The Circular Economy – How Best-In-Class Businesses Did it Right
The world’s population is predicted to reach 9 billion people by 2030, yet we are already consuming more resources than the planet can provide now. Many companies are tackling this problem by embracing the “circular economy”, creating closed material loops to ensure that value isn’t lost at the end of a product’s first life.
For manufacturers, this involves designing products and materials that can easily be deconstructed and reused or recycled. For non-manufacturing businesses, it is about purchasing products and materials that are intrinsically reusable or recyclable, and then structuring the business processes in such a way that the highest proportion of materials can be reused or recycled.
The reason for its growing popularity is that adherence to the circular economy is beneficial not just to the environment, but also to the financial performance of the businesses that adhere to its concepts.
In this article, we look at some of the best-in-class businesses that are driving forward the circular economy mindset – and who are reaping benefits from doing so.
Leanpath – Smart Food Waste Meters
Companies have long been using smart meters to measure their consumption of electricity and water. The U.S. company Leanpath has now developed smart meters to measure our trash, specifically food waste.
Their smart meters have been embraced by the food service industry. They help kitchens to understand exactly what food they throw away and where it comes from; enabling them to identify methodologies to reduce the amount of waste they produce.
It’s thought that up to a fifth of food purchases find their way to the kitchen trashcan, and Leanpath has reduced that by 50%, while also reducing kitchen labor and operating costs. Since 2014, Leanpath-empowered culinary teams have prevented over 52 million pounds of food from being wasted. Leanpath promises that kitchens will benefit from a 3-4x ROI on the purchase price.
Their innovative technology has earned the company a number of sustainability and business awards, and their meters can be found in thousands of kitchens around the world.
Ahrend – Circular Office Furniture
Manufacturing office furniture requires lots of materials and energy, and many of the materials in products today come from increasingly finite sources. Typically, between 80 and 90% of these resources are lost after a short use period.
Like most industrial sectors, the manufacture of office furniture typically adheres to the linear model of production, but not with Ahrend. Ahrend manufactures office furniture with modularity, disassembly, and life extension as core design principles. This gives every product multiple lives thanks to easy repair, upgrades, and modifications.
Ahrend takes this circular concept further by offering their customers furniture-as-a-service (FAAS). Customers pay a monthly rental fee and return the furniture when they no longer need it. This gives Ahrend a closer relationship with customers, and a potential for greater profits. After five years of use, the per-item revenue for a piece of furniture is greater than the standard sale value. And because Ahrend maintains ownership of the furniture, many of the recovered components and materials can then be used to make the next piece, reducing their future manufacturing costs.
The result of Ahrend’s circular business model is a reduction in material usage and carbon emissions, closer client relationships, greater profits, and a more secure supply chain. Their customers benefit from lower office set up costs and more flexibility in a rapidly changing business environment.
Austin Materials Marketplace – A B2B Reuse Platform
The City of Austin has set a target to reach zero waste by 2040. Part of their roadmap involved finding value from discarded materials, rather than losing them to a landfill. This led to the creation of an online exchange platform called the “Austin Materials Marketplace”.
The marketplace brings together businesses of all sizes and is driven by the principal that one company’s by-products can be another’s raw materials, creating closed loop systems.
The Austin Materials Marketplace provides an additional revenue stream for participating businesses, while also helping them to divert more material from landfill. Between 2014 and 2019, the trades resulted in over 400 tons of material being diverted from landfill, and avoided more than 950 million tons of CO2 emissions.
After nearly 600 trades had been made, a net value of over $600,000 had been generated. This includes the value of the each trade, in addition to the sellers’ estimated disposal cost savings, and the amount the purchasers saved by not having to purchase new material.
Renault – ‘Short’ Closed Loop Recycling of Plastics
Renault needed to create a stable and cost-competitive supply of recycled plastic so that their cars could be manufactured in an economically and environmentally sustainable manner. The company realized that pursuing circular economy objectives made good business sense as a strategy for optimizing resource use and minimizing environmental impacts.
Renault initiated collaborations with multiple stakeholders, establishing a closed loop system for plastics that could be maintained wholly within the local automotive industry. By keeping the materials local, they created what is defined as a “short’’ closed loop. The environmental benefits are further increased as the materials are travelling short distances and maintaining their optimal value. Short closed loops are particularly achievable when recycling raw materials such as steel, copper, textiles, and plastics.
As a result of their closed loop recycling process, on average 36% of the total mass of a newly produced Renault vehicle is now made from recycled materials. 20% of the plastic in a new Espace crossover SUV is from recycled material, and 85% of an ELV is now recyclable.
Mobile technology has transformed our lives and 90% of adults across the globe now own a mobile device. However, the manufacture of mobile devices can be incredibly environmentally and socially impactful. 62 different metals and metalloids have to be mined to make one smartphone. In 2018 alone, 1.4 billion smartphones were sold globally, using 100 billion liters of water and 20.5 million kg of cyanide to mine the required 34 billion kg of ore.
Our appetite for the latest must-have tablet or smartphone has also created a glut of discarded devices. HYLA Mobile works with many of the world’s leading manufacturers and service providers to repurpose and reuse these devices or their component parts, to encourage sustainable practices, drive digital inclusion, and increase revenues.
HYLA collects, processes and redistributes refurbished devices to give them a new life. It’s estimated that HYLA Mobile has reused more than 50 million devices, making $4 billion for their owners and diverting 6,500 tons of e-waste from landfill, avoiding over 59.4 billion gallons of groundwater pollution, and bringing connectivity to over 30 million people.
National Waste Associates Helps its Customers to Join the Circular Economy
As a waste and recycling management services provider, National Waste Associates (NWA) ensures our customers can extract more value from their waste and minimize their environmental impact.
Our sustainability experts help our customers to reach their carbon reduction targets and achieve their environmental initiatives. We work directly with individual locations to develop effective recycling programs, and carry out constant waste analyses and surveys to identify recycling, diversion, repurposing and reuse opportunities to keep your waste out of the landfill.
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