There are many good business reasons to move towards a Circular Economy (CE), from cost reduction through to establishing more efficient supply chains and reusing expensive finite resources. But with products and manufacturing more complex than at any time in history, how can the recovery of materials for refurbishment and reuse be simplified and turned into an efficient process?
Digital technology is rapidly becoming a key driver in unlocking value in the CE production chain by enabling transparency and providing data-driven intelligence. Technologies like IoT and blockchain provide transactional data and information from billions of minute sensors embedded in devices all around us, which can be distilled into usable insights to inform data-driven decision making. When it comes to electronic and IT products, these digital technologies support the circular economy by helping to eliminate waste throughout the product life-cycle. Using data about materials and components will improve the process of recovery, and the re-use of parts and materials will enable resources to be kept in use for as long as possible.
When it comes to providing recycling, repair or refurbishment of products, especially if working to a deadline, providers of these services understandably need to be able to identify the correct value of the products they are working with. Having certainty about where a product comes from, its composition and its condition – new, damaged or beyond economic repair – would allow for the highest possible recovery of that product at the end of its life-cycle.
The idea of giving products a ‘material passport’ is a good one, but manufacturers can be resistant as it risks revealing sensitive information such as design concepts and proprietary data that might be protected by IPs and patents. However, blockchain might be an enabling technology here as its immutable and cryptographic data, captured in a decentralised open ledger format, means it’s permanent and verifiable but not owned by any one party, nor stored in any one place, and it can’t be manipulated for personal benefit. With the historical ledger almost impossible to compromise and every detail in the blockchain documented each time a product changes hand, when authentic product-specific information is requested it can be shared securely while protecting the data owner’s identity.
By enabling material passports, blockchain could become an important part of the Circular Economy by proving product origins and thereby incentivising positive behavioural change. But we’re not there yet. The technology is currently in the testing phase but there has never been a better time for organisations to explore and test the technology through proof of concepts and pilots.
Incentivising new behaviours is a crucial part of making the Circular Economy successful. In addition to data driving change within the circular economy model, organisational change continues to be driven by new and emerging regulations for tackling climate change and eliminating land-fill waste.
Although Europe has been accused of being too slow in tackling climate change and leveraging circular economy strategies, there is a sense that the response is speeding up and that organisations want to go deeper. The evidence that consumer protection, planned obsolescence, durability, the circular economy and the right to repair are hot topics right now can be seen in some significant legislative activity that’s in the pipeline at both an EU & national-level. From the Green Deal Communication, the 2020 work programme and the Circular Economy Action Plan, we can see that this year the EU Commission is planning a legislative approach to durability and repairability, establishing a ‘Right-to-Repair’, and a proposal on the substantiation of green claims. Next year, in 2021, a sustainable product policy framework is expected.
At Lexmark, we actively participate in a circular economy by designing cartridges to be refilled and reused multiple times, incorporating recycled materials and protecting natural resources by reducing waste. Adopting circular economic principles promotes innovation and growth in a more environmentally sustainable manner, and industry should welcome any regulations that drive us to continually think about ways of working and the way we design and make products available to our customers.
We know that most devices built with a three-to-five-year lifespan will actually be in use for at least six years, and start to incur higher maintenance costs, so organisations must intentionally engineer devices to support a longer lifefor products.
Addressing climate change by adopting a circular economy approach doesn’t mean reverting to a bygone time when using technology meant harnessing water and wind power. By combining data-driven intelligence, with the principles of the Circular Economy, product manufacturing can be transformed. Data can better inform us about what materials and components are being used and when they might be reusable or at their end of life, helping us to unlock additional value from each product and accelerate the implementation of circular approaches to resource use. With research predicting a potential $4.5 trillion in new economic growth by 2030 from the Circular Economy, data and digital technology should be seen as its friend.