Answering your circular economy webinar attendee questions with Xavier Hubert
Have you seen examples of circular economy in healthcare? What could this sector do better in CE?
There are a lot of examples of circular economy (CE) strategies being applied to the Healthcare sector today. We know of numerous manufacturers that are involved in leasing, design for circularity, long term support, refurbishment, and various other circular activities either themselves or through strategic partnerships.
With the ever-growing demands on health services and points of care, the increasing reliance on technology for the detection, monitoring, and treatment, and the pressure on health budgets across the globe, a lot of conditions align to make a circular approach critical. Besides the obvious “Environmental” benefits, CE in Healthcare also carries a strong “Social” dimension by making it more accessible to a much wider part of the population that needs it.
What are your thoughts on how Indian automotive OEMs can effectively try to build circular economy in supply chain? e.g. Recycling of end-of-life vehicles? Bringing useful materials to use back into the supply chain?
Only second to the built environment (i.e. the places we live in), vehicles are typically the product that “embeds the most impacts” for households who use one. In other words, it takes an awful lot of materials, energy, and emissions to produce (as well as run). Personal vehicles are known to be effectively used less than 10% of the time, generating tonnes of waste at the end of their life and still have a relatively low level of parts remanufacturing and re-use.
I am not intimately familiar with the Indian automotive market and its end-of-life vehicles context, but I am certain that — compared to smaller hand-held devices where “leakage” (to landfill) is difficult to prevent — end-of-life vehicles should be somewhat easier to get back in the material chain given the right incentive and the right infrastructure to process.
What does DfE stand for?
DfE stands for “Design for Environment” also known as “Eco-design.” It refers to an approach to product design that aims to reduce the impacts of the product on its environment. It is a generic term that can involve one or many of the following design goals: design for repairability, design for refurbishment, design for upgradability, modular design, design for disassembly, design for recyclability, etc.
Would you speak to where the roadblocks lie in the circular economy? For example, there is a shortage of salvage companies to disassemble existing products to salvage parts.
At the current junction, challenges in becoming “circular” are aplenty. We need more non-virgin or renewable materials, different product designs, new skills, more data and information sharing, reverse supply chain scalability, shorter loops, new business models, and new consumption behaviors, and indeed, as well as new legislations, we may also need to re-think, remove, or update counter-productive legislative barriers. Finding the new equilibrium will take some time. What we start to observe is a clear first mover advantage on a number of these fronts.
What is the current status under your perspective for circular economy in the electronic industry? What are the main challenges?
The challenges for the electronic industry are in many ways similar to that described in the previous answer, and a lot would be quite common for most technical products, perhaps excluding the food and building industry.
There are however a number of additional challenges quite specific to the electronic industry, for example: data privacy/erasure, testing capability, access to parts including end-of-life parts, IP restrictions, software/firmware access and rights, high centralization of supply base at a global level, scarcity of some critical minerals, export controls, extended producer responsibility, toxicity of waste, potential dangerous goods classification, and presence of fire retardants and other substance of concerns.
As for the status, based on the results of a survey we carried out amongst participants at the beginning of the webinar, about a half of the key players have either plans or have already implemented plans to become more circular or fully circular. A number of them have given themselves 2040 targets to do so. Pilots are now giving way to large scale programs which start to represent a significant revenue and profit driver for some. The B2C market seems somewhat held-back by the pace of change in consumer behavior. However, the more pragmatic B2C procurement — with its own ESG targets or obligations to meet — seems to be leading the charge.
What are the best/most representative data measurements for CE to show CE success of a company?
The measurement of circularity is a complex topic. One suggestion is perhaps to look at how the legislator (the EU in this case) is attempting to measure and benchmark “circularity” to some extent, then apply it to your business context. At a very high level, this could start with KPIs as follows:
- Resources inflow (corporate):
a. Raw materials:
i. Total weight in
ii. % weight virgin versus non-virgin
iii. % renewable or “sustainably sourced”
b. Other resources in production:
i. Energy use (and intensity per unit), % renewable
ii. Water use (and intensity per unit), discharge mechanism
iii. Others as applicable
- Resources outflow (corporate):
a. Total weight to market
b. Total weight back from market, as a % of total weight to market
c. Total weight of “waste”
i. % diverted (re-used or recycled…)
ii. % disposed (incinerated or landfilled)
d. Total weight of waste categorized (incl. Hazardous versus non-hazardous)
- Product level circularity:
a. Same as 1.a. and 1.b. applied to a specific product
b. Same as 2.a. and 2.b. applied to a specific product
c. Circular product design KPIs (consistency of measurement probably as important as accuracy)
i. durability
ii. reliability
iii. reusability, number of use
iv. upgradability
v. reparability and access to parts
vi. possibility of maintenance and refurbishment
vii. presence of substances of concern
viii. energy use or energy efficiency
ix. possibility of remanufacturing and recycling
x. possibility of recovery of materials
xi. environmental impacts, including carbon and environmental footprint
d. Product dimensions and Packaging-to-Product ratio (volumetric)
- Circularity financials:
a. % revenue derived from circular activities (e.g. New versus Non-new sales, or PaaS versus outright sales)
b. % profit derived from circular activities
c. % of total units related to circular activities
