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The Circular Service Platform

Circular Service Platform
Author: 
Elisa Achterberg (Sustainable Finance Lab, Circle Economy)
Publication Date: 
April, 2019
Country: 
Netherlands

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In a circular economy, assets are no longer sold. Rather, the assets are collectively maintained by a network of stakeholders involved in the ongoing functioning of the assets - the circular service (CISE) network. This shifts the responsibility for the functioning of an asset from the end-user to the network, thus stimulating the re-design of business processes to optimize the life-cycle performance of the asset.

A CISE network however requires unprecedented levels of cooperation and coordination between participants, leading to high administrative costs and the need for trust and transparency in the network. CISE networks are a totally different way of doing business, requiring different financial, legal and governance structures. Would it be possible for assets to be owned and procured by a network that creates value from them? Could this, simultaneously, reduce administrative costs? Could cashflows generated by the asset be redistributed to the network, leveraging the sharing of risks and returns?