Could a circular economy transform business?

In order to make real-world impacts, many organizations are evaluating the economics of their business practices. With this rise in awareness comes a commitment to sustainability, and an evolution to a “circular” mindset. Products are “made to be made again,” and these sustainability practices can strengthen an organization’s overall health.

But what business practices contribute to a circular economy, and thereby environmental sustainability? We talked with Catherine Sheehy, Advisory lead for UL’s Environment & Sustainability division, for some insights.

Q: How would you explain circularity?

A: At its most basic level, circularity presents an approach to economic activity based on three principles:

1. Eliminate waste and pollution from product design
2. Extend the longevity of material use and/or reuse products and materials
3. Regenerate natural resources and systems used in the process

Q: What are some of the benefits of operating with a circular perspective?

A: A report by the World Business Council for Sustainable Development and the Boston Consulting Group estimated that reducing worldwide resource use by only 1% could save approximately 840 million tons of metals, fossil fuels, minerals and biomass each year, as well as 39.2 trillion liters of water.

In terms of financial benefits, estimates say the circular economy could generate $4.5 trillion of GDP growth worldwide by 2030.

Q: What are some of the challenges in adopting more sustainable practices?

A: Access to recycling options is becoming more and more limited, due to China’s limits on imports, the complexity behind effective recycling operations, as well as the increased use of materials that are more difficult to recycle.

Another fundamental challenge is the continuing lack of alignment with the overall strategy of a business itself. Far too many organizations still view sustainability programs as ancillary to their primary focus on key financial metrics and don’t consider it during product design. A change of any magnitude requires an investment of money, time and resources, which further impedes implementation.

Q: How does UL support the circular economy?

A: UL has introduced UL 3600, Outline of Investigation for Measuring and Reporting Circular Economy Aspects of Products, Sites and Organizations. Assessments evaluate specific aspects of material sustainability, including the use of recycled content, bio-based content, recyclability, waste minimization and zero waste to landfill. Validating the results of circular efforts is essential in assessing the effectiveness and limitations of those programs while also identifying areas requiring further attention.

To learn more about the circular economy and UL’s role in those efforts, read our white paper: “Bringing transparency to the circular economy.”