Social Business Models for the Circular

Economy: A Novel Approach for Closing

the Loop of Consumer e-Waste in The
Netherlands
Jeff Kroon - 11237457 - jeffkroon@gmail.com
Hans Pruim - 11368721 - hanspruim@live.nl
Robin de Boer - 11155183 - robindeboer@gmail.com

University of Amsterdam Faculty of Science

Master Information Studies: Business Information Systems

Abstract. New approaches to closing the loop of e-waste are needed. These new
approaches should be grounded in scientific theory to ensure the activation of
consumer e-waste recycling behaviour. This activation is needed because the
current methods of collecting e-waste are passive and require people to take some
effort to recycle their e-waste. Therefore, this paper proposes a new approach to
consumer e-waste recycling by leveraging current business networks and
activating the e-waste recycling behaviour through awareness and education. The
business network can provide the consumer with an e-waste recycling service on
top of current appointments and contact moments. What is important though, is
that the consumer and business network both profit in the new approach by social
and economic incentives. This study shows that combining scientific theory about
e-waste recycling behaviour as an activation mechanism for closing the loop of e-
waste can create an interesting and possibly lucrative social business model.

Keywords. Circular Economy, Social Business Model Framework, Social

Innovation, Corporate Social Responsibility, Theory of Planned Behaviour,
Recycling Behaviour
1. Introduction

A circular economy is one that is restorative and regenerative by design, and which
aims to keep products, components and materials at their highest utility and value at all
times, distinguishing between technical and biological cycles. (Ellen Macarthur
Foundation, 2017) The circular economy is a concept that describes an economy with a
circular material flow using closed loops. Making these material loops closed should
mitigate some of the economic, environmental and social problems caused by the
increasing rate of resource extraction from nature. These issues become more
problematic as the global population grows. Current predictions report an estimated
global population of 9,7 billion people living on earth in 2050 (UN, 2015). This
population enjoys an increase in wealth and will require three times as many resources
than the global population currently use (Godfray et al., 2010). This is a problem in
current linear business models because these models are built upon the concept that
energy and resource use is infinite in both production and consumption (Mont &
Bleischwitz, 2007). Research also shows that our current linear economy discards
almost 80% of resources during consumption (Sempels & Hoffmann, 2013). The
economic value and resources are discarded once they reach a waste disposal, while
many valuable raw materials can still be regained from them through the upcycling of
raw materials in the circular economy. However, even in the city of Amsterdam (one of
the leaders in waste recycling) the upcycling of raw materials is still a rarity (City of
Amsterdam, 2012).
One of these raw materials are the rare metals found in consumer e-waste (mobile
phones, tablets and laptops). The European Union (EU) alone consumes about 25-30%
of global metal production and only produces 3% themselves (Department for
Environment Food and Rural Affairs, 2012), which results in an increasing dependency
on the import of rare metals from countries outside the EU. However, the circular
economy provides an opportunity to mitigate this dependency through the reuse of
functioning e-waste (where it is possible) (Cooper, 2010; Stahel, 2010), but also by
returning the precious rare metals back into the circular economy through the upcycling
of e-waste, instead of burning or discarding it (Darby & Obara, 2005).
For example, mobile phones contain around 13,2% of their weight in rare metals
such as copper, silver and gold (Yu et al., 2010). Conservative estimations made by the
Green Alliance (2015) show that in the UK between 28 and 125 million mobile phones
are still in people's ownership without being used. Estimations like this show that
mobiles phones alone could be a significant source of rare metals if recycled in high
volumes. This is supported by the fact that the average gold density (around 44mg) in
mobile phones is approximately 200 times higher than the average gold density in a
South African gold mine (Takahashi et al., 2009). This shows that there is an
economically interesting opportunity for circular businesses to close the loop of e-
waste recycling and return the valuable rare metals back into the circular economy of
the EU.

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1.1. Problem Statement

In the Netherlands, the infrastructure for recycling e-waste is already present due to
government regulation. E-waste is collected through separation locations across various
municipalities, stores and recycling businesses. These methods require people to take
the effort to go to the various locations. Research shows that there are mental barriers
for closing the loop of e-waste in the Netherlands, as consumers are not fully aware or
just do not care for closing the loop of e-waste (MVO Nederland, 2014). Therefore, it
is necessary to look for new approaches to activate the consumer to recycle their e-
waste back into the circular economy.
An analysis of the interview data and literature found in this paper show that there
are several issues with closing the loop of e-waste in the Netherlands. The literature
about e-waste recycling in the Netherlands shows that the current attitude towards e-
waste recycling is neutral. The norm towards e-waste recycling is not as large as the
Dutch government wants it to be because the population does not feel socially
pressured to recycle their e-waste. They also have the possibility to recycle their e-
waste at various locations, but these are passive methods of collection and are not
regularly used, thus lowering the intent of recycling e-waste. The existence of these e-
waste bins is commonly known under the population, but people usually do not
remember them until they see the bins again. After they remember, it requires too much
effort to bring their e-waste back to the bin and thus the recycling behaviour is not
performed. The current collection method is also not incentivized, thus lowering the
reward for the effort people must make to recycle their e-waste. There are also privacy
concerns about e-waste because most people do not know how to properly transfer and
remove their data from the device to a safe location. People are also holding on to their
e-waste as a secondary device when their primary device breaks down, which results in
a lower intent to recycle the device. The absence of an effective collection of e-waste
has created space in the market for non-government parties that seek to find a solution
for the e-waste collection issue, based on new business models. However, these
initiatives are only sparsely successful. Therefore, it is important to seek out new
business models and approaches to activate the consumer to recycle their e-waste back
into the circular economy. This paper tends to explore these challenges using the
following research questions:

1.1. Research Questions

The problem statement leads to the following research questions:

How can consumer e-waste recycling behaviour be activated to close the loop of e-
waste recycling in the Netherlands?
1. What is currently known about consumer e-waste recycling behaviour?
2. What factors could be used to activate consumer e-waste recycling
behaviour?
3. How would a business model look like that is based on the activation of
e-waste recycling behaviour for closing the loop of e-waste in the
Netherlands?

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1.2. Scientific Rationale

This study shows that combining scientific theory about e-waste recycling behaviour as
an activation mechanism for closing the loop of e-waste can create an interesting and
possibly lucrative social business model. This is done by analysing and combining
scientific theory about e-waste recycling behaviour and social business models. This
paper also discusses the activation of consumer e-waste recycling behaviour, leading to
closing the loop of e-waste in the Netherlands. In the scientific literature, there is
information available on why people act irrationally in the specific case of e-waste
recycling. In addition, information is available why business models for closing the
loop of e-waste to date are rarely successful. By unravelling this literature and
combining the results, this paper proposes a solution that could lead to activation of
consumer e-waste recycling behaviour and thus a successful business model for closing
the loop of e-waste in the Netherlands. This paper also adds knowledge to the field of
the circular economy as this approach to integrating scientific literature into social
business models could possibly be applied in other loop closing contexts.

1.3. Structure of the Paper

The following chapter contains a literature review that follows directly from the
research questions and problem statement. The literature review provides an overview
of the current research into recycling behaviour and e-waste recycling. The next
chapter describes the concepts used in the paper. Next is the research methodology that
describes how and where the data is collected to answer the research question. The
analysis of the data is then combined with the theory to create an advice for closing the
loop of e-waste in the Netherlands. The paper ends with suggestions for future
empirical work to be done.

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2. Literature Review

2.1. E-waste Recycling Behaviour

Perrin and Barton (2001) study the issues associated with the change of behaviour and
the opinions of households with respect to materials recovery. They conclude that the
general public is interested in the recycling issue. It is easy for a consumer to identify
material recovery initiatives and to participate in them. It appears that inconvenience is
a major obstacle in the consumer's attitude towards recycling. Cairns (2005) studies e-
waste recycling in particular. She recognises the ever-growing volumes of e-waste and
started looking for ways to reduce, reuse and recycle e-waste. She concludes that the
development of an infrastructure for collecting e-waste is necessary for effective reuse
and recycling. However, there is an incomplete range of programs available to the
consumer, "ranging from rare municipal or retailer collection events and manufacturer
mail-back services, donation programs and fee-for-service operations "(Cairns, 2005, p
240). The different ways of operating; the cost to the consumer; collecting only a
specific type of e-waste; the final fate of e-waste; and the safety of the consumers data
in the device, are all facets that can limit the participation of consumers. The success of
activating recycling behaviour is dependent on the confidence of the consumers. That
confidence is based on the transparency and the reliability of the system that recovers
consumer e-waste. Zhang and Wakkary (2011) study e-waste recycling behaviour of
Generation Y (1977 -2003). Many of the participants in their research have a positive
attitude towards e-waste recycling. However, the supply of e-waste recycling programs
and the associated information seem to fall short. The authors also analyse the
decision-making process their participants use when selecting a specific recycling
action. On that basis, they opt for an easy way for returning e-waste, that takes into
account the desired goal (donate, sell, give away, recycle, repurpose) of the consumer.
A study of Ramayah, Lee and Lim (2012) among students in Malaysia shows that
knowledge and awareness of the environmental benefits of recycling in general have a
positive effect on the recycling behaviour of students. Communication and education
are important activities, because social norm has the greatest impact on recycling
behaviour of the students, while the convenience and cost of recycling would play a
less important role. However, these findings may reflect the strong collective way of
thinking that prevails in South East Asia, with individual convenience and costs are
subordinate (Hofstede and Bond, 1988).
Based on several papers that studied the e-waste cycle in China (Zhang, Schnoor &
Zeng, 2012) and Brazil (Schroeder et al., 2015), it becomes clear that the collection,
dismantling and recovery of materials is an issue that is relevant all over the world.
Furthermore, it seems that many governments try to find solutions for the challenges
that the collection, dismantling and recovery of materials provide for them. They do
this by creating reversed material cycles through legislation, but these solutions turn
out to be ineffective. Most scientific literature mentions convenience as one of the key
elements in determining consumer recycling behaviour, but many solutions have
trouble to include high convenience.
The solutions that are put forward are in many cases an expansion or improvement
of existing initiatives. This includes: applying social pressure on consumers to recycle;
an improved form of education through new (digital) media (Perrin & Barton, 2001);
an eco-friendly e-waste recycling container that provides easy collection of e-waste for
consumers (Zhang and Wakkary, 2011); the use of social influence and creation of a

5
aversive effect communicated through digital media (Facebook), that can convince
people to recycle, thereby emphasizing on the difference in beliefs and behaviour
(Comber & Thieme, 2013). What is interesting though, is that most of these studies are
grounded on the Theory of Planned Behaviour to explain and predict recycling
behaviour.

2.2. Theory of Planned Behaviour for e-waste recycling

The Theory of Planned Behaviour has previously been applied to the study of recycling
behaviour and is well supported by empirical evidence (Comber & Thieme, 2013). The
Theory of Planned Behaviour (TPB) is one of the best-tested theories of human
behaviour and will also be used in this study to research how consumer e-waste
recycling behaviour can be activated. The theory explains and predicts human
behaviour by the intent and control they have towards a certain behaviour. TPB was
developed to extend the Theory of Reasoned Action (TRA), which looked at the
intention of an individual to perform a certain behaviour (in this case recycling e-
waste). Intention is formed by the attitude towards a specific behaviour, as well as the
subjective norm (Fishbein & Ajzen, 1975). The attitude towards a behaviour is based
on the opinion of the individual whether a behaviour is positive or negative. The
subjective norm is the perceived social pressure from significant others to perform a
specific behaviour. However, TRA was developed with scenarios in mind where the
individual had control over the situation, while there might also be situations where
control is external to the individual. Ajzen (1991) included perceived behavioural
control into the TRA and extended the theory into the Theory of Planned Behaviour to
account for this situational control. The TPB is a basic behavioural theory of human
behaviour and can be applied to various behaviours and settings. However, Ajzen
(1991) states that other contextual variables should be accounted for when studying
specific behaviour. Specific behaviour is defined as part of four elements, namely the
action performed, the target at which the action is directed, the context in which it is
performed and the time at which it is performed. (Ajzen & Fishbein, 2011 p. 29)
Recycling behaviour is one of these specific behaviours where multiple variables
influence the intent and behaviour towards recycling. Research shows that knowledge
about recycling and sustainability increases the attitude towards recycling behaviour,
which includes technical knowledge about which materials belong to which bin (De
Young, 1989; Oskamp et al., 1998), past recycling behaviour (Tonglet, Phillips & Read,
2004), and perceived moral obligation to recycle (Chu & Chiu, 2003) all lead to a
greater intent to recycle. However, inconvenience of recycling such as time
consumption and high effort to recycle have a negative effect on the intention to
recycle (Philippsen, 2015). People are thus more inclined to recycle when they feel it is
the right thing to do, have previous experiences with recycling and if it the situation is
convenient for them to do so. However, Wilson et al. (2017) state that in the case of e-
waste (and specifically mobile phones) the consumer holds onto their e-waste because
of perceived value loss. This is because some consumers hold onto their mobile phone
as a secondary phone' in case the primary phone is lost. They perceive the phone as
still valuable and functional after their average two-year usage time. What consumers
tend to forget is that once the phone is placed in storage it loses its value over time.
Another issue with e-waste is that some devices contain privacy sensitive or
confidential information which can be retrieved if not removed or transferred. (Wilson
et al, 2017) Therefore, perceived value loss and privacy concerns negatively influence

6
the intention to recycle e-waste. These factors are included in the extended Theory of
Planned Behaviour for e-waste recycling (Figure 1).

Figure 1: Theory of Planned Behaviour for e-waste recycling

This model is an extension of the Theory of Planned Behaviour and is based on the
model created by Philippsen (2015) in her study on recycling behaviour. The model
shows that attitude, subjective norm, perceived behavioural control, past behaviour,
perceived moral obligation and recycling knowledge all have a positive effect towards
the intention to recycle e-waste. Inconvenience, perceive value loss and privacy
concerns have a negative effect towards the intention to recycle e-waste. The effects are
based on the scientific literature found in the literature review. However, it is unclear
which variables are significant in the prediction of e-waste recycling behaviour and
how strong this effect is. The model shows which factors influence the intent to recycle
e-waste and therefore are important in activating the consumer e-waste recycling
behaviour.
The literature overview also shows that there is a gap in the knowledge about e-
waste recycling behaviour activation and what mechanisms can be used to activate the

7
behaviour in a successful way. The theory also does not show that this behaviour can
be used to close the loop of e-waste recycling in the Netherlands. Therefore, it is
necessary to investigate the possible approaches to consumer e-waste recycling
activation and how this approach might be used in a business model for closing the
loop of e-waste in the Netherlands. The following concepts will be used in the advice
for closing the loop of e-waste and to show how the concepts are defined in this paper.

3. Concepts

3.1. What are Business Models?

In this paper, scientific theory and concepts are used as guidance to develop a
sustainable business model for activating consumer e-waste recycling behaviour and
closing the loop of e-waste in the Netherlands, but first, a definition of a business
model needs to be established.
Doganova and Muniesa (2015) define business models as a capitalization device.
Business models should not be aimed at illustrating the organisational processes or
practices but should focus on creating and exploiting new sources of value. The true
value of the business model does not lie in the degree of accuracy in which it describes
the current state of affairs, but in its ability to circulate and enrol allies for utilising
these new sources of value. This is called the performative role of a business model.
The business model thus is a device that performs a mode of valuation, through
which objects or ideas can be transformed into assets' that have the power to generate
streams of future revenues (Doganova & Muniesa, 2015). Yunus, Moingeon &
Lehmann-Ortega (2010) describe the value proposition, the value constellation and the
profit equation as the main components of a linear business model. This is in line with
the definition of Bocken, Short, Rana, and Evans (2013). These authors identify the
value proposition, the value creation & delivery and value capture as key components
for business models. The value creation and delivery of value in the value constellation
are the central point of business models. This value generation can take place by
tapping into new markets, introduce new products or find new product/market
combinations. The value proposition is the product or service which is delivered and
what value is represented. The delivered value may take the form of economic, but also
social value. Value capture or profit equation is concerned with the associated cost
structure and revenue streams of the business model.

Figure 2: Business Model Components

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3.2. What is Social Business?

Dacin, Dacin & Matear (2010) describe social business from the perspective of the
social entrepreneur. The authors state that science should not focus on the differences
between social entrepreneurship and "traditional" entrepreneurship. The difference is
the aim and outcome of the mission, which focuses in case of social entrepreneurship
on creating social value, where it traditionally focuses on generating economic value.
Furthermore, the authors suggest that a strong delineation between social
entrepreneurship (SE) as self-contained theoretical domain "may be blurring the
potential and opportunities that the more general context of SE may hold." (Dacin,
Dacin & Matear, 2010 p. 37) This view is also reflected in the work of Yunus,
Moingeon & Lehmann-Ortega (2010). These authors argue that an organisation in the
field of social business is built-up and run in the same way as in the traditional business
area. "It is a no-loss, no-dividend, self-sustaining company that sells goods or services
and repays investments to its owners, but whose primary purpose is to serve society
and improve the lot of the poor." (Yunus, Moingeon & Lehmann-Ortega, 2010 p.311)

3.3. The Social Business Model

Although social business models have many similarities with the traditional business
models, there are adjustments needed to get it working. The need for these adjustments
are also identified in the literature (Yunus, Moingeon & Lehmann-Ortega, 2010;
Bocken, Short, Rana & Evans, 2013). Both papers stress the need for a comprehensive
examination of the relevant stakeholders involved in the social business model, so it
can be made clear that the value proposition and constellation are not focused solely on
the customer, but are expanded to encompass all stakeholders. Furthermore, the main
aim in social business models is not targeted at economic profit maximisation, but
rather on social outcomes. The desired outcomes should be stated specifically and
should be measurable in some way. Finally, the social business model should be
designed in such a way that it enables the delivery partners to capture economic value,
to recover costs and capital, through delivering social and environmental benefits.
According to Schaltegger et al. (2012) one of the biggest challenges in designing
social business models is for the firm to capture economic value for itself through
delivering social and environmental benefits. Yunus, Moingeon & Lehmann-Ortega
(2010) add that this capturing of economic value should not target at financial profit
maximisation, but that it should target only full recovery of cost and of capital.
Combining these two conceptions the social business model should be designed in such
a way that it enables all related delivery partners to capture economic value, to recover
costs and capital, through delivering social and environmental benefits. Yunus,
Moingeon & Lehmann-Ortega (2010) provided, based on above-mentioned
characteristics, the Social Business Model Framework (see figure 3). This framework
takes in the three components which are known from traditional business models and
adds to these the social component.

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 Figure 3: The social business model framework

The Social Business Framework can help social business entrepreneurs to develop
social businesses. The three components from the traditional business models are
discussed in detail. In the next chapter the focus is on the social component of this
framework.
Within this model, multiple partners can work together to create the value
constellation. As the model indicates there is an economic profit equation as well as a
social profit equation. The economic profit equation is self-evident. All the partners
that work together to provide the value proposition to the consumer should have full
recovery of cost, at least. However, there is also the social component. As stated before,
the true ability of a business model is to circulate and enrol allies for utilising new
sources of value. This social component can be a convincing trigger for new partners to
enrol in the model. This trigger is often referred to as Corporate Social Responsibility.

3.4. Corporate Social Responsibility

The question whether organisations must pursue objectives other than profit
maximisation is a question that is visible throughout organisational history (Mohr,
Webb & Harris, 2001). Besides profit maximisation (economic value), organisations
can also aim to create social value. Organisations such as charities, non-profit
organisations are examples of organisations who purely focus on social objectives. In
current times an increasing number of hybrid models arise, where organisations
primarily focus on socially oriented objectives but attempt to reach these objectives
through a model that also produces economic value. Another common form of a hybrid
model is where organisations mainly focus on creating economic value but try to limit
the social damage. This phenomenon is defined in the scientific literature as Corporate
Social Responsibility (CSR).
In the 90's, research on CSR began to increase (Mohr, Webb & Harris, 2001).
Back then, research mainly focused on the different forms CSR can take on. After the
year 2000, the research on CSR increasingly focused on the impact of CSR on the
operating result. Isaksson, Kiessling and Harvey (2013) state the importance of the

10
 concept of CSR, by mentioning Strategic Corporate Responsibility as a synonym.
According to the authors, organisations participate in CSR to improve their reputation,
to reduce market risk or to gain competitive advantage. They further indicate that
organisations that took an approach to CSR as a strategic concept, participated in more
CSR practices and had better financial performance within their research.
So, in the name of CSR organisations participate in initiatives which provide value
to the consumer or aims at environmental benefits. As mentioned earlier, organisations
participate in CSR initiatives for various reasons. The initiatives themselves can also
pursue different objectives. It can be profitable for companies in the long term to take
part in projects that do not directly provide economic value. Connecting a brand name
to an initiative mainly focused on social impact is a frequent phenomenon, look at the
FIFA World Cup or the Olympic Games for example.

4. Research methodology

The theory and concepts in the literature review show that there is a gap in the literature
on the activation of e-waste recycling behaviour. It is also unclear how a social
business model can be created to close the gap of e-waste recycling in the Netherlands.
Therefore, it is necessary to study current social business models that try to close the
gap of e-waste in the Netherlands. It is also necessary to study what the current
limitations and issues are in the activation of consumer e-waste recycling behaviour
and what possible solutions there might be to solve this problem.
The information is gathered through semi-structured qualitative interviews with
stakeholders in the scope of the circular economy in the Netherlands, such as
businesses and experts on the circular economy and e-waste recycling. Various
businesses and stakeholders have been contacted, although due to the limited time
available for this study, only three parties were interviewed (table 1). The data gathered
from the interviews is then used to create an advice for a solution to activate consumer
e-waste recycling behaviour. The advice also contains a proposal for a business model
to close the e-waste loop in the Netherlands, based on the social business model
framework. This business model is then pitched at a network organisation where two
seniors were interviewed to test whether the solution is interesting for businesses that
want to collaborate in closing the loop of e-waste in the Netherlands.

Table 1: Interviews
Company Interviewed Person Type of Interview

Closing the loop Director Explorative

E-wasterace Director Explorative

Implement Circular Director Explorative

Economy

Guidion Chief Social Officer Pitch business model

Guidion Chief Innovation Officer Pitch business model

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5. Case study

The information in the case study has been gathered through qualitative interviews and
is analysed to create a context description for this case study. The interview data is also
used to create an advice for closing the loop of e-waste in the Netherlands by
interviewing experts in this field and combining this with the scientific theories and
concepts found in the previous chapters.

5.1. The Circular Company

The Circular Company wants to build an e-waste recycling plant in the Netherlands.
They are currently in the financing phase and soon will need large volumes of e-waste
to get their plant running continuously. Their current collection method is based on
passive collection methods through various partners, where people can bring their e-
waste. The Circular Company made agreements with some partners to provide small
incentives, like a bread in return for e-waste. However, this is not a sustainable and
successful method for collecting e-waste, as the amount of e-waste collected is
insufficient. This is the Circular Company is looking for innovative business models to
ensure continuous e-waste collection for their new plant and closing the cycle of e-
waste in the Netherlands. However, there are already some initiatives like the e-
wasterace and Closing the Loop that tries to approach the problem in novel ways.

5.2. E-wasterace

the e-wasterace is a social business that tries to do something about the problem of
recycling e-waste. The e-wasterace tries to do this by integrating social principles into
the business model of education for kids, creating awareness with consumers and
making it more fun and attractive to recycle e-waste. However, the current problem is
that people need to take the effort to go to a recycling bin for e-waste, but consumers
do not think continuously about recycling their e-waste and tend to forget that until
they see an e-waste bin. Their e-waste recycling awareness should be increased through
actively getting the consumers attention.
The approach of the e-wasterace is to increase awareness among young children in
primary school by providing education about e-waste recycling. They collaborate with
local governments for funding and the logistics for the recycling of the collected e-
waste. They then encourage the kids to gather e-waste in their local community through
an e-waste race'. The kids can win a prize for their class if they collect the most e-
waste in their local area. The success of this initiative is in this active collection method.
The consumers who give the kids the e-waste show a higher intent to recycle once a
social factor such as kids collecting e-waste for a prize' is introduced in the recycling
behaviour. The e-wasterace also uses their website to support the initiative by
providing a waste collection function on the website with time and location service. It
is a simple and easy way to show the kids that you have e-waste and they can collect it
for you. The e-waste race is a successful social business model for closing a small
portion of the e-waste cycle, but there are also other initiatives that look further than the
Netherlands and its consumers.

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5.3. Closing the Loop

Another example is Closing the Loop, which focuses on collecting e-waste from Africa
and Asia instead of the Netherlands. In the past 50 years, large volumes of e-waste and
second-hand mobile phones have been dumped in these areas. This is the reason why
Closing the Loop is working together with their business network to upcycle the e-
waste (in this case specifically mobile phones) back to the European Union. Their
social business model revolves around creating jobs and a cleaner environment in the
areas where they collect e-waste. This is a successful business model, as they create
sustainable jobs, provide education on sustainability and clean up the e-waste in the
areas where they operate, while still making a profit of the upcycling of e-waste back
into the circular economy.
This example shows that current business networks can be used in the recycling
stream of e-waste. Closing the Loop uses their business networks from selling second-
hand mobile phones in Africa to collect the e-waste and return it back to the EU. The
problem of e-waste is significant in Africa and Asia, as large numbers of functioning
and non-functioning phones were dumped there. The problem and the current business
network provided an opportunity for Closing the Loop to create a sustainable social
business model in these areas. In Africa and Asia, there is no limited regulation for e-
waste recycling, while in Europe there is strict regulation for the collection of e-waste
and mandatory e-waste collection bins. The whole infrastructure to collect and recycle
e-waste is present, but consumers rarely make use of it.
The business model for Closing the Loop is to recycle old phones that are not
functioning anymore, selling phones that are still functioning and giving them a second
life. They also collect functioning phones by providing organisations with a life cycle
business model for their e-waste through services provided by Closing the Loop. The
biggest partner for Closing the Loop is Umicore, which collects e-waste such as mobile
phones and upcycles them into rare metals in an efficient and effective process.
However, it is unclear what happens to the rare metals after it has been processed by
Umicore.
The business model of Closing the Loop also has a social factor, as they provide
value generation for small business networks in Africa that collect the phones for them.
The entrepreneurs there use their networks even further to collect the phones. Closing
the Loop provides them with the business knowledge and supply chain management.
They create sustainable jobs in the local communities through this value chain.
Closing the Loop also provide CSR value to corporates that want to recycle and
reuse their old new' phones for a second lifetime. They support organisations in
creating a sustainable mobile device policy. They do this through service and
knowledge sharing. They want to make the corporation's phone usage circular in this
way because most corporates have no idea on how to become more circular.

6. Analysis and Results

The passive method of e-waste collection does not work effectively and people should
be actively approached to activate their e-waste recycling behaviour. Consumers are the
hardest to convince in the case of circularity and e-waste. Consumers are ignorant and
say that they are sustainable, but are not taking the real actions to become sustainable.
Their ethics do not relate to their behaviour. It is because people look for the best value

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for their money and that is most of the time a financial incentive. This is a large group
and needs more effort to convince of accepting something else. This is because the
amount of effort needed for sustainable circular business models with companies is far
less than the effort needed for consumers. One thousand employees versus one
thousand consumers are much easier to get activated because companies have policies
that employees should abide by. Consumers only want the best value, while
organisations want to show their stakeholders that they provide value. If other people
recycle their e-waste and the mass of the people see that they are doing it, then they
will probably follow this behaviour through social pressure.
Business models like that of the e-wasterace are not sustainable, as the business
model of the e-waste race is dependent on government funding and the availability of
schools. What the e-wasterace does is look for local partners that are interested in the
upcycling of e-waste and try to get funding for the business model through that.
However, smaller municipalities do not have enough budget and there are fewer
schools that can commit to the project. Smaller municipalities in a cluster do not work
as well because the communication between the municipalities is not sufficient.
Another issue for this business model is the funding because the model relies on
government funding and the actual value of the e-waste is not returned to the business
itself, which is why it remains a small operation. However, the e-waste race does
educate the kids in recycling behaviour and thus might have a value return in the future
because of the diffusion of knowledge through these kids.
In the e-wasterace value proposition, they want to show that a sustainable business
can create social value through education and recycling awareness while providing
economic value. This is in the form of recycling e-waste that otherwise wouldnt be
recycled. However, they cannot provide the consumer with actual value, as the value of
the e-waste is too low to consider. They do show that their mechanism is an effective
way of collecting e-waste from consumers for recycling purposes, although it is still
just a very small percentage of the total e-waste cycle in the Netherlands. The method
shows that people are more willing to recycle their e-waste if there is a social aspect to
the recycling behaviour and if the recycling behaviour has a low boundary of effort.

6.1. Solutions for recycling behaviour

To increase the recycling behaviour of consumers, it needs to be very easy to deliver

and recycle products. There is no daily e-waste to recycle, so it needs a different
collection scheme than for example glass or paper. There are initiatives of various other
businesses like food delivery and package delivery that provide and extra service to
collect your e-waste during the delivery moment. However, people need to have the e-
waste ready in these cases and the time-frame of contact is very short.
Another issue is the incentive because one euro per phone would not be feasible
for the consumer to recycle their e-waste and a higher incentive would not be feasible
for social businesses. It would be more interesting to look for a social purpose, where
for example one euro is donated to a charity that relates to all consumers. One way is to
first create awareness for this good cause and then ask the consumer if they would like
to donate. However, this requires the attention of the consumer to make it work.

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To sum up the issues and solutions:

Issues
Attitude towards recycling e-waste is neutral
Social pressure is not high enough
People have the control to choose if they want to recycle through passive
methods
People do not often recycle e-waste
People know about the passive recycle methods, but are not continuously
thinking about it
Passive methods are not sufficient enough to collect all e-waste
It is inconvenient to bring the e-waste to the recycling points
People have issues with giving away e-waste without a proper incentive
People hold onto their mobile phone as a secondary phone
There are privacy concerns about e-waste recycling
There needs to be value creation throughout the value chain

Solutions
Create social business models for the upcycling of e-waste
Provide education and awareness through these business models
Make it easier and more fun for people to recycle e-waste
Provide social incentives as a mechanism to activate recycling behaviour
CSR value can be created for organisations through circular business models
and upcycling e-waste

7. Advice

The advice for the Circular Company is to build a social business model around the
problem of upcycling e-waste in the Netherlands. It is necessary for this business
model to activate the consumer's intent to recycle and to actively approach the
consumer. This is done by getting into the house of the consumer through current
business networks that are already going to consumers. These networks should contain
people that are knowledgeable of e-waste recycling and should be capable of educating
the consumer to increase e-waste recycling awareness. These people should also be
capable of relieving the concerns about privacy issues and have the possibility to take
the e-waste with them. There also needs to be a large enough time window to be able to
educate the person and convince the consumer that they are helping a good cause.
Which good cause this needs to be investigated, as it should not be an ideological good
cause, but one that speaks to all people. The value created through the collection of e-
waste should be shared across the value chain to make the business model sustainable.
The rare metals from the upcycling factory should also be returned to the local
economies where the e-waste comes from to truly be circular.
This proposition has been pitched at the network company Guidion to test the
business model as an example and to see if the proposition is feasible and viable.
Guidion provides services to their partners by leveraging their expert network towards
the service appointments of their partners. These partners include Ziggo, Vodafone, T-
Mobile, KPN, XS4ALL, Eneco and others. Their expert network includes self-
employed engineers that work together with Guidion to fill the appointments created

15
through the partners of Guidion. They have filled around 600.000 appointments in
2016 for their partners, which means that there are around 600.000 contact moments
with consumers where e-waste can possibly be collected. The average timeframe of
these contact moments is around 30-60 minutes, which is a long enough time to
educate the consumer on e-waste recycling awareness and to possibly activate their
recycling behaviour. This proposition makes it easier for the consumer to recycle their
e-waste and possibly more fun, as the time that the expert is in the house is spent on
educating the consumer for a better world. This could possibly be extended with other
social incentives for the consumer, such as donations to a good cause.
The feedback from Guidon was very positive and resulted in the creation of an
experiment plan to try and see how viable and feasible this proposition is. However,
there are some remarks on the value creation in the value chain. For starters, the
consumer must be made aware of this e-waste collection service before the expert gets
into the house. This increases the awareness of the consumer and possibly increases the
intent for recycling behaviour, but it also makes sure the expert does not surprise the
consumer when he asks them for their e-waste. Secondly, the expert is doing all the
work in this business model, as they must educate the consumer, collect the e-waste
and bring it back to some logistical collection point. This work should be rewarded
financially and thus the Circular Company should give back some of the profits it
makes from the e-waste in a certain form. Guidion proposed some examples such as
creating a shared budget where experts in the Guidion network can make use of to buy
training or create some sort of event for the experts. Another example would be to
quantify the amounts that each expert or Guidion brings in and pay them back the
relative amount in profits. However, they also propose that some experts might do this
for the social benefit and for them there should also be social incentives like donations
to a good cause. Guidion itself is not interested in benefitting from this business model
themselves, as they profit from the happiness it might create for their experts and the
CSR value it creates for their partners. Guidion wants to collaborate to create impactful
organisations that not only do good or create value but achieve both in a sustainable
and socially impactful way.

7.1. Next steps in the circular economy

A big step that needs to be taken is that of the transition towards the circular economy.
Current business models need to change towards more circular and Product as a
Service based propositions. In such a proposition, the supplier is responsible for the
management of the product and thus the product is seen as an asset for the organisation.
This requires the supplier to change the design of the product to manage the assets as
effectively and efficiently as possible, which directly benefits the consumer. However,
this transition towards a truly circular economy requires the collaboration of various
stakeholders and actors within the circular economy to make their business models
circular. If this business model of upcycling e-waste is successful, it might also be
interesting for suppliers (and possibly the partners of Guidion) to collaborate with the
Circular Company and look for new approaches to making their businesses more
circular.

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8. Future Work to Be Done

Due to the explorative nature of this paper, it is necessary for the future to empirically
test the theory and business model. This explorative study shows that there is an
opportunity for the Circular Company to collaborate with Guidion and their experts to
activate consumer e-waste recycling behaviour and close the loop of e-waste in the
Netherlands. However, it is necessary to experiment with this approach in various ways
to see if the business model would be successful. First, future research should focus on
validating the Theory of Planned Behaviour for e-waste recycling in a quantitative
study. By doing so, the significance and strengths of the various factors can be
validated to see which ones have the most effect on the intent to recycle e-waste. This
study should be done on a broad range of consumers and not only students.
Second, the efficacy of a social incentive could be further researched in the context
of e-waste. An empirical study could focus on which kinds of incentives would be
interesting for consumers in exchange for their e-waste. Finding out which social
incentives are the most interesting could lead to higher intent to recycle e-waste. This
study should look for social incentives that are created through social networks, where
all parties again benefit from this arrangement.
Finally, the proposed business model and the principles behind it should be
experimented with in various other recycling contexts. This could lead to the
identification of other business models that can close loops in the circular economy.
Most importantly is that these business models could be used in other countries as well,
where social incentives are much more needed than in the Netherlands. Creating win-
win situations is key to the success of these high impact business models, as every
stakeholder and actor in the business model should benefit from the profits; either in
economic or social value.

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