SWC CIRCULAR ECONOMY CONFERENCE T H E F U T U R E O F S U S TA I N A B L E B U S I N E S S I N N I
SOME STATISTICS… A 2018 National Union of Students (NUS) research project into 10,343 students’ experiences of sustainable development reported that 73% of FE and HE respondents say they would be willing to sacrifice £1,000 from a starting salary to work for a company with a positive environmental and social record. A recent National Geographic Greendex survey, which surveys 18 countries to measure and monitor consumer progress toward environmentally sustainable consumption found that 61% of consumers are “very concerned” about the environment. A report from global measurement and data analytics company Neilson found that the 72% of respondents aged 15 - 20, also known as Generation Z, are willing to pay more for products and services that come from companies who are committed to positive social and environmental impact - up from 55% in 2014.
TAKE-MAKE-DUMP – THE LINEAR ECONOMY
ANOTHER STATISTIC… “A Global Review of Solid Waste Management” by the World Bank: estimates that in 2010 almost 1.3 billion tonnes of MSW are generated globally every year, or 1.2 kg/capita/day. This volume is expected to increase to 2.2 billion tonnes by 2025 or 1.42 kg/capita/day. This is clearly unsustainable – and this cannot be managed by a concept as simple as ‘Reduce/ Reuse/ Recycle’
TIPPING POINTS “T he point at which a series of small changes or incidents becomes significant enough to cause a larger, more important change.” Oxford dictionary “The crisis stage in a process, when a significant change takes place.” or “ when an important decision has to be made” Collin’s dictionary “The time at which a change or an effect cannot be stopped.” Cambridge dictionary
TIPPING POINTS – UNCERTAINTY…
BUILDING IN RESILIENCE When the effects are irreversible, it may be better to have a more paced transition that starts earlier. e.g. awareness building, policy changes, R&D investment, collective agreements Reduce the “costs of deviating form the norm” E.g. Create favorable conditions for small, innovative businesses and identify and remove linear standards and policies
CIRCULARITY NOT RECYCLING
THE CIRCULAR ECONOMY A central theme of the CE concept is the valuation of materials within a closed- looped system with the aim to allow for natural resource use while reducing pollution or avoiding resource constraints and sustaining economic growth.
WHERE DOES NI FIT INTO THIS? The EU’s Circular Economy Package has set the policy direction for the circular economy in Europe and the most recent set of measures includes a Europe-wide Strategy for Plastics in the Circular Economy, a Monitoring Framework on progress towards a circular economy, and a Report on Critical Raw Materials which highlights the potential to make 27 critical materials in Europe’s economy more circular. With the implications of Brexit still unclear, particularly for Northern Ireland, there is uncertainty about whether we will continue to be aligned with this roadmap. UK Government’s 25 Year Environment Plan has a plastics circular economy as a central focus. We should be wary that this Plan does not apply to Northern Ireland, and in the absence of a Government legislating for Northern Ireland this puts us at serious risk of not capturing the benefits of the circular economy.
3 KEY PRINCIPLES OF THE CIRCULAR ECONOMY 1. Preserve and enhance natural capital by controlling finite stocks and balancing renewable resource flows 2. Optimise resource yields by circulating products, components and materials in use at the highest utility at all times in both technological and biological cycles 3. Foster system effectiveness by revealing and designing out negative externalities
4 ESSENTIAL BUILDING BLOCKS OF A CIRCULAR ECONOMY. 1. Circular economy design 2. New business models 3. Reverse cycles 4. Enablers and favourable system conditions
CIRCULAR EXAMPLES:
1. PRODUCTS AS SERVICES In products as services, goods vendors embrace the idea of themselves as service providers: leasing access to and not selling ownership of a service. Example: Vodafone’s Red Hot You can rent the latest phone for a year and keep on exchanging it for a newer version. Assuming Vodafone is engaged in collecting the old phone, not only does this act as material collection and pooling but, from a business standpoint, it also creates deeper customer relationships.
2. NEXT LIFE SALES Next life materials and products work when a company can efficiently recover and recondition its products after use and then put the same products into the market to earn a second or third income. Example: Tata Motors Assured It is more than a second-hand car dealership. Cars are handpicked and refurbished in Tata workshops and then undergo a certification process. Customers are even offered financing options and warranty.
3. PRODUCT TRANSFORMATION Not all products can be reconditioned in their entirety but most products have certain components that carry a high value. Not just products but often materials have an embedded energy component that makes them even move valuable than their virgin source. Example: BMW’s remanufactured parts For BMW, product transformation can mean a 50% cost saving for customers buying remanufactured parts as compared to new ones. You get exactly the same quality specifications as a new BMW part subject to the same 24-month warranty.
4. INNOVATION IN RECYCLING Innovation in recycling technology is rapidly evolving and enabling the production of high-quality products with fantastic sustainability performance. Example: Starbucks’s recycling of waste coffee grounds Starbuck aims to turn thousands of tons of its waste coffee grounds and food into everyday products by using bacteria to generate succinic acid, which can then be used in a range of products from detergents to bio-plastics and medicines.
5. COLLABORATIVE CONSUMPTION Lastly, social media exchange platforms are rapidly transforming industries by collaborative consumption. Example: Airbnb Airbnb matches people seeking holiday rentals with hosts who have space and it now has over 200,000 listings in 26,000 cities.
UNDERSTANDING THE ‘CIRCULAR ECONOMY’ Just like the word sustainability, circular economy means different things to different people. Not surprisingly businesses thought that waste companies, manufacturers and the construction sector were most likely to benefit from the circular economy as it becomes more mainstream, but they also understood that how we design new products and services is going to matter.
WHY SMES ARE NOT GETTING MORE INVOLVED Regulation and lack of customer demand inhibited interest, and as with any small business, time was flagged as a big problem. Companies only change when a business owner is passionate about an issue or is presented with a very clear economic case - both are preferable. • SMEs are sometimes characterised by day-to-day cash-flow challenges, time constraints, and short-term thinking • They are ALSO excellent multi-taskers, flexible and characterised by the importance of personal relationships
WHO NEEDS TO DRIVE THE CHANGE NEEDED? Politicians? Consumers? Business?
MAKING YOUR BUSINESS MODEL CIRCULAR – 5 FUNDAMENTALS 1. How can we design our products with asset recovery in mind? 2. How can we develop product lines to meet demand without wasting assets? 3. How can we source material in regenerative loops rather than linear flows? 4. How can we develop a revenue model that protects value up and down the chain? 5. How can we get our customers to cooperate with us?
WHERE CAN YOU GET HELP? The Connected Programme at SWC 4 sector-specific projects: 1. Digital technologies 2. Engineering, renewable technologies and sustainability 3. Construction 4. IOT and data
WHERE CAN YOU GET HELP? • InnoT ech Centre • CREST • Engineering Hub • IMAGE • IDEA
Recommend
More recommend
