Companies must think circularly instead of linearly
20 September 2023 16:33
Many companies have already embraced the concept of the circular economy. However, as a recent study by Bain & Company shows, despite their commitments, many companies have not yet integrated the circular economy into their business.
For this study, 400 large companies were asked about their strategies, according to a report by the Boston-based consulting firm. The report states that 55 per cent said they were committed to the circular economy but more than half limited themselves to recycling or waste management. This, says Bain & Company, is laudable, but will not trigger a circular transformation.
Part of the problem, they say, is that senior executives still operate with a linear mindset. "Leaders need to change their mindset to replace linear business models by decoupling growth from resource consumption," Jenny Davis-Peccoud, partner and head of the sustainability and responsibility programme, is quoted as saying. "To accelerate progress, they need to embrace new technologies and transform their value chains."
One possible strategy, she said, is to limit the use of virgin materials. Apple, for example, has stepped up its efforts to collect precious metals from old devices. A second measure could be to extend the life of manufactured products. Michelin, for example, has introduced a new process for retreading tires.
And thirdly, product capacities should be better utilized. To this end, Dell APEX offers customized hardware, software, and cloud storage packages on a subscription basis, for which the intended uses, distribution, and business models are coordinated in the sense of the circular economy. A recent study by market research firm IDC reportedly found that APEX customers' operating costs had fallen by up to 39 per cent in three years. ce/jd