These might not yet make for pretty Google search terms, but as social, economic and environmental drivers – migration, poverty, health epidemics, pollution levels, water scarcity, etc. – push organizations to rethink their business models and strategies, these alternatives are starting to gain attention across corporations.
So much so that entire conferences have been devoted to unpack these concepts and their applications. One such concept is a circular economy, the idea of a restorative industrial economy in which all products and services can be disassembled, reinvented and put back into the system – a circular loop that benefits both consumers and businesses. By contrast, our current economic model is linear and relies on a steady stream of new resources to feed production and consumption.
Last month, we attended a forum hosted by the U.S. Chamber of Commerce Foundation in Washington, D.C. featuring representatives from both the public and private sectors. The event focused on how organizations are starting to bring the concept of a circular economy to life through product design, R&D and partnerships. Hosted in collaboration with the Ellen MacArthur Foundation, the event featured inspiring keynotes from Dame Ellen as well as William McDonough, who sparked the movement to bring cradle-to-cradle innovation to life with his seminal book “Cradle to Cradle: Remaking the Way We Make Things.”
So, how can an organization bring this to life?
Having attended two days of stimulating panel discussions and rigorous workshops, here are three ways to help get you started on retrofitting the elements of a circular economy:
1. Assess the product lifecycle
Engage cross-functional stakeholders to assess your product lifecycle early on so that you have the right champions and ambassadors to push this forward. Know that this exercise is as much about understandingbiomimicry principles as marketing, communications, sourcing and merchandising. Once the results are in, a cross-functional team can help your team think through the possible wins from myriad angles, including revenue streams, cost savings, marketing opportunities, partnerships, etc.
2. Engage in cross-industry collaboration
Many companies have made remarkable strides reducing waste by partnering with other industries where their products can be repurposed. For example, Procter & Gamble takes products that are slightly off spec and adjusts and reformulates them to work in other industries. From selling laundry detergent to car washes to altering beauty products to work in leather conditioner, P&G has created a revenue stream off of something that was once considered waste. This innovative way to tackle waste not only helped the company save costs, but it also fostered cross-industry collaboration that will help all industries stretch their resources with minimal effort.
3. Reframe the issue
The idea of a circular economy, like many borne out of the sustainability wing, is often dismissed and relegated to the discard pile. It’s not just the jargon, which does play a significant role in undermining its potential, but it’s also the absolute necessity to delineate it from a “good thing to do” mindset.
By reframing the move to a circular economy as a business imperative, companies can build a clearer picture of costs, opportunities and scale. This then helps secure buy-in from senior executives and helps companies better manage supply chain and procurement gaps. As DSM* North America President Hugh Welsh succinctly put it, “The case for the circular economy is not just a case for corporate social responsibility or saving the environment; it’s really about … surviving as a company … It’s a case of competitive advantage.”