Circular economy: Be away from throw away

THE FUTURE OF CIRCULAR ECONOMY

The world population is estimated to exceed 8.5 billion by 2030, according to the UN. Under this case, renewable resources would not be adequate to meet the demands of all the people who live on Earth. That’s why it needs a circular economy.

It would reshape our future and make it more prosperous for our lives. Life in a world of circular economy implies making structures that operate in a circle, restoring and reusing resources constantly. In this world of circular economy, we will have less waste with more innovations and advancements. 

The world is, in fact, moving towards a sustainable future. However, the advancements aren’t happening fast enough. Despite all the efforts, one truckload full of plastics gets dumped into the ocean every minute. Moreover, an amount of $500 billion gets lost every year due to clothing being barely worn and rarely recycled. 

Corporates and startups are on the battlefield to save the planet

These facts are shocking. That’s why we need more tangible steps that can more effectively bring outcomes. Fortunately, entrepreneurs have begun responding. For example, Sulapac, a Helsinki-based start-up, manufactures straws made from raw and biodegradable materials, while Grover, a German company, promotes the leasing of technological devices rather than the purchasing of new ones. There are more examples like this, waiting for big and powerful corporations to notice and raise them.

Grover, online rental platform for consumer electronics

The EU has a plan as well. The Circular Economy Action Plan involves a whole series of tangible actions addressing the product lifecycle from manufacturing, consumption and waste use. In the following period the organization set some very specific goals to achieve:

  • Recycling 35% of municipal waste by 2035;
  • Reducing landfill to up to 10% of municipal waste by 2035;
  • Recycling 70% of packaging waste by 2030;
  • Complete separation of household waste by the end of 2025, etc.

In addition, the EU has set recycling goals for particular packaging products, minimum standards for production obligations and prevention targets in order to accomplish EU commitments to the UN SDGs.

The possibilities for capturing value through adopting the circular economy method are endless, and startups are working tirelessly to capture their cut of the pie.

What is circular economy?

At a time when we are struggling with the production of waste, in particular plastic waste, the depletion of natural resources (raw materials and non-renewable energies) and an increasing global population, more and more industries are moving to a sustainable business model aimed at manufacturing products and services in a sustainable way. This is termed as circular economy.

This strategy, which was initiated 10 years ago, is well-founded and aims to optimize the utilization of natural resources by thoroughly reconsidering the choice of materials and the way they are used, thereby reducing the excess use of resources (raw materials, water, energy) and therefore the amount of waste produced. By developing innovative and more virtuous manufacturing structures in order to conserve the natural resources of our world, the circular economy often offers companies the potential to eliminate their prices.

The circular economy is based upon the new model of production and consumption which involves the sharing, renting, reuse, repair, renovation and recycling of materials and products. In this manner, the product life cycle is expanded.

Circular economy model
Circular economy model

The current way that goods are used by our economies is not sustainable. A ‘linear’ methodology consumes scarce energy and destroys the ecosystem, where materials are produced, turned into a product, consumed and discarded. Moreover, rising consumption levels in developed countries would bring more and more pressure on developing countries on the material rates and subsequent expenses for firms and customers. 

Environmental and economic sense is rendered by a ‘circular approach to re-use resources, maximizing their value over time. By being more resource effective, there are actually billions of pounds of opportunities for companies across the economy.

A modern and sustainable economic paradigm, a circular economy, is demanded by the world. The quest for products coincides with the rising issue in our oceans of plastic waste, rampant air pollution, and uncontrolled disposal of hazardous water.

The EU alone generates more than 2,5 billion tons of waste a year according to a survey by the European Union. To overcome this problem, the EU is working to reform its waste management regulations with a view to promoting a transition to a more sustainable paradigm known as the circular economy.

The shift to a circular economy is about modifying the traditional economic make-use-dispose system, which helps us to keep resources in use for longer. This model helps suppliers, at the end of each lifecycle, to take the greatest benefit from resources when in use, while still recovering and regenerating goods and materials.

This article relies on a StartupLynx analysis. You can access the full radar here:

StartupLynx Radar for the circular economy topic

A real-life case study of circular economy

An examination of a real-life case study is the ideal way to understand what a circular economy is.

Philips: 

A lightbulb can be designed to last for a lifetime, but so-called ‘planned obsolescence’ would be financially unviable for manufacturers to do that. A new service called “Circular Lighting” has been developed by the appliance firm, Philips, where consumers pay only for the light, not for the equipment. For the installation, performance and maintenance of the lighting, Phillips will pay. The lighting system can be upgraded and reused at the completion of the service contract, or all components and parts can be returned for repurposing or recycling, reducing materials and waste and compelling the manufacturer to take accountability for the product’s entire life cycle.

Apple:

A further example of a company supporting the ideals of the circular economy is Apple. The company revealed in 2017 that 100% recycled materials will produce new iPhones, iMacs, and other products. The company currently has a system where consumers can carry their old devices and get an upgrade discount-it reports that up to a third of peoplewho buy a new phone in an Apple Store are trading in an old one.

Globally, about 44.7 million tons of e-waste were produced in 2016, 435 000 tons of which were mobile phones.

At the beginning of March, the EU unveiled its Circular Economy Action Plan, which encourages producers to produce goods that last longer and are easier to fix, use and recycle. The EU enforces the concept of a closed economy in its legislation. Taking effect in 2021, as outlined in its Latest Green Deal, the initiative is part of the EU’s goal of becoming a climate-neutral economy by 2050.

Top companies adopting circular economy

The circular economy is being increasingly adopted by large international companies, which see it as an opportunity for growth and innovation.

NIKE 

NIKE, a sporting goods manufacturing company, embraces the values of this economy. For its initiatives in the combat against waste, NIKE received the 2016 Circulars Award. Along with more productive design and processing technology, the firm focuses on waste management. 54 000 tons of industrial waste were turned into high-end fabrics in 2015 and reused in sporting shoes and garments. For instance, NIKE uses recycled polyester and certified Better Cotton (cotton grown according to the standard system of the Better Cotton Initiative), which optimizes energy efficiency and water usage.

IBM

In the shift to a circular economy, IBM is another important player. The organization has been operating a computer hardware recovery unit for more than 30 years, re-processing about 30,000 devices every week. More than 99 per cent of the IT and IT waste returned to IBM is reused or recycled at the end of its life.

CATERPILLAR

CATERPILLAR, a major player in the construction industry, implements the theories of the circular economy in a totally different area through its remanufacturing and reconstruction programs, through which parts and equipment are completely overhauled rather than merely repaired or substituted. This re-use of components eliminates waste and minimizes the need to manufacture new parts from extra raw materials. With this method, CATERPILLAR intends “to substantially contribute to sustainable development by preserving the distribution of non-renewable resources over several life cycles.”

HEINEKEN

HEINEKEN, the world’s second largest beer company, is a benchmark in terms of recycling as well. Its product, packaging and industrial waste recycling rate is estimated at 97 percent.

Other companies like LVMH, Kering and Schneider Electric in France are also are actively engaged in this process.

Few examples which are leading the way for circular economy

Joining together with other organisations and addressing issues together is one means of solving regulatory challenges. In this area, collaborations between corporations and start-ups are very important, since they can all benefit from their partners’ position. Corporates have economic stability and experience, while innovation is driven by startups.

Following the circular economy process the business benefits have already been recognized by companies like Honda, GM, Unilever, Dell, and Procter & Gamble. Just few of them are lowered prices, improved reputation, and the attraction of talent. In addition, the circular economy also opens doors for new opportunities and allows greater differentiation of products.

They are based on so many parameters from both within and outside their enterprises, and here’s where startups should step in. They are known as initiators of disruptive business models, market disruptors, and industry transformers, even if they’re not economically stable. Their limited resources do not hold them out of strategic alliances that can help advance the implementation of sustainability with big players.

There are endless possibilities to extract profit by implementing the circular economy method, and startups are working relentlessly to capture their share of the market.

RE:NEWCELL

Renewcell, recycler of cellulosic materials into biodegradable fibres

Re:Newcell is a Swedish start-up, working with fashion giant H&M, which manufactures Circulose, a new material made of recycled cotton and viscose. The organization aims to create a loop in which apparel products are re-used rather than dumped into a landfill. This aligns with the objectives of H&M, provided that their Weekday brand was the first brand developed by Infinited Fiber Company to test denim fiber.

LOOPTWORKS

Looptworks, recycle discarded materials into "valuable, long-lasting and limited edition products.

Further examples include Looptworks, a company founded in 2009 that intends to recycle discarded materials into “valuable, long-lasting and limited edition products.” To this end, Southwest Airlines and later Alaska Airlines have collaborated with the company to upcycle the seat leather into soccer balls, bags, and other products.

DYECOO

DyeCoo, provider of water-free and process chemical-free dyeing solution

An innovative fabric dyeing method has been developed by the Dutch company DyeCoo that does not require the use of water or chemicals, except dyes. This new technique has immense potential to influence the textile industry, which uses massive amounts of water and chemicals and generates enormous quantities of hazardous waste. The importance of this strategy has been recognised, and the business has so far collaborated with major brands such as Nike and IKEA.

SAPERATEC

Saperatec, micro-emulsion separation based technology for recycling composite packaging materials

Saperatec is a start-up that has developed a patented solution which allows flexible packaging containing aluminum foil to be separated and recycled. The business is sponsored by Henkel and for over two years the two companies have been engaged in strategic cooperation aimed at developing and expanding a range of tailored recyclable adhesive solutions.

CELLUCOMP

Cellucomp, manufacturer of nano-fibers for paint and coatings

As the cement industry accounts for almost 7-8 percent of global carbon dioxide (CO2) emissions, this Scottish company is focused on replacing cement with a sustainable material. An agent called Curran, which is developed by extracting cellulose nanofibers from waste root vegetables, is their cutting-edge solution. Curran is commonly used in the fields of concrete, paints, pharmaceuticals, and even food. This startup is a great alternative in preserving the nature and the entire world.

HYLA MOBILE

Hyla Mobile provides mobile device trade-in and reuse solutions

The era of smartphones and tablets has changed the very way we live, work, and rest, offering once-unthinkable possibilities and benefits. Unfortunately, the flip side of the coin is that supply has overtaken demand, resulting in landfills are full of out-service gadgets. To fix that, this company recycles and reuses the old devices or their components. According to some estimates, the company recycled about 50 million devices, which brought a $4 billion profit.

Unused fish skins as Leather

Consumers are more than ever asking themselves several questions in a troubled economic world about the sources of the goods they purchase and how they were made. Leather is one of the fabrics that poses the most ethical issues, along with textiles: animal rights, the practice of environmentally sustainable tanning, consumer protection, etc.

Femer is a marine skin leather product based on a 100% eco-responsible approach. They promote and transform in a circular economy, fish skins, into a noble material, leather. Their leathers are entirely produced by themselves locally in the Aquitaine region, in France. The skins which they use are residues from the maritime food industry. 

Femer, skin factory specializing in fish leather

This is the start of the Marine Skin adventure! It is the rebirth of an ancestral leather driven by an eco-responsible design. Skin factory specializing in fish leather: eco-responsible approach, 100% natural and vegetable tanning.

A startup called “My sport market” combating the waste of sport goods

My Sport Market was created by Thibault Barthez a few years ago, which is a digital solution that fights against the waste of sports products. My Sport Market enables the store to sell online while destocking, and customers to consume differently. It mainly focuses on products which are on promotion, unsold, used or completely devalued. Thibault highlights that they are not looking for new collections.

On average, 1 in 5 items in France are never sold in sports shops. Or 20 percent annually unsold. This constitutes a total of EUR 2.5 billion of sporting goods wasted or incinerated annually in France.

My Sport Market is therefore a viable, sustainable and eco-responsible solution. My sport market are giving these items a second chance online and at a price that is bound to be attractive. By giving these products a second chance, this marketplace kills three birds with one stone: one gesture in favor of the planet, another in favor of local commerce, and a last towards the portfolio of customers.

My Sport Market does not stock any product and leaves the hand to the stores. This reduces the logistics and transport of goods unnecessary and costly for the planet.

CONCLUSION

We must preserve our world, our nature, our home for the greater good of our children. The ultimate formula occurs in solutions like the digital circular economy. The world must stick to this plan to help save the world.

The future is a promising one and businesses are getting ready to take action. The best way to create a sustainable future and foster a circular economy is through collective action between stakeholders, making the planet a better place for all its inhabitants. Realizing this is vital way of developing a better and more sustainable future.

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