Article

Risk Sharing in the Circular Economy

Abstract

Activities and research in recent years have clearly shown that the emergence of the circular economy is an economic, rather than only environmental approach (Yuan, 2006; The Ellen MacArthur Foundation, 2012, 2015). Consequently, it becomes crucial to first consider its unique risks and promises for business and economics, and then propose foundations for its adoption as a viable alternative to traditional models. The goal of this article is to research how circular-oriented small and medium-sized enterprises (“SMEs”), due to their unique values and principles, would be able to share risks related to market activities. For this research, six representatives from various circular-oriented SMEs were interviewed based on several relevant risks related to their business models, and they described how they mitigate these risks. The findings revealed a common pattern which was also examined by experts in the circular economy. The results show that a network structure, where companies from related industries and who share a common goal, work together and actively engage customers in companies’ activities, can more effectively share risks. These networks need to be highly transparent and based on trust rather than purely on formal contracts.

Keywords

circular economy, risk sharing, SMEs

How to Cite

Wojcik, A., (2017) “Risk Sharing in the Circular Economy”, Science for Sustainability (S4S) Journal 1(1). doi: https://doi.org/10.53466/IVUY4239.S4SWOJ

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Authors

Alicia Wojcik (Vrije Universiteit Amsterdam)

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Creative Commons Attribution 4.0

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This article has been peer reviewed.

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