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Article in the California Management Review co-authored by Khal Soufani of Cambridge Judge urges companies to recycle, expand product lifespans and shift from selling products to servicing them.

Circular economy - globe with circular bar chart around it

Dr Khaled Soufani
Dr Khaled Soufani

An article that outlines how companies can help themselves and the environment through the “circular economy,” which is co-authored by Khal Soufani of Cambridge Judge Business School, was published in the latest edition of the California Management Review.

The blog article entitled “How Companies Can Benefit from the Circular Economy” argues that many companies produce goods without taking into account issues such as product end-of-life and dwindling resources, and that circular economy principles can help combat this.

Under a circular economy approach, business models are based on “longevity, renewability, reuse, repair, upgrade, refurbishment, capacity sharing, and dematerialization,” says the article.

Companies should focus on rethinking products and services from the bottom up to ‘future proof’ their operations, all the way to customer propositions.

There are three key routes to this identified by the article: reducing waste through recycling, a shift from selling products to servicing them, and expanding product lifespans. Through “servitisation,” for example, companies retain ownership of goods throughout their life – so Renault leases its electric car batteries to customers so they can be returned for proper disposal or reuse.

The article is co-authored by Soufani, Terence Tse and Mark Esposito. The California Management Review is published by the Haas School of Business at University of California Berkeley.

In addition to the California Business Review article, an article by the three co-authors regarding the circular economy was recently published in the Italian edition of the Harvard Business Review.