Traditionally, businesses have relied upon a linear model sometimes described as the ‘take-make-waste’ economy. Companies prioritised decisions that focus on cheapness, ease, and convenience. But with public perception shifting to a preference for sustainable and environmentally friendly thinking – there has been a push towards a circular economy.
Functionally, you can think of the circular economy in terms of three words: reduce, reuse, and recycle. It revolves around making better use of materials and resources to ensure that there is as little waste in the system as possible. And many businesses might assume that the move to a circular economy is simply well intentioned, but too expensive or difficult to implement. In fact, there is good evidence to the contrary.
Studies have suggested that a move towards a circular economy ‘could boost Europe’s resource productivity by 3 percent by 2030, generating cost savings of €600 billion a year and €1.8 trillion more in other economic benefits’. These kinds of cost savings are only one of many benefits of a shift to a circular economy for businesses.
Here we take a look at some of the key benefits of the circular economy for businesses, and why your businesses should consider making changes to the way it operates.
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A path to sustainability
Sustainability is often seen as a goal for businesses, but it is not always appreciated that this can actually be hugely beneficial for organisations, as well as being good for the environment.
Joe Hemsley-Rudd is the Business Development Manager at Countrystyle Recycling, who have recently expanded their operation into Cambridgeshire. He explains the path to sustainability is more viable than ever before: “Businesses are looking for a green alternative to waste management. With landfill diversion, promoting biodiversity and working with local organisations to minimise the impact of waste on the roads and local environment, Cambridgeshire has a very green future”.
There is good evidence to show that customers actually prefer to work with businesses that prioritise the environment and green alternatives. Some studies suggest that 4 of out 5 people prefer to work with companies that have a positive approach to environmental sustainability.
Interestingly, the circular economy can provide new opportunities for profit. Cutting costs associated with waste, reducing energy consumption, and potentially broadening the client base all offer possibilities to increase the profits of your business.
This is something that can often be overlooked – but lowering costs and improving revenue streams are two of the key ways to improve profits.
Moving towards digitisation
Taking things virtual is one of the most important aspects of a circular economy. The simple fact is that traditional, non-digital ways of working are typically far more resource heavy and intrusive, compared with digital.
Let’s take a couple of examples: first, moving to be a paperless office means investing in technology, doing so not only minimises paper usage and waste but also reduces the amount of physical space needed to store large amounts of documents and data. Second, allowing employees to work remotely can often massively reduce the carbon footprint of a business.
The important thing to state here is that digitisation – an important part of the circular economy – has a profoundly positive impact on areas like productivity and profitability. The encouragement on being a part of a circular economy turns out to be a huge advantage.
Reduced material costs
The traditional economy model puts a great deal of emphasis on the use of raw materials. One of the major issues here is that businesses are very rarely in control of the costs associated with sourcing these raw materials – ultimately, then, profits are at the mercy of often volatile raw material prices.
When you recycle a great deal of the materials you use, you are reducing your dependence on raw materials. This is just another example of where the circular economy model can end up saving your business a significant amount of money in the long term.
Many businesses think of a switch to a circular economy model and more sustainable practices as something that is beneficial for the environment. But it can actually have enormous tangible benefits to the company too. Don’t think of the move to this model as being an inconvenience – look to the advantages that it can have from both perspectives.
Daniel Groves – Business Growth Consultant