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Squaring the circular economy with business growth: Addressing challenges and opportunities.

So you’ve seen the term ‘circular economy’ around everywhere – but what does it mean, and how does it impact business growth?

A truly circular product would never produce waste or impact the environment negatively (in fact, it would be beneficial). Materials and energy are input at the start of the creation process, and then processed, used, and reprocessed to make a new product. This is a simplified view. The Ellen Macarthur Foundation highlights circular products as ‘retaining the highest value possible’ – so just down-cycling to eventually reach a waste product is not truly circular.

The ‘old’ (and arguably current) model of our economy is ‘take-make-waste’ – selling new products is what drives growth, so moving to a circular model will require a considerable eco-innovation and collaboration from many stakeholders, whether they are governments, consumers, or businesses (including those competing in the same sector, a novel and seemingly high-risk strategy).

Traditionally, businesses are not responsible for their products once the customer has purchased them. This is changing with the introduction of legislation such as the Plastic Packaging Tax, Extended Producer Responsibility schemes so product lifecycle analysis will be key to future eco-innovation developments.

Take an item of clothing, for example a pair of jeans. The traditional process would look something like this:

Design - Manufacture (usually by a 3rd party) - Retail to consumer - Use (for months or years) - Disposal (through resale/donation or landfill waste)

Perhaps the ‘circular’ solution seems obvious here – resale or donations give the product a new, valuable life. However, this requires the jeans to be in good condition and valuable enough (in the eyes of other consumers) to sell. Even when clothing does avoid immediate landfill, if is not saleable it could go to lower economic status countries to be resold or be landfilled/incinerated in the destination country (which may have less stringent waste management laws) – ‘out-of-sight-out of mind’ is clearly not a worthwhile circular business model.

To make the jeans ‘circular’ what do we need to do?

Retaining value

The way to retain the most value is probably to resell them as jeans to another user – this means they need to be in good condition after their initial wear and be desirable to others.

If not, perhaps we could deconstruct the jeans into their components and re-use each part – that would be fabric, buttons and zips. This requires time and energy deconstructing the jeans, sorting items to be re-used and of course, finding a new end use or customer for the components.

To be used at commercial scale, the buttons and zips would need to be grouped together so than new garments can be produced consistently – how frustrating is it when you order something online but it doesn’t match the images on the website?

Material reuse

The fabric is even trickier – it may be worn in places, so not suitable for a new garment, it is likely to have dyes and finishing chemicals in which are difficult or energy intensive to remove, and it made be made of mixed fibres. Jeans are normally mostly cotton, but many now have a blend of elastane (Lycra) to improve fit and longevity of shape. If separating these materials out requires more energy and chemicals than producing a new pair of jeans – what would be the point?

Waste and biodegradability

The last place we want to product to end up is landfill, but if that’s the only option – maybe it’s ok for the cotton, which is a natural plant fibre after all? At least if we produce compost, it can be used to grow new plants – food or even fibres like cotton. It is likely the cotton would biodegrade in a matter of months – however what about those dyes and chemicals? What if they contaminate the environment – the purpose of circularity is reduced damage to the natural world. We still have the problem of the elastane – this is usually PU and not biodegradable.

This list is not exhaustive, but it gives a taster of the challenges faced by businesses to move to a circular economy.

Perhaps it’s not time to pack up and go home quite yet – maybe you have spotted some of the common themes above:

Designing for circularity

Many problems can be mitigated by considered design, i.e. if we control the inputs better, it makes the outputs easier to manage. If we make the jeans durable (and desirable) they will last a long time, in the first purchasers’ wardrobe, or will be highly valuable to sell on.  Using ‘mono-materials’ – or materials that can be easily separated (or composted as a last resort) is another critical aspect of the design. There are even more opportunities in the design phase – for example, making products repairable, and providing this as a service. 

Managing customer behaviour

Traditional models of growth in fashion have encourage the development of fast (and now ultra-fast) fashion – considering how we sell to customers is key to move attitudes from the drive for ‘new-ness’ to investing in low environmental impact products. This may require a new value proposition to be developed for your product or service, to focus on how the eco-benefits translate to customer needs.

Product lifecycle analysis

This brings us to responsibility for the full product lifecycle – a widely used example is ‘take-back schemes’ where the business accepts products back once the customer has used them, and recycles them. Customer awareness of climate impact is greater than ever – but for the circular model to work, the products need to be recyclable in the first place, and there needs to be enough scale to create a genuinely useful waste stream. This might be difficult for all the but the biggest businesses to make work, so collaboration may be key here.

As we can see, there are challenges – but there are also opportunities. From economic ones like using innovative materials which make your products and business stand out, as well as high quality, high value products which could bring you well-invested life-long customers, to the environmental and social benefits of reduced emissions and emissions.

There is a long way to go to reach the bold goal of a truly circular economy – and the Eco Innovation team can help. From eco-design to business modelling, we provide a structured process which is bespoke to each business, and a wide-spanning network of Growth Hub colleagues and partners to help your business create the circular economy of the future.

Please enquire now to discuss how we can support your eco-innovation.

Elizabeth Snape

Elizabeth Snape, Eco Innovation Advisor

Elizabeth is an Eco Innovation Advisor at the GC Business Growth Hub, joining in 2022. She supports SMEs in Greater Manchester to commercialise eco-innovation – bringing new products, services and processes to market.

Elizabeth has a background in materials and manufacturing, holding a BSc in Textile Science & Technology from the University of Manchester and spending 10 years in technical textiles manufacturing environments. Focussing on product development and innovation strategy, her passion is to make materials and manufacturing more sustainable, and to strengthen UK industry. Having developed and commercialised innovative sustainable products, processes and developed global supply chains, she brings insights from this on-the-ground experience to the Eco Innovation service at the GC Business Growth Hub.  Elizabeth also has experience in sourcing and supplier development, improving the value of the supply chain as well as the eco-credentials. She enjoys bringing her technical expertise and passion for strategy and sustainability to help businesses in her home region of Greater Manchester.

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