April is Earth Month, an opportunity to promote awareness and inspire innovation and action around the issues that affect mother nature during this time of climate crisis. While there is no silver bullet for solving the climate crisis, one piece of the puzzle is learning how to efficiently use, and reuse our existing, limited resources-shifting our economic model from linear to circular.
A circular economy decouples economic activity from the consumption of finite resources. It is a resilient system that is good for business, people and the environment.
Ellen MacArthur Foundation
Historically, businesses have relied on a “take, make, waste” linear economy approach, however through implementing new business models, businesses can reshape their relationship with waste and can achieve competitive advantages, differentiating themselves in the market, reducing costs, improving reliance, and capturing new revenue streams.
To achieve a circular economy, we must address both sides in reducing waste production and increasing reuse and recycling rates.
The United States Environmental Protection Agency estimates that the US recycling rate hangs at just around 9 percent.
On the federal level, government spending on promoting sustainability is poised to more than triple, reaching USD 500 billion over the next ten years. Legislation such as the Inflation Reduction Act, Infrastructure Investment and Jobs Act, and the CHIPS and Science Act will promote innovative suitable solutions.
California is also taking action by introducing regulations, such as SB 54, a landmark new packaging law that requires 100% of packaging in the state to be recyclable or compostable, a 25% reduction in plastic packaging, and 65% of all single-use plastic packaging be recycled by 2032.
With regulatory and economic interest in a sustainable and circular economy, there is a market need for innovative solutions. Here are some examples:
Recovery and Recycling
In this business model, materials that were previously considered waste are revived as inputs for new products. Whether that means recovering end-of-life products to extract additional value or reclaiming waste from the production process, this model involves recycling and repurposing materials into a closed-loop supply chain. This can help reduce manufacturing costs while protecting resource supply and mitigating the organization’s impact on the environment.
- Artus Trade House GmbH extracts fibers from post-consumer goods and supplies recycled, raw materials to close the loop for post-consumer goods by bringing recycled fiber back into the production cycle.
- PARTSLIFE GmbH takes care not only of the legal disposal of waste from workshops, but also provides services in waste disposal, energy, work safety and consultancy for stakeholders across Europe.
Reducing Waste through Marketplace & Sharing Platforms
Marketplaces can increase both the utility and usage of physical assets that might otherwise be underutilized. Through this, fewer assets are required to meet the needs of all participants in the marketplace. Marketplaces can also offer a platform for renting out assets instead of selling them. Product-as-a-Service models or sharing platforms are a way to encourage the circular use of products. Customers pay for the use of a product, rather than owning it outright, and the product is designed to be reused or recycled at the end of its lifecycle. Sharing models enable product owners to connect with individuals and organizations to allow for co-access and co-ownership, maximizing product usage without requiring each party to own separate products.
Digital Solutions & Platforms
While many circular economy initiatives are focused on physical materials and resources. However, digital solutions and platforms can be used to scale these solutions globally and across industries. These platforms can enable more efficient use of resources, reduce waste, and promote circular business models. Today, various digital technologies enable information to travel with a product along the value chain. These technologies allow us to identify a product and capture, store, share and analyze data throughout its lifecycle.
- Recyda offers a SaaS solution to help companies along the packaging value chain assess the recyclability as early as the development stage and map existing large packaging portfolios and output digital analyses and reports on optimization within seconds.
Wasted Opportunities: Internal Innovation
In a circular economy, solutions can be implemented in a number of business models, crucially the business itself doesn’t need to be focused on sustainability to be sustainable. Corporate innovation plays a crucial role in driving the transition to a circular economy. The circular economy requires a shift in mindset; innovation is necessary to develop new technologies, products, and business models that enable this transition.
- Sprick Gmbh supplies both eco-friendly packaging products and reliable machine systems from its own production.
- IIC AG is specialized in injection molded food packaging and implements research and development to continuously innovate and find more sustainable solutions, replacing their own products with sustainable alternatives.
- GK Sondermaschinenbau (GKS) develops machines and systems tailored to the demanding needs of globally based customers. They cooperate with packaging material manufacturers and customers, to test and implement compostable and recyclable packaging materials.
As we look towards the future, the continued exponential growth in the global population, higher rates of consumption, stricter hygiene regulations and rising consumer expectations will only increase the need for circular economy solutions. By enabling new business models that are more sustainable, both economically and ecologically, we can fundamentally change the global waste problem.
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