How developing a Circular Economy can drive sustainability and profit for Sign and Graphics companies

How developing a Circular Economy can drive sustainability and profit for Sign and Graphics companies

Whichever way we look at the world of business today, the impact we are all having on the environment has to be a major consideration. The sign and graphics industry has never really covered itself in glory on this front and it is now time to look at some of the processes and methodologies that can help to move more positively to the future. In this article we look at what is called the Circular Economy, and how it might be incorporated within the sign and digital market.

What is a Circular Economy?

A circular economy is a regenerative system that looks to optimise the resources we use and keep them in productive loops for as long as possible. These resources include raw materials, manufactured products, energy and water. For those in the Sign and Graphics industry, which has tended to be relatively wasteful, developing a circular economy could actually result in increased profitability as well as helping save the planet.

A key aim of the circular economy is to design out waste from industrial processes, while minimising any negative impacts of these processes, such as leakage of materials, energy and emissions. As the circular economy seeks to rebuild economic and natural capital, it is important that any circular model is underpinned by a transition to renewable energy.

A common misconception is that the circular economy is just about recycling – dealing with materials and products once they become waste. In fact, recycling is represented as one of the outermost loops of the circular economy because it captures the least value. Most materials and products, particularly banners, textiles and personalised goods, aren’t designed to be recycled, so recycling often downcycles them into lower quality resources which limits their usability.

Why should you adopt a Circular Economy?

Our economy must become more sustainable and resource-resilient. A growing world population, higher life expectancy rates, rising affluence – particularly the predicted doubling of middle-class consumers to almost five billion by 2030 – are all placing enormous stresses on the planet’s natural resources, which are becoming more difficult and costlier to extract.

To meet society’s future consumption needs, Sign and Graphics businesses will need to engage in greater resource productivity, particular around plastic and vinyl banners. A circular economy offers a practical way to achieve this, through the repurposing or reallocation of old products and waste materials to serve new demands, or by offering services that can better utilise idle assets.

While it’s difficult to fully assess the global value of moving towards a circular economy, a number of studies have estimated the potential benefits of moving towards such a system. Among them, a detailed report from the Ellen MacArthur Foundation and McKinsey & Company concluded that a circular economy, enabled by the technology revolution, would allow Europe to grow resource productivity by up to 3% annually, generating a net economic benefit of €1.8trn by 2030.

For the UK, a 2018 Business in the Community (BITC) report found that a more ‘circular’ approach to business could increase resource productivity by 3% annually and generate £10bn GVA and 200,000 jobs by 2030; as well as providing new market opportunities for businesses of all sizes and improving the UK’s balance of trade by 1-2%. The Sign and Graphics industry is one that can certainly benefit from this approach.

How can the Circular Economy apply to your business

Business models based on circular principles fall broadly into four categories: circular design; product as service/subscription; repurposing; and resource recovery. Circular design centres on lifecycle thinking – for example, designing more durable goods that can be reused or more easily recycled.

Product service or subscription models involves companies retaining ownership of a product but selling the usage of it through leasing or access arrangements. This allows the life or performance of a product to be extended through maintenance, repair and reuse.

Repurposing turns used product parts and materials into higher value goods or materials through processes like upcycling, while resource recovery involves more traditional waste management activities such as recycling and converting residual waste materials into renewable energy.

Each of these models can potentially integrate with each other to build a circular value chain, from design through manufacture and retail to product takeback and reuse/remanufacture.

On a basic level, it may be helpful to view the circular economy as being about making products and then taking them apart at the end of their useful life for repurposing or recycling into new goods. The sharing economy is about what consumers do with these assets during their lifespan. For example, making a power tool that can be returned directly

to the manufacturer and recycled into a new tool would only be part of the sharing economy if it was rented or lent out from a tool library during its use phase.

What are the benefits of going Circular?

Cost Benefits?

The circular economy should be seen first and foremost as a driver for value protection. Its primary focus is on retaining value, enabling companies to get the most from the materials and resources they use. This retention and creation of value is the overarching business rationale for going circular.

While many studies have highlighted the broader economical benefits of moving towards a circular economy, it has been harder to determine how these cost savings might translate at company level. Government figures suggest that UK businesses could save up to £23bn per year through implementing low cost or no cost improvements in efficient resource use.

Circular approaches not only result in lower raw material costs – from a lifecycle perspective, reselling and component recovery can lower material bills while creating more durable products can reduce warranty risks.

Environmental benefits

Around 90% of raw materials used in manufacturing become waste before the product leaves the factory while 80% of products made get thrown away within the first six months of their life. By decoupling economic growth from resource consumption, circularity can help rebuild natural capital. The circular economy also encourages the use of less toxic materials – such as plant-based plastics for packaging – which will help further reduce pressures on GHG emissions, water usage and biodiversity.

Social benefits

Keeping resources circulating in the economy for longer not only satisfies consumer demand for better, longer-lasting products, but can save customers money. Circular business models are generally more labour-intensive than those focused on simply selling products, generating demand for new skills and employment opportunities around the maintenance, collection and repurposing of such goods.

Circular initiatives can also help alleviate poverty in low-income countries by encouraging micro-enterprise in repair and refurbishment or by improving incomes for informal waste collectors.

Conclusion

There are many steps for sign and graphics companies to consider in order to both improve their environmental impact, while remaining fiscally stable and profitable. Introducing  Circular Economy principles won’t be the best way for everyone, but they may well be worth considering, at least in part.