Thinking circular: applying an effective closed-loop model
Ahead of her appearance at edie Live 2017 in May, circular economy expert Catherine Joce explores what it takes to deliver a successful closed-loop product or service, drawing on real-life examples of businesses that are driving the resource revolution.
Circular economy rhetoric paints an ambitious and progressive vision for transformation of global systems, imaging a world where the value of products and materials is retained by keeping them in circulation in the economy and where waste is designed out from the system.
An abundance of shocking statistics drive home the message: a third of food all food produced is wasted, 5,000 coffee cups are discarded in the UK every minute and nearly a third of all clothes haven’t been worn in the past year. The numbers are oft repeated and generate much talk of change and opportunity, but despite this, many companies have yet to take significant steps towards applying circular economy thinking.
Perhaps this inaction is unsurprising. Firstly, many companies are locked in by their business model, designed to fit existing linear system. And secondly, translating the complex systems thinking of the circular economy into a viable business opportunity, financing the idea and delivering the required change is no mean feat.
There are of course circular economy pioneers, visionary companies determined to set the standard for sustainable business. Many of these companies such as Interface, Caterpillar and Ricoh, now synonymous with circular economy, have been developing circular economy business models long before the Ellen MacArthur Foundation popularised the term.
For businesses to truly reap the rewards of a circular model, they need to identify how circular economy principles can solve their customer’s problems. To be commercially attractive, ‘circular’ must equal ‘better’, whether those improvements come in the form of cost savings, increased functionality or reduced exposure to risk.
There are many companies that have managed to articulate a clear value proposition. One of my favourites is E-Car – the UK’s first entirely electric car-sharing club – which provides an appealing, affordable alternative in to traditional car ownership. The user benefits from on demand mobility, whilst E-Car’s business model maximises the use of assets in order to maximise profit.
Another standout for me is Recycling Technologies, an engineering company based in Swindon which is pioneering novel chemical recycling technologies able to convert a problem waste stream generated in vast quantities – dirty mixed plastic waste – into a valuable chemical feedstock.
Often, applying the circular economy to an organisation requires a combined product/service offering and again, there are already some prime examples of this approach. Rype Office is opening up the remanufactured office furniture market to a new swath of large corporate clients by offering a full design service, then realising the vision with remanufactured furniture. Meanwhile, Vegware – a manufacture of bio-based and bio-degradable food service products – works directly with customers on the design of waste disposal systems and signage to improve consumer behaviour, reduce waste and associated disposal costs.
From early adopters to the mainstream
For circular economy thinking to be adopted by a broader range of companies, further education and support to articulate the benefits is needed. For organisations attempting to apply the principles of circular economy at an organisational or process level, tools are emerging to support decision making. The Knowledge Transfer Network (KTN) has developed a suite of tool to support the identification of circular economy business opportunities and the British Standards Institute will launch the world’s first circular economy standard British Standard – BS 8001, Framework for implementing the principles of the circular economy in organisations – in June.
Image: KTN’s 30 ideas to transform your circular business tool
Identification, evaluation and the successful roll-out of a circular economy product or service – particularly for large multinationals with complex portfolios – does require a complex set of capabilities. Recently, I joined Cambridge Consultants – a global product development engineering and technology consultancy – where the ability to draw together interdisciplinary teams with designers, human factor experts, internet of things specialists, engineers and technology management consulting provides a unique capability to crack the circularity challenge.
From mainstream to laggards
Whilst the circular economy has a long way to go to become common practice, the pipeline of ideas is developing. Probably my biggest surprise working with companies experimenting with really innovative circular economy ideas has been the breadth of sectors starting to explore these concepts.
From automotive to business services; from defence to the built environment, if you look in any sector there will be some pioneers evaluating the opportunity presented by the circular economy. The question then becomes: if your company is not at least experimenting with circular economy approaches, do you risk becoming a laggard?
Catherine Joce was previously the circular economy lead at KTN and is now a consultant working across strategy, process and innovation with Cambridge Consultants.
Catherine Joce at edie Live 2017
Joce is among the expert speakers appearing on stage at edie Live 2017 at the NEC Birmingham on 23-24 May.
She will be appearing on the Resource Efficiency stage on Day One of the show, in a session titled ‘Thinking circular: applying an effective closed-loop model’.