How a Circular Economy Aligns Business Value with Environmental Preservation
For as long as people have been making things, the predominant model has been one of “take-make-waste.” Creators take resources from the environment, make goods with them, and once an object reaches end of life, its material is disposed of as waste. Whether that waste ends up in the landfill, incinerator or the environment, this linear economic model leads straight to an economic dead end — and eventually, a depleted planet.
By contrast, the circular economy is an economic and social system in which there is no such thing as waste. The goal of this model is to keep materials in the economy for as long as possible by making new things out of materials that are already in use. This approach extends the life of the world’s resources by minimizing what is consumed.
“The circular economy is one that eliminates waste and continually uses resources becoming restorative and regenerative by design.”
— Jonathan Perry, Dell Technologies Environmental Affairs Consultant
Schools of thought on the circular economy vary, but the ultimate goal is to utilize appropriate business model(s) to eliminate waste. In their book, The Circular Economy Handbook, Peter Lacy, Jessica Long and Wesley Spindler lay out five distinct models for addressing four specific types of waste.
Circular inputs are renewable or recyclable resources designed in a way that enables them to be recaptured at the end of a product’s life. Sharing platforms, such as Zipcar, put less “things” into the economy. The Product-as-a-Service (PaaS) model, exemplified by car or appliance leasing, ensures that once a consumer is finished with an object, the manufacturer can take it back for proper reuse. Product use extension is a model enabled by design for easy upgrade or repair. This could be something like computers that easily allow the user to upgrade components such as RAM, hard drives and server cards, or a mobile phone with a camera that can be easily removed and replaced with a newer, better version. Finally, if a product must be broken down into a new form, resource recovery helps remove and repurpose the materials it was composed of to create new items. Dell Technologies, for example, uses discarded carbon fiber from the aerospace industry to strengthen the plastics used in our products.
There are several drivers that help accelerate the adoption of waste reduction, from product design and disruptive technologies to reverse logistics and consumer engagement. A functional circular economy also requires the development of inter- and intra-industry ecosystems on a local, regional and global level. Such alliances often need to cross competitive lines, so organizations must be willing to develop a healthy sense of competition to serve a greater purpose.
With so many challenges and moving parts, the question becomes this: why would anyone but the “green extremes” of the world adopt a circular economic model? Basically, it boils down to the “4 Rs” of risk, revenue, reputation and responsibility. The recent global pandemic has spotlighted the area of supply chain risk. When the supply chain is disrupted in a linear economy, business continuity becomes a serious issue. However, with the circular economy’s ownership model, materials can either be recaptured through recycling or companies can recover products to be resold or remanufactured — thus avoiding pitfalls with supply chain disruption. Another area of direct impact on revenue is that with a circular economy, companies that take the ownership model retain the end rights to the materials in their product and can benefit financially from reusing those elements.
Another benefit to businesses that adopt the ownership model is that they can take responsibility for the safe disposition of the products that they make. Unlike the linear purchase model where consumers have ownership at end of life, the circular economy helps manufacturers ensure that entire product either has an extended lifetime, or at least parts of that product or the materials do.
The final “R,” reputation, can elevate the value of a brand in the eyes of consumers. Most people intuitively understand that wasting resources isn’t a great idea. For prospects with a commitment to fostering sustainability on an individual or corporate level, a company’s circular economy practices can influence purchasing decisions. Conversely, anytime you are taking materials out of the environment, your organization risks generating a negative environmental outcome or a negative social outcome to which you can be connected.
“We believe that the circular economy is something that’s important, not only for us, but for the planet. Dell is all in on this.”
— John Pflueger, Dell Technologies Principal Environmental Strategist.
For Dell Technologies, implementing a circular approach means taking advantage of technology’s ability to deliver new value in new ways, examining the bigger systems, identifying efficiencies, and uncovering new opportunities for both ourselves and our customers. The entire organization is committed to furthering the adoption of the circular economy in every area, from global policy development to local technology recycling opportunities to innovative programs like our partnership with Seagate to recover and reuse magnets made from rare-earth metals.
Nowhere is this more evident that with our Moonshot sustainability goals. By 2030, 50% of the material input into Dell Technologies products will be renewable or recycled materials as well as 100% of the materials that go into our packaging. In addition, while we already offer one of the best take-back programs in the industry today, our 2030 goal is to take back one unit for every similar unit put back on the market. It will require scaling up the existing program by a factor of 8-12x, but the entire company — from front-line workers to the executive suite are working to meet this challenge.
When it comes to enabling the circular economy within your organization, Dell Technologies Principal Environmental Strategist, John Pflueger, has some advice for getting started. “You’re playing a role in it already, whether you know it or not,” he explains. “So understand it. Be conscious of it. Make the decisions that are right for you and make the decisions that are right for your business — but make them consciously. Know what your connection is, and what you want that connection to be down the line.”