ROCKWOOL GROUP: A Circular Economy Business Model Case

Abstract

This report presents a case study of the ROCKWOOL Group and its circular business model, selected by the R2π project along with 17 other cases, due to its position within the construction and building materials sector, which is one of the priority areas of the European Union’s circular economy strategy. The objective of the report is to analyse the contextual and business factors affecting the circular business model, as well as to assess the enablers and barriers to implementing such a model and to provide considerations for both business leaders and policy makers. The construction industry is a rapidly growing and important sector for future global development and yet is currently one of the most resource-intensive and wasteful, accounting for 25-30% of all waste generated in the EU1. ROCKWOOL, as a major global player in the industry, was chosen particularly for its “RockCycle” take-back and recycle programme for building insulation materials. ROCKWOOL provides customers with fire resilient thermal insulation for buildings and houses. The product is made of a natural stone material and has high fire resistance, good thermal properties, long durability and is fully recyclable. During renovation, old insulation material would typically be considered waste and would be discarded in landfills, however, with the RockCycle programme, it is recovered and recycled. Today, RockCycle is offered in 5 countries, and the company has set goals to replicate the service to 30 countries by 2030. Currently, it is a small part of ROCKWOOL’s business with estimates in Germany of roughly 5% of the volume of flat roof insulation sold during 2017 being recovered and recycled. This is, nevertheless, a significant improvement, as the majority of all companies’ used insulation is still sent to landfill. The take-back programme is characterised primarily by three circular economy business model patterns in different parts of the value chain. At end-of-cycle, the material taken back from customers is “resource recovery”, and during production, this is combined also with the “co-product recovery” of secondary materials originating from other products or industries to enter a “re-make” process and recycle them back into new insulation material. This combined circular model results in positive environmental and economic impacts over the typical linear model. Outcomes include: reduced materials ending in landfill, lower consumption of virgin materials, financial benefits to customers, revenue to the company as well as image enhancement for the company