Efforts to implement circular economy practices in UK organisations are struggling, according to new research from Ivalua. According to the research, just one-in-four businesses surveyed have been able to successfully make their supply chains more circular.
Many to miss out on economic and sustainability benefits.
Ivalua’s research found that more circular economy models are helping UK businesses meet persistent efficiency, cost and sustainability challenges.
The circular economy essentially refers to practices that replace the traditional linear model of take-make-waste with a more regenerative approach. This approach, according to the World Economic Forum, emphasises the restoration and regeneration of products, materials and energy. As a result, circular economic practices include recycling, part harvesting and remanufacturing, repair, refurbishment and re-commercialisation. However, circular economic thinking doesn’t just seek to replace the existing disposable manufacturing culture with one that favours more recycling; the circular economy challenges conventional metrics of value creation, pushing manufacturers, supply chain managers, and sourcing teams to design products, supply chain models, and logistics networks that put durability, repairability and recyclability in mind.
Ivalua’s report finds that more than half of organisations implementing circular economy models generated more revenue. Not only that, but these organisations also reported more efficient material usage, a reduced carbon footprint, and lower costs. However, most organisations still struggle to instil circular economy practices in their business. Therefore, they are also failing to see the benefits. .
Struggle to implement
The study of 300 UK supply chain and procurement decision-makers found that just 25% have implemented a circular economy model. Almost half (49%) say they are in the process of, or planning to implement a circular economy model, while 22% still have no plans at all.
The findings indicate that the circular economy slowdown stems from basic sustainability shortcomings. UK businesses currently lack comprehensive and fully implemented plans for using renewable energy (75%), buying recycled materials (76%) and exchanging resources with suppliers (81%).
“Against persistent inflation and rising energy and fuel costs, UK businesses must urgently find new ways to optimise their supply chains,” says Jarrod McAdoo, Director of Product at Ivalua. “In our ‘survival of the fittest’ economy, circularity will improve the financial and environmental standing of businesses – particularly those who can gain a first-mover advantage. In fact, our data shows more than half (51%) of UK businesses say if they don’t implement circular economy models, they’ll be overtaken by greener, more efficient competitors.”
- Sourcing & Procurement
- Sustainability
