Circular Economy: How to Create Sustainability and Active Presence for Companies?

Patagonia, an American company, has launched a program called “Worn Wear” to promote its sustainable approach. The initiative encourages customers to repair or reuse their clothing instead of buying new pieces, by providing spare parts for clothes that need repair. Additionally, the company offers a special program for customers through its website, where they can send in their used Patagonia clothing and exchange it for points that can be used to purchase new items. The company also provides important tips for caring for and repairing clothes, as well as offering some used products for sale.

Of course, there are several companies from various countries that follow the sustainable and recycling approach, aiming to reduce the use of resources and keep them in the manufacturing and usage cycle.

So what is the purpose of all this? It is the circular economy, which I tend to call “circular improvement”. This is different from the linear economy, which relies on the usual process from resource extraction to usage, and then disposal of products, which turn into waste and pollution. In the circular economy, the product cycle is extended, while reducing waste and emissions in the product or service journey. This is based on the three principles of using, reusing, and recycling.

With the increasing environmental awareness on one hand, and the negative consequences of the linear economy on the other, it has become necessary to stop the continuous production of waste and its catastrophic effects on the environmental balance, which directly or indirectly affects humans.

So how can companies enhance their presence as effective brands through the circular economy? And can this approach serve them in terms of presence, profitability, and innovation compared to companies that use the linear economy?

In this article, we try to shed light on the importance of the circular economy in shaping the identities of companies in a competitive market. While the circular economy may not be a prominent feature for many sectors, it has proven to be a crucial approach in achieving sustainability and mitigating environmental impacts.

Companies can benefit from the circular economy by:

1. Reducing costs by adopting more efficient production processes and reducing waste.
2. The potential to save on raw material costs and disposal, which leads to increased profitability.
3. Opportunities to increase revenue by designing products that can be reused, repaired, or recycled. These companies can also provide new sources of income by selling refurbished or recycled products.
4. This is what Patagonia did, as we mentioned earlier, and its practice contributed to reducing costs, reducing waste, and increasing its profitability at the same time.
5. Creating a unique positioning for the brand without competitors, making the distinction in this area prominent and ahead of others, especially for companies that rely heavily on the linear economy. The transition to the circular economy is an intelligent repositioning for the company, taking a new line that advances over the rest of the competitors.
6. Building customer loyalty through these environmental practices, which make their impact on the target audience, especially those who are concerned about the environment and are aware of the products they buy. This interest can be reflected in several environmental and social images to form sustainable corporate social responsibility (CSR).
7. A space for innovation and collaboration by continuously communicating with suppliers, customers, and all parties involved in the product or service cycle. Companies can develop circular models in manufacturing, transportation, and delivery.

One of the notable models, for example, is Philips, where it developed lighting service models, where customers pay for using lighting instead of buying products directly! This trend will reduce waste and provide new revenue opportunities for the company.

Of course, considering understanding the purchasing behavior of the target audience and the importance of aligning the company’s goal with the possibility of changing consumer behavior through possible and practical human engineering.

Challenges facing the circular economy practice

If we look at the matter, although it seems beautiful and encouraging, and although it is possible for companies that want to make their own presence with the sustainability of their products and revenues, there are a number of challenges as there are opportunities, including:

1. The absence of qualified infrastructure for the circular economy. Therefore, everything we have is based on the linear economy. Hence, the matter needs to work in stages to smartly transition from the linear economy to the circular economy.
2. Among the possible measures are the implementation of extended responsibility programs for the product, support for the development of supply chains, and the study of time, distance, and the mechanism contributing to the carbon or water footprint of the product or service. Each product consumes a certain amount of energy, which results in carbon emissions, and this is the “carbon footprint,” as well as the amount of water used to provide a product or service, which is the “water footprint.”
3. Several companies are working to reduce water use during their product manufacturing, including Levi’s, Adidas, H&M, Stella McCartney, and Eileen Fisher.
4. The need to provide policies and legislation, by directing towards the circular economy gradually, through legislation that encourages reuse, recycling, and waste reduction. The direction towards supporting companies, institutions, and entities that partially adopt the circular economy. This will encourage others to follow suit, and there will be models that can be relied upon even if only partially. This is the starting point for expansion and benefiting from the best practices.
5. Working on creating public awareness, through continued smart and effective communication with the public through various digital and physical contact points, and demonstrating the mutual added value from the manufacturer of the product or service provider or even the consumer himself, in case of adopting the circular economy in the selection of products and services. It may be difficult for industries with complex supply chains, but there are still many areas where several industries can take their first steps in this direction.
6. Awareness is through choosing environmentally friendly products and services, promoting a culture of recycling and reuse, and educating individuals on the importance of reducing waste and carbon emissions.

A roadmap for business sustainability can be achieved by incorporating sustainability into various elements of the company’s core identity. These elements include the purpose, vision, mission, values, positioning, promise, and products/services. They can be abbreviated as 4P2VM, which stands for Purpose, Vision, Mission, Values, Positioning, Promise, and Products.

However, this cannot be accomplished in one fell swoop. It is part of a sustainability strategy that must be embraced by the company or organization. The low number of players in this economy is an opportunity to enter early and gain both material and spiritual benefits, as well as create change. There are challenges, but it is worth working on, and the following steps can help achieve it:

1. Study the product and service cycle, and examine the possibility of reducing waste from the first birth of the product until its end of life.
2. Identify areas where the product can move to be closer to the circular economy, such as the type of packaging used with the product, using recyclable or environmentally friendly materials.
3. Connect that area to one of the aforementioned strategic points, such as the purpose, vision, mission, etc., to make it part of the company’s policy rather than a luxury.
4. Examine the best practices and include them in the “optimized” product cycle, by studying the experiences of companies from different countries, and looking at the latest technologies and practices in this field.
5. Start with the initial model of the product or service and calculate the cost, while educating the target audience to be a parallel path, one in the product journey and the other in the customer experience.
6. Collect feedback from the product manufacturing cycle and from the customer experience and evaluate it.
7. Make recommendations for continuous improvement.
8. Expand the experience vertically in terms of supply chains and raw materials, and in terms of product logistics and quantity, while the focus remains on the customer experience and the impact on the environment.

Between environmental balance and innovation

The shift to a circular economy, as a qualitative leap for the economy, naturally presents challenges in transitioning from a linear economy inherited from the first industrial revolution to the present. However, it would be our best option if we want to maintain a healthy and civilized life simultaneously. This balance cannot be achieved with a linear and environmentally polluted economy, leaving heavy consequences of emissions. Rather, it can be achieved through a well-thought-out adoption of what we produce and what is wasted, and the journey between them.

The goal is to increase the lifespan of the product and reduce waste, thus improving the quality of life by providing job opportunities, promoting innovation and expanding the scope of use, and obtaining a better environment, resulting in fewer diseases and better restoration of the earth’s natural cycle.

Identity presence can be created by touching on these possible areas in the circular economy, if included in the strategies of governments and companies in a coordinated manner.

The distinctive presence will be through understanding the circular economy scenario and linking it to the organization’s strategy, with smart employment of available tools to enhance it, including “artificial intelligence,” which can play a role in planning, financial analysis, risk management, understanding the behavior engineering of the target audience, and all this through data analysis, predicting demand and identifying future opportunities.

Artificial intelligence can also analyze data related to product and service usage and design models to develop more efficient and sustainable methods of production and consumption.

Local Reading and the reality of the Circular Economy

In Bahrain, we produce about 1.2 million tons of solid waste annually, at a daily rate of more than 4,500 tons. This provides many opportunities not only to work on recycling waste at the end of the linear economy but also to work on the beginning, during, and after the product’s birth, and in this way, the process of transforming the linear economy with time into a circular economy can be accomplished.

It seems that there is an ambitious vision, given that the Bahraini government has launched a waste management strategy for the period 2020-2035. The goal is to reduce the amount of waste that is sent to landfills to 60%. If we know that the landfill in Askar is expected to reach its maximum capacity in the coming years, this becomes crucial.

Based on the Economic Recovery Plan in Bahrain, the Kingdom plans to target investments of up to $30 billion in strategic projects, creating new investment opportunities in infrastructure and priority sectors across the Kingdom, including renewable energy sectors such as blue and green hydrogen.

Knowing the quantity and quality of waste and using data analysis, it is possible to determine the percentage of waste from residential, commercial, and industrial use. By providing this data to interested companies, universities, research centers, and institutions in and outside Bahrain, it is possible to work on reverse engineering and providing practical solutions to reduce the amount of waste and focus on transitioning from a linear to a circular economy.

All of this comes within the context of the clear vision of Bahrain’s 2030 economic vision, which talked about the importance of the need to change the current economic model according to sustainability, competitiveness, and justice. As stated in the vision, “Bahrain finds economic model that contributes to achieving sustainable development, enhancing competitiveness, and ensuring social justice.”

To achieve these goals, Bahrain has launched various initiatives and strategies, such as the Waste Management Strategy and the Vision 2030, which aim to create a more sustainable and circular economy. This shift towards a circular economy not only helps to reduce waste and environmental degradation but also creates new opportunities for innovation, job creation, and economic growth.

In conclusion, the issue of solid waste management in Bahrain presents both a challenge and an opportunity to transition towards a circular economy. By leveraging data analysis and engineering, and by implementing various initiatives and strategies, Bahrain can reduce its waste output, create new investment opportunities, and contribute to a more sustainable future.

“Kaizen Day-to-Day”!

When we aim for continuous small changes, as the Japanese call it “Kaizen”, some products can contribute to providing a daily experience for the audience and practically enhance their awareness. Among the displayed products is this device that converts food waste into organic fertilizer that can be utilized! Check out www.Lomi.com.

There is also a Saudi product that provides a smart farm at home, which enables self-sufficiency for some vegetables, and it was discussed in the “Future of Food” episode on the program “Seen” by Ahmed Al-Shugairi. Check out https://www.youtube.com/watch?v=9KC4XKEn10o.

These are images of converting the consumer into a “Prosumer”, i.e., a consumer and producer at the same time. This is a call for action in two directions: first, towards innovation to reduce the amount of waste we dispose of, whether it is food or other products. Second, through social engineering, which can be primarily done by governments, by legislations, laws, and incentives. The less you waste of what you consume, the more you can turn that into appreciation points that individuals can benefit from in different areas of life for products and services that interest them.

If we talk about a slightly larger circle in the industry sector, there are advanced technologies that can save a lot of waste, in addition to energy, by providing innovative and practical solutions. These technologies can balance between the environment, productivity, and quality. One of them is the Magic Fiber product from MTECHX, which is a tested Japanese innovation. It is a cotton piece treated with nano-technology and has unique advantages, such as its absorbency, which helps in treating oil leaks in water, as well as practical applications in factories.

Such technologies can be leveraged and employed to enhance sustainability on the one hand, and productivity and quality on the other hand. All of this can be achieved through the gateway of choosing sustainability as part of the government or company’s identity strategy.

Cycling in a circular economy!

What we need most is to pause for a moment, reflect, read the numbers on pollution, carbon emissions, and waste, and reverse engineer the compass of the economy to make it more circular rather than linear, even if gradually and in specific sectors at first.

This shift offers many opportunities to realign governments, companies, and institutions, with room for innovation and sustainable development, which would reflect positively on revenues, improvement, and growth.

Both factories and banks can play a crucial role in promoting the circular economy through the umbrella of social responsibility and innovation. This should be included in their sustainability strategy to achieve positive results in the environment, economy, and market.

Universities can also leave their mark in the research and development of this change, with the importance of sustainable partnerships between universities, the public and private sectors, banks, and financing.

The circular economy will not be an option in the near future but rather an essential path that governments, companies, and institutions must take. This is an opportunity for them to work on it, whether for sustainability or to create a unique identity.

Future challenges are not limited to energy consumption but rather in how we recycle it to make it last longer. As it has been said before, “we don’t spin in an empty circle” but rather we can “cycle in a productive circle”.

Jaafar Hamza

Jaafar Hamza is the founder of BOXOBIA, a renowned brand strategy and design communication house based in Bahrain. He is an accomplished author, writer, and speaker with a passion for creativity and communication. With a BS.c in Engineering, an MBA, and an MOAR, he is currently pursuing his DBA.

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