Working at a circular business. Why is it sustainable?
In short, a circular business is a business that uses a business model that ideally has zero waste. That does not always mean that the company does not produce any waste, it could also put the waste it does produce to good use. Today, only about 10% of our global economy is circular. That means that a lot of valuable researches are wasted every year. Now, in order for a business to become truly sustainable, it needs to reduce or compensate for this waste. Compensation can be done by carbon offsetting for example. We will dive into that in a next article.
Understanding circular business is about how to minimize and preferably eliminate waste in a production process or supply chain. Reducing waste is not only hugely profitable because all resources get used, but it is also sustainable when the output is the same or has a larger value than the input of external resources.
Let’s look at 5 circular business models to understand that better…
Products as a service.
Instead of selling a product to customers, a business can rent it to them. Think of your mobile phone for example. Every two years you need, or want, to get the newest model. What if instead of owning it, the manufacturer remains the owner? After two years your rental period ends and you send it back to the supplier (resource recovery). They recycle or refurbish it, and you receive the new model.
Circular supply chain.
As opposed to the traditional linear “take and waste” supply chain, a circular supply chain strives to be closed-loop. This means that for example, it strives to use another company’s waste output as an ingredient in its process. The waste that the process produces itself, can be sold as a possible resource to another company. This way, companies can reduce waste together as a network.
Resource recovery.
In the linear model, as we have learned, a company extracts resources from nature. Then we turn them into products, consume them, and let them go to waste. By recovering the end product and turning it into a different product, a company can turn waste into value. For example, the fleece jacket that you own… it is very well possible that it started as a cola bottle that was recycled into a plastic bag and then into your jacket. All thanks to Resource recovery.
Sharing platforms.
Let’s say that you and I are both hobby DIY’s. I own a saw and you own a drill. Because it is only my hobby, I don’t use the saw every day. The same goes for you and your drill. On a sharing platform, we can both list our tools, thereby gaining access to other tools. This way we share our tools and we don’t all have to buy every tool. The same goes for cars, bicycles, or even summer houses.
Product life extension.
As with the above-mentioned mobile phone example, we are used to throwing away items that no longer work perfectly. For a company, it can be profitable to make a product that needs to be replaced after a short life cycle. However, by making a product that can be repaired and updated (as Tesla does with their software), it extends the lifecycle of the product, reducing waste, but also ensuring a long-term customer relationship.
So next time you see a business that works with a circular business model, you know that it is the sustainable way to go. We at SustainableJobs.com make an ongoing effort to list sustainable jobs in one place so you know where to find them.
Written by Marc Wijnja
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