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Sustainability officers must put in place new models and encourage the continuous reuse of materials to minimise waste and the demand for additional natural resource consumption.
Circular economies will replace wasteful linear economies in as little as 10 years’ time, according to a new report.
Analyst Gartner predicts that as both consumer and shareholder preferences move toward sustainability, chief supply chain officers (CSCOs) must prepare for the transformation to a circular supply chain without waste. It reckons that by 2029, the circular economy will be the only economy.
Gartner defines the circular economy as an economic model that separates the ability to achieve economic growth from the consumption of natural resources.
Circular economic business models encourage continuous reuse of materials to minimise waste and the demand for additional natural resource consumption.
“Organisations are under pressure to reduce the amount of waste they’re producing – from consumers and governments alike,” said Steven Steutermann, managing vice president in the Gartner supply chain practice.
“The solution to this challenge is a shift towards a circular, waste-free economy. The supply chain will play a key role in this process. Eighty-four percent of participants in Gartner’s recent Supply Chain and the Circular Economy Survey stated that the supply chain has, or will have, decision-making authority when it comes to their organisation’s circular economy strategies and initiatives.”
“To turn around a supply chain system, 10 years is not a long time. CSCOs should deploy change management programmes and start pilots now”
Gartner highlights that switching from a linear to a circular economy is not a go-it-alone project, and requires a whole ecosystem. CSCOs should collaborate with internal product designers and suppliers to understand exactly how products are consumed and disposed after consumption.
“To turn around a supply chain system, 10 years is not a long time. CSCOs should deploy change management programmes and start pilots now,” added Steutermann. “The pilots will provide valuable learnings and help build momentum for further circular economy initiatives.”
According to the survey, the biggest challenge to circular economy efforts is setting measurable goals. Often, the key challenge in setting these goals – as with any transformational initiative – is substantiating how the proposed changes will impact consumer preferences and, ultimately, margins.
Steutermann added: “While some metrics on sustainability already exist, they are mostly related to linear metrics, such as reducing waste to landfills or carbon dioxide emissions.
“It is important not to confuse those metrics with the circular economy. Good metrics for the circular economy could be the percentages of reclaimed, reused materials for production and the reduction of single-use plastic.”
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