The circular economy is the future of business

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By rethinking the production process, businesses can create better products that are safer for the planet. This article will help you understand the need for a circular economy, how it works, and how to apply it to your business.

May 18, 20227 mins
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Close your eyes and imagine a world without trash. Does that seem impossible? To see what a waste-free world would look like, simply take a walk in the woods. Nature wastes nothing. That’s the thinking behind the circular economy, a revolutionary business framework that sees waste as a design problem.

The circular economy increases sustainable materials management by making products to be reused, repaired or remade; keeping materials in circulation for as long as possible by using them as inputs for other products; and safely returning materials to nature at the end of their lifespan. By rethinking the production process, businesses can create better products that are safe for the planet. This article will help you understand the need for a circular economy, how it works, and how to apply it to your business.

Why is the circular economy beneficial?

Nature has billions of years of research and development around recycling materials through the ecosystem. By contrast, since mass production of plastic began in the 1950s, humans have produced more than 8 billion tons of it — and 60% of that plastic has wound up in landfills or the environment. Today, people consume more than 100 billion tons of resources annually, more than half of which turns into waste, greenhouse emissions, or (in the case of plastics) in rivers and waterways where they are broken down into smaller pieces and consumed by wildlife, ultimately ending up on our plates. Furthermore, resource extraction and processing cause 90% of biodiversity loss and water stress.

Urgent action is needed and investment into the circular economy is a potential solution. It bends our linear, take-make-waste system that extracts natural materials to make items that are used for a short time and thrown into the landfill. The circular economy is often called "cradle-to-cradle design" because it allows materials to be continuously recycled into something useful. In short, the circular economy takes a non-linear (or closed-loop) approach to material extraction, production and distribution.

The Ellen MacArthur Foundation found that implementing a circular economy in industrial sectors could cut CO2 emissions by 3.7 billion tons by 2050, which would negate emissions from the entire transportation industry. The circular economy is also a $4.5 trillion economic opportunity that will create business growth and job opportunities in new sectors. But in order to decouple economic growth from resource consumption, businesses must act now.

How Iron Mountain is looping in the circular economy

Businesses are applying the circular economy to create products and services that use what's already available and provide new sources of value. It's a powerful way to reduce environmental impact while creating opportunities for growth. Toward this end, Iron Mountain has two goals: Increasing our reporting coverage of waste and recycling data to at least 90% of our global operations by 2023, and working towards zero waste in our operations by 2040.

We're digging through our proverbial trash and asking: What does it take to reduce waste? And what products can be designed so that their waste becomes inputs to other processes? The answer isn't always obvious.

“Moving from a linear economy to a circular economy is a complex undertaking,” says Erin Gately, Iron Mountain’s first-ever Circular Economy Product Manager. “Starting with an in-depth inventory of inputs and outputs can provide data needed to take further steps. Is there an output to my company that has value to another system? If the answer is yes, and if the right partner and application can be identified, the system can begin to move from linear to circular.”

Pulling the levers to enable the circular economy

Policy must change. According to the World Resources Institute (WRI), “there is much to be done on the policy side to incentivize circularity at the systems level,” starting with a “major shift to incentivize or require the use of secondary or recycled materials, for example by placing taxes on products that use only virgin materials.”

A robust circular economy policy must incentivize materials recovery, record data about the circular economy, verify emissions and sourcing of materials, and assure data security, according to Mathy V. Stanislaus, Executive Director, The Environmental Collaboratory at Drexel University and adviser to the Global Battery Alliance and World Bank's Energy Storage Partnership.

Another roadblock has been the lack of extended producer responsibility (EPR). However, “Right-to-repair, EPR and mandatory recycled content in packaging are some of the areas where laws are being passed to help advance the circular economy in the US," says Lauren Phipps, Circular Economy (CE) expert and former CE analyst at GreenBiz.

Domestic infrastructure for handling waste is needed. The U.S. recycling system is part and parcel of the circular economy. But the recycling infrastructure hasn’t kept up with the amount and types of recyclable materials. That’s important as we produce 50 million tons of e-waste per year. Nor have we agreed on a standard for measuring the impact and performance of recycling.

The need for a modernized recycling system is more urgent than ever. In 2018, China passed the “National Sword” Policy, which banned imported recyclables. China has been processing about half the world’s waste for 25 years.

Invest in the future. Investment is essential to innovation and cost reduction. However, while governments, investors, and companies invest $1.3 trillion annually into closed-loop systems, it’s a drop in the ocean compared to investments in the linear economy.

That’s where companies can step in. Iron Mountain has acquired ITRenew, which gives new life to data center servers through safely disassembling, recycling, and remarketing them.

To help other businesses, we’re sharing lessons we’ve learned about circularity and the levers that must be pulled to scale the circular economy.

3 ways businesses can implement the circular economy

1. Educate stakeholders

You can’t meet circularity goals without getting your employees and customers on board. When you educate stakeholders about the circular economy, you can collect buy-in and great ideas.

“There are benefits and financial rewards for these kinds of interventions,” says Kevin Hagen, Vice President of Environmental, Social, and Governance (ESG) Strategy. For example, an Iron Mountain employee saved millions of pounds of plastic wrap — and millions of dollars — by suggesting an idea for a reusable pallet cover.

Externally, Iron Mountain’s Green Report that helps communicate the environmental benefits of secure, recycling shredding to stakeholders. It contains data about how waste diversion conserves water and eliminates greenhouse gas emissions, which will help partners with their sustainability goals and reporting.

2. Rethink materials

Design is intention. By rethinking “waste” as feed streams for other products, you can do more with less. Gately is part of a company-wide Zero Waste team, which found that shredded paper is already part of our circular flow. Iron Mountain collects and securely shreds about 600,000 tons of paper annually, which is sold to paper mills. We’re exploring how to recycle cardboard from our data centers into Forest Stewardship Council (FSC)-certified boxes.

3. Collaborate

As they say, cross-divisional collaboration makes the dream work.

“When we have siloes, we create sustainability problems,” says Hagen. “The circular economy is a systems challenge, so it takes a systems view to solve it.”

Case in point: The Zero-Waste team is investigating secure solutions for used data storage tapes, like using shredded tape in construction materials and using chemical recycling methods to make building blocks to create other plastics.

Partnerships with other companies also move the needle. For example, we’ve met with a leading plastics manufacturing company to discuss safe chemical recycling of pill bottles collected from Iron Mountain customers.

Going further, companies can see how to take back or return materials they no longer need, and see if other organizations need what you have. One example of a large-scale circular economy scheme is the US BCSD Materials Marketplace.

Unfortunately, even these steps fall short without the infrastructure and policy to support the circular economy.

The circular way

The evidence is clear: Businesses must take the lead to make the circular economy a reality. We must be willing to make an investment in design, hiring circular economy professionals, and rethinking waste streams.

As companies begin to recognize these opportunities, the demand for a circular economy will only rise. Once you understand how beneficial a circular economy will be for your company, it will become easier to make adjustments that will pay off in the long term. Knowing that it’s good for the planet is just an added bonus!

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