Breaking news from the frontlines of business—the world’s largest corporations are throwing away money.
The U.S. Chamber of Commerce Foundation’s latest research report, Trash to Treasure: Changing Waste Streams to Profit Streams, unearthed that nearly 6,000 of the largest companies in the United States sent 342 million metric tons of waste to landfills and incinerators in 2014—about 8 metric tons for every $1 million in revenue—even before their products were shipped, used, and disposed of by consumers. Every ounce represents money invested in raw materials, energy, equipment, and human talent to create it—all interred in the junkyard of history.
Business needs another industrial revolution—one led by corporations like Phillips, selling light as well as bulbs, or Dell, creating a closed-loop recycled plastics supply chain to recycle computers back into new computers, or the Dow Chemical Company, recovering non-recycled plastics, and converting them into usable energy. While reducing waste is not a new idea, these companies understand the value of a circular economy at work, one in which resources are endlessly cycled back into supply chains, where waste simply does not exist.
Macro trends, including rapid population growth, urbanization, resource constraints, and digital technology, help to fuel this shift. Yet, despite the compelling trends, examples, and business cases, practical approaches of how companies can enter the circular economy remain elusive. That’s why the U.S. Chamber of Commerce Foundation is hosting Better Business, Better World: Mainstreaming the Circular Economy, in partnership with the Ellen MacArthur Foundation and PYXERA Global, on May 16-17 in Washington, D.C.
The event begins with the premise that the linear economic model—Take, Make, Waste—is no longer viable. Instead, the May event seeks to examine the practical application of the circular economy from a systems perspective, to help corporate leaders better understand how to leverage new business models to generate resource productivity improvements, and how to exploit the effects of disruptive, innovative technologies to uncover new sources of value in their supply chains.
Moving Re-Use beyond Recycling
The linear economy, which was highly successful in delivering economic development throughout the 20th century, is no longer a viable approach to sustained economic growth.
According to the Ellen MacArthur Foundation, a U.K.-based nonprofit, the circular economy, by contrast, is restorative or regenerative by design and intent, in which products, components, and materials are kept at their highest value at all times. Beginning with design that considers the entire ecosystem, circular economies reduce resource consumption as much as possible at the start, and then keep those resources in circulation as long as possible, extracting the maximum value, and finally recovering or regenerating those resources at the end of its lifecycle.
Leading companies are actively pursuing alternative models that decouple economic growth from resource constraints, capturing the imagination of innovators who see the circular economy as a viable model to successfully tackle sustainability challenges, drive performance, competitiveness and innovation, and stimulate economic growth and development.
The circular economy offers a compelling and coherent framework for systems level redesign in which resources never become waste. This includes front-end design processes and back-end waste management processes. From the front end, products and services should be designed so that at the end of that product or service’s current useful life, the components, embedded water, energy, and other resources can be easily cycled back into the supply chain to make new products and services. From the back end, there should be strong collaboration among private sector companies, municipalities, communities and consumers to invest in after-use infrastructure to recover more of those materials to serve as feedstock for new products. At the May event, the Ellen MacArthur Foundation will discuss its new report, The New Plastics Economy, Rethinking the Future of Plastics, which outlines a global vision in which plastics never become waste and the concrete steps needed to achieve that systemic shift.
The Economic Opportunity of Going Circular
The circular economy is, at its core, an economic innovation with sustainability and societal benefits. By rethinking business models and material choices, products and materials can be upgraded, remanufactured, and kept in production longer. Products as they are currently designed, produced, and used can be converted into new services and revenue sources. Consistent with the findings of the U.S. Chamber Foundation’s research, the Ellen MacArthur Foundation reports the circular economy represents a net materials cost savings opportunity of up to $630 billion annually just within Europe. Accenture, a global consulting and services company, stipulates shifting to the circular economy could unlock an estimated $4.5 trillion in additional economic growth by 2030, and could be the biggest economic revolution in 250 years. These compelling figures are attractive to businesses and governments alike.
The shift to the circular economy requires a redesign and adoption of new business models as well, based on dematerialization, longevity, remanufacturing, refurbishment, capacity sharing, and eventual recycling. The conference will provide a forum for companies to highlight how they are leveraging new business models to generate resource productivity improvements, cut costs, generate revenue, and enhance customer value and brand differentiation. For example, Stuffstr, which will participate in the May event, helps consumers get the most out of the stuff they buy. The mobile app captures retail purchases, spurs increased engagement with each product, and streamlines repair, resale, donation, sharing or recycling through leading third party marketplaces and service platforms.
Making a Better World through Better Business
Mainstreaming the circular economy on a global level will require a combination of redesigning systems, adopting new business models, leveraging disruptive technologies, and developing innovative partnerships across stakeholders, industries, and geographies. Biomimicry, the internet of things, green polymer science, and 3D printing are just at the frontier of their potential economic value, and show great future promise. By embracing a restorative consumption model that leverages new, disruptive technologies, business can reinforce, rather than erode, the economic, social, and natural capital that are the necessary foundation of a thriving global society.
On May 16 and 17, the U.S. Chamber of Commerce Foundation will host its 6th annual sustainability forum, Better Business, Better World: Mainstreaming the Circular Economy, in partnership with The Ellen MacArthur Foundation and PYXERA Global, at the U.S. Chamber of Commerce, 1615 H Street, NW Washington, DC 20062. Building on the 2015 conference, The Circular Economy: Unleashing New Business Value, and the Chamber Foundation’s case study report, Achieving a Circular Economy, thought leaders and practitioners from business, government, academia, and nonprofit organizations will come together to identify practical approaches for unlocking the value of the circular economy and accelerating scalable solutions across global supply chains.
Feature photo from Pixabay.