Businesses that embrace the circular economy in their supply chains have reduced energy prices, lower their carbon footprint and are less exposed to environmental disruptions, according to a report.
These were the findings of researchers at Eunomia Research and Consulting Ltd, who looked at progress on the circular economy across a range of industries and markets.
The report highlights the practices of several businesses including Mainetti, a manufacturer of garment hangers. The company has diversified over the past decade and has become an industry-leading recycler, with two-thirds of output produced from recycled processes. This has allowed Mainetti to reduce its carbon footprint, its energy related overheads, and its production costs.
Dan Botterill, CEO of Ditto Sustainability, who commissioned the report, said: ‘If businesses are to future-proof their operations and supply chains then they need to move away from today’s disposal-economy, which is so reliant on making things that can never by recycled or reused.’
The report also found that those adopting the circular approach benefit from improved brand loyalty. It argues that if customers are connected to the return of products to their supplier, then they are much more likely to be loyal in future.
Another key trend they found was a focus on what happens to materials and how they are designed and used, due to the enormous public interest in the problems caused by plastics in the marine environment.
They also reported a growing movement to ensure that company reporting takes into account non-financial issues and highlights risks associated with exposure to environmental problems and issues. This parallels a move in the investment community to seek forms of labelling of financial assets as ‘green’.
The report mentions China has taken a leading position in the market for so-called Green Bonds, with the market expected to exceed $1 trillion by the end of the decade.
The report also hails new technologies, such as artificial intelligence (AI), big data, machine learning, 3D printing, biotech and blockchain, as being key enablers for business leaders seeking to adapt their business models.
Read the report here.