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The circular economy represents a paradigm shift in how we produce, consume, and manage resources. It offers a promising path to address the pressing environmental challenges we face, including climate change and resource depletion. With mounting pressure on companies to adopt sustainable practices and the advent of new technologies, the transition to a circular economy is not just necessary but increasingly feasible. As we move forward, embracing circular principles will be crucial to our collective effort to create a more sustainable and resilient global economy.
Digital traceability can enhance supply chain transparency, allowing for better tracking of materials and ensuring the authenticity of recycled or sustainably sourced products. This innovative approach to product lifecycle management offers a comprehensive digital record of a product's journey, from raw material sourcing to end-of-life disposal, creating a digital product passport (DPP) to drive sustainability and transparency across supply chains.
This ebook delves into the concept of DPP, examines the regulatory landscape driving its adoption, and highlights the benefits for businesses in terms of achieving ESG goals and fostering a circular economy.
Additionally, we will present MARCO Track & Trace, Finboot’s innovative traceability solution to automate ESG and sustainability credit record-keeping, create digital product passports, and manage sustainability declarations and certifications.
The circular economy represents a paradigm shift in how we approach production, consumption, and resource management. This innovative economic model is designed to revolutionize our traditional linear "take-make-dispose" approach by eliminating waste and maximizing resource efficiency throughout the entire product lifecycle.
At its core, the circular economy is built on three fundamental principles:
According to various reports, projections indicate substantial growth opportunities across various sectors within the circular economy. As consumers become more environmentally conscious and regulations tighten around waste and emissions, businesses that embrace circular and low-carbon models are likely to see increased demand and potential for profitability.
Recent McKinsey research proved that consumers care about sustainability, and they back it up with their wallets. Products that make ESG claims have disproportionate growth.
On average, across 32 different categories, consumer products with ESG claims have 1.7% higher growth than products with no claims. Some categories, like paper and plastics, have seen as much as 20% higher growth.
Embracing sustainability isn't just about boosting revenue; it's about cultivating a diverse array of enduring economic advantages by transforming eco-friendly initiatives into profitable enterprises. While initial investments may be necessary, they hold significant potential for long-term gains. This is particularly true because circular practices significantly reduce expenses related to raw materials, energy consumption, and waste management.
Being a first mover will put you in a strong position as we explore new revenue streams and business opportunities that can only be unlocked through digital traceability and green supply chain management.
Consider techniques such as solvent recovery, material recycling, and waste repurposing. These methods aren't merely environmentally responsible; they're financially astute. They lead to considerable cost savings, increased revenues, and enhanced profitability.
In the circular economy, companies have several strategic positioning options within the value chain:
By adopting these circular economy principles, businesses can simultaneously drive profitability and environmental sustainability, creating a win-win scenario for both their bottom line and the planet.
As businesses transition towards a circular economy, it's crucial to reassess and reimagine your value chain, particularly regarding the reuse of waste products. The journey begins with a deep dive into your target circular value chain.
Identifying potential partners along this chain is essential, but equally important is adopting your customers' viewpoint. Scrutinizing their purchasing processes is a critical step in successfully monetizing the green premium. Gone are the days when a product-centric, feature-focused portfolio sufficed.
To effectively sell the green premium, two key factors come into play: product quantification and customer qualification. Quantifying the product requires a shift from traditional cost-based pricing to a value-based approach, addressing the crucial question: "What are customers willing to pay for sustainability?"
Deloitte outlines four interconnected elements crucial for monetizing the circular economy's green premium. These elements reach their full potential only when integrated into a comprehensive Monetizing Circular Economy Framework:
Customer insights and engagement form the backbone of this framework, influencing every aspect from product development to commercialization. By understanding customer perspectives, needs, and preferences, businesses can align their offerings with sustainability-driven demands.
Checklist for Monetizing the Circular Economy:
By following this approach, businesses can effectively navigate the transition to a circular economy while capitalizing on the green premium, creating value for both the company and its environmentally conscious customers.
In our experience working with forward-thinking clients, we've observed the tangible benefits of adopting cutting-edge technologies to support circular economy initiatives. Two key tools have emerged as game-changers in this space:
Our clients are already reaping the rewards of implementing these technologies. They're not only enhancing their sustainability practices but also gaining competitive advantages in terms of operational efficiency, regulatory compliance, and market differentiation.
Business Opportunities:
The Cepsa Case: Digital Product Passports for Homecare Products
Finboot’s MARCO Track & Trace has allowed Cepsa to implement digital traceability systems for tracking each batch of vegetable oil from its origin to its use in biodegradable surfactant production, in addition to automating bookkeeping and determining what percentage of output is from renewable and circular inputs.
The SABIC Case: Blockchain to Deliver Sustainable Packaging
SABIC, the global leader in the chemicals industry, becomes the first in their industry to unlock batch-level traceability from waste to packaging for their TRUCIRCLE products through MARCO Track and Trace.
The project, with advanced recycling pioneer Plastic Energy and packaging specialist Intraplás, uses the Finboot application to support end-to-end digital traceability of circular feedstock in customer products.
The Repsol Case: Full Traceability of net-zero emissions fuels (HVO)
Repsol has been a client since 2018 and uses our digital traceability solutions extensively across several business areas. They use our digital ecosystems for the traceability of low-carbon fuels like HVO (Hydrotreated Vegetable Oil), and circular chemical products like packaging.
The transition to a circular economy is not just an environmental imperative; it's becoming a business necessity. As we move forward, the companies that will thrive are those that embrace these principles and leverage innovative technologies to create value while contributing to a more sustainable future.
Download the ebook to read more!
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