Circular Economy and its financial challenges


In September 2018 I started my PhD-research. I only knew that I wanted to understand better what will be necessary to enable the connection between investors and sustainable solutions. In developing my research proposal, reading a lot and talking to experts in the field, my research project focussed on the circular economy and building the circular business case. In the more popular way, phrased as the “Circular Economy and its financial challenges.”

After doing 3 years of research next to my full time jobs in financial positions, I’m ready to bring this knowledge in to the world. I’m ready to build my own consultancy practice to accelerate the linear-circular economy transitions. We do not know everything there is to know about this circular economy, but we’ll learn faster together. In co-creation we’ll develop new business models, will measure the circular impact and we’ll find the right investors who believe in this new future as we do.

I invite you all to connect and reach out if you want to know more on the circular economy or want to co-create your circular economy business model together! I’m looking forward to this brighter future together!

Project 1: Business actions to develop a strategic circular economy roadmap[1]

Every company building towards a circular economy will have its own motivation and beliefs to do so. Once a company expresses this ambitions, patterns in behaviour and strategic actions can be recognized. The most important findings are that developments are complex, both internally and externally focussed. Not will you need to put circular economy high on the own company agenda, you will also need to take your value chain partners (suppliers and clients) into this strategic journey. The pace of development of you and your partners together will define the pace of your circular economy achievements. Strategic actions vary from defining goals and measuring your performance to developing value chain steps, which are not available yet (return logistics or datapoints of materials being used). The difficulty in this complex journey from a linear to a circular economy comes with the fact that the most intensive investments need to be made in the manufacturing business. From processing different (and a variety of) materials, redesigning products into modular designs, based on expensive machinery. When machines need adjustments, additional depreciations may be needed which directly have a negative impact on profits. Clients at the other side of the value chain are also learning what’s different in a circular economy and what they should ask for in creating this. Uncertain client requests combined with possibly heavy investments on the supplier side creates an impasse for circular economy scalability.

Project 2: Circular Accounting for product-as-a-service business cases[2]

Together with Circle Economy and the Dutch Association of Accountants (NBA), the Coalition of Circular Accounting was founded. A coalition which aims to find the hurdles in accounting in creating a circular business case. Based on real-life business cases, four different focus group cycles were organised and per case we reported on the findings. Cases varied from product-as-a-service implementation, to upgrading residual streams and measuring impact. From an accounting perspective, we can conclude that the current account structures don’t support a positive evaluation of a circular business case. Obligations in depreciation schemes, the many uncertain aspects to create long-term future value that cannot be expressed in the business case and upfront investments which create longer return on investment terms, actually would have a negative assessment outcome. The risks of business continuity when we run out of raw materials in the near of further future are not taken into account, since these are part of our linear economic system. In that system our environmental impact assumes infinite environmental resources and limited costs of waste. Measuring the circular economy is difficult, still, since we have no frameworks and indicators that simply reflect our environmental impact of circular economy contributions. The indicators that can be measured, differ per sector and are not standardized yet.

Project 3: Circular Economy Handbook: Circular Accounting Chapter[3]

The first three cases, combined with literature review, lead to a book chapter for the University of Exeter, initiated by the Centre for Circular Economy. This CE Handbook combines all academic knowledge from several academic experts in the field. Together with two co-authors who also contributed to the Coalition of Circular Accounting and are doing PhD-research, the insights from an accounting perspective were reflected in this book chapter. The circular economy and accounting are totally different worlds. Where combining these worlds would make both stronger, but specific language and guidelines need to be translated. From the basic principles of accounting, figures from the business cases, together with the hurdles from an accounting perspective, this book could contribute to creating that mutual understanding.

Project 4: Circular Economy: risk assessment model (in progress)

This fourth project will combine the risk perspective from the financial sector with the circular economy principles, which are needed to understand a circular business proposition. This project is still in progress. The aim for this project is to create a risk assessment model, evaluate a business case – reflecting the full potential of an investment case.

Circular pioneers: thank you!

I want to thank everyone who was so open to share his learnings and thoughts on the circular economy, together with the energy he/she has to develop a circular economy further. Together we create the knowledge necessary to create this beautiful new world of doing business. Looking forward to work with you in the coming years together!



Publications (together with Circle-Economy and NBA)

  1. Pursuing the financial reality of the circular road
  2. Asset ownership; liability or key building block for circular construction?
  3. In a circular economy, the proof of the pudding is in the eating
  4. How to Find the Value of Circular Impact in Business
  5. Financial Accounting in the Circular Economy: Redefining Value, Impact and Risk to Accelerate the Circular Transition

Other information

  1. Nyenrode New Year online presentation – academic results Diane Zandee
  2. Publication of the Coalition Circular Accounting findings
  3. Podcast Winstgevendheid is uitdaging voor duurzame economie

[1] The paper of this project is submitted to an academic journal and in the review process.

[2] Based on this project, I wrote an academic paper, based on 2 product-as-a-service cases. This is still in the review process.

[3] The Circular Economy Handbook will be published by De Gruyter around summer 2022