Professor Julia Binder: My entry into the world of sustainability was a journey of self-discovery. I originally studied marketing and began to question the constant promotion of new products and the emphasis on driving consumption. During my studies in Edinburgh, I was introduced to the concept of sustainability marketing. It was during this period that I realized that I wanted to use my skills to create meaningful, positive impact. So, I began to study circular economy in depth, particularly the cradle-to-cradle principle. According to this principle, products are designed so that all materials are either biodegradable or can be fully reused after usage as raw materials – without any loss of quality and without generating waste. This inspired me to write my master’s thesis on circular economy.
 

Binder: Unfortunately, I have to say that less has changed than I had hoped. The concept of circular economy is better known today and is recognized by more companies, but practical implementation often falls short of expectations. Many associate circular economy mainly with recycling, but recycling is not the goal of circular economy, it’s the last option – only after all means of preserving or increasing the value of resources, such as reducing, reusing, repairing, and refurbishing, have already been exhausted. The real challenge is to design products from the outset in such a way that they can be integrated into a closed loop.

Binder: We emphasize that circularity shouldn’t just be another buzzword. It’s a means to unite profitability, growth, and sustainability. Companies should not treat the circular economy as a standalone goal but as an integral part of their business strategy.

We argue that it’s not just about incremental improvements, but about genuine, transformative innovation. Companies need to understand that the circular economy can help them remain future-proof by fostering resilience and enabling new business models.
 

Binder: The five archetypes are:

• Optimize resource use: This is how companies can use their resources more efficiently and reduce dependencies. One example is the switch from fossil to bio-based materials, which often also saves costs.
• Capitalize regeneration and restoration: This includes investing in regenerative agriculture and monetizing it. Companies can not only secure their supply chain but also generate additional revenue through the sale of carbon and biodiversity credits.
• Monetize extended product life: This is how companies can make money by extending the life of their products. This can be done through repairs, upgrades, or the modularity of products.
• Valorize waste: This archetype views waste products as valuable resources. One example is the use of used frying oils to produce biofuels.
• Servitize products: This approach transforms products into services. Companies offer products as a service, which increases customer loyalty and reduces material consumption at the same time.
   

Binder: Design is absolutely central. Around 80 percent of a product’s characteristics – including its recyclability – are determined in the design phase. The decisions made here have a huge impact on the environmental footprint. Unfortunately, designers are often neither trained nor incentivized to develop sustainable solutions. This is where companies need to rethink their approach – to design products that are easy to repair and recycle.
 

Binder: Policy can play a major role by setting the right framework. Ideally, social and environmental costs should be internalized in a product’s price. Right now, we have a situation where the real costs are not reflected in prices — they're borne by society and the environment. It’s a complex geopolitical issue, and I don’t believe we’ll see a global agreement anytime soon. That’s why companies must act proactively and create economic incentives to develop sustainable business models.
 

Binder: Sporting goods retailer Decathlon is a great example. They’re rethinking how to offer products as services instead of just selling them. Another example is the chemical company BASF. It is working intensively to optimize its processes and reintegrate materials into its production cycle. Technology conglomerate Siemens is also innovative. They design trains that can be recycled at the end of their life cycle. These companies show that combining economic success with sustainability is possible.

 

Dr. Julia Binder is Professor of Sustainable Innovation and Business Transformation and Director of the Center for Sustainable and Inclusive Business at IMD in Lausanne, Switzerland, a globally renowned business school known for its hands-on Executive Programs, with a special focus on sustainable business management and circular business models. Her academic career began with a degree in marketing and then led her to the Technical University of Munich and the Swiss Federal Institute of Technology Lausanne (EPFL), where she specialized in sustainability. In research and practice, she is dedicated to the question of how companies can combine ecological change and economic success through circular business models. In 2024, she published the books “The Circular Business Revolution” (Pearson) and “Leading the Sustainable Business Transformation” (Wiley).