Monday, June 24, 2024

Why your business needs to join the circular economy

The current UK economy follows a linear ‘take, make and dispose’ approach. For example, when a new iPhone is released, we immediately ditch our old model even if it is working just fine. Similarly,  we purchase on-trend clothes which may only be worn once and eventually thrown away.

As this approach relies on the world’s finite resources, it isn’t sustainable in the long term. Only 9% of the world’s economy has moved away from the linear model and far more organisations need to get onboard to help preserve the planet. One alternative is the so-called circular economy. Here we explain what the circular economy is and why your business should consider switching to this model.

What is the circular economy?

The circular economy is a closed-loop economic system focusing on reusing, repairing, refurbishing, remanufacturing and recycling items and services instead of disposing of them. There are seven key elements, including rethinking business models, designing for the future, and preserving and extending existing products and services. This aims to reduce the volume of resources used and avoids creating waste, pollution and carbon emissions.

This sustainable model considers the full life cycle of products and aims to design these to ensure we get maximum value from the natural resources used. All potential waste should fuel another process. For example, London waste management company Bywaters offer food waste collection as part of its recycling services. During the decomposition process, the gases given off can be used to produce energy which helps to provide electricity to the UK. A circular system aims to eliminate waste, keep materials and products in use, and power the economy with renewable energy.

The benefits of a circular economy

A circular economy benefits businesses, citizens and the planet by promoting resource efficiency, encouraging eco-friendly product innovation and supporting green companies. Many industries including hospitality, fashion and technology will benefit from this economy model, increasing performance and reducing costs. This will help to make non-green industries green which will boost GDP by nearly 1% and create two million additional jobs.

A McKinsey study in collaboration with the Ellen MacArthur Foundation revealed that the circular economy could boost Europe’s resource productivity by 3% by 2030 and reduce CO2 emissions by as much as 48% by 2030 and 83% by 2050. While it could also help save EU countries €600 billion. What’s more, businesses will benefit from reimagining its products, packaging and services to meet the demands of a sustainable environment, and consumers will be purchasing better products meaning they won’t need to keep paying to replace them.

Why businesses need to adapt now

The UK government has introduced laws on greenhouse gas emissions, aiming to reach net zero by 2050. This involves things like introducing greener transport, carbon efficient agriculture technologies and the Climate Change business tax. As well as ensuring emissions are offset by measures like planting trees or using carbon capture and storage. As a result, it makes sense for businesses to adapt now rather than later when restrictions and laws may be stricter.

Using the circular mode will help create a consistent supply chain that is beneficial for both your business and the planet. For example, Katie Leggett, sustainability manager at drinks company Innocent told The Telegraph: “The benefit to the business may not be short term but may instead be for the planet, and the knock-on impact associated with that. For example, less extreme weather means more predictable harvests and therefore more consistent supply across the global agricultural system.” Adapting your operations is worthwhile in the long run, helping to reduce environmental damage and costs, innovate products and services, and protect against reputation damage.

Failing to pay attention to the impact of consumerism on climate change may impact your reputation as customers may be less likely to do business with you. Considering 25% of UK consumers want to shop more sustainably, this is a great opportunity for your business to build and retain its loyal customer base. It will enable you to stay relevant and ahead of the competition in an ever-changing consumer market. In fact, taking action now will enhance your branding and place you as a sustainable company.

Claire James
Claire James
Claire is an accounts manager at Fire Digital UK, an online publishing and content marketing company based in the North West.

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