W4/W2: The Circular Economy

1. Case Study Analysis: Circular Economy in Real Businesses

In this workshop, you are required to analyze a company that has implemented circular economy strategies and assess their circular solutions. The goal is to identify how these businesses integrate sustainability and circularity into their operations.

Case Study Companies (Industry Examples)

Questions to Consider for Case Study Analysis

1. Which circular economy strategies have they adopted?

2. What are their key sustainability initiatives?

3. Can you identify their use of the “R Strategies” (Reduce, Reuse, Recycle, etc.)?

🔹 Example: Patagonia’s Circular Strategies

• Reduce: Uses recycled materials in manufacturing.

• Reuse: Offers Worn Wear program for repairing old clothes.

• Recycle: Converts old clothes into new garments.

🔹 Example: Apple’s Circular Economy Approach

• Reduce: Eliminated plastic packaging.

• Reuse: Refurbished and resold iPhones.

• Recycle: Uses Daisy Robot to disassemble old devices for recycling.

2. Industries in the Linear Economy

Many industries still follow the linear economy model, leading to waste, pollution, and resource depletion.

Key Linear Economy Industries

1. Fashion/Textile

   • Fast fashion leads to textile waste, water pollution, and overconsumption.

   • Example: H&M's fast production cycle vs. sustainable alternatives.

2. Food and Beverage

   • High food waste, excessive use of plastic packaging.

   • Example: Unilever’s shift to biodegradable packaging.

3. Electronics

   • E-waste problem from short product life cycles.

   • Example: Swappie repairs and resells second-hand smartphones.

4. Cosmetics

   • Overuse of single-use plastic packaging.

   • Example: Lush offers zero-waste packaging and refill stations.

5. Construction

   • Massive material waste and high carbon emissions.

   • Example: Modular buildings with recycled materials.

3. Evaluating a Product’s Value Chain in a Linear Economy

A linear value chain follows this sequence:

1. Raw Material Extraction

   • What materials are used?

   • Where are they sourced from?

   • Environmental/social impact?

   🔹 Example: Cotton farming for clothing requires excessive water & pesticides.

2. Production & Manufacturing

   • How is the product manufactured?

   • What emissions/waste are produced?

   • Labor conditions in factories?

   🔹 Example: Many fast fashion companies outsource to low-cost countries.

3. Consumption

   • How is the product used?

   • Does it promote overconsumption?

   🔹 Example: Smartphones are designed for obsolescence, forcing frequent upgrades.

4. Disposal & Waste Management

   • What happens at the end of life?

   • How is it disposed of?

   🔹 Example: Plastics in cosmetics are not biodegradable, contributing to waste.

4. Challenges in the Linear Value Chain

🔹 Example: E-Waste Crisis

• Less than 20% of electronic waste is properly recycled.

• Toxic materials like lead and mercury pollute ecosystems.

5. Transitioning from a Linear to a Circular Economy

To redefine the value chain, companies must introduce circular solutions.

Circular Strategies (R-Strategies)

The 9R Framework helps businesses shift towards circularity.

6. Implementing Circular Solutions in a Business

Businesses need to redesign their supply chains by integrating circular principles.

Key Circular Economy Building Blocks

1. Circular Supply Chains – Use renewable/recycled materials.

2. Product Life Extension – Encourage repair & refurbishment.

3. Reverse Logistics – Create take-back & recycling programs.

4. Innovative Business Models – Adopt leasing, sharing, or subscription services.

🔹 Example: IKEA’s Circular Economy Initiative

• Introduced furniture buy-back programs.

• Uses recycled wood & sustainable sourcing.

7. Evaluating Circular Solutions

When choosing which circular strategy to implement, businesses must consider:

✅ Effectiveness – Does it significantly reduce waste?
✅ Economic Viability – Can the business afford the change?
✅ Scalability – Can it work globally or in multiple locations?
✅ Social Impact – Does it improve labor conditions and consumer behavior?

🔹 Example: Which is better for fast fashion?

• Recycling? → Still consumes energy.

• Resale & Repair? → Extends product life with less environmental impact.

8. Challenges in Implementing Circular Economy

1. High Initial Costs – Investing in recycling infrastructure is expensive.

2. Consumer Mindset – Many prefer new products over refurbished ones.

3. Supply Chain Complexity – Requires cooperation from suppliers & distributors.

4. Regulatory Barriers – Some policies favor linear economies.

🔹 Example: Why isn’t plastic-free packaging mainstream?

• Biodegradable alternatives cost more.

• Consumers aren’t always willing to pay extra.

9. Key Takeaways

✔ Many industries still operate in a linear economy, leading to environmental challenges.
✔ Companies must transition to circular strategies like recycling, reuse, repair, and reducing resource consumption.
✔ The 9R framework helps identify circular economy solutions.
✔ Evaluating the best circular strategy requires considering cost, effectiveness, and scalability.
✔ Challenges include consumer resistance, costs, and regulatory barriers.