“Reduce, Reuse, Recycle.” It’s a commonly repeated tagline, encouraging individual consumers to take action to reduce the waste they create and thus the emissions linked to a disposable culture. It represents a cornerstone of environmental movements and a rallying cry of activists, who point out, for example, that the average U.S. consumer produces 110 pounds of single-use plastic waste in a year, or nearly 8,000 pounds in their lifetime. If every person managed to reduce, reuse, or recycle some portion of this massive amount, it would mean far less waste in the landfill (or the ocean). In this view, it is an inherent consumer responsibility to minimize consumption of plastics and then take care with the disposal of any plastics being used.

Assigning such responsibility certainly seems reasonable. But is it? In reality, even if every consumer did their absolute best to reduce, reuse, and recycle their consumer plastics use, it would be just a drop in the proverbial bucket of plastic waste. The top 100 plastic waste–making companies are responsible for more than 90 percent of the world’s single-use plastic waste, in amounts that reached 130 million metric tons in 2019 alone. Furthermore, 98 percent of corporate-originating plastic waste was not recycled once before being sent to landfills.

Such a scenario requires a reconsideration, and many companies accordingly have begun to acknowledge their own responsibilities, as they relate to their material use and disposal. A prominent approach to reducing plastic waste production involves creating what is known as a circular (as opposed to linear) business model. In a linear model, products have a singular life: They are manufactured, used, and then disposed of. A circular model instead explicitly seeks ways to keep products in use and extend their lifespans by finding ways to reuse or recycle them. Used and surplus products get reintroduced into the material economy rather than being thrown away. Yet the intense challenges and expensive (in terms of resources and time) commitments required for companies to develop a different infrastructure and design products suited to more sustainable material management often limits such efforts.

The challenges are not enough to stop IKEA though. It has committed to becoming entirely circular by 2030. That means that all of its nearly 10,000 products will be made of only responsibly sourced renewable or recycled materials. Furthermore, all of them will be capable of being reused, repaired, refurbished, or recycled after their initial lives.

These are lofty goals, and not ones that other companies have achieved yet. In this sense, IKEA is creating its own plan for circularity from scratch. Thus far, its efforts have involved incorporating circularity into every aspect of its product production. In the design phase, IKEA considers eight circular design principles to ensure the ultimate products will be easy to repurpose at the end of their lives. For example, by designing products that are simple to repair, it prevents them from being thrown away simply due to superficial or minor breaks.

As part of this initiative, the company also has designed and produced more than 7,200 different types of spare parts to make it easier for customers to repair their furniture and extend the lifespans of their products. Then regarding material sourcing, IKEA also seeks raw materials that are responsibly sourced or recycled. Thus for example, it progressively has been replacing metal with engineered wood to reduce the materials’ climate impact and waste.

Furthermore, IKEA prepares for end-of-life considerations, after materials have left its control. In some retail locations, IKEA offers buy-back services, taking back used furniture from consumers who no longer want it and then reselling the secondhand item to other customers as-is. For the long term, IKEA is developing a comprehensive infrastructure that will enable it to assess used products’ condition; determine whether they should be reused, refurbished, remanufactured, or recycled; take the appropriate action; and then put the product back to market.

While IKEA thus appears to be paving the way for the circular economy in the affordable furniture market, it is not the only company developing circular practices. Adidas, for example, has introduced the UltraBoost DNA Loop shoes, with the intention that customers would return them once they no longer needed them. Each pair of shoes is made with a single material that can be recycled. Thus, each returned pair becomes the source material for another pair—as signified by the shoes’ “Loop” branding.

Discussion Questions:

1. Why is a circular business model beneficial?
2. What other sectors could benefit from circular business models?
3. What challenges do companies face when shifting to circular business models? How can they address them?

Sources: Michael Corkery and Somini Sengupta, “Here Is Who’s Behind the Global Surge in Single-Use Plastic,” The New York Times, May 18, 2021; Jason Breslow, “20 Companies Are Behind Half of the World’s Single-Use Plastic Waste, Study Finds,” NPR, May 18, 2021; Atalay Atsu, Céline Dumas, and Luk N. Van Wassenhove, “The Circular Business Model,” Harvard Business Review, August 2021, https://hbr.org/2021/07/the-circular-business-model; IKEA, “Transforming Into a Circular Business,” https://about.ikea.com/en/sustainability/a-world-without-waste; Judith Magyar, “IKEA on Circular Economy: Consumer Behavior Must Change,” Forbes, October 25, 2022; Adele Peters, “IKEA’s 8 Principles for Circular Design Show How to Build a Business Based on Reuse,” Fast Company, September 10, 2021; IKEA, “Becoming Climate Positive,” https://about.ikea.com/en/sustainability/becoming-climate-positive; IKEA, “Fix, Upgrade, Pass On – How We Enable Circular Services,” https://about.ikea.com/en/sustainability/a-world-without-waste/circular-services; World Economic Forum, “These Four Companies are Embracing the Circular Economy,” EcoWatch, December 29, 2020.