Adopting a circular business model improves market equity value

The circular economy is set to be the future paradigm in business. Consumer preferences and demographics changed the way companies design products, market them, and interact with their customers. In this conceptual article, it is argued that the positive externalities documented in the circular economy literature (environmental impact, creating of a sustainable economy) can also be translated into a financial gain for shareholders. This article focuses on only one aspect of this potential multifaceted financial gain: an improvement in the customer relationship. The finance-marketing hybrid model of consumer life value is used to explain the extent of this possible increase in the market equity value of the firm when adopting this new economic paradigm.