[INFORMATIVE] Circular Economy
Circular Economy
By Yashwini Chauhan
What is a Circular Economy?
A circular economy keeps materials and products in circulation for as long as possible.
It reduces material use, redesigns materials. It's a system based approach and involves regenerative and restorative use of design materials. The amount of waste that is generated when it comes to industrial areas or companies, only when we include the packaging materials and the materials used in developing the product in hand, comes close to 40%. And while the percentage may not seem a lot, the environmental impact it has is more devious than the rest. In practice, it implies reducing waste to a minimum. When a product reaches the end of its life, its materials are kept within the economy wherever possible thanks to recycling. These can be productively used again and again, thereby creating further value. In this way, the life cycle of the product is extended. This can provide a way to not only protect the environment but use natural resources more wisely, develop new sectors, create jobs, and develop new capabilities. A circular economy is based on three principles, all driven by design. Eliminate waste and pollution, the first principle of the design is due to the take, make, waste system that our industries are currently pressed upon. This causes major environmental damage hence something more meaningful is required. Circulation of products, the second principle the products or materials that can be reused or repaired in any way to attain their full usage at its highest value. Regenerate nature, we are giving what has been taken from nature and reducing the abuse that has been done to it.
Why do you want to use a circular economy model?
To know whether you would require a circular economy model or perhaps by using one it would not only be beneficial for the company’s cost management but also the reputation of the brand you need to ask yourself the following questions:
- Are the resources you want to use for your business likely to get more expensive, or difficult to source? Or do prices fluctuate making it hard for your budgeting processes and price stability?
- Do you think there is a better market opportunity for your business if you make it a circular one? For example, increasing repairs and improving product life extension will enable you to develop partnerships and deepen relations with your customers.
- Do you see a lot of waste in your area that costs you to manage it responsibly?
- Do you want to contribute to a more sustainable and healthier community?
- Do you want your business to be longer lasting?
- Are your investors and employees concerned about sustainability?
- Have your customers asked you about your business sustainability, are they unable to manage price fluctuations/increases?
- Do you want to reduce the impact of your business on the planet and people?
- Do you want to hand on a sustainable business to your kids?
To protect the environment, reusing and reducing the resources and their usage can slow down the constant abuse and give the alternative ways a chance to impact the environment in a positive manner.
Another benefit from the circular economy is a reduction in total annual greenhouse gas emissions. According to the European Environment Agency, industrial processes and product use are responsible for 9.10% of greenhouse gas emissions in the EU, while the management of waste accounts for 3.32%.
Creating more efficient and sustainable products would lead to less resource consumption and would help to reduce energy. More than 80% of it is used during the design phase
Reduce raw material dependence
The world's population is growing and with it the demand for raw materials. However, the supply of crucial raw materials is limited.
Recycling raw materials mitigates the risks associated with supply, such as price volatility, availability and import dependency. This especially applies to critical raw materials, needed for the production of technologies that are crucial for achieving climate goals, such as batteries and electric engines.
Create jobs and save consumers money
Moving towards a more circular economy could increase competitiveness, stimulate innovation, boost economic growth and create jobs (700,000 jobs in the EU alone by 2030). Redesigning materials and products for circular use would also boost innovation across different sectors of the economy. Consumers will be provided with more durable and innovative products that will increase the quality of life and save them money in the long term.
Entrepreneurs/Businesses currently operating on a circular economy
Neither dumpster nor landfill, Architect Raffaela, while working on various constructions sites realised the amount of waste that was generated and was discomforted on the effect it had on the environment.
It was from this discomfort that Relóco was born in 2020, a São Paulo startup that encourages the reuse of materials left over from construction and renovations.“As I couldn’t find a company that provided this service, I decided to take the initiative” he stated. The startup is responsible for mediating their sale. Interested parties send photos to the team, the materials are evaluated and made available in the online store, generally for at least half the market value. The company takes 30%. Products that are not sold, the owner is not interested in taking back, or arrive as donations are sent to partner NGOs for use in housing improvement projects for low-income families.
Patagonia
Patagonia is a clothing company that has long been known for its commitment to sustainability. They have been at the forefront of the circular economy movement, with a goal to reduce the environmental impact of their products. Patagonia has embraced the circular economy by implementing several initiatives, including: Worn Wear: Patagonia's Worn Wear program encourages customers to repair, reuse, and recycle their clothing. They have a repair program that fixes any damages to the clothing, as well as a trade-in program where customers can trade in their used Patagonia clothing for store credit. This program has helped to extend the lifespan of Patagonia's products and reduce waste. Sustainable Materials: Patagonia has committed to using sustainable materials in their products. They have introduced a line of clothing made from recycled materials, as well as using organic cotton and other sustainable fibres. By using sustainable materials, Patagonia is reducing the environmental impact of their products and promoting a circular economy.
H&M
H&M is a global fashion retailer that has made a commitment to sustainability and the circular economy. They have implemented several initiatives to reduce waste and promote sustainability, including: Garment Collection: H&M has a garment collection program where customers can return their used clothing to be recycled or repurposed. This program has helped to reduce waste and promote a circular economy. Sustainable Materials: H&M has committed to using sustainable materials in their products, such as organic cotton and recycled polyester. By using sustainable materials, H&M is reducing the environmental impact of their products and promoting a circular economy. Circular Services: H&M has introduced several circular services, including renting clothing and selling refurbished items. These services help to reduce waste and promote the reuse of products, further promoting a circular economy.
To conclude, the circular economy is a business model that needs to be implemented for the reduction of the use of natural resources. It will be beneficial for the companies and the human race to be in favour of such a systematic approach to increase their limit of life expectancy as well as those of the resources available.
Sources:
What is a Circular Economy? | US EPA. (2024, August 26). US EPA. https://www.epa.gov/circulareconomy/what-circular-economy
Circular economy. (2024, March 28). UNCTAD. https://unctad.org/topic/trade-and-environment/circular-economy
Circular economy: definition, importance and benefits | Topics | European Parliament. https://www.europarl.europa.eu//circular-economy-definition-importance-and-benefits
Ambipar. (2024, January 15). Entrepreneurs bet on the circular economy trend. https://ambipar.com/ie/news/entrepreneurs-are-betting-on-the-circular-economy-trend-meet-6-stories/
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