What goes around comes around. And the same is true in business. Embracing the circular economy is a great, possibly even necessary step your organisation should take towards sustainability.
It’s a regenerative economic model, which seeks to have positive environmental and social outcomes, while also maintaining business growth and profitability.
The circular economy is designed to minimise waste and maximise the use of resources. As such, resources are kept in use for as long as possible, waste is eliminated, and the environmental impact of production and consumption is minimised. It’s an important part of businesses becoming fully sustainable.
Here we’ll look at the principles of the circular economy, and how you can implement it within your organisation.
Key points:
- The circular economy promotes recycling, reusing and regenerating materials. These should be sourced sustainably, and products should be designed with durability and recycling in mind. By minimising waste and closing the loop, businesses can become less reliant on raw materials.
- Besides being more ethical, organisations can benefit from cost savings, improved innovation, compliance with regulations, and boosting the brand’s image.
- The circular economy is a journey, not a quick fix. It involves a thorough evaluation of the business’s practices, regular monitoring and continual improvement. All aspects of the business can be viewed through a lens of sustainability, from the supply chain, through production, and to the end (or rather new beginning) of the product or service’s life cycle.
What is the circular economy, exactly?
The traditional economy can be described as linear. This is typified by resources being extracted, manufactured into products, and eventually discarded as waste.
By contrast, the circular economy aims to minimise consumption of resources and waste. At its heart, it promotes recycling, reusing and regenerating materials. As such, it strives for economic growth while also being sustainable and environmentally conscious.
*Find out more about making your business more sustainable while maintaining profitability.
There are four guiding principles of the circular economy:
- Designing for durability and recyclability. Products are designed to last longer, while also being easy to repair. They should also be made up of components which can be reused or recycled.
- Resource efficiency. By minimising waste, energy consumption and water usage, businesses can be more efficient with their resources.
- Closing the loop. By recycling, reusing and refurbishing, materials are kept in circulation, and you become less reliant on raw materials.
- Sharing platforms. People share services and resources, maximising their value – otherwise known as collaborative consumption. Examples include ride-sharing and co-working spaces, for instance.
The benefits of circular economy practices
By reducing waste and implementing circular economy practices, businesses can enjoy numerous benefits. These include:
- Cost savings. By reusing materials and optimising the use of resources, businesses can slash the cost of buying raw materials. Less money will also be spent on production and disposal.
- Innovation. Working with circular economy principles helps businesses to think creatively, and innovate within its framework.
- Brand reputation. Embracing these principles will appeal to environmentally conscious customers, and help differentiate your business.
- Compliance. With increasing regulation and incentives for working in an environmentally conscious way, embracing the circular economy will help you comply with government initiatives.
Listen to our training experts discuss how your business can become more sustainable, in our green skills podcast
How can I implement a circular economy in my business?
To implement circular economy principles in your organisation, it’s worth considering the following steps.
#1. Evaluate your current business practices
First off, take a good look at your business operations. Identify areas where you can reduce waste and improve the efficiency of your resources. In addition to your operations, evaluate your supply chains with a view to being more sustainable.
Also, think about whether resource sharing could be an option for your business. Could you use part of the premises as a co-working space, for instance? Having people come in to work could generate extra income, while also maximising the space available – ideal if you currently have empty seats. It’s also a good idea to encourage transport sharing among staff.
#2. Design your products with reuse or recycling in mind
If your business makes products, you should consider redesigning them to extend their lifespan, and make them more durable. You could also think about whether recycled materials could be incorporated.
When designing products, it should be at the front of mind to promote reuse and recycling.
For example, packaging could be designed with reuse in mind, and steps taken to communicate this to your customers. At very least, any packaging should be easily recyclable. If it needs to be made up of different materials, it’s a good idea to make them easy to separate.
#3. Adopt a closed-loop supply chain
A closed-loop supply chain is where materials are reused and recycled at the end of their life cycle. This could involve take-back programs for instance, where customers are encouraged to return the product or packaging after use.
An example of this is Riverford Organic Farmers, who supply vegetable boxes, and request that customers return the boxes themselves for reuse.
Adopting a closed-loop supply chain could also involve working with suppliers to source recycled materials. And – as mentioned above – your business could seek out product designers which work with disassembly and recycling in mind.
#4. Make sure your energy supply is renewable
Energy supply is a big spend for every business, so choosing a supplier or tariff which generates power from renewables is a positive step towards sustainability. And renewable tariffs aren’t necessarily more expensive either. As such, it’s a good idea to use a comparison site and see if you can switch to a cheaper renewable tariff.
You could also invest in solar panels, especially if your premises has plenty of roof space. While the outlay can be fairly costly, if you’re generating your own power, this should ultimately pay for itself – especially if energy prices remain as high as they are at the time of writing. Obviously do your sums first though, to see if it’ll work out for your business.
#5. Engage your stakeholders
When adopting new practices, it’s best to get your stakeholders on board – both internal and external. For starters, you should educate employees about the principles and benefits of the circular economy, providing training on sustainable practices. Encourage staff involvement in coming up with innovative solutions, and be sure to gather feedback.
Externally, shout your commitment to circularity loud and proud – whether that’s to your customers, suppliers or investors. Update the relevant stakeholders on your progress and achievements – but also your challenges. Being transparent will help build trust, while also fostering a sense of shared responsibility. We’re in this together!
*Find out more about stakeholder analysis here.
#6. Measure your progress
Be sure to set key performance indicators (KPIs) to measure and track the progress of your initiatives. Your goals should be specific, measurable, achievable, relevant and timebound (SMART). To make these easier to track, take full advantage of any apps and digital technologies available, gathering useful data as they go.
Monitor metrics such as waste reduction, material reuse, energy efficiency and cost savings. You should then regularly assess the impact of the practices you’ve implemented, making adjustments as needed to optimise results.
#7. Improve and innovate
Embracing the circular economy is an ongoing journey. As such, you should encourage a culture of continuous improvement and innovation within your organisation.
Try to foster a mindset that encourages staff to generate ideas and experiment with new approaches, learning from both successes and failures. As your most valuable asset, you can also upskill employees by enlisting them on IEMA courses on environmental management and sustainability training.
Finally, subscribe to newsletters such as Circular Online to stay on top of emerging trends, technologies and best practices in the circular economy. There’s no shame in being a sustainability geek.
Is the circular economy a win-win?
We certainly think so. The circular economy presents a transformative opportunity for businesses to drive sustainability, minimise waste and foster long-term growth. By implementing circular practices, businesses can potentially reduce costs, enhance their brand’s reputation, and stay competitive by driving innovation.
Embracing the circular economy isn’t just an ethical choice. It’s also an increasingly necessary one. With fewer resources available, being smart with what we’ve got is essential for businesses to thrive – while also helping preserve the environment for future generations.
**Want to know more? Find out all about our IEMA courses, providing valuable training in sustainability and environmental management.
