Three circular business model pilots targeting resource efficiency
Three innovative business models based around reuse and recycling have been showcased by REBus, a project from the Waste and Resources Action Programme (WRAP) designed to empower businesses with practical solutions to improve resource efficiency and create more sustainable ways of working on a commercial level.
A 4.5 year project, part funded by EU LIFE+ and running from July 2013 to December 2017, REBus has worked with 30 organisations in the UK and the Netherlands, developing and piloting a range of resource efficient business models (REBMs) to improve sustainability. As the project comes to an end this year, these new case studies show how businesses big and small can incorporate and benefit from circular strategies.
Samsung UK: gadget trade-in (case study)
One of the higher profile companies benefitting from REBus expertise, Samsung UK developed a business case for a trade-in offer which enabled customers to upgrade to the latest premium smartphone, while allowing Samsung to retain the value of the previously owned products.
growing appetite among consumers for retailer electrical take-back and trade-in schemes, presenting a significant opportunity to reduce the amount of waste and environmental impact from electronic products.
The Samsung project took the form of an online upgrade service, through which used products were traded in to be refurbished by the company, thus creating access to a new market of premium, preowned products at the same time as reducing Samsung’s environmental impact.
An in-depth understanding of the pitfalls and benefits of circular business models was provided by REBus coaches, and the trial service proved popular with customers, such that the upgrade service has since been expanded to include their premium quality televisions and newest flagship smartphones.
A similar trade-in scheme was piloted in Argos through REBus in 2015, and claimed to be the first such service from a generalist retailer. The project says that through this project, Samsung, as an Original Equipment Manufacturer, has shown how direct circularity might be achieved on a producer level.
Po-Zu: shoe repair service (case study)
A smaller business striving for efficient resource use, Portuguese shoe company Po-Zu - founded by Sven Segal, who has since set up the Better Shoes Foundation to spread best environmental practice in the shoe-making industry - claims 70 per cent of the energy required to make their products already comes from renewable sources. The shoes are created using natural materials and supply a customer base which is invested in the ethical credentials of the company.
To see if the lives of the shoes could be extended further with repair a pilot was set up to determine whether Po-Zu products could physically survive a repair process, and to understand the logistics involved. The trial showed that ‘textile-upper’ shoes could be successfully repaired and indicated that more durable ‘leather upper’ shoes would also survive a disassembly and repair process. As such, Po-Zu felt a repair service with an independent cobbler would be of particular interest to customers, allowing them to extend the life of their shoes.
The partnership with REBus addressed issues over where repair should take place to make the most economical sense and volume. A repair business model was created from November 2016 enabling customer’s access to a shoe replacement service for their Po-Zu shoes. Shoes typically retail at £85-150, so replacement of the sole and foot mattress can be cheaper than replacement.
Po-Zu is now looking to expand the repair service model as the business expands.
Naturalmat: sustainable mattresses (case study)
Devon-based Naturalmat is a small scale handmade mattress company. Focusing on sustainably sourced and biodegradable materials, the company wanted to embed circularity into its service offerings as well as its products.
The company set out a number of goals including increasing reuse of the mattresses at end-of-life, informing customers interested in reducing waste, reducing waste at site and providing positive publicity and improved public relations.
With help from REBus, Naturalmat developed trade-in and upcycling services, providing new options for customers to extend the product life through reuse and recycling. The company also altered their product design with a 50 per cent reduction in the use of adhesives, in order to improve ease of disassembly and refurbishment.
As with Samsung, incentivised returns meant the customer became better informed about and involved in the circular system. REBus claim the pilot scheme produced tangible results, creating in 2016 an extra 81 tonnes of recycling, 89 tonnes of reusable material, and an additional income of £35,000.
The REBus legacy
Steve Creed, Director of Business Programmes at WRAP, said: “What we are seeing from the REBus pilot projects is a clear business case for resource efficient business models as well as huge environmental benefits. If you scale this kind of circular activity up across Europe, our extrapolation work suggests an additional £282 billion gross value added could be generated, along with a reduction in raw material demand of up to 185 million tonnes, and a reduction of greenhouse gas emissions by up to 155 million tonnes by 2030.”
Along with these figures, Creed also discussed the potential for job creation within REBMs: “The adoption of REBMs involves using more labour and fewer resources to increase the efficiency of production and broader economic activity. By 2030 the expansion of such resource productivity could create up to three million jobs in Europe.”
The success of these REBM pilots shows how the circular approach can, with a focused business case, enable companies to transform their strategies around long term, sustainable solutions. REBus published a summary of learnings alongside its case studies which noted that the businesses involved ‘continually highlighted the benefits of longer term thinking and development of business models based around customer needs’.
After the official REBus project comes to an end in December, the website will remain accessible for at least five years, providing a source of advice for others looking to implement REBMs or circular strategies.