How we can build on 2014 to develop a better circular economy in 2015
Date: 8/01/2015 | Author: Liz Goodwin
2014, in my opinion was a good year for the circular economy, and I expect there will be much more to come for 2015. Yes there have been challenges - we saw that when the EU Commission decided to drop the circular economy package in favour of a new proposal later for this year, and we wait to see what comes of this.
Yet, now is not the time to wait and see what happens, because ultimately, it is businesses that will make the circular economy a reality, and they have to. Currently in the UK, we use three times the resources that the planet can provide. It’s clear this is not sustainable, so the ‘take, make, throw away’ model has to change.
Given price volatility, shortages of supply, diminishing resources and increased pressure to act on sustainable business practices, only a circular business model will make businesses more resilient for the future.
And many businesses do understand this.
Peter Sainsbury from WRAP will be speaking at Secondary Commodity Markets 2015 - the conference for buyers and sellers of recyclable materials - on 3 March 2015 in London. Find out more here
South Korea has some great examples where forward thinking approaches are being applied. One of my colleagues recently returned from there, where he was exploring how LG approached this market. There, you take your broken LG product to a repair centre where you’re issued a ticket, you wait to see a technician, then it’s fixed there on the spot. A doctor’s surgery for electronics!
This is the kind of model that makes perfect sense. The customer gets their item repaired when it suits them. It fuels a thriving jobs market of skilled technicians, customer loyalty is increased, and products and materials are subsequently kept in circulation for longer.
So wouldn’t it be great if that could be implemented here?
Our research supports this working model, and has shown that customers do want products that are built to last and that are sustainable. So extending a products’ durability can increase customer confidence and deliver cost-savings on items that are still within their warranty. Product returns also cost UK businesses an estimated £400 million per year, with many items being found to have no fault. It’s clear to me that there is a lost opportunity here.
I know many who have been astonished, as I was, to learn that 40% of electrical goods are sent to landfill when the customer is finished – yet many of these goods are still fit for repair. It’s disappointing that the potential benefits of repair and re-use are sometimes overlooked, and equally disappointing that so much valuable material such as metals are lost as a result. Unlocking the value in these products can be achieved in a number of ways – repair, re-use and recycle – all potential business markets.
Looking at the broader market, there could also be opportunities to revisit the past. Remember the days of radio rentals? We have become accustomed to the idea of ownership, but we shouldn’t let this stigma around renting prevent us from seeing a good opportunity when it’s presented and in fact, why can’t renting be made attractive? It would allow you to ensure you always have the most up to date version so there are attractions for the user. There are an increasing number of rental options coming onto the market that allow flexibility, and when products unexpectedly fail, it’s not the end user who has to pick up the bill.
As Fiona Disegni, founder of Rentez-Vous, the peer-to-peer fashion rental marketplace said at our conference in November, there’s a growing emphasis on moving towards ‘experiencing’ a product, and drifting away from ownership.
We currently have more than 50 organisations, many household names, signed up to the Electric and Electronic Sustainable Action Plan (esap) to start exploring these possibilities - together. Learning from others in the industry is a key element; going at it alone will only prolong the journey. But if there’s one underlining theme that remains consistent across the markets that are exploring circular business opportunities though, it’s collaboration. It may seem daunting to completely change the way we look at business, but by all coming together, the right strategies can be found.
So 2014 has been a good year, but I want 2015 to be the breakthrough year, when we start considering the circular economy and resource efficiency as the standard.
Time is ticking, resources are diminishing, the population is growing and solutions are needed. So to round up the past year, I invite you to share a joint new year’s resolution with me - to think and act more circular.