The Next Economy
Report Explores Myriad Circular Economy Benefits for Built Environment

Discussion surrounding circular business models (CBMs) is often focused on manufacturing, packaging and consumer goods, where significant change is already underway, yet closed-loop systems have the potential revolutionize the built environment. In an effort to spark conversation about circularity and highlight the benefits the approach can offer to the field, ARUP and European construction-services company Royal BAM Group (BAM) have launched a study exploring the benefits that CBMs offer stakeholders within the built environment.

Supported by the Ellen MacArthur Foundation (EMF) as part of the framework of the CE100 program — a pre-competitive innovation program that aims to help organizations develop new opportunities and realize their circular economy ambitions faster — the report proposes a shift in the construction value chain.

As the largest consumer of resources and raw materials, the global construction industry faces significant challenges for the adoption of CBMs. Circular Business Models for the Built Environment seeks to help the industry overcome these challenges by reviewing different solutions that can help businesses save on raw material and waste management costs.

“To embrace a change of paradigm in construction, it is crucial to understand the logic behind circular business models,” said Guglielmo Carra, ARUP’s Materials Consulting Lead. “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.”

Buy in and involvement from investors, tenants and government is essential to the transition to a circular model, as well as a shift in societal mindset. While traditional business models do not often favor collaboration throughout the value chain, CBMs, by contrast, depend on collaboration amongst all construction stakeholders and agreement to use components that retain the highest value throughout the lifecycle, thereby minimizing waste.

“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 incentivization. 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!” said Nitesh Magdani, Group Director of Sustainability at BAM.

The report highlights how innovation 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 such as 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.

“The built environment offers a huge opportunity for businesses, governments and cities to play a leading role in realizing 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,” said Casper Jorna, CE100 Program Lead at the Ellen MacArthur Foundation.

This isn’t the first time ARUP has toyed with the idea of circularity. Last year, the group designed and delivered a circular building prototype for the 2016 London Design Festival. The prototype was one of the first in the UK built to satisfy circular economy principles.