Challenge 12.3

What is the problem, and how does it affect the Challenge Sponsor organisation, service users and/or People of Scotland?

Scotland's transition to a circular economy can be challenging for businesses and investors seeking to assess the commercial potential of circular business practices. Many existing financial assessment tools are designed to evaluate traditional linear business approaches and may not fully capture factors such as supply chain resilience, resource security, customer retention, or exposure to future material and energy cost volatility.

This can make it difficult to compare circular opportunities with more traditional investments, particularly where benefits are realised over a longer timeframe or across multiple parts of the value chain. As a result, some potentially valuable circular opportunities may be harder to assess, fund and scale.

For Zero Waste Scotland, this presents an opportunity to better support businesses in evaluating and adopting circular approaches, while improving understanding of the factors that influence investment and implementation decisions. There is also a need for stronger evidence and insights into market trends, barriers and opportunities to help inform future business support programmes and policy development.

For Scotland, increasing the adoption of circular economy practices could help reduce reliance on virgin materials, minimise waste, strengthen economic resilience and support progress towards environmental and net-zero ambitions.

How will we know this Challenge has been solved?

The Challenge will be considered successful when businesses can effectively demonstrate the commercial viability of circular economy opportunities and present stronger cases for investment.

Success would be demonstrated through:

• Increased confidence amongst businesses to pursue circular economy opportunities.

• Improved investor confidence in circular business practices.

• Increased access to public and private investment for circular businesses.

• Greater adoption of circular practices such as reuse, repair, leasing and product-as-a-service models. The generation of reliable, aggregated insight that helps Zero Waste Scotland better understand adoption barriers, commercial opportunities and business needs.

• The creation of an evidence base that can inform future business support programmes and wider policy development

Ultimately, success should be reflected in a widespread take-up by business of the tool created.

Who are the end users likely to be?

The primary users will be Scottish businesses, particularly micro, small and medium-sized enterprises (SMEs), entrepreneurs and established businesses seeking to assess, validate and communicate the commercial viability of circular economy opportunities. The solution should be intuitive, easy to use and suitable for organisations with limited time and resources.

Users will also include Zero Waste Scotland and policymakers who can utilise anonymised and aggregated insights generated through the solution to improve programme design, business support interventions and policy development.

Has the Challenge Sponsor attempted to solve this problem before?

Zero Waste Scotland previously provided Circular Economy Business Support (CEBS), offering tailored one-to-one support covering areas such as financial assessments, market research and risk analysis. This approach demonstrated the value of providing deeper commercial support to circular businesses, but was resource intensive and not easily scalable.

While a range of circular economy tools and business support resources exist, Zero Waste Scotland is not aware of a solution that successfully combines commercial viability assessment, circular economy metrics, investor readiness and actionable insight generation within a single self-service platform.

Are there any interdependencies or blockers?

The challenge aligns strongly with the Scottish Government's ongoing commitment to developing a circular economy and climate-ready businesses. Continued policy support for circular economy principles is therefore an important enabler of long-term success. 

A key consideration will be ensuring that any methodology, assumptions and data sources used by the solution are trusted by businesses, investors and financial institutions. Without confidence from the investment community, the solution would be unlikely to achieve its intended impact.

Will a solution need to integrate with any existing systems / equipment?

The solution is likely to be hosted on or linked from Zero Waste Scotland's Business Information Hub. Beyond this, no significant integration requirements have currently been identified.

The ability to provide dashboard reporting and insight outputs for Zero Waste Scotland would be desirable, supporting both operational decision-making and longer-term evidence gathering.

Is this part of an existing service?

Yes. The challenge supports Zero Waste Scotland's business support offering and aligns with the organisation's move from one-to-one support toward scalable one-to-many digital services.

The challenge also complements wider business support and circular economy programmes delivered across Scotland and has potential value beyond Zero Waste Scotland through other public and private sector business support networks.

Any technologies the Challenge Sponsor wishes to explore or avoid?

The sponsor is interested in exploring dynamic, intelligent and highly tailorable digital solutions capable of producing meaningful and evidence-based outputs. Static approaches such as spreadsheets or PDF-based tools are unlikely to meet user needs.

Solutions should focus on commercial viability and commercial resilience factors such as supply chain disruption, resource availability and cost volatility. Purely environmental or social impact assessment tools are outside the scope of the challenge.

The solution should also consider how aggregated user data and outputs can generate insight that supports business support strategy and policy development, whilst maintaining appropriate data governance and privacy standards.

What is the commercial opportunity beyond a CivTech contract?

The challenge addresses a need that extends far beyond Scotland. Circular economy policy and investment programmes are growing across the UK and internationally, creating opportunities for a solution that helps businesses, investors and support organisations assess circular commercial opportunities.

Potential customers could include enterprise agencies, local and national governments, business support organisations, accelerators, investors and financial institutions. If successful, the platform could evolve from a business support tool into a broader intelligence and investment assessment platform for the circular economy.

Who are the stakeholders?

• Scottish businesses and entrepreneurs.

• Investors, funders and financial institutions.

• Zero Waste Scotland Business Support Team.

• Zero Waste Scotland Policy Team.

• Zero Waste Scotland Research and Evaluation Team.

• Zero Waste Scotland Communications Team.

• Zero Waste Scotland IT Team.

• Scottish Enterprise, Highlands and Islands Enterprise, South of Scotland Enterprise and Business Gateway.

• Scottish Government policymakers and circular economy stakeholders.

Who’s in the Challenge Sponsor team?

The challenge will primarily be led by Zero Waste Scotland's Business Support Systems team, supported by colleagues from Research and Evaluation, Policy, Communications, IT, and Governance and Compliance. Subject matter expertise, business support experience, data insights and access to relevant organisational stakeholders will be provided throughout the challenge.

What is the policy background to the Challenge?

The challenge supports delivery of:

• Circular Economy Strategy for Scotland.

• Circular Economy (Scotland) Act 2024.

• National Strategy for Economic Transformation (NSET).

• Scottish National Adaptation Plan (SNAP3).

The challenge supports Scotland's ambition to reduce material consumption, increase resource productivity, strengthen economic resilience and accelerate the transition to a low-carbon, circular economy. It also seeks to improve the evidence available to inform future business support and policymaking decisions.