Major manufacturer Philips has said that it will investigate the potential of lease models as part of its commitment to the circular economy.
Royal Philips global head of sustainability Henk de Bruin (pictured) wrote in a blog on the Philips website that the company will “experiment with leasing contracts instead of relying on a ‘boxed product’ business model.”
This could mean that hospitals for example would pay for the usage of MRI scans rather than buy the hardware.
He added: “Instead of owning, customers may need to follow the lead of a ‘millennial’ generation more enthused by experiential and sharing behaviours and using services rather than abundant possessions.
“The circular economy is characterised by these things and more – a commitment to protecting the environment and developing a low-carbon society, a transformation from selling boxed products to supplying ongoing services, ensuring a more effective use of raw materials, nurturing relationships with customers rather than simply relying on a one-way corporate model of selling and buying.
“Research undertaken by WRAP has identified that circularity could result in an improved trade balance of £90 billion across the EU and the employment of an extra 160,000 people in the materials recovery sector alone.
“I strongly believe that Philips’ approach to the circular economy will be successful when it is woven into the fabric of everyone’s job, mindsets and reaches the very highest levels of the company.
“We realise that the circular economy is not a strategy you can pursue alone. It requires relationships with recyclers, retailers, consumers, resource providers, regulators and so forth: basically, everyone involved in a company’s value chain, from start to finish.”