The conditions a circular business model should meet to contribute to lowering environmental impacts in the IT sector, in comparison to a linear business model

Abstract

Globally, 54 million tonnes of e-waste are produced each year. This amount is rapidly growing, as global access to digital technology is expanding. The disposal of e-waste contributes to a range of environmental impacts, such as globally increasing amounts of greenhouse gases, extraction of rare metals and minerals and leaching of toxic substances. Transitioning towards a Circular Economy (CE) has been put forward as a solution to these increasing global pressures. A shift towards the CE can be operationalized through Circular Business Models (CBMs). CBMs that involve refurbishment and leasing are commonly employed within the IT sector. However, the effective sustainability advantages that occur as a result of the CE and CBMs remain ambiguous in academic literature. Therefore, this research explores the conditions that allow CBMs offering a laptop to have a lower environmental impact than a Linear Business Model(LBM). This was evaluated based on case studies of three different CBM implementations and one LBM Life Cycle Assessments (LCAs) were performed to determine the environmental impact of each case study. The results showed that a CBM can have a lower environmental impact than a LBM under the right conditions. Furthermore, the production phase of a laptop was determined to be an environmental impact hot spot within its life cycle. The production phase was also the sole lifecycle phase that showed results, in terms of changes in environmental impacts, that were different in practice to the expected outcome based on CBM Theory. This research established that to ensure that a refurbishing and leasing CBM has a lower environmental impact than a LBM, the decrease in environmental impacts that result from the CBMs’ production phase should offset the additional environmental impacts that occur due to extra services and transport that are integral to the CBM. This can be achieved through the implementation of measures that facilitate lifetime extension, such as an increased lease contract duration or refurbishment rate. Additionally, interventions to keep environmental impacts of the service and transport phases to a minimum were formulated.