Did you know that a study by Nielsen revealed that a company’s commitment to the environment has the power to sway product purchases for 45% of consumers? Some businesses have taken the plunge, with a total commitment toward a "Circular Economy"; but even small businesses can take steps toward lowering waste and increasing products' usable life span. With billions of pounds added to landfills every year, its a timely change we all can embrace.
In addition, if you are marketing to Earth-loving Millennials or save the planet Gen Z's, it’s crucial to get started now. So, in honor of Earth Day on April 22nd, here is an introduction to Circular Economy.
Circular Economy is not a new concept, and not everyone agrees on exactly what it means. To understand it, think of the linear economy stages of make, then use, then throw away, and bend it into a closed loop of use, then repurpose, then recycle. Notice there is no throw away stage. In a true Circular Economy, waste is completely designed out of the manufacturing process.
Only a slim 16% of firms in the US have fully adopted a circular economy framework. We are a little behind our European brothers on this. The good news is that 62% of US businesses are taking steps to make it happen. Below, I've listed 3 steps that your company can take toward a Circular Economy.
Don't be afraid to take these steps
3 Steps Toward Creating a Circular Economy
Plan and design your manufacturing processes around zero waste, or at least as little as possible. In order to begin the transition to Circular Economy, companies must learn to design all processes around the goal of maximum product use, reuse, refurbishment and recycling. This requires advanced skills and training in everything from initial material selection to chain logistics and warehousing.
While planning the design, practice system thinking by remembering that we all are a part of a network, and each of our actions affects our community.
2. Keep products and materials in use
In the past, we practiced a more traditional linear economy of making products, using products and disposing of products. Now we strive to keep our products, parts and materials in use until we've squeezed every last bit of use from them. By repairing, restoring, repurposing or remanufacturing materials, we use them for a longer period of time; this means that we need fewer products overall and more importantly that we use fewer natural resources.
Circular Economy systems must be restorative by intention and rely on renewable energy. By careful design, we can eradicate waste and reliance on toxic chemicals.
In Waste to Wealth, authors Lacy and Rutqvist Lay out 5 Circular Economy business models to develop.
I’ve summarized them below:
1. Circular Supply Model
The Circular Supply-Chain features fully renewable, recyclable or biodegradable materials that can be used time after time in consecutive life cycles.
2. The Recovery & Recycling Model
This model involves production systems that revive what we once considered waste and transforms them for new purposes. Used materials, reclaimed waste and by-products can enjoy new life in another system.
3. Product Life-Extension Model
Companies repair, upgrade, improve and remanufacture products that are broken or outdated, keeping them economically useful for as long as possible.
4. Sharing Platform Model
Uber, Lyft and AirBNB all fall into this category, in which micro-entrepreneurs rent, share, swap or lend products. Fewer resources are used, and consumers have a new way to both make and save money.
5. Product as a Service Model
If retailers bore the “total cost of ownership”, focus would suddenly swing to longevity, reliability and reusability. Manufacturers would make products to last, meaning less resources would be used to make and replace them.
Does this sound daunting? If you think that this goal is unattainable, look at these 7 Companies that are doing it right:
Thread manufactures their popular backpacks and T-shirts using “responsible fabric” made from plastic bottles from the streets and canals of Haiti and Honduras. In addition, the Pittsburgh-based company strives to improve the quality of life for locals in impoverished communities.
Thread is so comfortable in their upcycling processes that every step is transparent, from collecting bottles to transforming them into fabric to delivering their responsible fabric to manufacturers.
A whopping 24 billion pounds of clothing, shoes and textiles find their way into U.S. landfills each year. In an attempt to alleviate this waste, Levi's is accepting clothes and shoes of any brand and transforming them into things such as insulation for buildings, cushioning material and new fibers for clothing.
In addition, Levi's designed and is establishing infrastructure that supports closed loop products by 2020. Wow.
What do Timberland and tire manufacturer Omni have in common? They are two of the largest users of virgin rubber. So they teamed up to produce a line of tires meant to be recycled into footwear outsoles once they reach end-of-life on the road. This collaboration means that fewer tires are used for fuel or end up in landfill.
Here’s how the process works: Worn out tires are set aside by auto shops and shipped to a North American recycling facility to be turned into crumb rubber. It’s then processed into sheet rubber, shipped to Timberland outsole manufacturers and used in Timberland boots and shoes. Clever.
The Babylonians turned their old bread into beer 4000 years ago. Toast Ale brought back this ancient brewing process to help with the third largest source of global GHG emissions-food waste. In addition, they publically shared their recipe so homebrewers can recycle their stale bread too. Cheers!
It turns out DoorDash not only feeds my hungry coworkers; they aim to reduce waste and alleviate hunger in the communities they serve.(DoorDASH Acts for Sustainability and Hunger). In a collaboration with Feeding America, DoorDash put its technology to work to connect restaurants with surplus food to homeless shelters and soup kitchens, which keeps food out of landfills and feeds hungry people.
Is everything recyclable? TerraCycle thinks so! They focus on how we can reuse all of that junk that we toss every day. We are talking chip bags, toothbrushes, flip flops all getting a makeover and fabulous second life. Sounds like a new reality show!
So what does all of this mean to you? Not only is it possible to minimize waste by getting the maximum out of every resource your company uses, you can increase profits doing it. Gather some inspiration from these companies who are doing it right, and take a few steps toward a circular economy.
As customers become increasingly aware of the problems caused by industry waste, they will look for companies that are trying to make a difference. Let them know you're one of the good guys by taking steps to improve your processes.
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