Servitization as a Circular Economy Strategy: A Brazilian Tertiary Packaging Industry for Logistics and Transportation

Abstract

Leadership is essential for promoting the circular economy (CE) by fostering systemic thinking, promoting resource efficiency, and driving innovative practices that close material loops and minimize environmental impact. In addition, the principles of CE recommend changing production chains to balance economic development, sustainability, and social well-being. This study examines a tertiary packaging company’s circular economy implementation, by using a framework and a circular business model canvas (CBMC) and by identifying the challenges and opportunities for improving environmental management. The method was a participatory research case study using interviews and frameworks. In the context of this company, servitization in logistics was highlighted as an alternative to overcome growth challenges and to add value; however, the company faces significant challenges in implementing it. In addition, it is necessary to increase consciousness among those involved about the concept of the CE and its benefits to improve operational efficiency and review product design to expand environmental management. This research concludes that servitization (as a circular economy strategy), environmental education, and innovation practices can help companies achieve greater financial performance in the packaging industry and contribute to sustainable development goals—SDG achievements.

1. Introduction

The rise in environmental consciousness is mainly due to the consolidation of multiple actors promoting sustainability principles among governments, industries, and society. Meeting the expectations from the 2030 Agenda for Sustainable Development, which was endorsed by all United Nations member states in 2015, implies that immediate action is required.

Gomes and Wojahn [1] found that organizational learning capability promotes innovation by enabling knowledge creation, transfer, and integration in 92 Brazilian textile small and medium enterprises (SMEs). Leaders are crucial in establishing a learning culture [2], as they encourage open communication, dialogue, and knowledge sharing [3]. In Brazil, small and medium-sized enterprises often operate with just one or two executives due to their limited size and resources [4]. Consequently, they rely on their leaders’ strategic vision and agility to successfully navigate competitive markets.

For a long time, the industry has sought guidance on how to implement strategies for sustainable development. The circular economy (CE) offers a framework that attempts to merge economic activities with environmental management, providing businesses with a feasible approach to achieving sustainable development [5,6,7,8]. The CE is often characterized as a blend of activities involving reuse, recycling, and reduction. The CE concept defies both practitioners and scholars because CE aims to maintain, protect, transform, and/or strengthen the economy [9].

Recently, Ref. [10] presented examples (300 around the world) of how the CE can impact product and supply chain design, material selection, and supporting business models, including the emerging circular approaches in the food, fashion, consumer technology, and packaging sectors, and in what ways these strategies mitigate risk, enhance resilience, and establish profitable, future-ready organizations, and proposed a framework.

Moreover, the literature on CE has suggested that the circular business model canvas (CBMC) has advantages over original canvas or sustainable business model archetypes, such as demonstrating circularity for each business model component, including take-back and adoption procedures, highlighting the main barriers to converting from a linear to a circular business model [11,12] being simpler and easier for users to utilize than the triple-layered business model canvas (TLBMC) to construct sustainable business models [13,14].

Since large companies recognize the necessity of business model innovation for survival and growth in response to the ongoing external threat of continuous innovation [15] and ‘greening’ the supply chain [16], small business are on the same path. This claim suggests that concentrating more specifically on issues related to resources would encourage experimentation, rather than focusing on the broader idea of sustainability, especially within the manufacturing sector.

Dure and Baumhardt [17] highlighted the importance of tertiary packaging in logistics and transport systems for business sectors. The authors highlighted the significant impact on the cost and productivity of these systems, which affect all their activities, from stock control and transportation methods to their final destination, in addition to the requirement of responsibility from packaging manufacturers, more frequently, in the form of disposal operations.

Brazil’s National Solid Waste Policy (in Portuguese, Política Nacional de Resíduos Sólidos—PNRS) establishes the guidelines and responsibilities for waste management, directly impacting the packaging industry by requiring proper disposal, recycling, and shared accountability throughout the product lifecycle. Concisely, the packaging sector is strategic for stressing the implementation of structural changes because of its impact on sustainability. It is important to mention that the business model must be considered in the search for circularity, and implementing changes in environmental management can favor positive financial results [17].

Numerous articles have concentrated on creating methodological frameworks for analyzing the circular economy and sustainability issues at the firm level (micro-level) [14,18,19,20,21]. However, the Weetman framework [10] proposed is a theoretical construction derived from multiple studies and remains untested in practical applications.

This study seeks to address this gap by examining the applicability of Weetman’s CE framework—originally developed based on practical case studies in diverse industries—to the packaging manufacturing sector in Brazilian SMEs within the regulatory environment of Brazil’s PNRS. To this end, we conducted a case study in a Brazilian tertiary packaging SME operating in the transport and logistics sector to explore how circular economy practices can be integrated into a traditional business model. This study applies both Weetman’s framework [10] and the circular business model canvas (CBMC) proposed by Lewandowski [12], aiming to identify the key challenges and opportunities for a sustainable transition.

The following two research questions guide this study:

RQ1: How do top leadership teams (TLTs) in SMEs drive the adoption of circular economy (CE) models?

RQ2: How does servitization contribute to the implementation of circular economy (CE) strategies in Brazilian small and medium-sized enterprises (SMEs), particularly within the constraints of limited digitalization and regulatory support as the Brazilian PNRS?

The remainder of this paper is organized as follows: Section 2 presents a literature review and framework; Section 3 presents a thorough summary of the method employed and case study enterprise description. Section 4 presents the results regarding the business model and framework used in the analysis. Section 5 discusses the circular economy initiatives and significant implementation challenges in the organization. Section 6 presents the main conclusions, including the research limitations and paths for future studies.

2. Literature Review and Conceptual Framework

The literature section illustrates the relevance of circular business models, processes, and methodologies while identifying a research gap that advocates for amplifying the testing of circular business models and frameworks.

2.1. The Imperative of Transitioning to Sustainable and Circular Business Models

In 2015, the United Nations [22] launched the 2030 Agenda for Sustainable Development, introducing 17 sustainable development goals (SDGs) as a global call to action to promote prosperity while protecting the planet. Among these, SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation and Infrastructure), and SDG 12 (Responsible Consumption and Production) are particularly relevant to the packaging industry. These Goals address the key challenges faced by the sector, including improving labor conditions and economic inclusiveness (SDG 8), fostering innovation and sustainable industrial processes (SDG 9), and minimizing environmental impact through efficient resource use and waste reduction (SDG 12).

Thus, firms should create a sustainable business model (SBM) to satisfy the sustainability goals while assuring profitability [23], where sustainability can “play an integral role in shaping the mission or driving force of the firm and its decision making” [24] (p. 104). The SBM mandates sustainability-focused business strategies [25], and the circular economy has been considered a driver of sustainable businesses [26].

The Ellen MacArthur Foundation’s report is regarded as the inception of the CE definition as being “an industrial system that is restorative or regenerative by intention and design” [27]. The transition to a circular economy encompasses more than just mitigating the adverse effects of the conventional linear economy [28], but a systematic and designed change for business’s enduring resilience in a stakeholder-sensitive environment. Consequently, the move to a CE emphasizes the four essentials of business, including worldwide reverse networks, materials and product design, supportive conditions, and innovative business models [29].

In the last two decades, the importance of eco-labels, or sustainability labelling, has been highlighted, as supply chain actors to end-consumers require pertinent sustainability information regarding items to influence sustainable purchasing behaviors [30,31,32]. So, organizations are progressively employing labels and trademarks to evidence sustainability in their product offerings (mainly in the European market).

To create a circular business model, firms need to adopt management practices that emphasize value generation and thoroughly explore various perspectives and research areas. These areas include managerial dedication, organizational culture, technologies, the external environment, and the community (including main stakeholders), along with the methods and strategies that improve the efficiency of designing a circular economy business model [33].

Globally, there has been an increase in the level of organizational concern regarding environmental management [26]. Hence, to achieve sustainability, the industry sector must create innovative business models that allow companies to generate revenue while adhering to the principles of the CE. However, more knowledge is needed on how circular economy strategies affect different business areas and how they make them more sustainable, and experimentation is regarded as an essential attribute throughout the transition to more sustainable business practices in organizations.

2.2. Processes and Guidelines for Sustainable and Circular Business Models

The linear economy model emerged from earlier industrial revolutions characterized by extraction, manufacturing, and disposal of waste [10]. By contrast, the circular economy merges economic activity and environmental protection through assembly, usage, disassembly, and reuse, concomitantly eliminating waste with little disposal or directing it to be recycled. The CE can dissociate the environmental impact resulting from economic expansion, a significant ‘green growth’ aspect, and can garner stakeholder attention by promoting sustainable society knowledge and skills [34].

Straub et al. [35] found the following six areas of skills related to employees’ capabilities for implementing a circular business model: (1) business innovation, (2) operations, (3) social factors, (4) systems, (5) digitization, and (6) technological difficulties; this research indicates that deploying circular business models necessitates an array of ubiquitous, sustainable, and circular competencies. These could be enablers for converging traditional to CE business models in organizations.

Additionally, as pointed out by Weetman [10], the business model and its relationships must be interpreted, applying circular inputs to it (recycling, renewing, protecting), reformulating the design of product (utilize less, employ it more, and reuse it), the design of the process (to use less, use waste as food, renew) and implementing circular flows (reuse, remanufacture, and recycle), and looking for enablers and accelerators along the value chain to find possible benefits applicable to the practical case, as represented in Figure 1.

Corral-Marfil et al. [19] advocated for the utilization of advances in technology to attain a competitive advantage via a sustainable and circular business strategy, as emphasized in Weetman’s framework (Figure 1). Moreover, laws and norms play an essential role in inducing changes (accelerators); for instance, the Brazilian National Policy on Solid Waste (in Portuguese, Política Nacional de Resíduos Sólidos—PNRS), established at the national level under the coordination of the Ministry of Environment through Federal Law 12.305/2010 [36], aims to encourage the recycling and reuse of solid waste, reducing environmental degradation.

In this sense, the CE is a significant advancement from closed-loop supply chains (CLSCs) and is relevant for increasing product value and reducing waste [37]. Nevertheless, it is observed that most research has concentrated on developed countries, resulting in a significant lacuna in comprehending the phenomenon from the viewpoint of developing countries [34]. This study applies Weetman’s circular economy (CE) framework [10]—originally developed through practical case studies across various industries—to the packaging manufacturing sector of Brazilian SMEs, in order to address this gap. As far as we are aware, this framework has yet to undergo empirical testing in developing economies, especially in regulatory environments such as Brazil’s National Solid Waste Policy (PNRS).

Given the specific challenges faced by Brazilian SMEs, including lower levels of digitalization, informality, and limited institutional support, our research seeks to adapt and expand the framework to these unique conditions, thereby contributing novel insights to the literature.

2.3. Frameworks for the Implementation of the Transition to a Circular Economy Business Model

Circular economy research has expanded dramatically recently, and investigating alternatives in the industrial sector has consistently benefited the academic literature and business sectors [26]. At the micro level, there are several circular business models that have been created to enhance traditional corporate practices by integrating the core principles of the circular economy—such as reducing, reusing, recycling, and remanufacturing—alongside the broader goals of sustainable development [38].

As an overview of today’s context, in the early 1990s, the concept of the business model was first defined in terms of content in Forge’s article [39]. Currently, a business model refers to the logic an organization uses to create, deliver, and capture value. Regarding the Osterwalder and Pigneur [40] canvas business model, a new framework was proposed [12] to include aspects of the CE, including “take-back system” and “adoption factors”, as will be described next in this article.

The aforementioned framework of sustainable business models (SBMs) has been perceived as an appropriate channel for companies to communicate sustainability [41]. Evaluating the available methods for sustainable service-based business models, Chávez et al. [42] found out that the business purpose was the main motivation to transition from traditional manufacturing to servitization. Additionally, some authors have suggested that the use of key performance indicators (KPIs) contributes to the SDGs [43].

Recently, an article entitled, “How the Circular Economy Can Revive the Sustainable Development Goals?” [44] points out that business strategy models, such as the CE, have gained greater relevance in the political and academic spheres, being considered a potential approach to address the 2030 Agenda. Ziegler et al. [45] recognized strategy, business model classification, and policy analysis as key areas for future study in the CE field. These authors also found that integrating a circularity approach and refining the business model are needed to maximize this potential. One of these business model possibilities is servitization.

Servitization is a process that certain industries and companies implement in order to enhance the value of tangible products and to establish a competitive advantage by aggregating services. Production companies may choose to incorporate a product–service system into their operations. Specifically concerning the CE, there remains insufficient evidence about how servitization affects the sustainability or performance of a firm.

The literature increasingly highlights servitization as a strategic approach for driving sustainable business transformation, particularly within circular economy (CE) frameworks. However, a comparative review has revealed that the implementation of servitization varies widely across regions and firm sizes, with limited focus on SMEs. Lachiewicz et al. [46] offered a notable example of an investigation into Mikomax, a Polish SME in the office furniture sector. Their findings illustrate a successful transition from product sales to service-oriented offerings, supported by co-design practices, internal training, and a customer-centric philosophy. This transformation has resulted in increased market competitiveness and customer loyalty, although it has also presented challenges, such as operational restructuring and cost allocation for bundled services.

A more conceptually grounded approach to servitization is offered by [47], which discusses its relevance for sustainable business models in Latin America. By contrast, other studies [48] have explored its practical application in Brazil’s packaging and logistics sectors.

Both recognize servitization as critical for innovation and sustainability in emerging economies, but lack empirical depth, particularly concerning SMEs. These conceptual discussions emphasize the potential of servitization but fall short in offering detailed evidence of how SMEs implement or benefit from such models in practice.

Salwin et al. [49] contributed a simulation-based Product-Service System (PSS) model applied to logistics, demonstrating efficiency improvements, though without specific reference to SMEs. Meanwhile, Debrah et al. [50] analyzed systemic challenges to CE adoption in Sub-Saharan Africa (SSA), such as weak policy frameworks and limited awareness—factors that indirectly impact SMEs but are not addressed at the firm level. While the significance of servitization is broadly acknowledged, there is still a distinct requirement for empirical studies concentrating on small businesses, particularly in emerging markets, to better understand the enabling conditions and support structures required for effective servitization during circular economy (CE) transitions.

As services are becoming more important in the modern economy, industrial companies are incorporating them into their plans. Pereira et al. [51] pointed out that services were mostly cited to facilitate product sales, showing that manufacturing companies increasingly focus on their service operations, whereas many previously believed that their business value came from product production and sales.

Moreover, in industrial societies, the environment and society are significantly impacted by the manufacturing and consumption of products [52]. In Brazil, according to data extracted from the Industry Portal [53], the transformation industry is among the most significant industrial branches in the Brazilian economic scenario, representing 12.9% of the national GDP and a 53.7% share of the total industrial-specific GDP.

To remain competitive, as in other countries, Brazilian manufacturing industries are always searching for novel alternatives to meet customers’ expectations, such as offering services linked to their products. Pedrinho and Miguel [54] concluded that this transition to servitization in the Brazilian transformation industry opens up many possibilities. However, it also complicates management, requiring the redesign of strategic, organizational, and operational processes, and the reorganization of resources and capabilities to adjust to a new model of conducting business

The packaging industry is part of the industrial transformation sector, and the scenario highlights the numerous challenges faced by the field of activity research. The Brazilian Packaging Association (Associação Brasileira de Embalagem—ABRE, in Portuguese), indicated, in their 2023 report, that the packaging sector showed a growth of around 3.9% in production compared to 2021 and, according to the ABRE institutional website, in 2024, the sector experienced a rise in both production and employment, with a growth in packaging production of 6.7% and employment reaching 273,967 jobs. Lately, ref. [55] discussed the challenges associated with sectoral agreements in Brazil’s packaging industry in relation to the transition to a CE.

The ABRE also carried out a study in partnership with the Environmental Company of the State of São Paulo (in Portuguese, Companhia Ambiental do Estado de São Paulo—CETESB (São Paulo, Brazil)) in 2016, titled “Packaging and sustainability: Challenges and guidelines in the context of the circular economy.” This study [56] discusses the importance of packaging since ancient times in the demands that arose in the development of society itself and the increasing importance of sustainability for stakeholders in our country.

The Brazilian researchers, Valle et al. [57], pointed out that almost 40% of all derived virgin plastic produced in 2015 was transformed by the packaging industry, which in turn is the largest industry transforming virgin plastic into products, considering that part of this consumption is justified because most packaging is manufactured to be used only once, which leads to numerous environmentally negative consequences.

Furthermore, specific data on the market for tertiary packaging for customized transport and logistics is rare, the vast majority of these items are made by hand, meeting specifications given by the needs of end customers (“tailor-made”). As an alternative, reusable packaging has been proposed as a means to mitigate environmental impacts [58].

Ferreira et al. [59] emphasized that the benefits that justify the application of the circular economy technique go beyond cost reduction and environmental impact, as these activities promote a better use of raw material resources, price stability, innovation, job and income generation, and the reduction of other costs for companies, such as insurance and guarantees, as products are designed to have the greatest possible durability.

Finally, in addition to aligning with society’s demands for a more significant commitment to sustainability by organizations, all these management aspects are crucial for SMEs’ survival capacity. Nevertheless, a deeper understanding of how to design truly circular business models is essential to effectively advance the implementation of the CE, primarily in Brazil and other emergent economies.

3. Methodological Procedures

3.1. Approaching the Business Model Design on the Firm Level

This case study was based on qualitative and descriptive participatory research. The goal was to evaluate how a Brazilian SME, as a tertiary packaging company (focused on transport and logistics), might integrate circular economy practices into its traditional business model. Simultaneously, we identified the ongoing initiatives, challenges, and opportunities for a sustainable transition within this organization under circular economy principles.

Participatory research (PR) emphasizes collaboration with local communities and stakeholders, prioritizing their perspectives and lived experiences [60]. Therefore, PR co-constructs research with community members or others who may not have formal research training but may have insider knowledge [61]. Unlike traditional research that treats participants as subjects, PR fosters active partnerships between researchers and communities, ensuring that research outcomes are relevant and beneficial to the people it concerns. This approach connects research with practical applications in the real world [62].

The initial steps, conducted from 2022 to 2023 in the enterprise headquarters, involved an exploratory mapping of all outputs and inputs linked to the current operations concerning CE principles. These are present in physical space (e.g., material, energy, etc.), digital space (e.g., information), and relational space (e.g., inter-organizational and interpersonal relationships). All techniques and methods employed are described next and the first initiative for data collection was designed following Weetman’s framework [10].

As previously mentioned, this study adopted a participatory research approach to explore how circular economy principles were incorporated into the business strategy of a Brazilian small-to-medium enterprise in the packaging industry. The participatory aspect was strengthened by one of the authors’ active roles as a consultant within the company, which enabled close engagement with internal processes and facilitated the co-construction of knowledge alongside the firm’s stakeholders.

Data collection occurred between 2022 and 2023, and involved multiple sources to ensure methodological triangulation and strengthen the credibility of the findings as follows: (a) document analysis, including internal policies, operational records, and sustainability-related materials; (b) semi-structured interviews with six participants, comprising two senior-level managers involved in strategic CE initiatives and four staff members from administrative and operational areas; and (c) direct observations conducted during site visits, informal interactions, and collaborative meetings.

The interview protocol was derived from Weetman’s circular economy framework [10] and adapted to the specific context of the enterprise. The thematic blocks in the interview script addressed business model characteristics, circular design practices, production processes, and awareness of CE principles (see Appendix A Top Leadership Team Interview Script).

All interviews were audio-recorded and transcribed. Data were analyzed using thematic analysis, following the six-phase process outlined by Braun and Clarke [63]: (1) data familiarization, (2) initial coding, (3) theme identification, (4) theme review, (5) theme definition and naming, and (6) report writing. Codes were developed both deductively—based on the Weetman framework—and inductively from patterns that emerged during fieldwork.

Analytical categories were continuously refined through iterative reading and cross-comparison across data sources. Manual coding was supported by qualitative note-taking and synthesis grids.

Moreover, to ensure analytical rigor and to enhance trustworthiness, the following multiple validation strategies were employed: (a) triangulation across data sources, including interviews, documents, and field observations; (b) peer debriefing with academic colleagues specializing in circular economy and business models to refine theme categorization; (c) participant validation, where operational and administrative interviewees were invited to review the preliminary findings (including all direct employees); and (d) feedback from the top leadership team (TLT) on emergent interpretations, aligning with the participatory ethos of the study.

This multi-method approach enabled a robust understanding of the firm’s CE transition-oriented servitization process, while accounting for both strategic-level decisions and everyday operational practices.

As previously mentioned, all strategies to the data collection process were determined as “building blocks”, based on Weetman [10], with some adjustments:

• Circular Economy Design: product and system design requires different approaches to enable product reuse, recycling, and “cascading” (destruction of one process becoming input to another).
• Innovative business models to replace or exploit new opportunities: large companies can exploit their scale and vertical integration characteristics as a means of pushing the circular approach into the mainstream (what is considered standard or normal because it is conducted or accepted by the majority) of traditional businesses.
• Reverse cycles: new materials and products cascade, and the final return of materials to the environment or reintegration into the industrial production system requires careful perspectives and new approaches. These include logistics, storage, risk management, energy generation, and sometimes more specific actions (molecular biology, polymer chemistry, etc.).
• Enablers and favorable systemic conditions: new or renewed market mechanisms can encourage widespread reuse of materials and increase resource productivity. We included in this item, the role of eco-labelling and, specific to our context, the Brazilian National Waste Policy (PNRS).

From these theoretical building-blocks, the questions used in the interviews were designed (Appendix A Top Leadership Team Interview Script) to amplify the scope of the analysis.

3.2. Approaching the Business Model Design on the Organizational Level of Staff

The data used in this research were collected during on-site visits conducted by one of the authors as part of his consulting endeavors at the organization, leading to the current participatory research. The company was founded in 2017 and operates in two strategic locations in the state of São Paulo: Santos and Taboão da Serra. These sites support both production and administrative functions, thereby enabling efficient distribution and operational coordination. With a workforce of 93 employees, the company maintains a streamlined organizational structure. Four professionals oversee key administrative areas, including human resources, sales and marketing, operations and logistics, and financial administration. The leadership roles are held by the owner and founder, who serves as the President, and her daughter, who serves as the Chief Executive Officer (CEO), supporting strategic oversight and ensuring alignment with operational goals.

Its production capacity is supported by a robust set of equipment that includes 35 industrial sewing machines, one palletizing press, as well as precision cutters and gluing machines. This machinery enables the company to handle a wide range of manufacturing processes with agility and consistency, thereby enhancing both productivity and product quality. The company’s infrastructure reflects its commitment to operational excellence and continuous improvement in the textile and related industries.

The products produced by this industry include “big bags” and “bulk liners” in various models and sizes tailored to the customer requirements. The destination of these items is diverse, and currently, most of its clients’ demands are the transportation abroad of coffee, minerals, resins, rice, soy, and grains in general, among others. It is essential to mention that such big bags and bulk liners produced are not limited to pre-existing standards, and numerous items are developed in a customized way (tailor-made).

Potential buyers present their desires and needs for the products, and the organization fulfills them. Even if it implies the need for constant investment in research and development, this is a strategy for developing a closer relationship with them, and it also helps the top management team stay constantly updated on the direction of its market. Despite its up-and-coming and substantial sector in Brazil, the industrialization processes are predominantly manual and artisanal, primarily including cutting and sewing operations.

Likewise, the corporation still needs to verticalize its operations fully. The manufacturing operation model of the firm is linear, in which, basically, the raw material is acquired (ready-made polyethylene and polypropylene fabrics), labor is added (cutting and sewing), and results in the finished products, which are introduced in the market through sale and purchase operations. The lack of a model for marketing strategies was noticeable. Marketing strategies or actions were also not addressed in the operations, and any consideration on the subject was seen as an unnecessary expense.

The manufacturing and organizational structures were straightforward. The company had 93 employees, four of whom were in administration and the rest were in production as seamstresses and assistants who performed everything but the sewing. Third-party companies deliver manufactured goods to the clients. Although most production equipment is obsolete, there is significant potential for improvement. A palletizing press, thirty-five sewing machines, cutting machines, and adhesive equipment are available. Certain items require maintenance or improvement, which can significantly enhance manufacturing and reduce company costs.

Company customers were served by independent sales representatives. A strategic study showed that the organization was at risk of not having direct client contact. By contrast, the structure and relationship model with suppliers was straightforward. One of the employees in the administrative area acted as the focal point for the suppliers, who were always the same. Nevertheless, the company needed to demonstrate a formal initiative to develop new suppliers.

The interviewed member of the top leadership team (TLT) did not have any form of planning that would allow her to conduct operational processes towards sustainability, which is a reason that corroborates the general objectives of this research. Moreover, she had never considered possible improvements in the company’s results after applying the CE principles and redefining the current business model. In addition, there was no previous knowledge of “circular economy” and “sustainability” in the workforce.

4. Results

Recommendations were proposed to facilitate the shift from a linear to a circular economy within the conventional business model. The analysis of the TLT responses to the interviews indicated that, besides the absence of effective control and quality systems for operational data and the lack of an ERP (Enterprise Resource Planning) or finance management system, the following factors regarding the CE were identified:

• Circular Economy Design: (a) The company operates in a traditional model of purchasing raw materials, processing, and selling the final product, without considering the reintegration of products into the production cycle after use; (b) there is no reference to ancillary services that could encompass the products’ useful life or their reuse; (c) the only initiative that touches on the circular economy is the sale of trimmings (production waste) for recycling, although this does not necessarily indicate a fully circular approach, it appears to focus more on waste management than on a circular design or production strategy;
• Innovative business models to replace or exploit new opportunities: (a) Comprehension of the concept of servitization and its use in operations has not been examined; (b) the product design does not include reuse, recycling, or cascading, and the products are described as “one-way”, intended for one-time use in the transportation of goods;
• Reverse cycles: (a) There is no indication of circular flow formation or input use in production processes or design initiatives that prioritize resource reuse or minimization; (b) despite a small initiative related to the sale of production waste for recycling, the company does not demonstrate a significant or integrated circular economy approach in its operation, focusing mainly on a linear production model;
• Enablers and favorable systemic conditions: (a) There is a developing Brazilian sectoral agreement on reverse logistics of packaging; (b) the legislation (PNRS) regarding solid waste management reinforcing transitions to the circular economy business model; (c) the possibility of environmental awareness and education of the employees.

The prevalent strategies suggested to facilitate the transition to a circular economy include investments in infrastructure, employees’ environmental awareness and education, mapping the benefits to the participants in the process, and proposing a new business model canvas.

Lewandowski [12] found that the business model canvas (BMC) of the Osterwalder et al. [64] model could be further developed, including take-back system and adoption factors, producing the circular business model canvas (CBMC). The main determinants influencing CBMC adoption encompass general variables, human resources, political systems, norms and legislation, IT and data management, and business risks. Significant socioeconomic ramifications validate the endeavors related to the CE and consumer behavior, along with other facilitators, such as collaborations, leadership, culture, and intrinsic drive, from the sense that the CE is worthy. The CBMC has two important aspects as follows:

• Take-Back System (reverse logistics);
• Adoption Factors (internal and external).

Conceptualizing the framework of the circular business model canvas (CBMC) for this case study, we decided to include aspects of Weetman’s framework [10] and expand it, as presented in

Table 1. Proposed elements of the circular business model canvas (CBMC) in the studied company.

Item	Description
1. Value propositions	Provided by circular products are opportunities for extending product life, implementing product–service systems, offering virtual services, and/or promoting shared consumption. Additionally, this element includes the incentives and rewards given to customers for returning used products.
2. Customer segments	Closely related to the value proposition element. The match between the value proposition and the group of customers is shown by the value proposition design.
3. Channels	Potentially virtualized by offering virtual value propositions and delivering them in a virtual manner, selling non-virtualized value propositions through virtual channels, and engaging with customers virtually.
4. Customer relationships	Underlying production on order and/or what customers decide, and social-marketing strategies and relationships with community partners when recycling 2.0 is implemented.
5. Revenue streams	Revenues can be derived from the value propositions, and include payments for a circular product or service, or payments based on the availability, usage, or performance of the product-related service provided. Additionally, revenues might also relate to the value of resources recovered from material loops.
6. Key resources	Selecting suppliers that provide superior materials, virtualizing resources, utilizing materials that can regenerate and replenish natural capital, and/or acquiring resources from customers or third parties intended to be part of the material cycles (ideally closed loops).
7. Key activities	The focus is on enhancing performance by implementing effective housekeeping, optimizing process control, modifying equipment, adopting new technologies, promoting sharing and virtualization, and refining product design to prepare it for material cycles and increase its environmental friendliness (lobbying).
8. Key partnerships	By selecting and collaborating with partners throughout the value and supply chains that bolster the CE.
9. Cost structure	Incorporating financial adjustments from other parts of the CBM, such as the valuation of customer incentives, requires the application of specific evaluation criteria and accounting standards.
10. Take-back system	The structure of the take-back management system, encompassing the channels and customer interactions associated with it.
11. Adoption factors 1	The shift towards the CBMC requires backing from a range of organizational skills and external influences [PNRS; Brazilian sectoral agreement of reverse logistics of packaging].
12. Accelerators	Product stewardship, life-cycle assessment, certifications, [eco-labeling].

Note ¹: like Weetman 2020 Enablers’ [10]. Source: modified from Lewandowski [12] using Weetman [10] framework and further developed (Bold terms in brackets).

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In the organization studied, a tertiary packaging industry for logistics and goods transportation in Brazil, it was found that internal factors affect organizational readiness for the circular economy business model. As noted by other authors, these competencies encompass intangible elements, such as team motivation, organizational culture, knowledge, and awareness, as well as transition protocols. These components focus on human resources, including team building, change management, and knowledge generation [65,66,67]. So, Figure 2 shows the revised CBMC based on the Lewandowski [12] model and the Weetman [10] framework modified for the Brazilian context (Figure 2).

As one can see,

Table 2. Circular business model canvas (CBMC) and potential outcomes from the perspectives of customers and the organization.

Customers	Company
(1)  Enhanced quality at a reduced cost	1. Culture of Sustainability implemented
(2)  Potential for customization and access to more advanced technology products	2. Access to new markets and increased financial return.
(3)  Predictability of logistics investments, with a guarantee of meeting demand in the event of a need to increase acquisition	3. TLT and employee development
(4)  Satisfying sustainability standards	4. Enhanced business reputation
(5)  Reduces risks, ensures regulatory compliance, and enhances long-term resilience	5. Improved production capacity without an increase in production costs
(6)  Product options with different life cycles (one-way and multi-way)	6. Strengthening relationships with customers and suppliers

Source: This research data, adapted from the Barquet et al. [70] findings.

illustrates the primary benefits for the clients and the business under study in the shift to the CBMC, using the rationale of [68,69] presented by Barquet et al. [70]. Aligned with earlier publications in a related context, it was also noted that this corporation has included sustainability into their business plan by encouraging internal commitment [41].

When introducing a new business model, the organization seeks to assess its effectiveness, and the authors have suggested using value drivers. Laubscher and Marinelli [65] identified six key areas for integration of the circular economy principles with the business model.

Table 3. Company and its area of integration of CE transition into business model.

Areas	Description	Degree of Execution	Comments
Sales model	A transition from product volume sales to service provision and the retrieval of products post-consumer use	Implemented	Servitization since 2024
Product design/material composition	The modification pertains to the design and engineering of products to enhance the high-quality reuse of the product itself, along with its components and materials	Started	Conclusion in 2025
Data management and IT	Resource optimization necessitates a critical competence: the ability to monitor products, components, and material data	Implemented	Since 2023
Supply loops	Concentrating on optimizing the recovery of owned assets when it is profitable and improving the use of recycled materials and pre-owned components to extract additional value from the flow of products, components, and materials	Not started	In two years
Strategic purchases for internal operations	Building dependable partnerships and lasting relationships with both suppliers and customers, including joint creation	Implemented	Since 2023
HR and incentives in human resources	A shift requires appropriate cultural adaptation and the development of capabilities, which can be improved through training programs and incentives	Implemented	At C-Level, for others, in two years

Source: This research data, adapted from the Laubscher and Marinelli [65] findings.

describes the level of implementation of each one of these in our case study of the tertiary packaging industry for logistics and transport in Brazil (data from July 2024).

Transitioning from a focus on product volume sales to enhancing asset productivity via service-oriented selling and creating incentives to encourage customers to return products following initial usage [65], the CE capitalizes on the opportunity to evolve into the most sustainable business (environmentally and economically). By offering product options with different life cycles (one-way and multi-way), enterprises can strengthen their relationships with customers and suppliers while satisfying sustainability standards and the 2030 Agenda.

5. Discussion

The concept of a “circular economy” focuses on prolonging the lifespan of products, materials, and resources by employing them in closed-loop systems. This approach aims to minimize pollution and prevent resource wastage while simultaneously enhancing economic development [26]. The CE is also the latest attempt to connect economic activity and environmental well-being. With the increasing pressures and motivations to incorporate sustainability into their strategies, such as through regulations, corporate social responsibility indices, sustainability reporting, and consumer expectations, organizations are compelled to adapt accordingly [5,8,41].

In contrast to many Sub-Saharan African (SSA) countries, Brazil has made notable progress in institutionalizing circular economy (CE) principles through its National Solid Waste Policy (Política Nacional de Resíduos Sólidos—PNRS), established by Law No. 12.305/2010. The PNRS provides a structured approach to waste management through regulatory guidelines based on shared responsibility, reverse logistics, and prioritizing reuse, recycling, and recovery over disposal. Although Brazil still faces challenges in enforcement, funding, and infrastructure—especially at the municipal level—its policy foundation offers clearer guidance and legal backing for CE practices than in many SSA nations, where regulations are often absent, outdated, or poorly enforced [50].

Furthermore, Brazil’s integration of waste picker cooperatives into formal recycling systems exemplifies a socially inclusive approach to the CE, which is still nascent in SSA contexts. However, both regions share critical obstacles, such as insufficient technical capacity, underinvestment in innovation, and limited public awareness, highlighting the need for locally adapted and equity-focused strategies to operationalize the CE in the Global South.

Traditional manufacturing firms are progressively providing industrial services to maintain their competitive standing in the global market [71]. The new ways of a company’s plan for making a profit, materials choice and product design, reverse logistics, and specific enabling conditions are considered to be the basic building blocks in the transition from the current linear economy to a business model based on a CE [72]. Some of these aspects are already present in the investigated company, as displayed in Table 2 and Table 3.

Regarding the external and internal actors involved in the CE business model transition, some organizations promote environmental sustainability throughout collaboration in the supply chain [73,74,75], which suggests that successful collaboration in developing countries can lead to competitive advantage, and value creation for all partners. It is also possible for organizations to integrate sustainability into their business strategy by fostering internal commitment [41], and companies are urged to develop an SBM to achieve the SDG objectives. In Brazil, “Accelerators” like the Brazilian National Policy on Solid Waste (PNRS) play an important role, as organizational effectiveness is “agile decision-making”, innovativeness, and adaptability to changing environment [76,77].

The present research shows that the TLT plays an important role in the CE transition, and a new reference highlights the complexity of the subject. Burkhardt et al. [78] argues that consumer behavior is the “last mile” challenge in implementing circular economy innovations. While regulations and infrastructure set the stage, widespread behavioral adoption hinges on making reuse easy, visible, and socially desirable. This insight calls for interdisciplinary collaborations between behavioral science, design thinking, and business strategy to achieve systemic change in consumption patterns. As stated by Salwin et al. [49], there is limited research regarding the theoretical understanding and practical application of Product-Service System (PSS) design, especially within the logistics industry, mainly due to insufficient financial assessment, lack of market analysis, and weak linkage between theoretical models and real-world application.

This paper has observed that “Enablers”, such as key partnerships and organizational capabilities, are needed. Sensitizing employees of this SME regarding environmental education and awareness can contribute to enablers and favorable systemic conditions. The CE transition requires proper culture, environment, and technical shifts, where information and communication technology may underpin these needs [76,77], as they facilitate monitoring products, components, and material data.

Although not applicable to the SME studied, it is widely acknowledged that technologies, such as big data and analytics, are relevant in enabling circularity. These technologies facilitate shifting to servitization business models, where companies maintain ownership of the products and sell their usage or related services instead [71]. Moreover, ref. [76] concluded that automation success factors, such as circular design strategies, reverse logistics (returns, reselling, repairs, repackaging, and recycling using AI and robotics), and sharing success factors, such as top management commitment, product service systems, and industrial symbiosis, promote the CE transition.

This service-oriented approach introduces innovative methods for engaging with customers, organizations, and the value chain [70]. Thus, manufacturing organizations seeking competitive advantage are increasingly using this method. Companies routinely supply services to the market, but only recently have they identified product–service integration as a growth and additional income opportunity [79]. Moreover, various research fields have examined the integration of products and services using different terms, including servitization [80].

Servitization in the CE is a driver to obtain greener products, processes, and services (including supply chain management), reducing resource input and preventing waste and emissions, and enhancing operational efficiency and competitiveness [26]. According to the TLT interviews, the inclusion of smart objects with sensors for packaging monitoring is under development in this enterprise, accelerating the continuous improvement of the results of reversed logistics complying with the sectoral agreement concerning the packaging industry’s demands in Brazil [55].

Gauthier and Gilomen [81] delineated a classification of business model transformations designed to promote new value propositions (as sustainable-oriented business is an intangible asset) on an increasingly large scale, with level four being the optimal stage.

• Business model as usual: If there are no alterations to the elements of the BMs.
• Business model adjustment: If some modifications to one element of the BMs occur.
• Business model innovation: If major BM transformations are implemented.
• Business model redesign: If a thorough reevaluation of an organization’s BM components leads to entirely new value propositions.

Currently, the enterprise investigated is at level three of this scale, as substantial modifications toward sustainability occurred after the use of the modified CBMC. When this firm’s transition to the circular economy is complete, it is expected to reach the most advanced stage, which is planned to occur in the next two years. Packaging industries can minimize their environmental impact through integrated chain management, which involves extraction, production, usage, and waste phases, and aims to reduce the environmental load across the chain [66].

The transition from a product-centric to a system-oriented mindset, the establishment of direct customer relationships to enhance interaction frequency, and the promotion of deeper involvement between customers and companies are likely to play significant roles in fostering stakeholder engagement and accountability across the product lifecycle [68,70]. Furthermore, the production, case-by-case design, and revision delivery system in the investigated company seem to increase its competitiveness.

The literature describes green business models aligned with our results [66]. First, innovative financing schemes, such as long- and medium-term investments, increase environmental and economic performance. Second, functional sales and management services emphasize product functions and benefits over physical goods by using environmentally superior materials and more efficient production methods, leading to increased output, optimized contracts, and durable products. Third, gaining a competitive edge and creating new income opportunities by marketing the features of their product or incorporating additional services (servitization) are increasingly important in many industry sectors [82].

The circular economy is a viable and compelling alternative to business, as it can result in improved resource risk management and value creation [83]. Based on the literature review, Lewandowski [12] found that the main determinants influencing the CBM adoption encompass general variables, human resources, political systems, norms and legislation, IT and data management, and business risks.

The present study identifies the significant socioeconomic ramifications validating the endeavors related to the CE transition and consumer behavior, along with other facilitators, such as collaborations, leadership, culture, and intrinsic drive, from the sense that the CE is worthy. Internal factors affect CBMC suitability in the investigated organization, such competencies include intangibles, like team motivation, company culture, knowledge, and transition processes, as previous authors have noted. The HR components include team development, change management, and knowledge generation [65,66,67].

Moreover, Souza [84], focusing on biotechnology firms, concluded that inspirational leadership and bioentrepreneurial capacity mediates significantly between knowledge transfer and firm growth. This highlights how internal capabilities and innovation practices contribute to sustainable growth and economic development in Brazil.

Finally, shifting focus from a product-oriented approach to a service-based model is a complex endeavor, and variances in outcomes are inevitable [71], so qualitative research utilizing case studies provides a significant methodological framework to illustrate the implementation of the circular economy in real-world contexts. Weetman’s 2020 [10] model, developed based on case enterprises, had not been used empirically before this study, especially considering the influence of regulatory systems (as PNRS in Brazil).

6. Final Remarks

Rising climate change urgency, unsustainable resource use, and waste mismanagement highlight the global consensus around the 2030 Agenda for Sustainable Development. Within this framework, the CE has emerged as an environmental imperative and a promising framework for sustainable value creation. The CE is gaining traction in both academic and practitioner communities, as the sustainable business model (SBM) is increasingly seen as the dominant paradigm for 21st-century businesses. Notably, business managers may not need complete awareness of CE concepts to adopt circular practices, especially as regulatory pressures, such as Brazil’s National Solid Waste Policy, continue to grow worldwide.

This study responds to that need by empirically applying Weetman’s theoretical framework through the circular business model canvas (CBMC), originally developed by Lewandowski, and expanded to align with Brazil’s National Solid Waste Policy (PNRS). It documents the transition process led by the top leadership team (TLT) within a Brazilian SME in the tertiary packaging sector.

In the Brazilian context—particularly among SMEs—many of the challenges observed in Sub-Saharan Africa (SSA) and Latin America also apply, albeit with some important distinctions. Similar to the SSA and other Latin American countries, Brazilian SMEs face significant barriers to the CE implementation, such as limited access to funding, low awareness of the CE principles, and insufficient technical capacity. Despite the existence of the National Solid Waste Policy (PNRS), enforcement remains uneven, and many SMEs struggle to align with its guidelines due to a lack of clear incentives and operational support. However, compared to the SSA nations, Brazil benefits from more developed environmental legislation and institutional structures, and compared to other Latin American countries, it exhibits growing academic interest and policy debate around the CE.

Nonetheless, the practical application of the CE within SMEs remains fragmented, with limited integration into value chains or business models. Advancing the CE in Brazilian SMEs requires tailored strategies that consider the structural informality of the sector, promote public–private collaboration, strengthen education and technical training, and adapt the CE policies to local realities—avoiding the top–down imposition of international models that may not align with the socioeconomic dynamics of the Brazilian entrepreneurial landscape.

The results demonstrate that applying the CE principles—particularly servitization—can serve as a viable strategy for SMEs seeking to change their business models from linear to circular. Servitization allowed the firm to shift its focus from products to services, and create new revenue streams. Although this transformation is still in progress, initial outcomes show improved operational planning, awareness of circularity concepts, and openness to the redesign of products and processes.

This initial publication presents the foundational results of applying the CBMC, with particular emphasis on the role of leadership in promoting cultural change toward sustainability. At this early stage of the company’s transition, access to consolidated performance metrics—such as fully developed key performance indicators (KPIs)—remains limited.

From a theoretical standpoint, this research extends the Lewandowski and the Weetman models by incorporating not just financial aspects (servitization—revenue stream) but regulatory and cultural dimensions specific to emerging economies. The application of the framework revealed that organizational enablers—such as leadership engagement, environmental awareness, and change management—are critical for CE readiness, reinforcing previous findings on the role of internal capabilities in sustainable business transitions.

From a practical perspective, this study illustrates how this CBMC can help SMEs identify strategic priorities, redesign production and relationship models, and align business practices with the United Nations Sustainable Development Goals (SDGs). Specifically, the case study demonstrates alignment with SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation and Infrastructure), and SDG 12 (Responsible Consumption and Production), offering a replicable roadmap for similar firms.

Further questions also emerged from this exploratory research, such as how digital technologies (e.g., IoT, AI) might support the evolution of servitization, circular models in SMEs, and how CBMC elements interact to optimize value generation across supply chains. Although the company currently operates with a low level of digitalization, it is actively seeking funding and partnerships to support the digitalization of its processes, the transition to digital assets, and the development of specialized cost centers. This mindset reflects a strategic orientation toward efficiency and innovation, which is essential not only for overcoming growth barriers but for building a competitive and sustainable market position.

However, this study has certain limitations. The absence of fully developed key performance indicators (KPIs) and reliance on a singular case study restricts the generalizability of the results. Future ongoing research should incorporate comprehensive performance metrics and intend to adopt multi-case study approaches to validate and to refine the CBMC across various organizational settings.

Furthermore, in the context of SMEs in developing countries, several research questions remain open. Beyond the use of KPIs to monitor the impacts of circular transitions, future studies could explore the following questions: In what ways can products serve as data collectors that, by adding value, improve service offerings and guide the design of future products? How are the core components and functionalities of the CBMC structured to deliver value to customers? What are the interconnections among business model components, supply chains, and stakeholder networks—and through which mechanisms does the organization generate and capture value or profit from these interdependencies?

In summary, this study confirms that circular strategies, when adapted to local contexts and supported by leadership and participatory engagement, can unlock innovation and competitiveness in SMEs. By providing a tested analytical tool and outlining practical implications, this research contributes to advancing the theoretical and applied understanding of sustainable business model transitions in emerging markets.