With the emergence of circular economy business models, we are slowly disrupting old ideas about “waste” as well as provide new opportunities for economic growth, material cost savings, and innovation while eliminating waste. In this article, we will delve into the basics of circular economy, its benefits, and how volunteering can help advance and contribute to this model.
CIRCULAR ECONOMY 101
Before diving into what circular economy is, let’s find out what the term, economy is in its basic definition. According to investopedia.com, “an economy is the large set of inter-related production, consumption, and exchange activities that aid in determining how scarce resources are allocated. The production, consumption, and distribution of goods and services are used to fulfill the needs of those living and operating within the economy, which is also referred to as an economic system.” An economy basically asks three questions:
What to produce?
How to produce it?
Who gets the benefit?
LINEAR ECONOMY VS. CIRCULAR ECONOMY
The linear economy traditionally follows the “take-make-dispose” model where we “take” raw materials that we “make” or process into a product that is commonly disposed of after use. This model produces too much waste and creates a waste problem since its value is to create and sell as many products as possible without thinking about the underlying consequences. In a circular economy, on the other hand, the 3R approach is followed. The 3R approach revolves around the concept of reducing, reusing, and recycling. Instead of mining new raw materials, this model reuses or recycles the materials to refurbish, remanufacture, or redistribute products.
CIRCULAR ECONOMY BUSINESS MODELS
Shifting to a circular economy has many benefits for the economy, the environment, and the people. Among the benefits are:
1. New profit opportunities
2. Reduced volatility and greater security of supply
3. New demand for business services
4. Improved customer interaction and loyalty
NEW PROFIT OPPORTUNITIES
Shifting to a circular economy can create new profit opportunities with material costs reduced and new profit streams created. An example of this would be the remanufacturing of mobile phones to create “new” mobile phones and the leasing of high-end items that are traditionally sold such as washing machines.
NEW DEMAND FOR BUSINESS SERVICES
With the new business model, new demand for business services emerge. An example of this would be collection and reverse logistic companies that would collect materials and deliver them to factories to be remanufactured, product remarketers, and sales platforms that promote reuse and recycling of products, and parts and components remanufacturing companies.
REDUCED VOLATILITY AND GREATER SECURITY OF SUPPLY
Using alternative material sources such as less virgin material and more recycled inputs would positively reduce exposure to the volatility of supply, lowering the material costs and thereby increase material cost savings.
IMPROVED CUSTOMER INTERACTION AND LOYALTY
With the new business model, new demand for business services emerge. An example of this would be collection and reverse logistic companies that would collect materials and deliver them to factories to be remanufactured, product remarketers, and sales platforms that promote reuse and recycling of products, and parts and components remanufacturing companies.
VOLUNTEERING AND THE CIRCULAR ECONOMY
In our previous article, we talked about the different benefits of volunteering and how tapping into this social capital helps solve today’s problems and advance humanity. Charitable organisations like Charitable Recycling Australia champions the circular economy as the foundation of a more sustainable environment and an equitable society with the help of their volunteers. They utilize the unique skills of their volunteers such as collection, sorting, administration, maintenance, driving, management, and fundraising.
Redress, an environmental charity with a mission to prevent and transform textile waste to catalyse a circular economy and reduce fashion’s water, chemical and carbon footprints, also utilizes the help of volunteers who sort through clothing donations and direct them for resale, reuse by local charity partners.
Through lending their time and unique skills, volunteers can be key drivers and accelerators of the circular economy. As discussed in our previous article, anyone can volunteer even if they cannot be physically present on site. “The great thing about participating in charity or volunteering opportunities is that you may or may not be physically present at the site to join a volunteer program.
Even before the covid 19 outbreak, virtual volunteering has been available for those who want to volunteer but could not be physically present on site. Examples of virtual volunteer opportunities include writing, doing graphic design, answering emails, and recently, creating social media content. It is just a matter of finding the right volunteer role in an organisation.”
CONCLUSION
There are a lot of benefits to switching to a circular economy and volunteering to advance this model. From creating new job opportunities and lowering the material cost to reducing and eliminating the need to use virgin materials, the closed-loop model of circular economy is truly beneficial for the whole ecosystem. By employing the circular economy model, we are one step closer to a sustainable future. While it would seem like a big task to clear out waste with its state today, it is achievable when we work together and it starts with volunteering. Together, let’s champion a circular economy for a better future.