Brand leaders sign up to accelerate circular economy innovation
A new global alliance will launch next month to accelerate business innovation towards a circular economy as new research identifies a $700bn economic opportunity for the consumer goods sector in this transition.
The Circular Economy 100, facilitated by the Ellen MacArthur Foundation, will bring together blue-chip companies on a pre-competitive dialogue basis to provide a global platform building circular economy capacity across the wider economy.
The foundation's work with its existing founding partners - B&Q, BT/Cisco, National Grid and Renault - has already triggered circular initiatives that collectively target over $1bn in resource savings and new revenues.
Meanwhile as reported by edie yesterday, the think tank has released its second report Towards the Circular Economy Vol 2 today, which on last year's analysis from McKinsey & Co.
This new study makes the case for faster adoption, quantifies the economic benefits of circular business models, and lays out pathways for action.
It focuses on consumer goods market, which globally accounts for around 60% of total consumer spending and 35% material inputs into the economy. Significantly, this sector also absorbs more than 90% of agricultural output.
According to its findings, adoption of the circular economy could be worth as much as $700bn in consumer goods material savings alone, but there are also significant benefits to be realised in terms of land productivity and supply chain stability.
The report features specific examples in product categories that represent 80% of the total consumer goods market by value, namely food, beverages, textiles, and packaging.
It also provides a series of concrete examples of businesses that derive competitive advantage from better valorising their material flows. These include household food waste as one tonne of food waste can create electricity worth $26, heat worth $18, and fertiliser worth $6.
In the textile sector, $71bn in material savings could be achieved through increasing the amount of clothing that is collected and reused or remade, while beverage manufacturers could reduce material inputs and the price of packaging by moving to reusable glass bottles. This would enable a cost reduction of 20% (per hectolitre) of beer.
Reacting to the report, CISCO EMEA president Chris Dedicoat said that the circular economy offered a "profound transformational opportunity".
"Transitioning towards a regenerative model will stimulate economic activity in the areas of product innovation, remanufacturing, and refurbishment, and in turn generate employment," he said.
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