Circular economy: setting your direction

Many business models are resource inefficient. Discover how your business can retain value and boost your bottom line by adopting circular economy thinking.

What does the circular economy mean for business?

If you knew there was value flowing out of your business everyday, wouldn’t you want to do something to capture it? Every time your product ends up in landfill, your business buries valuable resources. Circular economy thinking is helping businesses regain some of that value, resulting in benefits to the bottom line and to society.

Across sectors, companies are taking a different approach to how materials are sourced, produced, purchased, used and disposed. Looking across the supply chain and operations in this way can generate innovative new approaches for business.

It opens up opportunities for companies to build competitive advantage, create new profit pools, develop resilience and provide solutions to some of the most important issues facing business today.

Megatrends are driving the move

Consumers don’t need to own products anymore – it’s all about access. And fewer products will be required if you’re able to share, make them last longer or use materials multiple times. Unprecedented transparency means that environmentally conscious and socially responsible has become an expectation, not a nice to have.

Business implications: Customers want products provided to them differently and disruptors may be willing to meet these expectations better or quicker.

Innovative technologies are becoming increasingly affordable and more readily available. Businesses can now monitor their products or individual parts, increasing their knowledge of how products are used (and disposed of). These advances are also allowing for an extension of product lifecycles, keeping materials in use for longer.

Business implications: New technologies open up opportunities for business to explore solutions that weren’t previously viable. Businesses that acknowledge this and look for new ways to apply existing technologies will gain the upper hand, those that don’t may be left behind.

Resource price volatility has created uncertainty for a number of organisations, may of whom have already switched to alternative options. Business is also feeling the pressure from regulatory changes and tighter environmental standards.

Business implications: Leaders can decide to accept the fluctuations in the price of natural resources or look for ways to reduce or remove it. Sourcing materials from existing or obsolete products may be a lucrative alternative.

Transforming your business

Circular business models can have a transformative impact on your organisation. We’ve developed a methodology to help businesses design and implement circular solutions. 

These models aim to:

  • Design out waste: account for and profit from potential new revenue streams
  • Decrease resource dependence and increase system resilience: using renewable energy to duel each ‘cycle’  
  • Help you shift your customers from consumers to users: shifting responsibility or even ownership to producers providing incentives to retain products at value 
  • Differentiate between consumables and durables: consumables are predominately biodegradable and can be returned to the biosphere, durables are design for extended and/or multiple life cycles.

Contact us

Melissa MacEwen

Asia Pacific Sustainability, Circular Economy, Director, PwC New Zealand

Tel: +64 27 726 0176

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