How a Circular Economy Can Bolster Sustainability Initiatives
Over the next few years, a focus for business owners will be around finding ways to integrate sustainability in supply chains in an effort to support a circular economy. Environmental action is not only on the agenda of political leaders, but it’s also on the minds of consumers. From eating less meat to saving energy to recycling, North Americans want to live a “sustainable lifestyle”.
Over the next three to five years, 75% of North Americans say sustainability is important or very important.
What is the circular economy?
A circular economy is an economic model aimed at making the production and consumption of goods more sustainable. It involves sharing, reusing, repairing, refurbishing, and recycling existing materials for as long as its lifespan allows.
In contrast to the common “take-make-waste” linear model, a circular economy is self-sustaining and regenerative. This means waste becomes the new raw material, and businesses no longer need to rely on the consumption of finite resources. For example, plastic can be recycled into plastic pellets and used to make new plastic products or eco-friendly packaging.
A successful circular economy has the power to tackle global environmental challenges such as climate change, biodiversity loss, waste, and pollution.
How technology is propelling the circular economy forward
From cloud-based data platforms that connect waste producers with waste haulers, to new biological materials that replace oil-based plastics, companies around the world are innovating in big ways to help the planet. These new tools are able to lower costs and automate tasks—thus creating a strong economic opportunity for companies wishing to engage in the circular economy. For example, a Swedish startup created a mobile app called LoopRocks, which uses mobile technology to make construction site waste available to companies that can reuse and optimize waste that was otherwise destined for the landfill.
Three types of circular supply chain models
Businesses are in a unique position to influence environmental sustainability through the choices they make in their supply chain. Here are three examples of circular business models to consider when determining how to adapt your supply chain for a greener future.
Circular supplies model
This model supplies fully renewable, recyclable, or biodegradable resource inputs to support circular production. Businesses working with scarce resources can benefit from this circular supplies model if they can identify fully renewable, recyclable, or biodegradable material.
In 2021, Adidas released its first high-performance running shoe that was carefully designed with manufacturing and recycling partners in mind. When a customer is ready to throw away their shoes, they can return them to Adidas—there, they get broken down and reused to create new performance running shoes.
Another example of the circular supplies model is the swimwear brand Sisterly Swim. Their swimwear is crafted with nylon fabric made from recycled ocean waste, including fishnets and carpet fluff at the end of their lifecycle.
The Product-as-a-service (PaaS) model
In this model of a circular economy, products are used by one or many customers through a lease or pay-per-use agreement. This model is attractive for companies that have high operational costs and the ability to manage rentals and maintenance of their products to serve a wide customer base.
One example of this is Fitzroy Boutique, a dress rental company in Toronto that purchases designer dresses, rents them out to customers for a short time period, and takes care of the dry cleaning when the dress is returned. The customer benefits by not having to pay the upfront cost of a dress, while the company benefits from being able to rent out their dresses to more customers, thus prolonging the life of their products.
The resource recovery model
This circular economy model is based on converting waste into secondary raw materials. The resource recovery model not only provides financial benefits of efficient waste disposal, but it also presents the opportunity for companies to recover costs of resources at a value that is equal to, or even above the initial investment.
Walt Disney Resort’s food waste system is a perfect example of a resource model at work. They send food scraps, including grease and cooking oils from select restaurants, to a nearby anaerobic digestion facility that converts the organic waste into renewable biogas—a form of energy that generates electricity. This energy helps to power Florida’s electric grid, thus eliminating material leakage and maximizing the economic value of “would-have-been” waste.
More resources saved means more benefits for your profits and the planet
The circular economy is a term that you’re going to start to see more and more. As businesses look for innovative ways to achieve their sustainability goals and respond to demands from customers to do their part for the planet, innovative supply chain solutions will become more important. For a full list of sustainable ideas to improve your supply chain, check out our comprehensive checklist.
Sustainable supply chain solutions for businesses
Like you, Purolator is committed to finding ways to help the planet and be more environmentally conscious. We’ve introduced fully-electric delivery fleets such as electric low-speed vehicles and e-bikes, and we’re continually striving to offer services to make your supply chain more sustainable.
Ready to work on your sustainability goals and strategy? Whether you’re looking for eco-friendly delivery methods, recyclable packaging solutions, or seamless courier services to improve your electronics return/refurbish cycle, we have the solutions to help your business prepare for the future.