As customers become more focused on their favorite products' social and ecological impact, companies are working to showcase how they prioritize more than profits. Many companies are operating ahead of the curve, they are adopting what's known as a circular business model. But what is a circular business model, and what does that mean for sustainability? We're here to break it down for you!
- What is a circular business model?
- Why is a circular economy model useful for the environment?
- What companies utilize a circular business model?
- What is your part “The Customer” in this process?
- How can you adopt circular practices in your life?
- What circular practices does Gen Woo adopt?
What Is a Circular Business Model?
In the past, companies made clothing and accessories with a focus on quality, dependability, and style. It wasn't unusual to have a purse, a pair of shoes, or a jacket for years because the craftsmanship was impeccable. However, as time progressed, craftsmanship and longevity took a backseat to quick styles and fast fashion. Clothing and accessories have become cheaper and, unfortunately, decreased in quality in the process.
Many companies operate a linear model, a style that only considers the production of its products as opposed to what happens to its products once they are sold to the next stage in the supply chain. A circular business model forces a company to completely change its way of thinking and provide a function rather than the consumption of a product.
According to the Ellen MacArthur Foundation, a circular business model, also known as a circular economy, "is a systemic approach to economic development designed to benefit businesses, society, and the environment." The linear model is a "take-make-waste" style. A circular business model works to create sustainable products that enable the company to continue its growth without consuming limited resources or materials.
The circular business model works through 3 principles:
- A reduction in pollution and waste
- Reusing materials and products
- Replenishing natural systems and resources
A circular economy considers how production harms the environment and our health, including the production of hazardous materials and greenhouse gasses, the pollution of land, air, and water, and things such as an increase in traffic congestion. This style also encourages the recycling of materials and designing products with reuse, durability, and remanufacturing in mind. A circular business model takes environmental protection up a notch by avoiding non-renewable materials and preserving and increasing renewable resources through environmentally friendly practices.
Circular business models also require companies to build relationships with one another to utilize materials in new and inventive ways rather than discarding them. The model aims to create an end goal of encouraging future generations to think of design more sustainably while working to build a better future.
Why Is a Circular Economy Model Useful for the Environment?
A circular economy separates materials into two categories: biological and technical. Biological materials are resources that can be returned to the environment after being used. Once these materials have gone through the cycle one or more times, they can biodegrade naturally, returning nutrients to the Earth. On the other side are technical materials. These supplies include plastics, metals, and other synthetic materials that cannot be returned to the environment once used. To retain their value, these materials must continuously cycle throughout various products.
The circular business model promotes environmental sustainability by encouraging companies to rethink how they create, consume, and prolong the life of natural resources, allowing materials to be reused in new ways. These small changes help save materials, protect supply levels, and reduce their overall carbon footprint.
Unfortunately, many of our natural resources are finite. Although these materials may reproduce, we are also using them at a higher rate than they can be created. Therefore, resources such as high-quality soil, clean water, minerals, natural gas, and precious metals are dwindling. According to Veolia, "In the past forty years, annual global extraction of materials has tripled."
One of the aspects that companies must consider when transitioning to a circular business model is the fundamental change between linear and circular manufacturing. The company must emphasize renewable, recyclable, and biodegradable resources to decrease its reliance on finite materials. Suppose a company sells products rather than services. In that case, it must focus on creating long-lasting, high-quality products that can be repaired, redesigned, or upgraded to extend their life rather than turn them into waste at the end of the product cycle.
Companies also must work to educate consumers and take into consideration the ways that customers use the products. If something can be recycled, but a customer doesn't have easy access to the recycling process, a company must evaluate the likelihood that the product will be reused rather than be turned into waste. Companies can achieve this concept through business models that actively educate customers on extended product life, service options, warranties, and other repair resources. Companies must also change how they fundamentally market and brand their products so that consumers are aware from day one what the options are when it comes to the lifecycle of the product.
Using a circular business model offers companies a variety of benefits outside of the environment as well:
- Save your company money and improves the pricing stability of your supplies
- Get ahead of potential governmental regulations
- Create powerful change within your industry
- Inspire your employees to support environmental and social change
- Increase customer loyalty and brand recognition
What Companies Utilize a Circular Business Model?
Although one or two companies utilizing a circular business model to reduce waste is helpful, the entire fashion industry requires a massive overhaul to truly impact the negative effects of clothing waste on the environment. Thankfully, several industry-leading brands are working towards becoming more sustainable, including Adidas, H&M, DyeCoo, and Gen Woo.
Adidas, the standout athletic brand represented by athletes and celebrities like Patrick Mahomes and Beyonce, is in the process of releasing its first shoe that is “made to be remade.” The FUTURECRAFT.LOOP is a high-performance running shoe expected to be released in mid-2021. The shoe is manufactured using special materials and resources so that when it is no longer able to be worn, the customer can return it to Adidas to be recycled into new running shoes.
Another company at the forefront of responsible circular business practices is H&M. The company known for its affordable clothing options partnered with I:CO* to recycle over 29,000 tons of textiles for recycling and reuse. Customers bring old clothing to an H&M store and receive a coupon for a future purchase as an incentive. I:CO* then collects the returned items and categorizes them based on condition: re-wear contains items that the company can sell second-hand; reuse can become alternative items such as cleaning cloths; and recycle is broken down into insulation or other products using fibers.
DyeCoo is an innovative company that is attempting to reduce the amount of water, toxic waste, and chemicals that textile manufacturing companies use in countries like China, Singapore, and Vietnam. The Dutch company uses a dying process that uses no chemicals or water, instead using pressurized carbon dioxide to push the dye into the fabric. The process saves money on water as well as energy because the fabric doesn’t require drying time. DyeCoo already partners with retailers like IKEA and Nike, so it’s only a matter of time until this trend becomes more mainstream in fashion textile manufacturing.
What Is Your Part “The Customer” in This Process?
While it’s important for the fashion industry to drastically overhaul the way they manufacture clothing, customers play a major role in the success or failure of environmentally friendly processes as well. Changing the way customers contribute to the environmentally harmful processes of fashion companies begins with customers buying in to the idea of a circular business model and shopping more sustainably.
Here are 3 ways customers can help reduce their negative environmental impact when it comes to fashion:
- Be intentional in your shopping habits. Go through your closet and organize your clothing and accessories into two categories: wear and don’t wear. Take what you no longer wear and donate it to a local nonprofit organization, domestic violence or homeless shelter, or invite friends over and see if there’s anything they would like. Next, organize your clothes to determine how many different outfits you can create with each piece. Understanding what items you have in your closet will help prevent you from purchasing something you don’t need because you already know what you have at home.
- Learn to value quality over quantity. If you purchase a pair of pants for $20 but they only last for a handful of wears before you have to replace them, it makes more financial sense to invest in a pair of pants that costs more but is made more durably and lasts much longer.
- Never throw away textiles or clothing. The first step is to determine if the piece can be worn again. If so, donate it or give it to a friend. If not, find a recycling program near you or one that accepts shipments. Trash is for Tossers provides a great list of resources for recycling everything from shoes and t-shirts to bras!
How Can You Adopt Circular Practices in Your Life?
Helping the environment is about more than shopping with green-friendly clothing brands. There are hundreds of quick and easy ways to become more environmentally friendly in your everyday life.
Here are our top 5 ways you can be more eco-friendly in a matter of minutes:
- Use less paper. Although we live in a world full of technology, there are still ways that we use paper on a daily basis. If you find that you must use paper, make sure that you use recycled paper and recycle it when you’re done.
- Invest in reusable bags. There’s no use in collecting yet another shopping bag that will just be thrown away. Invest in a few high-quality reusable bags or totes like these from Baggu.
- Eat less meat. According to the Food and Agricultural Organization, more than 30 percent of the surface of the Earth is used to raise livestock for food, an industry responsible for roughly 14.5 percent of greenhouse gas emissions worldwide.
- Use less energy at home. Cutting back on your energy use is a double win. You save money and the environment. Choose the cold cycle on your washing machine as much as possible, unplug unused appliances, and turn your thermostat up a degree or two in the summer and down in the winter.
- Use less water. Invest in a shower head that reduces the water you use and take shorter showers. You can also purchase a reusable water bottle and water purification filter to avoid using so much plastic.
What Circular Practices Does Gen Woo Adopt?
Gen Woo is a lifestyle brand operating in Singapore that features clothing for babies, children, and teens. The company focuses on creating trendy styles for everyday wear while also striving to maintain environmentally favorable and sustainable manufacturing and production choices.
Gen Woo uses sustainable manufacturing practices by sourcing existing materials for many of its pieces, including excess fabric, thread, buttons and zippers, and elastic. By recycling and reusing these materials, Gen Woo avoids using ecological reserves, helping preserve the environmental resources.
The company also invests in recycling water from dying fabric. Dying one kilogram of fabric in Singapore takes roughly 60 litres of water. Gen Woo aims to reduce water consumption by investing in equipment that allows it to create a circular water use model. This goal means processing the water through an effluent treatment plant, a biologic membrane, and reverse osmosis. Processing the water in this way allows the company to reuse its water safely. Each step processes contaminants such as dyes and harmful chemicals out of the water. Gen Woo uses recycled water for watering plants, glass, vegetables, and flush toilets.
Another aspect involving water is the high levels of energy needed to heat its dying fabric operation. Gen Woo uses co-generation to use its excess heat from one of its natural gas generators. Co-generation allows the company to harness the generator's heat to heat the water needed to dye its fabric. Gen Woo is also shifting towards solar energy for its new projects, and it estimates that solar energy will power 30 percent of its energy needs by 2021.
Gen Woo offers accessories, dresses, jackets, leggings, tops, rompers, and more in styles ranging from bohemian and romantic to candy cool and garden party. Although the company is located in Singapore, it ships internationally to provide customers with beautiful, sustainable styles that are casual, comfortable, and cool. Check out our collections to find styles that you’ll love while feeling great about your positive environmental impact.