Circular Economy Opportunity

Circular Economy Opportunity

The circular economy opportunity often becomes shrouded in “higher level” benefits to address the triple planetary crisis of climate, biodiversity, and pollution, as well as pathways for inclusive development.  Throw in the holy grail “Net Zero” misconception that it is only possible only through heavy investments and sacrificing margins and enthusiasm wanes rapidly.

Sustainable development goals (SDGs) or environmental, social and corporate governance (ESG) models appear to be growing.  However there is often a lack of connection between day-to-day business operations and the higher purpose of those sustainability efforts. 

However, SDGs, ESG, Circular Economy and Net Zero do not have to be at odds with productivity or, by extension, profitability.  The transition to a circular economy requires the reconfiguration of global value chains.  However, there are circular economy opportunities at the end location for each “linear” production

The repairing and leasing circular economy efficient lever to help society reach Net-Zero, SDG and ESG goals

  • Macro problems can be solved with a series of micro solutions
  • A wasted resource is one where value is not being optimised: products, processes & people
  • The best place to address wasted resources is at project design stage.
  • Starting with the end game in mind, supply chain complexities can be accounted for and incorporated into agile, flexible, and resilient operations

What you don’t measure, you don’t really manage.  Performance monitoring could be the key to unlocking that lack of connection between social and environmental initiatives and bottom-line results.

  • Sustainability metrics measure the direct impact of the social or environmental issue a company is addressing and include energy, emissions, climate, water, waste and personnel.
  • Communications metrics to various stakeholders could include purchase intentions, reputation, awareness, media exposure and impressions.
  • Business metrics which are common to all businesses include costs, revenues and returns.

Once we understand how to measure the real economic impact of sustainability, thinking in terms of a new management model in which sustainability projects are not seen as altruistic or necessary efforts but as competitive advantages is required.  This will require:

  • Companies to think that anything they do should have a social or environmental impact outside the organisation and they should see this impact as another operational project that has a profit and loss account.
  • Consumers to accept that it is not only good to make money solving social and environmental problems but also necessary if we want that impact to remain for longer periods of time or until the need no longer exists.

The company that best aligns with its target’s concerns could have a competitive advantage over its peers. 

In parallel, consumers can be more thoughtful when buying products and try to understand the social and environmental consequences of purchases.