The movement towards a circular economy is gaining traction among industries and governments, and many have started taking steps towards change. Nonetheless, the majority of businesses are still ginger to implement sustainable business practices because they are, after all, yet another expense of time and money.
But what if it wasn’t? What if, as a direct result of enacting circularity, businesses receive real tangible benefits? And no, I’m not talking about CSR publicity. I’m talking about getting more value out of your money, raw materials, and products.
Businesses can save money through closed material loops
A closed material loop is a system in which no amount of material ever gets put to waste. Rather, once they have served their purpose in one production process, they are put to use by either another industry or another division of the company.
Businesses can cut expenditure on the logistics of recycling or disposing their waste by selling their waste, by-product, or excess material to other industries who use that material in their production line. On the other side of the transaction, the recipient of the material cuts costs as well, as it is cheaper to purchase the waste material than to obtain it from the virgin source.
Andy Mangan, executive director of the U.S. Business Council for Sustainable Development, gives an example of such an exchange in an interview with MAPI: during automobile production window holes are stamped out of steel sheets, which are then used by architects in the production of furniture. No steel is wasted, and no extra steel is mined for the manufacture of the furniture.
Another approach to this closed-loop system is trading materials between industries – one company gives their unneeded material in exchange for material from another company, resulting in both parties receiving the resources they need at 50-75% less cost.
And with online trading platforms like Material Trader, businesses don’t even need to have connections with other industries with which they can trade, as anyone can easily offer their material and find a supplier of the components they need over the internet.
Businesses can get more value out of their products and raw materials
By retrieving materials, such as metals and plastics, from old products and melting them down for re-use in new products, companies get nearly twice as much value or more from that batch of substance. Similarly, refurbishing old products for resale means that the product delivers more value for the company, and customers can get the refurbished product for 30-50% cheaper.
However, this process relies on the consumer to return the product at the end of its life, rather than disposing of it or giving it to a recycling plant. A solution can be found through another concept that has been suggested by circular economy innovators, which is leasing products to consumers rather than selling them. This way, customers are required or are given incentive by the company to return the products once their lease is up.
What are the ways in which your company has benefited from implementing circular practices? We would like to hear from you!