Circles of profit: A conceptual framework for economic and financial aspects in circular construction

Abstract

Circular construction is an emerging paradigm aimed at addressing the sustainability concerns related to the construction industry. While technical and environmental aspects of circular construction receive ample attention, their economic dimension remains underexplored and is often limited to costs and micro-level factors, lacking a holistic perspective. In response, this study develops a multi-level conceptual framework to critically evaluate the economic and financial aspects of circular construction, through an Integrated Literature Review (ILR) of 45 academic and grey literature sources, complemented by interview data from actors involved in real-world circular construction projects. Four primary research clusters of economic and financial aspects are identified: (1) economic assessment methods, (2) benefits, barriers, risks, and enablers, (3) market guidelines and reports, and (4) circular business models. The findings reveal that economic and financial aspects are complex, extending beyond traditional cost and finance issues, and multilevel, shaped by supply chain dynamics, market forces and policy frameworks. As there is a high degree of interdependency among economic and financial aspects, any change can trigger cascading effects. Additionally, the study demonstrates how targeted interventions can mitigate multiple barriers and create positive feedback loops. The results contribute to the literature on the economic aspects of circular construction by broadening the traditional cost-focused approach and highlighting interconnected economic dynamics. Furthermore, the results advance the circular construction transition literature by illuminating relationships across multiple levels. Lastly, the study contributes to the literature on circular economy barriers and enablers by critically examining the underlying reasons behind existing barriers. By providing a structured approach to the economic and financial aspects of circular construction, the framework enables stakeholders to systematically identify and address barriers, costs, and uncertainties that often hinder its practical implementation.