The Circular Rebound Tool: A tool to move companies towards more sustainable circular business models

Abstract

Companies design circular business models through experimentation. However, most companies do not consider the environmental impact of their new business model ideas during experimentation, an iterative phase of high uncertainty. Previous research shows that companies typically use ‘rules of thumb’ to estimate environmental impact in this stage due to limited time and reliable information to guide decision-making. This might prevent innovators from detecting unintended rebound effects that offset positive environmental gains of new business models. To mitigate this and let innovators think more profoundly about rebound effects during the circular business model experimentation phase, we propose an evidence-based business model ideation tool, the Circular Rebound Tool, designed around lifecycle thinking, the zero-waste hierarchy, and increased rebound effects awareness. The tool's development follows the design science research method, undergoing continuous improvement through 15 workshops. Our tool can help business innovators gain insights into the environmental impact of their early-stage business ideas.