Closing the circle
Here, we take a closer look at doing business in a circular economy, and how some of the world’s top brands are challenging the status quo and realigning their attitudes with more restorative concepts.
Last week we looked at some of the ways businesses were utilising more circular concepts and building their brands via successful circular principles. Here’s a few more ways, which were highlighted in a recent JWT Intelligence report, you can build these restorative ideas into your brand:
Facilitate product repair
In a circular economy, broken goods are repaired and used for as long as possible rather than thoughtlessly tossed out. Some companies are empowering consumers with the information, tools and replacement parts to fix their products, and also designing goods to make the repair process easier.
DIY-minded consumers looking to repair broken products have plenty of help at their disposal thanks to Wikipedia-style communities such as iFixit, a crowdsourced resource that teaches some three million users a month how to mend anything from broken zippers to iPhone screens.
Offering consumer repair kits: Dell and Lenovo are among the consumer electronics companies that make it easy for customers to replace parts on their own. Dell designs certain computer components for easy removal and replacement; these are labeled Customer Self Replaceable and shipped to customers in need, along with instructions. Similarly, Lenovo products feature Customer Replaceable Units.
Find new uses for waste
Many big corporates are embracing circular principles, particularly in relation to their waste, and evaluating their production chains to discover any points at which waste could be turned into a commodity of value.
General Motors: GM sees waste “from a systems perspective,” an approach that cuts costs and increases efficiency while also reducing environmental impact. The automaker has managed to realize $1 billion annually in recycling and reuse revenue from its waste. The company has 110 landfill-free facilities around the world and diverted 2.6 million metric tons of waste from landfills in 2012. Among other things, GM recycles shipping waste into sound- dampening materials for cars and melts down aluminum shavings from transmission casings to create more casings.
Procter & Gamble: With a commitment to send zero manufacturing waste to landfills by 2020, P&G created Worth From Waste, a program it says has generated more than a billion dollars in value for the company since 2009. A Global Asset Recovery Purchases team works with external partners to identify potential uses for waste. In the U.S., scraps from the Pampers plant are used for upholstery filling; in Mexico, waste from a Charmin plant is used to make roof tiles for the local community; and garbage from a Gillette factory in the U.K. is turned into turf for commercial use.
Greencup Coffee: U.K. entrepreneur Jeremy Knight was looking for a way to turn the waste generated by Redcup, his original coffee company, from a cost (incurred in dispatching the waste to a landfill) into a commodity. In 2009 he launched corporate coffee service Greencup: Each bag of beans is delivered with a recycling container into which customers place their grounds; a Greencup Fleet collects this waste, and the company turns it into fertilizer.
Collect and recycle used goods
Some companies are collecting used goods directly from their customers, then giving them to charities or using the raw material to make new goods, which creates a closed-loop production cycle. Apparel provides a good example.
Puma: The Bring Me Back program, in which shoppers deposit apparel from any brand at collection points in Puma shops, launched in Germany two years ago and has expanded to 40% of the retailer’s stores worldwide. Materials from these used items are used to create Puma’s Cradle to Cradle-certified InCycle line of clothing.
H&M: Last year the fast fashion retailer kicked off a global recycling effort in tandem with I:CO that spans all markets in which H&M operates. H&M collected 7.7 million pounds of clothing last year, some of which was used to create a denim collection that went on sale earlier this year. (Twenty percent of the cotton used in these pieces is recycled,a percentage that H&M plans to increase in future collections.) The brand also launched its Conscious Collection, a line made of organic and other sustainable materials, in April.
Recycling via partnerships
Many companies won’t be able to reuse their own waste or used goods, but can give these materials new life thanks to symbiotic partnerships.
Ford and Coca-Cola: Late last year, Ford and Coca-Cola unveiled a prototype Ford Fusion Energi hybrid vehicle that featured cushions, door panel inserts and other components made with a fiber that uses recycled plastic Coke bottles. The collaboration marked the first time Coke applied its PlantBottle Technology beyond PET packaging. The car also used sound- absorbing denim material in the carpet liner and a soybean base in the seat cushions.
Ricoh: This Japanese company, considered a global leader in the circular economy, has been remanufacturing its copy machines since 1994. When leased products are returned, Ricoh inspects and dismantles them so that certain parts can be upgraded. Ricoh then re-enters the machines into the market with the same warranty as a new product. Ricoh is aiming to cut its use of new resources by 25% by 2020 vs. 2007 levels, and by 87.5% by 2050.
Renault: The French automaker has grown its remanufacturing business into a €200 million operation, sparking interest among companies including Jaguar Land Rover and Toyota, which are both experimenting with remanufacturing projects. Renault first opened an engine remanufacturing facility in 1949 and today remanufactures injection pumps, gearboxes, injectors and turbocompressors, all of which are used for vehicle repairs.
Designing for circular use
Some brands are going back to the drawing board, using a new set of criteria to design goods that involve much less waste than traditional products. The ultimate goal is a closed loop in which every aspect of a product’s existence, from creation to disposal, is accounted for.
Google, Project Ara and ZTE, Eco-Mobius: Smartphones can quickly become obsolete, but generally only because a few features are outdated. Google is working on a phone, dubbed Project Ara, made up of modules that customers would swap out when new, improved components are available. The phone is scheduled for release in 2015. ZTE showed its similar Eco-Mobius concept phone at this year’s Consumer Electronics Show.
Fairphone: This Dutch startup makes an Android smartphone that uses only conflict- free minerals and is easily repairable (the company sells spare parts online). A portion of Fairphone’s $450 cost facilitates e-waste recycling and reuse via a partnership with Closing the Loop, a foundation that sponsors recycling programs in Ghana and elsewhere. Fairphone sold its first batch of 25,000 phones in 2013, and a second, bigger batch went on sale in May.
Reframe the customer relationship
For many businesses, the relationship with customers ends as soon as the purchase is made. In a circular system, however, products are often essentially leased, which means that periodic customers of a brand instead become ongoing users.
Are you embracing any of these concepts, or are you thinking about it? What challenges have you faced? We’d love to hear your thoughts.