Steering businesses towards a circular economy

As I have previously blogged about, the students in my master course ‘measuring sustainability’ at NHH have analysed and proposed indicators that H&M and other fashion companies can use to steer their business towards a circular economy. We are very thankful to H&M and sustainability manager Luisa Book for collaborating with us on this case. The topic is very much of the moment as an increasing number of companies, just like H&M, aim to become circular but then also need appropriate tools to help steer their operations in this direction.

Some of the indicators the students proposed, such as amount of recycled material out of total use of materials, are maybe not new but are crucial when a circular business is the target. Moreover, the number of times a material can be recycled needs to be monitored in order to make sure that recycling is not just a prolonging of a linear path (see Circular Flanders great illustration of this to the left). In an ideal world, materials can be recycled indefinitely.

The students also argued that it is key to keep track of collecting initiatives i.e. when brands collect used or discarded products. How much of what is sold returns to the company for recycling? Moreover, companies need to monitor what happens with collected garments- are they recycled into new garments or in fact only downcycled (used for other less valuable products)?

One reason materials cannot be recycled is because the materials are contaminated for example by chemicals that hinder recycling. The students here proposed to measure the use of such chemicals or substances. By monitoring, the company can also try to minimize such use. To know if the product is made with substances that might hinder recycling, you need proper information about what the garment is made of and how it is made. Here the students proposed that H&M could develop more elaborate tags with information about the item which could help the customer to take care of it and, eventually, facilitate the recycling of the garment.

Another point that is crucial to circular operations is to keep the materials in the processes. In the textile industry, a lot of fabric gets wasted and does not end up in any garment. Consequently, some students suggested to measure the amount of material that ends up in a garments in relation to total amount of materials used. Ideally, all materials used should end up in a garment. Similarly, the students also identified microplastics as a threat because it means that small amounts of plastic fibers continuously leave the circular flow and non-renewable materials are subsequently lost.

Another aspect commonly discussed in the context of circular economy is the slowing of the circle i.e. the prolonging of a product’s life span. Here the students reintroduced the idea of enabling users to repair their clothes, for example by making sure all items come with threads or buttons necessary for repair or providing repair services in stores. The company can track both the use of repair services and number of items that customers could repair themselves.

I hope that H&M and other companies will find the students work helpful. How to measure a circular business is really at the forefront of both practice and research. In fact, two research colleagues and I just last week got financing for a project on circular business practices by Vinnova. That the students managed this task so well and were able to develop these very helpful indicators show, to my mind, that we at University teach students useful and up to date skills. We educate students that can in fact contribute to and improve current business practices.

Sweden to become a ‘circular economy’

The Swedish government is investigating how it can promote a ‘circular economy’.  Now, what is a circular economy? While it is not so well defined, I’d say it’s an ambition to keep materials in a loop. Nature tends to work with cycles (the carbon cycle for example). Businesses, the circular economy proponents say, should mimic such systems. In a circular economy,  waste should become input to new production. In addition, there’s the idea that sharing and renting is better than owning things (I’d like to see some evidence for this).

The Swedish government’s investigation into the circular economy resulted in a 400 pages report, released last week. The report suggests tax deductions for rental, second hand and repair services, which sounds like more of what the Swedish government has already done. Other suggestions are for example to increase access to carpools and to facilitate prevention of waste (the latter is always a good idea).

When I encountered the ‘circular economy’ concept, I was initially a sceptic. It might be an academic instinct to question terms the industry has invented. ‘Isn’t this just a new fancy concept for recycling?’. Lately, however, I have slightly changed my mind. The more I learn about the waste issue the more it seems necessary that companies ‘design out waste’ (as the circular economy proponents put it). We need to have a plan for what happens to the materials and products when they are discarded. We need to make sure that our products are safely recyclable and can potentially be recycled more than once. If the circular economy concept is helpful for businesses (or states!) in order to work on these issues, then that’s more important than the lack of definition.

I also find the circular economy system diagram useful. The ways in which materials circulate are put into a hierarchy where maintaining products (such as mending) is more desirable than recycling. This seems very reasonable.

Now my research area is really the measurement of such initiatives. And, as it happens regularly, I got a really good question from a student some week ago: “How can we measure whether a business is circular?”  While businesses are quite different from nation states, the Swedish government’s report has in fact suggested some indicators for whether a country is ‘circular’. The proposed indicators measure the amount of recycled materials, the use of raw materials and the amount of waste produced. These are standard indicators that companies disclose in their sustainability reports. In a business setting, such indicators are nothing new. However, they might be more difficult to calculate on a national level. The government report suggests no indicators for the sharing, renting or repairing ideas of the circular economy.

Clearly, this is an area that needs some more work. Now if the Swedish government would want some help with measuring their circular economy ambitions, I am here to help 😉

Is more recycling the answer?

We’ve learned that recycling is desirable. It’s the way to a more sustainable society. And in some ways it is. Compared to accumulating trash in landfills, then yes, recycling might be a good idea. Keeping materials in the loop means that we don’t have to produce new resource intensive materials, such as cotton, from scratch. However there are also issues with recycling.

First, toxic materials might result in toxic recycled products. In a recent case, artificial football turf, from recycled car tires, seems to be carcinogenic. Recycling is not desirable if football kids develop cancer as a result.

Second, although something can be recycled once, it does not necessarily mean that it can be recycled twice. So although we produce something by recycled materials, it may not be recyclable a second time. When it is worn out, it still ends up in the landfill or to be burned. Taking one more turn and having a second life is of course better than going directly to trash but it is not a final solution.

Third, recycling requires resources. Recycling processes require energy, the items to be recycled are moved around and transported, there might be environmentally unfriendly chemicals involved (for example in the case of textiles) and it requires money. These resources may be well spent money compared to things ending up in a landfill. However, if we instead reuse what we have and produce less waste, these resources can be saved and spent on other things.

Bea Johnson, of zero waste home, asks the thought provoking question: “What if our municipalities could shift the resources they spend on waste handling to other activities, such as schools and hospitals instead?” She has many relevant points.

Overall, the zero waste movement is doing a pretty good job in educating us on how to reduce our waste. It means fewer things going into our homes, particularly disposables, and fewer items being thrown out. Everyday. If we all did it, it would make a big difference.

Personally, I’m a bit of a late adopter in this area. I’m at this point trying to reduce everyday plastic disposables. I’m also pretty good at the DIY skincare and home cleaning supplies that Lauren Singer suggests. In terms of food packaging, although I’m recycling, I’ve got a long way to go in terms of reducing what comes into my home. On my wish list for this year is to start composting food waste. Many cities have composting schemes that you can subscribe to and in Bergen even certain houses/areas (as in my friend Turid’s case).

On the picture: buying milk directly from the farmer (Lovö Prästgård) using old Kockum milk jars. Buying directly from the farmer, also at farmers market, is a good way to reduce waste.

Are you making effort to reduce your waste? Please share your experiences.