Sustainability is not some high-mindedideal – it truly pays off for businesses, both in the long and short run. In fact, there are numerous examples of companies which have managed to increase their value by adopting innovative sustainable practices. This is because they abide by something called the ‘loop’ of raw materials, in which there is no – or virtually no – such thing as waste. NPM portfolio company Vanderlande Industries is currently the market leader in the Netherlands on the strength of its sustainable Blueveyor innovation. Bed manufacturer Auping, which created the Auping Take Back System, is also viewed as a textbook example of the circular economy.
Eric Wuestman, Chairman of Stichting Circulaire Economie (the Circular Economy Foundation),explains in an article published on website sprout.nl called Hoe start je met circulair ondernemen? (‘How to get started with circular enterprise’) how companies can go about switching to circular economy business practices. We have listed his recommendations below.
1: Nothing is impossible
When it comes to circular enterprise, it’s all about having the right mentality. Many companies tend to stick to their traditional practices because they believe this to be more profitable. Wuestman argues to the contrary, stating that using a cycle of raw materials in business also pays off in its own way. And any company can do it – all it takes is a change in behaviour.
2: Start at the base
To turn a ‘regular’ business into a circular enterprise, you must first analyse a product’s source and origin by taking a closer look at the production process, the use of materials, and the design. Also: look at the opportunities provided by local production.
3: From product to service
A key feature of the circular economy is the shift from ownership to use. The user of a particular resource is not necessarily its owner – the manufacturer remains the owner, and therefore responsible for raw materials and how they are processed.
4: Think in the long term
Long-term vision is a central element of circular enterprise. If you are responsible for the entire lifecycle of raw materials, you automatically start thinking about the reuse and replacement of these raw materials.
5: Join a partnership
Collaboration is essential in the circular economy, but unfortunately, some financiers will vote down a circular business plan, feeling it will not yield the desired results. In order to bridge the gap between circular projects and investors, it can be worthwhile to set up a CESCO (Circular Economy Service Company) together with a group of coalition partners. This reduces risk for the partners and provides plenty of room for innovation.
6: Look at the supply chain
Keep an eye on the supply chain even after a product has been sold. While the sale of the product marks the endpoint in a linear economy, the cycle continues in a circular one. Wuestman also stresses the importance of exploring opportunities to make the return logistics of raw materials or the recovery of the product itself part of the business model.
7: Experiment
No innovation without experimentation: you need the freedom to play around and find out what does and doesn’t work, says Wuestman. Be sure to allow yourself that freedom.
Click here for more information about how NPM portfolio companies are adding long-term value to their businesses by embracing circular enterprise.
Source: Sprout.nl
