Sustainable Procurement: The Untapped Opportunities of the Circular Economy

In a world that is increasingly aware of its environmental footprint, the concept of the circular economy has emerged as a beacon of sustainable practice. This transformative approach shifts the traditional linear economy’s ‘take-make-dispose’ model to a more sustainable ‘reduce-reuse-recycle’ cycle. For businesses, particularly in procurement and supply chain management, understanding and integrating the principles of the circular economy is not just an environmental imperative but a strategic opportunity. This article gives a quick overview of what the circular economy is and lists some practical steps for procurement professionals and business leaders.

I. What is the Circular Economy?

The Linear Economy:

Currently, our world predominantly operates on a linear economy model. This approach follows a straightforward ‘take-make-dispose’ pattern.

Resources are extracted, transformed into products, and eventually discarded as waste after their useful life. This model has significant downsides: it leads to resource depletion, environmental degradation, and creates a vast amount of waste that often ends up in landfills or the oceans.

Transitioning to the Circular Economy:

In contrast, the circular economy is based on the principles of the 3Rs: Reduce, Reuse, Recycle; and the triple bottom line. This model aims to keep products, equipment, and infrastructure in use for longer, thus improving the productivity of these resources.

• Reduce: Minimizing waste and resource use. For businesses, this means considering the environmental impact at every stage of product development, from design to distribution.
• Reuse: Extending the lifecycle of products through maintenance and repair. Encouraging the use of pre-owned or refurbished items falls under this category.
• Recycle: Transforming waste materials into new products, thus preventing the loss of valuable materials and reducing the need for virgin resource extraction.

Adopting these principles can contribute to a company’s bottom line by decreasing costs associated with raw material procurement and waste management while also enhancing brand reputation and customer loyalty in an increasingly environmentally conscious market.

With these principles in mind, you can imagine a world where companies no longer sell a product but “product-as-a-service” where you pay for using a product that will be continuously repaired, recycled and upgraded by the company, operating in a “closed loop” with its material.

II. How to get started, with procurement ?

Start small with identifying suppliers that use circular models

Entering the world of circularity doesn’t have to be such a radical change where the whole company changes its products and sales strategy, it can start through procurement.

Start small by piggybacking on existing vendors, products and services by asking yourself: What are the purchases that your business does and that could be recycled ? Repaired ? Re-used ?

1. Electronics: For IT equipment, a company could procure certified refurbished laptops from a reputable vendor. These laptops, having undergone thorough testing and restoration to original specifications, offer a sustainable and cost-effective alternative to buying new.
   Fully repairable and recyclable laptops integrating circular economy like Framework are starting to appear.
2. Packaging Materials: A business can switch to packaging materials made from recycled cardboard or biodegradable plastics for its shipping needs. This move not only supports recycling industries but also reduces the company’s carbon footprint.
   Or simpler,  find suppliers that use recycled or biodegradable packaging materials for shipping products to you: how many tons of plastics does your business receive and send every year? How can you reduce that number?
   Or even simpler, make sure your office cleaning supplies and soap dispenser are bought with refillable bottles, or don’t use throw-away cups for coffees.
3. Uniforms and Workwear: If your company uses uniforms, they can choose to source uniforms made from recycled polyester, which is often created from recycled plastic bottles or other more sustainable materials. This approach not only reuses plastic waste but also offers durable and sustainable workwear.
   Or even simpler, when considering your next employee SWAG, maybe consider a circular manufacturer for this corporate sweater!
4. Office Furniture: There are many options to integrate circularity in Office Furniture, whether that is by buying office furniture made from recycled materials, to buying repairable furniture. Companies like Interface (from Cradle to Cradle book !) are well-known for their modular carpet tiles and their commitment to sustainability and circular economy principles. At least, make sure there is a plan for disposing of the office furniture you are buying from now on (it may as well be financially sound!)
5. Office Supplies: Choosing office supplies made from recycled materials (e.g., recycled paper, pens made from recycled plastic) to promote the use of recycled content and reduce the demand for new raw materials could be a good start. Most businesses already track printing usage with badges, also preventing some abuses.
   Most distributors these days offer some green labels, check them out as they can also save some bucks along the way.
   Or even simpler, educate your business and promote paper-free practices.

By implementing these specific examples in procurement strategies, businesses can make significant strides towards sustainability, reflecting a commitment to the circular economy model.

These are small and easy steps, yet potentially impacting your business footprint significantly.

Introduce circular models from within !

Now, if you already explored this, then start looking beyond and try to see how you can implement circularity from within your business and operations. What is it that your company keeps on buying and disposing ? is there a better way around it? What generates the most waste in the organization? These could be good questions to ask yourself and business leaders to identify opportunities.

This could be :

• Things you are buying every year (vast question, and it should include the business, most notable the shipping supplies which are a great untapped opportunity
• Things you dispose when a site/branch closes or is move
• Things that are not standardised (they are usually few valid reasons for non standard, if you dig deep enough)

Implementing circularity where out of the box solution don’t exist can be hard as it requires buy-in from your internal stakeholders to this vision, and finding suppliers ready to make their offering evolve to match your vision. But often the return on investment can be substantial, as after all, the best savings is the purchase you don’t make!