Companies without waste: Welcome to the circular economy
This article was published on September 9th, 2014 in the magazine „Wirtschaftswoche Green “. It was translated by shared.value.chain.
by Michael D‘heur
A company’s motivation for embedding sustainability into its core businesses, i.e. in products and value chain, are as diverse as the economic, ecological, and societal value that can be generated. No doubt that sustainability can improve a company’s reputation. If asked for the economic value, increased sales (as clients are willing to pay higher prices for sustainable products) and the possibility to differentiate themselves from the competition are important.
But what is it that makes up sustainable products? A catchword here is cradle-to-cradle. This concept describes a form of cyclical resource utilisation. At the end of a life cycle, one should be able to break down the product into its basic materials so that it can enter the biological or technical cycle as new raw materials. This principle, which was inspired by nature, means that materials should not only be ‘downcycled’ (i.e. it is thrown away) but should be reused indefinitely.
For product development it implies that products must be designed so that they can be produced out of recycled raw materials and that they can be recycled after utilisation. This way, no costs or environmental pollution arises by primary raw material production.
This is a huge goal and cannot be achieved for every product group, but the general idea points in the right direction.
If an existing product portfolio shall be changed in a sustainable way, it is best to start with an inventory control. The following questions help:
- What environmental effects do particular products have during their life cycle?
- Where do positive and negative effects arise, and how can they either be increased or decreased?
- Is it possible to change from finite to renewable resources?
- What product components can be either fully or partly returned to biological or technical cycles?
- Can specific production forms and methods create societal value?
„Think big, start small“– successful implementation in small steps
One should understand that a realignment of the product portfolio can only take place gradually. Successes in that matter will be slow. Therefore, it is appropriate for companies to start with particular products and to learn from the experience they make. How do suppliers and value chain partners react? How is the consumer acceptance? Successful approaches will step-by-step be applied to more products. Long-term company alignments can be helpful here. It’s therefore no surprise that many examples for successful implementation of sustainability into a company’s core business can be found in the small and medium-sized business sector. Especially family businesses are often guided by concepts that serve the construction of future-oriented economic and value systems. This also applies for the German outdoor equipper Vaude whose headquarters are located in Tettnang, Baden-Wuerttemberg. Vaude owns production sites in Germany, China, and Vietnam. About a third of the company’s products are manufactured at the company’s own production sites, the rest is produced by subcontractors.
Vaude strives for social and ecological optimization in all sub-areas of the value chain, and set themselves high objectives, without losing sight of the economic success. Until the year 2015, Vaude wants to be Europe’s most sustainable outdoor equipper. Vaude has embedded the pursuit of sustainability into their strategy and formulated the “Vaude Ecosystem” for all sub-areas of the value chain. Vaude pursues three directions of impact in its implementation:
- Environmental-friendly economic activities in production, logistics and administration,
- Societal engagement via active environmental policy in the professional associations of retail and of textile industry,
- Pursuit of innovations that base on environment-friendly product design and production methods.
Product design is crucial for the entire life cycle…