We are seeing a confluence of forces directing humankind to consider ecosystems, sustainability, carbon reduction, climate change, soil degradation, water scarcity, and deforestation. But perhaps one of the biggest reasons that a circular economy is gaining momentum is because it is just good business.
In a circular economy, we regenerate products and materials and design out waste and pollution. Today, many companies are searching for — and finding — profitable ways to move from a throwaway economy to a circular economy.
A convergence of factors has led us to this very moment. For one, corporate leaders including Amazon, BP, Shell, Dell, Trane, Google, Cargill, and others feel a responsibility and pressure from customers, employees, and investors to change their wasteful ways.
The take-make-waste model was successful for many decades as highly productive manufacturing factories prospered. But now, we’re witnessing a greater push for circularity, which significantly impacts business, economics, and governments.
The Circularity Gap Report for 2021 shows that we need to double global circularity from 8.6 percent to 17 percent to keep our world livable and thriving. And with the right goals, companies will not only reduce waste but will also make money — if done correctly. A restorative and regenerative economy could potentially generate as much as $4.5 trillion by 2030.
How can businesses tap into this? Here are three key strategies for conducting business in a way that’s both profitable and sustainable.
1. Set Objectives
Establishing the right goals is critical to make money while creating a more circular business model. This can help promote clarity in your business, ultimately leading to better results. Ensure you focus on targets that align with your corporate mission while also meeting your customer and employee needs and expectations.
Here are a few examples:
- Amazon is on a path to powering its operations with 100 percent renewable energy by 2025 as part of its goal to reach net-zero carbon by 2040.
- Dell will reduce Scopes 1 and 2 greenhouse gas emissions by 50 percent by 2030 and source 75 percent of electricity from renewable sources across all Dell facilities by 2030 — and 100 percent by 2040.
- Microsoft commits to being carbon negative, water positive, and zero waste, all by 2030.
- By 2030, Google aims to be carbon-free.
These are just a few examples, but the big takeaway is that objectives are specific, measurable, achievable, realistic, and timely. Once the targets are set, create a solid roadmap for your business to meet its goals. Make sure your objectives are intertwined with your company processes and that you have the right systems in place to reach those goals.
2. Learn from Others
One of the best ways we can become more profitable is by learning from others in a similar situation. Many companies — from construction to agriculture — have successfully made a move to a more prosperous and sustainable business model.
Case in point: TK Elevator’s (formerly ThyssenKrupp Elevator) traction elevator systems are equipped with an energy recovery function that allows for energy generated by braking to be put back into the building’s power grid. The company has also proven that refurbishing older elevators can lower its energy consumption by up to 70 percent and extend an elevator’s use phase by an additional 25 years. Talk about value for a business!
3. Leverage Intelligence
For anything to be successful, we need to have people, processes, and technology. Quite simply, we can’t change what we can’t measure. It’s critical to make sure you have the right objectives upfront and ensure you implement the right processes, so your workers have the best chance at being successful. After that’s established, you also need to make sure you have the right technology to make intelligent decisions. This can include the IoT (Internet of Things), AI (artificial intelligence), digital twins, digital transformation — you name it.
Sam George, vice president of IoT Azure, Microsoft, says the first thing he always counsels a customer on is examining what’s really at the core of the business and whether the organization has the ability to know something — faster or in realtime. Even more, how would the organization leverage that data? This is a question to consider as you continue on your circular and sustainability journey.
Technology, along with circularity and sustainability, isn’t a destination. It’s a journey. Set a target, put the processes and technologies in place to meet that target, and then continue to the next objective. We need to continue to move forward, and this is how to do that. The good news is that we can reach for sustainability while also being profitable.