While recycling’s taken off, around 80% of the UK’s economy is still a “once through” process. Raw materials are extracted, processed, turned into products which are then dumped at the end of life. Circular economy approaches keep materials closer to hand, designing and building businesses that reuse materials and use less too. Beyond green, here are five reasons that it makes good sense for businesses to embrace the approach.
1. Business resilience
Home retailer, Kingfisher, buys wood sourced from a forest equivalent to the size of Switzerland each year. Aero Engine manufacturer, Rolls-Royce, uses 20,000 tonnes of rhenium, hafnium, tantalum, and titanium each year. Business models reliant on virgin materials, increasingly sourced from a global supply chain, have the risks of interruption and price shocks. Using less and reusing materials, as Rolls-Royce does with its Revert program, reduces demand for raw materials, increases business resilience and cuts costs. Atlanta based carpet firm, Interface, recovers nylon from used carpet tiles and sends it back to its supply chain – helping insulate the firm from oil price volatility.
2. Costs and growth
Increased efficiency, greater business resilience and new value chains developed to take back and repurpose goods mean lower costs and new business opportunities. The European Commission estimates that a circular economy approach could deliver €600bn in savings for European businesses, creating thousands of jobs and supporting growth. And if it’s really true that we’ve reached ‘peak stuff’ as IKEA, the global retailer, suggested earlier this year, then firms need new ways to grow home markets.
3. Customer demand
Nearly every large infrastructure project in the UK has committed to cut greenhouse gas emissions in their designs; reductions both in ultimate operational use, and also in the greenhouse gases it’s taken to make the concrete, metal and other materials that go into its construction. Reprocessed materials usually have a much lower carbon and ecological footprint, increasingly giving them the edge over virgin products. That’s not always the case. In a materialistic society, people like and trust new stuff, and can’t quite believe what’s gone around will be as good. So as an alternative, think of circular economy as the sharing, dematerialised economy - sharing stuff, buying music through Spotify rather than a CD.
