How circularity enablers can be applied in practice by businesses? This is one of the key issues that have been tackled recently by the CIRCULOOS’ partner, INNOMINE. This transformation process of existing (or new) businesses towards more circular practices was identified by Dilmegani (2022) and has been summarized in five main points below.1
- Design an enabler corporate structure
In this process current pain points of the organization have to be determined, while also estimating current and expected tangible-intangible costs of these existing pain points (e.g. plastic and/or carbon tax, excessive raw material expenditure, bad reputation, etc.). The next step is evident, businesses should estimate the current and expected tangible-intangible returns of improving circularity of the company (e.g. tax reduction, good reputation, less expenditures due to efficiency, government subsidies, etc.). After these estimations the leadership can set achievable goals for short and long-term periods subject to tangible-intangible cost and return analysis, infrastructure, human capital, financial capital of the company. Based on these short and long-term goals the strategy can be built, that should aim to help their achievement. Out of the actions that the strategy implies, those with high potential return/effort ratio should be prioritized. Monitoring the execution and output of actions by setting KPIs (firm use x% renewed materials until the end of the year) is the closing step in the design phase.
- Periodical circularity assessment
The second issue is the periodical circularity assessment of the given business. Why is this important? Well, because defining present pain points and tracking changes is meaningful only if business circularity is measured on a regular basis. There are metrics that help firms evaluate their processes, such as resource productivity, percentage of circular water use, percentage of recycled material used, and so on.
- improvement of industrial symbiosis
Then comes the most interesting part, which is the improvement of industrial symbiosis. Instead of going into theoretical concepts, let’s see some real-world examples:
- Waste heat from one manufacturer-energy producer can transfer the greenhouses for reducing energy bills and GHG emissions.
- Waste water from some manufacturers that do not release toxic chemicals can be reused by other manufacturers or farmers after a simple water retreatment.
- Waste car tyres can be turned into materials for civil engineering.
- Organic waste can be turned into biogas which is a substitute for natural gas.
- Design sustainable product
This is obviously too general, but what could help are for example the adoption of a product-service system (PSS), the use of biodegradable raw materials (if possible) and the dematerialization of products. Increasing the recyclability of the products and focusing on producing durable-repairable goods are also good ideas.
- Nudge consumers
Finally, a very important action is to nudge consumers. How is this relevant? It is not hard to see that to close the circularity gap, consumers must assist businesses. The most effective approach to accomplish this is to reward them for being proactive. Beer producers’ deposit schemes are a good example of motivating consumers to be responsible. When customers return their empty bottles to the market, they are given a monetary reward. Beer companies collect empty bottles when they supply the new ones for the supermarket. Thus, the same vehicle brings the raw materials into the company after delivery. The specific examples are endless, but let’s see some more thought-provoking ones: Timberland offers discounts to the consumers who bring their old shoes; Renault offers up to 3000 £ discount in the UK for the customers who bring their old cars; and many electric, electronic, and smartphone companies offer a discount for customers who bring their old furniture/smartphones. (Dilmegani, 2022)
Implementing circular economy enablers across business spheres
The most important takeaway from Dilmegani’s (2022) findings is that enablers of circular economy can be introduced on different levels of the business. These ideas have been used in the interviews with the partners to identify new opportunities for the introduction of circular practices. During these interviews current and to-be processes of the pilots were discussed, functional requirements were defined. Working closely with the partners, INN discovered, finalized, and assessed the user needs, while SUPSI carried out the LCA and circularity challenges assessment.
