10 ways the circular economy is changing the way businesses think
Here's how Dell, Patagonia, DHL and others have adapted to the circular economy.
To mark the world’s premier circular awards program, The Circulars, opening up entries for 2016, we take a look at the impact that a circular economy approach is already having on businesses.
Two studies in recent weeks have put some hard figures to the economic benefits that a shift to the circular economy could bring.
First up was an independent report commissioned by resource management business Veolia and produced by Imperial College London. It found that a combination of closing the loop on resource use and moving to a service rather than product based economy has the potential to add £29 billion to UK Gross Domestic Product over the next decade.
Hot on the heels of this was the Growth Within report by the Ellen MacArthur Foundation. It claims a pan-European shift to a circular economy could create a net benefit of €1.8 trillion for European economies by 2030.
These are compelling and timely figures, as the European Commission considers its circular economy strategy with the promise of presenting a new, more ambitious plan by the end of the year. But there is already a huge up-swell in ground-level innovation in this field being driven by large corporations, and small and medium enterprises alike. Here’s a round-up of 10 ways the approach is impacting on what they are doing.
1. Encouraging collaboration to drive innovation
Closed-loop thinking and sustainable packaging are two targets that computer manufacturer Dell has committed to and it is using collaboration to drive innovation in both these areas. Dell has joined forces with bio-tech start-up, Newlight Technologies to pilot the use of carbon-negative product packaging and worked with original equipment manufacturer partner Wistron GreenTech to reuse plastic from its consumer and business-to-business recycling program and feed it back into its new IT products.
2. Thinking counter-intuitively
Clothing company Patagonia has made long-running efforts to counter over consumption and its Worn Wear California-to-Boston road show that took place earlier this year perfectly sums up this approach by building consumer knowledge about the value of fixing broken goods. GreenBiz author Lauren Hepler gives a first-hand account of Patagonia's vision for elevating the approach beyond the apparel sector.
3. Reverse logistics
Logistics giant Deutsche Post DHL is actively exploring new ways it can capitalise on reverse logistics, one of the most important enablers in the transition to a circular economy. With its global network reach, DHL is undoubtedly sensing an opportunity to develop new models that can push forward more circular flows of goods and materials.
4. Think users not consumers
Are we moving back to people behaving more like users rather than consumers? This is one of the trends emerging in the automobile and IT sectors. In this interview with Kirstie McIntyre, director of social and environmental responsibility at HP, explains how the company is seeing service models for users becoming more frequent and how that translates to product design.
5. Handing the creative process back to the consumer
Sustainable footwear is a hotbed of innovation for many apparel and lifestyle brands. But one enterprising start-up is looking to take this to the next level. Lyf Shoes is looking to capture a slice of the market by handing the creative process back to the consumer and is working up a customized 3D-printing service for shoemaking.
6. An incentive for transforming workplaces
The launch of the world’s first guide to creating an office using circular principles promises to minimize waste and maximize the life of all materials. The guide, which has been produced by a cross-industry collaboration of nine organizations, launched in July and the authors are now looking for a New Zealand office in need of refurbishment to become the world’s first Circular Economy Model Office. They claim it is the first step in revolutionising the office refurbishment industry.
7. Using it for brand building
Elvis and Kresse is an emerging brand in the luxury fashion market, selling belts, wallets, handbags and rugs. It uses 15 different wastes, including leather and old tea sacks to make its products and it’s an approach that underscores its entire brand ethos - what's more it’s got plans to build on this creativity.
8. Delivering social good
From a Mother to Another aims to extend the lifespan of baby and children clothing by redistributing high quality clothing that has been outgrown to vulnerable families in the UK. Research by Hubbub UK discovered that over £3,500 worth of children’s clothing goes to landfill per child growing up. From a Mother to Another aimed to create a new circular economy initiative based on such findings. The campaign is delivered by a partnership of the retailer JoJo Maman Bebe, the charity Barnardo’s and Hubbub UK.
9. A catalyst for disruptive innovation
In 2012 B&Q offered nine young people the opportunity to win a year’s placement on a Youth Board. Following a nationwide competition, the nine who secured a place were each appointed a B&Q Retail Board mentor and set a specific challenge — to apply circular economy and closed loop thinking to re-imagine B&Q’s future business model.
10. And finally… there’s more than one approach
Research by Accenture has identified five different business models companies are adopting – alone or in combination — when embracing the circular economy: circular supplies, resource recovery, product life extension, sharing platforms, and product as a service.
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