The Circular Economy: A $4.5 Trillion Opportunity?

Circular economy has become one of the most used terms in the business world. This applies to business practices based on recycling, waste reduction and sustainable job creation. A study cited by the World Economic Forum suggests that the circular economy represents a $4.5 trillion opportunity by 2030.

The International Labor Office estimates that the transition to a circular economy could create six million jobs worldwide as companies seek to replace traditional ways of making money by extracting, manufacturing, using and discarding. And who says that circularity also means profitability. According to consulting firm Accenture, car manufacturers that adopt a circular approach to production methods can benefit from a 150% increase in profits.

But does the reality justify the hype around this concept? In this edition of The Exchange (watch in the video player above), we speak to players who believe the circular economy is the way to create sustainable growth and profit, including Nestlé, the world’s largest food and drink company. how it drives the global food and beverage transformation. In France, we visit the first fully circular car factory in Europe, according to the Renault group that developed it. We also speak to the Design Program Manager at the Ellen MacArthur Foundation, a charity working to accelerate the transition to a circular economy.

Nestlé: the quest for environmentally friendly packaging

One well-known company committed to sustainability is Nestlé. Maker of Nespresso, San Pellegrino and KitKat. This 150-year-old group has more than 250,000 employees, hundreds of factories and sells products in 186 countries. But how can he ensure that his activities on such a huge scale do not harm the environment?

Jody Russell, one of Nestlé’s key circular managers, highlights the progress his group has made. “Our goal is that none of our packaging becomes waste or ends up in landfills.” he says. “In terms of reduction, we are working to limit our use of virgin plastic and are on track to reduce it by a third by 2025. he specifies.

According to Jodie Roussell, the factor promoting this development: the current progress in the level of regulation in the European Union. “Very good steps are now being taken in the EU, where harmonization exercises have started on labeling and bins, as well as setting common objectives.” believes “These legislative examples give us hope that we can simplify consumer participation and business compliance.” he says.

Renault wants to get a circular start

Another company trying to make circularity a core commercial strategy: French giant Renault. Eleven million cars end their life in Europe every year, and the car industry dumps huge amounts of waste, chemicals and toxic metals into landfills every year. However, 85% of the materials used in the production of cars can be recycled.

Renault wants to change this trend at its factory called Refactory, located in the suburbs of Paris. The group presents its facilities as the first European circular economy area dedicated to mobility. Renault launched the Refactory project two years ago and hopes to generate 200 million euros in revenue by 2025.

Part of the project is a new workshop that can repair 150 old cars a day. From mechanics to painting, cars facelift in less than a week. They are photographed and re-sold.

In another building, 200 technicians can rework more than 1,600 different car parts. “Not only do we produce engines and gearboxes that meet the same quality requirements as their new counterparts by using materials recycled from old engines” says Francois Evrard, director of the Refactory project within the Renault group. “But at the same time” he adds, “This allows us to offer our customers a 30% cheaper alternative to the new model by reducing costs in the value chain.”

To unite the ecosystem around its brand, the group has launched a startup hub dedicated to the circular economy. “The idea of ​​Renault and startups is to combine their skills” Refactory center director Nathalie Ray explains. “Renault brings industrial and circular economy know-how and startups bring their agility and willingness to innovate” describes.

Ellen MacArthur Foundation: Think circular from the design stage

One of the main ways to implement circularity effectively is to do it by design.
The Ellen MacArthur Foundation is a London-based charity dedicated to promoting and developing a circular economy.

Joe Iles is responsible for the Design program within this foundation. He says that circularity should be at the forefront of every project. “Everything around us is the result of a design process: from what we eat, to what we wear, to the buildings we live and work in, to the systems that provide it all, such as food, energy, mobility solutions or medicine” Joe Iles remembers. “At this design stage, we’re making decisions about how these things work, even if we don’t realize it.” he insists.

“It’s not just about curing the symptoms of a failing economy or systems, but about intentionally designing circular and renewable products, services and systems.” Before concluding, make sure: “When designing something, I think the first question to ask should be: is this new product or service compatible with the circular economy?”