New data-led approach shows how electronics reuse cuts emissions

A new approach to measuring the environmental impact of circular business models in the electronics sector has been released by consultants Circularity.

Developed in collaboration with 12 industry partners including Vodafone, Telekom, and Grover, along with Systemiq, Fraunhofer IZM, and Deloitte, the ‘Measuring Circular Impact’ report demonstrates how second-hand sales and rental services can significantly reduce environmental impact.

"What makes the Circular Business Model Impact (CBMI) method unique is its grounding in real-world device usage," said Marina Proske, Group Manager Life Cycle Modeling at Fraunhofer IZM. "It allows companies to move beyond assumptions and act on measurable outcomes."

According to the findings, if 80 per cent of users rented or bought used smartphones, Germany could avoid 200,000 tonnes of CO₂ emissions annually. However, the electronics sector currently is over-reliant on linear business models, reducing its ability to mitigate its environmental impacts.

Circular Business Model Impact methodology

The CBMI methodology has been designed to assess the environmental impact of circular business models compared to linear consumption approaches. Using operational data from industry partners and market studies conducted in Germany, it focuses on evaluating changes in the use phase of products.

It defines specific scenarios for each combination of business model, product type, and customer group - such as rental of smartphones to business customers - and compares them to baseline linear consumption models.

"The CBMI methodology fills a critical gap in sustainability measurement," said Carolin Schmid, Deloitte Topic Lead Customer Strategy in Circularity. "By focusing on the actual use phase, the impacts of customer behavior become a central component in the evaluation. It enables a much more realistic assessment of circular strategies - especially in complex industries like electronics."

The central measure used in the methodology is “active use time”, which records the period a product is actually used rather than its total lifespan. This is used to calculate the total active use time and total environmental effects for each scenario.

It can be applied to different levels of analysis, assessing overall environmental impact, specific product journeys, and the overall impact of circular business model adoption for a defined market.

Significantly, the CBMI methodology also accounts for rebound effects - unintended increases in consumption that offset environmental benefits, for instance due to lower prices.

The technical process of the CBMI methodology suggests following these steps:

• Define the goal and scope, including the specific circular business model, product groups, and customer segments of interest
• Create a visual representation of the product journey, including all relevant stages from production to end-of-life
• Establish a baseline scenario (typically a linear consumption model) to compare against the circular scenario
• Develop and use the mathematical formulas to calculate the total Global Warming Potential (GWP) and active use time for both baseline and circular scenarios
• Interpret the results to identify areas for improvement and inform decision-making about the circular business model

Key findings and impact potential

According to the report, only 14 per cent of smartphones and laptops currently in circulation in Germany are second-hand, with repair rates remaining low. Furthermore, only 30 per cent of devices formally enter recycling streams.

"The electronics sector is still deeply linear," said Manuel Braun, Senior Director at Systemiq. "But with the right incentives, circular models can help us close resource loops at scale. What's been missing is a clear view of how devices actually move through the system. The Systems Map in this report provides exactly that - offering a shared baseline to understand where interventions are most needed."

The report demonstrates that both rental and second-hand sales models have a significant positive environmental impact compared to linear consumption models. For smartphones, professional second-hand resale can extend the lifespan by up to 33 per cent and cut annual CO2 emissions by around 20 per cent.

Despite this, current circular business models achieve only 20-50 per cent of their maximum impact potential, with about half of products’ carbon footprint still needing to be addressed through improved product design and end-of-life strategies, argues the report.

"We see massive untapped potential in the devices already out there," said Dr. Paul Wöbkenberg, Co-Founder of Circularity. "Today, around 50 per cent of privately owned and 70 per cent of business devices are never reused - often not because of technical limits, but due to lack or unawareness of return options, low incentives or concerns about data security."

Recommendations

The report offers specific recommendations for different stakeholders to maximise the potential of circular business models.

For companies, it encourages using the CBMI methodology to enhance transparency in impact assessment and publishing reports for both internal and external stakeholders.

"Circular business models hold great promise - but until now, it's been difficult to measure their true environmental impact," said Dr. Marianne Kuhlmann, Co-Founder of Circularity.

"This report gives companies the tools to move from assumptions to evidence - and to design models that really make a difference. It also highlights practical levers that companies can act on to reduce emissions and extend product use."

Investors are advised to incorporate the CBMI methodology in their due diligence process to better assess the impact of potential investments and support businesses with the most significant positive impact.

For regulators, the report recommends using insights from the CBMI method to inform policy making and create effective policies supporting circular economy development.

It also emphasises that data needs to be made more available, through improved national data collection, better device collection systems, harmonised Extended Producer Responsibility (EPR) schemes, and increased transparency on exports.