The concept of a circular economy has been gaining popularity in recent years as the world becomes more aware of the negative impact of traditional linear economic models. A circular economy aims to reduce waste and pollution by keeping resources in use for as long as possible, creating a closed-loop system.
What is a circular economy?
According to Gartner, circular economies are key to business value. They write about utility industry value chains that are rapidly changing and organizations that should operate across the enterprise and markets. Beyond that, they imply that CIOs can use trend analysis to contextualize the impact of the shift to circular economies on utility digital business models, operating models, and operations performance.
Businesses can implement circular economy practices by utilizing comprehensive production chain visibility provided by advanced business platform solutions, allowing for sustainable resource management and enhanced financial performance. Facing the challenge of the increasing scarcity of resources and the pressing need to mitigate climate change, several companies have embraced the circular economy model.
Here are five successful examples
Before reading on you should however note down that businesses from various industries and regions might have other challenges and imperatives, so a direct comparison is not easy.
Interface, a global manufacturer of commercial flooring, has been a pioneer of circular economy practices. The company has implemented several programs to decrease its environmental footprint, including reusing and recycling materials. Interface has developed a process that recycles old carpet tiles into new ones, which reduces waste and costs. In addition, the company launched Net-Works, a collection and recycling program that converts discarded fishing nets into nylon for Interface’s carpet tiles. The program also creates employment opportunities for the local fishing communities in developing countries.
Patagonia is a clothing company that adheres to this model. By running a comprehensive recycling program, the company converts old garments into new ones, ultimately extending their lifespan. Additionally, Patagonia partners with other companies to establish a closed-loop supply chain. As an example, the company’s wetsuit producer, Yulex, makes use of renewable natural materials such as guayule instead of petroleum-based neoprene that’s not recyclable. And therewith Patagonia’s model reduces waste, saves money, and enhances its reputation and the reputation of their products.
Philips, a diversified manufacturer including lighting products, has undertaken a circular economy model for its products. The company now offers a take-back system for its used products, promoting a closed-loop system that has led to significant waste reduction and greater efficiency. Moreover, Philips is committed to educating its customers on adopting circular economy practices, thus contributing to a more sustainable future.
Renault, the French automotive company, has embraced a circular economy model by creating a program to recycle electric vehicle batteries. Reusing batteries for energy storage units and other purposes, Renault’s model reduces waste and enhances the sustainability of its electric vehicles. Furthermore, the company requires suppliers to adopt circular economy principles, promoting sustainability through its procurement strategy.
Veolia is a French utility company that practices a circular economy across its operations. Their services include waste management, composting organic waste, recycling, and energy recovery from incineration. To briefly illustrate, they repurpose plastic into new items. By adopting this model, Veolia reduces waste and promotes better environmental performance.
Circular economy practices are proving to be very useful and valuable for businesses of all types. Renault, for example, reuses vehicle batteries and requires suppliers to adopt circular economy principles in order to reduce waste and increase sustainability. Veolia is another example of a company that adopts this model by repurposing plastic into new items, thereby reducing waste and promoting better environmental performance. This demonstrates how these practices can help businesses be more sustainable and reduce their environmental impact.
YouTube: Explaining the Circular Economy and How Society Can Re-think Progress
Photo credit: The feature image is symbolic and has been done by Balazs Sebok.