Season 5, Episode 162 : The Circular Economy: How to Incorporate Circularity into Your Business

Will Richardson 00:03
Welcome to the Sustainable Business Podcast. I'm Will Richardson. Today we're going to be talking about the circular economy. We'll be telling you what it means, how it differs from the standard linear economy, and how adopting circularity benefits your organisation and the world in general. Plus, we'll be showcasing some businesses that are already making the change to circularity. With me is Naomi Cohen from Green Element. Naomi specialises in resource and waste management. Naomi, thanks for joining us.

Naomi Cohen 00:33
Hi, Will.

Will Richardson 00:34
I guess we should start by asking you what the circular economy is and how it compares with the linear economy.

Naomi Cohen 00:40
The linear economy has been the way that we typically produce and use products and materials; we take resources, make products, use them and then throw them away, often well before the end of their useful life. This is described as taking make waste. The circular economy is an alternative model, which brings together several related themes, eliminating waste and pollution, keeping products and materials in circulation at their highest value, and helping nature to regenerate. To put it another way, the idea is to design waste out of the way we make and use things make products which lost can be easily repaired, and its end of life be easily disassembled for parts to be used elsewhere. And to minimise the impact of our activities to protect and preserve our natural capital.

Will Richardson 01:31
It's not actually a new concept, is it?

Naomi Cohen 01:34
No, you're right, the idea of the circular flow of materials and energy and cyclical production systems goes back at least to the 1960s. It's gained more traction in the last 10 years or so. And has been more widely discussed, thanks to the Ellen MacArthur Foundation, which is a great resource and a place to start looking things up about the circular economy. I'd also really recommend Dame Ellen's 2015 TED Talk, in which she describes the moment alone at sea, where she understood that the world's resources were finite and the need to take action.

Will Richardson 02:10
Yeah, it's brilliant. And we'll have a link on our websites for anyone who wants to watch that. We've had lots of guests on this show whose businesses demonstrate elements of circularity. And thinking about toast ale use surplus bread from sandwich making businesses to replace a third of the barley, they need to brew their beer. In fact, they also pass on spent grain at the end of their process for animal feed and local farms.

Naomi Cohen 02:35
Yeah, that's a great example. They're making the most of the bread and the grain and preventing those from being wasted. It's also a really nice example of industrial symbiosis. The idea is that surplus or waste products from one business can be raw materials for use in another, and so keep things in use for as long as possible.

Will Richardson 02:55
Juice round is another business that's adopted a more circular business model. Here's Silvia Garvin:

Sylvia Garvin 03:00
I was very much involved in providing bespoke drinks for businesses and offices. And over time, as I as our orders grew, I was more and more alarmed, I guess, by the amount of packaging that was passing through our doors and couldn't get out of my mind, the extent to which the drinks took a long time to make by hand, we took great care and attention in providing our products in our clients choice of packaging, there's a lot of effort going into the personalization of our drinks. And then with the objective reality, of people finding them delicious and delightful and consuming them very rapidly. And then the packaging that they're in would be sitting there and floating around in the environment for a long time afterward, I guess I was more conscious of the scale of packaging that was passing through our doors and felt an increasing sense of responsibility as a drinks producer to find a different way of handling that and really focusing on reuse as a solution. Then we started building on that concept by working with corporates in London, who were interested in having business sort of offers catering to reusable glass bottles. So we built up a nice client base over time providing that service, which was called the juice round. And then the pandemic happened, people stopped going to offices, and people stopped attending events. And I really saw an opportunity to perhaps pivot that idea and offer it more widely to consumers through retail outlets.

Will Richardson 04:38
How's your business been received by the public in the hospitality sector?

Sylvia Garvin 04:43
It's been really positive. Actually, initially, I was a little bit unsure about, I guess the viability of the refill model in a more mainstream context. So I could, you know, understand within an office or an office context that reusable packaging makes. I sense because our customers are consuming their drinks at the desk, they just pop the bottles in a crate within a kitchen area, it was a sort of contained environment within which to consume our drinks. And from a business perspective, there's that cost of recycling packaging is what is reduced, because it's being essentially it's not, it's not part of the waste stream that that business generates. So it made perfect sense within a business context. I was initially, I guess, intrigued to see how it would be received by our retail partners. But the response has been absolutely fantastic in the sense that they've really got behind the environmental agenda and have been really keen to promote it in terms of install marketing. And then in terms of engaging with consumers, we've really been pleasantly surprised by the levels of bottle returns that we're seeing. It's been really positive.

Will Richardson 05:54
That's great. And how do you work with your trade partners to ensure you get the bottles back?

Sylvia Garvin 06:00
We have created personalised marketing for the stores so that they feel that their point of sale information is going to fit their premises needs a suit, the layout of their drinks, fridges really speak to their audience in terms of encouraging them to return the bottles. The other thing that we have is a refund on that bottle. So there's a small financial incentive for consumers to return their bottles. And the retailer then is rewarded in inverted commas for that bottle collected in the form of a discount off their monthly invoice. So the idea is it with it being a bottle that we don't need to buy, we pass on that benefit down the line. And some of our retail partners have expressed that in the form of a temporary refund per bottle for the customer. Alternatively, some of them have really got behind local charities and make basically made a donation to the customer's behalf for that bottle that was returned. So it's sort of an additional when we leave it very open to our retail partners to decide what's going to work for them operationally. But essentially all working toward a common cause.

Will Richardson 07:18
What are your future ambitions for the juice round?

Sylvia Garvin 07:21
So as I sort of touched on previously, I would love to see a juice round in every major city in the UK, I would like reusing and refilling packaging to be something that consumers embrace and feel comfortable with and feel is the norm that it shouldn't feel onerous. It shouldn't feel unusual. So I would really love more of a, I guess mass adoption of reusing and refilling. I think for me, that sort of what really felt counterintuitive is that glassy is recycled relatively easy, but the thoughts of the kind of breaking it up and smashing it into a million pieces to then remake. It seems so counterintuitive that I think more of an awareness of where packaging comes from. And that actually it's a valuable asset, not just a disposable commodity, I think more of a sort of collective realisation around that would be very heartening just from an environmental perspective.

Will Richardson 08:30
Juice round is a great example of a change to a circular packaging system by using refillable bottles. They've done really well to set this up both with business customers and retail outlets and get engagement from the public with their bottle return scheme.

Naomi Cohen 08:44
Absolutely. It's really impressive. They made it easy for businesses with a return and refill model, and have incentivised the public to take part as well - making things easy for consumers is key. And it's a great ambition to make refill models more mainstream. Most of the major supermarkets have been piloting refill schemes for certain products. And it'd be really, really great to get this rolled out to all branches with a wide product range.

Will Richardson 09:12
It certainly would, wouldn't it? Moving from single-use packaging to a refill model is just one way we can change how we do things. Brendan Rowan from Cradle to Cradle talks about a very interesting product that demonstrates some of the other Circular Economy characteristics you mentioned.

Brendon Rowan 09:29
The Cradle to Cradle methodology is based on really authentic and clearly communicated metrics in terms of developing sustainability strategies for any company. So it's based on the premise of really deep down design in terms of using the right materials for the right reasons at the right times with the right people. So when we're looking at product design, from a cradle to cradle perspective, we take into consideration the five, what we like to call hallmarks, which are material health material reutilization, renewable energy, water, and soil stewardship, and social fairness. We take those elements, we then kind of distill them, particularly in, in the material health segment of that, we look at materials down to the parts per million. So we really go down deep into the chemistry of what makes a product, what makes a healthy product. And once you define that, you can then say, okay, great, we're looking at these materials, how are we going to circulate them? And then the energy used to make these things? Do they come from renewables? And are we? What is our effluent? Like? Is it good enough to for human consumption, and how we're treating the people that are working with those products, or manufacturing those things. So when you're looking at the Cradle to Cradle system, it's it's a multi-attribute approach, rather than just one siloed assessment tool.

Will Richardson 11:02
I wonder if you could give us an example of a piece of work that you've done. There's a really simple project actually, that is, it's being developed and the projects have now been taken over to the US. It's a baby food master water, which is made out of credit quail certified Parliament's those polymers were designed by the Eastman company, and our Credit Appraisal certified at the Gold level. So that project is literally a tool that allows mothers to wean their babies by macerating food that I prepared as parents already in US NMS writer. And that will, that will allow the actor to have their own parent-made food rather than bought food. And we know how that they're bought food creates a lot of waste product, in terms of the packaging and so forth, that gets diverted to landfill, unfortunately. And once that tool has been utilised, because we know babies have a weaning space of about 18 months, 18 months or three years, possibly up to three years, we take that product, and when recirculate that, on a platform, which invites other mothers to then swap and change and exchange those tools. By the end of that cycle of use is probably the tool itself designed to be used 50,000 times so there's about that amount of cycling use, we then take their product back or the company takes the product back and palletizers that into another product or the same product. So that it's true circular motivation. So when you palletise, they put it down to a mold as it were and then made it into something else?

Brendon Rowan 13:01
Well, when it goes go into making another it's called a Wonder Wean - and that product or the used material gets washed, cleaned, and re palletized, and remolded into the wondering. Again, so you've got about a 98% retention on your value on the value of your materials. Wow, there's a 2% loss, which is actually not bad. If you think about the reclamation of value, do you know what I mean? Yeah, and that's quite, it's quite a definitive difference. A lot of the lot of products that we you know, any plastic product that we get out there, most people just throw that away. So if you're retaining the value of that thing, that creates a different way of looking at how how to manage your business model, because then your business model depends on people being responsible for the materials, you know. And as a customer, you want to know, when you're buying something, you want to know that that that company that you've bought this thing from, has taken those things into consideration and given you an easy route to abide by those strategies.

Will Richardson 14:08
The Wonder Wean that Brendon talks about seems to take a lot of the circular economy boxes, doesn't it?

Naomi Cohen 14:13
Definitely. It demonstrates the benefits of careful product design. This is something designed for longevity for regular and repeated use to be passed from one user to the next. It can be repaired and when it's truly at the end of its life, remanufactured from its component parts.

Will Richardson 14:31
Brendon also talks about custodianship, doesn't he?

Naomi Cohen 14:34
Yes. And that's also a really important part of circular economy thinking. We're all custodians of the resources we use and the natural world. There's a duty of care for waste management. But I really feel we need a similar duty of care for resource management so that everyone in the chain has responsibility for product design and manufacture to the way we as consumers make decisions about what we buy and how we use things. identifying opportunities for extending life of these things or allowing someone else to benefit from them, and creating processes for repair and remanufacture. And eventually the ability to extract parts and valuable resources for reuse in new products.

Will Richardson 15:15
Now, Naomi you've had quite a varied and interesting career history, haven't you, including some time in the waste and resource management sector.

Naomi Cohen 15:24
That's right. It's an area of real interest for me, you can learn so much about a business by what it throws away. It's such an amazing diagnostic tool, you can use it to identify opportunities for savings and change. One great example is the Cagayan group. There is a removals company also doing office clearances, and they saw an opportunity to develop a business selling, refurbishing, and maintaining office furniture. I've worked in a construction and demolition waste business. And I've seen firsthand the amount of perfectly serviceable office furniture and other products which get thrown away unnecessarily when businesses move offices or renovate.

Will Richardson 16:07
Yeah, it's a family business too. Here's Sam Coggin:

Sam Coggin 16:10
Back in 1989, when it really started kicking off for us to be able to get our hands on good quality furniture that was coming out of government buildings, councils, places like that. So it's all high-end furniture. And before my dad really realised how good the furniture was, it was in such good condition and it was being thrown, you know, and they kept getting thrown away. We thought, hold on wait, can we sell this fortunately for us, my granddad set the business up back in 1969 as agricultural merchants, so we had a huge network of farmers that at the time needed to start buying filing cabinets, a desk needed a personal set of drawers. And we already had hundreds of farmers in our area that were making use of the furniture that we were able to take away from the government buildings. And then we had an already established network of farmers that required the furniture. So that really got the ball rolling.

Will Richardson 17:04
Was there a driver back then do you think for sustainability? Or was it just economic drivers,

Sam Coggin 17:12
Economic 100%, you know, we were coming across good quality furniture. And we were 60, 70 80% of the price of the same furniture new, but what they really valued was the quality of the furniture that we're getting, even though it was secondhand upcycling as we still really call it. And they liked the fact that they could buy something that was that's been on the market already for five years and then lasted them another 15, 20 years. But obviously now with the whole climate emergency and the Ellen MacArthur Foundation, you know, putting all this new kind of information, you know, out there into the world. And for us, it's absolutely great, because it's allowed us to understand our business more, and what it actually means for future procurement and disposal of quality office furniture. You know, we've been talking to different manufacturers, big manufacturers around the UK, and they're all gearing up for it. They're getting ready for it. I mean, everyone's talking about remanufactured engines, you know, ink toners, you know, computers and things like this, but office furniture still kind of at the moment is the bottom of the list. And but you look at where people are going to work is sitting on a chair, and they're working at a desk, what's happening with that furniture? How has it been purchased? For what reasons? Are they looking to purchase the furniture, and then what happens to it in their life, and that that's where we're really kind of shout to the height Hills is you should be coming to us to for us to supply it, and then dispose of it and maintain it. We don't want to just, you know, supply and in furniture that's 98% recyclable, if that's what we're shouting, it goes against what we're actually trying to achieve. You know, we're trying to provide something that's yes, it can be recycled at the very end of its life. But we need to come in next midlife to make sure not only is it being getting maintained properly for the whoever owns it, whichever organisation owns it. And that's been done very poorly at the minute. I mean, there's not enough information really out there and the manufacturers aren't really wanting to push that there are spare replacements. If a chair fails, they just want the distributors to go back to them get rid of the old one that might just have a broken caster. I mean, if you know anything about office chairs that the casters The wheels on the bottom of the chat, they just ping straight out and you can put a new one on and the number of times I'll walk into a building and I'll say what's happening with all those shares with the missing casters, oh, they're getting thrown away because the wheels are broken. We've ordered some new ones and 500-pound chair you're gonna throw away when you could buy a 50p castor replacement. It's craziness. What would you say your business superpower was? 100% upcycling office furniture, you know, the amount that we bring in is a crazy amount. We never like throwing anything away. You know, we'll keep it when it gets to the point. It's like why are you keeping Why are you keeping hold of that but everything if we're to prove a point, all quality office furniture has replaceable parts. And that's key To always, you know, if anyone knows is in the industry is oh yeah go to Coggins for some good quality secondhand furniture, or upcycle furniture, you know, we've tried to get away from calling it secondhand furniture because it just devalues it as soon as you say it. Whereas if we call it upcycled I mean when it sounds more current, or people are more understanding what it is because it's not recycled furniture now mean Recycling's different terminology. So we thought upcycle is great for us right now. But we do really want to across the board remanufactured every single piece of furniture that we come across, you know, we've got a heck of a lot to do. But that's the ultimate goal is to be known for remanufacturing on a commercial scale,

Will Richardson 20:37
When it comes to running an ethical and sustainable business, what would you say your biggest struggle so far has been and how you've overcome it?

Sam Coggin 20:45
We're not seeing very much support in the way of remanufacturing grants, or grants to allow us to do more r&d in this space. So we can actually get the message out there. Because for me, a big thing of mine is to try and get more people involved in this space.

Will Richardson 21:03
Any advice for anyone listening to this podcast and what you think that they should do? Or what you'd like them to do?

Sam Coggin 21:10
Yeah, I mean, obviously, when we're in the procurement stage of buying furniture, I think should definitely look at organisations that are supplying upcycled office furniture, because there's a lot out there, and a lot of people don't really know where to look. So I mean, that's just a quick Google search, and you'll find a lot of the right people. But if you really want to support us, and what we're doing, look for the ones that are really shouting about upcycling, and remanufacturing. And its longevity of it. You know, there are a lot of secondhand dealers out there that will sell secondhand furniture as a byproduct service of the main agenda, which is just selling lots and lots of furniture. But if people can really look into what companies like ours are doing, you know, there's just this premier sustain, there's obviously Greg, right office, these guys were all on the same mission to really get this going. And but yeah, I think people should, if they can, I mean, we do understand that it is hard as a small business, to go out and spend a lot of time looking for sustainable office furniture. And like I said, a lot of the startups that we deal with, and the smaller businesses, they're in it to find something that's affordable. And while they're purchasing it, we try and educate them in a way where they're not going Listen, we're not bothered about the impacts of this, we don't need a certificate to say how much co2 We've just prevented by buying a secondhand desk. And we have to do it in a way where if you have any issues with this secondhand piece of furniture, just know that we're here to keep it going for you. If you want to change the colour of it, we can re-upholstery, if you want a replacement gas lift, we're here to do it. And then they actually ask the question because of the whole climate crisis and everything else they do asks how they go, why do you do that? Do you not try to keep selling as a new one every time? No, we don't, you know, we could do and we will probably be more profitable doing that. The main thing for us is to be pushing something out and having people be able to find some information on upcycled and remanufactured office furniture and that's why we're trying to centralise it under the TCG system. And we are inviting people if they feel like they can help us with this. We're open to hearing what people have got to say maybe how we should change that and things. Yeah, we would love to talk and possibly collaborate and really works on kind of partnerships and synergy partnerships definitely

Will Richardson 23:28
Such a great opportunity, both for those selling those refurbished products, but also for those looking to source quality office furniture at a much lower price. For the Coggin Group. It started as a business opportunity, but they've also come to value the environmental impacts of what they are doing.

Naomi Cohen 23:43
They really have and research from WRAP, the Waste, and Resource Action Programme, shows that refurbishing an office chair can reduce its carbon footprint by 45%. And reusing a desk by around 36%. Repair and refurbishment are very much part of the cog in the business model. Being able to repair a product extends its useful life. It's really crazy to think that a 500-pound chair might have been thrown away for one to for 50p castor bizarre isn't it. Yeah, it's really wild. In previous generations, people really looked after their things and most high streets had repair shops. But more recently, it's become much harder to source spare parts. And some products are notoriously hard to open for repair. The right to repair legislation introduced last year for some electrical items is an improvement. But we need other incentives and interventions to make repair easier, accessible, and more mainstream and to level the playing field so that it's no longer cheaper and less hassle to buy new than to repair.

Will Richardson 24:49
Yeah, I mean, Sam talks about collaboration. This is a really important part, isn't it?

Naomi Cohen 24:54
It really is. We need to change our approach to facilitate the success of businesses like the Coggin Group, manufacturers working together with repair and refurbishing businesses to prolong the useful life of their products and keep them working within the economy. Organisations like the Reuse Network have been promoting this idea for a long time.

Will Richardson 25:16
Are there any other examples of circular economy practice that would be useful to mention at this point?

Naomi Cohen 25:21
It's such a big topic, so much we could talk about, but there is one other point I think is worth mentioning. It's called Servitization. And it's an important concept in circular economy thinking. It's the idea that when we buy things, we often don't need the item itself as opposed to the service it gives us. And rather than owning the item, there might be other ways to get that service. Toast Ale have a great example of this in their business model. They make beer but they don't own a brewery. Another brewer makes a beer for them. It shows the potential for products to be made without each producer having the infrastructure needed for production and the environmental impact that goes with it. There are examples of this and other sectors as well, like equipment rental and sharing opportunities. You have examples of this in the construction and education sectors, equipment, which is very expensive to buy, but which might only be needed occasionally. It makes so much sense for organisations to share the use of these items. And for individuals, there are local neighborhood sharing platforms for household items like lawnmowers and kitchen equipment.

Will Richardson 26:32
Yeah, there are lots of opportunities already out there aren't there. Is there anything else that we could be doing to start moving towards a more circular way of living and doing business?

Naomi Cohen 26:43
I think people are already doing some of these things without necessarily being aware of them. There's a whole range of things that we can do starting small and simple, reusable coffee cups and water bottles, choosing refill options in supermarkets and other shops. The next level might be looking at the way that we source things like clothes, furniture, electrical and electronic equipment is worth asking yourself, Do I really need to buy new, there are opportunities for quality secondhand purchases and rentals. If you decide it has to be new buy well for longevity repairability items that can be refurbished, resold, and ultimately disassembled for parts. I'd also like to mention building products, both commercial and residential. The construction sector's contribution to the overall UK greenhouse gas emissions is around 40%, which is really substantial. This is an area where there's a great opportunity to think in a more circular way. For projects already underway, there will be reuse opportunities for building contents like the Coggin Group example or even parts of the infrastructure itself. But before these projects have even begun, when they're still on the drawing board, the option for refurbishment rather than demolition rebuild should be carefully considered.

Will Richardson 28:04
So many options out there aren't there. And from listening to you, it just feels that we are, you know, we're almost there. But is there any way that we can find more information about this?

Naomi Cohen 28:18
There are a lot of amazing organisations and resources out there to help and we'll tell you how to find them in a moment. But to name a few right now, there's the Ellen MacArthur foundation that we discussed at the beginning. There's Woolpit, a website you can use to give away or loan office furniture, equipment, and other resources. For refurbished its products. There are now several providers. The Edinburgh jewelry maker is a nice example, they've recognised the potential of repair and reuse while providing skills training and donating electrical goods to people who would not otherwise have access to these items. Sharing platforms for borrowing and lending equipment in your local area include things like the Library of Things, which is an example for individuals, and Share Plants in the construction sector allows businesses to rent out the equipment which they're not currently using. Last but not least, there are well known examples like eBay for buying and selling pre-loved items, Freecycle, and many wonderful charities for giving away and finding a huge variety of items, as well as countless Facebook groups based on shared interests or location.

Will Richardson 29:30
There are so many companies out there doing really good things and working collaboratively with society. You know, we've had the Good Goods - Zac Lawless - and that's the Reusable Wine Bottle Company. You know, it's just fascinating to see an amalgamation of so many businesses that are trying to do the right thing and using the circular economy as a business model. And all of those links to all of those resources are in the show notes for this episode, or just click through to our podcast web page. And don't forget, you can join our post-podcast discussion at sustainabilitysolved.org. So that wraps up our focus on circularity. I hope you found it useful. I certainly did. And if you enjoyed this podcast, please rate and subscribe so you don't miss an episode. Next month we'll be asking the guys from Abel and Cole "Does food have the power to save the world?" Until then, take care