THIS IS THE FUTURE
FOR BUSINESS

The role of design in a circular economy is pivotal. Businesses must work with designers to develop new design briefs for products and services that take account of lifecycle thinking. This is likely to involve wider collaboration with key stakeholder groups such as material experts, chemical scientists, manufacturers, and recyclers. The Great Recovery Project proposes four design models that could work under a circular economy: designing for longevity; designing for leasing/service; designing for reuse in manufacture; designing for materials recovery.

The resource-flow systems that underpin these design models will also need to be re-engineered, ideally at the same time. There is no point designing a product for disassembly if the take-back mechanisms aren’t in place to recover those component parts effectively. This will not only require new government policies and market levers to incentivise the designing out of waste, but greater transparency across supply chains so that end-of-life products and materials can be effectviely tracked and recaptured. Here are three examples of how design could power more sustainable consumption.

The cradle-to-cradle chair
Office furniture maker Orangebox’s design philosophy is based on using less material to create durable products that are easy to disassemble and recover for remanufacture. Its flagship product is ARA, an office task chair that adheres to cradle-to-cradle principles (pdf), effectively creating a closed-loop product cycle.

Virtually all of the materials (98%) used to make the ARA chair are recyclable. Under cradle-to-cradle, each raw material chemical compound has to be assessed to ensure that at end-of-life, it can be taken back into the production cycle to create new high grade products. These ingredients must also be free of toxins that could cause harm to human health or the environment if released into the atmosphere.

To maximise the value of the materials used in this chair and other products, Orangebox has set up a recycling facility at its manufacturing site in south Wales so it can offer a customer take-back service. Used products are collected by the company’s own delivery fleet – if reuse or refurbishment isn’t possible, they are disassembled and the materials sent on for recycling.

Selective disassembly for fabrics
Wear2 is a textile process technology (pdf) that allows garments to be selectively disassembled at end-of-life. It allows manufacturers to specify during the design phase which pieces of the garment they would like to separate out in the future, such as zips, labels, buttons, logos or branding. This means such items can be removed from corporate clothing or uniforms so that the garments can be made available for reuse or resell.

The technology has been developed by a consortium of organisations including C-Tech Innovation, the University of Leeds, Royal Mail Group and textile recycler Oxfam Waste Save, and co-financed by the Technology Strategy Board. It works by utilising a material that behaves in the same way as conventional yarn, except it loses tensile strength when exposed to microwave radiation. This makes it easy to remove and it leaves no trace on the garment.

According to the developers behind wear2, the lack of effective disassembly technologies and absence of design protocols for handling end-of-life clothing are hindering profitable, sustainable clothing operations. They claim the technology could reprocess a significant amount of the clothing that’s landfilled each year to create new revenue streams for the textiles industry.

Build your own smartphone
Phonebloks is a Lego-type smartphone concept, allowing users to replace or upgrade component parts within a modular mobile platform rather than trading it in or discarding it. This means a phone can be customised or personalised from prefabricated parts – using detachable blocks (or bloks) – to help extend its overall life. Each blok is connected to the base of the device for easy interchange. The idea is that as technology evolves, so does the phone in your hand.

According to Phonebloks inventor Dave Hakkens, smartphones are usually thrown out because one of the bloks such as the battery, screen, camera or speed processor has failed or is no longer considered fit-for-purpose. Replacing or upgrading individual bloks therefore offers a more durable solution, especially if users can choose the type and brand of blok they want, or even design their own. The system will be built on an open platform, allowing co-creation between designers, researchers, developers, investors and brands.

Phonebloks has now teamed up with Motorola, a company that has also been involved in its own modular smartphone research, to develop the concept further. It is expected the first prototypes will emerge shortly.

The circular economy places an emphasis on the sharing of physical resources through a more collaborative form of consumption where customers pay for the benefit of using a product, rather than owning it outright. Companies will sell usage of their products through leasing or access arrangements allowing them to retain ownership of these goods through the entire lifecycle, extending their performance through maintenance, repair and reuse.

Some product categories are more likely to benefit from being a service-based proposition than others. A recent Guardian survey found a majority of business owners (66%) felt technology hardware/equipment offered most value as a product-service model, followed by electronic and electrical equipment (56%) and cars, tyres and parts (51%). Interestingly, these three product categories were also singled out by consumers as being most desirable to access as a service.

Product-service models could take various forms but may include pay per use, renting or sharing, lease ownership, and pooling/multi-access. The following examples illustrate how traditional products are being reinvented as services.

Selling light rather than bulbs

Philips is already selling light as a service – where customers pay for the performance of lumens, measures of light output, rather than the physical hardware of a light bulb or light fitting. The company’s ‘pay per lux’ solution is generating significant energy savings for customers such as the National Union of Students (NUS) and the Washington Metropolitan Area Transit Authority (WMATA).

The NUS offices in London are fitted with Philips LED lighting, which is leased through a flat rate payment scheme. If the NUS exceeds its expected energy usage, it gets cash back from Philips. This creates a financial incentive for Philips to provide the most energy-efficient service possible and in turn, the customer has the advantage of paying no upfront costs and the reassurance of a fixed price contract over a set period – in this case, 15 years.

Philips has also developed a tailored solution for the WMATA by converting more than 13,000 garage lighting fixtures to LED lighting in a move that will reduce energy usage by 68% per year and save 11,000 tonnes of CO2 emissions. Many cities are prevented from switching to more efficient LEDs due to the upfront costs involved. Again, this scheme carries no upfront cost as it is underpinned by a 10-year performance-based maintenance contract. As a result, it will also save $600,000 in maintenance costs for WMATA.

Philips is now looking to further develop its product service model – if scaled up, such schemes could pave the way for a completely new approach to lighting procurement.

Would you rent a pair of jeans?

Lease A Jeans is a fashion concept introduced by Mud Jeans whereby users can rent a pair of jeans for a year. After that they have the option to keep them, exchange them or send them back. At the end of the lease contract, returned jeans are reprocessed so that all the raw materials and recycled fibres can be remanufactured into new clothes.

The company’s aim is to build a circular fashion industry based on using, instead of owning. During the lease period, users can take advantage of a free repair service and if they eventually opt to keep the jeans, they can still return them for recycling once they are worn out. Mud Jeans is now reclaiming some of the material to make new clothing lines such as hoodies, which can also be hired through its Lease A Fleece scheme.

Recently the company ran an experiment to see how much people would pay for sustainable clothing. Around 800 people were given the chance to place a bid on a pair of Mud Jeans – some were shown the jeans with the sustainable logo and lease contract while others weren’t. The results indicated that people were willing to pay 12% more for leasable fashion over conventional fashion.

Affordable kitchen hire

Swedish retail giant IKEA is mulling over the idea of leasing kitchens to customers as part of a wider sustainability drive to close the loop on raw materials for its supply chain. It is considering offering affordable kitchens as part of a long-term lease agreement, whereby customers could return the products at end-of-life for reuse or recycling.

Steve Howard, IKEA’s chief sustainability officer, has publicly stated that such a move could pave the way for smarter consumption in the retail sector, where people are less attached to ownership. The company has already launched a ‘Second life for furniture’ campaign in France to encourage customers to bring back used or unwanted furniture to be resold in-store. The initial two-month pilot proved a success and 24 of the 28 stores involved are continuing to offer the service.

In a related move, IKEA has launched Resource Chain, a two-year project to develop a framework for working with recycled materials such as wood, foam and textiles as it looks to strengthen customer takeback of used products.

The transition towards a circular economy is still very much in its infancy. The whole system that we operate within has to be circular and this means ironing out conflicting issues relating to regulation, collaboration, governance, supply chain dynamics, data transparency, and cultural mindset. One of the most obvious barriers is the lack of product takeback schemes and industrial infrastructure to reuse by-products; this issue was considered to be the main stumbling block for achieving circularity by businesses responding to the Guardian survey.

While there is definitely a case for reforming national and international recycling systems to enable more streamlined collection and reprocessing of materials, which in turn could create opportunity for higher value remanufacturing, new value networks must also be established. These value networks, built on intelligent reverse logistics and facilitative product/material asset management, will help support those alternative business models highlighted in the previous sections.

Businesses also don’t feel confident enough to make this change yet – a lack of knowledge about how to make the transition to a circular economy was cited as the second biggest barrier by respondents in the Guardian survey. Particular concerns around accountancy, financial modelling, marketing and creating value were mooted.

This suggests a strong need to relate the circular economy back to business basics and make it relevant to an organisation’s everyday operations. Using the right language for employee engagement and buy-in is crucial; this has been backed up by recent research. The trend toward servitisation in manufacturing whereby value-added services are offered alongside products presents a good hook for circular economy education in this sector.

The Guardian survey also highlighted the fact that many businesses feel there isn’t a high enough level of customer demand yet for more circular products, given the fact that these goods are likely to command a premium – at least in the short term. This lack of market pull is a disincentive, and companies must work out how to create desirable brand propositions around this agenda to widen both customer and consumer appeal.

Huge challenges also exist within supply chains, particularly global ones, to coordinate circular material flows and unlock the level of innovation needed to redesign these new systems. A single company may have little influence with its direct suppliers, let alone further upstream or downstream the chain, to start a mutually beneficial dialogue or gather the right types of data needed to assist in this quest.

As the need for innovation grows, companies will increasingly need to look outside of their traditional stakeholder communities and engage with more unconventional groups such as creatives, systems thinkers and futurists.