What exactly is a circular economy? It is sometimes vaguely understood. In simple terms, turn waste into something useful – welcomes to the world of the circular economy.
This trend is soon going to take over the wasteful linear economies. Analyst Gartner prediction reveals that 2029 would be the year when the circular economy will be the only economy. This will be true as both the consumer and service provider decisions are shifting towards sustainability.
It is time for the chief supply chain officers (CSCOs) to prepare for the transformation – while terminating ‘waste’.
Along the line, Gartner also emphasises that the switch to a circular economy is not something that can be achieved alone. It requires the involvement of all – from businesses to government and to consumers. CSCOs, in specific, must partner with internal product designers and suppliers to comprehend precisely how products are consumed and disposed of after consumption.
In 2015, Waste to Wealth by The Accenture Strategy highlighted the fact about the golden opportunity in a circular economy. Experts have indicated opportunities worth US$4.5 trillion by 2030 and $25 trillion by 2050.
Besides, some also say that reducing waste to landfills or carbon dioxide emissions are not directly related to a circular economy. Instead, a better standard to contribute could be the amount of reclaimed, reused material for production. And another major contribution could be the decrease or elimination of single-use plastic.
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No-waste Strategy Of Small-scale Companies Is A Big Opportunity For The Giants
There are people, who have no idea about the circular economy. Yet, they buy eco-friendly shopping bags instead of plastic bags from the supermarkets. There are also people who know about its benefits and are happy to pay a slightly higher price for a recycled product. Because they know it will help protect the environment.
Both examples show that either this way or the other, the circular economy offers a golden opportunity to businesses. No matter, if they are operating at a small-scale.
Lee & Man Vietnam, a company that manufactures FDI paper uses recycled materials as 95% of the input. As per Patrick Chung, general director of the company, paper can be recycled up to six times before it turns unusable. This is a huge opportunity that if ignored, puts more pressure on the environment.
In Vietnam, the circular economy is a relatively new concept. It is only big or foreign-invested that are venturing into it. However, according to Chung, implementation depends on the capability and orientation of the company and the dedication of the management board.
Thus said, pursuing the goal is a challenge, says Chung. Companies need to consider a number of aspects. These include finance, resources, vision, and investment of time. Moreover, they need to invest effort and resources into non-financial goals that associate to environment and society. Certainly, this reduces the company’s profit. It is not possible to achieve sustainable goals without trade-offs.
For example, in the paper industry, solid waste like metal and plastic are processed. And recycled paper can be re-supplied to manufacturing industries. The non-reusable waste is incinerated at the factory and its ashes can be purchased by cement companies to manufacture cement. Or it can also be used in producing unburnt bricks. Lee & Man has invested millions of dollars in this kind of model. But the question is, can small-size companies afford the zero-waste strategy?
The solution comes from the director of Asia Pacific, Constant Van Aerschot. A smart business model can be a key to create a circular economy. It does not necessarily require to be cost-intensive.
He added that SMEs can supply to big companies. If SMEs have a solution that benefits big companies, it will turn into a win-win situation. Leasing or taking back products for reproduction are models that are not very expensive. Small companies can benefit from it. By reevaluating the life cycle of the products, loan-proposed SMEs can identify points that can be enhanced to bring the most value. However, doing this requires roadmap and a fixed goal that has to be set.
Besides, a public-private partnership can help take the agenda on a larger scale. For this, governments need to play a role.
A Circular Shopping Centre
Eskilstuna in Sweden is home to the world’s first shopping mall ‘ReTuna Återbruksgalleria’ that works on the principles of a circular economy. The aim was to build a shopping centre with regular shops, but with a reused and upcycled range of products. In doing so, they also envisioned to spread the knowledge of circular economy and sustainability.
The municipality-owned company Eskilstuna Energi och Miljo (EEM) meaning ‘Energy & Environment was tasked to create the project plan. They were tasked to provide optimal benefits to customers and residents. This was furthered by having a minimal impact on the environment. Project Manager, Anna Bergström, helped in successfully establishing the shopping centre from her prior experience of dealing with the establishment of shopping centres.
Of course, the private retailers operating in the shopping centre have a vital role to play. But alongside, even citizens are encouraged to play an active role. People donate reusable items like furniture, clothes, toys, electronic device etc. to a depot called “Return” in the mall. The staff of the depot then sort out the usable items and distribute them to recycle shops. These shops then perform the second assortment where they choose products that can be repaired, refined and resold.
Today, the shopping centre is not just offering to shop sustainably but also serving as a public educator. The centre has generated over 50 new jobs. In 2015, it won the ReTuna Recycling Gallery of the Year at the Swedish Recycling Awards competition.
A Re-use Warehouse
The Mayor’s Environmental Programming team, in Houston, US collaborated with key stakeholders from City’s Solid Waste, Public Works and Planning Departments. It also involved local non-profits in the reuse and deconstruction field. Going further, they consulted construction and demolition companies and found that a massive amount of reusable material is ending up in landfills. And groups who could make use of the material do not have means of connecting with the producers. To bridge this gap, the team came up with the concept of ‘Re-use Warehouse.’
Initially, the inspiration came from the neighbouring municipality of the City of Huntsville which runs a similar programme.
The City of Houston Reuse Warehouse accepts materials from individuals, builders, and supply companies. NGOs, schools, universities and government agencies can collect the materials for free. Moreover, the facility is also open for donation.
The Reuse Warehouse is now keeping the reusable building material from going into landfills. It is helping the material reach those who can use it.
Until November 2018, the programme has successfully diverted 4,500 tonnes of material from landfills. The Warehouse has provided 90% of the construction material to 700 NGOs, schools, universities, and government agencies. Besides contributing to a circular economy, the initiative also connects Houston community together.
These are just a few of the examples which show how small-scale initiatives can create a circular economy. Perhaps, there are many more ways to drive in more sustainability.
Padampani School in a village situated in Bihar, India has introduced an innovative initiative for school children. The institution accepts plastic waste as school fees and in return provides free books and meals to its students. Kids are encouraged to gather plastic waste from their surroundings and bring it to school. This is not just helping save the environment, but also preparing the next generation to grow up as green guardians.