Procurement is a key catalyst for the circular economy

One of the central organisational players in the transition towards a circular economy is the procurement function. Some of the key questions are, how will procurement expand its role to address the circular economy, and how can they add value?

04.02.2015

Alis Sindbjerg Hemmingsen in cooperation with Ecovadis, CSR.dk

Although it’s too early to know details of how such a transition will be implemented, there are some very strong indicators where we are heading.

Materials are Leaking
Companies which rely on the availability and ‘linear use’ of plentiful and inexpensive natural resources are living on borrowed time. Our economies have up until now used a “take-make-consume and dispose” pattern of growth – a linear model, which assumes that resources are abundant, available and cheap to dispose of, and will be so forever.

In a linear economy or business activity valuable materials are leaking from the system. Our society can benefit economically and environmentally from making better use of those resources, as well as reducing or eliminating accumulated waste by applying circular principles. By helping to decouple economic growth from resource use and its impact, the circular economic model offers the prospect of sustainable growth that will last.

Continued dependence on scarce natural resources for growth exposes a company’s tangible and intangible value to serious risks. Risks which have to be managed. Supply uncertainties and changing consumer preferences could disrupt companies’ revenue streams and their ability to maintain market share. Companies whose growth is tightly tied to scarce resources will find themselves at a competitive disadvantage due to rising and volatile prices. This can reduce their ability to forecast and compete with less resource intensive competitors.

Radical Change
Transition to a more circular economy requires radical changes throughout value chains: from product design to new business and market models; from new ways of turning waste into a resource to new modes of consumer behavior. This implies full systemic change, and innovation not only in technologies, but also in organizations, society, finance methods, policies and business models. 

There are five major shifts in business capabilities when considering the transition to a circular model:

  1. Strategy: From focus only on core business to managing complex and collaborative networks
  2. Innovation and product development: From designing for single use to designing for many life cycles and users
  3. Sourcing and manufacturing: From homogenous supply chain to heterogeneous resource flow innovation and cascading
  4. Sales and product use: From never seeing the product again to customer and asset life cycle management
  5. Return chains: From compliance to opportunity-driven take back

A Procurement Change Management Challenge
It is critical for procurement to understand the radical changes that the business will most probably undertake when integrating circular principles. Practically speaking, procurement has to be able to challenge their suppliers on the re-design of production processes, products and services, materials handling and transportation, and engage them in the post-use cycle. 

Transforming into a more circular approach means that products have to be redesigned (to be used longer), repaired, upgraded, remanufactured or eventually recycled – instead of being thrown away. 

Production processes have to be based more on the reusability of products and raw materials, and the restorative capacity of natural resources. New innovative business models can create a new relationship between suppliers, companies and consumers.

The leaders of the procurement function will have to find out how they can support the business in managing the complex and collaborative networks which the new business models require. Moreover they must define how procurement can support the business in the design of new products and integrate the supplier more closely in the process. Procurement will also have to find ways to support the company on asset lifecycle management and with establishing and managing the return chains. 

How can you prepare your company to start meeting these new business paragraphs? 

Procurement is one of the key organisational players in enabling a transition towards a circular economy. Key questions you can start asking within the business are: Are we already now engaging in more circular models? What challenges have we so far faced, and how have we and will we address them?

It is also important to acknowledge the fact, that no matter what your ambitions are in terms integrating the circular principles it is a complex change management process, which can take years to implement. The change process must start now so your business can gain the competitive advantage and survive as a company. The business of business is staying in business.

Examples to learn from:

One of the companies working on the Circular Economy agenda is DS Smith, a leading provider of corrugated & plastics packaging. They have recently published their whitepaper: One step away from zero waste. An example mentioned in the whitepaper is Costco, who redesigned their peanut container. All they really did was change the way the lid was designed. By making their peanut container more square, so it was domed at the top, it can be packed so much more efficiently that they managed to take 500 vehicles off the road every year.

Southwest Airlines found itself with an excess of 80.000 leather seat covers after a large-scale redesign of many of it’s 737 aircrafts. The airline started looking for recipients of the used leather. The airline decided to take a more holistic approach, giving the materials to NGO’s. These NGO’s turned them into shoes and soccer balls. A great example of how you can reuse instead of turning it into waste. Learn more in this article.

Author: Alis Sindbjerg Hemmingsen

First published in the Sustainable Supply Views blog from EcoVadis

EcoVadis is the CSR rating platform for supply chains spanning 150 sectors and 99 countries of Global-500 enterprises like Verizon, Coca Cola Enterprises, Johnson & Johnson and 100 others.  

EcoVadis Scorecards make it easy to understand, track and improve suppliers’ environmental, social and ethical performance. www.ecovadis.com 

Miljømærkning Danmark

Sponseret

Netværk for Miljømærket indkøb Årskonference 2024

Bureau Veritas

Sponseret

Online forum om food waste & loss

Relateret indhold

27.03.2024CSR.dk

LEGO sender 16,5 millioner efter CO2-fangst

26.03.2024CSR.dk

Københavns Lufthavn kan lagre grøn strøm

21.03.2024CSR.dk

Nye værktøjer til SMV-virksomheders ESG-indsats

20.03.2024CSR.dk

Ny EU-aftale om bæredygtig emballage og mindre emballageaffald

20.03.2024SustainBusiness

Sponseret

Fremtidens værdikæder – med Alis Sindbjerg Hinrichsen

19.03.2024Schneider Electric

Sponseret

Kundetilpassede skabe og effektiv logistik sikrer effektiv produktion hos Ehcolo

08.03.2024NGUVU

Sponseret

Kvindernes Kampdag: Kvindelige kaffebønder i Kenya kæmper for bedre vilkår og mod klimaforandringer

06.03.2024BLÅKLÄDER WORKWEAR ApS

Sponseret

Korte forsyningskæder er en af nøglerne til øget ansvarlighed

Jobmarked

Se alle

Thygesen Textile Group

Struktureret og analytisk Corporate Responsibility Manager

Thygesen Textile Group søger struktureret og analytisk Corporate Responsibility Manager

Område

Midtjylland

Ansøgningsfrist

19.04.2024

Compass Group Danmark A/S

Forretningsanalytiker til nyoprettet stilling i ESG

Brænder du for bæredygtighed, springer nye muligheder i komplekse data frem i dine øjne og vil du have ansvaret for at implementere strategiske nøgleinitiativer på ESG-området? Så er det måske dig vi søger.

Område

Hovedstaden

Ansøgningsfrist

21.04.2024

Region Midtjylland

Udfold dine kompetencer og viden om bæredygtighed til gavn for bæredygtig omstilling i sundhedssektoren

Vil du omsætte dine naturvidenskabelige/tekniske kompetencer inden for grøn omstilling til praktiske løsninger i sundhedssektoren – og har du mod på at løfte en stor udviklingsopgave? Så vælg Region Midtjylland som din kommende arbejdsplads og vær med til at gøre en konkret forskel!

Område

Midtjylland

Ansøgningsfrist

15.04.2024

Uddannelses- og Forskningsministeriet

Koncernindkøber til Uddannelses- og Forskningsministeriet (Ny frist)

Er du vores nye koncernindkøber? Vi søger en ny kollega, som kan styrke samarbejdet på tværs af UFM koncernen og som bidrager til at gøre UFM’s indkøb endnu bedre og endnu grønnere.

Område

Hovedstaden

Ansøgningsfrist

31.03.2024

PwC Danmark

Erfarne rådgivere inden for strategi, rapportering og erklæringer på bæredygtighedsområdet

Hvis du kender os, så ved du, hvad der ligger i rollen. Hvis ikke, så læs videre – så fortæller vi dig mere.

Område

Hovedstaden

Ansøgningsfrist

Snarest muligt

Fortum Waste Solutions A/S

Apprentice Warehouse

Vil du være lagerelev hos os? Er der en indkøber gemt i dig med flair for god kundeservice, så læs videre her om en spændende mulighed for dig!

Område

Syddanmark

Ansøgningsfrist

30.04.2024

BDO Statsautoriseret revisionsaktieselskab

Klima og GHGP – bliv en central del af ESG-området i BDO

Har du lyst til -og erfaring med at arbejde med bæredygtighed og klimadagsordenen hos Danmarks virksomheder? Så har vi stillingen til dig: ESG-konsulent hos BDO. Med rollen følger en unik mulighed for at kombinere din faglige viden og kompetencer inden for miljø, klimaregnskaber og CO2- reducerende tiltag med en central position i opbygningen af BDO’s ESG-afdeling.

Område

Hele landet

Ansøgningsfrist

Snarest muligt

Hold dig opdateret med CSR.dk

Tilmeld dig nyhedsbrevet og følg med i alt som rører sig indenfor ESG og bæredygtig udvikling Nyhedsbrevet kommer kun to gange ugentligt. Herudover sender vi dig relevante temaer og spændede events.

Se flere temaer

Events

Se alle
PwC Danmark
Webinar
Double Materiality Assessment: Value Creation and Value Leaks

The new Corporate Sustainability Reporting Directive (CSRD) makes it a legal requirement to conduct a double materiality assessment.

Dato

02.04.2024

Tid

09:00

Sted

Online

Aros Business Academy
Kursus
Bæredygtighedskommunikation & brand management

Lær at kommunikere alle jeres fremragende bæredygtige tiltag og styrke jeres bæredygtige brand – og undgå samtidig at falde i fælderne ‘greenwashing’ og ‘greenhushing’!

Dato

03.04.2024

Tid

09:00

Sted

Radisson Blu Scandinavia Hotel, Aarhus

Dansk Industri
Webinar
Tal biodiversitet med finansbranchen: TNFD

Bliv introduceret til det globale biodiversitetsinitiativ med rapporteringsværktøjer og sektorvejledninger fra Taskforce of Nature-related Financial Disclosures (TNFD), og hør hvordan virksomheden Ørsted arbejder konkret med værktøjerne.

Dato

04.04.2024

Tid

13:00

Sted

Online

Bureau Veritas
Kursus
ISO 14001 Intern Auditor

På ISO 14001 Intern Auditor træner du forskellige auditeringsteknikker og -værktøjer, og hvordan du udfører intern audit af din virksomheds miljøledelsessystem i henhold til de strategiske og operationelle kravelementer i ISO 14001 standarden.

Dato

08.04.2024

Tid

08:30

Sted

Severin Kursuscenter, Skovsvinget 25, 5500 Middelfart, Danmark

Aros Business Academy
Kursus
Bæredygtighedskommunikation & brand management

Lær at kommunikere alle jeres fremragende bæredygtige tiltag og styrke jeres bæredygtige brand – og undgå samtidig at falde i fælderne ‘greenwashing’ og ‘greenhushing’!

Dato

08.04.2024

Tid

09:00

Sted

Fredericiagade 15 1310 København K

Klimakurser
Kursus
Klimahandling og klimaregnskab i praksis - Aarhus i april

Klimakurser er effektiv uddannelse, der giver ledere og medarbejdere de vigtigste kompetencer til at tage ansvar og arbejde med klimahandlinger og klimaregnskab i praksis – så virksomheden lykkes med at honorere klimakravene nu og i fremtiden.

Dato

09.04.2024

Tid

09:00

Sted

Aarhus