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AI driven financial risk assessment for circular business models

When companies transition to circular business models (especially functional sales models), risk assessments of business cases and payback times, as well as new types of collateral and residual value, have been identified as important challenges for financiers. We investigated how these challenges could be overcome with the help of AI.

This project aimed at reducing uncertainties regarding future value of products and thereby increase the willingness among financiers to be part of the development of new circular business models (CBMs).

Research shows that there is a strong relationship between CO2 reduction potential and circular resource effective systems for production and consumption. Manufacturing firms transitioning to circular business models are thus one important part of the solution of the climate crisis, and the financial sector is a key enabler to make the shift happen. Our own research as well as earlier literature have highlighted the need to reduce risk in CBMs, and the specific aspect of understanding future residual value of used products - as collateral and balance sheet items. We collected open data from online marketplaces and used machine learning technology to predict residual value of 3-4 product categories.

The project resulted in an AI model and application prototype. Together with our bank project partners we explored how to best disseminate the use of the model, as well as how a scaled-up shift to CBMs would affect the business ecosystem of financiers (banks and insurance companies), and enabling technology firms.

This research is ground-breaking and has the potential to both substantially add knowledge to the intersection of circular economy and digitalisation, and to set an industry standard for how to use AI to reduce risk in financing of CBMs.

The film from the project webinar the 8th of March 2022.

Final report (pdf, 734.6 KB)


Project name





Region Stockholm, Västra Götaland Region

RISE role in project


Project start


2,5 år

Total budget



Nordea, SEB


Vinnova, Innovationer för ett hållbart samhälle 2019


Project members

External press

Supports the UN sustainability goals

12. Responsible consumption and production
13. Climate action
Ann-Charlotte Mellquist

Contact person

Ann-Charlotte Mellquist


+46 70 265 65 60

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