Circular economy: benefits for your business

Circular economy is one of the most widely debated topics of our time. It is now evident and has been confirmed by numerous studies, carried out in various fields of scientific research, that this economic model is good for the planet, because it limits the exploitation of natural resources and reduces the inconsiderate proliferation of non-recyclable waste. There is also substantial evidence that an effective circular economy can reduce emissions in various manufacturing industries. What is not always apparent is that companies also have much to gain from the implementation of circular economy models. On the contrary, the changes needed to achieve a circular business model are often seen as a "necessary evil" that may be unavoidable but will certainly increase the company's costs without improving profits. This is another reason why companies often do the bare minimum to comply with legal requirements in terms of sustainability, but do not go any further, for fear of damaging their bottom line. In this post, we will try to explain briefly why a circular economy business model is good not only for the environment, but also for the companies that implement it.    

Raw material sourcing: affordable and accessible resources

All companies operating in the manufacturing sector have to deal with the availability of raw materials. Based on market demand, you determine how much material you need, but when it comes to finite resources, prices can vary depending on availability and it can be difficult to secure the quantity you want. Switching to sustainable materials provides greater continuity and security in the supply chain and often allows materials to be sourced at lower prices than the extraction of new raw materials. Using recycled or renewable materials makes the whole production cycle more sustainable and cost-effective for the company.  

Reducing disposal costs

So far we have considered the point of view of companies that participate in the circular economy by acquiring waste materials to be regenerated. However, this model is also extremely convenient for companies that resell their residual materials. At an industrial level, the safe disposal of waste represents an expense for companies. Circular economy makes it possible to turn this expense into a profit.  The double benefit of saving on disposal and earning money on sales allows companies to improve their margins and thus grow.    

Diversifying supply

Becoming part of a circular economy model is not only about reselling your waste materials or producing with recycled materials, but also about breaking the cycle of planned obsolescence of goods. At the moment, most products are designed to have a relatively short lifespan and to be replaced: this is one of the least sustainable features of our economy. Breaking this cycle and starting to offer maintenance and repair services for your products, extending your customer support, allows you to diversify your offer and the resulting profits, creating jobs and securing revenue from a part of the market that would normally remain out of reach (e.g. consumers who cannot afford to replace a product or who prefer not to for sustainability reasons).

Published on 23-07-2021

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