The circular economy is all about keeping resources in use as long as possible to extract maximum value, minimise waste and optimise efficiency.
Many of you are already on that journey; our research has found that 65% of SMEs are familiar with the concept of the circular economy and 47% have set a target for Net Zero.
For SMEs in supply chains that want to differentiate themselves from the competition and establish a reputation for innovation, the circular economy represents a massive opportunity.
Larger firms are increasingly concerned with Scope 3 emissions reporting, which will surely become mandatory in time; it’s already in place in Europe, for example.
It is also likely that compulsory reporting requirements will ultimately apply to smaller companies too.
A point of difference
In this environment, suppliers that can demonstrate their circular thinking will make themselves more relevant to consumers and open up new opportunities in global markets, particularly where Scope 3 reporting is already legislated.
Though producing products can be repaired and repurposed at the end of their lives may mean that you ultimately sell fewer units, it presents the opportunity to create new revenue streams such as refurbishing and reselling used products.
And it can enable alternatives to traditional ownership like renting.
The circular economy can also enable significant cost savings; reused and recycled materials reduce your reliance on virgin raw materials and mean lower waste disposal costs.
Perhaps more importantly, engaging in the circular economy stimulates innovation and can deliver new and sustainable solutions to longstanding problems.
Fresh thinking
The benefits of being part of the circular economy should now be clear. However, for some this may mean going right back to square one and fundamentally redesigning your products.
There are some basic principles that should inform your thinking, which must consider the entire lifecycle of a product:
Birth: This starts by incorporating sustainable, recycled or reused materials in the manufacturing process.
Life: Products should be as durable as possible to maximise their lifespan, as well as enabling repairs and upgrades.
Rebirth: The product must be able to be recycled, refurbished or reused when it reaches the end of its life.
If you aren’t sure where to start, Lloyds Bank’s partner the Manufacturing Technology Centre employs a team of sustainability experts who can offer support. After an initial virtual assessment, they can visit your premises to carry out a free line walk, reviewing how you work and identifying opportunities to take a more sustainable approach.
Because circularity is more than just another buzzword; it represents a new model for the global economy that works for the benefit of the planet and its people.
For more information on the MTC’s Sustainability Line Walk, visit lloydsbank.com/mtc/sustainability
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