In case you haven’t heard, we’re facing a climate disaster. Traditional linear commercial and economic models require constant expansion, but we do not have infinite resources to maintain it.
As a result, a new economic model has arisen, describing how firms might foster a more sustainable and resilient economy. Here’s the good news: if you’re an entrepreneur, you have a fantastic opportunity to build your company around these principles from the start. You can get ahead of the competition as more businesses implement these principles.
The circular economy concept focuses on waste reduction and resource reutilization. The concept dates back to 1981, when Genevieve Reday and Walter Stahel released research for the European Commission that theorized about a looping economy’s possible impact on employment creation, waste control, and competitiveness.
As we grapple with the devastating effects of climate change and how businesses have contributed to it, the argument has gained traction. In 2013, McKinsey & Company and the Ellen MacArthur Foundation commissioned a ground-breaking report, Towards the Circular Economy: Economic and Business Rationale for an Accelerated Transition, which outlined concrete steps for transitioning from our infinite-growth linear models to more sustainable ones.
In this blog post, we’ll discuss how to create a company plan that fits into the circular economy. This will not only strengthen your business strategy, but will also allow you to create an authentic brand, boost employee morale, improve your reputation, and build something lasting.
- Define your Circular Economy Business Model.
If you’re beginning a new business, you can create a circular economy business plan right now. To begin, design your business model by considering your company processes for waste reduction, resource efficiency, and closed-loop systems. To give you a sense of what this might look like, here are some examples of circular economy-inspired company models:
- Conduct a circularity assessment.
To determine where your company is in terms of circularity, take a look in the mirror and undertake a circularity evaluation. This includes assessing your operations and identifying places where you may cut waste, improve resource efficiency, and shut material loops. The audit should encompass all aspects of your business, including product design, sourcing, manufacture, distribution, use, and disposal.
This step may disclose difficult truths about the waste your company generates, so go into it prepared to face the facts without excuses. You can also join the Ellen MacArthur Foundation’s business network and receive a “Circulytics” assessment, which determines how effectively your company has adapted to a circular economy and what opportunities are open to you.
- Set Circular Economy Goals.
Based on the evaluation results, you can define targets for improvement. These objectives must be clear, measurable, achievable, relevant, and time-bound (SMART), or they will flee from you. For more information on how to create SMART goals, see this Forbes article. Here are some samples to try:
- Reduce landfill waste by X percent.
- Implement a product take-back program by a specific date.
- Reduce greenhouse gas emissions from operations by X percent.
- Become carbon neutral by a specific date.
- Develop Circular Economy Strategies.
Now, how can we achieve those objectives? To accomplish this, you must establish effective strategies that are in line with your business strategy. They could look like this:
- Redesigning items to save waste and improve durability
- Introducing closed-loop solutions for materials and goods
- Choosing materials from sustainable sources
- Donating a fraction of profits to combat climate change (such as 1% for the earth).
- Creating partnerships between suppliers and customers to develop circular supply chains.
- Implement and monitor your Circular Economy Plan.
After you’ve created your circular economy plan, you must implement it and track its success. To guarantee that your circular economy goals are met, you should set timetables and track KPIs. It is also critical to review and update your plan on a frequent basis as your firm grows and new opportunities arise.
It’s a significant commitment, especially if you already have a successful business with well-oiled systems. However, there are numerous advantages to using circular economy ideas. You will not only contribute to the improvement of the earth, but you will also be proactive in adjusting your business to the disruptions caused by climate change and resource scarcity.
As a business owner, you have the unique opportunity to contribute to the long-term development of a regenerative economy. More effective supply chain loops will save you money while also improving your brand’s reputation and gaining client loyalty. You’ll also boost morale. According to a research report by the Harvard Business Review, organizations with committed and sustainable programs had 38% higher employee loyalty and 55% higher morale.
Your company plan is the most effective way to structure and integrate your circular economy goals and initiatives. As we’ve discussed earlier on this blog, the business plan allows you to connect guiding concepts across your whole organization and develop a cohesive strategy for growing your business.
The business plan is more than just a document to offer investors or banks; it may also act as a road map for you to follow as you construct a long-term strategy for growing your business.
So, as you create your business plan, make sure to incorporate the circular economy into all aspects of your operations to boost performance. This encompasses product development, marketing, sales, and internal decision-making procedures.
For example, when describing your products and services in the strategy, make sure to include a section on waste reduction and repair. Your management section can demonstrate how your recruiting procedures will be consistent with key values. business can also describe how your commitment to sustainability gives business an advantage over your competition.