EXCLUSIVE: Circular economy confidence lies in 'boosting the bottom line'
There needs to be a concrete business case if companies are to collaborate and innovate on circular economy models in order to scale up activity within this space.
This was one of the key messages to emerge from edie's webinar Squaring the circle: making it work for my business held last week, in which a panel of experts examined the day-to-day realities that are driving decision-making on circular strategies.
WRAP undertakes a lot of facilitation work to bring businesses together on this front, and according to its director of sustainable food systems Dr Richard Swannell, the critical ingredient is that the circular economy must improve the bottom line.
"What we found in trying to get new innovations into the marketplace and get collaborations to work is ensure that there is a very concrete business case at the heart of action," he said.
"Although a lot of us view the circular economy as an environmental case for action, central to it is an economic case for action."
Dr Swannell acknowledged that there might be a confidence issue among businesses to take the first step towards making this journey, in terms of undertaking some initial analysis.
He advised businesses to focus on key areas where more circular strategies might result in rapid payback - this would build the level of confidence needed, he added.
One such company that is already pioneering work in this field is Kingfisher Group. Its strategy is to create 1,000 products formed from closed loop processes by 2020.
James Walker, head of innovation for net positive at Kingfisher, said that one of the big triggers for his company in doing this was being at the mercy of rising material costs for certain product lines.
"We sell a bucket that has always been 99p, it is a price entry-level bucket and it is synonymous with one of our brands, B&Q. The cost of materials in it hit a point where the price couldn't be 99p anymore ... we saw a 34% rise in its material costs over two or three years," he recalled.
"As resources become scarce and as prices go up ... if we can get back materials and reuse them, that's giving us control over our supply chain that we wouldn't have otherwise had," he explained.
Meanwhile waste management companies are now also seeing appetite among their own customers to pursue a more circular approach with waste materials.
FCC Environment's head of regional development of Paul Dumpleton said that this was particularly the case among larger corporations who are showing a good understanding of circular economy principles and a willingness to try and adopt them.
"From our point of view with the bigger issue lies is in the lack of infrastructure," Dumpleton pointed out. "There is still a big gap in the amount of reprocessing capacity we have in the UK compared to the amount of material we recycle, and are legally obliged recycle."
The webinar is the latest output of edie's ongoing Resource Revolution campaign and builds on the recently published White Paper Making circularity relevant: a business blueprint.
Both the White Paper and recorded webinar, sponsored by FCC Environment, can be accessed here.