The circular economy: a 4.5 trillion dollar opportunity?
The circular economy has become one of the most used terms in the business world. It refers to business practices that rely on recycling, reducing waste and creating sustainable jobs. A study cited by the World Economic Forum indicates that the circular economy represents a $4.5 trillion opportunity by 2030.
The International Labor Office estimates that the transition to a circular economy could create six million jobs worldwide as companies work to replace traditional ways of making money through procurement, manufacturing, use and disposal. And who says circularity also says profitability. According to consultancy Accenture, automakers that use a circular approach to their production methods can benefit from a 150% increase in revenue.
But does the reality justify the buzz around this concept? In this edition of The Exchange (watch in the video player above), we talk to players who believe the circular economy is a way to create sustainable growth and generate profits, including Nestlé, the largest food company and drink in the world, to learn. how it is driving global food and beverage innovation. In France, we visited the first fully circular car factory in Europe according to Renault, the group that developed it. We also speak with the Design Program Manager of the Ellen MacArthur Foundation, a charity working to accelerate the transition to a circular economy.
Nestlé: the quest for environmentally friendly packaging
One of the famous companies committed to sustainability is Nestlé. The maker of Nespresso, San Pellegrino and KitKat. This 150-year-old group has more than 250,000 employees, hundreds of factories and sells products in 186 countries. But how can he ensure that his activities carried out on such a large scale will not harm the environment?
One of Nestlé’s key circularity managers, Jodie Roussell, highlights the progress her group has made. “Our goal is that none of our packaging becomes waste or ends up in a landfill,” he says. “In terms of reduction, we are looking to limit our use of virgin plastic and we are on track to reduce it by a third by 2025,” he refers.
Factor encouraging this development according to Jodie Roussell: current advances in the level of regulation in the European Union. “There are some very good steps being taken now in the EU where a harmonization exercise has started on labeling and bins, as well as setting common objectives,” he believes “These examples of legislation give us hope that we can simplify consumer participation and business compliance,” he says.
Renault wants to have a head start on circularity
Another company that is working to make circularity its main commercial strategy: the French giant Renault. Eleven million cars reach the end of their life every year in Europe and the car industry dumps huge amounts of waste, chemicals and toxic metals into landfills every year. However, 85% of the materials used to make cars can be recycled.
At its factory called the Refactory in the suburbs of Paris, Renault wants to reverse the trend. The group presents its facilities as the first European circular economy site dedicated to mobility. Renault launched the Refactory project two years ago and hopes it will generate 200 million euros in revenue by 2025.
Part of the project is a new factory capable of refurbishing 150 old cars a day. From mechanics to painting, in less than a week, the cars were facelifted. They are photographed and resold.
In another building, 200 technicians reworked more than 1600 different car parts. “We not only produce engines and gearboxes that meet the same quality requirements as their new counterparts using remanufactured materials from old engines,” said François Evrard, director of the Refactory project within the Renault group. “But at the same time,” He added, “this allows us, by reducing costs in the value chain, to provide our customers with a 30% cheaper alternative to a new model.”
To unite an ecosystem around its brand, the group launched a start-up hub dedicated to the circular economy. “The idea of Renault and start-ups is to combine their skills,” explained Nathalie Rey, director of the Refactory hub. “Renault brings its knowledge of the industry and the circular economy and the start-ups bring their agility and the way they want to change,” he describes.
Ellen MacArthur Foundation: think circular from the design stage
One of the main ways to effectively apply circularity is to do it through design.
The Ellen MacArthur Foundation is a London-based charity dedicated to promoting and developing the circular economy.
Joe Iles is responsible for the Design program within this foundation. He said that circularity should be at the forefront of every project. “Everything around us is the result of a design process: from what we eat, to our clothes, to the buildings in which we live and work, to the systems that provide all these things like food , energy, mobility solutions or medicines,” Joe Iles recalled. “In this design phase, whether we realize it or not, we make decisions about how these things work,” he insisted.
“It’s not just about treating the symptoms of a failing economy or systems, but about deliberately designing products, services and systems that are circular and regenerative,” he assured before concluding: “When working on designing something, the first question to ask should be in my opinion: does this new product or service fit into a circular economy?”