How can circular economy benefit businesses?

Businesses are one of the most important contributors to the economy, but they also cause significant pollution.

Can the adoption of the circular economy provide a solution to pollution problem?

The concept of circular economy has started to attract great attention recently. If you are aiming to make your business truly sustainable, it is imperative that you embrace the principles of the circular economy. This means moving away from planned obsolescence and making cheap products that are quickly becoming obsolete. Instead, we need to put effort into practices such as repairing, reusing, and recycling.

But what does the circular economy really mean in the business world where growth is paramount? How can businesses minimize their environmental impact without compromising their profitability? While it is true that the welfare of the planet must come before profit, it is also necessary to recognize the importance of businesses. A healthy and functional economy is vital to the overall well-being of society. Supply chains are already under great pressure post-pandemic and there are concerns about an impending financial crisis. Given these challenges, what steps should be taken? How can we effectively reduce production waste without driving businesses into bankruptcy?

What is a circular economy?

A circular economy is a systematic approach to the control and reduction of waste in production and business. The basic idea is to design products that can be reused, reduced, or recycled when they become unusable. Then these products can be somehow reintroduced into production so that the materials are not left as waste.

The circular economy works on three main principles: creating production systems that no longer produce waste or pollution; instead of materials with limited applicability, choosing materials according to their reuse values, and using renewable power sources and materials.

In practice, this means using clean production processes that do not release toxins or carbon into the environment, using durable and end-of-life recyclable materials, and using renewable power sources and safely recyclable bio-based materials (such as bamboo) as production materials.

Why should your business adopt the circular economy?

Moving from a linear to a circular economy has many business benefits, regardless of the environmental benefits, such as saving yourself and your customers' money or retaining staff through less 'conscious turnover'.

While the circular economy may seem more expensive and time-consuming than the standard take-make-waste style of the linear economy, it is more beneficial in the long run as it respects the fact that the world's resources are limited.

Global waste is a big problem. Millions of tons of waste from fast fashion and technology are thrown away every year, which is not only bad for people and the environment, but also an embarrassing waste of currently available resources.

It has long been a serious problem for rich countries to dump their waste into poorer countries, such as the dumping of e-waste in Africa. But even worse than this problem is the fact that these waste materials can be reused. This is all the more striking in the context of resource scarcity, which jeopardizes other environmental solutions such as electric vehicles.

Rather than developing products on the assumption that they will be waste, it is critical to incorporate reuse and recycling into the entire lifecycle of these products which requires some degree of foresight. A business that effectively manages the waste cycle gains control over the supply chain and minimizes competition for limited resources. Even where the reuse of materials for their original purpose is not possible for safety reasons, there are ways that waste can be reborn in other forms, such as furniture or clothing. By-product synergy, a widely adopted business practice, involves the sale of by-products or waste from different production processes to other industries, enabling collaborations to develop among many industries.

The circular economy is not that much different from that. Businesses just need to be creative about how they produce their waste and how to monetize it. This approach will not only benefit businesses but will also increase environmental efficiency and sustainability.