In our current Linear Economy, we take things out of the ground, make something with them, use them – maybe only once or twice – and then dispose of them, without giving much thought as to where they end up.
This model is quite simply no longer sustainable. The world’s resources are becoming increasingly difficult to extract and plants and wildlife are under increasing pressure to survive because of human activity.
Add to this the 3 billion new consumers estimated to join the market in the next 30 years and there simply won’t be enough to go around.
We need to rethink how we manage our resources and we need to do this now. The good news is that the Circular Economy gives us a very practical framework to approach this.
What is a Circular Economy?
Circular Economy is about keeping products and services at their highest value for as long as possible so that essentially we cut out waste.
The clue is in the name.
Through a Circular Economy, products and services circulate for as long as possible, everything feeds into something else and the whole life cycle is considered at the design stage.
The way in which we design products and services is reconsidered to reflect this, including introducing leasing and sharing platforms as opposed to our current desire to own everything.
- Related content: 4 key steps towards a circular economy
How can it help us and the environment?
The average European car sits unused a whopping 95% of the time, yet represents 10% of a household’s income.
Introducing a car sharing platform such as Enterprise Car Club or BlaBlaCar can maximise use of the car, re-align the interests of the user and the manufacturer. In this scenario it’s in all these parties’ interests to maximise the car’s lifespan and to make it as secure and fuel efficient as possible, significantly cutting down on household costs.
What we would usually consider waste can have a value for someone else.
An estimated £50 million of gold will be imported into Scotland between 2016-2020. This gold can be found in our phones, computers and other electronic goods, but only a tiny percentage of that will be recovered.
£50 million of gold going to landfill: this doesn’t make sense from an economic, environmental or social perspective.
In a Circular Economy, the goods are designed for disassembly and made to last.
Companies such as Fairphone are already adopting this model, designing phones that can easily be taken apart so they can be updated, repaired, and at the end of their life, each component can be extracted to be reused as something else or properly recycled: no more wasted gold.
Fairphone is an early adopter of a circular model and has seen the benefits this can bring. They have attracted a huge amount of positive publicity and a committed and active customer base who have had enough of built-in obsolescence and are buying into this alternative.
A Circular Economy model can capture public and customer imagination to increase brand recognition and loyalty, as well as attracting a committed workforce.
- Related content: 3 Reasons to incorporate social good strategies into your business
Economic consultants, McKinsey & Company, report that “the fastest growing companies are those working along the principals of the Circular Economy”. This has been recognised by major companies, including Philips, Renault and Unilever; and by successful SMEs such as Fairphone and Mud Jeans.
A Circular Economy can:
- create new profit streams, as well as savings on current spend,
- reduce the supply volatility of raw materials,
- give companies improved knowledge of their own product and the ability to leverage all the value in that product, and
- future-proof against legislation, for example by 2030 the EU is legislating that 50% of construction materials should be sustainable.
How does that impact on Scotland?
We are at an exciting crossroads in Scotland.
The Scottish Government has pledged to introduce a Circular Economy Bill (one of the first in the world) and business and financial support to be available at a local and national level for companies adopting a circular approach.
Scottish companies have a lot to gain financially and reputationally by adopting a circular approach – all whilst doing social good for the environment.
For more information, please contact Mary Michel at firstname.lastname@example.org.
- Related content: Social responsibility: its time to go all in!
* * * * *
This is a guest post written by Mary Michel who is a member of Ostrero, a research and advocacy body based in Edinburgh.
Together with Marian Brown, they are passionate about raising awareness of what a Circular Economy is and why it’s important to Scotland’s economic and environmental wellbeing.
* * * * *