Why Must You Think About The Circular Economy in Your Business?

4 Core Benefits of Circular Economy Businesses

Many businesses are facing competition from disruptive innovations that have turned norms upside down, and applied circular economy principles. Take a look at Airbnb, over 700,000 companies book rooms for their employees in people’s homes, but it was inconceivable that they would stay anywhere other than a commercial hotel in the past. Airbnb created new opportunities based on using existing resources and made $3.8 billion in 2018. In your business, where can you apply disruptive innovations where there are resources already available, and can apply circular economy initiatives? Begin to examine your business model from the point of view of circular economy products and services. Then you could discover innovative solutions that will give you 4 core benefits of circular economy:
Circle Economy Businesses
1. Brand Equity
2. Cost Savings
3. Revenue Growth
4. Regulatory Compliance
Brand Equity

Circular economy is not only good business but also is imperative, because we must use our resources in such a way that protects the environment and counteracts the depletion of resources. Many consumers are choosing companies based on their impact on the environment, and this core value strengthens a company's customer relationships and loyalty. This attention to our limited natural resources requires companies to reinvent the way they design, create, use, maintain and dispose of their products. The mindset must go from a “take, make, and dispose” culture, to adopt a “make, use, return/recycle” frame of mind.

Cost Savings

Then there is evaluating your product design, material selection, and manufacturing processes to ensure that the final products are reusable and waste can be re-engineered. Examine your waste products to see if there is a way to reuse or sell to another company as raw materials. Are there tools or equipment that can be shared with other businesses, which would reduce costs. I am sure you have some manual processes that would be ideal for automation and apply these with today’s latest digital technologies. Are you optimizing every single resource? For example, water can be recycled, which reduces the need for freshwater. There are many possibilities to find cost savings when you look at your materials, equipment and other resources from the point of view of its impact on the planet.

Revenue Growth

Times are changing... When you adopt circular economy projects, you will be positioning your company to be a leader in its industry. It’s this thinking out-of-the-box that will give you the edge to discover unused resources, manage the resources you have in more responsible ways, and improve your customer relations that will give you additional revenue growth by extending and reengineering your current business, product and service models. This fresh review of your company will inspire ideas that could make you find the next disruptive innovation and go far beyond your competitors.

Here are several examples:

1. Timberland purchases and processes recycled tires from Omni United, a tire manufacturer, to create outsoles for their new shoes.
2. Aquazone treats wastewater and extracts nutrient-rich sludge to be used as organic fertilizer, and cleans the water so it can be used for irrigation and even for consumption.
3. Toast Ale purchases unsold and stale loaves of bread, and uses an ancient method of brewing to make beer.

Regulatory Compliance

Governments are also now requiring companies to comply to more environmentally friendly regulations. When you are one step ahead of these regulations, it will be easier and less costly to be in compliance. You can be more forward thinking, rather than reactive when it comes to eco-friendly practices.

At the Annual Meeting of the World Economic Forum, experts concluded that the circular economy will become a $1 trillion dollar industry by 2025. Circular economy design thinking will takeover, and you do not want your company to be left behind doing what has always worked in the past. These are quite simple principles but require a complete change in priorities. Businesses must review their standards to make the world a better place--stop polluting and be more sustainable, reduce the amount of natural resources used per time and per product, and even encourage some consumers to share rather than own. This new era of industrial renewal reduces operational inefficiencies, and at the same time protects the environment. This ‘trillion-dollar opportunity’ leaves behind the traditional linear model (take-make-dispose), and becomes the solution for taking over economies worldwide.

Are you prepared to be the next successful circular company?

Are you prepared to be the next successful circular company?