If your company operates mainly in Europe, there is no way around the circular economy. More and more of the European Union’s strategic documents focus on the transition to a circular economy and its implementation. More and more project calls and grants are geared towards circularity and sustainability. The number of scientific publications on the circular economy has grown rapidly in recent years. At a recent conference on new business models, there was hardly a single presentation that did not sit in the context of the circular or regenerative economy.
And practice, too, is finally producing a growing number of successful examples of circular principles in action. Companies such as IKEA, Toyota and Pandora show that circularity benefits not only the environment and society but, if approached properly, also companies – suppliers, manufacturers and distributors. Not least, circularity is good for consumers, which makes it a source of customer value and, in turn, an advantage for companies.
Although the circular economy can be implemented in many ways, for example in product design or the choice of materials, we will look at it through the lens most natural to the corporate world, namely business models.
Let us take a closer look at the facts.
In many strategic documents, the European Union has long declared that the EU’s goal is the transition to a circular economy, in the interest of a cleaner and more competitive Europe. In 2020 the European Commission adopted its second Circular Economy Action Plan, which sets concrete targets for the transition. A proposal for a Circular Economy Act, intended to deepen and accelerate this strategic shift, is expected in late 2026.
In Europe today, the circular economy is defined as an industrial strategy. This shows that while circularity has a positive effect on many environmental problems, it also brings political, strategic and economic advantages. In 2025 the European Commission published two strategic documents that cement the principles of the circular economy and sustainability as industrial strategy. The Competitiveness Compass aims to make Europe the place where the technologies, services and products of the future are developed, manufactured and brought to market, while also setting the ambition for Europe to become the first climate-neutral continent.
The second document, the Clean Industrial Deal, proposes concrete measures to make decarbonisation an engine of growth for European industry. Among other things, it sets the target of doubling the circularity rate of our economy (the share of materials that are reused) from the current 12 % to 24 % by 2030.
The strategy is clear, but implementing it requires concrete steps. Numerous regulations, directives and their implementing acts contain the principles of circularity, more or less explicitly.
At present, the implementation of circular legislation in practice is at an early stage. Legislative requirements are so far largely uncoordinated and often far less ambitious than the framework strategic documents would suggest.
Implementing acts are being prepared step by step, and only the first of them are in the pipeline. This is probably one reason why many companies are now cutting the resources they allocate to sustainability, for example by eliminating sustainability or ESG manager positions. The question remains whether this is a sound long-term strategy and whether such companies are giving up a potential competitive advantage.
So what does the implementation of circularity and circular business models look like in practice today? Are companies adopting them even though legislation is, for now, only nudging them slowly?
According to a 2025 survey published by the World Economic Forum, 80 % of almost 500 executives surveyed across ten manufacturing sectors consider the circular economy very important or important (up from 36 % three years ago), and according to the same survey this share is expected to rise to 95 % within three years. The circular economy is not just a requirement “from above”. The market is responding to it as well.
Companies across all sectors are proving that circular economy models work. They are building more resilient, more profitable organisations that are ready for the future.
More than 200 European examples of such companies can be found in a database maintained by The Circular Economists team, part of Circle Economy. It contains 484 examples of organisations from around the world implementing different types of circular business models across 25 industries, and can be filtered by model, geography or type of organisation.
More detailed descriptions of business models at company or city level are also available from the Ellen MacArthur Foundation, which lists 87 European examples. Others are available from the research team CircularX, which studies circular models and works with companies.
Here are a few examples of companies on the European market that decided to tap the potential the circular economy offers, and proved that it also makes financial sense.
The pioneers of the circular economy thus show that circular business models also make economic sense. At the same time, these models are certainly not yet established as mainstream in Europe. That may well be down to the insufficient scale of their implementation.
Everyone reading this article knows what “industrial scale” means. Could circularity be stuck in the classic chicken-and-egg loop, where success requires scale but growth requires success?
This is why Europe is already talking about scaling circular economy models. That this is no fringe topic is confirmed by the European Environment Agency (EEA), which in 2026 published a dedicated analysis of scaling circular business models. It identifies three forms of scaling (scaling out – winning new customers, scaling up – changing the operating set-up, and scaling deep – changing behaviour and culture).
The main barriers are insufficient regulation, financing gaps and slow changes in consumer behaviour. The analysis also serves as input for the forthcoming Circular Economy Act. The Ellen MacArthur Foundation, together with representatives of the textile and apparel industry including major brands such as Decathlon, H&M and Primark, is calling for legislative measures to support this scaling. European companies such as Vinted, Vytal and Fairphone are examples of companies that have already reached this stage.
Some companies are testing circular economy models, others are already deploying them successfully on a smaller scale, and still others have reached industrial scale. The circular economy is built on the principle that what is good for the environment can also be good for business. That makes it a model that enables competitive business, social development and environmental protection at the same time.
A company’s economic growth and the improvement of its environmental footprint, or decarbonisation, need not be conflicting goals at all. On the contrary. This is demonstrated, for example, by an analysis of 20 companies by a team of researchers from the Technical University of Denmark, according to which the introduction of circular business models makes it possible to create environmental and economic benefits at the same time (Villers et al., proceedings of the New Business Models conference 2026, not yet published). And social benefits too – but that would be a topic for another article.
Some companies already make products that meet the conditions of the circular economy (at least in part) and may not even know it. Examples include products with a high recycled content, or products that are inseparably linked to services such as regular maintenance or repair. In such cases it may be enough to communicate these facts properly.
Other companies need to rethink their strategy in part or in full, for example companies whose products contain substances harmful to health, such as PVC, where it is only a matter of time before they are replaced by safer alternatives. There are many good options. The task is to choose the right strategy.
How to begin? According to Vojtěch Vosecký, a Czech who connects circular economy professionals from around the world, procurement in both the public and private sectors is a strategic tool for implementing circularity in companies and institutions. The logic is simple: procurement is where the money is, and that money has to be spent one way or another. If circular alternatives are not more expensive, they can be adopted painlessly. The economic potential here lies in savings in later phases of the product life cycle, for example thanks to durability or repairability.
Let us take this procurement argument a step further. Thinking in a broader context, in this case at the level of supply chains: if one company starts buying circular materials or products, it creates demand for them and will look for those that meet circularity conditions.
That is why another opportunity for companies is to offer such products, especially for companies that supply larger national, foreign or multinational firms. The largest companies on the European market are required under the CSRD to report sustainability information about their activities, including impacts in their value (supply) chain.
But these companies obtain the necessary data from their suppliers, so many smaller suppliers face requests for sustainability data even without a legal obligation of their own – from customers, banks and investors. If you are, or want to be, a supplier to large companies, sustainability or circularity can be your unique selling point (USP).
And we have not yet factored public procurement into this equation, that is, tenders that, to varying degrees, require products to meet certain criteria. Public procurement accounts for around 14 % of European GDP. The European Structural and Investment Funds, for example, which co-finance projects in Czechia among other places, call on recipients to apply green public procurement (GPP) conditions. In 2014–2020 these funds financed 520 billion euros. GPP was introduced in Czechia only in 2021, but since then its use has been growing slowly but steadily, and the topic is currently under active discussion at the legislative level.
The integration of sustainability and circularity principles in the public sector is also evidenced by the Circular Audit methodology issued by the Czech Ministry of Industry and Trade. It has two layers. The corporate part (Circular Audit I) is a voluntary diagnostic tool with which small and medium-sized enterprises in particular can assess their level of circularity, identify weak spots and quantify material, emission and financial savings. Independently verified audit data can then be used, for example, to identify savings opportunities or in ESG reporting to business partners.
Only the second part (Circular Audit II) serves evaluators in assessing projects applying for grant support in the circular economy area. The current call has an allocation of CZK 800 million, with 40–60 % funding rates.
When it comes to procurement savings, materials are an interesting issue. At present, secondary materials are still typically more expensive than primary raw materials. That may change in future with forthcoming legislation such as the Circular Economy Act. Here too, a workable business model is needed. Aluminium and iron products have historically had a high share of recycled material. Thermal insulation materials such as EPS or glass wool make large-scale use of plastic and glass waste from other industries. And Zicla, mentioned above, built its business on exactly this principle – it identified a stream of waste plastic and used it in production at a very favourable price.
Recycled and other environmentally friendly materials – such as locally available or renewable ones – are therefore cheaper only in some cases, but their main advantage is far less obvious. Risks linked to unstable supply chains, volatile prices and delivery times, and their impact on a company’s financial stability, are a live topic in Europe today. Reducing dependence on global material flows brings financial stability.
Pandora chose this strategy with great foresight, as noted above, by using only secondary sources of silver and gold. Even Apple, a company not exactly known as environmentally friendly given the disputes over repairability, hired McKinsey & Company to map possible circular supply chains for it.
Another way to secure such independence is the business model known as product as a service, in which the manufacturer or distributor retains ownership of the product and the customer pays regular fees for its use. At the end of the life cycle, the products and their materials belong to the manufacturer. The customer thereby avoids the risks arising from possible defects and damage to the product, which the manufacturer takes on. This can contribute to the success of the model, as Nornorm’s furniture-as-a-service model shows.
Further circular opportunities are linked to circular design. The simplest principle is using less material, the so-called dematerialisation of products, or less energy, which directly saves money. Other strategies make certain business models, such as product as a service, more financially viable, for example repairability, easy maintenance, or durability and reliability. The longer a product stays in use, the longer the manufacturer can earn regular income from it. This strategy is the opposite of planned obsolescence, which in certain forms is now becoming legally prohibited.
With this alternative, another natural source of income can be services such as maintenance or repair, and the sale of spare parts. This income need not be negligible. On the contrary. After-sales services and spare parts typically carry significantly higher margins than the sale of new products.
According to McKinsey data, margins on new products tend to be around 10 %, while service margins average 25 %. Gross margins on spare parts, according to a BCG study, are around 30–50 %.
Such services are considered circular because they aim to extend the life of the product. They are also a way to reduce the dependence of a company’s income, for example that of an originally manufacturing business, on material consumption, which in turn lowers the company’s carbon footprint.
This approach is successfully applied by the electronics retailer FNAC Darty mentioned above, but also, for example, by the major European appliance manufacturer Groupe SEB, which offers a 15-year repairability guarantee on selected products, which today make up 90 % of its range.
Another source of economic potential arising from business models such as product as a service or circular services is closer contact with the customer. This matters for building trust and a long-term relationship, which then leads to further sales opportunities, lowers the cost of generating such opportunities and potentially also marketing costs.
Regular contact gives the company ongoing data on how customers actually use the product and allows it to offer maintenance, upgrades or follow-on services at exactly the moment they are needed. Customer satisfaction and loyalty grow, the likelihood of customers switching to a competitor falls, and space opens up for referrals and repeat sales.
Feedback from such a close relationship is, moreover, a valuable source of ideas for innovation and the development of further products. Circularity also opens the door to redistributing used products, as IKEA does, or selling remanufactured products, as CAT does very effectively.
The economic advantage of such alternative products is that they open up new market segments. Remanufactured products, for instance, become affordable for customers your company has so far been unable, or originally had no intention, to reach.
Last but not least, introducing a new (for example circular) business model means innovating. And innovation is the means of adapting to changing market and legislative conditions. Corporate graveyards are full of companies that did not innovate.
Europe is slowly but surely moving towards a circular economy. Every company on the European market has the opportunity to take part in this change. As with all change, some companies will improve their position and others will lose ground, depending on how well they adapt and implement the necessary changes in their processes and products, but also in their relationships with other players. We believe that innovation in material flows, business models and supply chains is an essential part of the transition to a circular economy. If this innovation is carried out with current and future legislative requirements in mind, if all risks are properly analysed and suitable digital tools are used, the transition can deliver not only environmental and social benefits but economic ones too, as the examples from practice show.
Across the wider mutualus team, we combine expertise in law, regulation, technological innovation, circular business models and digital tools.
Of course, whether and how the principles of the circular economy and its business models should be implemented depends on the specific sector, type of company and product. That is why we will continue to explore this topic in our series “The circular economy in the dominant sectors of Czechia and Slovakia”.
Co-author of this article is Zuzana Procházková, an architect and researcher in circular business models.
This article was originally published in Czech in two parts on Ekonews: Circular economy in practice. Car, jewellery and furniture makers are testing circular principles (6 October 2026) and Circular economy in practice. How to introduce business models based on the circular economy (7 October 2026).
This article is current as of its publication date and does not constitute legal advice.
