Looking beyond the current “take, make and dispose” extractive industrial model, the circular economy is restorative and regenerative by design. Relying on system-wide innovation, it aims to redefine products and services to design waste out, while minimising negative impacts. Underpinned by a transition to renewable energy sources, the circular model builds economic, natural and social capital.
In order to maximize its implementation into society, the Ellen McArthur Foundation has identified the following four essential building blocks of a circular economy.
Block 1. Circular economy design
Companies need to build core competencies in circular design to facilitate product reuse, recycling and cascading. Circular product (and process) design requires advanced skills, information sets, and working methods. Areas important for economically successful circular design include: material selection, standardised components, designed-to-last products, design for easy end-of-life sorting, separation or reuse of products and materials, and design-for-manufacturing criteria that take into account possible useful applications of by-products and wastes.
To picture how this design can shape the economy landscape, Braiform is at the top in their circular economy design.
Braiform is a global leader in garment hanger reuse. This means that products are returned to reuse centres where they are sorted, repackaged and distributed back to garment-producing regions, preventing them from ending up in landfill.
Braiform is amongst the largest garment hanger suppliers in the world, handling billions of hangers each year. In the past, the company was a key player in the initial manufacture of these products, but fifteen years ago the decision was made to sell off all production facilities and commit to a dedicated re-use supply chain. Today, Braiform are the global leader in garment hanger re-use.
Block 2. New business models
The shift to a circular economy requires innovative business models that either replace existing ones or seize new opportunities. Companies with significant market share and capabilities along several vertical steps of the linear value chain could play a major role in circular economy innovation and driving circularity into the mainstream by leveraging their scale and vertical integration. While many new models, materials, and products will come from entrepreneurs, these brand and volume leaders can also play a critical role. Profitable circular economy business models and initiatives will inspire other players and will be copied and expanded geographically.
One of the companies that have come up with a completely new business system is Bundles. Bundles offer clean clothes on a pay-per-wash basis. Applying Internet of Things technology enables product monitoring, while maintenance and refurbishment of higher quality machines preserves the product integrity for multiple cycles.
Bundles aims to go beyond generic advice, to using Internet of Things data to enable customised performance tweaks and continuous improvement; optimising machine load, cycle duration, temperature and detergent use, all variables that can waste money for the user and damage appliances. In this way, not only do customers get household jobs done in an easy and affordable manner, but there are wider economic benefits. In addition to energy savings, the ability to monitor, maintain, repair and refurbish the higher quality machine preserves product integrity for multiple cycles, breaking from the current resource-intensive linear model.
Block 3. Reverse cycles
New and additional skills are needed for cascades and the final return of materials to the soil or back into the industrial production system. This includes delivery chain logistics, sorting, warehousing, risk management, power generation, and even molecular biology and polymer chemistry. With cost-efficient, better-quality collection and treatment systems, and effective segmentation of end-of-life products, the leakage of materials out of the system will decrease, supporting the economics of circular design.
On of the best examples of how to reuse and recycle left-for-dead devices is Mazuma Mobile.
Set in the UK, Mazuma Mobile is an online mobile phone reuse and recycling service allowing consumers to unlock the cash value of their mobile phones, offering same day payments. Collected handsets are refurbished by an external partner where necessary and then sold to partners in emerging markets, insurance dealers and retailers.
Of the 50,000 to 150,000 phones received every month, the large majority can be reused, provided part of them go through refurbishing – which is handled by an external partner. The handsets are then sold to approved partners in China and Africa, with whom they keep long-term relationships. These second-hand phones are also sold within the UK to phone retailers and to insurance companies. CEO Charlo says “These companies find them an economic way to replace lost, broken or stolen phones while discouraging fraud.” The small proportion of phones that do not work are recycled for materials.
Nevertheless, In 2011, Mazuma Mobile became the first company of its type to pay out £100 million to its customers and was awarded by ‘The Best Recycling Service Provider’ in 2012 and 2013.
Block 4. Enablers and favourable system conditions
For widespread reuse of materials and higher resource productivity to become commonplace, market mechanisms will have to play a dominant role, but they will benefit from the support of policy makers, educational institutions and popular opinion leaders. Examples of these enablers include:
Providing a suitable set of international environmental rules
Leading by example and driving up scale fast
Access to financing
Indeed, one of the companies that have taken advantage of some good community iniciatives is Kalundborg Symbiosis.
At Kalundborg Symbiosis, public and private companies buy and sell waste from each other in a closed cycle of industrial production. Driven by increased costs of materials and energy for businesses, exchanges between companies are initially assessed on the basis of economic gains in saving of resources or money.
Industrial symbiosis can be defined as the exchange of materials or waste streams between companies, so that one company’s waste becomes another company’s raw materials. At Kalundborg Symbiosis, public and private companies buy and sell waste from each other in a closed cycle of industrial production. A variety of by products are traded, such as steam, ash, gas, heat, sludge, and others that can be physically transported from one company to another.
The post Building Blocks Of A Circular Economy appeared first on Intelligent Head Quarters.
This post first appeared on Intelligent HQ The Leading Social Business Website, please read the originial post: here