You’ve probably heard the words, “circular economy” in business articles or on the news. But what is it? A circular economy is a model of production and consumption that utilizes recycled materials and existing items for as long as possible. Where we stand now… A new plastic bottle is manufactured from virgin plastics and filled with water. Then it’s shipped and sold at a store near you. You buy it, drink it, and throw it away. We call this take – make – waste, and it’s terrible for the environment. Where we need to be…
How we can get there… It starts with demanding companies change their business model. Each company needs to have a program that recycles their old products at end-of-life and upcycles the materials to be reused and then resold. Next, we need to get legislation passed that promotes and incentivizes a circular economy. Laws like extended-producer responsibility laws, in its simplest terms, require companies to be responsible for the waste they produce. An example of this would be if paint companies had a program to make it easy for customers to recycle leftover paint in a responsible way. Though there are some state-level laws on the books, it needs to be expanded and target high-waste industries. States with Extended-Producer Responsibility Laws
Another law to consider is the right-to-repair law. This allows the purchaser of an electronic product, an individual consumer or business, to repair components of that product without producer restrictions. This type of law passed in New York as the Digital Fair Repair Act this past summer. It requires electronic makers who sell products in New York to provide repair information, parts, tools, software, and components to consumers and third-party repair shops. This means less e-waste in our landfills and far fewer resources that would be otherwise consumed to make new products. Globally, we produce 53.6 million metric tons of e-waste every single year. Right-to-repair laws could significantly lower that number. Finally, we need to look at individual changes. First, we need to change our frame of mind. We live in a society that bombards us with ads literally everywhere. Companies want us to buy more and more. But what we really need to be doing is purchasing only what we really need. And when we buy, only purchase used, upcycled, reclaimed, and thrifted items. Buying new should always be a last resort. We also need to be taking care of what we purchase so it lasts as long as possible. And when we’re done with an item it should be sold, donated, or traded in – not trashed.
But the economy… And yes – in circular economies, businesses can absolutely make a profit. According to the International Labor Organization, a circular economy could create six million jobs by 2030 and add an additional $4.5 trillion dollars into the economy. Let’s look at an example. Schneider Electric sells a wide range of products from solar and energy storage to cooling solutions for IT companies. They use recycled materials in their products but also offer services that help consumers extend the life of their aging products. They will even take back equipment so it doesn’t end up in the landfill. And how are they doing? SE posted a 12% increase in revenues in the third quarter of 2022. The simple fact is that by creating a business model that reuses old products, you are able to essentially resell the same item more than once (with upgrades or upcycling, of course). When transitioning a company to a circular model, it’s important to consider a few things… Repairability – Can an item be easily repaired so it doesn’t end up in a landfill? If not, how can that product be designed to ensure it can be fixed? Recovery – How will you recover the product, or parts of the product, when they are at their end of life? What kinds of programs can you put in place to make it easy for products to be returned and reused? Next Gen – How can you take recovered items and reuse, recycle, or upcycle them to create a new profit stream? Companies Committed to Circular Models To learn more about each company’s circular business model, please click on their name below. Ikea Patagonia Fairphone Looptworks AB InBev Miniwiz Trash Lab DyeCoo Nike Grind Loop The North Face
“The (Circular) Path Away from Obsolescence. Sierra Magazine. Fall 2021. “Global E-Waste – Statistics & Facts. 10 Oct 2022. Tiseo, Ian. Statista. “These 11 Companies Are Leading the Way to a Circular Economy.” 26 February 2019. Thornton, Alex. World Economic Forum. “10 Brands That Embraced the Circular Economy in 2020.” 31 Dec 2020. Mazzoni, Mary. TriplePundit.com “Companies Embracing Circularity to Turn a Profit.” 16 March 2020. Steward, Rebecca. Raconteur.net “Promoting a Circular Economy.” USAID.gov