There are lots of businesses making claims about being sustainable these days and the current trend is to go all out and make a big bold statement about how circular your business is – Ikea, P&G, Unilever, to name a few in 2017 already.
At Bioregional, we are always looking for ways to support and accelerate the change to circular business models. It’s clear that there is a lack of clarity around the meaning of the term, so we’ve set out to address this.
The challenge we faced was that, as humans, we tend to like simplicity and crave neat solutions to problems. This is probably why it’s appealing to define the circular economy simply as closed-loop production, as many seem to do.
If you’re new to the concept of ‘closing the loop’, I define it as collecting post-consumer waste, recycling it and turning it back into the same product (or if we are being less pure, then turning it into something new).
While closing the loop plays a critical role in the circular economy story, the two concepts shouldn’t be conflated. Thinking of it solely in these terms misses out the truly transformative potential of circular thinking.
To understand the full potential of the circular economy I reviewed a wide range of useful circular economy business model frameworks and tools, including those created by Forum for the Future, WRAP and Accenture. I also reviewed the draft BSI circular Economy Standard.
SIX SIMPLE FEATURES OF CIRCULAR BUSINESS MODELS
Across all these versions I identified six simple features of circular businesses, which are presented in the matrix here. These are grouped into three categories: features that relate to processes, features that relate to product-life extension, and finally features that relate to service models.
As I investigated the different business models I realised that in order to make your business circular you would need at least one of the features outlined. Although it also became clear that the presence of any one feature on its own was by no means a guarantee that a business was now ‘circular’.
From my perspective, it is a misnomer to suggest there is such a thing as a ‘circular’ business model that you can just take off a shelf, apply to your business and hey presto! It is more the case that through increasing your circular thinking and understanding, you can correctly apply one or more of the features outlined here and make your business more circular. I would also argue that, for an incumbent business, this is going to be an iterative process, starting with small pilot projects to test out ideas and then moving onto more fundamental rethinking of the entire business purpose and operating model.
DECODING SUSTAINABLE BUSINESSES TO UNDERSTAND WHAT MAKES THEM CIRCULAR
To see how this works in practice I then examined the circular credentials of 12 businesses – from well-known global brands and ethical companies to innovative start-ups and disrupters – covering products and services we use daily, as well as those lesser-known business that are providing innovative solutions to intractable problems.
Using our features of the circular economy business models matrix, I explored how they have applied circular thinking to make their business more sustainable, and ultimately (I hope) help to solve some of the big sustainability challenges we face globally.
PATAGONIA
Why we love it
Patagonia is the outdoor clothing manufacturer that famously told customers not to buy its clothes on Black Friday in 2011. It has incorporated many aspects of circular thinking into its business.
These range from addressing chemical use in its materials, to making durable and repairable products. It even encourages its customers to make use of its repair service, or reuse and recycle items through its Worn Wear program, which was created in 2013. Worn Wear aims to keep clothing in circulation for as long as possible.
Features: circular value chain, collection and recycling, durable products, repair services.
SPLOSH
Why we love it
Using plant-derived and low-toxicity ingredients, this is more than just your eco-friendly cleaning products brand. Splosh has set out to disrupt how we buy our cleaning products.
Customers first buy a starter pack containing well-designed bottles and add sachets of concentrated liquid and tap water to make up the product. The bottles can be used repeatedly, with refill sachets delivered by post. Some sachets dissolve completely in the reusable bottle; others can be posted back to be reused again and again.
Features: circular value chain, collection and recycling, personalisation and lock in.
NIKE
Why we love it
It is great to see such a global brand championing circular thinking. It has created its own material named Nike Grind, made from recycled trainers, plastic bottles and offcuts from the manufacturing process and it is used in over 71 percent of the Nike range. It also offers a personalised, made-to-order option.
Features: circular value chain, recycling, collection and industrial symbiosis, personalisation, made to order.
PHILIPS – PAY-PER-LUX
Why we love it
In the Philips pay-per-lux model, Philips installs, maintains and upgrades the lighting system, maintaining responsibility for reusing/recycling the equipment. The customer pays a flat service fee for the lease of the lighting system and energy usage of a specified time period. This model has been successfully trialled with high profile clients.
Features: circular value chain, recycling and collection, product service system.
LIFTSHARE
Why we love it
Liftshare is the UK’s largest car sharing community. The platform enables people to easily share their journeys, either through finding a driver or someone to share their own planned journey. Liftshare also works with corporate clients, including big names like JLR (Jaguar Land Rover), Diageo and National Grid. During a recent week-long Southern Rail strike, more people registered trips between Brighton and London than in the whole of 2015.
Features: collaborative/sharing economy, dematerialised services.
ECOR
Why we love it
ECOR is an advanced sustainable building and design material designed to be 100 percent recycled and recyclable, completely non-toxic (and 100 percent certified bio-based).
Made from waste cellulose fibre, heat and pressure (by that we mean waste cardboard, paper and so on).
It can be used as an alternative for traditional wood, plywood, corrugated cardboard and plastics. ECOR is already successfully replacing traditional wood-based and plastic materials in many applications, including graphics/signage, packaging, construction, architecture and design, furniture, fixtures and consumer products.
Features: circular value chain, recovery and collection including industrial symbiosis.
GCYCLE
Why we love it
A subsidiary of gDiapers – a cradle-to-cradle certified nappy – gCycle is a new service that includes a 100 percent compostable nappy, which allows childcare centres to divert around 80 percent of their waste stream (food waste and nappy waste) from landfill to valuable compost.
By replacing the oil-based polypropylene plastic that makes up 80 percent of a nappy with non-GMO cornstarch, the product can be composted. This creates an additional revenue source for childcare centres.
Features: circular value chain, recovery and collection including industrial symbiosis, modularity and lock-in.
BOOM ECO MUG
Why we love it
Designed by XD Design, the Boom Eco Mug is completely recycled and cradle-to-cradle certified.
No glue is used during the production process; it has been made in a modular fashion and designed for disassembly with each individual part having a symbol to explain how it can be recycled. XD Design has a ‘2020 vision’ to become a 100 percent sustainable manufacturing company and the Boom Eco Mug is one of several sustainable products in it range.
Features: circular value chain, recovery and collection including industrial symbiosis, modularity.
MBA POLYMERS
Why we love it
Given the fanfare with which the Ellen MacArthur report ‘New Plastics Economy’ was launched at Davos in January 2017, it seems hard to believe that recycling plastics from complex waste streams used to be viewed as unachievable and probably unnecessary. This is what MBA Polymer was founded to achieve back in 1992.
Fast forward to today and it is the most advanced plastics recycling facility on the planet – something that we are greatly in need of, given the frightening levels of plastic waste polluting our land and oceans. Globally, we only recycle a tiny fraction of plastics from complex waste streams – 10 percent compared with up to 90 percent of metals.
MBA Polymers is leading the way in demonstrating that recycled plastic is a highly valuable commodity and a major part of the solution we need to reduce our global carbon emissions. It sources 100 percent post-consumer feedstock, which has been diverted from landfill or incineration, and through this it saves over 80 percent of energy and between one and three tonnes of carbon dioxide for each tonne of virgin plastics it replaces.
Features: circular value chain, collection and recycling.
FAIRPHONE
Why we love it
Fairphone is a Netherlands-based social enterprise with a social mission at its very core – to build a ‘fair trade phone’. It has really applied many different aspects of circular thinking across its value chain, from sourcing to how it liaises with their customers – circularity is right at the heart of the business philosophy.
It has had a very collaborative and open innovation approach to the way it has developed its phone and uses many different elements of circular economy thinking in its business model – from the design of the phone (modularisation) to the supply chain approach (really understanding what materials go into a phone and making sure that it sources ethically). Thanks to the supporters who bought 60,000 first edition Fairphones, the company was able to invest in a one-of-a-kind modular design for Fairphone 2. This design allows owners to open and repair their phones without any special technical skills.
What I really like about the company is that it genuinely apply systems thinking. It is not just focused on building a ‘circular product’ – such as modular made from recycled materials, and recycled/recovered at end of use. It really looks at the full system in which a phone is created, manufactured and used by the consumer. It recognises that there is a huge role to play in educating the consumer about the issues to do with conflict minerals and the durability of materials, repair during use and recoverability at end of life. It is one of my favourite companies.
Features: circular value chain, collection and recycling, modular, repair services, made to order.
BASF
Why we love it
A chemical company embracing the circular economy may not be something we think about on a daily basis, but it may surprise many of us to realise how much we already interact with its innovative solutions to some challenging problems. Just take the issue of coffee makers and their ‘disposable’ capsules. Typically, they are made from partly, or wholly, unrecyclable plastics, making them one of those items we ‘circular geeks’ love to hate. BASF has worked on creating a bio-based compostable plastic called ecovio that is being used in its household food waste bags and coffee capsules. Since 2006, BASF bioplastics have enabled an additional diversion of over 1.5 million tonnes of organic waste from landfill or incineration.
Features: circular value chains, recovery and collection.
JOHNSON CONTROLS
Why we love it
If the future of cars is electric, then batteries are a key element of the future, and Johnson Controls is leading the way in developing the circular system required to make the production of batteries sustainable. With more than one billion cars on the road, Johnson Controls is currently responsible for about a third of the market. When consumers buy a new battery, they return their old one for recycling and remanufacture – with 8000 batteries being reprocessed every day.
Current battery design enables 99 percent of all materials in a battery to be recycled, with much of the recycled material used to manufacture new batteries. Where they can’t, Johnson Controls uses industrial symbiosis to find a market – such as electrolytes, which are used in detergents.
The reuse of metals from used batteries results in 99 percent fewer greenhouse gas emissions than processing primary ore, while using recycled plastics consumes 90 percent less energy than processing virgin plastic. The reverse logistics network that Johnson Controls has implemented also reduces transportation miles.
Features: circular value chains, recovery and collection, industrial symbiosis.
CIRCULAR BUSINESSES ARE ALREADY MAKING OUR LIVES BETTER
Each of the businesses featured here is taking at least one aspect of circular thinking and applying it to their product or service development to make their business more circular. From longer lasting shoes and clothes made with fewer chemicals and more recycled content, to non-toxic cleaning products that you can refill via mail order, to modular and/or repairable and ethical mobile phones, to building materials made with absolutely no chemicals, companies are finding innovative ways to get the same great results without the expected negatives.
Other businesses are addressing what seem like intractable problems, such as the frightening levels of waste created by our need for convenience. This is at the root of our reliance on plastics of all kinds, disposable nappies and our obsession with ‘coffee on the go’. Others are challenging us even more, by selling us ‘light’ instead of light bulbs or taking us away from our love affair with our own cars by enticing us to be like James Corden and run our very own ‘carpool karaoke’!
HELPING MORE COMPANIES BEGIN THEIR CIRCULAR JOURNEY
We hope that by enabling others to decode what makes a business circular through using our matrix, this will make it that little bit easier for more companies to take the first few tentative steps towards a more sustainable and circular future.
We also argue that our matrix shows closing the loop is by no means the Holy Grail of the circular economy. By focusing solely on resource efficiency and designing out waste, we will not address the major sustainability problems that we face.
Through the businesses we have examined above, we can see how all these different dimensions of circular business models have been applied in practice. We have started to see just how transformative the circular future could be – from totally rethinking the design process, to enabling fairer access to products and services through collaborative consumption.
Circular thinking is already changing the way we work, consume and even travel, and in my opinion has the potential to enable us to live happier, healthier lives within the means of our one planet. For businesses, governments and others to really maximise the potential of circular thinking, however, we need to ensure we are taking into account all the dimensions outlined above.
Claire Brady is a sustainability expert and commercial development manager for Bioregional, a UK-based non-profit organisation.
This article also appears in Issue 6 of CWS magazine. Get your free, obligation-free trial of the mag here.
Read Online Here: https://www.fmmagazine.com.au/sectors/circular-thinking/
