The increasing international focus on improving environmental sustainability and the Circular Economy principles have a trickle-down effect on all aspects of ‘’business as usual’’ including business models, company image, attracting investments and product development.

Human interference has affected the earth systems beyond repair, and we might be the last generation to possibly have a chance to reverse this negative impact.

To qualify and quantify the impact of human intervention, and to define safe limits for the environment at a global level, scientists have introduced the concept of planetary boundaries. For five out of nine critical earth system processes including climate change and novel entities, the planetary boundaries have been exceeded, posing severe threats to our existence on the planet. Among the planetary boundaries, climate change is one of the most significant boundary where the industry has a significant role to play. Researchers at the Stockholm Resilience Centre claim that a shift to Circular Economy is integral to reverse this trend.

The Circular Economy as a Means to ‘’Achieve Sustainability’’

The term ‘’sustainability’’ is often used in the same context as ‘’circularity’’, sometimes even interchangeably which may not always be correct, since the two terms are not inherently similar. Sustainability is a complex term, covering three different pillars: people, profit and planet. It is often described according to the UN definition of ‘’meeting the needs of the present without compromising the ability of future generations to meet their own needs’’. The term circularity is generally used in the context of the Circular Economy (CE), describing the path of resources in a way that their value maximised, as an alternative to the traditional ‘’take-make-dispose’’ linear way of producing and consuming. In a CE, resources are kept in use as long as possible, through reuse, repair or recycling amongst other optional routes. This way the creation of waste is minimised as well as the dependency on raw materials for the manufacturing of new products.

Sustainability can be considered as a goal and the CE principles as a means to achieve a more sustainable way of producing whilst maintaining a safe living and working space within the planetary boundaries. The aim is to minimise the impact of resource extraction, production and consumption on people and environment, whilst also being able to keep the ball rolling for businesses and the global economy.

It’s all about finding balance.

The Circular Economy is About Much More than Recycling

Thinking about the CE and Sustainability, we often think of recycling. However, CE encompasses much more than just that one perfect solution. A number of solutions aiming for circularity by retaining the value of material resources are well-known: Recycling is only one of them. It allows to turn waste material into feedstock material for the manufacturing of new (low-value or high-value) products. However, resource value retention solutions can be identified all along the product value chain. Not just at the products’ end of life or end-of-use, but also at the sourcing, design, manufacturing and usage stages. In fact, some approaches to CE favour ‘’small loops’’ (activity-wise and geographically), meaning that recycling is seen as one of the solutions to be considered only after a number of ‘’smaller’’ loops as more efficient solutions. Other solutions include reuse or designing a product to make it easier to repair or refurbish. Stakeholders positioned along the value chain all have their own unique opportunities to contribute towards greater sustainability.

Re-considering the way business is done, is also part of the CE principles. For example, businesses could consider partnerships and creating circular supplies, or even consider maintaining ownership over the product you produce and selling products as a service.

Pressure from (European) Regulations Encouraging Companies to Act

Over the past years we have witnessed greater awareness and more stringent environmental regulations in the fast-moving consumers goods industry prompting producers, retailers and citizens to adapt their behaviours. Lately these regulations are coming to other Industries with an unprecedented speed.

The transition to a more sustainable economy can be very complex for the industry, especially for resource-intensive ones like electronics, e-mobility or the packaging sector for example. In this context, public policies such as the Fit for 55 package, The EU Green Deal, The new CE Action Plan, the New Batteries regulation or The Waste Framework Directive, to name only a few, play a key role in building a more circular world by providing guidance and sometimes support to the industry.

At the European level, one could say that directives and regulations act as a key lever and the foundation for change. Meaning that some regulations or directives like the WEEE directive, RoHS Directive, REACH regulation, or the taxation on non-recycled plastic packaging, compel the stakeholders to comply to environmental standards and prevent financial sanctions. On the other hand, initiatives such as the NFRD, EU eco-innovation fund or Horizon Europe represent major opportunities to develop new technologies and boost businesses’ competitiveness or their brand image. Furthermore, the EU Taxonomy encourages businesses to rethink their operations in terms of environmental sustainability in order to stand out positively compared to their competitors and benefit from investments.

The Journey towards Environmental Sustainability

We have an estimated decade left before we exceed the limit of carbon emissions we can emit to keep global warming to 1.5°C above pre-industrial levels. All over the world governments, industries and individual companies are setting targets and developing strategies to achieve the goals of the Paris Agreement. The European Union (EU) pledged to be climate neutral (an economy with net-zero greenhouse gas emissions) by 2050. This is at the heart of the European Green Deal. and in line with the EU’s commitment to global climate action under the Paris Agreement.

For governments and for industries, this sustainability transition means overcoming severe challenges. In order to do so, it is important to understand, measure and prioritise: Understanding the current situation, and upcoming environmental regulations. Measuring the environmental impact of your sites, products and processes: from carbon footprint assessment to life cycle analyses. Setting the targets you need to reach to be -at least – compliant with today’s and future regulations and connecting it to your trajectory. We believe that collaboration is the new competition. In this context it is then key to – with the right partners – find the right levers & innovations to build actionable & scalable roadmaps that enable you to meet your business objectives as well as your commitments so that you effectively reduce your carbon emissions, create value from waste and increase resource-efficiency. 

At eolos we partner up with businesses so that they can successfully operate within the planetary boundaries. From the industry, for the industry: We help businesses embed environmental sustainability within their daily operations, with end-to-end solutions, from trainings, and developing sustainability strategies to product management and (re-)engineering. Amongst others we focus on the railway-, electrical & electronics-, and marine & naval industries.

Are you interested to learn more about how your business can become more environmentally sustainable? Contact us at [email protected] or visit www.eolos.org

eolos Contributors

Helene Isermeyer | partner & environmental performance and governance expert

Nikhil Varghese | Consultant & Env. Policy expert