The non-financial benefits of a circular economy are very clear. By centering business activities around renewable inputs, reuse, and product life extension, as opposed to a linear take-manufacture-disposal model, companies can significantly reduce their negative environmental and social impacts. It can be reduced. But as many chief sustainability officers who have tried to make the case for circularity have proven, implementing circular business models can be complex.
A recent study by PwC Sweden could give CSOs some much-needed leverage. Researchers predicted the emissions and cost impact of three major circular business models over the next 12 years by conducting scenario modeling based on extensive life cycle analysis of electronic products. . The study found that implementing any of these in any of four broad segments of the electronics industry not only reduces carbon emissions, but also significantly reduces operating costs. This equates to an average savings of 12% compared to a linear business model. Of course, not all industries have the same raw material demand and energy use profile as the electronics sector, but the strength of the findings should encourage his CSOs across a wide range of businesses.
As the graph above shows, the Product-as-a-Service (PaaS) model offers the highest potential for cost savings, but changes to the product ownership structure require major system restructuring. It also tends to be the most difficult to implement because of the potential for operation. CSOs need to work closely with CFOs to conduct rigorous cost-benefit analyzes that take into account market conditions, green taxes and incentives, upstream and downstream stakeholders, and, above all, the types of products their companies produce. there is. PaaS is ideal for companies that sell complex or high-value products. (Compare renting a handmade Italian tuxedo to buying a ready-made blazer.)
Many CSOs will want to start gradually, such as moving to renewable industrial raw materials and other circular inputs. This type of move can result in savings and emissions reductions without major operational or strategic changes. Instead of spending energy importing raw materials, you can also source them locally. His CSOs whose companies already have strong decarbonization or net-zero programs in place are likely to be one step ahead and make progress by aligning pilot efforts with the company's existing sustainability strategy. It can be accelerated. Regulatory frameworks such as the EU Corporate Sustainability Reporting Directive and the Carbon Border Adjustment Mechanism should also be studied. Circular practices in place now have the potential to reduce future costs associated with compliance and carbon pricing provisions contained in these regulations.
The benefits of circularity don't end there. Indeed, for many industries, rethinking how they acquire, use and reuse resources is an existential imperative, as resource scarcity and price volatility become increasingly pressing concerns. It is a matter of fact.
