U.K. shifts focus to closed-loop economy

U.K. shifts focus to closed-loop economy

UK businesses will face increasing pressure to use natural resources more efficiently as a way of stimulating economic growth, as part of new a strategy being developed by UK government-backed waste body, WRAP.

Liz Goodwin, chief executive of WRAP (Waste and Resources Action Programme), set out plans to place a greater emphasis on the financial benefits of creating a "closed loop" economy, in which products are designed and manufactured so that materials can be re-used.

Research by consultancy McKinsey launched earlier this year found that European manufacturers could save $630 billion a year by 2025 if they moved towards greater resource efficiency and reduced their reliance on increasingly rare and costly raw materials.

Separate research from Defra has found that businesses could save more than £18 billion (US$28.8 billion) a year by adopting no-cost or low-cost measures to enhance their resource efficiency.

While WRAP has been a long-time supporter of "closing the loop" with regards to materials, Goodwin today signalled that the organization's annual conference would mark a shift in its approach whereby it will become even more "acutely aware" of the economic case for reducing waste and enhancing resource efficiency.

Speaking exclusively to BusinessGreen on the eve of the conference, she explained that resource efficiency could become more widely recognised as a means of driving much-needed economic growth.

"A lot of businesses don't see the full cost of not being resource efficient and they're very busy trying to keep their head above water," she said. "It's a battle, but we need to find the right messages to demonstrate the way things can be done differently."

Image of recycling bins provided by sunsetman via Shutterstock.

Goodwin maintained that the UK is leading the way in driving resource efficiency, but she admitted that only a handful of businesses are fully aware of the financial and environmental benefits associated with successful waste and recycling strategies.

"The bigger companies, the M&Ss and Unilevers and Kingfishers, clearly recognize it as being an important part of the future of being sustainable," she said.

"In a way that's good, because they will influence their supply chain. But we've got to get to the next layer down of organizations, because the SMEs are going to be the powerhouse that gets us out of these poor economic conditions -- we need those organizations on board to grow."

As part of its shift in strategy, Goodwin said WRAP will be increasingly focusing on sectors and areas which can yield the biggest impacts on waste levels, such initiatives to tackle electronic waste and reduce waste through improved design in the textile industry. Some of these areas are likely to feature heavily in WRAP's next business plan, which will run from 2015.

In her speech today, Goodwin will also invite green businesses to recommend ways of raising the profile of resource efficiency and will re-commit WRAP to building on its work bringing different areas of the supply chain together to help drive waste reductions through co-operation between businesses.

In addition, she signalled her support for the government's focus on voluntary waste reduction targets over binding legislation, arguing that lighter touch regulations can be effective in the right circumstances.

Citing the Courtauld Commitment, which has seen more than 50 supermarket chains reduce waste significantly, she argued that voluntary targets encourage competition between businesses, which in turn drives improvements.

She also downplayed the environmental significance of supermarkets' failure to curb plastic bag use in line with voluntary targets in England.

Figures for 2011 reveal that plastic bag use in Wales fell 22 percent in 2011, largely as a result of the introduction of a compulsory 5 pence bag levy (US$.80), while bag use rose 7.5 percent in England and 8.1 percent in Northern Ireland, where no such policy exists.

As a result, the government has faced repeated calls to introduce legislation in England to ban or charge for plastic bags.

"Let's keep things in perspective," said Goodwin. "A lot of progress was made, but also carrier bags are not the biggest environmental issue.

"It's very iconic and important to focus on plastic bags, because it's something we all see every day, but in terms of environmental impact, sorting out other things is probably more important, such as making sure people don't waste their food."

Goodwin said that WRAP has "a big pipeline" of potential projects that it is hoping to lend money to a range of innovative waste projects, including anaerobic digestion and mixed plastics processing.

However, she also revealed that it was struggling to attract companies to support a £1.5 million (US$ 2.4 million) waste prevention fund that was launched earlier this year.

"It's quite a tricky subject so we're encouraging businesses to come forward with proposals about waste prevention," she added.

This piece originally appeared on Business Green and is reprinted with permission.