Value propositions for advancing circular economy business model in construction-related organisations

The construction industry consumes many resources and causes severe environmental impacts, including high energy use, carbon emissions, and waste. It contributes 40% of global energy use, 36% of carbon emissions, and one-third of total waste (Li et al., 2019). Thus, the sector needs to adopt circular economy (CE) principles. Applying CE principles in construction can improve resource efficiency. This can be done by encouraging material reuse, recycling, and reduced extraction of virgin resources (Swarnakar and Khalfan, 2024). Hence, reusing construction and demolition waste (CDW) can reduce landfill use and reliance on non-renewable materials (Abdullahi et al., 2023; Swarnakar and Khalfan, 2024). The CE is an economic model that aims to separate growth from resource use. Unlike the linear model of “take, make, dispose,” CE focuses on closing resource loops, extending product lifecycles, and designing for sustainability (Osaobajo et al., 2022). Also, CE follows three principles: eliminating waste and pollution, keeping materials in use, and regenerating natural systems (Geissdoerfer et al., 2017).

However, circular economy business models (CEBMs) are vital in adopting CE in organisations (Otasowie et al., 2024, 2025), and the value proposition is a critical component of the CEBM canvas (Lüdeke-Freund et al., 2019; Lewandowski, 2016). It defines the unique benefits an organisation offers to its customers. Thus, aligning value propositions with CE principles helps businesses rethink their offerings while promoting sustainability (Ghafoor et al., 2024). Traditional construction business models follow a linear approach, which leads to resource depletion and environmental damage. However, a CE-based value proposition prioritises resource optimisation, waste minimisation, and lifecycle management. This implies that organisations can focus on modular designs, material reuse, or leasing models to retain ownership of resources (Adekunle et al., 2024). Furthermore, integrating CE into value propositions can address global issues such as climate change and resource scarcity while contributing to the United Nations Sustainable Development Goals (SDGs) (De Silva et al., 2025).

Nevertheless, many construction organisations continue to follow linear models that focus on the single use of materials (Adams et al., 2017; Otasowie et al., 2023a). In addition, while research on CE implementation exists (Otasowie et al., 2023b, 2025; van Stijn and Gruis, 2020), studies focussing on CEBM or circular value propositions for construction organisations remain limited. Since circular value propositions shape how organisations create, deliver, and capture value in CEBM, addressing this gap is essential (Geissdoerfer et al., 2018). Hence, this study aims to identify the value proposition attributes in a CEBM for construction organisations. The purpose is to bridge the gap between theoretical understanding and practical application in redefining circular value propositions. Also, it will offer actionable pathways for construction organisations to adopt CEBM.

Recent studies (Jayakodi et al., 2024; Zhang et al., 2025) on CEBM in construction have provided valuable frameworks for understanding how construction organisations can create, deliver, and capture value in more sustainable ways. These studies introduced a set of sustainable business model value propositions, such as creating value from waste, encouraging sufficiency, and delivering functionality rather than ownership. These value propositions align closely with the goals of CE and are relevant to construction organisations seeking to adopt circular value propositions. For example, offering reused, refurbished, or upcycled construction components fits the “create value from waste” value proposition. Value propositions in CEBMs represent a shift from traditional models to focus on sustainability and resilience. They challenge the linear “take, make, dispose” system by promoting circular principles:

1. Durability and Longevity: Products are designed for long-term use.

2. Access over Ownership: Service-based models like Product-as-a-Service (PaaS) replace product sales with access-based solutions.

3. End-of-Life Solutions: Take-back systems ensure products are recovered for reuse or recycling.

Thus, the value proposition in a CEBM focuses on minimising waste, resource efficiency, and system regeneration (Osterwalder and Pigneur, 2010). Organisations may also redesign products and services to align with CE principles. An example is leasing instead of selling products, which reduces material consumption and extends product lifecycles (Ghafoor et al., 2024). Ultimately, value propositions drive the transition from linear models to sustainable, circular business models (Gyimah et al., 2025). They support resource efficiency, innovation, and systemic change, particularly in construction-intensive industries. Thus, redefining value propositions in line with circular principles is crucial for achieving global sustainability goals and advancing CE.

However, the construction industry has unique characteristics that make circular practices more difficult. These include project-based work, fragmented supply chains, and reliance on traditional procurement methods focused on cost (Luong et al., 2018). Due to these constraints, adopting circular models in construction is not straightforward. It requires tools and frameworks that are tailored to the sector. Hence, this study draws on the Sustainable Business Model framework by Bocken et al. (2014). This framework provides an understanding of how sustainability can be built into business models. It includes patterns such as creating value from waste and closing resource loops. These patterns match well with circular value propositions for CEBM in construction organisations.

This study used an exploratory sequential mixed-methods approach to examine value propositions in the CEBM for construction organisations. This approach was selected because the subject matter is still emerging, and there is limited empirical data specific to the construction industry (Jack and Raturi, 2006). Thus, combining them provided a deeper understanding and a broader perspective on the subject (Mangan et al., 2004; Takona, 2024). First, the qualitative phase involved data collection and analysis. The findings from this phase then guided the quantitative phase. In the qualitative stage, purposive sampling was used to select participants with expertise in CE. Initially, experts were contacted via email and given a summary of the study's purpose. Those interested received a detailed explanation and were required to submit their curricula vitae to confirm their qualifications. This ensured that only experts meeting the study's criteria participated. Invitations were sent to 30 construction professionals, but only 15 responded, and 13 experts participated. According to Patton (2022) and Guest et al. (2013), this number was enough to achieve data saturation. Furthermore, Els and De la Rey (2006) defined reliability as the degree to which a process consistently gives similar results under the same conditions. However, this level of reliability is difficult in interviews, as different experts may provide different views based on their background. Thus, the study focused on ensuring credibility, consistency, and relevance in experts' responses. Experts were selected based on predetermined criteria and their vast experience. These criteria include the experts needed to understand CE principles and their application in construction. They were required to hold senior roles in construction organisations and have academic qualifications in construction, such as a Bachelor's, Master's, or PhD degree. They also needed practical experience with public and private construction clients and a strong theoretical background in CE. In addition, participants had to hold managerial or supervisory roles in CE-related construction projects, be members of a professional body, and be willing to participate fully in the study. Their anonymity was also maintained to reduce bias and improve validity. Table 1 presents the demographic details of these experts.

Semi-structured interviews were used because they allow flexibility and encourage deeper insights (Kallio et al., 2016). The interviews lasted 30–45 min and were conducted via Zoom. All interviews were audio-recorded with consent and transcribed verbatim using Microsoft Word to ensure accuracy (Braun and Clarke, 2022). After the transcription, the text was uploaded to Atlas.Ti for analysis. Furthermore, insights from the qualitative phase informed the development of the survey questionnaire used in the quantitative phase. The questionnaire was first piloted with five experts to test for clarity and relevance (Hirshfield and Fowler, 2020). Given the classifications of construction organisations (grades 1–9) in South Africa, a stratified random sampling technique was adopted to ensure fair representation. The strata were determined based on the classifications as defined by the Construction Industry Development Board (CIDB) of South Africa. However, only grades 7 to 9 were considered for this study due to the significant years of experience of the organisations. The total population (5,036) was divided into the relevant strata, and the sample size of 357 (based on Yamane's formula) was proportionally allocated across the strata based on their population ratios. Respondents were then randomly selected within each stratum. However, only 208 valid responses were returned from the 357 questionnaires distributed to the construction organisations, which is considered suitable for the data analysis method employed in this study (Bagozzi and Yi, 2012). The background information of respondents was analysed using percentages. In addition, data on value propositions in CEBM were assessed using the Relative Importance Index (RII), Kruskal–Wallis test, and Confirmatory Factor Analysis (CFA). The RII ranked the value propositions based on their significance. Also, the Kruskal–Wallis test examined whether opinions differed significantly based on professional roles (Pallant, 2020; Otasowie et al., 2023c). A p-value above 0.05 indicated no significant difference, while a p-value below 0.05 showed a significant difference. Furthermore, CFA was used to test the measurement validity of the identified constructs. The analysis was conducted using EQS software version 6.4, and a multi-dimensional approach was applied to assess the model fit. The study used indices such as the Root Mean Square Error of Approximation (RMSEA), Satorra-Bentler Scaled Chi-Square, Standardised Root Mean Square Residual (SRMR), Goodness-of-fit index (GFI), Comparative Fit Index (CFI), and RMSEA with 95% or 90% confidence interval. These ensured the reliability of the findings. Lastly, each interview expert and questionnaire respondent gave informed consent before data collection, as approved by the Ethics and Plagiarism Committee (FEPC) of the Faculty of Engineering and the Built Environment at the University of Johannesburg.

Value propositions are critical to every organisation's business model, representing the unique benefits and solutions offered to clients, stakeholders, and the broader community. It defines how these organisations create, deliver, and capture value, particularly within evolving industry demands and sustainability objectives. The findings reveal that offering services such as building maintenance, construction component renting, building upgrading, and facilitating client education are circular value propositions that can be adopted by construction organisations (P1, P2, P3, P4, P5, P6, P7, P8, P9, P10, P11). P2 opines, “When it comes to building maintenance, construction component renting, building upgrading, and facilitating client education, I see these areas as essential to not just preserving but enhancing the value and functionality of buildings over time.” P6, on the other hand, says, “For me, building maintenance is about taking responsibility for the longevity and reliability of a structure. It is not just about fixing things when they break but about regular inspections, preventive measures, and timely repairs. I believe good maintenance is the foundation of sustainable construction management.” Building maintenance ensures the longevity of structures by addressing wear and tear, preventing failures, and optimising performance. This proposition can reduce the need for new materials and minimise waste generation, aligning with the CE's emphasis on extending product lifecycles (Adams et al., 2017). P9 reveals that “renting construction components has become an area I find particularly interesting, as it aligns with the circular economy principles. Providing access to high-quality equipment and components through modularity without ownership can reduce waste, minimise costs, and promote resource efficiency.” This position corroborates Lewandowski's (2016) findings on achieving a product-service system. In this system, a construction organisation can provide clients access to a product while maintaining ownership. This approach is an alternative to the conventional “buy and own” model. For instance, the Philips pay-per-light model (Laubscher and Marinelli, 2014) exemplifies this concept. Furthermore, renting construction components, such as scaffolding, machinery, and modular units, can promote resource efficiency and reduce material waste. This model shifts the focus from ownership to access, enabling reuse and reducing the need to manufacture new components consistently. It also extends the lifecycle of construction components through repeated use, aligning with the “sharing economy” principles of CE (Li et al., 2019). P5 says, “Building upgrading is where I feel we can make a difference in enhancing the user experience and increasing a building's value. Upgrading can involve retrofitting older structures for energy efficiency and incorporating smart technologies. Also, facilitating client education is a passion of mine because it empowers clients to make informed decisions about their properties. Helping clients understand the benefits of sustainable practices, the value of regular maintenance, or the impact of upgrading projects creates a partnership built on trust. I enjoy being part of this process, where education leads to better outcomes for both the client and the environment.” Upgrading buildings to improve energy efficiency, structural resilience, and adaptability reflects a key CE principle. This finding corroborates the position of Pomponi and Moncaster (2017) that retrofitting older buildings with energy-efficient technologies like insulation and solar panels can reduce resource consumption and emissions, contributing to a sustainable built environment. Also, incorporating smart systems can enhance resource optimisation by automating energy and water use, prolonging the building's usability (O'Grady et al., 2021). These circular value propositions form a holistic construction and building management approach. They are about more than just structures; they create spaces that last, adapt, and inspire.

Furthermore, other circular value propositions for construction organisations include manufacturing and selling long-lasting construction components/items and construction waste handling and processing (P1, P2, P3, P5, P6, P7, P8, P9, and P11). Also, construction component/item leasing, producing construction components/items only on demand, and designing out waste (P1, P2, P4, P5, P6, P7, P8, P10, P11). P4 opines that “it is clear that our industry must embrace smarter, more sustainable practices. Selling manufactured, long-lasting construction components and items is a no-brainer for me. Why create something that only lasts a short time when we can design for durability and resilience?” This position corroborates Geissdoerfer et al. (2017), who state that selling manufactured durable construction components is a cornerstone of CE principles in construction. Durable components will reduce the need for frequent replacements, minimising resource extraction and waste generation. Durable materials are often designed for adaptability and ease of maintenance, enabling reuse or refurbishment rather than disposal. In addition, effective construction waste management involves strategies to reduce, reuse, and recycle materials. Construction organisations can recover valuable resources and reduce environmental impacts by diverting waste from landfills. Likewise, on-demand production can minimise overproduction and associated waste. This will ensure that materials and components are manufactured precisely when and where needed. The same applies to designing out waste. This will involve rethinking building designs and construction processes to minimise material use and waste generation.

Experts P1, P2, P5, P6, P7, P8, and P11 also assert that selling recycled construction components/items can be a good value proposition for construction organisations. P2, P4, P5, P6, and P8 added facilitating stakeholder collaboration through technology. P2 says, “Selling recycled construction components or owning a recycling plant is something I see that can be a game-changer for the construction industry. It is about making the most of what we already have rather than constantly extracting new resources. Even concrete waste, often overlooked, can be crushed and repurposed as aggregate for new construction.” P4, on the other hand, added, “But recycling and reusing materials is just one piece of the puzzle. To make a difference, we must prioritise collaboration among all stakeholders, contractors, suppliers, architects, and clients. This can be done through technology.” This position aligns with Nedeljković et al. (2021). Recycling construction components involves salvaging materials from demolished or deconstructed buildings and repurposing them for new projects. Selling recycled construction materials/components can reduce the demand for virgin materials, reduce waste sent to landfills, and reduce the resulting environmental impacts. Also, since concrete is one of the most commonly used materials in construction, its waste significantly contributes to construction and demolition debris. Repurposing concrete waste as an input for new production cycles can close the material loop. The findings suggest that collaboration among stakeholders, including designers, contractors, clients, and policymakers, is critical for implementing circular value propositions.

In addition, expert participants P1, P5, P6, P7, and P11 suggested refurbishing construction components/items, repairing construction components/items and remanufacturing construction components/items as circular value propositions for construction organisations. P4 mentioned constructing with fewer resources and less waste, while P2 and P8 mentioned facilitating the take-back of used construction items/materials. P8 says, “Facilitating the take-back of used construction items or materials is an exciting way to close the loop. Imagine if every material we used had a plan for its next life. We can reduce landfill waste and create a circular system where materials are continuously repurposed by setting up systems to retrieve and reuse these items.”. This corroborates the findings of Lewandowski (2016). The take-back of used construction items or materials is a core component of circular value propositions in the construction sector. This approach aligns with the fundamental principles of the CE, which aim to minimise waste, optimise resource use, and create regenerative systems. Facilitating the take-back of used materials will reduce the environmental impact of construction activities and create economic and social value by extending the lifecycle of construction materials. The findings also corroborate Adams et al. (2017) that construction materials such as steel, wood, concrete, and glass can be effectively reclaimed and reintegrated into production cycles. This will create a closed-loop system. Take-back systems can enable the recovery, reuse, refurbishment, and recycling of construction materials. These systems are meant to support resource efficiency and reduce the extraction of virgin materials, which often have high environmental costs.

Lastly, P12 and P13 mentioned offering upcycling construction components/items, while only P13 mentioned offering downcycling construction components/items as a service. P12 says, “I have been part of a project where things like old windows were bought and became greenhouse walls, and discarded bricks were used to create rustic pathways. It was inspiring to see how creativity and sustainability can go hand in hand, making construction more eco-friendly and beautiful.” There was little mention by the interview experts of downcycling and upcycling. This might be a result of the nature of the construction industry, which is perceived to be different from other sectors. The experts believe it would be challenging to downcycle, repair, refurbish, and upcycle construction components in the construction industry. Thus, they are not perceived as feasible value propositions. However, Zhang et al. (2022) believe that processing construction materials for downcycling purposes is possible in construction. According to Monier et al. (2017), downcycling can be implemented off-site using a stationary facility or a mobile crusher.

The integration of circular value propositions into the business models of construction organisations represents a significant shift from traditional linear practices, which offer benefits. However, communicating the benefits of circular or sustainable value propositions and aligning diverse client segments is important. The findings highlight benefits that specific construction client segments would receive.

P2, P4, P6, P7, and P13 opine that cost-conscious clients could benefit from refurbished, repaired, and downcycled construction components. P6 says, “These value propositions would result in lower costs and reduce procurement expenses”, while P7 posit that “These will reduce overall construction expenses” Other experts echoed the same sentiment. This implies that clients who focus on minimising costs often hesitate to adopt sustainable practices due to concerns about financial feasibility. However, these findings show that economic and environmental goals can align, reinforcing the business case for sustainability. Hence, a substantial business opportunity exists to target cost-conscious clients with circular construction solutions. Furthermore, experts P1, P5, P8, P9, and P12 mentioned that business-to-business (B2B) suppliers could benefit from remanufactured construction components/items, facilitating take-back of used construction items/materials and construction waste processing. P1 noted, “remanufactured construction components/items can provide access to high-quality, lower-cost alternatives, and increase profit margins” P12 added, “facilitating take-back of used construction items/materials can reduce waste disposal costs for business-to-business suppliers”. P8 further stated that “construction waste processing will create new revenue streams from waste materials for business-to-business suppliers”. B2B suppliers provide construction materials and services to other businesses. These findings suggest that B2B suppliers have much to gain from integrating CE practices. Reduced costs, increased profitability, and sustainability benefits make these strategies viable and attractive. However, these suppliers must develop partnerships to facilitate these transitions effectively.

In addition, P1, P2, P3, P4, P5, P6, P7, P8, and P12 identified that business-to-client (B2C) suppliers could benefit from recycling construction components/items, producing construction components/items only on demand, and building upgrading. P5 noted, “Value propositions such as producing components on demand would reduce storage and waste costs while ensuring tailored, efficient production for business-to-client suppliers.” P8 says that “business-to-client suppliers would benefit from building upgrading as such value propositions aim to increase property value and user comfort” Other experts echoed the same sentiment. B2C suppliers sell materials and services directly to individual clients. The findings suggest that B2C suppliers can reduce costs, improve efficiency, and enhance competitiveness by adopting recycling, on-demand production, and building upgrading strategies. Furthermore, P1, P4, P6, P11, P12, and P13 mentioned that green-conscious clients could benefit from constructing with fewer resources and less waste, designing out waste, and upcycled construction components/items. P11 says, “Constructing with fewer resources and less waste will benefit green-conscious clients to achieve a low environmental footprint in their projects” P4 added, “Designing out waste will benefit green-conscious clients to minimise waste disposal costs.” The findings suggest that construction organisations that align with these value propositions can improve their brand reputation. This can help them attract sustainability-driven investors and strengthen partnerships with environmentally responsible clients. Table 2 gives a summary of the responses from the interview experts.

From the responses, 3% of respondents have a doctoral degree as their highest qualification, while 24% have master's degrees. Furthermore, 28% of the respondents have honours degrees, whereas 24% have bachelor's degrees. In addition, 19% of the respondents have post-matric certificates, while 2% have matric certification as their highest qualification. Also, a total of 1.9% of respondents have less than one year of experience in the construction industry, 6.7% of respondents have between one and two years of experience, 10.6% of respondents have between three and five years of experience, 17.3% of respondents have between six and ten years of experience, 23.1% of respondents have between 11 and 15 years of experience, 12.5% of respondents have between 16 and 20 years of experience, 4.8% of respondents have between 21 and 25 years of experience, and 23.1% of respondents have more than 25 years of experience in the construction industry. Hence, the research includes both entry-level professionals and experienced construction experts. Similarly, 19.2% of respondents are engineers, 17.3% are construction managers, 39.7% are architects, 19.2% are quantity surveyors, and 3.9% are project managers. Thus, the research covers a diverse range of professionals within the construction industry.

Table 3 indicates that offering manufactured long-lasting construction components is the most important value proposition, with an RII of 0.85. Thus, construction organisations could focus on fabricating durable components to meet client needs. The second most important value proposition is offering refurbished construction components, with an RII of 0.84. This suggests that refurbished components are a cost-effective option and a profitable business opportunity for organisations adopting the CEBM. Similarly, the third-ranked value proposition is fabricating and offering recycled construction components, with an RII of 0.83. This implies that construction organisations could leverage this opportunity by ensuring high-quality recycled materials while highlighting their cost and sustainability benefits to clients. The fourth-ranked value proposition is offering upcycled construction components with an RII of 0.83. Hence, organisations can focus on upcycling construction products to enhance their sustainability strategies. Also, partnerships with B2B suppliers can further improve business sustainability and competitiveness. The fifth most significant value proposition is building maintenance with an RII of 0.83. This suggests that construction firms could expand their services to include maintenance contracts. Thus, this could create new revenue streams and drive long-term client relationships, strengthening business sustainability. However, the least ranked value propositions include construction component renting, downcycled construction components, and on-demand fabricated components, all with an RII of 0.76, respectively. This indicates that stakeholders may prefer ownership over temporary use of construction components. Nevertheless, the Kruskal-Wallis test results reveal differences in opinions among professionals regarding CEBM value propositions in construction. This test determines whether respondents' perspectives differ significantly based on their professional roles. If the p-value exceeds 0.05, there is no significant difference in opinions. However, if the p-value is less than 0.05, it indicates a significant difference in respondents' views. Table 3 shows no statistically significant difference in opinions regarding some value propositions. These include manufactured long-lasting components, upcycled components, and facilitating client education. These are considered value propositions in CEBM for construction organisations, with p-values of 0.131, 0.286, 0.307, and 0.055, respectively. Nevertheless, for other value propositions, the p-values are less than 0.05, suggesting significant differences in views. In addition, the Cronbach's alpha value for the value propositions is 0.941. Since this exceeds the 0.7 reliability threshold, it confirms that the construct variables in this study are highly reliable. Hence, the questionnaire used in this research demonstrates acceptable internal consistency, supporting its suitability for achieving the study's objectives.

The initial model included nineteen measurement variables. However, only eight variables had acceptable values before conducting CFA. Thus, these variables were selected for further analysis. The selected variables are VP9, VP10, VP12, VP13, VP14, VP15, VP16, and VP18. According to Byrne (2013), residual covariance distribution should be centred around zero and symmetrical. Hence, a latent construct with these features is considered a good fit and can be used in CFA (Boomsma, 2000). Also, Gao et al. (2008) emphasised that these characteristics help address multicollinearity and high correlations, which could otherwise impact the model's fit. The residual covariance analysis for the model with eight variables shows that the residual matrix meets the required standards. Thus, this confirms that the model demonstrates convergence. Bentler (2005) noted that a well-fitting residual matrix should have values between −1.00 and + 1.00, ideally close to zero. Hence, the results suggest a good model fit. In addition, the residual values fall within the expected range of −1.00 to +1.00. The unstandardised average off-diagonal residual is 0.0268. Considering that residual values above 2.58 are too high (Byrne, 2013), the findings suggest that the measurement model fits well. However, the results from the goodness-of-fit analysis will further confirm the model's appropriateness and strengthen the fit indices.

The estimated parameters of a model help decide if to accept or reject a proposed model (Lei and Wu, 2007). In addition, assessing model fit involves evaluating parameter estimates such as reliability, validity, and statistical significance (Lei and Wu, 2007; Hair et al., 2013). Hair et al. (2013) also suggest that model fit should be tested using various criteria, including incremental and absolute fit indices and the chi-square test. Table 4 presents the fit indices and related estimates. The results show that the GFI and the CFI have values of 0.927 and 0.958, respectively. According to Iacobucci (2010), a GFI or CFI value of 0.95 or higher indicates a good fit, while values above 0.90 are still acceptable. Hence, this study's GFI and CFI values confirm a good model fit. Furthermore, the SRMR and the RMSEA values are 0.038 and 0.029, respectively. A SRMR or RMSEA value of 0.05 or lower indicates a good fit, while values up to 0.08 are still acceptable. Thus, the results confirm that the model meets the good fit criteria. Also, the model analysis produced an S-Bχ² value of 62.447 with 20 degrees of freedom and a p-value of 0.000. However, Zhong and Yuan (2011) point out that the chi-square test is susceptible to sample size and data normality, making it sometimes less reliable. Thus, Kline (2023) recommends using a normed chi-square, which is calculated by dividing the chi-square value by the degrees of freedom. The normed chi-square for this study is 3.122. According to Byrne (2013), a normed chi-square value between 3.00 and 5.00 suggests a good model fit. Hence, the findings confirm that the model is appropriate. Furthermore, Table 5 presents the analysis's correlation coefficients, standard errors, and test statistics. The coefficient of determination (R²) and z-values help determine the significance and impact of the model's parameters (Bentler, 2005). The results show that all correlation coefficients are below 1.00, while the z-statistics are above 1.96, confirming the fitness of the measurement variables. Also, the z-statistics indicate the significance level of the path coefficients in the inner model. Hair et al. (2014) opine that a z-value greater than 1.96 in a two-tailed test at a 5% confidence level is considered statistically significant. In addition, the R² value measures the model's predictive accuracy. A value closer to 1.00 suggests strong predictive power (Kline, 2023). The analysis results show that the R² values for the measurement variables are above 0.5. Hence, this suggests that value propositions account for a significant portion of the variance in the indicator variables. This implies that the measurement variables effectively predict and define the model.

Furthermore, the internal reliability and consistency of the value propositions were further tested. These tests included factor loadings, Cronbach's alpha, and the Rho coefficient. These parameters provided sufficient information to assess the dataset's validity, reliability, and consistency (Hair et al., 2014). The reliability coefficient should range from 0 to 1.00, with values closer to 1.00 being more desirable (Kline, 2023). Furthermore, Table 6 presents the results of the reliability and validity tests. The Cronbach's alpha and Rho coefficient values were 0.920 and 0.921, respectively. Hence, these values confirm that the indicator variables are consistent and reliable. Also, the factor loadings of the measurement variables helped assess the strength and appropriateness of the construct validity. The coefficients showed a strong correlation between the measurement variables and the construct, indicating they converged toward a common point. In addition, coefficients above 0.5 suggest a close relationship between a measurement variable and the construct. The results in Table 6 show that all indicator variables have coefficients above 0.70, the recommended value. Kline (2023) suggested that a factor loading of 0.7 is required for convergent validity. Likewise, each construct's average variance extracted (AVE) should exceed 0.5. Hence, these results confirm that the measurement variables have good convergent validity.

The study's findings have significant implications for the construction industry. Theoretically, they show that the attributes of value propositions play a significant role in adopting CEBMs within construction organisations. However, only eight of the nineteen variables met the necessary standards before conducting CFA. This suggests that not all the variables initially considered were relevant for defining value propositions in the CEBM for construction organisations. Also, the results of the interfactor relationships indicate that the value proposition attributes were significantly correlated with the latent variables. When evaluating the variation explained by the construct, all values were statistically significant at the 5% level. Thus, these findings suggest that this latent component has a direct and statistically significant effect on CEBM. In addition, the results indicate that multicollinearity and high correlations were addressed by selecting variables that met the required residual covariance distribution. Since multicollinearity can distort decision-making models, the selected variables provide a reliable foundation for circular value propositions in the construction industry. Hence, the study contributes to refining CEBM by identifying client-driven value propositions. It also supports the integration of resource efficiency and client value into CEBM research.

Practically, the results show that the value proposition with the strongest statistical influence was facilitating collaboration among stakeholders, closely followed by facilitating the take-back of used construction materials. These value propositions can benefit both B2B clients and suppliers of the client segments. According to Lewandoski (2016), the client segment is closely associated with the value proposition component, and value propositions are typically designed for client segments. Several studies (Adams et al., 2017; Otasowie et al., 2024, 2025) have shown that stakeholder collaboration is crucial for successful CE adoption in the construction sector. Thus, construction-related organisations can adopt this as a value proposition using digital platforms to strengthen collaboration and knowledge-sharing in the industry (Li et al., 2019). This will benefit the B2B clients by improving supply chain efficiency and ensuring access to sustainable construction materials. For example, shared databases for material passports can allow organisations to track and reuse high-value components, reducing reliance on virgin materials (Swarnakar and Khalfan, 2024). In addition, construction-related organisations can adopt the value proposition of facilitating the take-back of used construction components. This system will allow construction organisations to recover, refurbish, and resell used components/materials rather than dispose of them Adams et al. (2017). Thus, B2B suppliers can benefit by securing raw materials at lower costs and reducing their dependency on virgin resources. Furthermore, B2B suppliers providing recycled aggregates, reclaimed timber, or repurposed steel can gain a competitive advantage by offering cost-effective and sustainable alternatives.

Also, the construction industry will experience the much-desired adoption of the CE when consideration is given to the CEBM value propositions. Since the value proposition is a significant component in CEBM, construction organisations need a well-defined value proposition model. This will help them better understand what circular value they can offer to different client segments. In addition, construction organisations can use these insights to develop tailored value propositions. These value propositions align with different client preferences and improve client satisfaction and service delivery while supporting CE principles. Furthermore, the results will enable stakeholders in the construction sector to consider the attributes of the value proposition (Bello, 2025).

Lastly, implementing these circular value propositions within construction organisations is a significant approach to advancing the Sustainable Development Goals (SDGs) 1, 8, 12, and 13 (Otasowie et al., 2024, 2025). One notable impact of implementing these circular value propositions is their ability to create economic opportunities and reduce poverty (SDGs 8 and 1). It will likewise reduce the environmental damage caused by resource extraction and waste disposal (SDG 12, Responsible Consumption and Production) and significantly reduce the industry's environmental footprint (SDG 13, Climate Action).

This research explored value propositions for advancing CEBM in construction organisations. It used an exploratory sequential mixed-methods approach. First, a semi-structured interview identified nineteen value propositions and their benefits for different client segments. These findings informed a quantitative survey, where respondents rated the influence of each value proposition. The data was analysed using a four-stage process: instrument validation and reliability testing, descriptive statistics, Kruskal–Wallis test, and confirmatory factor analysis (CFA). The descriptive results showed that the most significant value propositions include offering manufactured long-lasting components, refurbished and recycled items, upcycled components, and building maintenance. However, professional opinions varied across most value propositions based on their roles, except for a few. These include selling long-lasting, recycled components and client education, where there was general agreement. Furthermore, CFA confirmed the strong influence of eight value propositions. These include constructing with fewer resources and less waste, facilitating collaboration among stakeholders, designing out waste, facilitating client education, facilitating take-back of used construction items/materials, construction waste handling, upcycling construction components/items, and construction waste processing.

This study fills a research gap by providing empirical evidence on how value propositions influence the shift toward CEBM in construction. Theoretically, it contributes to refining CEBM by identifying client-driven value propositions. It also supports the integration of resource efficiency and client value into CEBM research. Practically, the study provides an avenue for construction organisations to align their services with CE principles. Organisations can use these findings to improve resource use, increase sustainability, and diversify income sources. Lastly, the findings of this study provide a theoretical foundation for future research on CEBM in construction organisations. Hence, future studies could focus on how these value propositions can be linked with digital technologies to improve component traceability and knowledge sharing. Also, these studies could focus on how government support can promote CEBM adoption in construction organisations. Lastly, these studies could further consider monitoring the adoption and the short and long-term impact of the identified value propositions.

The study was conducted as approved by the Ethics and Plagiarism Committee (FEPC) of the Faculty of Engineering and the Built Environment at the University of Johannesburg (UJ_FEBE_FEPC_00828 and 6 June 2023).

This manuscript was edited using Grammarly for proofreading. No part of the manuscript was generated using AI tools.