STATE OF PLAY
Today, most businesses and governments follow a linear model of production and consumption, where they take finite resources from natural ecosystems to make products they eventually discard as waste. In 2021 alone, this model consumed over 100 billion tonnes of materials and wasted over 90% of all materials extracted and used, widening social inequalities, and exacerbating other global challenges such as biodiversity loss, pollution and waste, climate change, and resource scarcity (Circle Economy, 2022).
Currently, only 8.6% of materials are returned to the economy. Yet, the circular economy could yield up to $4.5 trillion ineconomic benefits to 2030 (World Economic Forum). Companies that adopt circular economy business models stand to maintain or gain a competitive advantage, through creating new products and services, lowering costs and meeting stakeholder expectations.
With 70% of global GHG emissions released into the atmosphere directly linked to material processing and use (from extraction, transportation, and manufacturing to use of products such as clothing, food, and phones), implementing “closed loop” practices will also be critical in enabling businesses and governments to meet their net-zero targets and in aligning with a 1.5°C pathway.
WHAT IS THE CIRCULAR ECONOMY AND WHY IS IT GOOD FOR YOUR BUSINESS?
The circular economy transforms linear models by decoupling growth from extraction. It is underpinned by 3 principles:
1. Elimination of pollution and waste
2. Circulation of materials and products at their highest value
3. Nature regeneration
(Ellen MacArthur Foundation, 2022).
It provides solutions for businesses and governments of all sizes to tackle the root causes of global challenges and achieve sustainability targets across all three dimensions of sustainable development:
Environment: Different strategies can be adapted to progress towards a circular model, including: a) (re)designing products to be easily maintained, refurbished, and disassembled;
b) reusing and recycling products and resources (e.g., packaging) which cannot be returned to the environment; and
c) more efficient use of renewable resources and sharing of resources and services.
These strategies help minimise the environmental impacts of the products and services we use and contribute towards GHG emissions reductions, pollution reduction, and waste minimisation.
Economic: The economic benefits of a circular model include lower production costs, economic growth, reduced investment in resource extraction, lower cost of recycled raw materials compared to virgin raw materials, growth in technological development investment, and creation of high-quality jobs in the new sectors of industry focused on converting the linear model to a circular model. With consumers and other stakeholders increasingly focusing on the impact of their purchases, incorporating the circular economy into your business model can lead to a competitive advantage.
Social: With new job opportunities, higher economic stability, and a cleaner and better community to live in, the circular economy increases the standard of living, encourages community development, and creates a pathway towards a sharing social economy.
WASTE AND THE CIRCULAR ECONOMY
In 2020, the world generated over 2.2 billion tonnes of waste, of which 37% was sent to landfill, 33% was illegally dumped, 11% was incinerated, and only 19% was recycled or composted (Landfill Solutions, 2020). This included over 57 million tonnes of electronic waste or e-waste. Even though it contained over USD 57 billion in valuable raw materials, such as copper, iron, silver, and gold, only 17.4% was effectively recycled (UN, 2020; Kilvert, 2021).
If we don’t address this problem soon, global waste will likely increase to 3.88 billion tonnes per year in 2050, and e-waste to 74 million tonnes per year in 2030 (Kilvert, 2021; World Bank, 2022). This will exacerbate multiple social and environmental issues related to waste generation including climate change (waste releases methane and other GHG emissions into the atmosphere), ocean and waterways pollution, declining health conditions, particularly of those living in poverty and near disposal areas, and displacement as landfills expand (Nakamura, 2021).
For these reasons, we need to transform the take-make-waste linear model and make it circular (Ellen MacArthur Foundation, 2019). In the circular economy, waste is considered a design flaw, so products are designed in a way that can be maintained, repaired, and remanufactured to keep them in use longer. At the end of life, products are recycled, and materials re-enter the economy (Ellen MacArthur Foundation, 2019).
HOW TO GET STARTED
Adopting a circular economy business model will take time but following these steps can help you get started:
STEP 1 – Consider the lifecycle of your products or those you purchase and undertake a waste audit (PwC, 2021) – look at your own operations as well as waste generated throughout your value chain (e.g., in farms, in manufacturing & logistics, and by the consumer). This can help you identify areas of improvement.
STEP 2 – Redesign products to eliminate waste and improve repairability and recyclability. This allows businesses to implement end-of-life services, such as repair or refurbishment, which creates an extra source of income for the company, keeps products in use longer, encourages customers to recycle and buy used products, and reduces emissions. If you don’t make products yourself, engage with your suppliers to ask what they’re doing to incorporate circularity.
STEP 3 – Engage your suppliers. This could include:
a. Embedding circular economy requirements into your procurement strategy and processes (e.g., sustainable product or packaging, or recycled content requirements or targets) (Bland, 2022).
b. Integrating return flows into your supply chain to recover products for post-sale interventions, such as refurbishing, repairing, reselling, and recycling (DHL, 2022).
c. Mapping preferred or mandatory supplier credentials to your targets – more on this
below!
d. Educating and incentivising your supply chain to improve sustainability performance by
adopting circular methods of production.
STEP 4 - Set time-based, measurable targets to support your transition to a circular economy business model (e.g., waste minimisation, GHG emissions reductions, upcycled content, and sustainable resource use, such as sustainable packaging, etc.). Identify initiatives to deliver on these targets (PwC, 2021).
STEP 5 – Engage with consumers. Educate and incentivise consumers to participate in collection programs to increase the number of products returning to the cycle, grow demand of circular products, and shift consumer behaviour (DHL, 2022).
Finding suppliers with credentials that advance the circular economy is essential for moving away from the take-make-waste model. The increasing number of sustainability credentials means that it is now possible to set preferred or mandatory requirements and maintain an acceptable level of supply. It is, however, difficult for companies to know what each credential means.
givvable is an AI-Driven Supplier Sustainability Insights Platform helping businesses to identify preferred or mandatory sustainability credentials aligned to their targets, and discover and track the credentials of their suppliers and trading partners. The platform covers over 1 million+ credentials across 1,500+ local, regional, and global sources, such as certifications, accreditations, ratings, commitments, and initiatives, and automatically maps over 100 million indicators to sustainability & ESG targets, and widely used, global frameworks (such as the UN Sustainable Development Goals).
givvable helps companies screen existing suppliers for preferred or mandatory credentials and continuously grow pools of credentialed suppliers.
CREDENTIALS THAT ADVANCE OR SUPPORT THE CIRCULAR ECONOMY
Examples of credentials captured, or that suppliers may register, on givvable and users can track in the platform indicating supplier practices or initiatives advancing the circular economy and minimising waste include:
Name: Cradle to Cradle certified
Issuing Organisation: Cradle to Cradle Products Innovation Institute
Coverage: Global
Category: Product
Cradle to Cradle Certified® products are independently assessed for environmental and social performance across five critical sustainability categories: material health, product circularity (specifically that products are intentionally designed for their next use and are actively cycled in their intended cycling pathways), social fairness, water and soil stewardship, and clean air and climate protection. Certification is awarded based upon four ascending levels of achievement: Bronze, Silver, Gold or Platinum, according to the product’s performance in each category. The product’s lowest category achievement level determines its overall certification level. Recertification is required every 3 years and companies need to show measurable improvement to re-certify.
Name: Good Environmental Choice Australia (GECA) certified
Issuing Organisation: Good Environmental Choice Australia (GECA)
Coverage: Australia
Category: Products & Services
GECA certified products, materials andservices have been assessed by a third-party assurance provider as conforming with the applicable GECA standard. The GECA standards recognise products, materials and services that are environmentally responsible and minimise impact on human health. Separate standards apply for each product, material or service category, with each standard including a number of health, environmental and social criteria. Environmental criteria relate to air emissions, energy use, recyclability, hazardous materials, water management, sustainable and efficient material usage. They also consider impacts across the entire life cycle of a product or service, from raw material extraction through to use and eventual disposal or breakdown. Recertification is conducted every 3 years following the initial conformance assessment.
Name: Total Resource Use and Efficiency (TRUE) certified
Issuing Organisation: Green Business Certification Inc.
Coverage: Global
Category: Projects/facilities
TRUE is an assessor-based, zero-waste certification program that rates how well projects perform in minimizing their non-hazardous, solid wastes and maximizing their efficiency in the use of resources. Facilities achieve TRUE certification by: (i) meeting 7 minimum program requirements, which include having a zero-waste policy in place and achieving an average 90% or greater overall diversion from landfill, incineration, and the environment for solid, hazardous wastes for the most recent 12 months, with diverted materials reduced, reused, recycled, composted or recovered for productive use; and (ii) attaining at least 31 out of 81 credit points on the TRUE Rating System, with credit points available across 15 categories that reflect aspects of a successful zero-waste program. Recertification is required every 3 years.
Name: TCO certified
Issuing Organisation: TCO Development(owned by TCO, the Swedish Confederation of Professional Employees)
Coverage: Global
Category: Product
TCO Certified products are IT products that been independently assessed against a comprehensive set of sustainability criteria that cover social and environmental responsibility in
the supply chain and throughout the product life cycle, including circularity, socially and environmentally responsible manufacturing, user health and safety and product performance. The certification covers 12 product categories including computers, mobile devices, display products, imaging equipment and data centre products. Verification of compliance with the sustainability criteria is carried out before and after certification, throughout the certificate’s validity period.
Name: R2 certified
Issuing Organisation: SERI (Sustainable Electronics Recycling International)
Coverage: Global
Category: Facility
R2 certified facilities manage the collection, responsible reuse and recycling of electronics and have been certified by a third-party to an approved Environmental, Health and Safety Management System as well as requirements in the R2 Standard, which are specific to the electronics reuse-recycling industry. Facilities engaged in test and repair and/or brokering activities are also required to certify to an approved Quality Management System. The purpose of the R2 Standard includes supporting a circular economy by extending the life of electronic devices through reuse whenever feasible. To maintain R2 Certification facilities must pass an annual audit to demonstrate ongoing conformance to the R2 Standard.
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If you are looking for an organisation to help with your tech recycling, you could also consider
ZOLO. ZOLO collects and recycles old tech and e-waste, wipes data securely and keeps e-waste from landfill. ZOLO refurbishes old tech and gives it a new life through the second-hand market. Devices that can no longer be reused are dismantled and the valuable materials are recovered and connected to material specialists to support new product generation. We have used ZOLO ourselves!
Want to discover suppliers with attributes like these that advance your sustainability targets?