More on Circular Economy: Use Waste to Build Capital

More on Circular Economy: Use Waste to Build Capital

Jun 12, 2017: Weekly Curated Thought-Sharing on Digital Disruption, Applied Neuroscience and Other Interesting Related Matters.

By Jennifer Gerholdt, Senior Director, Circular Economy and Sustainability Program, US Chamber of Commerce Foundation

Curated by Helena M. Herrero Lamuedra

The circular economy – an economic model focused on designing and manufacturing products, components and materials for reuse, remanufacturing, and recycling – promises big opportunities for the private sector to drive new and better growth and accelerate innovation. Shifting to the circular economy could release $4.5 trillion in new economic potential by 2030, according to Accenture. But how do we take that vision of a circular economy – which imagines a world without waste – and translate that into profitable and scalable action?

The U.S. Chamber of Commerce Foundation Corporate Citizenship Center, a nonprofit organization driving the circular economy agenda in the US, is releasing a new report featuring case studies that illustrate how companies are translating their circular economy aspirations into action – and how that in turn drives greater resource productivity improvements, eliminates waste and inefficiency, and contributes to a stronger and more competitive economy.

Let’s take a look at some of the companies featured in the report.

Aramark: Reducing food waste

Food services provider Aramark has set a goal of reducing food waste by 50% by 2030 from its 2015 baseline, such as by setting standards for ordering, receiving, preparing, serving and tracking food production. Through its partnership with food waste reduction experts LeanPath, Aramark is accelerating its waste prevention and minimization efforts by integrating LeanPath’s tracking and analytics technology platform into its largest 500 accounts. Since 2016, Aramark has rolled out LeanPath’s platform across 161 sites, slashing its food waste on average by 44% and reducing the amount sent to landfill by 479 tonnes. In instances of overproduction, Aramark donates unserved food to local food relief agencies or for composting.

EILEEN FISHER: The path to 100% circularity

EILEEN FISHER’s take-back programme, in which employees and customers can bring back unwanted EILEEN FISHER clothing for $5 store credit per piece, started in 2009 under the name Green Eileen. Funds raised from the programme are donated to organizations that support women, girls, and the environment. In 2017 Fisher Found was launched as the next iteration of Green Eileen, a circular take-back programme that focuses on reselling, renewing (repairing slightly flawed pieces, for example), and remaking EILEEN FISHER garments. Since 2009, EILEEN FISHER has taken back over 800,000 garments and donated $2 million to its chosen causes. EILEEN FISHER currently takes back 3% of the products it creates each year, and is working towards a goal to take back 100% of its output.

Intel: Finding value in waste material

Computer chip manufacturer Intel has set a goal to recycle 90% of its non-hazardous waste and divert 100% of its hazardous waste from landfills by 2020. Since 2008, Intel has recycled 75% of the total waste generated from its operations, such as through upcycling, recycling, recovery, and reuse. For example, Intel developed an onsite electro winning system to recover solid copper for reuse from an aqueous waste stream generated by semiconductor manufacturing. The recovered copper can enter the metals market supply chain for reuse in other industrial or commercial applications. The copper recovery process has been replicated at Intel’s microprocessor manufacturing sites and more than two-thirds of the waste was recovered in 2016. Additionally, over the past 10 years Intel has donated more than 1,000 pounds of copper to Arizona State University for use in the creation of works of art.

Johnson Controls: Closing the automotive batteries loop

Johnson Controls has designed its conventional automotive batteries so that 99% of the materials can be reused. Customers can return old batteries that are collected by Johnson Controls and turned into new batteries. The company’s circular supply chain has pushed recycling rates for conventional batteries to 99% in North America, Brazil, and Europe in 2015, enabling Johnson Controls to produce batteries containing more than 80% recycled material. In partnership with suppliers, customers, and logistics partners, Johnson Controls has enabled hundreds of millions of batteries to be properly recycled and recovered into new batteries. The benefits include a more resilient raw material supply, job creation and economic development for local communities and suppliers, and a 90% reduction in energy by using recycled plastics instead of virgin plastic.

The case study report will be released at the U.S. Chamber of Commerce Foundation Circular Economy and Sustainability Summit, From Aspiration to Implementation, on June 26-28 in Washington DC

Turning the linear circular: the future of the global economy, leveraging Internet of Things

Turning the linear circular: the future of the global economy, leveraging Internet of Things

CE

Jun 5, 2017: Weekly Curated Thought-Sharing on Digital Disruption, Applied Neuroscience and Other Interesting Related Matters.

By Mark Esposito

Curated by Helena M. Herrero Lamuedra

Institutions, both in the private and public sector, can always reap the public relations benefits of doing good, even while still accomplishing their goals. As resources become scarcer, a major way to enhance social performance is through resource conservation, which is being underutilized.

Although the traditional model of the linear economy has worked forever, and will never be fully replaced, it is essentially wasteful. The circular economy, in comparison, which involves resources and capital goods reentering the system for reuse instead of being discarded, saves on production costs, promotes recycling, decreases waste, and enhances social performance. When CE models are combined with IoT, internet connected devices that gather and relay data to central computers, efficiency skyrockets. As a result of finite resource depletion, the future economy is destined to become more circular. The economic shift toward CE will undoubtedly be hastened by the already ubiquitous presence of IoT, its profitability, and the positive public response it yields.

Unlike the linear economy which is a “take, make, dispose” model, the circular economy is an industrial economy that increases resource productivity with the intention of reducing waste and pollution. The main value drivers of CE are (1) extending use cycles lengths of an asset (2) increasing utilization of an asset (3) looping/cascading assets through additional use cycles (4) regeneration of nutrients to the biosphere.

The Internet of Things is the inter-networking of physical devices through electronics and sensors which are used to collect and exchange data. The main value drivers of IoT are the ability to define (1) location (2) condition (3) availability of the assets they monitor. By 2020 there are expected to be at least 20 million IoT connected devices worldwide.

The nexus between CEs and IoTs values drivers greatly enhances CE. If an institutions goals are profitability and conservation, IoT enables those goals with big data and analysis. By automatically and remotely monitoring the efficiency of a resource during harvesting, production, and at the end of its use cycle; all parts of the value chain can become more efficient.

When examining the value chain as a whole, the greatest uses for IoT is at its end. One way in which this is accomplished is through reverse logistics. Once the time comes for a user to discard their asset, IoT can aid in the retrieval of the asset so that it can be recycled into its components. With efficient reverse logistics, goods gain second life, less biological nutrients are extracted from the environment, and the looping/cascading of assets is enabled.

One way to change traditional value chain is the IoT enabled leasing model. Instead of selling an expensive appliance or a vehicle, manufacturers can willingly produce them with the intention of leasing to their customers. By imbedding these assets with IoT manufacturers can monitor the asset’s condition; thereby dynamically repairing the assets at precise times. In theory the quality of the asset will improve, since its in the producers best interest to make it durable rather than disposable and replaceable.

Even today, many sectors are already benefiting from IoT in resource conservation. In the energy sector, Barcelona has reduced its power grid energy consumption by 33%, while GE has begun using “smart” power meters that reduce customers power bills 10–20%. GE has also automated their wind turbines and solar panels; thereby automatically adjusting to the wind and angle of the sun.

In the built environment, cities like Hong Kong have implemented IoT monitoring for preventative maintenance of transportation infrastructure, while Rio de Janeiro monitors traffic patterns and crime at their central operations center. Mexico city has installed fans in their buildings which suck up local smog. In the waste management sector, San Francisco and London have installed solar-powered automated waste bins, that alert local authorities to when they are full; creating ideal routes for trash collection and reducing operational costs by 70%.

Despite the many advantages to this innovation, there are numerous current limitations. Due to difficulty in legislating for new technologies, Governmental regulation lags behind innovation. For example, because Brazil, China, and Russia do not have legal standards to distinguish re-manufactured products from used ones, cross-border reverse supply-chains are blocked. Reverse supply chains are also hurt by current lack of consumer demand , which is caused by low residual value of returned products. IoT technology itself, which collects so much data people’s private lives, generates major privacy concerns.

Questions arise like: who owns this data collected? How reliable are IoT dependent systems? How vulnerable to hackers are these assets? Despite the prevalence of IoT today, with 73% of companies invest in big data analytics, most of that data is merely used to detect and control anomalies and IoT remains vastly underutilized. Take an oil rig for example, it may have 30,000 sensors, but only 1% of them are examined. Underutilization of IoT in 2013 cost businesses an estimated 544 billion alone.

Even with these current barriers, because of the potential profits and increased social performance, the future implementation of an IoT enhanced CE is bright.

Estimates are that the potential profits from institutions adopting CE models could decrease costs by 20%, along with waste. The increase in efficiency combined with the goodwill generated by conservation is a win-win proposition for innovation, even with costs implementation, future monetary profitability will make it a no-brainer.