Circular economy 101

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Circular economy 101

The words ‘Circular economy’ have been on the lips of every company from Adidas to IKEA for a good while now. Everyone wants to jump on the circular economy bandwagon by shouting about sustainability targets and buzzing about zero waste solutions. And it’s no wonder: the circular economy is indeed the new black of the business world. If you still don’t know what folks mean by the words ‘circular economy’, this is your crash course to the topic.

The circular economy is often connected to recycling, but there is a lot more to it. The goal of the circular economy is to say goodbye to the “end-of-life” concept, overconsumption and throw-away culture. In the ideal circular economy, products are made from renewable materials, everything is recycled and reused, and no waste is generated.

Here are five business model examples built on the principles of the circular economy (sources: OECD and Dansk Industri):

1. Product-as-a-service

Product-as-a-service, Device-as-a-Service, PC-as-a-Service... The X-as-a-Service trend has entered the market with a bang. Through selling access to a product rather than the product itself, each one can be used by several users during its life. This maximizes the use of the product and saves natural resources as they don’t need to be manufactured as often. The company is also in control of what happens to the product once it can no longer be used for its primary job, and can reuse or recycle it responsibly.

2. Circular supply chains

Circularity should go deeper than just being sustainable on the surface. Circularity in supply chains means that companies use recyclable or renewable materials in their products. This means that the final disposal of the product creates no harmful waste and the extraction of virgin materials is minimized. Circularity in supply chains also means that companies choose their subcontractors based on these circular values.

3. Sharing economy

Sharing is caring. Sharing economy models allow products to be used by multiple users at the same time. As more people can use the same product, new products have to be manufactured less, saving both energy and raw materials.

4. Product life extension

Product life extension models extend the life of a product so that it can be used for as long as possible, meaning that products should be made out of durable quality materials. This reduces both the rate of material extraction, as new products have to be manufactured less, and the rate of waste generation, as products have to be disposed of less often.

5. Resource recovery models

One of the fundamentals of the circular economy is, well, the circularity. We must ensure that products and materials can be used in the production of new products for as long as possible so that no waste is created, and the use of existing materials can be maximised. 

Read also: Reusing smartphones -Sustainable actions

Circular economy vs. technology

We live in a digitalised world. Consumers love technology. Companies need to be hi-tech in order to stay on top of the game. More and more, companies consider access to modern technology as a key to success in the survival of the fittest. But how does circular economy get along with technology? How can companies keep up with the fast-paced world without harming the planet?

Companies can indeed be sustainable while also using cutting-edge technology. The first step is to start leasing modern IT rather than buying it. Leasing models make sure that product life is prolonged and devices are used by multiple people during their lifetime. This way new products have to be manufactured less, saving raw materials and minimising waste. 

The next step is to manage the IT and take care of it properly. Once IT is being taken good care of, it can keep on working efficiently for longer and this way IT needs to be updated less often.

The third step is to take responsibility for the old IT equipment companies have. Old IT can often still be reused, extending the product lifetime and minimising waste.  

For over 20 years, 3 Step IT has worked for a more circular economy. We do this by helping organisations acquire IT devices, manage them efficiently and extending the lifecycle of IT equipment and refurbishing old IT devices for reuse sustainably. You can read more about sustainable IT here >>>

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