‘Harnessing the Circular Economy’ Session Outputs
October 28, 2019
Two major themes came out of "Harnessing the Circular Economy”, the second session of “Vision to Action: Sustainability in Business": 1) the pilot projects that companies promote as Circular often still have much work to do and, 2) when you start to design Circular approaches to business problems, there is a danger of unintended consequences from unleashing disruptive forces.
To sum it up, the Circular Economy, even within a single business, requires a true whole systems view to be meaningful and additive to the creation of solutions, rather than implementing half measures which could result in new problems.
Nevertheless, with examples from DSM and The Netherlands, we saw that Circular thinking can be applied to resolve structural environmental and social problems in an economy that have been recognized or chosen to be more strictly managed, such as setting national limits on the amount of nitrogen that is produced and consumed; and it can help businesses to find new opportunities in their product and service lines and improve their position within the market and society.
As mentioned during the session introduction, theoretically there are four million Circular Economy Business Models–finding the one that that works for your company, can be a challenging but rewarding endeavor that will strengthen your business if you can overcome the obstacles and apply the concepts comprehensively.
Our full session synopsis:
“Is this Circular?” Breakout
Discussion groups were presented with three case studies: Adidas shoes made from recovered and recycled plastic, the Sort Systems from CP Manufacturing for Waste-to-Energy facilities, and Zara’s in-store clothes recycling program.
Participants were asked to rate how Circular these case studies were on a scale of 1 to 10, suggest how managers can be better equipped to bring Circular solutions to market, and discuss whatever challenges you might encounter in trying to make a case study more Circular.
CASE STUDY: Adidas shoes
Taiwanese inventors make fabric from ocean plastic for upper part of sports shoes
— Discussion of the product/service
Highly profitable
— Questions about the product
Where are the materials sourced?
What is Adidas’ after use plan?
Can customers return the product?
Is it returnable if it’s damaged?
— What managers would need to develop, launch, and manage this product over time
The ability to:
Track the design stage
Control real-time supply chain
Deploy after service management
Control safety issues
— General discussion
Store employee-level education is required about the product + Adidas clerks would need to know details of the shoes’ materials and lifecycle management aspects (e.g. options for disposal, etc)
Is a leasing model possible? + Leasing model struggling to achieve profitability + Nike proposed leasing model for children shoes - Children grow quickly and don’t wear out shoes so a good proposition + Philips light rental - Customers need to come back for Philips light bulb and light tube
Need to start thinking about "singularity" at the design stage
KEEN footwear provides a model + Durability model - Detachable parts resolve issue of wear and tear
Start with a products-as-a-service strategy + End-of-life perspective from DSM - Before: Saw oil as raw material - Now: See final product, such as cellphones, as raw material
CASE STUDY: Waste-to-energy technology
— Discussion of the product/service
It offers an alternative to landfill + Innovative waste management
Not entirely circular + Waste is burned
Circular features + Circulating waste-to-energy + Separation technology
— What managers would need to develop, launch, and manage this product over time
Knowledge around how to manage emissions
Perspective on to improve on: + The separation technology - Separate all the different types of plastics - Remove recyclable, non-burnable waste
— General discussion
There is policy momentum in South-east Asia for this kind of waste-to-energy technology
Communities should steer away this model + Waste needs to recognized as a potential resource + Using waste as an energy source incentivizes producing more waste - Learn from the Singapore case study
The model only adds a loop to the existing linear model
CASE STUDY: Zara in-store clothes recycling
On a scale of 1 to 10, would give it a 2 in regards to Circularity
"Consumers believe they’ve contributed positively to addressing the issue, but they didn’t solve the problem"
— Discussion of the program
Actual commitments should be disclosed + How much is recycled? Reused?
Reused: Not a perfect example of the Circular Economy + Warehouses are filling up with reclaimed, used clothes + But there’s not enough of a market for all the items that are reclaimed
Recycled: Technology is available + Dutch company Mud Jeans that leases jeans from recycled materials + Need to understand real statistics around recycling better
Charity: Model is disrupted donations being redirected
There are major issues with volume of clothes being disposed of + 60 percent of used clothes end up in landfill + In-shop recycling is not an impactful solution
— What managers need to know
That this business model is not circular + It only dresses up a linear model with few loops
Why this is not the best solution?
Where do the clothes go?
What are alternative solutions? + H&M’s “no landfill” policy + Investment in technology + Collection companies - Though, the quantity of clothes collected becomes burden
— General Discussion
The fashion industry has been working on this problem for 50 years + Garment design and technology are the forces stopping progress
Agriculture used to be purely circular 100 years ago – need to revisit those models + Production processes changed + Impacts from outside led the changes, i.e. Industrialization
The Circular Economy requires adopting a different lifestyle
Find more materials on the Circular Economy and how businesses are embracing sustainability at the 'Vision to Action' Resource Center
Read the Air—Trista Bridges and Donald Eubank are cofounders and principals of Read the Air, a Tokyo-based specialist advisory service that enables companies to put sustainability at the core of their business, for purpose and profit. Read the Air guides commercial enterprises in designing, implementing and executing powerful business strategies that create sustainable business models.
Follow Read the Air on LinkedIn
Subscribe to our mailing list for updates on posts
Follow us on Twitter at @_read_the_air_
Contact us directly at info@readtheair.jp
