Arup and BAM have launched a study exploring the benefits that circular business models (CBMs) offer stakeholders within the built environment sector.

The report, supported by the Ellen MacArthur Foundation (EMF) as part of the framework of the CE100 programme, proposes a shift in the way the construction value chain has been historically seen.

The global construction industry is the largest consumer of resources and raw materials of any sector, which creates significant challenges for the adoption of CBMs. To overcome these challenges the study reviews different solutions that can help businesses save on raw material and waste management costs.

These include the adoption of long-term design thinking; the role of technology and innovation; the adoption of new production and consumption models and collaboration throughout the supply chain and the lifecycle of a construction asset.

Guglielmo Carra, Arup's Materials Consulting Lead, Europe, commented:

‘To embrace a change of paradigm in construction, it is crucial to understand the logic behind circular business models. They will lead the future of our industry by enabling technical, social and financial opportunities and triggering benefits for all stakeholders involved in the value chain – including citizens as users of buildings and infrastructures. This report set the foundations for future research and potential implementation in construction.’

Adopting CBMs presents financial, social and environmental benefits. According to the ING Economics Department, the market for a circular economy is growing and it is estimated that over the next 10 years, this will boost economic growth by up to 4 per cent.

The switch to a circular economy, will require investors, tenants and government to play a central role and will also depend on a change of societal mind-set.

While traditional business models do not often favour collaboration throughout the value chain. CBMs by contrast, depend on collaboration by all construction stakeholders, and agreement to use components that retain the highest value throughout the lifecycle, thus minimising waste.

Nitesh Magdani, Group Director of Sustainability at BAM said:

‘The entire value chain needs to work together for mutual gain. Products need to be designed with future uses in mind and all members of the value chain need to work with different business models, and levels of incentivisation. Among them, clients benefit over the longer term with better performance and higher residual values of their asset. So far, we haven’t seen a single solution, but have experimented with several – each solution needs to be tailored to its situation!’

The report highlights how innovation (including digital platforms, product passports, 3D printers and tagging sensors) will play a key role by enabling CBMs. Material databases will be created to store the information required to facilitate their later reuse and demonstrate their residual value through time and at the end of a building’s life-cycle.

In addition, platforms like Building Information Modelling will become crucial to bring together people, processes and technology to achieve circular efficiency and performance. New models of governance and regulatory models will also be required, to ensure investments are supportive of CBMs.

Casper Jorna, Circular Economy 100 Programme Lead at Ellen MacArthur Foundation added:

‘The built environment offers a huge opportunity for businesses, governments and cities to play a leading role in realising circular economy without having to wait for the transformation of the whole system. Tangible examples that develop in this space can act as a catalyst for a shift in how our cities and urban areas operate in the future.’

Click here to download the report CIRCULAR BUSINESS MODELS FOR THE BUILT ENVIRONMENT