Circular economy companies and startups are making great strides to mitigate climate change by adopting new ways of resource management and manufacturing, and preserving the environment along the way.
Moving towards a circular economy is crucial for extending the longevity of our natural resources in a sustainable way that can also enhance the quality of life for consumers.
Overcoming this hurdle includes acknowledging the benefits of sustaining already processed resources by circulating them within the economy for reuse.
Thankfully, many large corporations and startups are already embracing the concept of a circular economy.
To see how, let’s delve into the business model of some circular economy companies!
What is a Circular Economy?
A circular economy is best described as a resource-preservation economy that cuts waste and reduces carbon emissions by circulating materials and products for as long as possible.
The aim is to encourage the responsible utilization of natural resources by modifying the design of materials, products, and services to reduce their dependence on resources and making use of waste as a valuable resource to create new materials and products.
At the end of a product’s life, the materials used to make that product are kept in the economy and reused wherever possible.
A Circular Economy vs A Linear Economy
Recycling in a circular economy typically refers to refurbishing, repurposing, and extracting materials for further use.
The concept of a circular economy essentially involves minimizing waste. This means that when a product has served its purpose, its constituent materials are reused within the system to the greatest extent possible.
Thanks to recycling, these materials can be productively used repeatedly.
On the other hand, in a traditional linear economy, resources are acquired to make products, which are consumed and discarded as waste.
A linear economy requires a continuous flow of raw materials and, in the process, produces vast quantities of waste that pollute the environment.
A linear economy relies on large quantities of cheap, easily accessible materials and energy.
Circular Economy Transformations
Currently, only 7.2% of used materials are cycled back into the economy. This significantly burdens the environment, perpetuating climate, biodiversity, and pollution issues.
During the last 20 years, the amount of material consumed has increased by more than 65% worldwide, and in 2019 it reached 95.1 billion metric tons. Additionally, it is estimated that 13% of the food that was intended for human consumption was lost after harvesting, and another 17% was wasted by retailers and end-users in the same year.
The United States Environmental Protection Agency (EPA) has outlined a visionary plan to tackle waste management and establish a range of measures aimed at promoting a circular economy.
This vision reflects the urgency of the climate crisis.
The Save Our Seas 2.0 Act is a circular economy initiative that involves restorative or regenerative industrial processes and economic activities.
This enables products from resources to maintain their highest value for as long as possible and targets the elimination of waste through superior designs of materials, products, and systems.
It is a change to the linear economy in which resources are mined, made into products, and become waste.
Carbon-neutral companies are on the rise. These are businesses with net zero greenhouse gas emissions.
Investing in green energy and zero-waste technologies is a sure way to convert to a circular economy, and the reward is being recognized as an environmentally friendly business worthy of association.
How Does a Circular Economy Impact the Environment?
Slowing down the impact of climate change requires us to move towards a circular economy.
According to the International Resource Panel of the United Nations, nearly 50% of worldwide greenhouse gas emissions are caused by natural resource extraction and processing.
Embracing the concept of a circular economy can potentially ensure environmental protection, economic improvement, and social justice.
However, to make a circular economy sustainable, it is essential to ensure a certain level of social equity.
Check out this video by the Ellen MacArthur Foundation:
Ethical company policies and behavior involve sustainable sourcing and use of materials, reducing production waste, ensuring energy efficiency, and advocating fair labor policies.
How we extract, process, and dispose of resources can affect vulnerable communities negatively. This is evident in the environmental and health impacts caused by a non-circular economy.
Many landfills, as well as manufacturing and processing facilities, are located close to low-income communities, usually plagued by unemployment and a lack of education and opportunities.
The change to a circular economy can empower existing sectors to stimulate local employment and introduce training facilities to provide new circular economy skill sets.
This can be achieved through the repair and reuse sectors within new circular business entities.
In the past ten years, the prices of natural resources have either gone up or become more unpredictable. Opting for recycling of raw materials can mitigate the risks linked with supply, such as price fluctuations, availability, and dependence on imports.
It is essential to emphasize the significance of critical raw materials that are needed to manufacture technologies that have a pivotal role in achieving the objectives of mitigating climate change. For instance, batteries used in electric vehicles and energy storage systems are prime examples of such technologies.
The environment is taking a hard hit as worldwide material consumption increased eight times in the 20th century, and by 2050, global resource use is expected to triple.
As a result, the world the growing challenge that many resources are slowly depleting and will probably become scarce.
What are the Benefits of a Circular Economy?
A circular economy has the potential to:
- Reduce our dependency on non-renewable resources
- Lower carbon emissions
- Reduces waste
- Provide benefits to end-users in terms of savings
- Creates new opportunities for companies
Among the benefits to companies is new job creation. The circular economy may also decrease the cost of materials, allowing companies to run more efficiently.
Achieving a circular economy can be a daunting task and will require a global effort of individuals, businesses, and governments to achieve.
The benefits alone should be inspirational enough to transition to a circular economy.
4 Circular Economy Startups
The circular economy startups listed below are destined for great heights. Their vision and approach to sustainability are on a whole new innovative level.
LICO
LICO Materials Private Limited is a startup circular economy company with a focus on recycling end-of-life lithium-ion batteries.
They are geared to provide a cleaner, more ethical method of producing critical finite battery materials than the mining industry.
LICO has created a sustainable circular economy solution in the lithium-ion battery supply chain for the recovery of critical materials.
Lithium recovery, cobalt recovery, manganese, and nickel are recovered and resupplied to battery manufacturers, giving critical materials a second life.
Their battery recycling plant uses scalable and standard equipment to separate plastics, copper, aluminum foils, and black mass.
The black mass-produced contains materials like lithium, cobalt, manganese, and nickel. Proprietary hydrometallurgy technology is used to recover critical metals from the black mass produced during shredding.
Coffee Resurrect
Coffee Resurrect is a startup that specializes in upcycling coffee waste collected from coffee bars.
The initial range of products utilizing coffee essential oil derived from used coffee grounds has been introduced by the company.
Coffee Resurrect is a startup that transforms used coffee grounds collected from restaurants and cafes into natural ingredients that are used in nutraceutical, functional food, and personal care products.
The byproducts, which include coffee oil, fiber, and flour, serve as a base for a variety of personal care items and toiletries.
The company uses biotechnology and coffee waste as a platform to create all-natural ingredients for personal care, nutraceuticals, and functional foods.
Using a unique technology that involves supercritical carbon dioxide, it is able to extract vital components from waste, such as lipids, proteins, sugars, polyphenols, tocopherols, and antioxidants.
Gremix Energy
Gremix Energy is a new startup that decarbonizes concrete by recycling ash from landfills to replace cement.
Gremix is developing a cost-effective and scalable solution to reduce cement emissions.
The key area of interest for the organization was to obtain fly ash, a residual product of coal burning, from waste disposal sites to use as a substitute for cement in the manufacturing of concrete, up to a maximum of 40%.
Gremix has come up with a solution to tackle the scarcity of fly ash that is usually obtained from coal-powered power plants, which are being closed down.
They recycle ash from utility landfills to address the issue. The production of cement is responsible for up to 8% of global CO2 emissions.
However, by employing advanced technologies to process ash from landfills, it is possible to reduce CO2 emissions. Moreover, the cement produced as a result of this process is of high quality and has better bonding properties than conventional cement, which is made from limestone.
The black mass-produced contains materials like lithium, cobalt, manganese, and nickel. Proprietary hydrometallurgy technology is used to recover critical metals from the black mass produced during shredding.
Made of Air
Made of Air is a company that aims to address the issue of emissions caused by the growing use of concrete, steel, and wood in urban areas.
They have developed carbon-negative materials that have already been adopted by major corporations like H&M, BMW, and Audi.
Made of Air is a company that utilizes biochar waste obtained from plant materials like tree clippings or crop residue to produce thermoplastics that are high in value and carbon-negative.
The company saves non-food biowaste from being incinerated and turns it into elemental carbon, locking in its CO2 content forever.
Made of Air uses its patented technology to create a filler that can be used to decarbonize incumbent materials radically.
Their unique smart coating technology helps to replace global plastics with biochar, which can remove an average of 3 gigatons of CO2 from the atmosphere per year.
8 Companies that Embrace a Circular Economy
Below is a list of circular economy companies that are leaders in the transition to a circular economy:
Patagonia
Patagonia first made its commitment to transition to a circular economy in 1986.
They create durable and comfortable everyday clothing using eco-friendly materials like organic cotton, hemp, and other sustainable fibers. These materials not only support farmers striving towards organic certification but also help reduce the environmental impact of the brand’s products, promoting a circular economy.
The company has set a goal of promoting sustainable materials and practices to minimize the environmental impact of its products.
Additionally, the Worn Wear program by Patagonia encourages its customers to recycle, reuse, and repair their garments, thus reducing the company’s environmental footprint.
A repair service is offered for any damages to the clothing, and a trade-in option is provided where customers are provided with store credits for used Patagonia clothing.
Through these initiatives, Patagonia prolongs the lifespan of its products while also minimizing waste.
IKEA
IKEA is a Swedish home-retail conglomerate founded in 1943 as a mail-order sales business but began to sell furniture five years later.
IKEA is currently working towards creating sustainable livelihoods for underprivileged families. The company is exploring possibilities in regenerative agriculture, green enterprise, and the effective utilization of renewable energy.
IKEA’s circular economy is implementing three main initiatives, namely, The take-back program, circular services, and investment in sustainable materials.
IKEA offers a Take-Back program that facilitates the return of furniture for repurposing or recycling.
In addition, customers can opt to rent items or buy refurbished furniture, promoting the reuse of products and encouraging sustainable shopping habits.
To reduce the company’s impact on climate change, many IKEA products are made from FSC-certified wood and recycled plastic.
IKEA
H&M Group is a leading fashion and design company that operates in over 70 markets worldwide and has a network of more than 4,000 stores. The group comprises several brands, each with its distinct identity, yet they work together to provide customers with exceptional value and encourage a more sustainable lifestyle.
H&M places a great emphasis on its environmental, social, and governance (ESG) initiatives, which include promoting sustainable practices and reducing waste.
To support this cause, H&M recently introduced a program that enables its customers to recycle or repurpose their used clothing. The brand integrates eco-friendly components like recycled polyester and organic cotton in its merchandise, making a significant contribution towards minimizing its ecological footprint.
Unilever
Unilever is a multinational consumer goods corporation established over 100 years ago and is one of the world’s largest consumer goods companies.
They are known for their variety of popular brands available in over 190 countries where an estimated 3,4 billion people use Unilever products daily.
The Unilever circular economy approach prioritized sustainability and circular economy goals.
They mitigate their environmental impact by undertaking various measures to have all products use sustainable ingredients, such as ethically sourced palm oil.
Unilever pledged to reduce packaging waste by 2025 and establish a recycling program to increase education and enhance recycling rates.
Accenture
Accenture, a company specializing in advanced technologies, has partnered with Mastercard, Amazon Web Services, Everledger, and Mercy Corps to enhance and strengthen its circular supply chain capability.
The objective of this capability is to promote sustainable practices, enhance financial inclusion, and empower consumers. With this approach, Accenture helps its clients achieve their sustainability goals by improving their resource planning and utilization.
Accenture aims to enhance financial inclusion, promote sustainable practices, and empower consumers.
Accenture utilizes its technological expertise and unique approach to assist clients in achieving their corporate sustainability goals by enhancing resource planning and utilization.
Adidas
Adidas, which is the second largest sportswear manufacturer in the world and the largest in Europe, holds an 8.33% share in Bayern München (football club).
Adidas has shown that even large corporations can take accountability for their contribution to the plastic crisis and commit to using their power to make a beneficial difference.
Adidas has introduced the Three Loop Strategy, which comprises three closely connected measures.
The first one aims to recycle plastic waste, the second one focuses on creating shoes that can be remade, and the third one emphasizes regeneration.
Adidas aims to use biodegradable materials that will disintegrate naturally into their surroundings.
HP
HP has been incorporating circular practices into its operations for nearly two decades by collecting used ink cartridges.
The company launched the world’s first monitor and an entire PC made from ocean-bound plastics as part of its entrenched recycling regiment.
The company’s goal is to become net-zero by 2040, with 100% renewable energy.
Adidas has introduced the Three Loop Strategy, which comprises three closely connected measures.
The first one aims to recycle plastic waste, the second one focuses on creating shoes that can be remade, and the third one emphasizes regeneration.
Adidas aims to use biodegradable materials that will disintegrate naturally into their surroundings.
TrusTrace
TrusTrace is a Technology company that provides a leading platform for traceability and compliance data management.
They focus on high-volume footwear and textile value chains, particularly high-risk commodities and production facilities in high-risk regions.
The company’s mission is to introduce transparency to both producers and consumers in the fashion industry. These industries account for 10% of humanity’s carbon emissions.
With its cutting-edge digital platform, TrusTrace aims to raise awareness about individual responsibilities and promote ethical practices.
The company’s exceptional dedication to sustainability and becoming one of the best circular economy companies has earned it the prestigious Solar Impulse label.