Cooperatives' Engagement with Circular Business Models: A Qualitative Exploration of Levers and Barriers?

Cooperatives serve as a powerful tool for promoting sustainability objectives. However, the existing literature on the intersection of cooperatives and the circular economy (CE) remains relatively limited (Ziegler et al., 2023). Despite the inherent alignment between cooperative values and CE principles, such as collective welfare, social equity, and environmental stewardship (Geissdoerfer et al., 2017), the extent to which cooperatives adopt circular business models (CBM) and the factors influencing this process require further investigation. Addressing this gap, this paper explores the drivers and barriers affecting cooperatives’ engagement with CBM, focusing on three distinct categories: (1) cooperatives founded with a focus on CE principles, (2) those transitioning to a circular approach, and (3) those not currently involved in circular practices.
Using qualitative research methods, including semi-structured interviews and focus groups, this study investigates organizational culture, governance, stakeholder collaboration, resource access, and regulatory frameworks as key enablers and obstacles.
First, organizational culture is also expected to play a pivotal role. In cooperatives with a strong CE orientation, innovation and long-term thinking often underpin operational practices, such as closed-loop production and sharing economies (Lüdeke-Freund et al., 2019). Organizational values may often motivate cooperatives to adopt circular practices, such as resource optimization, waste minimization, and product lifecycle extension. However, the extent to which these values translate into operational strategies probably vary across the three cooperative groups studied.
Second, governance structures that facilitate participatory decision-making may further enable cooperatives to navigate the complexities of CBM implementation. Conversely, misaligned governance structures can pose significant barriers, particularly for cooperatives in transition or those uninvolved in circular practices.
Third, stakeholder collaboration is probably another critical factor influencing the implementation of CBM. Cooperatives often depend on networks of members, customers, and partners to effectively adopt circular practices. Successful CE-oriented cooperatives frequently demonstrate robust stakeholder engagement, fostering partnerships that enable resource sharing, knowledge exchange, and co-creation of value (Korhonen et al., 2018). However, transitioning and uninvolved cooperatives may face challenges in establishing and maintaining such collaborations, which hinder progress toward circularity.
Furthermore, access to resources — both financial and non-financial — should significantly affect the ability of cooperatives to adopt CBM. Indeed, smaller cooperatives often encounter barriers such as limited funding and insufficient technical expertise. In contrast, access to innovative technologies and supportive networks enables CE-focused cooperatives to implement advanced circular strategies (Ghisellini et al., 2016).
Last but not least, regulatory constraints also remain a persistent challenge across all cooperative groups. Policies that favor linear economic models, inconsistent regulations, and a lack of incentives for circular practices frequently impede cooperatives’ ability to fully transition to CBM. Advocacy for policy reforms and the establishment of supportive legislative frameworks are essential to mitigating these barriers.
This analysis contributes to the broader understanding of sustainable business practices and cooperative development by highlighting the unique role of cooperatives in fostering systemic change toward sustainability. The findings suggest that cooperatives leveraging their values-based approaches, participatory governance structures, and community-oriented focus are well-positioned to pioneer the adoption of CBM. By overcoming identified barriers and reinforcing enablers, cooperatives have the potential to drive a regenerative economy that benefits both society and the environment.