What if everything used in industrial production, manufacturing or refining could be endlessly reused in some beneficial way?
Products and operations would be designed for use, then disassembled, redesigned, or repurposed and used again. Precious resources wouldn’t run the risk of being depleted as quickly. The environmental footprints of conscientious companies’ would consequently shrink.
Though the concept of a circular economy (or a sustainable closed-loop model) has been catching on for years, the actual practice has been a little slower to be adopted by industry. However, by illustrating the economic and social value that industrial circular solutions can attain, the practical reasons for adoption are made crystal clear.
Should you be scaling up this innovative business model in your industry? Here are three reasons why you should.
Business plays a central role in creating the systemic change required to reap the financial benefits of this (circular economy) transition” - The Ellen MacArthur Foundation
When industries reuse or recycle process materials, they require fewer virgin resources and can leverage recycled materials as new feedstock.
For example, sulfuric acid can be produced from sulfur recovered during fuels development and recycled to be used again, reducing the need for new product. Sulfuric acid can also be used in manufacturing an array of end products such as fertilizers, batteries, dyes, detergents, personal care products, pharmaceuticals, specialty chemicals, synthetic fibers and cosmetics.
Within this process, recycling sulfuric acid may reduce the need for storing, handling and manipulating new materials, which can save considerable costs.
Finally, recycling materials helps reduce the amount of used materials to dispose of, lowering costs and carbon footprint.
Some materials can be recycled on site which is faster than waiting for new resources to be trucked in. It also saves you the costs of hiring or maintaining a fleet. This is true for Toledo Refining Company. Through optimized processes, the company is recovering 50 percent of its wastewater for reuse.
Hire a qualified outside company to handle your industrial process streams, and you can direct your focus on your core business. Third party companies can help shift your production processes to more circular business models, promoting sustainability while conserving valuable resources.
An ING study found that shifting to a circular economy could “unlock $4.5 trillion of additional economic output by 2030” globally. Investing in changing production processes certainly can be challenging at first but the long term synergies are astounding. The benefit: Your company’s utilization rate remains at peak while your environmental footprint shrinks.
As a citizen of the world, you likely want to fix some of the problems affecting our environment. But as the leader in a company, you also have an obligation to company profitability and growth.
But these days, savvy companies also realize that social and environmental responsibility is an increasingly important goal for business. And it’s not just a feel-good aim.
For example, according to Wendy Wood in a TED talk called The Business Benefits of Doing Good, oil and gas companies who scored high in “total societal impact” (social and environmental considerations) have a 10% valuation and 3.4 margin premium over other oil and gas companies.
The conversation about sustainability efforts affecting a company’s bottom line is certainly not exclusive to the oil and gas industry. According to a Harvard Business School article, “For the first time, a link has been drawn between public sentiment about a company’s sustainability practices and how that company is valued on the market.” Scholars, economists, and social activists agree; the best path forward is a circular one.