How The Circular Economy Helps Business — And How Its Principles Can Be Applied On A Company Level

This is another guest post by the wonderful Lucy Rose. Thank you, Lucy for writing this for me.

By 2050, global waste is predicted to grow by 70%. This alarming figure can be changed, but only if governments, businesses and individuals work together to reduce their waste output. The good news, however, is that not only is it possible, but it could also be a boost for business productivity, as well as for your company’s reputation as a socially responsible business. How? The answer lies in a system known as the circular economy.

What is the circular economy?

The fundamental principle of the circular economy is to keep resources within the economic circuit, thereby extending their use and reducing waste. When applied efficiently, this can allow a business to increase its efficiency while reducing consumption and minimising its carbon footprint. It is facilitated through the application of the ‘five Rs’: Reduce, Reuse, Recycle, Reflect and Refuse. For the model to work efficiently and a true circular economy to be created, it needs to be applied across the majority of businesses.

However, even within one business, the principles of the circular economy can be beneficial to business and have a positive effect on the environment. A good example of this is seen with Alaska Airlines: they have partnered with Looptworks to turn used seats into purses and handbags, saving 10 million gallons of water in the process. The new products are sold on, generating a new revenue stream for the company.

How can a business benefit?

By adopting the principles of a circular economy, a business stands to benefitfrom reduced costs, and therefore increased profit margins. This is achieved through a reduction in the acquisition of new materials and a reduction in energy consumption. Additionally, if repurposing materials can be worked into the business model as has been achieved for Alaska Airlines, a business stands to benefit from an additional income stream.

Companies working in the manufacture or construction sectors are particularly open to benefit. Recycling construction materials comes with a number of advantages, including reduced costs, time savings, and opening doors to new business opportunities. This is because construction companies can earn green certifications by meeting sustainability criteria. With environmental awareness growing, this helps them to stand out over their competition, and many companies have won large contracts this way.

The role of the customer

Ultimately, it is the consumer who defines the market. Currently, consumers are becoming increasingly more eco-conscious, so businesses who can prove their commitment to sustainable practices are held in high regard. Reducing consumption, and recycling and reusing waste are important, but for a business to reap the most rewards, informing its clients of its efforts is also critical. While businesses should be wary of greenwashing, truly sustainable practices should be celebrated and advertised, bringing consumers into the loop. This will also be beneficial if an internal circular economy produces a new product line: your first consumers will be your current ones, so it’s vital they know what’s going on from the beginning.

Reducing waste and reusing resources are critical environmental issues that all organisations should support. The silver lining that comes with this, however, is that it can be of as much benefit to a business as it is to the economy. A truly circular economy involves all businesses adopting the approach, but until that happens, an internal circular economy is entirely possible — and hugely beneficial to your business.

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