By Joseph Tabet, VP, Circular Economy Solutions, at Flex
This week, world leaders are convening at COP26 to agree on actionable plans to mitigate the worst effects of climate change. For their part, many businesses are rethinking their practices to drastically reduce emissions and curb electronic waste. In this, we see an opportunity to develop solutions through the framework of the circular economy (CE) which embraces restoration and regeneration. Until recently, we have heavily relied on a traditional linear model of take, make, and waste, having a clear beginning and end and delivering value by producing and selling as many products as possible.
Increasingly, businesses are considering the potential of CE to help solve some of our sustainability challenges. As outlined by the Ellen MacArthur Foundation, CE is based on three principles: eliminate waste and pollution, circulate products and materials (at their highest value), and regenerate nature.[1]
So, how to begin embedding CE practices into your product lifecycle?
Start by measuring environmental impact
Accelerating a circular economy transition begins with measurement tools that analyze the environmental impacts associated with your products. While the measurement and reporting of organizational emissions is a mainstream practice, companies have historically measured their products’ environmental impact through a life cycle assessment (LCA). While providing a clear idea of the product’s environmental impact, LCAs typically are time and cost intensive, require environmental specialist involvement and don’t gauge circular activities.
At Flex, we developed a circular economy impact calculator to analyze supply chain and manufacturing scenarios to help inform supply chain design and decision making. The tool measures the impact of CE processes including repair, refurbishment, and parts harvesting, and specific forward supply chain activities such as transport and postponement models for in-region product packaging with local material sourcing. For instance, customers can see an estimate of reduced emissions associated with an in-region postponement approach.
Flex’s CE calculator helps to address the gaps of LCAs by measuring the environmental impact of adopting circularity processes. These include repair, refurbishment, and parts harvesting as well as ancillary services like freight, supply chain, sustainable packaging, logistics and distribution. Specifically, the calculator measures how much carbon emissions, waste, water and energy consumption can be lowered through certain circular economy practices using customer-supplied inputs about their products, logistics and repairs. Based on the input, the tool provides a range of results that include reductions in Co2e, energy consumed, waste, water and circular economy metrics like virgin materials inputs, materials circularity and waste electrical and electronic equipment diverted from landfills.
These dimensions are also available as equivalents, like car trips, water and household energy use, and flights to underscore the magnitude of benefits underlying circular economy practices.
Levers throughout the product lifecycle for circularity
The calculations can help identify the optimal path to reducing emissions and quantify the sustainable impact of circular economy solutions. In quantifying CE’s value, this critical baseline can be the launchpad to develop your company’s CE strategy.
Circularity requires collaboration. Partnering with team members from sustainability, supply chain, marketing and operations, among other groups, is critical to getting a cross-functional team involved early. Circularity also entails thoughtful planning along the key points of the product lifecycle and this starts with design and extends to the aftermarket where products can be refurbished, repaired, recycled, or their parts harvested for reuse. During this phase, you consider the design and parts for your product from many vantage points to extend their useful life, from maximizing their durability and performance to optimizing their ease of repair, refurbishment and reuse.
For example, one of our customers wanted to eliminate waste and scrap by extending the life of their servers, laptops, desktops and tablets in Europe. The answer? Our customer leased these units to medium and large businesses through a returns and re-use program that processes 12,000+ units every month. The customer’s CE efforts included end-to-end traceability, parts harvesting, repair and refurbishment, among other services.
By adopting circular economy solutions, our customer’s returns and reuse program yielded:
85 percent of units refurbished and 15 percent of units recycled, preempting the emission of 75 to 85 percent of CO2e associated with the manufacture of new units
A 10 percent increase in residual value by Flex creating a secondary market for the customer’s refurbished units
The future is circularity
Developing solutions that minimize environmental impact is a marathon, not a sprint. To better understand how your products are impacting the environment, how these effects can be abated by adopting CE solutions and how you can advance a path to zero-waste, begin by making calculations as outlined above. This understanding will help chart a course to rethink how a product is designed, where it is manufactured, and how a device can be given a second life. Taking these small steps will help you go a long way to carving a path towards a circular economy.
A sustainable future is not only better for the planet, but also better for businesses, economies, and consumers. The circular economy poses tremendous opportunity for businesses to connect to new markets and open new revenue streams. Today, start wherever you can, seize opportunities that are ripe for circularity and don’t underestimate the value of after-market activities. As we forge ahead together, the prospect of a circular economy can become very real.
[1] https://ellenmacarthurfoundation.org/topics/circular-economy-introduction/glossary