The Circular Economy: From Concept to Business Reality

October 31, 2018
wharton
Senior Associate Director of Business Development, Initiative for Global Environmental Leadership (IGEL), The Wharton School, University of Pennsylvania

Using every possible resource is what circular economy means to me and to many of the corporate partners I’ve collaborated with. The amount of waste that goes into landfills is minimized when products are designed to use recycled materials and with the use of less packaging. Companies are positioned to save millions of dollars in the next decade by practicing circular economy principles.

Communication is in the fabric of efficient circular economy distributions. Effective communication in the supply chain and to the consumer is crucial for a successful sustainability plan that optimizes resources and reduces greenhouse gas emissions. Consumers are well informed when it comes to price but often not when it comes to the processing and the content of a product. Wharton IGEL’s sustainability partners do a great job educating their customers on the content and the process of producing a service or a product that saves energy, reduces waste, and also saves money. A key way of messaging the circular economy comes from translating the product design to the consumer and communicating how each design component preserves resources and offers the best outcome for an equitable world.

Wharton IGEL’s Corporate Partners have published sustainability reports and carbon disclosure projects that are available to the public. These are great ways to message circular economy principles based on actual accomplishments and not on speculation. Companies have a unique opportunity to impact the use of valuable resources by taking the lead in setting sustainability goals. These strategies have reaped many rewards on the balance sheet, as well as a true demonstration of ethical corporate social/environmental responsibility.

Many of IGEL’s partners focus on the 2025 Sustainability Goals to communicate best strategic practices. For example, Veolia uses waste as a key commodity. It has made great strides in retrieving and reusing plastics in its bioplastics markets, in advanced technologies that convert wastewater into drinking water, in new concepts that turn biogas into electricity, and in an extensive furniture recycling platform throughout Europe.

Design is at the cornerstone of Dow’s circular economy practices. These tactics have added greatly to the realization of Dow’s manufacturing goals, which could generate about 1 trillion dollars a year by 2025. The goals focus also on the reuse of waste that creates new designs in packaging that optimizes the life cycle of a product. The redirecting of sustainable packaging materials has resulted in a large reduction in cost and has increased better communications in messaging the circular economy movement.

As noted by Nate Morris, founder and CEO of Rubicon Global, “The circular economy laid the foundation for building a company that is reinventing the waste industry—our business model is circular by design.” Rubicon educates its employees and clients about the value of the waste supply chain and the value of recovery, recycling, and reuse.

For more insights about business sustainability leadership and the circular economy, note that Wharton IGEL has published several research reports in Knowledge@Wharton that feature these strategic sustainability opportunities.