To tackle urgent planetary challenges such as resource depletion and climate change, we need to fundamentally rethink the way we do business in industrialized systems. One model that holds great promise is the circular economy (CE) — instead of digging up materials, using them once, and then throwing them away, companies in a CE recapture the enormous volume of resources in their value chain in order to use them again and again.
A Step Toward Making Your Company More Sustainable
What if companies were responsible for the full life cycle of their products?
January 11, 2021
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Summary.
One model that holds great promise for sustainability is the circular economy (CE) — instead of digging up materials, using them once, and then throwing them away, companies in a CE recapture the enormous volume of resources in their value chain in order to use them again and again. Such an approach sounds good in theory — but how does it work in practice? The authors suggest four steps: Closing the loop is an essential first step. Companies should move from Take-Make-Use-Dispose linear value chain to a Take-Make-Use-Recover circular value chain. In the second step, companies should look for ways to improve resource efficiency within the circular value chain — for instance, by understanding where and how your products wear down so you can make them more durable. In step three, companies should look at alternative business models. For example, Signify, formerly Philips Lighting, moved from selling light bulbs to offering lighting-as-a-service. And finally, companies should reach outside their own walls to engage their partners and customer in the wider effort to conserve the planets finite resources.