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With a proliferation of standards, metrics and tools to help firms join the zero-waste revolution, we look at those that are doing most to close the loop
The world's first standard for the circular economy will be launched next month by the British Standards Institution, a development that reflects the model’s growing relevance for business. BS8001 is intended to help companies realise how they can create direct or indirect value by applying circular principles to their processes, products and services.
Demand is growing for metrics and tools that can assess, track and measure corporate progress towards the circular economy. Besides the new BS8001 standard, the Ellen Macarthur Foundation’s Circularity Indicators Project offers a methodology and web-based tool, designed to help with internal reporting, supply chain risk assessment and procurement decision-making. Other online toolkits are also starting to emerge, from organisations like Netherlands’ Circle Economy and C2C Bizz, Canada’s National Zero Waste Council and University of Cambridge’s Institute for Manufacturing.
But to what extent is “circular economy” just the latest CSR buzzword? How much real progress are companies making on this agenda? In this briefing we take a detailed look at some of the companies that are establishing best practice in closing the loop, reducing waste and making their production processes more efficient. These include Smurfit Kappa, Timberland, and carmakers Toyota and Jaguar. We also look at how circular economy principles are being democratised by cities as they bring businesses together to collaborate on zero-waste.
Circular to the core
The most progressive companies are those that are looking to embed circular thinking into their core business. In 2015 H&M, one of 12 companies working closely with the Ellen Macarthur Foundation as a global partner, declared its intention to be “100% circular” although it has not revealed a timeframe for this. One of the first targets the Swedish clothing retailer set was to increase the number of items made with at least 20% recycled fabric from collected garments by more than 300% in 2015, compared with 2014. It achieved this, with 1.3 million garments now made from 20% recycled cotton.
Similarly, IKEA Group has a vision for all of its products to have circular capabilities. While not wishing to publicly disclose any timeframe, Ethical Corporation understands that the company has a target date in mind. In its latest sustainability report, the retailer states that in 2017 it will “define new targets that measure the impact of quality on customer happiness and sustainability (especially waste reduction)”.
Part of this will involve making furniture easier to assemble and disassemble, so that customers can take such items with them when they move, prolonging product life. An example of this is the wedge dowel, which replaces traditional metal fittings. The dowels come pre-installed in furniture panels and click into place, requiring fewer tools and shorter assembly time.
The retailer has also been running pilots across its European stores, helping customers to prolong the life of IKEA products through service options such as repair, share, bring back, and resell. The company sent out 1.3 million repair kits to customers during the fiscal year 2016 – 155,000 more than in the previous year.
Nike, another Ellen Macarthur Foundation global partner, is looking to integrate the circular economy into its business strategy by setting a vision for a low-carbon, closed-loop future. One of the more circular goals is that by the end of 2020, all excess materials produced in the manufacturing of Nike shoes will become inputs for other processes. The company also intends to build on its Nike Grind initiative, where materials and products perform beyond a single use and are repurposed for multiple lifecycles. Around 71% of Nike footwear and sportswear products contain a range of Nike Grind, recycled and regenerated materials from waste streams such as rubber, foam and textile scrap.
Home improvement retail giant Kingfisher, a founder partner of Ellen Macarthur, is working to develop products with closed loop credentials under its Sustainable Home Product Guidelines, with 748 such products so far, according to its 2015-16 sustainability report.
Kingfisher is also looking to build 10 circular value chains. As part of this work, it has been working with Bioregional, which helped develop B&Q’s One Planet Home sustainability programme, to determine what a circular value chain is by reviewing available metrics and developing criteria to identify and assess these value chains.
Bioregional says it has developed a three-tiered assessment methodology for Kingfisher that will “allow the analysis of both proposed and existing value chains” together with recommendations of how the retailer can enhance circularity. These include high-level design principles, a product checklist and detailed requirements for developing circular products and services.
Marks & Spencer in 2014 announced it would complete a detailed review to identify circular economy opportunities across all areas of its business (food, construction, operations, and clothing) by 2016 as part of its Plan A drive. A spokesperson for the retailer confirmed to Ethical Corporation that this review was now complete, but that there weren’t any further time-bound commitments at this stage.
From this initial assessment, M&S has highlighted 10 areas where there is potential to create value around the control of material inputs and outputs. These include improving the durability of clothing and non-food products, exploring new financial models that promote greater reuse of clothing, incorporating a greater proportion of recycled fibres in new fabrics, optimising redistribution levels of food waste through use as animal feed or via energy recovery, and improving the overall carbon efficiency of packaging.
M&S has also undertaken internal engagement work on the circular economy to help build a common understanding of what the concept means for different departments and job functions across the business. “As we are a business that operates across a number of different product area, industries and supply chains, we need to tailor our circular economy approach to suit each area,” says Munish Datta, head of Plan A at M&S. “We are working with a number of organisations to develop these approaches.”
Asked if M&S is looking to set specific circular targets in the future, Datta replies: “Resource efficiency or circularity targets will form an important part of our sustainability strategy going forward”. He adds: “Ultimately we aspire to be a business that wastes nothing and circular economy thinking is an important consideration to achieve this.”
But he adds that M&S cannot do it alone. “It’s key that we recognise that we are part of a much bigger economy that needs to go circular and a collaborative approach is key.”
Collaboration is also a prime consideration for Danish brewer Carlsberg Group, which has established its Carlsberg Circular Community. The company set targets over 2015-17 to achieve three cradle-to-cradle (C2C) product certifications for different types of packaging, and to have 17 partners and suppliers in the CCC working actively to create more circular packaging solutions.
In 2015 it achieved C2C bronze certification for the Rexam (now Ball Corporation) beverage can, which is used for the Somersby and Carlsberg brands. This was followed in 2016 by C2C bronze certification for the 25cl Kronenbourg 1664 bottle. “This is especially significant since it is the first time global validation has been given to a glass beverage pack,” states the company’s latest sustainability report. The report adds that it anticipates a further certification this year, which would see it achieve its initial target, and hopes “to obtain further certifications in the coming years”.
However total membership of this community sits at nine, lower than the goal of 12 members that was set for 2016, and far from the 17 set for this year. Carlsberg now plans to expand the remit of CCC to include members “who share our ambition to innovate along the value chain. In particular, we will focus on addressing carbon, water and responsible drinking challenges,” the report states.
‘Only a partial solution’
Leading commentators, however, raise questions over just how accurately businesses can measure their progress towards the circular economy. Sandy Rodger, a consultant who has worked with the Ellen MacArthur Foundation, says that for businesses, the circular economy is about innovation – with an ultimate view to selling new products and services – and that this should be reflected in the targets being applied, and the metrics being used.
“The key thing is they are business targets, not sustainability targets,” he says. “The key which unlocks the circular economy is creating demand, as opposed to creating supply. It is more important that buyers are pulling recycled or reused stuff, rather than that sellers are pushing it.”
Rodger feels that dedicated circular economy metrics are at best a partial solution, and companies might do better to use existing innovation, sales and profit metrics with some kind of circular filter. “The metrics I would concentrate on for big companies are the quantities of recycled or reused inputs they are specifying and buying. That’s much more valuable than lots of people churning out things they claim are recyclable.”
James Greyson, a systems thinker who runs his own thinktank BlindSpot, says that while circular targets are “certainly helpful” for companies, they may also encourage silo thinking.
“The goal of greater circularity can look very tangible and business-friendly. Perhaps companies should have targets not just for what seems manageable within their business, but also for inspiring the necessary scale of change everywhere else. How can we make circular economy happen for real, with all products and all resource flows?”
This is part of our circular economy briefing. See also: