Using business resources sustainably to enhance your operations

Using business resources sustainably is now a fundamental metric for corporate governance and ESG success. Here’s a guide to explain the basics. 

Let’s face it, the old way of doing business – take resources, make something, use it, then bin it – just isn’t cutting it anymore. Now, there are limits. Governments, investors and consumers don’t want to see hints of waste, because their values have shifted strongly towards sustainability. 

This has happened because resources are getting scarcer, environmental pressures are mounting, and it’s becoming clear that sustainable models can bring long-term corporate security if done correctly. 

That’s where the circular economy comes in. It’s a major strategic shift, offering a smarter way to achieve long-term resilience, get ahead of the competition, and grow sustainably. The big idea? Ditch the throwaway culture. Instead, let’s design out waste from the start, keep products and materials cycling at their best, and help nature bounce back.

The circular economy is a different approach which offers a practical, system-wide fix focused on sustainable resource management for the long haul.

At its heart, championed by groups like the Ellen MacArthur Foundation, it’s about three core ideas:

1. Stamp out waste and pollution: Think of waste not as inevitable, but as a design flaw that could be fixed by updates to products. 
2. Keep products and materials in play: Make things last. Reuse, repair, refurbish, remanufacture – keep the value locked in for as long as possible. 
3. Give nature a boost: Don’t just aim to do less harm; actively help natural systems recover and thrive.

This is worlds away from the linear path causing resource drain, biodiversity loss, pollution, and climate chaos. The old model makes businesses vulnerable to unpredictable prices and supply chain headaches. Switching to circular isn’t just the ‘right’ thing to do; it’s smart strategy for business resilience through circularity. It’s how we can grow without costing the earth. Plus, the potential payoff is huge – studies point to a multi-trillion-dollar global opportunity, driving GDP, sparking innovation, and creating heaps of jobs.

Beyond the drawing board, making circularity work means shaking up operations to boost resource efficiency and slash waste using waste minimisation techniques.

It’s about getting more from less: using less material per product, choosing inputs with lower footprints (like recycled or bio-based materials), cutting energy and water use in production, and making sure your own operational kit (machinery, buildings) lasts longer and is handled responsibly at its end-of-life.

Lean manufacturing’s focus on cutting waste is a great starting point. But for circularity, we need to think bigger. Use tools like Value Stream Mapping to map the entire resource lifecycle, not just the factory floor. Redefine ‘waste’ to include anything that harms long-term sustainability. The aim isn’t just efficiency in one spot, but maximising resource value across the whole closed-loop system.

Getting materials and products back to be reused or repurposed is the engine room of the circular economy.

• Reverse logistics: This is the whole process of getting stuff back from users so value can be recovered. It’s essential but often tricky. Think varied returns, cross-border complexities, costs, and getting a reliable flow of used items. Solutions need smart tech (digital platforms, tracking), good planning (regional hubs), and strong teamwork across the supply chain. Nailing reverse logistics operations are vital for making loops actually close.
• Material recovery tech: Better tech makes it easier to unlock value from old products. Think AI-powered sorting, chemical recycling for tricky plastics, composting for organic waste, and ‘urban mining’ for valuable metals in e-waste.
• Industrial symbiosis: One company’s waste becomes another’s treasure. These networks save money, cut landfill, conserve resources, and boost local economies, but they depend on trust and good coordination.

Going circular isn’t just good for the planet; it’s good for the bottom line.

• Cost savings: Spend less on raw materials, energy, water, and waste disposal. Remanufacturing brings big savings, as companies like Renault have shown.
• New income streams: Make money selling recovered materials or by-products. Embrace circular business models like product-as-a-service (think leasing or pay-per-use), set up resale platforms (like Patagonia’s Worn Wear), or offer repair and upgrade services.
• Competitive advantage: Stand out with sustainable products. Drive innovation. Build supply chain resilience by relying less on volatile virgin resources. Forge stronger customer bonds through ongoing service and engagement. Attract top talent who want to work for purpose-driven companies.

Circularity acts as a powerful shield against various business risks:

• Tackling environmental risks: Directly addresses resource depletion, price shocks, pollution, climate change (lower emissions!), and biodiversity loss.
• Lowering regulatory risk: Stay ahead of tightening environmental rules on waste, materials, and reporting.
• Building brand value: Show you’re responsible and innovative. This boosts your reputation and builds trust – as long as you’re transparent and avoid ‘greenwashing’. It strongly supports corporate performance aligned with ESG frameworks.

You can’t manage what you don’t measure. Tracking progress is essential. Key Performance Indicators (circular economy KPIs) help:

• Material Circularity Indicator (MCI): A score (0-1) showing how circular your material flows are. The MCI methodology provides a structured approach to work this out.
• Waste Diversion Rate: How much waste avoids landfill.
• Recycled Content (%): How much recycled material you’re using.
• Renewable Content (%): How much material comes from renewable sources.
• Product Longevity / Utilisation Rate: How long products last or how intensively they’re used.
• Circular Revenue: How much money comes from circular offerings. The WBCSD’s Circular Transition Indicators framework helps define this.

Don’t forget the financials – showing the Return on Investment (ROI) makes the business case clear.

Moving to a circular economy isn’t just a tweak; it’s a fundamental upgrade for businesses wanting to thrive long-term. By embedding circular economy principles – from design and operations to circular business models and measurement – companies can unlock serious value, build resilience, manage risks, and win customer loyalty. It takes commitment, innovation, teamwork, and looking beyond the next quarter. Those businesses actively embracing sustainable resource management through circularity aren’t just adapting; they’re leading the way to a smarter, more prosperous, and genuinely sustainable future. Getting on these strategic pathways to a circular economy is simply smart business.