The circular economy lands in the strategy of companies
Reduce, reuse and recycle. A mantra that many companies are considering incorporating or are already implementing in their business strategy, as a competitive advantage and to improve their positive social and environmental impact.
Some 100 million tons of plastic are at the bottom of the sea or floating on the surface. Sea Threads, an Australian company, has decided to use part of this plastic to manufacture high-performance sports clothing.
This company is just one example. Ecoalf or Patagonia they are true emblems of the circular economy. Since 2005, Patagonia has recycled 27 tons of clothing.. With a purpose based on creating the best product, not causing unnecessary damage to the planet and implementing solutions to the environmental crisis, it has managed to become a benchmark for sustainable quality fashion. They have an enviable loyalty ratio and exceptional customer service, which repairs garments consistently following that purpose of reusing and repairing to avoid irresponsible consumerism.
Companies like these have an obvious impact on the environment since only 9% of plastics are recycled properly, according to Smithsonian Ocean. The rest is stranded for years accumulating and generating a negative impact on the marine environment.
But there are many examples of the circular economy. Danone is another company that puts into practice “the 3Rs” (Reduce, Reuse and Recycle). Through his brand, Bonafont implemented one of the first bottles made from other bottles.
There are companies that turn bottles into mats and dashboards for cars or tires that are transformed into shoes.
What is the circular economy
The circular economy is a system framework that addresses solutions to global challenges such as climate change, biodiversity loss, waste and pollution.
In our current economy, we take materials from the Earth, make products from them and, finally, we throw them away as waste: the process is linear. In a circular economy, on the contrary, the objective is to stop producing waste in the first place and reuse what is generated.
In this way, the current disposable linear system is avoided and a commitment is made to another one that is environmentally friendly and based on prevention, reuse, repair and recycling.
Reduce, reuse and recycle
The Rule of Three 3R - Reduce, Reuse and Recycle- reduces the negative impact on the environment, saving on resources and energy.
But why not make products more sustainable by design? Or why not repair them instead of buying new ones? The circular economy is proposing new concepts such as ecodesign and repair, expanding these 3R to 7R.
What do the 7Rs of the circular economy consist of?
- Redesign: consists of designing products taking into account the environment, that is, based on ecodesign to improve functionality and sustainability.
- Reduce: seeks to reduce the amount of products we consume and the waste we generate.
- Reuse: its objective is to extend the useful life of products, either by using them again or by giving them a new utility.
- Repair: consists of fixing a product that has broken down instead of buying a new one, without even considering the option of repairing it.
- Renew: it's about updating all those outdated products so that they can be used again.
- retrieve: consists of collecting materials that have already been used to reintroduce them into the production process.
- Recycle: is to reintroduce waste that has already been used in production processes so that it serves as raw material for other new products.
Why the circular economy is necessary
Resource extraction and processing cause 90% of biodiversity loss and account for nearly half of global greenhouse gas emissions, as warned by the Organization for Economic Cooperation and Development (OECD) in its Global Material Resources Outlook to 2060.
Minimizing the extraction and use of raw materials by 28% would reduce greenhouse gas emissions by 39%, with the objective of complying with the Paris Agreement and not exceeding the temperature increase by more than 1.5°C at the end of the century, as indicated in The Circularity GAP Report 2022.
Companies are challenged to adapt their businesses to reduce the impact that manufacturing their products has on the environment.
The importance of redirecting financial flows towards a circular transition is something that is generating increasing interest so that Europe, and Spain, can progress towards a green and sustainable recovery.
The data is convincing. Every Spaniard generates an average of 460 kg of urban waste per year, that is, six times more than their average weight. This shocking fact is a consequence of an economic model based on extraction, production, consumption and disposal. A model that involves a high environmental cost, both when producing products and at the end of their life cycle.
In this context and as part of the European Green Deal, the European Commission presented in early 2022 its Action Plan for the Circular Economy, which aims to make sustainable products the norm in the EU, promote circular business models and empower consumers for the ecological transition.
The investment acquisition scenario linked to the circular economy has experienced significant growth in recent years, and has become a key element for the transition to a more sustainable economy.
In fact, Since the beginning of 2020, assets generated through capital funds in the circular economy have increased from 300 to more than 2 billion dollars, which means that this volume of investment has been multiplied by 6.
A Powerful Job Opportunity
The growing importance of the circular economy in companies is driving demand for jobs related to this type of profile.
According to the International Labour Organization, the circular economy will generate 24 million jobs in the world in 2030. In Europe alone, it is estimated that some 700,000 jobs will be created.
It is increasingly common to demand skills from employees related to calculating the carbon footprint or manufacturing products designed to extend their life cycle and their recyclability.
The challenge faced by society and companies to join the circular economy
It is a huge challenge for society that transcends all sectors and all levels. The most obvious are those related to the use of renewable raw materials, as well as those based on reuse, repair and recycling. And it affects many aspects of companies, such as digitalization, logistics or accounting management. It is difficult to find a sector that is alien to this necessary revolution.
The opportunities for companies to position themselves at the forefront of this challenge are enormous. The circular economy could reduce waste from some industrial sectors and 99% of their greenhouse gas emissions by up to 99%, thus helping to protect the environment and combat climate change. An ambitious challenge, but necessary and, in addition, profitable.
