Explore 11 key reasons why digital tools are crucial for implementing and advancing the circular economy successfully.
According to the Boyden Executive Survey 2023: Exploring adaptivity through strategy and talent, 2022 was the first year that executives included sustainability in the top three skills they wanted to strengthen and that those opportunities drive growth.
Embracing sustainability at your company presents opportunities for strategic differentiation and innovation. The Circular Economy approach, focusing on resource regeneration and waste minimization, is a powerful way to achieve sustainable growth. Digital tools play a crucial role in tracking metrics and integrating systems, driving operational excellence and brand loyalty.
In Digitalisation as an Enabler of Circular Economy, three methods for improving your circle are to Slow, Close, and Narrow the loop. By building a better loop, your organization can show improvements to your sustainability metrics. Since Circular Economy thinking improves the sustainability of your business, you should also keep track of how these sustainability metrics affect your organization’s economic KPIs. As the costs of extracting raw materials continue to increase, use these strategies to lessen your environmental footprint and save resources.
Can you use digital tools to improve your design so that it lasts longer? During your design process, slow the loop your products go through by:
Many loops still require some material to enter the system and some waste to exit. Not every system can be perfect. But with smart design, you might be able to close the loop by considering the following in your design:
By optimizing your processes to use fewer resources, you narrow the loop. Design your products to:
An article on corporate strategy by the Balanced Scorecard Institute notes that today’s customers want safe, natural products and that millennials demand accountability and engagement during this era of social media. The Ellen MacArthur Foundation anticipates more demand for new business services that use and reuse products for longer.
The Circular Economy involves a community of people, and it’s worth engaging with your customers on what you’re doing to participate. In the article A Circular Economy requires community, and communities are built through storytelling, clothing companies point out that by connecting with young audiences and incorporating them into sustainability initiatives, they are adding to the resiliency of their branding.
Digital tools are going to help you keep track of metrics for circularity. Regulations for product design, recycling, and waste have legal ramifications that should be monitored and stored digitally for simplified reporting.
And while many customers want companies to show that they are engaged in the Circular Economy, they avoid companies that engage in “greenwashing.” Risk management company DNV highlights problems with inaccurate metrics in their article What matters to consumers in the circular transition?
By creating a series of metrics your company tracks using digital solutions, you can harvest data that provides concrete evidence of circularity ambitions and successes at your organization.
Not every Circular Economy experiment works, but good data helps you be transparent with your customers and team. Show where you’ve improved, and find spaces where your metrics don’t line up with expectations.
By building items that last and that use sustainable processes, you build quality into your company. Quality materials and items are more likely to be reused and earn a reputation for value. This focus on quality is especially important, as regulations have started to spring up due to unsustainable, low-quality items and related labor practices, such as those in fast fashion.
As McKinsey points out, circular models can be “an opportunity for growth rather than a threat.” Part of this opportunity is technological progress and infrastructure, and good digital tools are part of this potential growth.
By developing and tracking Circular Economy Key Performance Indicators (KPIs) with digital tools, you can measure how well you and your company are doing at your sustainability goals alongside your revenue goals. A quality tool will help you develop targets and model scenarios to reach them.
Integrating with the Circular Economy is a cultural shift, and it’s one that many employees are happy to be a part of. The article Impact of Industry 4.0 and Circular Economy on lean culture and leadership: Assessing digital green lean as a new concept explores combining the Circular Economy with lean manufacturing techniques. It discusses the digital revolution to improve product development by creating “smart factories” that use digital tools to improve the Circular Economy of the factory by using IoT, big data, AI, automations, and other technologies to create more efficient, intelligent solutions in manufacturing.
The article also emphasizes that when employees engage with sustainability efforts and digital transformation, their morale improves, fueling innovation.
Digital tools can help your employees track improvements, motivating them to make better products and see progress toward sustainability. Employees want to take pride in their business, and having clear targets for circularity motivates and focuses employee efforts.
Does your organization use Salesforce? SAP? Slack? Do you have specialty tools or custom tools that are integral to your business?
Circular economy metrics are one part of sustainability and economic metrics for a business. It can be easy to duplicate these metrics across your different divisions and incentive structures. By using digital tools that are specific to the Circular Economy, and designed well to integrate with your processes, you maintain a single source of truth for sustainability metrics.
Good digital tools that track your Circular Economy metrics should integrate with your major systems. As the idea of sustainability grows from a niche marketing opportunity to a mainstream expectation, digital tools for the Circular Economy can help you bring sustainability to every function in your organization:
By creating better products and distributing them more effectively, you might be able to track how many trees you’ve saved, and how many species still have a home. Perhaps your company is adding incentives to protect acreage from development or to reduce mining by using alternatives such as recycling and renewable resources. Maybe a community was once a victim of water pollution, and your company has improved that locality.
All of these accomplishments can be tracked with digital metrics, giving your company stories to tell communities and attract more investment. For example, the American Forest & Paper Association article Understanding the Circular Economy and the Forest Products Industry states that over 1 billion trees are planted yearly and 94% of people have access to community paper recycling programs.
By reviewing your design from initial brainstorming through manufacturing through end-of-life using the lens of the Circular Economy, you’ll be able to create high-impact designs that might be simpler and less wasteful.
For example, meat producer Danish Crown wanted to improve their processes to be more sustainable and found a Circular Economy solution. They partnered with gas company Bigadan, selling their waste to process into gas and fertilizer, some of which Danish Crown will use at their plant.
With both companies looking at their raw materials and waste products, they designed a system that significantly reduces waste and energy costs, a Circular Economy transition that helps both parties.
Digital tools can help you to identify opportunities to look at cost centers, redesign your processes, and forge partnerships to improve your Circular Economy metrics.
Government organizations have been introducing regulations for company waste, as local economies do not want to fund the waste side of organizations. Sometimes, the best solution is to work with an entire community.
For example, an economic area in Denmark, Northern Jutland, decided to try out “industrial symbiosis” through the Sustainable Synergies project, where companies could buy and sell waste materials to each other. Within the 25 companies that participated, there were reductions in waste and water costs and greenhouse gas emissions, and companies could source many materials more cheaply. While none of the individual companies could have achieved these results, thinking about the design and manufacture of their products within the community had an impact.
By using digital tools to manage waste, you can enhance its economic impact and demonstrate your awareness of how your products and processes impact the environment and social responsibility within your organization and your community.
Some companies are known for their leadership in their industry, and they also want to show their strength as a leader in sustainability. One way of doing this is tracking their circularity metrics throughout their entire design, manufacturing, and distribution processes.
For example, BMW Group Circular Economy showcases its vision for circularity with quality designs to reduce waste and improve its vehicle design to reduce wear and waste.
And, long a sustainability champion, Patagonia has stories of its successes and failures. They’ve experimented with recycling its materials, sourcing recycled materials, reselling pre-owned products, and simply renting products instead of owning them. Not everything worked, but they showed a willingness to innovate using the Circular Economy approach that few clothing companies can match.
Circularity metrics can work with other financial interests to boost your bottom line, and the metrics can integrate with every part of your business. The Balanced Scorecard Institute article Link Sustainability to Corporate Strategy Using the Balanced Scorecard describes methods to incorporate a combination of sustainability culture with better information technology improvements. Companies should use digital metrics to realize profitability by reducing risks and costs and increasing revenue.
PixelEdge has a strong track record in circularity and sustainability, creating new tools with clear metrics that help you track your circularity compliance and share improving metrics with reporting organizations and clients.
Our innovation team identifies your sustainability issues and recommends investments in digital technology for the best impact. Our developers build the best idea into a fully functional application that your team and clients can use within weeks. Our adoption team examines what works to improve the application. And our research teams can power up your content and data with minimal overhead. We think creatively to create the fastest and best impact for your discretionary budget.
Most sustainability systems are highly disparate because companies must learn how to engineer these solutions. With our experience, we can create solutions that cross existing silos. Similar to quality, sustainability should be part of your business thinking.
Our systems gather data from your processes across groups and give you actionable data.
Our technology has benefited its clients with:
How can we help your organization grow sustainably?
Integrating digital tools into Circular Economy strategies offers businesses a pathway toward sustainable growth and competitive advantage. Whether you want to improve your client communication, have a single source of truth for your data, or add to your bottom line, digital tools are the key to improving sustainability metrics for the Circular Economy. As the demand for environmentally responsible practices continues to rise, leveraging digital technologies becomes a tool for driving positive change.
