Why you should consider embracing the circular economy!

circular economy

The first standard for the circular economy - BS 8001:2017 - has recently been published and was created with a broad support of key actors in the domain. We went through the document and will provide you with the major insights it has to offer. Furthermore, we will provide examples from industry and link to our experiences, to bring the new standard as close to the activities of manufacturing companies as possible.

The new standard is built up in four major sections. The first section describes in general the need for a transition towards the circular economy and describes the benefits for organisations that apply the circular business practices. This article will provide some insights from this section.

The guiding principles of the circular economy can be found in the second section which we will illustrate in a next article. The last two sections describe the framework and a set of supporting guidelines that should allow organisations to transform their business methods to become more circular. 

It is clear that this standard is not intended to be read from cover to cover, rather was it meant to be used either as a guide or as a source of inspiration. Companies at any stage of their journey towards their circular business future can find useful structures and guidance in this standard.

We will give you in this first part an introduction to the opening sections of the BS 8001:2017 standard.  

This article is the first in a series of publications introducing this circular economy standard.
  1. Why you should consider embracing the circular economy!
  2. Which principles of the circular economy deliver value?
  3. How to get your transition started?

Why you should consider embracing the circular economy

The reasoning is essentially simple. We live on a finite planet and are striving for a growing economy. This is only possible if there is a decoupling of the economic growth from our resource use. The availability of resources in the future depends on our use patterns and volumes. A dramatic change in this use pattern is needed to bring the current consumption back within the planetary boundaries. The circular economy can offer significant contributions to achieve this transition.

From a company’s perspective the circular economy refers to a systemic approach impacting design of products and manufacturing processes, products and services and the business models by managing the resources more effectively. This results in making the flow of materials more circular and ultimately eliminating waste.  

Drivers and stepping stones

We appreciate that the standard mentions the relation between the circular economy and other schools of thought and approaches aiming for the same sustainable goals. It highlights Blue economy, Performance economy, Biomimicry, Natural capitalism, Industrial symbiosis, Cradle to Cradle and Regenerative design as valuable lines of thought to embrace the circular economy. Even so the company’s strategies focusing on resource efficiency, zero waste, bio-economy or lean thinking can be stepping stones in this process. It encourages companies to build on their proven practices to embrace the circular economy.

The macrolevel benefits are well known and recognised as important. Who would be against a better world ? The lack of leverage of those macrolevel benefits on the short term results in small and slow changes to our business practices.

The microlevel benefits are more likely to be highlighted and identified as drivers for change or trigger to action. The BS 8001 standard mentions four major potential benefits:

  • Firstly, it is an opportunity to reduce the net cost of producing, obtaining and using a product or service. As an example disassembling and repurposing through remanufacturing might provide value at lower cost than new product manufacturing.

 (Source: Remanufacturing Roadmap Zuid Nederland – Mare Advies) 

From our experience in the manufacturing industry we need to add that additional value from by-products and side streams from the current production processes is rarely the main driver for value capture.  

  • Consequently, new sources and ideas for innovation and design might lead to new revenue. New types of services, valorising side streams or by-products or reaching new markets with pre-used products are some examples. Associated risks such as market cannibalisation are mentioned in the document, which adds to building a nuanced picture. Frontrunners such as Philips emphasize the driving force of the circular economy for product and service innovations. (see also previous blogs)
  • The improved customer relationships inherent to the Circular economy principles make additional services come within reach. Being closer to the customer provides the opportunity for reverse logistics, data acquisition, brand loyalty, etc.: all useful when new innovative services are to be explored. As Barco explains in an interview with Agoria, it becomes clear that through this improved customer relation additional value for both customer and manufacturing company can be generated by, for instance, providing energy efficiency and performance upgrades to the installed products.
  • Finally, improved resilience for organisations can be beneficial. Products containing critical materials or other price volatile primary commodities that can be substituted by regenerates, bio-based materials,… might improve the companies' resilience. In practice, this is often only a long-term effect and as such not a key driver in the early stages of a company's transition trajectory.  

Conclusion

The aim of the BS 8001 document is creating an understanding of what value the circular economy can bring directly and indirectly. Furthermore, it highlights stepping stones to put the circular economy business concept into practice by describing the interlinkages between numerous good practices and management principles already present in a broad range of companies. The value to express those relations explicitly is significant. Companies that have already embraced change and are working towards more sustainable and resilient business can identify where their approach needs finetuning or change. The document encourages them to take action and to define additional targets to transform the current practices without losing the performance of the good practices in place. Last but not least, it provides a common language enabling clear communication within the companies and with partnering organisations.

Our services

Sirris and Agoria assist and support companies on their path to a circular economy. Our initiative identifies small structural steps towards the desired future, while monitoring and strengthening the involvement of employees and other stakeholders. This approach allows companies to discover, step by step, which added value can be achieved and results in concrete actions to cash in on that added value. Content and speed are adjusted to the organisation of the company.

Our business-oriented approach consists of an exploratory meeting, awareness-raising, advice and assistance, while investigating which opportunities and concrete solutions are available for your company.

In addition, there is also a collective approach through the Circular Economy Connect learning network, which offers opportunities for networking and peer-to-peer learning. Within this network you will get in touch with leading guest speakers, have the opportunity to visit other inspiring companies, exchange experiences with other companies, reach solutions for shared challenges together and attend interactive workshops.

This article is published within the framework of the projectEco-compliance als competitief wapen’, executed by Sirris and Agoria, with the support of VLAIO.

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(Figure above @ Sirris, based on BS8001)