Federica Guelfi, Circular Economy Project Manager at DNV, explains the importance of circularity to our environment, and how DNV helps businesses to benefit from implementing a circular business model.
First things first: what is a circular economy?
A circular economy is a new way of approaching traditional consumption patterns in which: waste is minimized; products and services are designed to last or be upcycled over time; overall consumption is reduced; and energy and natural resources are reconsidered and better preserved. It sounds complex, but this new model is instead a shift towards a safer, sustainable and more natural way of living and thriving on our planet.
This circular revolution breaks from the current “take-make-waste" status quo of the linear economy, which is based upon the availability of vast quantities of materials and energy at a low economic price. In the linear model waste is created in each production phase, whereas in the circular model–from extraction to creation to disposal–materials and processes are designed to reuse and recuperate resources, bringing them full circle. Society has come to realize that both humanity and our planet simply cannot sustain this excessive consumption and waste model, because there are no longer sufficient resources to satisfy the ever-increasing global demand. In response, the circular model involves sharing, lending, reusing, repairing, reconditioning and recycling existing materials and products, for as long as possible, extending their life cycle while reducing refuse and waste. Once a product has reached the end of its life, the materials it is made of are repurposed, where possible, thus generating further value.
What does this mean for business?
Fortunately, the conversion to a circular economy is not as daunting a task as it may have seemed decades ago. Among shifts in demand and a growing awareness of the precarious state of affairs, individuals, businesses and institutions alike have already made significant progress in preparing our economy for a circular transition. This systemic transformation requires the active participation of all the players that make up a supply chain: from producers of raw materials to processors, from logistics to the consumer up to separate collection. This is where DNV comes in: as a trust provider that facilitates collaboration and transparency among the many actors involved throughout the supply chain.
Why assurance is important when adopting circular practices – and how it helps build trust for your business
New business models require new methods of guaranteeing trust – from consumers, regulators, investors and more. When it comes to sustainability initiatives, businesses need metrics, compliant practices and efficient communication mechanisms in order to effectively and transparently track their progress. That said, it’s one thing for a company to evaluate their own performance and it’s another for a third party like DNV to perform regular, comprehensive and compliant verifications and implement real-time tracing solutions as a measure of a company’s action. The role of DNV in such a context is as a trusted, time-tested assurance partner and can serve to be the authenticator of a business’s actions on a path towards circularity. Employing a third party not only affords companies the possibility to focus on what they do best, but also ensures that the necessary technology-powered actions are taken to safely and securely track and report their business’s ESG efforts.
Circular value of products: (re)defining the value of products
In the global circular economy, the value of products is intrinsically tied to the circularity of products. This also translates into value for companies. The more resources able to be recovered, the more cost savings companies experience, in addition to improved brand reputation and facilitated regulatory compliance.
Circularity is and will be made possible via technology. Without a secure IT infrastructure, maintaining control over each phase of the supply chain and having real-time information on-hand is simply unthinkable. Thus, circularity is also an instigator of innovation. Translated in economic terms, the traditional business structure is fused with renewed life and the creation of new potential revenue streams arise. In practice, this means that a wave of new services has come into demand, services which can either take the place or live in parallel with conventional products. In other words, the adoption of circular practices can pave the way for innovative, sustainable and cost-efficient business models, creating infinite growth possibilities for businesses.
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