Learning to Make Capital out of Waste

Learning to Make Capital out of Waste

By Dr. Sathya Menon

In a world of limited resources, the current “use and throw” policy might not last. That’s where the circular economy comes in. This new model challenges us to think of ways to turn waste into capital.

By redesigning and re-packaging components, it is possible to create safe, reusable and compostable materials that help the world to grow while simultaneously reducing: product footprint, product costs and supply chain risks

Some companies worldwide have already started implementing this circular business model and they may well be defining the future of sustainable businesses.

Products as services

Here vendors of goods become service providers leasing access to and not selling ownership of a service. Vodafone’s Red-Hot plan is a good example. You can rent the latest phone for a year and keep on exchanging it for a newer version. This is an effective material collection and pooling method resulting in deeper customer relationships.

Next life sales

This is when a company efficiently recovers and re-conditions its products after use and then put the same products into the market to earn a second or third income. Tata Motors Assured offers an example of a second hand car dealership employing the circular business model. Cars are handpicked and refurbished in Tata workshops and then undergo a certification process.

Product Transformation

Not all products can be reconditioned in their entirety but most products have certain components that carry a high value. With the right design and remanufacturing capabilities, they can be put together to form new products. This is product transformation. For BMW, it can mean a 50 per cent cost saving for customers buying remanufactured parts as compared to new ones.

4: Recycling

Innovation in recycling technology is rapidly evolving and enabling production of high-quality products with fantastic sustainability performance. Starbucks, for example, is actually aiming to turn thousands of tonnes of its waste coffee grounds and food into everyday products by using bacteria to generate succinic acid which can then be used in a range of products from detergents to bio-plastics and medicines.

5: Collaborative consumption

Lastly, social media exchange platforms are rapidly transforming industries by collaborative consumption. Airbnb (the online service that matches people seeking vacation rentals with hosts who have space) now has over 200,000 listings in 26,000 cities. Check out ThredUP the next time you need new clothes for your kids, you can browse like-new clothing at significant reductions from families whose children have outgrown their old clothes.

Handy Hints

·         In a resource-crunched world use and throw policies can spell disaster.

·         The key is to create more jobs locally through the recycle & re-use method.

·         Circular businesses may well define the future of the global economy.