What is the Circular Economy Model? How Could it Benefit My Business?
Our current model of living is unsustainable, this has been known for a long time now, however, the idea of moving to more sustainable economies and ways of living has been getting a lot more traction in recent years - particularly considering the recent ICCP report and the COP 26 Summit. There has been more of an emphasis placed on businesses to change the way they operate to be kinder to our environment. Many businesses have been making changes to their packaging to eliminate plastic, and to make their product recyclable after it has been used. Some businesses change their delivery methods or pay to offset carbon emissions, and some businesses evidently ‘greenwash’ their company to come across as ethical to fit in with this movement and keep consumers happy. Whilst the former two of these methods do help with the sustainability movement, could more be done by following a circular economy model?
What is a circular economy?
The majority of people when hearing this phrase assume it’s a new buzzword that at its core just means recycling. But there’s much more to it than that. A circular economy doesn’t just mean correcting our environmental wrongdoings, but it means providing opportunities and living a healthier lifestyle whilst tackling the climate and biodiversity crisis. This will be discussed further on, but for now what is the model?
Most businesses currently follow a linear economy model. To put it very simply, this essentially means that finite raw materials are taken, put into production, used by the consumer, and then disposed of as non-recyclable waste.
A circular economy uses finite resources in a better way. The materials are taken, put into production, used by the consumer, recycled, and then put back into production. This is a different model from just re-using and recycling, as instead of the product being repurposed into something else, such as a tote bag or recycled water bottle, the raw material can be re-used time and time again.
To give you an example of how this is being implemented, think of deposit return schemes. Places such as Burger King are trialling reusable food containers, where you pay a deposit, eat your food, and then get the deposit back upon returning the container. You can read more about how we helped make this model happen for Tesco in our press release.
Adidas is also taking on this model on a new range of shoes that are made without glue and using only one material. When the shoes have reached the end of their life, they are returned to Adidas, ground into pellets, and melted down into the raw material form to create a brand-new pair of shoes, so there is zero-waste manufacture of the shoes.
Of course, the circular economy model is not just linked to one specific product but is best utilised when applied to as many aspects of a business as possible. One fantastic example of thinking outside of the recyclable box is presented by British Sugar. Creating nearly half a million tons of sugar per year, the company have used the circular economy model to become more resilient to changes in the market. Whilst sugar is their primary product, they also create 12 different products from by-products that otherwise would have just become waste, ranging from food to biofuel and chemicals. The sugar is produced from beets which need to be washed before processing. The dirt and stone waste coming from the beets is harvested and sold for industrial purposes. They also use their sugar syrup to create biofuel, which puts them in a unique position of being able to supply both the food and the fuel used in their production.
Why is it so important?
More than 100 billion tonnes of resources enter the economy every single year. Ranging from organic materials to minerals, metals, plastics, and fossil fuels. Most of us know the harmful effects of waste on the environment so there’s no need to reiterate it here, but many individuals and business owners are unaware of how unsustainable the linear model is. Of these 100 billion tonnes of resources, we bring into the world every year, only an abysmal 8.6% is recycled. Since 1970 our use of resources has tripled and is projected to double again by 2050 should businesses continue using the linear model. This means that we would need one and a half Earths to continue to support our current use of resources – something that we just don’t have. Businesses will not be able to sustain their current models for much longer, which is why it is critical to move to a circular model and build resistance to upcoming changes in the market, if not to stop the catastrophic consequences our production models are having on the planet.
What benefits could it have?
There are several benefits that the circular economy model could have, here are just a select few from the bigger picture.
1) It could boost economies
Research into circular economies has shown that this model could create a global £3.4 trillion economic opportunity. By presenting opportune moments for sustainability and innovation, major financial losses from pollution can be mitigated. An example of this would be the fishing and tourism industries who lose approximately £10 trillion a year due to plastic pollution, and the costs for producing plastic which uses a substantial amount of fossil fuels.
2) It could make better use of finite resources
This one is plain and simple, using a circular economy means that we are using less of our finite resources for single use things. The amount of land, fossil fuels and water needed to create basic things such as clothing and hygiene products would be significantly reduced. This is critical as we cannot sustain our current usage, especially as the population is on trajectory to reach 10 billion people by 2060.
3) It could protect human health and biodiversity
Approximately 9 million deaths occur annually due to air, soil and water pollution which also affects biodiversity. Many people will look at that figure and home in on the large amounts of human deaths occurring due to pollution and overlook the biodiversity. However, our earth relies on biodiverse systems to function, so this is not something to brush over as if we don’t have biodiversity the figure for human deaths will increase. Utilising a circular model and recycling methods could have significant impacts such as reducing the amount of plastic flowing into our oceans by 80% in the next twenty years, this would be an incredible feat that would have significant benefits for human life and biodiversity. It’s worth mentioning that a circular economy can also promote ample job opportunities that could help to improve the lives of millions of people.
4) It could benefit your business
Providing a path to sustainability can help to build relationships with your clients and consumers. Certain studies show that 4 out of 5 people will prefer working with companies that take ethical responsibility for their business and promote a positive approach to sustainability. This has also been shown time and time again by consumer behaviours as an increasing number of people seek out products that have less of a damaging environmental impact.
In addition to this, you could also see an increase in profits and a decrease in expenditure on material costs. This can be done in several ways, as mentioned above you can sell your waste product for industrial purposes or use it to create another useful product for your company. You may also find yourself building a larger client base. When you use materials that are recyclable and reusable, you can significantly reduce your costs by not relying on investing in raw materials each time. To put it very simply, think about reusable shopping bags. If you’re buying a brand-new bag each time you go shopping, you’re investing in raw materials which are costing you. Whereas with bringing a reusable shopping bag there’s a one-time fee so, in the long run, you are saving money.
How can I implement a circular economy?
This all depends on your business but remember that whilst some short-term solutions of the linear model may sound appealing right now, they aren’t. Investing in a linear model will not allow you to become resistant to market changes and does not maximise your potential as a business. The short-term solution is a mere survival technique, forcing you to adapt as we run out of resources and can no longer sustainably support this model. Look at your business and see where you can start to implement these changes. Can you sell any of your waste products to be repurposed? Can you change your packaging to reduce your costs on raw materials? Can you pioneer a self-sustaining production line by creating your own fuel from your waste products to produce new ones? In 20 years’ time will your business meet the needs of consumers and will it be able to withstand a sustainable global economy?
Businesses across the world are thinking only of today and not of the future. At first, a circular model may seem new and complex or difficult but any problems you may encounter setting up this model will be far easier to deal with than the catastrophes our current economic model presents.
Where does Scayl fit in?
A circular economy requires reliable machinery to make the loop work. Investing in a Scayl machine would reduce the number of man-hours needed to pack and seal products, reduce waste and human errors with accuracy. Scayl machines can come with a range of funnels that are compatible with different types of reusable containers. The Scayl x Tesco and Loop collaboration is proof of how well this model can work. Taking the leap to buy one of our machines is the first step to creating an efficient and successful circular model.
Sources:
https://newsroom.tomra.com/5-examples-circular-economy/
https://www.wri.org/insights/5-opportunities-circular-economy
https://www.chathamhouse.org/2021/06/what-circular-economy
https://www.rethinkglobal.info/what-is-the-circular-economy/
