provides installation job opportunities. options to access the cooperatives’ tax
certificates for material collection that the
Move to reusable products producers are obligated to show as proof of
Morada da Floresta: São Paulo compliance. This however does not align with
Morada da Floresta develops products to paying for the value, recognised in the
allow people to move toward more SWNP, of the benefits to society and
sustainable living. It operates across several environment produced by the 800,000 waste
CEBMs but one of its main lines is a variety pickers gathering and sorting 70% of the
of products based on transitioning consumers selectively collected waste in Brazil. Typically
from disposable to reusable products and a waste picker working in a cooperative
dematerialising that activity. Products include would receive around R$400 per month (less
reusable nappies that prevent the need for than £100). Ideally, a system would be in
hundreds of disposable nappies and place to pay for the collection service
mooncups for women’s menstrual cycles. provided by these waste picker cooperatives
These products also mean a much lower in a transparent way.
overall cost for the consumer while vastly
To address this, BV Rio has developed a
reducing the waste to landfill. Mooncups can
Reverse Logistics Credits system. An
also make a big social impact, supporting
electronic invoice of a credit is issued by type
gender equality; in India 23% of girls drop out
of material when the collection, sorting and
of school when they start their periods while
selling of sorted material is recorded. Since
those that stay miss five days a month
waste pickers get paid not just for the
(Nielsen, 2011).
material value of the products they sell to a
Digitisation processor but also for the credit (essentially
for the service of collection), this has the
BV Rio: Rio de Janeiro, Brazil
potential to significantly increase their
BV Rio has been developing digital platforms
income. Further, new markets are created for
to enhance the typically peer-to-peer opaque
materials that have no real material value e.g.
transactions that occur within a variety of
plastic film packaging, which are not currently
environmentally aligned sectors25. Without
collected as there is no incentive to do so.
digitisation, there would simply not be enough
scale to create a viable liquid market, and A small pilot program with limited funds was
coordinating up to date pricing would be far performed in 2015 which worked well,
too onerous. increasing median incomes for waste pickers
by 30%. The pilot study also showed that
One platform is based on the 2010 Solid
materials reach a ‘level playing field’ in terms
Waste National Policy (SWNP) which moved
of value to the waste picker, for example the
the liability for waste products from
price of aluminium was little affected as it
municipalities to producers, emulating
already has high inherent value, but glass
European Extended Producer Responsibility
price effectively tripled making it much more
(EPR) legislation. The SWNP requires
likely to be collected. The social impact from
producers (or manufacturers i.e. those that
the pilot was also pleasing; it was assumed
create future waste) to arrange for the
that most cooperatives would split the extra
reverse logistics to ensure consumer waste is
money and share it across its members as a
recovered back into the production supply
windfall but in fact only 30% of the
chain. The SWNP also recognises waste
cooperatives did so; 70% put aside a “rainy
picker organisations as legitimate jobs and as
day” fund and/or purchased new equipment
key stakeholders within the recycling chain
to enhance their operations. This showed a
and aims to encourage a bottom of the
level of latent sophistication with investment
pyramid26 (BOP) economy. However, SWNP
decision-making that was previously not
provides a framework but no firm guidance on
available to them.
how infrastructure should be deployed nor
clear targets. This has had the unintended A significant challenge in recent times has
consequence of producers providing some been the downturn in the economy and the

25 26
responsible timber exchange, platforms for buying largest, but poorest socio-economic group.
voluntary credits (e.g. forest reserves, tyres) and
industrial effluent quota system.

23
political turbulence in Brazil. For the platform them to earn an income as installers. This
to take off there is still some work to do with lets the organisation scale much quicker than
policy and corporate decision-makers to roll- by doing installations itself.
out the SWNP infrastructure at scale. This is
a good example of how the circular economy Liter of Light’s focus has now moved on to
has to be founded upon strong collaboration solar lighting or ‘Liter of Light – At Night’. It
of a wide variety of stakeholders. has several designs including a street lamp
that includes a repurposed bottle, but its most
Circular inputs recent and iconic design is to take a standard
kerosene lamp that most people are familiar
Renewable energy with and embed the solar light inside – a
Liter of Light: Makati, Philippines repurposing of lamps too. For this it has won
Liter of Light started with a frugal innovation international design awards.
to bring clean and safe light into shanty
homes using an open source circular
economy approach. They took discarded
plastic bottles, filled them with water with a
drop or two of bleach to keep away mould,
and then developed a leak free way of putting
that bottle into the corrugated iron ceiling.
Sunlight is able to come through the bottle,
looking remarkably like a light bulb, and
thereby giving people the ability to see
properly inside their homes during the day.

Figure 827: The original open source innovation

provides safe and clean lighting during the day.

These houses are usually very dark making Figure 9: Liter of Light's solar systems,
moving around hard meaning this simple idea clockwise from top left: solar street lamp
(including repurposed plastic bottle); home
has a large social impact. Homes are often
lighting system (including repurposed plastic
where much of the livelihood is earned e.g. bottle); train the trainer session on soldering and
making and fixing things. It allows people to building solar lanterns; lanterns to be fitted for
see without having to pay for other more training day; operating solar lantern.
costly sources of light, some of which are
hazardous, like smoky naked flames. For this solar lantern, it uses the knowledge
gained from the prior phase on train-the-
Liter of Light focuses on scale of impact and trainer models to teach people how to solder
therefore developed a train-the-trainer type their own solar lighting kits to scale its reach.
programme, teaching locals to install these This allows three revenue-generating models,
‘Liters of Light’ in their community, enabling all focused on scaling quickly:

27
Courtesy of Liter of Light Facebook page, Album
First Bottle Lights in Malabon: Thousands More

24
Figure 10: Various images from a training day teaching a community to build solar lanterns

1. Working typically with women’s to making are often lovingly and slowly
collectives on a credit basis; they are crafted – often too slow to be
loaned the solar kits which they economical. Thus Ecotece time certain
manufacture into solar lights. They sell parts of the manufacturing process to
these to their local community and pay highlight what needs to be done quicker
Liter of Light back within 60-days of the or should be less intricate. This is often
initial kit delivery and keep the profit. a big behavioural shift for the collectives
2. An offering to foundations and and requires patience to work through;
corporates, selling a certain number of  Design: linked to the above, designs
kits. These kits are delivered to a often need modification to ensure
community where they are trained to commercial viability. Maintaining
solder the kits together – some will keep aesthetics / commercial look during this
the light and some go on to start their simplification requires deep expertise;
own manufacturing enterprise as per the  Professionalism: training on stock
model above. checks, customer services, keeping
3. Selling kits (without lanterns or solar electronic cost records and
panels) to corporates for team-building systematising processes; and
events. In a few hours, teams can build  Quality control and on-time delivery:
dozens of soldered kits, giving a sense consistency in production and on-time
of purpose to attendees while Liter of delivery is key in the commercial arena
Light outsource labour and build closer to build trust for repeat business - not a
relationships with potential future forte for collectives that may not have
backers. the same priorities or prior training.
All three business models allow it to
outsource and distribute labour to help scale
their impact of getting more clean and
affordable lighting and energy into
disadvantaged people’s hands, and where
possible involve them in the income
generating process.

Sustainable inputs
Ecotece: São Paulo, Brazil
Ecotece is a group of fashion experts and
designers that supports textiles
Figure 11: Ecotece face-to-face support -
manufacturing collectives, not dissimilar to Clockwise from top left: Discussing Grupo de
the broker type model seen with Retalhar and Mães que Bordam portfolio with a major
Rede Asta earlier. It provides help on: Brazilian brand; simplifying designs; highlighting
design challenges for Flor de Cabruêra;
 Access to markets: particularly brands assessing new design options
that can support higher input prices;
 Cost management: often collectives All of this support requires significant face-to-
move from hobby to trying to sell their face time with the collectives. To service this
wares; thus the products they are used need Ecotece have developed a student work

25
experience programme – design students are have returned to previously barren areas in
desperate to support real life problems just a couple of years.
meaning it is a win-win-win situation
(collectives, students and Ecotece). While Eco Farm Asia has planned three phases of
Ecotece is a capacity-building organisation work; first to test and develop the idea
helping disadvantaged people into decent (ending at time of writing). Soon it will move
work, it makes a strong push on both brands to the second phase to develop pathways to
and collectives to use sustainable inputs. This scale, working with various stakeholders such
includes organic cotton, fully recyclable fibres as local government, NGOs and setting up a
or secondary materials like disused street teak farmers’ association. Using European
banners sourced from a network of suppliers standards of farming puts it in a niche high
and gives a behavioural nudge on the end segment making it more attractive for
ecosystem of textiles manufacturers. people to come on board. Phase three aims
at full scale up, with three million teak trees
In delivering this work, Ecotece has a mix of across the country within 15 years.
models it uses to generate income to
continue its work: capacity building project Good Food Community: Quezon City,
work for foundations, consulting work for Philippines
brands, and taking a percentage on products Good Food Community uses a Community
sold through new business that they have Shared (or ‘Supported’) Agriculture (CSA)
helped generate for collectives. Since there is model to deliver organic produce in a socially
no ideal legal structure in Brazil for a social impactful way. CSA is a partnership between
enterprise they have a dual legal structure – farmers and consumers in which the
a limited for-profit company and a non-profit. responsibilities, risks and rewards of farming
These allow it to manage the different are shared. Good Food Community offers a
streams effectively and ensure they can subscription model for city dwellers in Metro
deliver the impact they pursue. This dual or Manila to receive weekly vegetables, either
even triple legal structure is something that by direct delivery or pick-up from local
was not uncommon amongst others in Brazil. community hubs dotted across the city. For
rural farmers it provides market access,
Biodegradable inputs training and seeds.
Eco Farm Asia: various, Philippines Good Food Community has invested
Eco Farm Asia is a sustainable teak farming significant time to build trust with
operation in various locations across the cooperatives of marginalised smallholder
Philippines. Its focuses on regeneration of farmers and now works closely together on
denuded or idle land either by purchasing planning, logistics and price-setting. The
small plots or working in partnership with produce is focused on vegetables rather than
farmers that have unproductive areas of land. rice or sugar cane, as the cash flow is
The founder has worked extensively with delivered faster back to the cooperatives.
local communities in the developing world This also has the added benefit that produce
and living near teak plantations in various can be grown in the back garden so that the
countries and recognised how this beautiful, traditional role of women staying at home can
durable and valuable product could be grown be incorporated, allowing them to participate
more in the Philippines to produce an ethical in being financially productive too – in fact
product and support rural communities. several cooperatives have a majority of
women. The farmers grow vegetables without
Eco Farm Asia has started multi-cropping,
pesticides or synthetic fertilisers and promote
putting in coffee plant seedlings in between
biodiversity, polyculture and soil health.
the teak trees to produce shade-grown
organic coffee. The shade-grown coffee does GK Enchanted Farm: Bulacan, Philippines
not produce quite as big fruit as those mono- Tony Meloto or Tito Tony (‘Uncle Tony’) has
cropped in the sun but tend to have a lot of developed Gawad Kalinga (GK) a non-profit
flavour. This multi-cropping approach has a that focuses on building communities, helping
number of benefits with a quicker cash flow to grow the movement of supporting the poor
for coffee than for teak (five years versus 11, and mainstreaming social businesses. It has
15 or 25 year harvests) while maintaining provided a million homes for economically
high profitability and building in well- disadvantaged people or those affected by
evidenced ecosystem resilience against pests natural disasters across the Philippines. Tito
and diseases. Amazingly, bees and owls Tony stresses the need for Filipinos to

26
believe in themselves, and is passionate then supported by the jobs created by the
about building an enabling platform to lift social enterprises incubated at the farm.
people from poverty. GK was awarded the
2012 Skoll Award in social entrepreneurship Some ventures are already successful, such
for its works. as Bayani Brew that makes agri-based
beverages sold in stores across Metro Manila
In recent years, Tito Tony has realised that and beyond. Human Nature, a very
there is a growing issue with youth heading to successful cosmetics and personal care
urban centres for work. Since the average business using raw materials grown in the
age of farmers in the Philippines is about 60 Philippines, grew in tandem with the farm and
years old, there is growing pressure on the employs several residents. The social
food production system with domestic enterprises all share a common thread of
production declining despite the fertile striving to reach financial sustainability
climate; over 70% of chocolate, milk and quickly to ensure employment for
cheese are imported. With that in mind, Tito impoverished people. They also seek to use
Tony has branched out from GK to set up the organic products grown on the farm or
first GK Enchanted Farm a couple of hours Filipino land more widely and all share a
outside Manila, with the plan to open many strong work ethic instilled by Tito Tony.
more farms across the country. Similarly to
other GK communities, poor people are Product life extension
supported to build homes for a community
Repurpose
village based at the farm. The site is
constantly growing in size and includes: Pelangi Nusantara: Malang, Indonesia
Pelangi Nusantara is a women’s co-operative
 the School for Experiential and working in a hub and spoke model, with a
Entrepreneurial Development (SEED) to Centre leading more informal cooperatives
foster better understanding of farming, within communities. It started life by taking
community, innovation and social textile off-cuts from local batik28 factories and
enterprise based on biological outputs other wastes to make beautiful bags.
from the land.
 a ‘Disney Land for social tourism’ with
tours and accommodation
 a ‘Silicon Valley for Social
Entrepreneurship’ including facilities and
farm land to incubate social enterprises,
with the prospect of investor funding.

Figure 13: Bags and accessories made from

repurposed batik

Founder Bu Yanti then moved to train other

local women to form a network of collectives
able to sell textile products. These are
exclusively women, often working from their
Figure 12: GK Enchanted Farm - clockwise from own living rooms, meeting up weekly to work
top left: Map of the farm; farm landscape; together as a collective, and creating items
chicken farm; growing crops.
from novel waste materials. For example, one
The social tourism and grants provide the of the ‘spoke’ collectives visited had taken
income to run the farm and university while instant coffee sachets collected amongst the
investors are attracted by the setup and women to build bags. These are not luxury
reputation of GK to come and invest in
ventures. The local community on the farm is

28
A Javanese method for producing textile of coloured often have distinct local influences e.g. a Malang batik
designs by applying wax and dyeing – the wax leaves will look different to one from Yogyakarta.
parts undyed. Intricate patterns can be created and

27
items like those made from batik, but are turn makes shoes and accessories from them
popular in local markets. through in-house manufacturing. The shoes
combine this weave with organic cotton
trimming and waste aircraft tyres as soles.

This outsourcing model allows Habi to vastly

reduce quality control and on-time delivery
issues as the intricate and difficult part of the
manufacture is kept in-house while a
Figure 14: Collected coffee sachets and a bag significant part of the time-consuming and
under construction from the sachets value-adding step is democratised.

Figure 15: Bags made from textile off-cuts

The central hub also supports the other

collectives by procuring particularly high
quality items to sell on, after a level of quality
assurance. The central hub creates and/or
sells higher value fashion items like
handbags, while the collectives are less
professionalised and tend to have a range of
products for local consumption – bags for
markets to uniforms and accessories for
community groups.
Figure 16: Habi Footwear - made from weaved
Through its model Pelangi Nusantara has a textile off cuts, repurposed airplane tyres and
reach of over 20 cooperatives, providing organic cotton.
more than 300 women with income in their
Habi then reinvests some of the profits into
local area. It has a strong focus on training
the infrastructure to train the women and
women with not only skills in making textile
grow the business. For example, one of the
products but computer literacy and
benefits of the model means women can
foundations in finance. It has several levels of
weave in their spare time at home; however
internal training to accommodate the range of
some women are so prolific that their living
prior experience – some women do not have
rooms start to run out of space before the
a chance to finish high school so require
regular pick-ups by Habi. To combat this
different support to those that have.
affecting their living standards, Habi are
Habi Footwear: Metro Manila, Philippines opening up a local space in which inventory
Habi works with women in poor areas of can be stored and to act as a more
Metro Manila to recover textile off-cuts from communal co-working environment.
local factories. It uses a simple business
model innovation to ensure quality and more Resource recovery
easily allow local women to participate. Recycling
Essentially, Habi treat the women as micro- UPASOL: Vicuña and La Serena, Chile
entrepreneur suppliers; the women live near Vicuña is a rural town in the Andes which
the factories get hold of very cheap or does not receive much support from central
donated textile off-cuts and weave standard government for health services. UPASOL
sized commoditised square tiles. Habi formed from this lack of provision, with
promises to buy these at a fair price and in several parents starting a rehabilitation centre

28
for disabled children. It quickly became them as a gate, maintains an old ambulance
apparent that it required funding and from the UK (even though the driving position
equipment so a recycling centre was started is on the wrong side for Chile), and reuses
in the seaside tourist town of La Serena donated crushing and baling machines from
about an hour’s drive away to raise funds. Japan for its recycling activities.

The recycling centre is embedded within a Practically everything in the centre is

community where no alternative municipal recovered and when these recovered goods
waste collection service is available. The are not of direct relevance to the centre, they
community come and drop their non-organic are put into the on-site Museum of Old
waste off in a holding area which UPASOL Objects to teach people about the transience
triages within a very compact facility. The and obsolescence of consumer products and
approach is that nothing is thrown away. the importance of reuse and reduction.
Even the tiny spoonful of washing powder left
in an ‘empty’ box is collected, and over the
course of a couple of months, a bag is filled
to donate to poor people in the area. Loose
screws and metal brackets are stored in
various drawers on-site; over time enough
similar items are aggregated to be useful.

Once the materials have been triaged, they

are sold on to processors. UPASOL are
adept at knowing the best market prices
available so take the trouble to sell materials
like aluminium in Santiago where the
arbitrage opportunity is high versus local
prices while other materials like cardboard
fetch a similar price locally. The recycling
operation is so successful that it can employ
eight people to work there and another six at
the rehabilitation centre.

Figure 18: scenes from the rehabilitation centre

clockwise from top left: view of surrounding
Andes; donated hospital beds to be refurbished;
donated shredder for recycling; refurbished
wheelchair; rehabilitation equipment;
rehabilitation session in background.

Waste4Change: Padurenan, Indonesia

Figure 17: UPASOL recycling - clockwise top
Waste4Change is a waste management
left: baled plastic bottles; filing system for
reusable items; triaging; glass to be recycled. social enterprise that pursues four core
activities: campaigning for better waste
The principles of circular economy are management, timely waste collection,
embedded throughout UPASOL with the maximising potential value of waste through
rehabilitation centre kitted out with donated proper sorting, and consulting services like
medical equipment - much of it was broken waste audits and waste management advice.
and has been refurbished to be made use of
There is limited municipal collection of waste
again. The on-site kitchen also uses
in Indonesia so significant amounts go
reclaimed equipment. At the time of visit, the
through informal waste collectors and then
centre was being refurbished so second hand
often end up being fly tipped. Waste4Change
carpet to insulate walls and lights from a
recently closed-down business were being
made ready to be installed. UPASOL makes
use of broken hospital trolleys by repurposing

29
compete with these collection services,
serving residential blocks, restaurants and
offices. The majority of clients in fact only
want professional timely pick up of waste and
are not necessarily driven by the recycling
offer. This can make it difficult to compete at
price parity with other collectors who may just
dump the waste in the nearest river. Thus,
Waste4Change takes a different approach,
providing a premium service that ensures
timely pick up and reports of the composition
and masses of waste streams.
Figure 20: Waste4Change bio-cycle - clockwise
Waste4Change provides coloured refuse from top left: composting under sheets; bagged
compost; mango grove; mangoes on sale.
bags to its customers to sort their waste; blue
for paper, cardboard, duplex and Tetra Pak,
and orange for glass, metal and all plastics.
Bio-cascades
These are exchanged for clean empty bags Growbox and Mycotech: Bandung, Indonesia
on collection, which is done using owned Growbox and Mycotech are separate entities
trucks. It hires former waste pickers to work but are both run by the same people and
as drivers and refuse sorters at its Materials utilise fungi to generate value from
Recovery Facility giving them a higher and agricultural waste.
assured income. The triaged materials are
Growbox sells oyster mushrooms to
sold to recycling aggregators and processors.
consumers while supporting local farmers
who provide agricultural waste and help grow
the mushrooms. The mushrooms come in a
variety of colours and associated health
benefits. Growbox sells ‘Growboxes’ online;
these are mushrooms in stasis that sprout
when the consumer sprays water on it;
producing three harvests.

Growbox has popularised mushroom eating

in Indonesia, helping to spread the message
of their health benefits. A nice touch is the
development of an augmented reality app
that allows consumers to view a virtual
mushroom growing out of the box to see what
it should look like at harvest – a question that
cropped up frequently from consumers prior
to the introduction of the app.

Figure 19: Materials Recycling Facility (MRF) –

clockwise from top left: filled refuse bags; scales
for reporting; triaging.

Waste4Change process 3 tonnes per day of

waste, around half of which is organic. The
organic waste is composted either under Figure 21: Clockwise from top left: The
‘Growboxes’, oyster mushroom spores growing
plastic sheeting or through vermiculture and
in a controlled environment; augmented reality
the resultant compost is either sold in bags or app showing what mushrooms look like on a
used to grow mangoes which are also sold. real-life Growbox

30
Mycotech focuses on mycelium rather than from different organisations can be
edible mushrooms. It uses a proprietary assembled quickly to deliver innovative
method to produce a baked mycelium solutions that integrate social and
alternative building material. It can be used in environmental value. The sharing of assets
interior design as wall tiles or even furniture. and networks generated allow enterprises to
get many of the benefits of being in a larger
organisation while still keeping lean as a
small firm.

Product as a service
New Hope Ecotech: São Paulo, Brazil
New Hope Ecotech is a start-up that is also
trying to utilise Brazil’s Solid Waste National
Policy (SWNP) requirements for producers to
set up appropriate recycling infrastructure
and deliver more income for waste pickers. It
takes a similar but distinct approach to BV
Rio, rather focusing on providing a free
Figure 22: Mycotech material used in a stool service for recyclers and charging producers
(left); Mycotech tiles ready for processing. and institutions with a Software as a Service
(SaaS) with which the clients can gather and
Both Growbox and Mycotech products took monitor data on their recycling incentive
years of research and constant adaptation programs. The software is online and the
and the process is unlikely to work directly analysis is generated automatically, reducing
transplanted in other parts of the world. This the effort that producers and institutions have
is because the agricultural waste is relatively to spend on non-core monitoring and
specific to a region while the climate is well compliance activities.
suited to growing fungi, being warm and wet.
In time this system will be expanded so that
the data is audited to produce reverse
A circular economy definitional aside:
logistics certifications which are sold back to
Mycotech blurs the line between technical
and biological nutrients. This is because
producers. The profits from these are then
biological nutrients usually refer to short life shared to provide aggregators and waste
time products that get rapidly cascaded back pickers with increased income.
to nature - not a good description of what
New Hope Ecotech are working on a trial
Mycotech’s material does. The technical
using a corporate incentive program and
nutrient on the other hand is a material
endlessly able to loop within an economy with
analysing the best price points for various
no loss of quality. Note, it is possible to have materials to incentivise waste pickers to
a technical nutrient that is bio-derived e.g. collect different materials that maximises both
some biopolymers. Mycotech does not the social impact (more income) and
conform to this rule either as it is not environmental impact (more varieties of
necessarily recyclable, rather it is 100% waste collected). Similarly to some of the
compostable. Instead it is designed to be models seen previously, New Hope Ecotech
used for a long time, potentially being reused is effectively a broker for distributed small
over more than one use phase i.e. resembles actors to connect with larger organisations.
both technical and biological nutrients.
Corong Galeri: Coron, Philippines
Corong Galeri started as a gallery
Product as a Service showcasing local art and photography in
Coron, a beautiful island area. It branched
Sharing economy
out after a number of years into tours visiting
GOMA, Rio de Janeiro, Brazil nearby islands for snorkelling and scenery. It
GOMA is an association of socially and/or quickly became apparent that between trips
environmentally minded entrepreneurs there was significant damage to marine
connected by collaboration and creativity. It is areas. This turned out to be by indigenous
based in a large shared co-working space groups that, finding it difficult to get by, were
catering to start-ups in the service industries. plundering natural resources including
The space is designed to allow free-flowing dynamite fishing and devastating grouper and
collaboration meaning multidisciplinary teams wrasse populations. Realising it was a

31
symptom of the lack of support they had, Themes
Corong Galeri decided that rather than
reporting them to the authorities, they would The following themes were identified as
meet, talk and get to know the groups. It then common threads across the social circular
proposed to bring them into the tour activities enterprises showcased in this report. The
to provide them with income and educated majority of these themes have applicability to
them on the importance and benefits of the UK for organisations looking to transition
preserving the environment. Starting with two to the social circular economy.
families, fishing boats were converted into
tourist boats and a new tourism package was
developed to sell ‘Seat In Coach’ (SIC) tours Combining circular economy
i.e. book a seat like a coach, sharing the tour business models (CEBMs)
with others. This was unlike the private tour While some organisations generated income
offerings that other operators provided. This solely through one CEBM, it was clear that
has grown now to 15 boats with each boat many organisations used multiple CEBMs to
representing income for 7 families; a boat generate income suggesting there may be
owner, a captain, some crew, food preparers synergy effects. For example, providing
(generally women) and recipients of entrance waste collection services allows Resource
fees for access to indigenous areas and Recovery (recycling) and Product Life
marine parks. Corong Galeri operate the Extension (reuse / repurpose) of waste, and
market-facing side of the operation, providing not doing both would in fact represent a loss
access to markets and bringing in bookings. of potential value.
The model is brought together as a Some used one CEBM to generate sales and
cooperative rather than a company-employee one to reduce costs internally. A good
or service provider-supplier approach which example of this is UPASOL using Resource
helps to empower the communities. The Recovery (recycling activities) to generate
impact has included indigenous children income while it uses Product Life Extension
staying in school, graduating college and (refurbishment and reuse of medical and
getting jobs, previously very unlikely to rehabilitation equipment) to reduce internal
happen. Beyond bringing in stakeholders in a operation costs on social delivery.
more democratic approach, the structure has
a business benefit. It makes operations Broker-enabler roles
leaner and more responsive to improving the Most organisations play the broker or enabler
service as any customer feedback is role between communities and corporates /
traceable to exactly the person responsible clients. In effect this means having a dual
e.g. boat cleanliness. Corong Galeri can knowledge/skills base to deliver dual value –
relate this feedback directly to the person in usually a customer value proposition and a
charge of that particular part of the service social one. Firstly, an ability to understand a
and help if there are any issues or change corporate perspective, delivering consistent
protocols to ensure that clients get the right quality on time and minimising hassle for the
experience. This is distinct from other client. Secondly to understand how to train,
operators in the area which own boats, empathise with, motivate and support
rooms, provide food and tour guides meaning communities actually executing the circular
staff end up working across a variety of economy activities.
functions making it much harder to trace the
causes to issues, and thus find solutions. One of the key areas of support was in
design; many of the broker roles needed to
Corong Galeri utilises the product of a have design expertise to ensure products are
beautiful destination and sells access to it desirable to the consumer and cost-effective
using an ecotourism service. It works with to manufacture.
local indigenous communities to provide them
with decent work and therefore preventing An innovative approach taken by a few
the destruction of coral reefs, marine broker-enablers was to bring in-house the
ecosystems and rainforests in the area. latter stages of the manufacturing process i.e.
bring in product manufacture while
maintaining component manufacture with
productive groups. This simplifies the
manufacturing process for productive groups
to making a simpler and more uniform

32
component, reducing quality assurance Small capital operations
issues that can mean costly and time- The organisations under study are relatively
consuming rework. While some of the value low capital operations and scale somewhat
addition steps are taken away from the linearly without need for jumps in capital
productive groups, this is offset by the fact spend. This is often due to the use of
that they become more expert and produce underlying assets being on a continuous
those components quicker and better. scale rather than discrete. For example,
many organisations focus on textiles and
Several organisations had corporate clients crafts where double the amount of waste
that bought into the idea of repurposing their material needs double the work to repurpose
own waste into corporate gifts. They saw with very minor asset requirements e.g. a
added value in portraying the closed loop sewing kit. Similarly, bio-based products
story aligning to company values and sharing scale with the amount of bio-material
that with their own clients, employees and available, typically aligned to the size of land
stakeholders through tangible corporate gifts. available. There were few organisations that
needed access to significant infrastructure,
Training provision like a factory or processing plant, to allow it to
operate. The exceptions were those that had
Most of the organisations in this study sorting centres for collected waste, but even
empowered disadvantaged people through these were generally just an open-sided
employment rather than delivering a service warehouse with a sorting table and
or product to a beneficiary. In these instances sometimes donated capital equipment for
a significant amount of training is provided, shredding and baling triaged recyclates.
often on the job skills but sometimes through
a set of distinct courses built in-house e.g. This hints that the social circular economy
Pelangi Nusantara, Rede Asta. does not benefit significantly from economies
of scale as much of the activity is human
centred. It means that it does not entail large
Scaling impact leaps in capital for incremental increases in
Organisations looking to scale their impact activity. This should therefore allow an easier
considered three approaches: path to scale as access to capital does not
pose a significant barrier to entry.
1. Building a new marketplace, based on
an online platform (BV Rio and New The observation of small capital operations is
Hope Ecotech) partly due to the study design with a focus on
2. Automating manual operations to smaller organisations but also partly down to
remove the organisation as a potential the nature of the social circular economy
bottleneck to scaling (Bali Recycling, which is aligned to grassroots community
Rede Asta and Trama) action that is distributed and not focused
3. Social franchising (Liter of Light, around large capital projects. This is
unsurprising as large capital projects are
REMBRE)
often aligned to traditional financing
techniques and social financing is still
Cross-subsidy model relatively new. Further review of social
Several organisations used a cross-subsidy circular economy models using significant
model by generating income through a capital is warranted albeit initial review
circular activity (without beneficiary suggests these are indeed less prevalent.
involvement) to fund social impact, for
example UPASOL making money from Other models: the emerging markets
recycling to fund its rehabilitation centre, or countries visited have a large scale network
of repair stations and metal working shops
GK Enchanted Farm running a social tourism
that maintain and recover value from the
service to fund the social enterprise incubator economic system. This is unlike many high
and SEED university. income nations where maintenance and
repair activities are dying out undermined by
This model is not atypical of social
high labour costs and relative low price of
enterprises where some organisations
products. That said, the research failed to find
operate a purely commercially division to organisations in this sector with social
sustainably fund a socially impactful activity, missions working with higher capital, heavier
typically that has some connection to the duty, metal-based product sectors and thus
commercial operation e.g. selling bottled do not feature here. These microenterprises
water and providing profits to a water are typically operated by economically
conservation charity. disadvantaged entrepreneurs so do have
social impact, but no clear social mission. An

33
example would be the Kumasi industrial organisations in the UK also cannot afford a
automotive repair cluster in Ghana. This may dedicated resource for social impact
be an overly literal interpretation of the measurement and often fall back on output
definition of social enterprise and may also indicators. While there is awareness that
warrant further investigation. Note these better outcome measurement would be
microenterprises are almost always operated useful, most organisations are candid that if
by men while many of the organisations in
extra resources were available, they would
this study were driven by women.
deploy it to pursue more of the core activity
Ad-hoc volunteer support rather than outcomes measurement.
Due to the social missions of social circular Many of the featured organisations do
enterprises, they often receive volunteering measure outputs as indicators for
offers, which is often gladly received to environmental or social benefit where it is not
relieve capacity issues or increase scale. cost or time prohibitive. Rede Asta was one
However, some organisations suffered from of very few that had run surveys to ascertain
brief temporary volunteer support. For outcomes amongst the women in the
example, a website may be setup but is no collectives it works with.
longer maintained due to the lack of business
processes so no proper handover With the above said, most of the
documentation is generated. organisations featured are embedded in the
communities they operate within and have a
Emerging markets focus more intuitive feel for the impact. Indeed,
often the beneficiaries are involved in the
The themes highlighted above are all
circular value-adding activity meaning that
applicable to the UK, however some areas
there is a vested interest or co-production of
have less applicability. One area is in waste the most effective model. In fact, many of the
management where the UK has municipal organisations formed to solve an identified
collection and processing programs problem – finding a ‘waste’ to valorise gave
organised by local councils. This service is them opportunity to solve it. Implicitly then,
patchy at best in the countries featured in this the organisations have created a theory of
report and thus provides an opportunity for a change or logic model, working back from the
thriving, yet underpaid, informal economy. It impact they wish to create to find a set of
is significant in contributing to high collection (circular) activities to meet the objective.
rates in certain high value products e.g. 96%
of aluminium cans are recycled in Brazil with Bio-derived technical nutrients
the help of waste pickers. That said, in No organisations were found producing bio-
general overall national recycling rates are derived technical nutrients such as bio-
lower without municipal systems. polyethylene. One hypothesis is that these
require a significant amount of technical
Another area is the significant level of labour innovation (not just business model
required in some of the models featured – the innovation) with commensurate high capital
financial structure may work in emerging needs i.e. for large organisations and thus
markets where wages are comparatively low screened out by this report’s focus on smaller
but the costs could be prohibitive when organisations. Alternatively social mission
paying a UK living wage. To allow those organisations may not have access to such
models to flourish in the UK, there would significant amounts of capital. This area
need to be a reduction in labour per unit, be it warrants further investigation.
automation or higher skill level, and/or an
increase in price. Missing loops
There were some missing loops of the
Not seen circular economy e.g. remanufacturing.
Considering the breadth of the circular
Rigorous social impact
economy it is not surprising that there are
measurement missing loops in a limited study. However,
While there was clear social impact being remanufacturing in its truest sense is
made, in general the knowledge and performed with precision and requires
sophistication in social impact measurement significant capital equipment. It also requires
is well below that found in the UK. It is noted a degree of sophistication in taking on the
that the organisations featured are relatively risk of warrantying a product to ‘as good as
small so may not have the resource new’. Both these factors make it less
availability. To be fair, similar sized amenable for the social circular economy at

34
its current maturity – in future, social circular user-powered collection (i.e. the previous
enterprises may have access to the requisite product user would deliver the item) or some
capital and sophistication. This hypothesis other innovative low cost return mechanism
was somewhat validated by finding no for it to work. The examples of reverse
remanufacturing enterprises with a social logistics observed were generally for lower
mission even after a significant global search. value distributed materials e.g. packaging
waste. In a very limited number of cases,
Social Circular Business higher value items were collected.
Model Canvas The five themes identified did not corroborate
The Social Circular Business Model Canvas the hypothesis in that very little collection is
(SCBMC) proved to be a useful tool in based on the previous product user delivering
guiding conversation and drawing out the item. Instead organisations find ways to
information and insights. Areas like ‘price in’ the added logistics costs into their
Governance and Unique Advantage not product/service or avoid it by pushing it to
captured by the traditional BMC proved to their suppliers i.e. the risk of reverse logistics
unearth information that would have was mitigated but suppliers may implicitly
otherwise been missed and in some cases charge for collection within contract prices.
proved to be of value to the organisation
Mechanisms dealing with very complex and
being interviewed as it opened up uncertain
high residual value resources (e.g. laptops)
territory and areas that had not previously
were not seen. This is partly as there may not
received much thought.
be requisite skills to valorise these resources
or they are retained within service contracts
with the Original Equipment Manufacturer
(OEM) e.g. medical imaging equipment.

The five return mechanisms were identified:

 Collection as a service (Bali Recycling,

Waste4Change, REMBRE, Triciclos):
generally used for mixed waste. All
organisations work to some degree with
clients to foster an understanding for the
need to separate waste streams to lower
their own costs and increase the purity
Figure 23: Part way through the Pelangi and volumes that can be recycled. While
Nusantara's SCBMC with founder Bu Yanti these waste streams can vary widely in
content, they are relatively continuous in
Similar to the traditional BMC the SCBMC supply and there are only a certain
aims to keep things simple and maintain an number of recyclable material grades.
organisational perspective rather than These generally have a liquid29 market
develop a whole market one. Practically this supporting investment into infrastructure
means that the canvas does not try to fully to triage and process these materials.
analyse market dynamics including Beyond the service, triaged and
competition. However its inclusion of ‘Unique processed materials are sold but without
Advantage’ as a criterion not captured in the any addition of value to the materials.
traditional BMC allows comparison with other o The model can be operated on a
models in key differentiating aspects. free basis for items with significant
residual value. For example
The tool was generally well received by the UPASOL picking up a donated
organisations in the study and is a concise hospital bed30 warranting a
way of capturing how social circular bespoke call-out for pick-up.
enterprises generate and deliver value.
 Product price includes collection
(Growbox/Mycotech, Jacinto & Lirio,
Reverse logistics UPASOL): Collection represents a
One of the objectives was to test the significant activity of the business but
hypothesis that reverse logistics requires differs to the Collection as a service
model in that revenue is generated not
29 30
One in which there is enough volume In Europe, social enterprises like Emmaus
traded to ascertain a discernible market price operate this model

35
 through collection but only through Conclusion
product sales. Generally the material
has value added to it for example The study met its five main objectives:
growing mushrooms and water hyacinth
leather, rather than just being triaged to  It showcased a wide variety of
send to processors. This means that the organisations from four different
value per mass (£/kg) is high enough to countries operating within a diverse set
incorporate logistics costs as a small of sectors that all tackle social issues
part of the overall cost structure. while generating value from the circular
economy archetype.
 Part of a contract (Retalhar, Flor de
 It identified social circular economy
Cabruêra, Rede Asta, ZEBU): typically
themes providing insight into how these
as part of a valorisation service for
single type end-of-life waste produced organisations operate and how.
by the client e.g. uniforms, seat belts  The SCBMC tested during site visits
and banners. These are generally required minimal change and proved to
produced in a batch manner e.g. be robust in its ability to adapt and
annually, rather than continuously. Since capture the models pursued by the
clients are often the producer of the variety of organisations showcased.
waste in the first place, it is understood  Captured insights into how reverse
that the cost of waste disposal and logistics is handled with five distinct
reverse logistics are recouped within the mechanisms identified.
overall service cost.
 Identified applicability of social circular
As the material is relatively economy to the UK and recommend
homogeneous within each batch, it how to scale its implementation.
justifies a level of design work to
repurpose into higher value items e.g. Interpretation:
bags. This added value also helps Combining circular economy business
towards covering the reverse logistics
models: this was an often observed model
costs. Where ‘wastes’ are donated, it
potentially highlighting synergy effects in
does not present a prohibitive cost for
the donor to drop-off since it is likely some areas. Therefore organisations in the
one-off and avoids waste disposal costs. UK looking to transition into the circular
economy may be best placed not to start with
 Push to supplier (Bio Fair Trade, a particular CEBM but rather consider the
Ecotece, Good Food Community, Habi value proposition they are trying to deliver
Footwear, Pelangi Nusantara, Rede and enabling activities that align with its core
Asta): these broker type organisations competencies, say a bicycle safety advocacy
push the risk and cost of reverse group offering to take away abandoned
logistics back to the supplier who are bicycles from the local council it partners with.
generally productive groups and
Applying CEBMs to this may lead to running
artisans. These groups typically live
hands-on training programmes that let people
close to the origin of the ‘waste’ (i.e.
nutrient) and therefore can source it for learn repair and refurbishment skills in the
minimal or low cost. This nutrient is then workshop after which the upgraded bicycles
used to produce goods aggregated into could be sold (Product Life Extension) while
a large batch and sent in bulk to the unrecoverable metal scraps could be sold to
broker social enterprise. The broker then an aggregator (Resource Recovery) and
pays the supplier, taking a cut for the having empowered people to repair and
access to markets, training and support. refurbish their own bikes in the future.
 Push to user or ‘waste producer’ (Flor Broker-enabler roles: many social issues
de Cabruêra): not too prevalent a model stem from a lack of opportunity often
in emerging markets. However,
reinforced by prejudices. This is in effect an
particularly in developed nations, users
who have no further need for a product underutilisation of social resource i.e. a
often drop off the item e.g. charity shops person is seen as a problem to fix rather than
(social enterprise divisions of charities). an untapped resource. Identifying these
people and what activities they could
contribute to with the right support is a critical
role. However, to be successful the majority
of organisations needed highly capable and
educated management to find and develop a
market to sell outputs. UK organisations

36
should therefore develop these dual pilot a new model with a social circular
capabilities of supporting beneficiaries and enterprise partner e.g. to valorise non-
stoking the market to play the matchmaker continuous waste streams like office furniture.
role between supply and demand.
Ad-hoc volunteer support: Better internal
Training provision: Since many of these business processes and access to long-term
organisations are small, there is a significant or continual flow of volunteers is likely an
amount of duplication in basic training across enabler for social circular enterprises to
them e.g. business finance fundamentals, scale, moving from micro to small
business processes, computer literacy, enterprises, and small to medium. There is
quality assurance. There is clearly an therefore an opportunity for an online portal
opportunity for a more centralised approach where this type of knowledge could be
to delivering this type of training e.g. an garnered and connections made. However,
online repository of training videos that social several organisations suffered from
circular enterprises could access. incomplete support or lack of continuity.
Thus, ensuring completion, proper handover
Scaling impact: those looking to scale and discretising tasks will make roles more
impact were observed to pursue three rewarding resulting in more committed
approaches. UK organisations with an volunteers and better outcomes from
established sustainable model and looking to volunteer resources.
scale should consider the same approaches:
Emerging markets focus: some areas like
1. Building a new marketplace, based waste collection are much better catered for
on an online platform. in rich nations meaning there may be more
2. Automating manual operations to limited prospects for organisations in the UK
remove the organisation as a to participate in recycling. That said, there is
potential bottleneck to scaling. still opportunity for organisations to
3. Social franchising. participate in this loop of the circular
Cross-subsidy model: not all CEBMs have economy. For example, schools could ask
to be directly aligned to the core mission. If in their students to bring in aluminium cans
delivering this mission there is a circular rather than recycling them at home – this
economy opportunity and the capacity to could be aggregated and sent to a processor
deliver, then it is possible to pursue this to for close to £1,000 a bale. Alternatively, an
generate profits and support the core urban farm delivering growing programmes
mission. However, this was not a typical could use its agricultural waste or local food
approach and caution is advised before waste as a growth medium to run a
undertaking this model. Firstly it may take therapeutic mushroom growing programme
away resources from core into non-core for those with mental health issues, then sell
activities. Secondly without proper focus, cost the mushrooms for profit.
control may be poor. Thirdly, the setup and Reverse logistics: there were five
running costs in the UK may be higher than in mechanisms identified (see more detail
emerging markets, while global market above) that are directly applicable and could
pricing often dictates revenues for recycled provide inspiration for UK organisations to
material i.e. costs may outstrip sales. develop their own reverse logistics to enable
Small capital operations: many greater circularity.
organisations operated with very little fixed
assets. This may be partly to do with the
study design but also to do with the more
human-scale and thus distributed nature of
their operations. This suggests that there are
low barriers to entry for UK organisations
looking to transition. The majority of
operations did not seem to have a minimum
scale requirement meaning one person could
in theory run the venture. This makes it very
amenable for pilot testing with scale achieved
by adding another human resource – useful
for companies keen to use an ‘intrapreneur’
approach i.e. an in-house entrepreneur or

37
 to other relevant resources and potentially
Recommendations get supply contracts or funding.
Government Recommendation 4
Recommendation 1 Government to recognise this report’s
Government to support more research to definition of social circular economy and
quantify and evidence the potential benefit provide clarity of how it is a synthesis of
and make decision-makers aware of the circular economy and social enterprise
positive impact the social circular economy concepts that delivers full system benefits,
can deliver. Considering the economic benefit not just partial ones.
of the circular economy is $4.5 trillion by 2030
(Accenture, 2015), there is likely at least that Recommendation 5
value, potentially much higher, in currently Government to improve consumer
externalised costs that the social circular awareness of social circular economy,
economy can mitigate or turn into value. This including national campaigns. Consumers
may be valorisation of waste (materials, understanding what ‘good’ looks like is key to
under employment and underutilisation), or stoke demand toward circular products and
through allayed costs (environmental clean- services that also deliver social benefits.
up, welfare and healthcare). Quantifying
these savings provides an attractive prospect
Recommendation 6
for all public bodies to support the transition. Government to procure products and
services from social circular enterprises,
Recommendation 2 including office equipment, furnishings,
Government to take an active role in carpet and electrical equipment.
encouraging and supporting social Specifically, government should preferentially
circular enterprises. These organisations sign-post, procure from or fund social circular
mitigate state environmental management enterprises. This aligns with the Social Value
costs and the burden of delivering public Act 2012 that requires public service
services. Providing there is sufficient commissioners to consider how to also
evidence of positive impact being delivered secure wider social, economic and
(see Recommendation 1), supporting these environmental benefits. However it often
organisations and helping to create enabling receives only a token thought. Specific
conditions would be a win-win scenario. targets, increased flexibility or penalties for
lack of compliance would favour
Increased circularity also supports national organisations in line with the spirit of the Act
interests as it decreases reliance on raw i.e. social circular enterprises.
materials from other nations. With Brexit and
a need to strike various international trade Recommendation 7
deals, a more resource efficient nation helps Government to pursue enabling
negotiation stances and outlook. legislation such as a tax break for social
circular enterprises to encourage their
Thus government should support social growth. The 5p charge on carrier bags is an
circular enterprises scale i.e. professionalise, example where the proceeds go to support
evidence their impact and collaborate with good causes, typically social circular
each other. An example would be to leverage enterprises. However it is only tangential to
current resources like the Knowledge the aim of building a robust social circular
Transfer Network to help engender economy. The UK has the opportunity to take
collaboration or use the Technology Catapult the lead in this area and should freely borrow
to support a network effect e.g. develop from other jurisdictions; circular economy
enabling information technology platforms focused examples include:
that social circular enterprises can plug into to
support real-time monitoring and enable  France forces large supermarkets to
insights from aggregated data. donate unsold food or have it turned into
animal feed, compost or energy.
Recommendation 3  France has a law that aims to prevent
Government to encourage the planned product obsolescence to ensure
development of an online platform where longer life products.
social circular enterprises can network,  Italy introduced a food waste bill to give
exchange knowledge, learn from case tax breaks on food to worthy causes.
studies and training materials, be sign-posted

38
  Japan requires manufacturers to run Communities
disassembly plants with material
recovery legally mandated. Recommendation 9
 Sweden requires retailers selling Circular economy and social enterprise
electronic goods to accept the same proponents should network with each
quantity for reuse or recycling. other to foster collaboration, new ideas and
 Sweden gives tax breaks on repairs innovation in product and service delivery.
through reduced VAT on bicycles,
clothes and shoes, or a reduction in Recommendation 10
income tax for labour costs on white Community champions should develop
goods repair. local communication and assets so that
consumers can more easily access the social
The last one is of particular interest as it circular enterprises nearby and support their
aligns well to the human-centred approach of success e.g. by buying from or volunteering
the social circular economy, making repair for them. Community action as the bottom-up
more cost effective for consumers. This could
grass roots activity is key to complement any
help repair firms like Timpson’s grow - it has
top-down policy driven actions.
given hundreds of ex-offenders employment,
comprising an eighth of its employees. Assets to be developed could include a
Note, new policy should not be considered in directory of local organisations and/or an
isolation and a systemic view should be open source map that would sign-post people
taken. For example, the last Swedish to social circular enterprises. Local activities
example could result in OEMs increasing like repair cafes can be run to mitigate items
spare parts prices and reducing build quality going to landfill while also providing an
without supporting legislation preventing it. opportunity for disadvantaged people to save
money buying replacement products.
Recommendation 8
Government should work with schools, Open Source Circular Economy Days
universities, training providers and other (OSCEdays) and Social Enterprise UK
stakeholders to create an educational websites are useful resources.
programme to ensure circular economy
and social enterprise concepts are Circular social enterprises
embedded at a young age in order to help
foster advocates and practitioners for a full
Recommendation 11
Currently operating social circular
transition.
enterprises strive to become more
Current education helps develop knowledge relevant through scale and
in siloes, for example climate change or professionalisation by forming scaled
poverty, but does not provide an networks to share best practices, be a
understanding of the interconnections and common access point for being sign-posted
complexities that arise therein. Further, it to, present a more significant and attractive
does not present specific solution strategies proposition for customers to deal with, access
e.g. circular economy and social enterprise. funding not available to one organisation
alone and/or enable a financial stake to be
Resources should be made available to taken in the network. The Furniture Reuse
schools and universities so that teaching Network31 is an example of such a network.
these concepts is not only made easy for
educators but also encouraged. This is best Recommendation 12
done through ensuring specific concepts are Start-ups should be encouraged to utilise
part of curricula. Schools focus on aligning the framework to support the transition to
teaching efforts to maximise exam results a social circular economy. Dissemination of
meaning extra-curricular topics are unlikely to the concepts at entrepreneurial networking
be given attention and reinforced with site events would help inspire entrepreneurs to
visits e.g. to local waste management sites. pursue it. The availability of dedicated funds
The Ellen MacArthur Foundation develops would facilitate organisations to get through
circular economy education materials that investment phase and put in place the
can be used to support these efforts. infrastructure for scale.

31
Only UK-wide body concerned with helping re-use alleviate material poverty of the most disadvantaged
and recycling social enterprises and charities to members of society.

39
Appendix
Learn more
Case studies on featured organisations
Further information on the organisations featured in this report can be found on
www.socialcirculareconomy.com/showcase.

Organisation City Country Website URL

Azzura Solar Jakarta Selatan Indonesia http://www.azzura-solar.com/
Bali Recycling Bali Indonesia http://www.balirecycling.com/about-us.html
Beeconomics Olinda Brazil http://beeconomics.org/en/empresa-social/
Bio Fair Trade Recife Brazil http://www.biofairtrade.com.br/
BV Rio Rio de Janeiro Brazil http://www.bvrio.org/
Corong Galeri Lokals Coron Philippines http://corongaleri.com.ph
ECHOstore Manila Philippines http://www.echosi.org.ph/contact.asp
Eco Farm Asia Antipolo City Philippines http://www.ecofarmasia.com
Ecotece Sao Paolo Brazil http://ecotece.org.br/
Flor de Cabruêra Sao Paolo Brazil http://www.flordeCabruêra.com.br/
GK Enchanted Farm Manila Philippines http://www.gk1world.com/visit-enchanted-farm
GOMA Rio de Janeiro Brazil http://goma.org.br/
Good Food Community Quezon City Philippines http://www.goodfoodcommunity.com
Growbox Bandung Indonesia http://halogrowbox.com/en/contact
Habi Footwear Quezon City Philippines www.habifootwear.com
Jacinto & Lirio Quezon City Philippines http://jacintoandlirioph.weebly.com
Kawil Tours Culion Philippines http://www.kawiltours.com
Liter of Light Makati City Philippines http://aliteroflight.org
MateriaBrasil Rio de Janeiro Brazil http://materiabrasil.com.br/
Morada da Floresta Sao Paolo Brazil http://www.moradadafloresta.org.br/
Mycotech Bandung Indonesia http://www.mycote.ch/
New Hope Ecotech Sao Paolo Brazil http://www.nhecotech.com/
Pelangi Nusantara Malang Indonesia http://www.pelanginusantara.org/
Rede Asta Rio de Janeiro Brazil www.redeasta.com.br/
Rembre Las condes Chile http://www.rembre.cl/
Retalhar Sao Paolo Brazil www.retalhar.com.br/
Trama Rio de Janeiro Brazil http://trama.net.br/
TriCiclos Santiago/Sao Paulo Chile/Brazil www.triciclos.cl
Upasol La Serena, Vicuna Chile http://www.upasol.cl/
Waste4change Bekasi Indonesia www.waste4change.com
ZEBU Rio de Janeiro Brazil http://zebumidias.com.br/

About the circular economy

The following resources provide further information about the circular economy:

 Ellen MacArthur Foundation: Circular economy

 Waste and Resources Action Programme (WRAP): Circular economy
 European Commission: Circular Economy Strategy
 Zero Waste Scotland: Circular economy
 Friends of the Earth: Circular economy
 Circular economy portal: Circular economy
 Circular Economy Toolkit: Circular economy

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Circular Economy Business Models (CEBMs): detailed
1. Dematerialisation: reducing the amount of resource required to create products:
o Digitisation: replacing physical products with digital versions e.g. DVDs to online movies.
o On-demand production (made to order): making things only when an order has been
made, using resources only when needed and avoiding waste from over supply.
o Move to reusable products: Moving from disposable to reusable products e.g. nappies.
2. Circular inputs: ensuring that the inputs to the production process are circular, namely
renewable (e.g. solar power), fully biodegradable (e.g. untreated wood), sustainable (e.g.
properly sourced palm oil) and/or fully recyclable (e.g. pure high density polyethylene).
3. Product life extension: extending the life of products through:
o Design for durability: products are designed to be durable and last a long time.
o Design for modularity: components can be replaced rather than the whole in case of
failure or updates.
o Maintenance and repair: maintaining and repairing a product to allow it to be used longer.
o Reuse: redistribution and reuse of a product without any repairs or upgrades.
o Recondition: return of a used product to a satisfactory working condition by rebuilding or
repairing major components close to failure, potentially pre-emptively.
o Refurbish: aesthetic improvement, often as-new, with limited functionality improvements.
o Remanufacture: return a used product to as-new or better with a warranty to match
(typically done at component level).
o Repurpose: using a product, its components or materials in a role that they were not
originally designed for.
o Parts harvesting: recovering components of an end-of-life item prior to disposal/recycling.
4. Resource recovery:
o Recycling: action of processing a used product, component or material for use in a future
product component or material.
o Bio-chemical extraction: recovering valuable bio-chemicals from biological waste streams
o Anaerobic digestion: biodegrading of biological materials without air, producing methane
gas as a renewable fuel.
o Compost: biological materials biodegraded by microorganisms to produce compost.
5. Product as a service (including Sharing Economy32):
o Leasing: access to a product / service, and not selling ownership.
o Performance based (Pay for success): typically selling units of use e.g. miles on a tyre,
or washes in a washing machine
o Sharing resources: shared access of assets amongst users for a fee. Enables higher
utilisation of assets while users get the performance they want without ownership.
o Peer to peer lending: lending of products and services on a peer to peer basis with no
financial transaction.

About social enterprise

The following resources provide further information about social enterprise:

 Social Circular Economy: Social Enterprise

 European Commission: Social Enterprises
 Social Enterprise UK: FAQs
 Social Enterprise Alliance: Social Enterprise
 British Council: Social Enterprise
 The voluntary code of practice ('The Code') for social enterprises in Scotland
 Grameen Creative Lab: The Social Business Concept & 7 principles of Social Business
 BC Centre for Enterprise: What is social enterprise?
 Social Enterprise Mark: Eligibility Mark
 Yunus Centre: Social Business

32Sharing economy or collaborative consumption is an ecosystem based on sharing of physical,

human and intellectual resources. Examples include Airbnb (accommodation) and Uber (transport).

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Measuring social impact
Social impact measurement is the evaluation of the amount of change an organisation makes on
social issues. Measurement allows organisations to demonstrate the impact they make to their
stakeholders and shows that the activity they undertake is making a difference. It is also helpful
in identifying areas for improvement.

Social impact measurement is notoriously hard to do well; it is often much easier to measure
outputs, the result of an activity, than outcomes, indicators of change. An example of the
difference between the two might be 20 computing lessons delivered at a school (an output)
versus half the children improved computer literacy scores by 50% within a year (an
outcome). The output may lead to a desired outcome but it is far from guaranteed – in this
example the lesson content may not be appropriate, teachers may not have had appropriate
training on the curriculum to teach it well and/or not enough lesson time could have been
allocated for any noticeable change. All of these factors would prevent the desired outcome from
being achieved, despite the seemingly appropriate output being successfully delivered. Outputs
are helpful intermediate targets that support an outcome being delivered but in themselves not a
good indicator of delivering change.

References
Accenture. (2015). Waste to Wealth: The Circular Economy Advantage.

Club of Rome. (2015). The Circular Economy and Benefits for Society: Jobs and Climate Clear
Winners in an Economy Based on Renewable Energy and Resource Efficiency. A study
pertaining to Finland, France, the Netherlands, Spain and Sweden.

Club of Rome. (2016). The Circular Economy and Benefits: Jobs and Climate Clear Winners in an
Economy Based on Renewable Energy and Resource Efficiency. A study pertaining to the
Czech Republic and Poland.

Ellen MacArthur Foundation. (2013). Towards the Circular Economy vol 1.

European Commission. (2010). Being wise with waste: the EU's approach to waste management.

European Remanufacturing Network. (2015). Remanufacturing Market Study.

WRAP. (2015). Emploment and the circular economy: Job creation in a more resource efficient Britain.

Disclaimer
This report has been produced by Social Circular Economy who takes responsibility for the report’s
contents and conclusions. While the project participants consulted and acknowledged on the following
pages have provided significant input to the development of this report, their participation does not
necessarily imply endorsement of the report’s contents or conclusions.

To quote this report, please use the following reference:

Social Circular Economy, Social Circular Economy – opportunities for people, planet and profit. (2017,
http://www.socialcirculareconomy.com/news).

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