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Recycling // Waste Industry // Circular Economy

3 Ways Circularity Means Profitability For Businesses

Circular solutions have the potential for a profound impact to operational waste and recycling management, and can protect profitability across industries.

Bradford Arick | May 18, 2023


The concept of a circular economy has gained traction as a powerful framework for businesses to address increasingly pressing environmental challenges and promote sustainable operations at all levels. Circularity’s structure aims to minimize waste through efficiency in resource use. Businesses across industries are now pushing innovation through rethinking the linear consumption model, instead designing products to last longer, optimizing resource recovery and recycling, and creating actionable plans to reduce waste. Implementing circular solutions provides a transformative approach with the potential for a profound impact to operational waste and recycling management.

Here are 3 ways in which businesses can implement circularity and promote improvements to waste and recycling management:

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1. closed loop design

Designing products with circularity in mind right from the start is one solution that has immense potential in terms of product durability, profitability, and operational efficiency in waste and recycling. Closed loop design emphasizes the principles of circularity to minimize resource extraction and waste over a product’s lifespan. 

Products designed to be easily disassembled for reuse or recycling are also intentionally built to have a longer lifespan, a factor that can offer a competitive advantage over rival brands. The durability of these products justifies premium pricing because it helps customers justify remaining loyal to your product. Designing products that can be reused significantly reduces the demand for new ones which results in reduced waste generation. 

Products incorporating recyclability right from the design process increases the likelihood that valuable materials will be recovered and reintroduced into new products. This has the potential to drive up participation in recycling initiatives, offering another way the amount of landfilled waste can be reduced.

IKEA reported global revenue in 2022 at nearly $44.5 billion with 32 million products resold in circular hubs.

IKEA is incorporating both reuse and recycling in designs for new products as part of its commitment to be a circular business by 2030. The company has also implemented programs that can refurbish and remanufacture products to keep items from being wasted. The owner of the largest number of IKEA stores reported handing out 21.9 million spare parts to customers in 2022 which in turn extended the lifespan of a piece of furniture for nearly 2 million customers. The company reported global revenue in 2022 at nearly $44.5 billion with 32 million products resold in circular hubs.

Closed loop design can be a catalyst for innovation, driving companies to develop new products, technologies, and processes for products that in turn also reduces waste volume generation. Less waste often translates into cost savings opportunities through lower disposal costs and equipment expenses. 

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2. using recycled/repurposed materials

Consumers reported they would be willing to spend nearly 30% more than the retail price of a product if they knew it was made using recycled materials. Increasing numbers of manufacturers want recycled materials to include in their products and businesses have launched new initiatives to help increase the value of recycled materials. In 2020, Adidas manufactured 15 million pairs of shoes made from plastic waste sourced from beaches, and more than half of the polyester used in Adidas’ products was sourced from recycled plastic waste. Efforts such as this not only improve environmental conditions, but also reduce the amount of waste generated through resource extraction and processing. 

Over the past five years, there has been a 71% increase in online searches for sustainable goods.

Sustainably-sourced products have skyrocketed in popularity. Over the past five years, there has been a 71% increase in online searches for sustainable goods and two thirds of consumers say they’re willing to pay more for sustainable products. One manner in which brands are meeting this desire from consumers is through buy back programs and selling secondhand goods. Patagonia created its Worn Wear program in which consumers can trade in used clothing to receive credit for new products. The program also offers consumers the chance to repair and reuse items instead of buying new ones. By 2020, the company had sold an estimated 120,000 repurposed items and annual sales are estimated at more than $1 billion annually across the company.

Using recycled and repurposed materials prevents them from ending up in landfills. Diverting the materials from the landfill through company initiatives such as buy back programs can help reduce harmful greenhouse gas emissions as part of a zero waste to landfill goal. Repurposing materials and sourcing recyclables offers a way to achieve lower production costs, thereby reducing overall waste management expenses. Properly sorted materials can turn into a revenue stream through the sale of recyclables to other businesses as well. Offsetting waste management costs, or at least achieving greater affordability, can make these processes more attractive for many companies.

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3. employing strategies for waste reduction

Circular solutions incorporated as part of an overall business strategy can dramatically impact operational waste and recycling management. One of the main tenets of circularity is to minimize waste generation. By designing products and processes able to achieve that, there is a reduced need for extensive disposal efforts, leading to potential cost savings for businesses. 

A first step businesses can take to effectively reduce waste generation through circularity is a waste audit. The data gleaned from a waste audit shows the types of waste generated and the points of generation throughout your operation. Employing waste metering technology at scale across an entire company’s portfolio also aids in quantifying the makeup of waste and recycling for a business. The data from these initial steps provides the best way for businesses to explore implementing changes to better capture and manage waste, recyclable, and compostable materials. 

As part of an overall waste reduction strategy, 3M saved more than $2.37 billion in 2022 and prevented nearly 3 million short tons of pollutants from being emitted. 

Reusing, recycling, and composting can fuel a circular economy model as part of an overall commitment to waste reduction. Leveraging public private partnerships, such as the program with 3M and the Closed Loop Infrastructure Fund, provides one place businesses can turn once they commit to a goal such as zero waste to landfill. By 2020, more than $200 million in public and private money had been spent through this program to divert materials from landfills and incinerators, to generate revenue from the sale of recyclables, and to innovate plant and fiber-based packaging solutions throughout supply chains. As part of an overall waste reduction strategy, 3M saved more than $2.37 billion in 2022 and prevented nearly 3 million short tons of pollutants from being emitted. 

Let RoadRunner help your business today

With circularity solutions seeing increasing integration into business strategies across industries, the potential is there to dramatically improve waste and recycling management. Leaning on the expertise of a trusted partner like RoadRunner to help champion circular solutions through complete waste portfolio management powered by data can also lead to achieving sustainable goals. Leveraging RoadRunner’s industry-best fully-managed waste and recycling services provides an avenue to a future in which waste is minimized, resources are used to their full potential, and profit is maximized.

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