Circular economy strategies and business models resonate with co-ops in Quebec

Co-ops can help embed of circular economy practices in a strongly sustainable manner, says a study from HEC Montreal

A new study by HEC Montreal business school provides insights into circularity strategies of co-operatives in Quebec.

The report, Circular Economy and Cooperatives – An Exploratory Survey, draws on an exploratory database of 165 co-operatives, 48 of which responded to a survey carried out by the team from HEC Montreal.

The researchers aimed to find out which strategies and business models co-operatives pursue; how they view their advancement in relation to these strategies and business models; how strategies and business models are related to types of co-operatives and sectors; and what co-operatives need to advance circularity.

The analysis of the responses suggests that the circularity strategies and business models resonate with co-operatives across strategies and business models. Forty-nine per cent of respondents indicated more than one circular economy business model fitting their approach. These include ecodesigners who develop, produce, and sell products made from recuperated materials; mutualisers who coordinate the sharing of tools and products with a view to increasing their use within a community; second-hand shops; logisticians that offer waste management; repairers who offer their services to extend the life of a product; recoverers who offer a service in the collection, sorting, and preparation of ‘waste’ materials so that they become reusable again; transformers who offer industrial services by creating new products out of waste; craft hubs which offer citizens access to tools and training for repairing and making products in a workshop; and reduction at the source businesses, who offer a service based on the elimination of non-essential and harmful materials and in the value chain.

Fifty-five percent (n = 26) of respondents identify with the mutualiser model as their primary business model, followed by 8% for reduction at the source and logisticians, respectively, and 6% for consultants in circular economy. Another 8% of respondents identify with the reduction at the source models and logisticians models. Examples of reduction at the source businesses surveyed include a consumer co-operative and a solidarity co-operative focused on bio products and the sale of products in bulk, a producer co-operative offering bike-powered delivery services, and a worker co-operative farm offering certified bio products. Logisticians include solidarity co-operatives, three of them organising the availability of locally and ecologically produced agricultural products as well as one co-operative focused on waste reduction (helping restaurants and their clients to avoid plastic waste when ordering food).

Other examples provided in the study include the solidarity co-operative Centrale Agricole, which brings together urban agricultural producers (including several co-operatives) to share material and immaterial resources on its site in Montréal. The research found that the co-operative “actively fosters circular synergies between its members”. For example, the ‘waste’ of a coffee roaster on its premises provides an input for the mushroom cultivation of another organisation on its site.

Another case study mentioned in the research is Sollio Cooperative Group, which has been working to improve how its deals with organic ‘waste’. Sollio formed a partnership with an enterprise specialising in insect farming, which produces proteins and flour from insects fed by recuperated organic waste. The initiative led to a 56% reduction of organic ‘waste’ sent to the landfill, and has reduced trucking trips, costs, and GHGs emissions.

Another co-operative featured as an example, Retournzy, offers a turnkey service for the rental, collection and washing of returnable containers for restaurants and lists circularity among its values: “we encourage a circular economy of sharing reusable containers as an alternative to single-use containers” it says.

The study notes that a circular economy strategy and business model discussion among co-operatives, small and large, would be relevant and supported by the sixth co-operative principle of co-operation among co-operatives. It also points out that a co-operative might not use, or not even have heard of circular economy, but it may still implicitly advance the goals of a circular economy.

“We interpret the mutualisation at the core of the co-operative model as a deep, implicit support potential for circular economy,” reads the paper.

Despite being prone to adopt circular economy approaches due to their business model, co-operatives remain constrained by policies that support the linear economy. “We argue that co-operatives need to move towards explicit goals and strategies to ensure and sustain social and ecological ‘circular’ impact, and to avoid mission drift towards the linear model,” adds the paper.

The study concludes that while “there is a structural link between the co-operative model and circular economy, this is not a matter of either/or (circular/no circular).” The research also argues that co-operatives need to move towards explicit goals and strategies to ensure and sustain social and ecological “circular” impact, and to avoid mission drift towards the linear model, in line with the seventh co-operative principle of co-operation among co-operatives.

In light of these findings, the paper suggests practical recommendations to advance a co-operative embedding of circular economy in the light of current needs: support for the integration and improvement of circularity strategies and associated socio-technical questions, support with business model development and finance, as well as promoting circular economy education and enabling peer exchange. Furthermore, argues the paper, because co-operatives have greater longevity than private enterprises, advancing their circularity can be expected to have a more lasting effect.

The study forms part of a larger project of creating a collection on circular economy and co-operatives which started in 2022. The online collection includes a toolbox section, which provides co-operatives with tools to advance their circular strategies; a knowledge section, which provides access to research articles and policies, and an examples of circular co-operatives section, which showcases co-operatives that are pursuing circular strategies.