Synergizing Circularity and Social Impact

Results from the SocialECOnomy Erasmus+ Project and the Inclusive Loop Framework

Implementing circular economy practices within the social economy is a powerful strategy for driving both environmental sustainability and social justice. This synergy was the focus of the Erasmus+ project SocialECOnomy, which demonstrated how social economy entities (SEEs) in Austria, Italy, Germany, and Poland can transition toward more resilient and regenerative business models.

While traditional circular economy models primarily emphasize environmental and economic gains, the social economy centers the social dimension within their businesses. In order to drive a socio-ecological transformation, environmental and social goals need to go hand in hand. Social enterprises are uniquely positioned to bridge the gap between environmental and social needs. Hence, adopting circular practices allows them to strengthen their impact. The Inclusive Loop Framework (Figure 1, see below) illustrates this synergy, showing how restorative resource practices and social objectives can mutually reinforce one another.

The idea behind the Inclusive Loop Framework is that three different social impact pathways can be connected with the circular 9R-strategies developed by Potting et al. (2017). To further visualize circular strategies, Bocken et al. (2016) developed a framework, which categorizes them into Narrowing, Slowing, and Closing resource loops. They can thus be clustered into three groups:

• Narrowing Loops by refusing, rethinking and reducing, showing the biggest circularity potential. Essentially, this means reducing the demand for virgin raw materials as well as resource and energy consumption.

• Slowing Loops by reusing, repairing, refurbishing, remanufacturing, and repurposing. This implies extending the lifespan of products.

• Closing Loops as the last resort by recycling and recovering materials.

The Inclusive Loop framework categorizes the work of SEEs into the following Social Impact Pathways, while acknowledging that they can fit into various models simultaneously:

• Provider Model: SEEs sell low-cost, essential goods or services to marginalized or low-income groups.

• Employer Model: SEEs directly hire and train marginalized populations (e.g., people with disabilities or long-term unemployed).

• Buyer Model: SEEs support vulnerable communities by purchasing materials, products, or services directly from them.

  
  

When merging the circular strategies with social impact pathways, models such as the “slow employer” are created. This model could for instance imply that social enterprises employ marginalized people to repair used products and therefore, contribute to the extension of product lifetimes.

Figure 1. The Inclusive Loop Framework. Reproduced from the report: "Inclusive Loops: The Crucial Role of Social Enterprises in the Circular Economy" (2023).

During the SocialECOnomy project, the participating social economy entities were encouraged to reenvision their social missions according to these models. By utilizing a Design Thinking approach, they were asked to design SMART implementation plans for their businesses that maximized added value and aligned with their social and environmental goals. During the process design thinking tools like "How Might We" and "Lotus Blossom" were used.

In Poland, Pałac w Małkowie worked on Narrow/Slow Employer measures, focusing on significant food waste reduction within their hospitality services. Italy’s Al Reves - Sartoria Sociale identified as a Narrow Employer by developing structured sorting guidelines to reduce textile waste. In Germany, Jikoni adopted a Narrow/Close Employer and Provider model by promoting vegan meals and establishing ways to recycle byproducts from their juice production, such as tamarind pulp. Finally, the Social Impact Award (SIA) in Austria became a Narrow Provider, creating comprehensive Sustainability Guidelines to ensure international events within their network are conducted in a circular manner.

These case studies illustrate that when social enterprises align their community-focused missions with circular strategies, they prove that a sustainable future is built on creating a restorative society where environmental protection and social inclusion go hand in hand.

Synergizing Circularity and Social Impact: To learn more about the project, its methodology and results, find the Circular Business Model toolkit on our website: https://www.thinkubator.earth/en/socialeconomy

Written by Lotte Lehtovuori

Sources

1. Bocken, N. M., De Pauw, I., Bakker, C., & Van Der Grinten, B. (2016). Product design and business model strategies for a circular economy. Journal of industrial and production engineering, 33(5), 308-320.

2. Potting, J., Hekkert, M., Worrell, E., & Hanemaaijer, A. (2017). Circular Economy: Measuring Innovation in the Product Chain.

3. TechnoServe, IKEA Social Entrepreneurship, and The Global Alliance for Social Entrepreneurship. (2023). Inclusive Loops: The Crucial Role of Social Enterprises in the Circular Economy.

Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or OeAD-GmbH. Neither the European Union nor the granting authority can be held responsible for them.