The United Nations, for example, estimates that in 41.8 million tonnes (Mt) of electronic waste there is 16 Mt of iron, 1.9 Mt of copper, and 300 tonnes of gold, plus other precious metals such as palladium, with a combined value of $52 billion. The transition to a circular economy not only contributes to climate action but can also have significant economic benefits as well.
A study from Deloitte revealed that four European Union (EU) sectors— food, construction, vehicles, and electrical and electronic equipment — have the potential to reduce emissions up to 66 percent using technically feasible circular economy methods. And that’s four of dozens of sectors.
Industries that rely on raw materials from metals and plastics can already cut emissions through large-scale, systematic recycling. Likewise, companies that produce vehicles, and electric and electronic equipment, can use recycling programs to trim emissions by 43 percent and 45 percent respectively.
Ultimately, a circular economy can deliver a reduction of 550 megatons of CO2 equivalent, which represents 33 percent of total EU emissions from goods consumption.
How do businesses start to adapt and evolve toward a circular economy? Here are a few of the frequent entry points:
Go for Eco-Design
Design and optimize products to minimize their impact throughout the life-cycle: raw materials, manufacturing, use, service, repair, recycling, and finally disposal. That’s not the end of the line, however. Companies may be able to take and re-manufacture these products or recycle parts to retain their value. The use of potentially toxic material should be avoided and renewable resources should be developed.
For instance, Ecovative has designed a new form of packaging made of mycelium or mushroom roots. Cheap, plentiful, and easy to grow, they become compost once they’re disposed of.
Think Collaborative and Durable
Economies need a range of businesses of various scales, shifting from an asset-owning culture to a service-based one. The practice of reusing and pooling resources (i.e., reselling or donating instead of throwing away) is growing among consumers, evidenced by the rise of collaborative economics. The durability of products becomes an essential factor and avoids the scheduled obsolescence. This logic makes it possible to decouple the service provided from the number of products distributed, creating new value chain streams in the second-life market.
A well-known example is Patagonia, which has grown its business on repair and refurbish principles, encouraging customers to reuse its outdoor wear and goods instead of replacing them.
Go for Renewable Supply
The energy required to power a regenerative economy should include an array of renewable resources, decreasing resource dependence, and increasing business security and resilience.
Case in point: The headquarters for electronics giant Apple includes a mix of solar, fuel cell, and microgrid technology, which will meet all of the campus’s energy needs.
Innovate and Innovate more
Move from linear to complex systems, taking into account the full picture of pre- and post-production.
To that end, Philips created a bespoke “pay-per-lux scheme” where instead of buying bulbs and fittings, customers only pay for light itself. The company is then responsible for the maintenance of the physical fixtures.
As the world gets more connected, and producers and consumers become closely linked, it’s time for the economy to take the shape of the planet. Adopting circular principles isn’t just an environmental play (although that’s of critical importance). It makes fiscal sense for individual businesses and furthers global markets as a whole.
How much do you know about the circular economy? Take this quiz and reach out to learn where to start on your business's journey to circularity.
Contributed by Irina Gilfanova, Sustainability Consultant for Schneider Electric