Trucost Blog / 09 Oct 2015

Making the business case for a circular economy

By building circularity into the business model, the electronics industry is well-positioned to identify both opportunities and potential constraints to revenue growth.

The financial opportunities and environmental benefits of a circular economy in the electronics sector – where waste becomes a resource for new products – was the focus of the recent Emerging Green conference held by the Green Electronics Council in Portland, Oregon, USA.

Representatives from the public, private and non-profit sectors convened to discuss profit-driven approaches to sustainability in the electronics sector, and how to develop collaborative strategies to achieve success. Trucost presented original research on natural capital dependencies in the electronics industry in partnership with the Green Electronics Council.

On a positive note, our research shows the electronics sector is more efficient than most other industries in its use of natural capital to generate revenue. However, rapid growth in sales of electronic devices means absolute natural capital impacts are likely to increase, even if the efficiency of devices improves. Companies need to explore these dependencies to ensure that product growth and innovation can continue. The circular economy offers a favorable strategy to address these dependencies.

electronics

Our analysis showed considerable financial opportunity, as well as environmental benefit, associated with a scaled-up circular economy in the electronics sector. In particular, precious metals recovery represents a significant business opportunity. Trucost estimates that if recovery of gold, silver and platinum increased from current rates to 100%, the financial and natural capital benefits would increase by $10 billion.

Hardware manufacturers Arrow Electronics and Dell both discussed the growing challenge with e-waste, and explored solutions to emerging streams of waste produced by the industry. Dell is a leader in this field, promoting the circular economy around plastic waste. The company received the 2015 Catalyst Award during the conference.

Between January 2014 and August 2015, Dell used more than 4,500 metric tons of post-consumer recycled plastics in its products. Cumulatively, the company has used closed-loop recycled-content plastic across 34 products globally through its closed-loop supply chain, turning waste into a resource.

Other conference attendees pointed to the growing challenge associated with circular models. As devices become smaller, disassembly becomes more difficult, and the use of composite plastics in place of traditional materials makes the prospect of circularity more daunting.

Incorporating disassembly, reparability and modularity into original product design was offered as a solution to these issues and a welcome change from planned obsolescence. Entrepreneur Alejandro Santacreu presented his PuzzlePhone, a “circular device” in which different parts of the phone can be repaired and upgraded according to individual needs. The modular product is designed to create a sophisticated and durable device that addresses consumer demand for the latest technology.

By building circularity into the business model, the electronics industry is well-positioned to identify both opportunities and potential constraints to revenue growth. Trucost’s work demonstrates how natural capital can provide the insights and leverage needed to move beyond the traditional linear business model. We were happy to share our work, but also to learn from industry leaders and innovators in the space, and we’re looking forward to the next conference!

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