“Investing in a circular economy approach must become an integral part of how companies run their supply chain,” said Stephen Jamieson, Global Head of Circular Economy Solutions at SAP. “As regulations become more widespread and investors increasingly favour circular business models, companies explore new ways to retain the value of their products.”
Circular economy as a competitive factor
The focus on a circular economy has clear financial benefits. Research by the Ellen MacArthur Foundation suggests 45 percent of CO2 emissions can be tackled by transforming the way goods are made and used. In times of growing CO2 prices, the circularity of products becomes a strong competitive factor and putting value on waste generates significant new revenue. Accenture estimates $25 trillion could be up for grabs by 2050.
In addition, circular manufacturing enables companies to:
- Retain and recapture the value inherent in the original equipment manufacturer’s existing products
- Reduce demand for new materials 50 to 98 percent
- Reduce energy consumption over new manufacturing 55 to 90 percent
A prominent example is Apple, whose products contain nearly 20 percent recycled materials such as gold, tungsten, rare earth elements and cobalt. These materials are also used in iPhone batteries and the plating of the main logic board or camera wires. Philips refurbishes medical imaging equipment like CT scanners, upgrades it and sells it again. Hospitals can trade-in their old equipment for a discount on new systems.
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