3 ways to move your company toward the circular economy
Written by Nathan Hurst
It’s no secret that Earth’s natural resources are diminishing at an increasing rate. According to the Global Footprint Network’s estimate, human demand on our planet’s ecosystems is projected to exceed what nature can regenerate by about 75 percent in the next three years. Considering we only have one Earth, we need to reinvent how we use its resources before it’s too late.
For global companies, it’s important to evaluate the effects that your business operations pose on society. Recognizing where your company can reduce its environmental impact is the entry point to joining the circular economy.
The circular economy is about reinventing how products are created, used and maintained. Companies must evaluate factors such as product design, material selection, manufacturing processes and the end product's reusability. It’s about reinventing business standards to make the world a better place.
It’s time to ditch the "take, make, dispose" mindset and adopt "make, use, return" as our collective mantra by joining the circular economy.
1. Disrupt industry business models
The emergence of today’s sharing economy propagated by tech-savvy, environmentally conscious millennials and members of Generation Z exemplifies the "product as a service" ethos. In this business model, physical products, services and software fuse together to create an ongoing experience rather than a one-time transaction.
For example, ride-sharing companies such as Lyft or Uber offer their product (rides) as a sustainable service — drivers use their own cars, and riders use their own mobile devices to call for a ride. Furthermore, matching services such as Lyft Line pair passengers headed in the same direction, turning what would be multiple rides into one — meaning less fuel consumption and reduced carbon emissions.
Subscription-based models are another viable entry point into the circular economy. They often result in economic and environmental benefits for both sides, including cost savings for customers and more sustainable outcomes for companies.
One example of a subscription model is HP’s Instant Ink program, which uses the Internet of Things (IoT) to ensure that print customers have ink when they need it and that they can recycle used cartridges more responsibly. Through the program, an internet-connected printer notifies HP when it is running low on ink. The customer is automatically delivered a replacement cartridge and a postage-paid envelope for returning used cartridges. This saves customers time, hassle and money — up to 50 percent on ink — while being gentler on the planet.
2. Digitize supply chains and production
In addition to disrupting business models, you can dive into the circular economy by digitizing the way products are designed, manufactured and distributed. Digitizing supply chains and production can help people turn ideas into finished products in a more efficient, economical and environmentally conscious way, preserving our planet for generations to come.
One solution is emerging across industries: additive manufacturing, ushered in by innovations in 3D printing. From initial design to supply chain, logistics and distribution, 3D printing technology is transforming the manufacturing industry.
3D printing can reduce the amount of material needed to make a finished part by realizing complex shapes or redesigning complex assemblies into a single part. Because it requires the transmission of digital files instead of the shipping of tangible goods, 3D printing enables manufacturing on demand. This localizes supply chains, reducing the need to transport physical goods on ships, cutting time and emissions. Furthermore, it allows for short-run production and greater product customization, opening up new ways for a company to connect with individual customers.
While additive manufacturing is not yet mainstream, the possibilities to make a positive environmental impact with 3D printing truly spans industries. Early adopters are already turning these possibilities into reality. Automotive company BMW is using 3D printing to make lighter tools for its assembly line. Nike uses additive manufacturing to make certain shoe models, reducing waste by 80 percent. Siemens has employed 3D printing to create industrial gas turbines, reducing greenhouse gas emissions and lessening resources used throughout the production process.
3. Decouple growth from consumption
Sometimes it doesn’t take immense technological innovation to make an impact. Encouraging consumers to reuse goods and integrating recycling at the corporate level are great places to get started. Doing this separates the concept of growth from consumption — a huge departure from the way many companies operate.
Take outdoor clothing company Patagonia, for example. Having committed to producing 100 percent organic products back in 1996, it is a pioneer in the sustainability world. From making fleece jackets out of plastic bottles to tracking the paper the company uses to print catalogs, environmental concern is engrained into everything Patagonia does. The company even launched a program called Worn Wear, which not only encourages customers to repair and reuse their Patagonia garments — it provides them with the tools to do it themselves. Urging customers to repair instead of replace clothing is radical in a world infatuated with fast fashion — and this is an important step in the right direction.
The North Face’s “Clothes the Loop” program is similar, allowing consumers to drop off worn clothes from any brand at collection bins at The North Face stores. After being sent to recycling centers, the clothes are then repurposed for reuse to extend their life or recycled into raw materials for use in products such as insulation, carpet padding, stuffing for toys and fibers for new clothing.
Repurposing clothing is one thing — but what if you could repurpose oppressive litter in developing nations to create consumer goods? In March, Timberland paired up with textile company Thread International to launch a new line of shoes, backpacks and shirts made from 50 percent recycled plastic, sourced from Haiti. Not only has this initiative removed over 700,000 plastic bottles from Haiti’s streets, it has created jobs in one of the world’s poorest countries. Timberland and Thread International even partnered with local recycling centers that encouraged more than 1,300 Haitians to collect bottles for profit.
As part of its own closed-loop recycling process, HP also has collaborated with Thread International to source bottles from these same Haitian recycling centers. The company's first cartridges made with recovered plastic from Haiti will be available this summer.
This innovative approach to the circular economy is regenerative by intention, recovering and reusing materials. It decouples growth from a reliance on increasingly scarce raw materials, benefiting the environment.
There may never be a perfect time to integrate your company into the circular economy — but the right time is now. After all, we live on Planet A — and right now there is no Planet B.
If you feel overwhelmed with the task at hand, remember that no single company can solve the world’s gargantuan waste problem alone. The move toward a more circular economy must be a collective effort. It will require collaboration both internally within your organization and externally with your supply chain, local government and customers.
How do you get started? As an individual consumer, being mindful of the companies you purchase from and educated on ways to reuse and recycle are crucial first steps to joining the circular economy. At the company level, ask yourself how you can improve the customer and partner experience while making them part of the change — and how this change will benefit all of you in both the short and long term.