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Circular economy and what should companies do about it?

Circular economy

The concept of the circular economy has left the level of academic theory and entered world business practice. Natural resources and materials are in continuous use and depleting, due to which prices are rising steeply, and reacting to unstable marketplaces and increasing competition, developed nations are examining this alternative model. A basic understanding of the circular economy can be done by the fact that the typical cycle of making, using, and disposing of changes in favor of continuous reuse and recycling. The longer such materials and resources are in use the more value can be extracted from them. It will be beneficial for us to understand the fact that the more early we understand the value of resources around us, the more quickly we can incorporate a circular economy are reduce the usage of resources. The system of the circular economy takes our waste from us and reroutes the waste back into the system which creates a 3R (Reduce, Reuse, Recycle) cycle. By this principle of a circular economy, if it is performed properly, there should not be any waste dropped out from the system. Once the materials have completed serving their purpose, they can be re-manufactured or recycled to go through this cycle yet again.

In Traditional Manufacturing raw materials are taken from the environment, which are later turned into new products and later disposed of into the environment after use. It is a continuous process with a beginning and an end. In the traditional system, limited raw materials ultimately run out. Waste generated keeps on increasing either by sustaining expenses related to disposal or else polluting. In 2012 World Bank produced a report which estimated that municipal waste generation will double over the next 20 years in low-income countries, along with that manufacturing processes are useless which leads to wastage of biological supplies. Mostly, every by-product generated is reused, recycled back to raw materials or used as a source of energy, or finally disposed of safely.

Principles of Circular Economy

The following 10 principles explain how the circular economy should operate:

 

  • Waste becomes a source: The major aspect is that waste becomes a resource. All biodegradable material is returned to nature, while non-biodegradable material is repurposed.

 

  • Use again- Reinstate items into the monetary cycle which no longer require the requirements of the original consumers.

 

  • Reuse- Certain items or components of those products that are still functional are reused to create new artifacts.

 

  • Repair- Find broken items and make them reusable.

 

  • Recycle- Find products that are thrown away and use them again

 

  • Valorization- Put the waste in a system and suck out the energy

 

  • Functionality economy- In many circumstances, the circular economy seeks to remove goods sales to develop a rental property system. When the product has completed its primary function, it is returned to the manufacturer and deconstructed to reuse the valid parts.

 

  • Energy from renewable sources- Use of no fossil fuels in the manufacturing process, as well as reuse and recycling

 

  • Eco Design- examines and incorporates environmental implications across a product’s life cycle into its design.

 

  • Industrial and territorial ecology- the creation of an industrial organizational system in an area defined by optimal material, energy, and service stock and flow management

The Key Steps to Circular Economy Implementation

Implementing a circular economy within companies can be contemplating and time-consuming. To improve the process, certain important measures are required to be taken for business purposes.

Create Plans & Set Goals

To effectively employ the circular economy, every business needs to develop an action plan. To do this, companies need to understand several important questions:

 

  1. What does the company stand for the most?
  2. How will implementing the circular economy affect a company’s revenue?
  3. What are the values that a company will give and receive if it incorporates this beneficial concept?
  4. How will this model contribute to a company’s scaling?
  5. How will a company contribute to a better planet?

 

  • Provide Knowledge to Educate Your Staff

To make a difference and effectively execute the concept in your company, companies have to be certain that the model of circular economy is well-known and understood by all company members and staffers. Moreover, it is a brand’s mission to become aware of the transition itself, its positive outcome, the strategies for shifting its design, and the goals and benefits that come with implementing it. The path of a company’s growth should be known to all interested in the procedure of increasing it.

 

  • Innovate, Select and Engage

There are three important words for correctly verifying the circular economy for corporate purposes.

 

  1. Innovation: any kind of innovation would be good for self-motivation, the company’s success, and its employees. When a company fails to inspire its supporters and workers, then there won’t be any changes in the company’s progress.
  2. Selection is a crucial part of implementing the circular economy in any business. Irrespective of the type of industry and materials produced, a company should select and improve main products and materials by effectively recycling, reusing, and moving them.
  3. Engagement. A company needs to focus on linking and connecting with its clients, and suppliers usually by introducing them to the company’s goals and ambitions towards sustainability.

Circular Economy in India

In Indian ecology, circularity is hardly a new concept. This nation is famed for its economical ingenuity in the area of ‘doing more with less. India is currently at a crossroads in its quest for economic development. To counteract the negative impacts of increasing urbanization, industrialization, population growth, and climate change, we must include circularity in our economic development.

The linear ‘take-make-waste’ model must be disrupted, and circular economic models that are restorative and regenerative by design, and pay equal attention to people, the planet, and profits must be adopted. This would incorporate a design-thinking approach to resource efficiency optimization throughout product lifecycles, allowing enterprises to avoid raw material shortages. It will also have a multiplier impact, reducing harmful consequences like waste, pollution, and health risks while opening up new economic benefits. In India as per the Ellen MacArthur Foundation, the development of a circular economy will generate an annual benefit of Rs 40 lakh crore ($624 billion) in 2050 and cut GHG emissions by 44%. The Union Budget’s recent emphasis on a circular economy is a step on the right path for India. So far, the government has taken the initiative in developing policy frameworks for 10 key industries in the transition to a circular economy. To allow circular business models in the future, policies must grow into cohesive and methodical action plans. Here are a few realistic approaches that might help change agents achieve their goals.

Several examples are the Natural Resource Efficiency Policy, Plastic Waste Management Rules, Construction and Demolition Waste Management Rules, Metals Recycling Policy, and Extended Producer Responsibility. To reap the many benefits of a circular economy, the next step is to invent and establish practical circular business models. This should go beyond the tagline CSR and span across sectors, industries, and value chains to achieve widespread sustainability by repurposing linear streams of inputs and outputs while making firms financially viable.

 

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