Trucost Blog / 01 Mar 2016

The circular economy: creating sustainable business value from waste

A new report by the U.S. Chamber of Commerce Foundation, Trucost and The Ellen MacArthur Foundation demonstrates the business opportunities for using waste as a resource.

It has been suggested that “waste is a resource in the wrong place.” If that is the case, then the opportunity for companies to put waste in the right place and recover resources is huge.

This is the focus of a new report released by the U.S. Chamber of Commerce Foundation in conjunction with Trucost and The Ellen MacArthur Foundation, titled Trash to Treasure: Changing Waste Streams to Profit Streams.

In 2014, 5,589 companies sent 342 million metric tons of waste to landfills and incinerators, according to the report. This amounts to sending the weight of the adult U.S. population to landfill every three weeks, or almost three Empire State Buildings every day. Waste production is a serious problem for companies due to the costs associated with waste disposal, the lost value of resources, and the social and health impacts of waste. Based on Trucost’s natural capital valuation, the environmental cost of the waste generated in 2014 totaled $31-58 billion.

There are tremendous opportunities for companies to value their waste streams and make changes to their business activities to take advantage of cost savings and new revenue streams. These opportunities can exist in a company’s own operations with changes such as improved production and packaging efficiency to reduce waste generation, or finding uses and markets for unused raw materials. For other companies there are opportunities outside their operations, for example, through product take-back programs or developing industrial services to turn waste into energy or recycle it into new products.

Companies like Walmart, General Motors, and IBM have done just that. Walmart not only has goals to generate zero waste in its facilities by reducing, reusing, and recycling materials, it also works closely with its suppliers to eliminate waste. Across all operations in the United States, Walmart has been able to reach 82.4% waste diversion, keeping tons of waste out of landfills and turning it into resources to be used for other purposes.  In 2014, General Motors earned an annual revenue of around $1 billion from waste by-products, recycling, and reuse. IBM processed 32,000 metric tons of end-of-life products in 2014, of which it refurbished, resold, or reused 96.6%, sent 2.9% to waste-to-energy and only 0.5% to landfill. IBM also achieved $2 million in annual material and transportation cost savings through product and packaging redesign.

Even more revolutionary ways for companies to address waste are through innovative business models and systematic redesign to do away with waste all together. A circular economy is restorative and regenerative by design, keeping products, components and materials at their highest utility and value at all times, keeping raw and finished materials within the system for as long as possible, decoupling economic development from the consumption of finite resources.

As environmental data experts, Trucost can help companies understand the size and value of their waste stream, how to monetize it, and how to make positive changes to effectively reduce or eliminate waste while creating new avenues of value.

The conversation about waste as a resource in the circular economy will continue at the US Chamber Foundation’s annual sustainability forum May 16 – 17 in Washington, D.C.  

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