As the economy grows, we need more raw materials for the production of goods, our economies have become so big that we have to question the wisdom of extracting more and more raw materials and throwing away more and more waste. This current unsustainable model that consists of “take-make-use-dispose” is called linear economics.
If we fix our attention a bit on our behavior as consumers. In general terms the society has increased its consumption with a short satisfaction for the relatively products or services, with this I mean that on average a product can last in the hands of the buyer between 6 to 12 months due to: a new model in the market, it is no longer useful, the use of the article was essential, etc. The designs are constantly changing to attract the buyer and achieve their loyalty. However, we face new challenges, the population is growing exponentially and current middle class consumers are enjoying many things that were only for a certain social status years ago and it is estimated that in the next 20 to 30 years more than 2 thousand millions of new consumers will enter the market where they will exert strong pressure on society.
Do we have enough resources to supplier world populations? If we are continue with the same behavior.
Most of us are used to only use and discard, but now we must put action to create a culture of reuse in which each item or material we use instead of discarding it, is regenerated. Food culture must be improved globally, since it is the real driving force behind this excessive waste.
Nature has given us the formula of sustainability since its inception. When an animal dies its remains nourish the soil and with renewable energy (the sun) creates another living being (the plants). If we simulate the process of nature to the manmade process we can close the loop and we would be re-designing the business model to a circular economy (CE).
The (CE) is inspired by the natural system which allows to radically reduce the extraction of raw materials and the production of waste. It does so by recovering and reusing as many products and materials as possible, in a systemic way, again and again, focusing on “manufacturing / re-manufacturing – use / reuse”.
The Ellen MacArthur Foundation defines the circular economy as a restorative and regenerative alternative, which aims to ensure that products, components and resources in general maintain their usefulness and value at all times. This concept distinguishes between technical and biological cycles; In short, it is an attractive and viable solution that has already begun to explore different companies.
There are several principles that should be considered among which we have:
- Waste = raw material
- Renewable energy.
- Work systems.
Waste = raw material: If we redesign the products so that they can be reused or disarmed at the end of their life span, we could generate value in processes where they are generating expenses.
Diversity: A company can gain greater value from diversity by sharing strengths and having a greater set of resources to take advantage of in its value chain.
Renewable energy: It is highly beneficial to use renewable energy in a circular economy.
Work system: the objective is to involve many actors who work together to create effective flows of materials and information. We refer to the connections between people, places and ideas and see how we can create opportunities to generate social gains.
Towards a sustainable future…
To close the cycles it is important to create appropriate models that guarantee long-term gains. There are several processes that are key to the development of a circular economy among the main ones:
- Product recovery
- Re marketing.
Recovering the product in terms of quantity, quality and reasonable price, are the first steps towards a circular economy. Then the reprocessing of these products that covers the expectations of the market. Remarketing plays an important role in locating and managing the flow of information that facilitates the output of these products.
With the appropriate strategy and investment, in time and education in consumers these processes allow sustainability and impact the triple bottom line: economic, social and environmental.
Innovation in business
For a circular economy it is necessary that all industries contribute, and not continue to promote the linear economy, as the development of single-use packaging where, we buy, remove the packaging and then discard it.
Can companies change their business models to a circular model? The challenges not only focus on the design of the processes, but also we could attribute to the need for a responsible leadership willing to continue generating profitability by doing the right thing. With an adequate consultancy, it is totally viable for any organization, regardless of its size, to achieve a sustainable business model.
Several companies have been pressured for a long time to assume greater responsibility for the single-use items they sell. Thanks to many initiatives, the consumer is increasingly attracted to socially responsible companies, to reprocessed products and they are even involved in the continuous improvement of the same through effective communication strategies generating value in the supply chain.
Currently there are many successful cases in different countries, which have managed to break all kinds of paradigms and generate great returns. As: Burberry, Gap, H & M, HSBC, Starbucks, McDonald’s, phone manufacturers such as fairphone and many more.
As entrepreneurs, organizations, governments and citizens, we are responsible for the impacts that we generate in our economy, society and the environment. There are many ways to contribute with this new business model. Here are some of them:
Governments: promote sustainable development by encouraging local trade, create laws that facilitate the recycling and collection process, encourage the use of renewable energy.
Entrepreneurs: design reusable and recyclable products. Send products and services with a long lifespan to the market that impact our planet as little as possible. Encourage staff for responsible consumption.
Non-profit organizations: communicate and guide citizens about the importance and impacts of sustainable development.
Consumers: acquire long-life products, 100% recyclable products, support initiatives to improve the environmental footprint of companies, organizations and governments and initiate a culture of reuse for the good of society and the planet.