The Circular Economy Handbook shows how companies are taking transformative steps toward circularity, creating new opportunities for competitiveness. Read more. https://accntu.re/36AfPX6
2. From Waste to Wealth to The Circular Economy Handbook Wefirstarticulatedthecompetitive advantageofa circulareconomyinWastetoWealth(2015).Thisbookhighlightedtheopportunityforvaluecapturebyadoptingfive newcircularbusiness modelsandtenenablingtechnologies. 2 Worked for and collaborated with clients and partners to deliver leading circular economy strategies around the globe. Found that efforts mostly focused on “quick wins,” small-scale initiatives, or programs can could be retrofittedinto business-as-usual environments. Since 2015 Analyzedmore than 1,500 circular case studies viaTheCircularsprogram, the world’s premier circular economy awards program run in collaborationwith theWorld Economic Forum. Rising political and economic tensions, the pace and scale of technological change, along with the urgency of the climate crisis and resource scarcity are dramatically altering the landscape. We have an unprecedented opportunityto transform these challengesintoopportunities, creating financial and economic value for businessand society.Our research shows the value at stake is $4.5 trillion of upsideby 2030. In seizingthe circular advantage, businessescan spur innovation, create new markets and wisely pivot the global trajectory toward one that is more sustainableand resilient. It is time to turn theory into practice andact now. Now
3. 3 The circular economy handbook is divided into three parts Where are we now? How do we get there? Setting the foundations: Exploring the five circular business models, and the disruptive technologies of the 4th Industrial Revolution Making the pivot: Uncovering the path to circular maturity across the four organizational dimensions of Operations, Products & Services, Culture & Organization, and Ecosystem Where do we need to be? Scaling industry impact: Identifying the biggest challenges and opportunities for value capture across ten major industries
5. The circular business models Thesecanbemappedacross thevaluechain,focusonbothproduction andconsumption, andprovideaprovenframeworkforcircular transformation. 5 Resource recovery Design Manufacturing Logistics Product of use End of use recycling Reverse logistics Sourcing Resource recovery Circular inputs Product use extension Sharing platforms Product as a service Resource recovery: Product use extension: Sharing platforms: Product as a service: Using renewable sources, bio- based materials and man-made materials, that are recycled or highly recyclable, to enable partial or total elimination of waste. Using the embedded materials or energy at the end-of-use of a product and recovering through collection, aggregation and processing. Retaining ownership of products and selling benefits through a service model. Product’s use extended through design considerations, repairs, reconditioning, upgrades and resale for second use. Optimizes utilization rates of products and assets through shared ownership, access and usage. Circular inputs:
6. 6 There are five key enablers we found through analyzing 1500+ case studies which are essential to capturing the full potential of the circular business models. Consumer engagement Re-shape what it means to consume to support evolving customer demands and to drive new behaviors. Create takeback loops by managing the return and recovery of products back into the value chain. Accelerate with 4IR innovations to enable the smart use of resources and create new opportunities. Embrace the power of external engagement and build new networks to unlock circularity at scale. Design Plan for product clarity to enable longer use-cycles and end-of-use recovery. Ecosystems Reverse logistics Disruptive technologies
7. Disruptive 4IR technologies are the single most important enabler accelerating the transition to a circular economy 7 Technologies based on computer, electronics and communication sciences, which make use of the increasing volume of information and connectedness of physical resources. Technologies based on basic properties of materials, energy, forces of nature and their interactions. Technologies based on biological aspects, including, but not limited to: biological systems and living organisms (or derivatives thereof), to make products and processes for specific uses. Digital Physical Biological
8. The most competitive businesses deploy combinations of technologies to achieve the best performance 8 Design Manufacturing Logistics Product of Use End-of-Use Recycling Reverse Logistics Sourcing Digital Physical Biological DataAnalytics Using aeroponics and predictive analytics for agricultural productivity, reducing resource consumption & waste generation while increasing quality output. Aeroponics MachineVision Using AI-enabled robotics and machine vision to fundamentally change the costs of recycling.The accuracy of waste sorting system has improved over time to reach 99%. Robotics
11. Industries can generate financial value and maintain or improve market share through circular opportunities 11 Value at stake by 2030 Value addition through reducing costs, such as through designing leaner products, sourcing circular materials, improving forecasting to reduce unsold product or producing more efficiently. Now Value migration between industry players or from one type of product/service to another, driven by growth in alternative products (e.g. EVs in automotive; renewables in utilities) and refurbished/second-use markets (e.g. fashion, electronics devices). Value addition through new sources of revenue, such as circular business models, brand differentiation and market share or premium pricing in some industries. Value Addition:Cost Value Migration Value Addition: Revenue $ USD Billion $500 $400 $100
12. Each industry is at a different stage 12 $80 bn Oil and gas $5 bn Household $300 bn Electricity $135 bn ME&I $80 bn Devices/ICT $5 bn Personal Mobility $300 bn FMCG $135 bn Fashion in their circular transition with unique waste challenges, but there is potential to realize significant value through large-scale adoption
14. The wise pivot provides a roadmap for the transition to a circular business 14 Transform the existing value chain to remove waste, reduce value erosion and drive up investment capacity. 02 Grow the core business organically with circular offerings embedded to sustain fuel for investments. 03 Invest in disruptive growth opportunities that will take organizations’ circular journeys to the next level. Wise pivot Transformthe core Growthecore Scalethenew 01
15. 15 Organizations must mature across four fundamental dimensions in order to successfully pivot to circularity: Ecosystem Collaborating and partnering with public- and private-sector actors to create an enabling environment for collective transformation. Rethinking the design, lifecycle and end- of-use of a product or service to optimize usage, eliminate waste and close product loops. Embedding circular principles into the fabric of an organization through redefined working practices, policies and procedures. Addressing the value lost through the operations and by-products of business processes across energy, emissions, water and waste. Operations Products & services Culture & organization
16. Investors and policymakers must help remove barriers to support organizations in the global transition by targeting new approaches which overcome linear structures and systems. 16 Investors Reevaluating measurements of financial risk Adapting the “corporate finance toolkit” 1 Mobilizing the required capital, $3.9tn a year in developing countries alone 2 Policymakers Steering regulations towards practices that yield the highest value of waste & scarce materials Incentivizing circular behavior through taxation Investing in infrastructure to recover & recycle materials and integrate back into production Redefining waste definitions to avoid discarding material with unlocked value Refining product quality and safety regulation to reduce limits on product reuse 1 Katherine Garrett-Cox, CEO of Gulf International Bank (UK) 2 UNCTAD, “Promoting investment in the sustainable development goals,” 2018,
17. 17 The circular economy handbook $4.5 trillion Global value at stake by 2030 Disruptive technologies Case studies Business models 5 27 1500 Industries 10