Circular Economy Becoming Critical to Business

Posted by on May 2, 2016 in Strategy

acric2J(3BL Media/Justmeans) – The traditional linear economic model of “take, make, dispose” has stretched the limits of the world’s finite resources. A circular economy, on the other hand, seeks to rebuild capital, including natural, manufactured, financial, and human, and restores and regenerates resources.

The newly released UPS/GreenBiz Circular Economy Research Study says that 86 percent of sustainability executives believe that the circular economy will be important to their business two years from now. This figure is nearly double from two years ago when just 47 percent felt them important.

Respondents to the survey said that the strongest growth in the adoption of the circular economy model will come from the technology sector, particularly electronics such as computers and cell phones, as take-back systems and product re-use are most easily integrated in those models.

Nearly three in five respondents in an online study conducted by UPS and GreenBiz Group state that their organization is implementing circular economy principles in at least one of its product lines or service offerings.

Ed Rogers, UPS senior director of global sustainability, said that the company’s customers are recognizing the environmental and social impact of their products and operations across the entire value chain, from raw materials and design through manufacturing and logistics. They recognize the opportunity to move toward a model that keeps resources in use for as long as possible.

The survey found Interface and Patagonia are two leading companies that were referenced with unaided recall whenrespondents were asked to identify companies that come to mind when thinking about circular economy.

Logistics stand out clearly as a crucial element when it comes to implementing a successful and sustainable circular strategy. As many as 87 percent of the respondents said logistics were “very important,” and 10 percent said they were “somewhat important” to transitioning to a circular economy.

Respondents stated that logistics companies can provide customers unique value through offerings such as pre-paid shipping labels, smart packaging and convenient take-back mechanisms. Additionally, costs can be reduced through the use of backhauling and load and route optimization. According to Rogers, UPS employs its expertise in logistics to help facilitate a cost-effective circular economy.

Source: 3BL Media

Image Credit: Flickr via Kevin Dooley

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