What is a circular economy?

There are several ways to adopt a circular economy in businesses. Here are a few examples:

Product-as-a-Service (PaaS) models

Companies that use a PaaS model shift from selling items to providing them as services. Instead of purchasing furniture, users can lease it from retailers such as IKEA. This technique enables the organisation to maintain ownership of the products, allowing them to be repaired, improved and reused once their life cycle has ended. This adds value to users as well, as they can update or upgrade their inventory periodically without large investments.

Closed-loop supply chain

In a closed-loop supply chain, items are designed to be recovered and reused. Burger King, for example, takes this approach by employing biodegradable or compostable packaging materials that can be easily recycled or returned to the manufacturing process. This decreases waste generation and encourages the reuse of resources.

Product remanufacturing and recycling

Adidas, for example, can undertake product remanufacturing and recycling operations. This entails collecting used products, reconditioning them to satisfy quality standards, and reintroducing them to the market. Furthermore, recycling programmes can be adopted to recover materials from obsolete items and use them to manufacture new ones.

There are many clear benefits of circular economy, cost reduction and improved environmental impact being the main ones. But there are other value-adding positive consequences of applying a circular economy approach to business and operations. And what’s even better, is that circular economy can be applied to many productive industries, which is an immense ocean of opportunities.

Extends the product life cycle

Extending the life span of products is a major aspect of the circular economy. Manufacturers may ensure their products can be utilised for longer periods by emphasising durability, reparability, and modular design. This circular-economy flow for continuous production minimises raw material extraction, lowering energy consumption and environmental deterioration.

Improves resource efficiency and waste reduction

A circular economy seeks to maximise resource efficiency through waste reduction. Valuable resources are recovered and reintroduced into the manufacturing process by recycling, upcycling, and waste-to-energy conversion.

Promotes innovation and job creation

Transitioning to a circular economy demands cross-sectoral innovation. This transition opens possibilities for new technologies, business strategies, and collaborations. Companies that embrace circularity can enter new markets, produce economic growth, and reduce environmental imprint. A circular economy in the business sector has the potential to create jobs in areas such as recycling, repair services, and sustainable design.

Reduces greenhouse-gas emissions

The circular economy is important in addressing climate change by helping cut greenhouse-gas emissions through waste reduction and cleaner manufacturing techniques. Furthermore, by reusing resources rather than creating new ones, the circular economy lessens energy consumption and the carbon footprint associated with resource extraction and manufacturing.

Preserves biodiversity and ecosystems

A good circular economic flow helps safeguard natural habitats, rivers, and oceans from the negative consequences of inappropriate disposal and extraction by decreasing waste and contamination. In addition, the circular economy promotes the preservation of natural resources and the overall health of ecosystems by encouraging the use of renewable and biodegradable materials.

The circular economy provides a timely model for change as we move towards net-zero decarbonisation targets, respond to natural resource depletion, and address the vulnerability of global supply chains.

At GHD, we have committed to a process of discovery and inquiry with our clients under the banner of circular economy to unearth the how of being regenerative by design. Three key principles will lead us to stay on track:

• Eliminate waste and pollution
• Circulate products and materials (at their highest value)
• Regenerate nature

Guided by this framework, we will look beyond traditional techniques and last-resort thinking to investigate new alternatives that will give our clients the best possible results. We see an opportunity to develop thriving local economies that create, exchange, and retain value. We will design and demonstrate innovative closed loops in collaboration with our clients.

To know more about our expertise in circular economy, visit GHD’s circular economy page. To learn more about how we promote sustainability, visit our website and services expertise page. Together, let us pave a route towards a more sustainable future for every community around the world.

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