Material Reuse in Buildings: Implications of a Circular Business Model for Sustainable Value Creation

Buildings are responsible for a third of global greenhouse gas emissions. A large proportion of their life cycle impacts derives from emissions embedded in materials. Material reuse has the potential to reduce these embedded impacts, since reused materials often have smaller environmental footprints than primary materials. Institutional settings and the structure of the building sector pose multiple barriers to businesses developing and commercialising products based on reused materials. Although material reuse is claimed to create multidimensional values for several stakeholders, the implications on value creation are still insufficiently understood and considered in decision-making. This study presents a business model developed by a pioneering Scandinavian company offering three building products based on reused materials – windows, wood cladding, and concrete. Using a multi-methods approach, the study investigates and discusses implications of the business model in creating value for the firm, value chain partners, customers, and the environment. Findings indicate the business model has significant potential to ensure that reuse is price-competitive with linear production practices, to offer value for customers and partners in the value chain network, and to provide significant reductions in environmental impacts. If the business model were to be upscaled, implications for value creation at industry and macro-economic level should be further investigated.