Why should your company give a sh*t about circular economy?
Products don’t have to be 100% shiny and new for customers to love them.
It’s not a secret that circular economy is hot right now. Sustainability trends come and go, but circular economy makes sense for both your company and the planet. Here are a few reasons why you should care:
If you sell physical goods, chances are your customers have gotten more and more concerned about what they’re made of. Having a clear — and more importantly, not greenwashed — sustainability value proposition mean that your customers can feel good about buying from you. The circular economy framework offers tangible ways to be sustainable, from implementing a rental program like Rent the Runway (which, as of last year, had an $800 million valuation), selling durable goods like BuyMeOnce, or offering repair services like Patagonia.
Access to new financing tools
New funds are springing up to invest in circular businesses. In 2015, Luxembourg, the European Commission and the European Investment Bank opened €24 billion in financing for ‘higher-risk, yet innovative sustainable business models and plans’, including ones that enable the transition to circular economy. At the national level, the Finnish Ministry of Economic Affairs and Employment has set aside €2 million for discretionary government transfers to fund company circular economy initiatives in 2019.
Preparation for resource scarcity
The Guardian calls it a ‘ticking time bomb’: access to critical resources that make up the products we all rely on everyday. Down the road, companies won’t have a choice but to figure out how to do more with less. Circular economy can keep your materials circulating for longer, mitigating your risk if the well runs dry.
Compliance and accreditation
Customers have gotten wise to greenwashing, so accreditation under a national, supranational or industry framework can be an important way to show your sustainability creds. Circular practices can help you get sustainability certifications. For example, LEED certification gives points for using recycled materials. Not only can this help you, but if your market is B2B, you can also help your commercial customers comply with regulations or receive accreditation.
High-quality products that customers love
Just because products aren’t 100% shiny and new doesn’t mean customers won’t love them. At the end of the day, even though customers care more and more about the impacts of their products, they still want things that look and feel good. One example of a company doing this well is Finland’s Lovia, which makes beautiful designer bags from leather cutting scraps from the furniture industry, food industry and more.
Learn how to get started with one aspect of circular economy in Pure Growth’s guide Expand your circles: Rethinking relationships to create value from waste.