For a responsible business, there are numerous benefits to abandoning any linear ‘make-take-waste’ processes in their operations and reimagining their products as part of a circular value chain that is closer to the regenerative cycle of nature. With no waste, just the indefinite reusing and recycling of resources, the financial savings and reduced environmental impacts are potentially enormous. Such a ‘closed-loop’ process encompasses every stage of a product’s life cycle, from raw material extraction and energy use during manufacture to sales and distribution and after-sale use, looking to eliminate waste and pollution at every stage.
More and more businesses are turning to circular economies like this, not just because they are more sustainable and share the same regenerative characteristics as natural ecosystems, but because they are cost-effective. Waste costs, and costs a lot. It’s just that this cost is usually hidden in accounts or temporarily externalized by ignoring or outsourcing it, where it lurks in the shadows to bounce back on the business. But with circular solutions, a business needs to know where costly waste and pollution is at every stage of a product’s life cycle. Owning every part of the value chain certainly helps, and many of the world’s largest corporations – such as Samsung and Sony – have taken this approach for the financial benefits of economies of scale, as well as to control quality and ensure security of supply. But for the vast majority of businesses, closing the loop requires working with others at different stages of the process – at very local and supranational levels and in very different ways.
For instance, the electric vehicle (EV) industry has many circular economy challenges, but one key part is for the millions of used batteries it will generate once they’ve declined to 80% capacity after 8-10 years of use. Most have potential second-life applications as energy storage in housing or the national grid, for example. But currently, many retailers, local authorities and other key stakeholders in the EV industry don’t know about this and aren’t collaborating with EV manufacturers to provide more options for reuse and recycling of batteries.
To ‘close this loop’ and end silo-thinking in the sector, the UK government could help incentivise or compel the recycling or reuse of EV batteries through legislation – something already being planned as part of the EU’s Circular Economy Action Plan to make all products easier to repair and less wasteful. Billions of public money is also already being invested in a new Battery Industrialisation Centre in Warwickshire, which could form the hub of a large-scale advanced battery ecosystem in the UK.
Such collaboration and cross-sector partnerships with other businesses, organisations and public sector bodies are essential for a circular economy to work. They provide the knowledge, skills and capacity to help responsible businesses ‘close the loop’ between their individual operations and the wider social and environmental systems they depend on and need to protect. These collective activities might be harder for companies to direct and measure than their own in-house operations, but there can be no effective strategy for a business’ sustainability that doesn’t also support the resilience of wider society and the environment.