At current rates, we are using resources at more than 1.5 times the rate nature can replace them. Scarcity of resources, volatility of pricing and environmental damage are driving a shift to a circular economy which minimises wastage and aims to re-use or recycle all end products. Embracing this concept can help manufacturers not only control costs but also create points of differentiation, and appeal to a consumer base that cares about buying sustainable goods.
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As the world consumes more resources than it can produce, there is an impetus to push away from a linear economy based on a make/use/dispose model, and towards a circular economy based on a reduce/re-use/recycle model that focuses on minimising waste and recycling or re-using all end products.
For manufacturers, there are significant benefits to this approach beyond saving the planet. Resource volatility leads to an unpredictable raw materials flow, volatile costs and changes in regulation. Reducing dependence on these raw materials helps manufacturers control their costs and operations.
However, reducing risk is not the only reason to pursue a more sustainable approach. Looking at a circular strategy allows for the generation of innovative ideas that serve as strong differentiating points and marketing tools.
Furthermore, sustainability is important to a large number of consumers worldwide who are keen to embrace companies and brands which uphold such values.
Fashion is a key area, due to the very rapid turnover of items, and due to the interest in re-use and repair as a fashion statement.
Appliances and electronics are also key due to heavy use of insecure resources and short lifecycles, with leasing schemes and repair/resale coming to the fore.
Food waste and food packaging waste are also key areas, with many companies in Europe particularly active in working to reduce food waste.