Developing a Circular Business Model

As part of my studies on the Circular Economy at the United Nations System Staff College, one resource from week three stood out: the UN Environment Programme’s manual on developing a circular business model. It caught my attention because the thinking maps closely to how we approach digital transformation at Human Kind, using it as a catalyst for sustainability improvements rather than an end in itself.

Below is a summary of the UNEP’s five-step approach, with my own reflections on where digital transformation fits in.

Step 1: Understand performance through assessment. Before you redesign anything, you need to know where you stand. This step involves collecting performance data to understand a company’s operational strengths and weaknesses, establishing a baseline against key sustainability metrics. At Human Kind, our starting point is similar. We work to understand a business’s current performance across sustainability, commercial, and operational dimensions before making recommendations. You cannot improve what you have not properly understood.

Step 2: Generate business model concepts. Using a business model canvas template, the UNEP guide suggests generating ideas that align with the company’s strategic sustainability goals. There are two routes in: top-down, where you identify what should stay the same and innovate around it, or bottom-up, where operational improvements drive the broader model. Either way, digital transformation creates significant opportunities. Whether approaching the challenge from the top down or the bottom up, technology can both reveal the opportunity for change and help deliver it.

Circular Business Model Canvas, UN Environment Programme.

Step 3: Generate ideas at the building block level. This is where it gets granular. You work through each area of the canvas: customer segment, value proposition, channels, customer relations, revenue streams, key resources, activities, partnerships, and cost structure. Each one gets scrutinised for circular potential. The breadth of this step is what makes it genuinely useful. It forces you to think systematically rather than defaulting to the obvious quick wins.

Step 4: Evaluate and select. With multiple options on the table, this step involves assessing each against sustainability metrics, implementation costs, and risks. The goal is to identify the model most likely to succeed and progress it. What I appreciate about this stage is that it brings commercial rigour to sustainability ambitions. Aligning the two is critical, and we are increasingly seeing organisations put sustainability at the top table rather than treating it as a side project.

Step 5: Senior leadership approval. The final step takes the proposed model to the decision-makers. A transformation of this scale needs leadership buy-in, but the guide rightly suggests that there should be no surprise reveals. Key stakeholders should be engaged throughout. At Human Kind, we build in review points from the start so that projects have space to develop without wasted effort or last-minute rejection.

The UNEP’s framework provides a solid, structured foundation for circular business model development. What I value most is seeing how closely the thinking aligns with the work we do. Digital innovation and transformation are not separate from sustainability strategy. They are a core part of how it gets delivered.

You can read the other posts from this series: Circular Economy and the 2030 Agenda, Sustainable Lifestyles, and Circular Cities.

Helping organisations think through circular business models is central to our sustainability work. Take a look at our Sustainability & Circular Economy practice.

Further Reading

• The Human Kind Approach to Developing Digital Products.
• The UN Sustainable Development Goals and Why They Are Important to Business.
• Building a Culture of Innovation for Sustainable Growth.
• The Circular Economy.
• Future Vision - Soluble Electronics, Volvo’s Electric Car Pledge and GPT-o1.