INTERNAL

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Circular
Economy
What is it? What are
best-practise
examples across
industries?

A circular economy strives to

curtail overconsumption,
design processes to reduce
waste whilst restoring and
regenerating ecosystems and
natural capital

Adam Mohammed
Sustainability Lead Analyst
EY Knowledge | Global Go-to-market-Initiatives
 Businesses understand

Circularity is long-held operating

models (e.g. linear) are
changing no longer sustainable. A
dramatic shift of focus is
businesses taking place as industry
seeks to reap the
and lives. economic and social
benefits of circularity.

A circular economy aims to reimagine the production and utilisation of materials using key
circularity approaches of reusing, refurbishment, recycling and repairing. Per the Ellen
McArthur Foundation, “the circular economy is a systems solution framework that tackles
global challenges like climate change, biodiversity loss, waste, and pollution”.
 Reimagines how companies produce
What is a Circular and profit from their products whilst
Economy? challenging consumer behaviour
towards consumption and waste

Design &
re-imagine the full life-
Re-think cycle of products to
promote circularity

Production
& remanufacture processes
Re-think and logistics to promote
Processing
sustainable practises

restrict wastage through

Recycling smart packaging and
& efficient logistics &
End-of-life equipment
Treatment
extend product life
through repair, resale,
refurbishment, and
Transport & recycling
Distribution
re-claim resources of a
Consumption
product whilst retrofitting
Use, Reuse waste collection
& Repair
 Business model built on
Circularity: Common sustainable
Approaches consumption and profit

Six commonly used circularity strategies and business models

Rethink Reduce Reuse Repair Refurbish Recycle

 Rethink the purpose  Reduce, eliminate  Maintain value of  Improve / renew  Refurbish existing  Maintain value of
of the product and material waste product across value of product to product with material across
its value for society, upstream (pre- multiple customers extend use replacement part to multiple product
Strategy influencing product consumer waste)  Reduced  Product in use for obtain like-new lifecycles
design and asset  Potential for environmental longer duration quality  Reduce waste going
overview and utilization financial savings impact and material  Value preservation  Product value is to landfill and
benefit  Rethink product gained through waste compared to benefit from resell, preserved with high environment and
ownership, and how efficient material making new product especially through benefit from re-sale impacts of virgin
to maximize usage use  Product in use for brand-owned feedstocks
and EOL recovery longer duration marketplace

 Sharing economy or  “Product-as-a-  Buy-back / thrift  Managed service or  “Product-as-a-  Financing models
rental business Service” models to models can enable repair service Service” model to like pay-per-part
models reduce maximize usage of re-sale and reuse of offering under refurbish products that can enable
product demand one product across used product “product-as-a- to re-sell at near ‘parking’ capital in
and maximize asset various customers  Rental models (also service”, unlocking original price material to increase
Business utilization  Sharing economy aligning with new revenue stream  Requires more input value (‘material
models model can promote “Rethink” strategy) from customers from the bank’)
reduction of new promote reuse repairing existing manufacturer /  Resource recovery
product creation through a shared products retailer to ensure through customer
economy product quality incentivization

Key industry
applicability

Industrial Automotive / Packaging &

Metals & Mining Energy / Power Electronics Apparel Chemicals Read more here
Manufacturing Mobility Plastics
 Circular
Sweden MCAP. $16bn
2nd largest international
clothing retailer
Consumer Economy

Circularity design centred on; physical Do not allow any wood or other Joined forces with Scania, E.ON & Siemens
durability, non-physical durability, forest-derived materials from to work towards fossil-free commercial
increased use and repairability of endangered forests transport by 2050
products as well as avoiding waste
through recycling By YE 2025, 100% of all wood used Invested smarter logistics, electrification of
will be sourced from FSC™ -certified vehicles and biofuels
Designed and released ‘Circularity Design forests
Actively improving routing and load
Range’ for customers with desire for
80% of materials are sourced through management to lower CO2 emissions by
purchasing products manufactures by
recycled+ means 20%
circular principles

Showcased recycling technology to customers in H&M customers in Sweden can now shop second-hand
Swiss signature store garments

Offers in-store collection for post-consumer garments Customers in other markets can buy & sell pre-owned
whilst working with partners, who sort garments for clothes via business technology provider Reflaunt
rewear, reuse and recycling
Selected H&M stores in Europe offer clothing rental
services for specific collections
 United Largest tech Technology, Media & Circular
States MCAP. $2.7trn company in the
Telecommunications Economy
world

Circularity design centred on; physical By 2030, goal to produce every product Focused on improving material and
durability, non-physical durability, with 100% clean energy manufacturing efficiency to reduce
increased use and repairability of emissions from transporting and
products as well as avoiding waste Apple’s Supplier Clean Energy Programme processing materials
through recycling helps its suppliers switch to renewable
electricity In FY2021, avoided 180,000 tonnes
Focused on designing products that of CO2e by changing mode of transport
require less end-user energy 200+ suppliers have committed to 100% & reducing product weight
consumption (Scope 3) renewable electricity for Apple production

Ambition to make every product with 100% recycled or renewable Works with trade-in partners to offer customers gift
materials card or cash options as well as free recycling for
non-eligible trade-in products
Collected materials: Material Recovery Lab in Texas helps reclaim
materials used in products – i.e. gold, cobalt, steel and tungsten 75% less single-use plastic in packaging compared
with 2015 with goal of removing all plastic
Unavoidable emissions: Through Restore Fund, aiming to remove at packaging by 2030
least 1 million tonnes of carbon dioxide per year
 United
World’s largest and most Health, Sciences Circular
broadly based healthcare
States MCAP. $430bn
company and Wellness Economy

Committed to use 100% recyclable, Partnership with A*STAR Institute of Removed hundreds of trucks from the
reusable or compostable plastic packaging Materials Research and Engineering road without sacrificing supply and is
by 2025 Circular Materials Lab to identify circular estimated to have doubled miles-per-
flexible film packaging solutions gallon fuel savings
Partnered with The Healthcare Plastics
Recycling Council and the Sustainable In 2021, produced or procured 52% of In 2021, received the EPA SmartWay
Healthcare Coalition, to increase healthcare electricity from renewable energy Excellence Award for climate-efficient
recycling, reduce waste and elevate sources transportation
sustainability in global health systems

Reusing wastewater: large facility in Canada treats wastewater Helping consumers make better choices:
to be re-used during manufacturing process and to support Reducing packaging size, usage of plastic trays as
cooling towers in warmer season well as improving biodegradable credentials for
key consumer items (e.g. wipes, lotions and
Partnered with The Closed Loop Infrastructure Fund to build mouthwash)
the recycling infrastructure in North America and innovate
toward a more circular economy
 United 9th largest Oil & Gas company
Energy & Circular
Kingdom MCAP. $87bn in the world (by MCAP.) Resources Economy

Industrial and automotive lubricant Committed to increase the proportion of Actively establishing several renewable
subsidiary company Castrol has committed investment into our non-oil and gas energy partnerships, extending the usable
to halving the net carbon intensity per litre businesses (c.$5bn per year by 2030) life, recovery and recycling of certain
of its products equipment across distribution network
2021 saw 2.2% fall in freshwater
Goal to increase renewables development withdrawals and 4.1% fall in freshwater Signed an MoU with NYK line to collaborate
to over 23GW in offshore wind consumption on future fuel and transportation solutions
to help shipping and other sectors
Focused on designing products that require Pledged to have net zero upstream oil and decarbonise
less end-user energy consumption gas production (scope 3) by 2050

Waste reduction programme: In 2021, nearly 45% less Since 2021, BP has converted low-quality mixed and used
hazardous waste was disposed compared to 2018 plastic into pyrolysis oil, which has gone on to produce
certified circular products that are available to non-
Partnered with Clean Planet Energy to process hard-to- commercial customers
recycle waste plastic into naphtha - a petrochemical
feedstock that can be used in plastic production to Reduction in carbon emissions is directly linked to providing
support a circular supply chain products with lower lifecycle emissions directly to
consumers
 New Population of
30% of land area is Government & Circular
protected as
Zealand 5 million
conservation land Infrastructure Economy

Supporting research and development and Committed to sustainable For Government use, agencies need
accelerate investment in the bioeconomy to procurement by buying low to choose a battery electric vehicle
commercialise bioeconomy technology and products emissions and low waste goods, (BEV), or a plug-in hybrid electric
services and works vehicle (PHEV)
The Carbon Neutral Government Programme (CNGP)
set up to accelerate the reduction of emissions Phasing out coal-fired boilers Using low-emissions fuels, such as
within the public sector from the public sector, with a biofuels and green hydrogen, will
focus on removing the largest help decarbonise New Zealand's
As at March 2022, nearly NZ$800 million is and most active ones by the end transport system
invested in projects related to sustainability, climate of 2025
change and similar initiatives

Waste Management New Zealand captures the gas produced Looking to pass ‘right-to-repair’ legislation that
from waste at its landfills and is converted into electricity and protects consumers who seek to repair products,
supplies the national grid. regardless of size, price and category

Investing $50 million over four years in projects that find ways The Government has already co-funded 1,000 public
to use less plastic and make what they do use reusable or chargers and will continue to improve EV charging
recyclable through the Plastics Innovation Fund infrastructure across Aotearoa
 Advanced Circular
2,300 daily
France MCAP. $4.7bn
flights in 2019 Manufacturing & Economy
Mobility

To avoid the destruction of products and New seats in Premium Comfort Class to be Use of Sustainable Aviation Fuel (SAF)
promote reuse, in 2017 the Group signed a lighter than previous designs and all materials is one of the most impactful measures
framework agreement with the Agence du were carefully assessed in terms of for reducing the Air France-KLM
Don en Nature (ADN). By donating new, re- circularity and weight, without detracting Group’s CO2 emissions
modelled and recycled products like crockery from aesthetic features
and blankets respectively 64% of new generation aircraft in the
Air France-KLM has partnered with Delft group's fleet by 2028
Air France Industries and KLM Engineering & University of Technology to give its planes a
Maintenance use pads that requires 80 times streamlined V-shape, saving 20% on fuel used Installation of new seats has been
less water than the previous one: 150 litres on flights and reducing emissions accompanied recycling and dismantling
to clean a Boeing 777, rather than 12,000 process for the old seats
litres used before.

In 2021, the Group reduced its non-recycled waste by Recycling of used uniforms which are transformed
70% compared to the 2011 baseline into carpeting on board KLM aircraft or the upcycling
of blankets used on board into goodies for customers
By eliminating single use plastic wherever possible and
replacing these plastics with other sustainable To reduce catering and cleaning waste, many items
alternatives, Air France gradually eliminated 210 million have been removed, e.g. magazines, or onboard
single-use plastic items, i.e. 1,300 tons procedures have changed to reduce demand
 14th largest Financial Circular
Netherlands MCAP. $34bn European company
Services Economy
by revenue

Building knowledge and expertise in order to New global headquarters was partially built Focusing on increased use of technology
finance circular companies, projects and with the concrete from the previous for seamless digital collaboration such as
solutions building on the same location in 2021 video conferencing to limit unnecessary
travel
ING is an active member of several circular Pledged to have net zero upstream oil and
economy platforms, like Circle Economy. gas production (scope 3) by 2050 Partners with EcoVadis to monitor the
social and environmental performance
ING has developed a system to assess all ING compensates for remaining operational of key logistic suppliers
asset classes based on a diverse set of ESG carbon emissions by purchasing voluntary
criteria carbon units (VCUs)

Residual waste was reduced to just over 1,000 tonnes in 2021 Launched Green Bond that is designed to allocate net
compared to 2,900 in 2014 proceeds to Eligible Green Loan Portfolio of new and existing
loans including renewable energy, projects and green buildings
Provided several loans to recyclers and companies that produce
goods using recycled resources Established measuring systems for emissions data, reporting
frameworks and governance structures which are necessary
Increasing use of eco-labelled and environmentally friendly for financial institutions to support the transition to net-zero
paper and recycle disposed paper worldwide emissions
 EY Discover Circular
Resources Economy

Circular Circular
economy CCaSS Circular Circular
economy
insights Economy Economy
perspectives:
Activation Solution Client
Examining
Pitch Deck
lessons learned
in circularity
 For a full version of this pack,
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