Circular economy for business: WWF guide

Circular Economy for SMEs: Discover how to embrace sustainability with Paula Chin from WWF.   

 As part of Vodafone's ongoing global partnership with WWF on issues of sustainability, we sat down for a conversation with Paula Chin, Senior Policy Adviser at WWF, to get some insight into how sustainability in business can be improved.
Here, we discuss the benefits of circular economy business models, including actionable steps smaller companies can take to transition from a linear economy towards a circular model, and what this means in practice for a small business.   

From your perspective Paula, why do we need a circular economy, and how is it different from the traditional economy models?

Most of our modern-day life and society has thrived off the back of a linear economic model: we're extracting the resources and materials we need, and getting the products that we buy and use in our everyday lives, from all over the world. We're then – for the most part - using these products for a relatively short time and throwing them away. That means precious materials are disposed of and wasted. That’s something we need to change, and that’s why a shift to a circular economy is really important.

By contrast, a circular economy business model is about keeping those products in circulation for longer and using and reusing those precious resources. Sometimes it’s incorrectly just thought of as recycling. Yes, we need to recycle but actually a truly circular economy is so much more: it’s basically using fewer resources and keeping the resources we do use in circulation for longer. We can achieve that by using more recycled materials in products, but also – crucially – by enabling things like repairing or refurbishing, and repurposing products before we even get to a point where they have to be taken apart and recycled.

We’re already feeling the impacts of climate change and catastrophic nature loss; a rapid shift to a circular economy approach will help reduce the pressures on our planet’s finite resources, helping address these threats and bolster the resilience of our economy. To promote zero waste and keep the precious resources and raw materials that we’re taking from the planet in circulation we need to embrace circular economy principles around repair, reuse, repurpose and of course, recycling.   

As a small business owner, it might be quite daunting to change your business model. What initial advice would you give to SMEs that are trying to implement a circular economy business model?

There are already examples of small businesses leading the way in encouraging behaviour shifts towards adopting a circular economy. If you’re an entrepreneur or innovator and you’re thinking about bringing your product onto the market, you’ve got an opportunity to design your product from scratch and ensure that you’ve incorporated circular economy principles into your product design, your commercial offer and the way you interact with future customers.

For really well established businesses that have very successfully thrived off the back of linear economy business models, I think it’s harder sometimes to put forward a comprehensive case to senior business leaders that they need to move away from what’s worked for so long. And it’s also challenging to bring your customers on the journey and support them to change their behaviour and attitude towards the way they consume products. But it’s a challenge established businesses need to take on.

It's also about engaging governments to take the need for a circular economy seriously and to create a level playing field for businesses, where no one's disadvantaged if they do go down the route of adopting more circular business models.  For example, making repair services more accessible and affordable and requiring businesses to support this would be a positive step in the right direction.   
Small businesses can have a really powerful voice, and there are trade associations specifically championing them, drawing attention to their innovative approaches to designing products and supporting and building relationships with customers in a way that promotes a circular economy. We need everyone to come on that journey and we need large businesses as well to really take this seriously and to have voices like Vodafone calling for more right to repair policies and regulations.

You mentioned the customer – is that something you’re seeing much more of? That customers are willing to pay more to invest in sustainable materials and potentially repairing rather than replacing items?

Yes, I think customers are willing to engage but the reality is that, right now, they’re often required to pay potentially a little bit more for a ‘circular’ product and, because of how our economy functions, it generally takes more effort to be more conscious about the impacts of what you consume and the way you consume it.
Marketing and communications around sustainability are everywhere, but this can create issues for consumers because they have to navigate that messaging time and again, as companies can use terms like “sustainable” to mean very different things. It can be confusing for people to understand whether they’re doing the right thing.
We currently lack common standards that give consumers confidence in what they’re buying. So, for instance, ratings for refurbished products vary because they often depend on the retailer’s own assessment rather than it being an acknowledged industry standard.    

How can SMEs make refurbishment or repairing more desirable?

There are several ways to do this. For example, if consumers know their product comes with free repairs or replacement parts to encourage these behaviours, they have the chance to take that up rather than simply buy a new product when something’s gone wrong.  And that results in consumers feeling good about doing something positive for the planet.
There’s an opportunity for SMEs to ensure that consumers have that feel good factor across many different types of product categories. In fashion for example, you have the rise of Vinted and depop, and online retailers like Back Market in the tech space. These businesses thrive on people engaging with refurbished and pre-loved products. It’s about the little things that add up to overall positive impacts. You can also have options on your website to pick a slower delivery method to save carbon, ensure your packaging is reusable or recyclable.
When we're looking at the implementation of a circular economy business model, small things make a big difference over time. So, it's about signposting to all of the small changes now. It isn't necessarily rethinking your business model overnight, but it's about picking out the small things and then communicating them effectively to your customers. This also needs to be coupled with some kind of financial incentives, too. I think that in this way, circular economy business models can also drive loyalty.

How can local communities benefit from SMEs having circular economy business models?

When you create a circular economy, you're creating a system that promotes sustainable practices, sustainable use of resources and, ultimately, ‘green’ jobs. A great example of this is The Edinburgh Remakery, an environmental and social enterprise promoting waste prevention through reduction, repair and reuse approaches for technology and electrical products. They provide skills training and employment for local people and champion tackling digital poverty.

What is the Green Claims Code, and how does it affect small businesses?

In 2021, the UK government introduced the Green Claims Code. This code provides guidance to businesses on the evidence they need to support any sustainability-related claims they make about their products, so consumers can be confident that what businesses are saying about their products isn’t greenwashing. With this code in place, businesses have to be really careful about what claims they're making. This could be a challenge for smaller businesses as gathering the data can be costly. For instance, you may need data to evidence carbon emissions savings.

This is where smaller businesses can turn to their relevant trade associations (like the Federation of Small Businesses) and ask how they can get support. They can also ask their manufacturers questions in terms of the certifications and accreditations they've got in place to support the green claims that they might want to make for their products.

There are big, well known organisations like the British Standards Institute that are constantly looking at how that they can support small businesses in the design and marketing of their products.

Large organisations like Vodafone also have many resources SMEs can refer to to help them make their business more sustainable.

Through the Vodafone WWF partnership, Vodafone is supporting the shift to a more circular economy and is collecting one million phones for the planet for reuse, refurbishment or recycling. Vodafone will donate £1 to WWF for every phone that is collected, supporting conservation around the world.
If you need advice on introducing a circular economy business model into your company, why not sign up for a free one-to-one call with a V-Hub adviser today for help and support.

More advice, tools and guides are available on the Vodafone V-Hub to answer any other digital questions you may have. 

Sustainable Business Growth For SMEs

Discover guidance on sustainable growth for SMEs with WWF and The Carbon Trust.

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