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Model of the circular economy and its application in business practice

Author

Listed:
  • Otakar Ungerman

    (Technical University of Liberec)

  • Jaroslava Dědková

    (Technical University of Liberec)

Abstract

The circular economy is a philosophy that is clearly beneficial to the environment. The question is what economic result is offered by this philosophy and how to quantify that result. The aim of this paper is to put together a model of the circular economy to determine the economic result of enterprises’ involvement in the circular economy. The model has been created and subsequently applied in business practice. The model was applied on the basis of primary research aimed at determining the level of enterprises’ involvement in renovation, reuse and recycling, and hard data were acquired from the Czech Statistical Office. The model enabled the quantification of the impact of enterprises’ involvement in the circular economy. The results exactly proved that enterprises profit through their involvement in the circular economy. A loss was demonstrated in just one sector and one phase of processing discarded waste. The results demonstrate a positive economic impact in the long term. The main obstacle in the short term is the initial investment in technology and processes for processing discarded material. The main scientific benefit of the paper is the creation of a functional model of the circular economy, which was applied in practice. The results of this work clearly prove the claim that the circular economy has a positive impact on the environment, and also on enterprises’ economic prosperity and thus the aggregate economy of the state.

Suggested Citation

  • Otakar Ungerman & Jaroslava Dědková, 2020. "Model of the circular economy and its application in business practice," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(4), pages 3407-3432, April.
    • Handle: RePEc:spr:endesu:v:22:y:2020:i:4:d:10.1007_s10668-019-00351-2
    DOI: 10.1007/s10668-019-00351-2
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    References listed on IDEAS

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    Cited by:

    1. Kerem Toker & Ali Görener, 2023. "Evaluation of circular economy business models for SMEs using spherical fuzzy TOPSIS: an application from a developing countries’ perspective," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(2), pages 1700-1741, February.
    2. Ekaterina V. Popova & Nikolay I. Strikh, 2021. "Environmental management practices for the circular economy development in Russia and their impact on the financial performance of companies," Upravlenets, Ural State University of Economics, vol. 12(2), pages 17-34, April.
    3. Yu Zhang & Jie Wang & Jiakai Chen & Weizhong Liu, 2023. "Does environmental regulation policy help improve business performance of manufacturing enterprises? evidence from China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(5), pages 4335-4364, May.

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    More about this item

    Keywords

    Circular economy; Life Cycle Assessment; Renovation; Reuse; Recycling;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L19 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Other
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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