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Rethinking the circular economy: unlocking new potential for supply chains

Posted by: , Posted on: - Categories: Circular economy, Sustainable ICT

Governments and businesses are sitting on a massive opportunity to lessen their environmental impact and drive up revenue and consumer satisfaction by moving toward a circular economy. Simply put, a circular economy is one that aims to eliminate waste and reuse resources.

Despite the massive opportunity, the Circularity gap report, published in January 2019, shows that the world’s economy is only 9% circular and becoming less so, making it environmentally unsustainable. To reverse this trend and create a cleaner and greener future, organisations and society need to maximise the use of resources already extracted.

Shifting to a circular economy

Defra’s circular economy hierarchy focuses on maximising the utilisation of materials and resources by extending the life of products and recovering value at the end of life through things like salvaging metals. Under the circular economy paradigm, all policies and strategies should achieve the highest possible level of circularity. This is something that has become increasingly possible through innovation.

Digital technologies, such as mobile internet, internet of things (that is, connecting everyday objects to the internet), renewable energy, energy storage and advanced materials have a key role under circular economy. For example, sensors in machines and products can help track and trace products, while predictive analytics and big data can create opportunities for smart monitoring and efficiency.

Defra’s approach to circular economy

In Defra, our value retention process looks at extending product life through reuse, repair, refurbishment or remanufacturing. This is validated by our performance, which is the strongest across government (81% reuse of ICT assets, zero to landfill, 3% donation, as well as 16% recycling for reuse by extracting aluminium (429kg), copper (829kg), ferrous (1,276kg), lead (2kg), glass (915.5kg), oxide plastic (7,286kg) and precious metals (1.2kg) ). These extracted materials are sold to manufacturers for reuse, and this year generated 50% more in revenue compared to last year.

When implementing a circular economy, you would need to think about the steps highlighted below, from production to procurement and end-of-life viewpoint.

  • use recycled materials from products to packaging
  • design products and packaging for reuse, recyclability and disassembly
  • use material with sustainability benefits, like recycled metals
  • choose responsible production (for example, avoid use of chemicals, vet your supply chain for modern slavery and conflict minerals)
  • look for eco labels (such as EPEAT Gold, Energy Star, Energy Efficiency)
  • choose products that minimise energy consumption/CO2 emissions
  • opt for durability, easy maintenance and reparability
  • choose reputable providers for disposal
  • remanufacture
  • reuse and recycle

The Benefits of Circular Economy

A recent report by the United Nations (UN) Environment Programme found that extending product life can reduce your greenhouse gases by between 80% and 99% in your supply chain. It also found that recovering and reusing material such as plastic and aluminium can reduce your emissions by as high as 96% in your supply chain.

When carefully designed, integrated and measured, the circular economy holds promise for consumers, the environment, businesses and governments. It’s the kind of economy that could help generate $4.5 trillion of new economic output, which would go far in supporting the UN’s 2030 Agenda.

We’re also keen to read your examples of best practice so we can all continue to learn from each other. In line with that ethos, we welcome your input and feedback into our work so please do add your comments and questions in the comments section below. If there’s more we can do to help, please let us know.

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