As we look around our world today, it's easy to see the effects of our current linear economic model - one of taking, making, and wasting. We see the oceans littered with plastic, our landfills overflowing, and our natural resources increasingly strained. But what if there was a better way? What if we could move to a circular economic model? One that reduces waste creates economic opportunities and benefits the environment.
Read on because below, you’ll find some circular economy examples that can inspire you to rethink how you produce and market your products and move towards a more sustainable business model.
What is the circular economy, and why is it so important?
According to the EPA, “Circular economy is a model that uses a systems-focused approach and involves industrial processes and economic activities that are restorative or regenerative by design, enabling resources used in such operations and activities to maintain their highest value for as long as possible. In simple terms, this circular economy model aims to keep resources in use for as long as possible, extracting maximum value from them and then recovering and regenerating products and materials at the end of their useful life.
This concept has been gaining momentum since the Special Report on Global Warming was submitted to the United Nations in 2015, which indicates that business as usual could lead to a degree of warming that would exacerbate hydro-meteorological phenomena, increase sea levels and decrease Arctic sea ice, bleach coral and lead to the loss of ecosystems. A catastrophic scenario that undoubtedly endangers the human being. But let's stay positive and look at the future we could create if we all join in the change.
What are the advantages of the circular economy?
The circular economy can reduce the environmental impact of our consumption patterns. The Ellen MacArthur Foundation reports that the circular economy could reduce global greenhouse gas emissions by 39% by 2050. By keeping resources in use for longer and prioritizing recycling and regeneration, this economic model can reduce the demand for virgin resources and decrease waste and pollution
Imagine every country implementing an action plan similar to the EU's circular economy package, which is expected to reduce CO2 emissions by 450 million tonnes annually. Crunch the numbers and consider the impact that could be achieved.
According to the World Economic Forum, the circular economy could generate $4.5 trillion in economic benefits by 2030. By adopting circular business models, companies can reduce costs by reusing materials, optimizing their supply chains, and creating new revenue streams. For example, textile company Worn Again Technologies has developed a process to recycle textiles, which could save the industry $10 billion a year.
The circular economy model provides economic and environmental benefits and significant social advantages. It can create new job opportunities and enhance resource security by prioritizing local sourcing and production. According to the International Labour Organization, the circular economy could create 18 million new jobs by 2030. Additionally, it can improve access to resources, particularly in developing countries, and foster a more inclusive and equitable society. For example, the African Circular Economy Network is promoting circular practices in Africa, creating new job opportunities and improving access to resources while addressing poverty and inequality issues.
But why the circular economy is so hard to achieve?
Migrating to the circular economy is not easy because the linear economy model is deeply ingrained in our society, and transitioning to a different model requires a significant shift in mindset and behavior.
According to a survey by GlobeScan, only 9% of US, Canadian, and Europe consumers are aware of the circular economy, and only 32% have heard of sustainable consumption. This lack of awareness and understanding can hinder the adoption of circular practices. As Ellen MacArthur says: "The biggest barrier to progress is not technology, it's the mindset."
Secondly, the circular economy requires systemic change, which can be challenging. It involves redesigning products and processes, transforming supply chains, and creating new business models. This shift can require significant investment and collaboration across different sectors and stakeholders. According to a report by the World Economic Forum, only 8.6% of the global economy is circular, and there is a significant gap between the current state and the vision of a circular economy. As Dominic Waughray, Managing director at the World Economic Forum, notes: "The challenges are many, but the potential benefits are too great to ignore."
There are regulatory and policy challenges that need to be addressed. Governments and policymakers need to create an enabling environment that incentivizes circular practices and penalizes linear practices barriers such as lack of incentives and infrastructure are hindering progress. As Jyrki Katainen, Vice-President of the European Commission, notes: "Policy changes can help drive the transition towards a circular economy by creating a level playing field for all."
Julia Delrieu, Head Of Impact at PALO IT, comments, "Governments need to create institutions or frameworks for disclosure that force companies to declare their risk exposures. For example, in the United States, the IFRS is the only mechanism responsible for carrying out the said activity. But for now, many of these frameworks, including those coming in Europe (the CSRD), are asking you to disclose information, but we are not acting yet. Companies must be more transparent and start making a lot of non-financial reporting. Also, the governments have to start changing their tender system".
How is PALO IT helping companies work towards a circular economic model?
We have also helped businesses by fostering collaboration and knowledge sharing, organizing workshops, seminars, and hackathons that bring together stakeholders from different sectors to share ideas and develop solutions for the circular economy. We have helped drive the transition through these events by facilitating collaboration between businesses, governments, and NGOs.
CircularX by Recommerce
The CEO of Recommerce had heard about PALO IT's expertise in digital transformation and software development. He believed we were the right partner to help bring the CircularX platform to life. We were intrigued by the project as we shared Recommerce's vision of creating a more sustainable future by reducing waste and promoting the reuse of products.
Our primary goal was to create a platform that could manage enormous volumes of data while delivering a seamless and efficient user experience. Achieving this goal required a robust, reliable tech stack that could handle heavy workloads. With that in mind, we utilized cloud-based technologies to build a scalable platform that could efficiently manage millions of products and transactions.
Since data played a crucial role in the platform's success, we collaborated closely with the CircularX team to design an analytics dashboard that could offer users valuable insights. This dashboard allowed users to keep track of their sales, monitor their inventory, and obtain a deeper understanding of customer behavior. Using a data-driven approach, users could make well-informed decisions and enhance their sales.
After the development period, CircularX hit the ground running, becoming the first SaaS solution allowing Leroy Merlin, Boulanger, and many more customers to resell their products easily. Today, CircularX is a thriving marketplace that helps divert unused products from landfills and into the hands of new owners. With over 300,000 registered users and over 1 million products listed, CircularX has become a game-changer in commerce.
As you noticed, we played a crucial role in the success of CircularX. Our technical know-how and data-driven approach were instrumental in creating an efficient and sustainable platform.
Other circular economy examples
Many other companies have migrated their business model toward the circular economy. Let's look at the case of Patagonia; this outdoor apparel brand has sustainably led the way for years. They implemented a system called "Worn Wear," where customers can send in their old Patagonia clothing to be repaired, upcycled, or recycled. Patagonia also uses recycled materials in its clothing, further reducing its environmental impact. As a result of their efforts, the brand has seen a significant increase in sales, proving that sustainability can be profitable.
Another great case of success is Interface, a manufacturer of carpet tiles that set a target to attain zero environmental impact by 2020. They accomplished this objective by reducing waste and energy usage and integrating recycled materials into their products. They also formulated a mechanism for gathering and recycling old carpet tiles, which they employed to produce new tiles. This approach decreased waste and generated a novel income stream for the company. The Interface is a flourishing enterprise and a pacesetter in sustainable manufacturing.
So what's next?
Although the circular economy model is still relatively young, more and more companies are joining the change and seeking to contribute to the environment by migrating or adapting their current business models toward sustainability. If we want to ensure the future of humanity, we must be willing to change and start acting from our trenches.
We know that developing and implementing strategies that generate changes in the structure and operation of your business is complicated, but that’s why we’re here. Our mission is to use tech as a force for good. We as a team have set out to rapidly create new business models, launch innovative products and services with positive impact at their core, and prepare leadership and culture for the future.
Let’s choose to be the stewards of our planet and embrace the circular economy as the future model for our businesses, communities, and world.
If this article made you think and motivated you to take action to make your business much more sustainable, Look no further – PALO IT’s Circular design method can help you achieve your goals.
Let's work together to create a better future for ourselves and the planet. Contact us now, and let's make change happen!