Circular economy: successful business model for profit and purpose is being amplified through a circular consulting service

This is a case study of a successful circular economy business model that captures new value, such as jobs or profit, through the reduction of destroyed value (e.g. ineffective return handling leading to new products been thrown away) by offering logistical solutions and prolonging products’ life cycles through reparation. Practical experiences about implementing circularity are shared externally through the company´s own consulting business.

GIAB is a public limited company active in the development of the circular economy. Within three of their business areas, GIAB offers logistics services for return handling, large-scale repair service of electronics and furniture as well as new distribution channels for repaired goods. In their business area of commerce, GIAB offers sustainable handling of reclamations and returns for the quickly growing e-commerce industry that has not developed efficient ways of handling returns, leading to a lot of value being destroyed. Returns are handled at GIAB, damaged products are repaired in-house, and all goods are resold through GIAB´s sales channel “Returhuset” (Returnhouse), which is a shop, both online and physical, for returned and repaired products. The profits are shared among GIAB and their e-commerce customers. GIAB´s service for the insurance industry entails a circular indemnification process, for which GIAB collects damaged products from insured private persons, repairs the damage, and sends them back. Since only 30% of the claimed products are handed in by the policy holders, the insurance companies, that previously automatically paid for damaged products, save a lot of money which is shared with GIAB. In the business area is Circular Office, GIAB´s concept is to offer and resell complete office equipment consisting of reused electronics and reused furniture to organizations. 

An in-house developed software, called the GIAB Circular Platform, allows for the traceability and data collection of a product´s logistical journey, including different materials inside a product and which parts of the product have been repaired or renewed. Using the product data, GIAB produces detailed sustainability reporting for their customers, including the amount of saved CO2, water, critical minerals and metals resulting from the prolonged product lives. With GIAB Consulting, their fourth business area, the company is shaping the circular economy with their practical and technical expertise (i.e. Circular Platform). GIAB contributes to the development of a EU product pass.  

GIAB´s unique business model is very successful, and the company is expanding in the Nordics and within Europe. Since 2021 GIAB is listed on NASDAQ First North Growth Market.  

When GIAB was founded in 2009, circular business models and environmental sustainability were not yet core business principles. The founder designed a business model that would save the insurance industry and e-commerce money whilst creating jobs for GIAB. In 2012, GIAB´s environmental coordinator realized that their business model was circular in nature, and that their services have a positive environmental impact by prolonging the products’ lives and inhibiting the production of new products. Around that time, the position of a sustainability manager and COO had been created simultaneously, making sustainability an integral part of the company. 

While contributing to environmental sustainability, GIAB increased their social sustainability by re-integrating unemployed people into workforce and providing them with training. In their repair services, GIAB created 20 jobs for unemployed people from the Swedish Public Employment Service that now have been integrated into GIAB. Moreover, Returhuset offers products at cheaper prices and therefore is attractive to people with smaller budgets. Returhuset is currently broadening their communication to attract more environmental conscious customers through the message that reusing goods is both smart for the environment and the wallet.  

Internally, GIAB is currently working on how to reach 100% fossil free transports.

GIAB´s sustainability impact goes beyond their company´s core business. GIAB´s goal is to become a catalyst for circular economy and fossil-free businesses. With their expertise on data generation and hands-on logistic processes, GIAB Consulting is contributing to a more resource- and climate-efficient production through supporting organizations in their transformation into circular and sustainable businesses. GIAB´s efforts in developing greater transparency for reused products aims to facilitate changes in consumer behaviour toward buying more reused goods. Many customers are currently wary as they think reused products are unhygienic and insecure from a quality perspective. On a policy level, GIAB is active in the Delegation for Circular Economy in Sweden and advocates for legislative change to create the best conditions for reusage in Sweden. More favourable conditions would have a trickledown effect on SMEs that currently do not have the manpower and resources to become more circular.

GIAB tries to be best-in-class in sustainability and circular economy, and through their consulting business area they are keeping themselves up to date.

GIAB conducts sustainability practices in the business areas Re:Commerce, Circular Insurance, Circular Office and GIAB Consulting. Their activities can be categorized according to these areas, as seen below:

Pathway maps represent the sequence businesses followed to implement successful sustainability practices and identify emerging ones within firms. The pathways also reveal the diversity of actors that begin to form sustainability enabling ecosystems for businesses to adopt, deploy or test sustainability practices.

GIAB´s sustainability practices are enabled by a number of key actors, policies, resources, and partnerships:

GIAB has a number of barriers that hinders or stall growth or progress on their sustainability work: