Circular Business Models: Current State and Framework to Achieve Sustainable Buildings
Publication: Journal of Construction Engineering and Management
Volume 147, Issue 12
Abstract
The construction sector exerts great pressure on natural resources, and its role in the transition to a circular economy (CE) is fundamental. Despite the growing prominence of circular business models (CBMs), based on strategies of slowing and closing resource flows, there is uncertainty with regard to how to implement them in the construction sector. This study analyzed how the construction sector approaches business models (BMs) to achieve sustainable buildings. Through a systematic literature review, 89 articles were analyzed to (1) explore how the sector is implementing circular strategies; and (2) verify how these strategies are distributed in the BMs described in the literature. The review showed that CBMs are concentrated in clusters, with a focus on energy efficiency strategies and the search for more information and understanding of circular actions in the sector. From the results, a model for value creation and a framework were created to facilitate CBM implementation. The model is a roadmap for embedding the process of innovation and value creation in CBMs. The framework relates CBMs to the building life cycle, aiming to introduce circular principles into policies, actions, and value chains. This study contributes to innovation and value creation, associating BMs with the circular principle of closing the cycles of materials and systems in the construction sector.
Get full access to this article
View all available purchase options and get full access to this article.
Data Availability Statement
All data, models, and code generated or used during the study appear in the published article.
Acknowledgments
The authors wish to acknowledge the Federal University of Paraná (UFPR) Postgraduate Program in Civil Construction Engineering (PPGECC) and Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (CAPES) for their financial support.
References
Abuzeinab, A., M. Arif, and M. Asim. 2017a. “Barriers to MNEs green business models in the UK construction sector: An ISM analysis.” J. Cleaner Prod. 160 (Sep): 27–37. https://doi.org/10.1016/j.jclepro.2017.01.003.
Abuzeinab, A., M. Arif, M. A. Qadri, and D. Kulonda. 2017b. “Green business models in the construction sector: An analysis of outcomes and benefits models.” Constr. Innovation 18 (1): 20–42.
Ajayebi, A., P. Hopkinson, K. Zhou, D. Lam, H. Chen, and Y. Wang. 2020. “Spatiotemporal model to quantify stocks of building structural products for a prospective circular economy.” Resour. Conserv. Recycl. 162 (Nov): 105026. https://doi.org/10.1016/j.resconrec.2020.105026.
Al-Saleh, Y., and S. Mahroum. 2015. “A critical review of the interplay between policy instruments and business models: Greening the built environment a case in point.” J. Cleaner Prod. 109 (Dec): 260–270. https://doi.org/10.1016/j.jclepro.2014.08.042.
Azcárate-Aguerre, J. F., A. Den Heijer, and T. Klein. 2018. “Integrated façades as a product-service system—Business process innovation to accelerate integral product implementation.” J. Facade Des. Eng. 6 (1): 41–56. https://doi.org/10.7480/jfde.2018.1.1840.
Bocken, N. M. P., I. de Pauw, C. Bakker, and B. van der Grinten. 2016. “Product design and business models strategies for a circular economy.” J. Ind. Prod. Eng. 33 (5): 308–320. https://doi.org/10.1080/21681015.2016.1172124.
Bocken, N. M. P., and S. W. Short. 2016. “Towards a sufficiency-driven business model: Experiences and opportunities.” Environ. Innov. Soc. Transitions 18 (Mar): 41–61. https://doi.org/10.1016/j.eist.2015.07.010.
Bocken, N. M. P., S. W. Short, P. Rana, and S. Evans. 2013. “A value mapping tool for sustainable business modelling.” Corporate Governance 13 (5): 482–497. https://doi.org/10.1108/CG-06-2013-0078.
Bocken, N. M. P., S. W. Short, P. Rana, and S. Evans. 2014. “A literature and practice review to develop sustainable business model archetypes.” J. Cleaner Prod. 65 (Feb): 42–56. https://doi.org/10.1016/j.jclepro.2013.11.039.
Boons, F., and F. Lüdeke-Freund. 2013. “Business models for sustainable innovation: State-of-the-art and steps towards a research agenda.” J. Cleaner Prod. 45 (Apr): 9–19. https://doi.org/10.1016/j.jclepro.2012.07.007.
Bribián, I. Z., A. V. Capilla, and A. A. Usón. 2011. “Life cycle assessment of building materials: Comparative analysis of energy and environmental impacts and evaluation of the eco-efficiency improvement potential.” Build. Environ. 46 (5): 1133–1140. https://doi.org/10.1016/j.buildenv.2010.12.002.
Carra, G., and N. Magdani. 2017. “Circular business models for the built environment.” Accessed January 12, 2021. https://www.arup.com/perspectives/publications/research/section/circular-business-models-for-the-built-environment.
Carrillo-Hermosilla, J., P. Del Río, and T. Könnölä. 2010. “Diversity of eco-innovations: Reflections from selected case studies.” J. Cleaner Prod. 18 (10–11): 1073–1083. https://doi.org/10.1016/j.jclepro.2010.02.014.
Carvalho, M. M., A. Fleury, and A. P. Lopes. 2013. “An overview of the literature on technology roadmapping (TRM): Contributions and trends.” Technol. Forecasting Soc. Change 80 (7): 1418–1437. https://doi.org/10.1016/j.techfore.2012.11.008.
Cerón-Palma, I., E. Sanyé-Mengual, J. Oliver-Solà, J. Montero, and J. Rieradevall. 2012. “Barriers and opportunities regarding the implementation of Rooftop Eco. Greenhouses (RTEG) in Mediterranean cities of Europe.” J. Urban Technol. 19 (4): 87–103. https://doi.org/10.1080/10630732.2012.717685.
Chen, Z., D. Clements-Croome, J. Hong, H. Li, and Q. Xu. 2006. “A multicriteria lifespan energy efficiency approach to intelligent building assessment.” Energy Build. 38 (5): 393–409. https://doi.org/10.1016/j.enbuild.2005.08.001.
Cheng, C., D. Lee, C. H. Wang, S. F. Lin, H. Chang, and S. Fang. 2015. “The development of cloud energy management.” Energies 8 (5): 4357–4377. https://doi.org/10.3390/en8054357.
Cobut, A., P. Blanchet, and R. Beauregard. 2016. “Prospects for appearance wood products ecodesign in the context of nonresidential applications.” For. Prod. J. 66 (3–4): 196–210. https://doi.org/10.13073/FPJ-D-15-00022.
de Almeida Biolchini, J. C., P. G. Mian, A. C. C. Natali, T. U. Conte, and G. H. Travassos. 2007. “Scientific research ontology to support systematic review in software engineering.” Adv. Eng. Inf. 21 (2): 133–151. https://doi.org/10.1016/j.aei.2006.11.006.
Elo, S., and H. Kyngas. 2008. “The qualitative content analysis process.” J. Adv. Nurs. 62 (1): 107–115. https://doi.org/10.1111/j.1365-2648.2007.04569.x.
EMF (Ellen MacArthur Foundation). 2014. Towards the circular economy: Accelerating the scale-up across global supply chains. Geneva: World Economic Forum.
Geissdoerfer, M., P. Savaget, N. M. P. Bocken, and E. J. Hultink. 2017. “The circular economy—A new sustainability paradigm?” J. Cleaner Prod. 143 (Feb): 757–768. https://doi.org/10.1016/j.jclepro.2016.12.048.
Geissdoerfer, M., D. Vladimirova, and S. Evans. 2018. “Sustainable business model innovation: A review.” J. Cleaner Prod. 198 (Oct): 401–416. https://doi.org/10.1016/j.jclepro.2018.06.240.
Ghaffar, S. H., M. Burman, and N. Braimah. 2020. “Pathways to circular construction: An integrated management of construction and demolition waste for resource recovery.” J. Cleaner Prod. 244 (Jan): 118710. https://doi.org/10.1016/j.jclepro.2019.118710.
Ginga, C. P., J. M. C. Ongpeng, and M. K. Daly. 2020. “Circular economy on construction and demolition waste: A literature review on material recovery and production.” Materials 13: 2970. https://doi.org/10.3390/ma13132970.
Giorgi, S., M. Lavagna, and A. Campioli. 2019. “Circular economy and regeneration of building stock in the Italian context: Policies, partnership and tools.” In Proc., IOP Conf. Series: Earth and Environmental Science. Brussels, Belgium: IOP Publishing.
Hagejärd, S., A. Ollár, P. Femenías, and U. Rahe. 2020. “Designing for circularity—Addressing product design, consumption practices and resource flows in domestic kitchens.” Sustainability 12 (3): 1006. https://doi.org/10.3390/su12031006.
Heesbeen, C., and A. Prieto. 2020. “Archetypical CBMs in construction and a translation to industrialized manufacture.” Sustainability 12 (4): 1572. https://doi.org/10.3390/su12041572.
IEA (International Energy Agency). 2019. “2019 Global status report for buildings and construction, UN Environment Programme.” Accessed May 27, 2021. https://www.iea.org/reports/global-status-report-for-buildings-and-construction-2019.
ING (Internationale Nederlanden Groep). 2015. “Rethinking finance in a circular economy—Financial implications of circular business model.” Accessed January 27, 2021. https://www.ingwb.com/media/1149417/ing-rethinking-finance-in-a-circular-economy-may-2015.pdf.
Jang, Y., K. Song, M. Park, and Y. Ahn. 2020. “Classifying the business model types of international construction contractors.” J. Constr. Eng. Manage. 146 (6): 04020056. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001836.
Johansson, C., J. Elfsberg, T. C. Larsson, M. Frank, L. J. Leifer, N. Nilsson, and V. Söderberg. 2016. “Urban mining as a case for PSS.” Procedia CIRP 47: 460–465. https://doi.org/10.1016/j.procir.2016.03.089.
Keskin, C., and M. P. Mengüç. 2018. “On occupant behavior and innovation studies towards high performance buildings: A transdisciplinary approach.” Sustainability 10: 3567. https://doi.org/10.3390/su10103567.
Kirchherr, J., D. Reike, and M. Hekkert. 2017. “Conceptualizing the circular economy: An analysis of 114 definitions.” Resour. Conserv. Recycl. 127 (Apr): 221–232. https://doi.org/10.1016/j.resconrec.2017.09.005.
Kurdve, M., and H. de Goey. 2017. “Can social sustainability values be incorporated in a product service system for temporary public building modules?” Procedia CIRP 64: 193–198. https://doi.org/10.1016/j.procir.2017.03.039.
Lacy, P., J. Keeble, and R. McNamara. 2014. “Circular advantage: Innovative business models and technologies to create value without limits to growth.” Accessed January 9, 2021. https://www.accenture.com/t20150523T053139__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Strategy_6/Accenture-Circular-Advantage-Innovative-Business-Models-Technologies-Value-Growth.pdf.
Leising, E., J. Quist, and N. Bocken. 2018. “Circular economy in the building sector: Three cases and a collaboration tool.” J. Cleaner Prod. 176 (Mar): 976–989. https://doi.org/10.1016/j.jclepro.2017.12.010.
Lewandowski, M. 2016. “Designing the business models for circular economy-towards the conceptual framework.” Sustainability 8 (1): 43. https://doi.org/10.3390/su8010043.
Malhotra, N. K. 2012. Pesquisa de marketing: Uma orientação aplicada. 6th ed. Porto Alegre, Brazil: Bookman.
Merli, R., M. Preziosi, and A. Acampora. 2018. “How do scholars approach the circular economy? A systematic literature review.” J. Cleaner Prod. 178 (Mar): 703–722. https://doi.org/10.1016/j.jclepro.2017.12.112.
Migliore, M., A. Campioli, M. Lavagna, I. Oberti, G. Paganin, and C. Talamo. 2015. “Intersectorial reuse of waste and scraps for the production of building products: Strategies and valorization of waste.” Environ. Eng. Manage. J. 14 (7): 1675–1681. https://doi.org/10.30638/eemj.2015.178.
Mulrow, J. S., S. Derrible, W. S. Ashton, and S. S. Chopra. 2017. “Industrial symbiosis at the facility scale.” J. Ind. Ecol. 21 (3): 559–571. https://doi.org/10.1111/jiec.12592.
Munaro, M. R., A. C. Fischer, N. C. Azevedo, and S. F. Tavares. 2019. “Proposal of a building material passport and its application feasibility to the wood frame constructive system in Brazil.” In Proc., IOP Conf. Series: Earth and Environmental Science 2019. Brussels, Belgium: IOP Publishing.
Munaro, M. R., and S. F. Tavares. 2021. “Materials passport’s review: Challenges and opportunities toward a circular economy building sector.” Built Environ. Project Asset Manage. https://doi.org/10.1108/BEPAM-02-2020-0027.
Munaro, M. R., S. F. Tavares, and L. Bragança. 2020. “Towards circular and more sustainable buildings: A systematic literature review on the circular economy in the built environment.” J. Cleaner Prod. 260 (Jul): 121134. https://doi.org/10.1016/j.jclepro.2020.121134.
Nußholz, J. L. K., F. N. Rasmussen, and L. Milios. 2019. “Circular building materials: Carbon saving potential and the role of business model innovation and public policy.” Resour. Conserv. Recycl. 141 (Feb): 308–316. https://doi.org/10.1016/j.resconrec.2018.10.036.
Osterwalder, A., Y. Pigneur, and C. Tucci. 2005. “Clarifying business models: Origins, present, and future of the concept.” Commun. Assoc. Inf. Syst. 15 (1): 1–43.
Pelli, P., and K. Lahtinen. 2020. “Servitization and bioeconomy transitions: Insights on prefabricated wooden elements supply networks.” J. Cleaner Prod. 244 (Jan): 118711. https://doi.org/10.1016/j.jclepro.2019.118711.
Peters, M., A. Ribeiro, J. Oseyran, and K. Wang. 2017. “Buildings as material banks and the need for innovative business models.” Accessed November 1, 2020. https://www.bamb2020.eu/wp-content/uploads/2017/11/BAMB_Business-Models_20171114_extract.pdf.
Pieroni, M. P. P., T. C. McAloone, and D. C. A. Pigosso. 2019. “Business model innovation for circular economy and sustainability: A review of approaches.” J. Cleaner Prod. 215 (Apr): 198–216. https://doi.org/10.1016/j.jclepro.2019.01.036.
Ploeger, H., M. Prins, A. Straub, and R. den Brink. 2019. “Circular economy and real estate: The legal (im)possibilities of operational lease.” Facilities 37 (9/10): 653–668. https://doi.org/10.1108/F-01-2018-0006.
Potting, J., M. Hekkert, E. Worrell, and A. Hanemaaijer. 2017. Circular economy: Measuring innovation in the product chain. Hague, Netherlands: PBL Publishers.
Rocco, T. S., and M. S. Plakhotnik. 2009. “Literature reviews, conceptual frameworks, and theoretical frameworks: Terms, functions, and distinctions.” Hum. Resour. Dev. Rev. 8 (1): 120–130. https://doi.org/10.1177/1534484309332617.
Romnée, A., C. Vandervaeren, O. Breda, and N. De Temmerman. 2019. “A greenhouse that reduces greenhouse effect: How to create a circular activity with construction waste?” In Proc., IOP Conf. Series: Earth and Environmental Science 2019. Brussels, Belgium: IOP Publishing.
Rose, C. M., and J. A. Stegemann. 2018. “Characterising existing buildings as material banks (E-BAMB) to enable component reuse.” Proc. Inst. Civ. Eng. Eng. Sustainability 172 (3): 129–140. https://doi.org/10.1680/jensu.17.00074.
Sandberg, J., and M. Alvesson. 2011. “Ways of constructing research questions: Gap-spotting or problematization?” Organization 18 (1): 23–44. https://doi.org/10.1177/1350508410372151.
Sanyé-Mengual, E., et al. 2018. “Urban horticulture in retail parks: Environmental assessment of the potential implementation of rooftop greenhouses in European and South American cities.” J. Cleaner Prod. 172 (Jan): 3081–3091. https://doi.org/10.1016/j.jclepro.2017.11.103.
Sebrae. 2017. “Pensamento do ciclo de vida: Negócios conscientes à caminho da sustentabilidade.” Accessed February 11, 2021. https://acv.ibict.br/wp-content/uploads/2018/08/Pensamento-do-Ciclo-de-Vida-Cartilha.pdf.
Segarra-Ona, M.-V., A. Peiró-Signes, and R. Cervelló-Royo. 2014. “A framework to move forward on the path to eco-innovation in the construction industry: Implications to improve firms’ sustainable orientation.” Sci. Eng. Ethics 21 (6): 1469–1484. https://doi.org/10.1007/s11948-014-9620-2.
Sierra-Pérez, J., S. García-Pérez, S. Blanc, X. Gabarrell, and J. Boschmonart-Rives. 2018. “The use of forest-based materials for the efficient energy of cities: Environmental and economic implications of cork as insulation material.” Sustainable Cities Soc. 37 (Feb): 628–636. https://doi.org/10.1016/j.scs.2017.12.008.
Stauch, A., and P. Vuichard. 2019. “Community solar as an innovative business model for building-integrated photovoltaics an experimental analysis with Swiss electricity consumers.” Energy Build. 204 (Dec): 109526. https://doi.org/10.1016/j.enbuild.2019.109526.
Teece, D. J. 2010. “Business models, business strategy and innovation.” Long Range Plann. 43 (2–3): 172–194. https://doi.org/10.1016/j.lrp.2009.07.003.
Tranfield, D., D. Denyer, and P. Smart. 2003. “Towards a methodology for developing evidence-informed management knowledge by means of systematic review.” Br. J. Manage. 14 (3): 207–222. https://doi.org/10.1111/1467-8551.00375.
Tronchin, L., M. Manfren, and B. Nastasi. 2018. “Energy efficiency, demand side management and energy storage technologies—A critical analysis of possible paths of integration in the built environment.” Renewable Sustainable Energy Rev. 95 (Nov): 341–353. https://doi.org/10.1016/j.rser.2018.06.060.
Ünal, E., A. Urbinati, D. Chiaroni, and R. Manzini. 2019. “Value creation in circular business models: The case of a US small medium enterprise in the building sector.” Resour. Conserv. Recycl. 146 (Jul): 291–307. https://doi.org/10.1016/j.resconrec.2018.12.034.
Zhao, X., T. Chang, B.-G. Hwang, and X. Deng. 2018. “Critical factors influencing business model innovation for sustainable buildings.” Sustainability 10 (1): 33. https://doi.org/10.3390/su10010033.
Zhao, X., L. Chen, W. Pan, and Q. Lu. 2017. “AHP-ANP–fuzzy integral integrated network for evaluating performance of innovative business models for sustainable building.” J. Constr. Eng. Manage. 143 (8): 04017054. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001348.
Zhao, X., and W. Pan. 2015. “Delivering zero carbon buildings: The role of innovative business models.” Procedia Eng. 118 (4): 404–411. https://doi.org/10.1016/j.proeng.2015.08.440.
Zhao, X., and W. Pan. 2017. “Co-productive interrelations between business model and zero carbon building: A conceptual model.” Built Environ. Project Asset Manage. 7 (4): 353–365. https://doi.org/10.1108/BEPAM-11-2016-0064.
Zhao, X., W. Pan, and W. Lu. 2016. “Business model innovation for delivering zero carbon buildings.” Sustainable Cities Soc. 27 (Nov): 253–262. https://doi.org/10.1016/j.scs.2016.03.013.
Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 147 • Issue 12 • December 2021
Copyright
© 2021 American Society of Civil Engineers.
History
Received: Mar 17, 2021
Accepted: Jul 20, 2021
Published online: Sep 21, 2021
Published in print: Dec 1, 2021
Discussion open until: Feb 21, 2022
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.
Cited by
- Hiba Jalloul, Juyeong Choi, Derek Manheim, Nazli Yesiller, Sybil Derrible, Incorporating Disaster Debris into Sustainable Construction Research and Practice, Journal of Construction Engineering and Management, 10.1061/JCEMD4.COENG-13561, 150, 1, (2024).
- Kerim Koc, Ömer Ekmekcioglu, Zeynep Işık, Developing a Hybrid Fuzzy Decision-Making Model for Sustainable Circular Contractor Selection, Journal of Construction Engineering and Management, 10.1061/JCEMD4.COENG-13305, 149, 10, (2023).
- Lukas Alexander Benz, Critical Success Factors for Circular Business Model Innovation from the Perspective of the Sustainable Development Goals, Sustainability, 10.3390/su14105816, 14, 10, (5816), (2022).
- P Huovinen, Incorporation of UN sustainable development goals into built environments-related business management concepts, IOP Conference Series: Earth and Environmental Science, 10.1088/1755-1315/1122/1/012057, 1122, 1, (012057), (2022).
- Kaveesha Gihani Dewagoda, S. Thomas Ng, Mohan M. Kumaraswamy, Design for Circularity: The Case of the Building Construction Industry, IOP Conference Series: Earth and Environmental Science, 10.1088/1755-1315/1101/6/062026, 1101, 6, (062026), (2022).
- Daniel Mmereki, Derk Brouwer, Application of Innovative Materials and Methods in Green Buildings and Associated Occupational Exposure and Health of Construction Workers: A Systematic Literature Review, Journal of Construction Engineering and Management, 10.1061/(ASCE)CO.1943-7862.0002296, 148, 8, (2022).
- Kaveesha G. Dewagoda, S. Thomas Ng, J. Chen, Driving systematic circular economy implementation in the construction industry: A construction value chain perspective, Journal of Cleaner Production, 10.1016/j.jclepro.2022.135197, 381, (135197), (2022).
- Namya Sharma, Pradip P. Kalbar, Muhammad Salman, Global review of circular economy and life cycle thinking in building Demolition Waste Management: A way ahead for India, Building and Environment, 10.1016/j.buildenv.2022.109413, 222, (109413), (2022).