Jump-starting your circular economy program
Changing from decades of linear thinking into circular is hard... where to begin and how to follow through? Fortunately, some bright ideas to close loops just emerge from existing know-how.
What to think of a beer brewer that adds yeast to his wastewater to ensure a better fermentation thereby producing more biogas and cleaner residual water? Or a winemaker that is looking for ways to make good use of his vine cuttings by experimenting with solutions such as “biochar”; producing charcoal in the orchard and adding it to the soil to make it more productive…
Regrettably, most of the time, such useful ideas for circularity are not evident. Data from the entire value chain is required since not all is what it seems. For instance, from a lifecycle perspective, it is known that merely closing loops is not always the best idea; it can even have negative consequences. An example of the tire industry: based upon Life Cycle Assessment (LCA) data, evidence suggests that using used tire-scrap for new tires has hardly any impact on the CO2 emitted during the lifecycle of the tire as the rolling resistance has the biggest impact and adding tire-scrap as filler will most likely increase the rolling resistance significantly. In this case, recycling does not make sense.
Finding the right innovation opportunities
To support the change towards circularity, a new approach – the “Opportunity Checker” – has been developed by Between-us and PRé Sustainability. It combines two well-established and proven ways of determining material impact of sustainability issues – a materiality assessment and hotspot analysis.
A materiality assessment provides valuable insights “outside-in” by asking the main stakeholders which issues are most relevant to them and their business. This approach helps organizations to identify the main issues in a company’s ecosystem including all relevant stakeholders.
A hot spot analysis is a quantitative tool based upon LCA-data that helps organizations to understand where the biggest impact is in the business ecosystem, not only where in the value chain but also for which indicators. To do a structural hot spot analysis one has to determine the exact boundaries of the business system: is it gate-to-gate, cradle-to-gate or cradle-to-grave? This ‘inside out’ approach makes the relevant impacts very tangible.
Usually, these tools or approaches are used independently by different parts of the organization. By combining both, the approaches and the teams, an organization can pinpoint what’s most relevant and where to make the biggest difference. By scoring issues and impacts on both scales, a matrix is created illustrating the biggest opportunities for innovation.
From analysis to actual practice: what’s next?
After having created more insight into where to start with circularity in the value chain, let’s move forward and see how to turn the analysis into practice. Here are two steps to help companies become more successful in turning analysis into practice:
Alignment: An innovation event to focus the efforts and address challenges that have been previously identified in key areas such as packaging, raw materials, process optimization, product re-use and waste valuation. During the event, teams need to identify challenging product ideas and redesign processes, products and services.
Follow-through: To avoid the infamous “Hackathon-syndrome” where beautiful one or two-day events suffer from a structural lack of follow-through, the emphasis is needed to make sure great ideas get the legs to make it into practice. The use of a proven and customizable tool such as Strategyzer might help. Developed by the team of Alexander Osterwalder, Strategyzer provides a customizable online learning and sharing environment that companies can apply post-event to continue the process of innovation for the circular economy in their own organization.
Jumpstarting the circular economy program at your company?
Is your company working on integrating sustainability and trying to advance its business model towards the circular economy? Send an e-mail to Eric Mieras if you want to learn how PRé could help you design and execute your challenge.
This article was written by Eric Mieras, Managing Director of PRé Sustainability and Jan van der Kaaij, Managing Partner of Between-us. Last February, they held a Masterclass Circular Economy in Rotterdam. If you want to learn more about the Masterclass and the Innovation Opportunity Matrix, please download the pdf.
Sustainability is all about impact. Positive impact makes you meaningful. But first you have to know where you are making an impact and where you can create shared value. That’s where PRé comes in. Pinpointing your impact is an essential starting point for taking joint action with people and organisations in your ecosystem. The combination of sustainability and social business can make a real change in the way we do business.