Forging sustainable partnerships
The Circular Economy is all about reintroducing recycled materials into the chain of production powered by renewable energy and resources — all this in addition to limiting loss and waste. The challenge facing companies today is the switch from a linear business model to creating partnerships with suppliers that may belong to entirely different sectors. This approach involves collaboration between stakeholders with divergent interests, so a shared vision is essential.
Making the right moves
Christophe Durand — Strategy and New Business Director at Michelin — believes we need to analyze the value chain and lifecycle of a product in order to uncover the most potent strategies for adopting a pro-CE business model. That way, you can pinpoint potential losses and gains across all levels of production and forge partnerships with suppliers that best meet your needs.
“Tires are an excellent case study,” Durand tells us. “If you want them to be sustainable, the focus needs to be on service life.” If you use more eco-friendly supplies, you can reduce your environmental impact. If the final product doesn’t last, however, you’re simply shifting the problem farther down the road in the form of increased waste, i.e. used tires. Based on their longevity, Michelin tires are nearly 90% sustainable.
On the opposite end of the spectrum, you would want to use more biodegradable ingredients to produce, say, a plastic cup and lessen the environmental consequences. “It’s all about compromise based on analyzing impact — then mitigating said impact,” concludes Christophe Durand.
Investing in sustainability
The principal objection certain companies have to using eco-friendly suppliers is the high cost of recycled and reused materials. Jocelyn Doucet — CEO at Pyrowave — explains that reusing plastics is more expensive than refining raw materials. His company reintroduces mixed plastics like polystyrene into the production of new ones. “Our products are more cost-intensive for the manufacturer, so solutions to alleviating production costs are certainly necessary,” he reports.
This is where public authorities could swoop in and finance the transition to a more circular economic model. They’re already doing it for certain industries, such as supporting the reuse of raw materials for beverage production.
Cooperating for the future
If the Circular Economy means forging new business ties, it also means that the benefits need to go all the way around the table. Every partner has to delve into analyzing their needs, expectations and what they can bring to the table. That way, two competitors can support the development of a single eco-friendly product supplier and both end up reaping the rewards. For example: if each party finances a portion of the supplier’s R&D, one might lower its prices and the other its carbon footprint.
- Be equipped with good metrics
- Find common ground
- Build trust
- Know your limits
- Acknowledge that the solution is a collective one
- Determine what’s shareable and what’s not