Come full circle: the small business guide to circularity

What is the circular economy?

Firstly, circularity isn’t simply another buzzword that will pass within the next 18 months – it’s part of the long-term solution in the fight against climate change – and therefore needs to be incorporated into your overall business strategy.

When it comes to sustainability you may have heard of the three Rs: reduce, reuse, recycle. The circular economy seeks to incorporate these ideas into an economic system to dramatically reduce waste and promote the continual use of resources.

Unlike the traditional linear economy, which follows a "take > make > waste" model, the circular economy aims to create a “closed-loop” system where products, materials, and resources are continually reused, refurbished, re-manufactured, and recycled.

Key principles of a circular economy are:

• Design for longevity – items are made to be durable, reducing the need for frequent replacement
• Re-use and repair – extending a product’s life by keeping it in circulation for longer rather than being disposed of
• Recycling / upcycling – using existing valuable components to manufacture new products or transform an item into a new higher-value product
• Waste reduction / elimination – keeping materials within the economic system – either as products, components, or raw materials – instead of discarding them

What are the benefits of circularity?

According to the Ellen MacArthur Foundation, adopting a more circular economy could reduce global carbon emissions by 39% by 2030 compared to the traditional linear economy.

In a 2021 report, the organisation suggested that by working to design out waste, keep materials in use, and focus on regenerative practices across five key areas (cement, plastics, steel, aluminium, and food), emissions could be reduced by 9.3 billion tonnes.

That’s the equivalent of eliminating current emissions from all forms of transport globally.

And circularity is not just about doing less harm to the planet, it makes good business sense too.

When looking at the EU economy as a whole, McKinsey estimated in a 2016 report that circular strategies could generate cost savings of €600 billion (£515 billion) per year, with €1.2 trillion (£1 trillion) in other benefits. 

How can I adopt circular principles into my small business?

Circularity may sound like a daunting task if you run a small business and believe me, I know you have enough things on your list already!

But I truly believe that if you run an ethical business, then looking at how to make it more circular is a central pillar to your sustainability strategy.

Here are five areas, where you can look at incorporating circularity:

1) Design for life

At design stage look to manufacture products with longevity in mind, using high-quality and durable materials. A product’s end-of-life needs to be considered right from the outset and factors like the use of mono-materials should be considered at this stage to ultimately make items easier to recycle.

The Sustainable Design Handbook is a sustainability guide for anyone involved in the design and production of physical things. It includes a range of industry-specific case studies and design principles.

Consider incorporating modular design that allows for easy repairs and upgrades. For example, Fairphone focuses on creating sustainable and ethical smartphones.

Their modular design allows users to easily repair and upgrade individual components, such as the camera or battery and, according to them, can extend the lifespan of their devices to 80 years!

Any ideas of planned obsolescence should be consigned to the past. The simple fact is the longer an item stays in use, the lower its overall environmental footprint. 

2) A case of deja-vu

If yours is a service-based rather than product-based ethical business, you can look at reusing existing models or services.

Any efficient business strategy means you shouldn’t be re-inventing the wheel each and every time you offer your services anyway – but how about taking this one step further…

What can be lifted wholesale and used entirely again?  

In January, alcohol-free beer brand, Lucky Saint, took the decision to re-run its Dry January campaign from the previous year.

This unusual move saved on emissions associated with the creative process, usually consisting of many months’ work across various in-house and agency teams.

If you are in the events industry, for example, you should be thinking about moving away from single use set design entirely. Instead, look at what bookings are in the calendar and give thought to how material elements can be repurposed and used across these separate events.

Proseed gives a great best practice framework for those in the events space – or even if your business role entails you having to plan or take part in events / trade shows less regularly.

We need to move away from the idea of simply recycling items – this should be the last resort. Implementing strategies to actually re-use and re-purpose materials first hand is more efficient in terms of human resource, as well as labour and materials.

3) Make the rent

Product rental is a strategy that is becoming ever more prevalent with tech-enabled peer-to-peer lending apps emerging as a key trend over the past few years. This works particularly well for high-value items.

But we’re also beginning to see rental as a great solution in traditionally low value markets with the success of companies like children’s clothing rental company, The Little Loop.

Benefits of this include items being kept in use for longer, and being reused / upcycled / disposed of correctly at the end of life.

As a small business, you can easily jump onto this circular initiative by offering a rental service for some of your core collection.  

Not only does this mean you can monetise products over a longer period, it also means that customers can try out your range before committing to a purchase.

Talking Tables, a B Corp which creates innovative and design-led sustainable party supplies, has added this as a strand to their offering, with a rental section of some of their high quality home and partyware. Great for those hosting larger events or weddings, meaning they don’t end up with fifty candle holders and a hundred vases once the party’s over.

4) Take that back!

Implementing a product take back scheme is a great way to increase customer loyalty as well as potentially reducing costs and environmental impact.

Many customers are happy to return items to brands once they’ve finished using them – especially if there is an incentive involved.

At my ethical kids clothing business, My Little Green Wardrobe, customers can send back their items in return for money off their next purchase.

Receiving quality used items also provides my business the opportunity to diversify its offering by providing a preloved section of the site called the Re:Wardrobe, which is a value add for customers.

If your business manufactures products, a take back scheme could also allow you to recover materials for use to produce new items. Additionally, you can look to capitalise any other waste material e.g. selling textiles no longer fit for use to industrial partners for the manufacture of carpets, mattresses, padding etc.

5) Leader of the pack

Packaging may not constitute the biggest impact when it comes to the overall footprint of your business operations, but whether we like it or not, it’s one of the first experiences your customers have of your business after they make a purchase.

And as we all know, first impressions last.

This matters particularly if your small business is a product-based consumer brand, but can also resonate with B2B and trade customers if you’ve marketed yourself as more sustainable.

Investing in packaging that is either completely biodegradable or completely recyclable is important, but it’s still ending the life of the packaging there, instead of it being re-used for something else.

Plus, as a business, you shouldn’t put the onus on your customers to come up with a waste solution for your packaging.

Instead, there can be ways to adopt a totally circular solution like RePack. Once customers receive their items, they simply post back the packaging to be re-circulated to businesses and used again.

Conclusion

Circularity may not be something you have given much consideration to yet, but, if you aim to run a genuinely ethical business, having a strategy of how to incorporate circular aspects is a must-have.

While it’s important to acknowledge the limitations posed on us as small business owners, in terms of access to resources, it’s equally important to recognise that we all need to play our part.

The easiest and most efficient way of reducing greenhouse gas emissions, pollution, and biodiversity impacts associated with commerce is to produce less and keep existing items in rotation for longer.

It’s up to all of us to show responsibility towards the items we create and sell – and even taking small initiatives add up.

Remember: small actions multiplied thousands of times across your own business, and others like yours soon, become a large action – ultimately saving on costs and emissions.

Together we can make the future of business circular.