(Copyright: Slaters Electrical Ltd.)
A recently published report has revealed that major corporations are calling for new policies in order to boost the circular economy.
In the latest news from Climate Action, which works in partnership with UN Environment, the Corporate Leaders Group on Climate Change has published a report that shows that “corporate giants are asking policy-makers to create an inclusive and robust framework to boost a circular economy.”
The report, which will be unveiled at Stora Enso’s headquarters in Helsinki, is entitled ‘European industry in the 21st century: New models for resource productivity’. Stora Enso specialises in “renewable solutions in packaging, biomaterials, wooden constructions and paper.”
The findings of the report are based on interviews with fourteen corporations which already use circular economy principles in their supply and production chains, among them Coco-Cola, Philips and Tesco.
It reveals that “low carbon and oil prices have led to low commodity prices and as a result, businesses lack incentives to replace virgin resources with recycled materials.”
In response to these findings Jill Duggan, who is the director of the Corporate Leaders Group on Climate Change, stated, “The price incentives are all wrong. It is often cheaper to use virgin material rather than use recycled materials or re-use of existing products.” She continued, “We really need to think about the price incentives for virgin materials. This report is hopefully the start of a conversation.”
The report also detailed examples of businesses transitioning to service-based delivery models to boost their resource productivity and examined how smart design practices “can enable resource re-use or product repair.”
Statistics released by the European Commission have shown that if businesses become more ecologically sustainable through “waste prevention, eco-design, reuse and other relevant measures” this could lead to net savings of €6 billion ($7.1 billion) and could reduce greenhouse emissions by 2-4 percent.
Duggan explains, “The benefits in terms of being less exposed to resource price volatility or scarcity are considerable.” She went on, “We are starting to see zero waste markets and the interest is particularly acute amongst younger people.” She concluded with a warning note to corporations: “If you want to keep millennials engaged you will have to act.”
Several case studies of prominent businesses that have been leading the circular economy transition were included in the report, such as that of Helsinki’s Stora Enso, which “has launched an innovative concept” whereby the business’s “waste resources can be re-used or repurposed by other industries.”
The company’s CEO, Seppo Parvi, is calling “for stricter policies, such as ‘eco-design’ and public procurement requirements that will prioritise materials and services with low carbon footprint.” She has also made the suggestion of removing VAT from the repair of white goods which she sees as “a very simple measure with immense impact on the circular economy thinking.”