By principle of a circular economy, no material should ever drop out of the process but should instead be routed back into the cycle. So as a direct result, businesses can get more value out of their products and the materials used to manufacture them. Following are five ways businesses can achieve this, demonstrated with real case examples of companies who’ve showed the world how it can be done.
1. Get more value out of products by collecting used products for reuse and recycling – H&M
H&M’s famous in-store clothing collection program aims to reuse and recycle all textiles, and to eventually use the recycled fibres to produce the clothes in their line. It begins by encouraging customers to return their used or unwanted clothes in exchange for a store voucher. The collected clothing is then sent for sorting into categories of rewear, reuse, recycle, or energy generation.
Rewear clothes make up the majority of the collection, and are sold second-hand in stores around the world. The clothes that are in too poor of a condition to be worn – reuse – are made into other cloth products, such as cleaning fabrics. Those that are in an even worse condition are recycled further down into fibres, which are then used by other industries. Finally, the textiles that could not be used in any other way are sent for energy generation.
H&M, therefore, gets more value out of their products by being able to resell the clothing or recycled textile. Likewise, the voucher received in exchange for returning a used product gives people incentive to continue purchasing at their stores, further returning value to the company.
2. Get more value out of materials by upcycling them into new products – RGS90
RGS90 is a Danish waste company, which sorts and recycles waste before it is turned back into new products. As construction scrap accounts for a large proportion of the total waste in Denmark, RGS90 began a new initiative to collect and process the rubbish into new construction materials. Hence, the materials that would originally only be useful for one product life are now being used again, creating twice their original value.
3. Get more value out of materials by reusing parts – Trina Solar
Trina Solar is a leading solar panel manufacturer who recycles solar panels that are at the end of their product life. They extract materials such as glass from the solar panel and use them for other purposes. This way, the company reaps the value from those materials again as they are reused in another way.
4. Get more value out of materials by transforming by-products into products – KMC
KMC processes potatoes into starch ingredients for both the agricultural and the food industry. They currently transform the potato fibres that are left-over from the production process into a food additive that is sold to the food sector. This enables KMC to maximize the product output of each potato by making use of every part of it.
5. Get more value out of products by leasing rather than selling – VIGGA
Buying baby clothes is one of the purchases with the lowest return on investment, as babies grow incredibly quickly, outgrowing their clothes every 1-2 months. So instead of wasting money every few months on buying clothes that will in a short time no longer be used, VIGGA came up with the concept of leasing baby clothes.
Parents pay a monthly subscription fee to receive several items of clothing in their child’s size, which are then returned to VIGGA in exchange for a new set of clothes when the child outgrows them. After thorough inspection and cleaning, the previous set of baby clothes are then rented out to another child in that size. The result is a circular loop in which no clothes or money is wasted, and VIGGA gets value out of their product again and again.
What is your innovative circular initiative? Share your expertise with us!