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Circular economy a new business model

Circular economy a new business model

13 Nov, 2018

Over the past years, the footwear companies have been going trough a paradigm shift concerning the sustainability of its operations, resources management and environmental impact. Nowadays, “more than being aware of this reality, companies are adopting Circular Economy as business model”, stated Maria José Ferreira, the coordinator of CTCP’s (Footwear Technology Centre of Portugal) Environmental Area.

Why a Circular Economy?
According to the Circular Economy Portal, “the current trends of population growth, increase of demand and consequent pressure on natural resources, have been emphasizing the need of the modern societies to advance to a more sustainable paradigm, a greener economy that assures the economic development, the improvement of living and working conditions and the regeneration of the natural capital”.

The current paradigm, based on a linear model, is facing issues regarding resource availability. In 2010 only, approximately 65 billion tons of raw materials entered in the economic system and it is predicted the increase to 82 billion in 2020. This is a system that exposes companies and countries to risks associated with price volatility and disruption of supplies. A more circular economy is being presented as an operational concept for this paradigm shift to face the environmental and social problems derived from the markets’ globalization and the current economic model based on a linear economy of “extraction, production and elimination”.
The Circular Economy establishes itself as a model focused on the maintenance of products and materials value for as long as possible in the economic cycle.

Over the last decade, CTCP has been promoting IDT projects strongly directed for this topic. The project NEWALK (2011-2014) “has as a main goal the innovation of materials by exploring the leather capabilities and innovation of products, through creativity, specialization and engineering, and technological innovation, which allowed the increasing of abilities for sector’s flexibility and quick response, as well as innovation of business models by taking advantage of logistics and information technologies potential”, stated Maria José Ferreira. The Technological Center has also coordinated the European project Step2Sustainability (2013-2016), under the scope of training and qualification, “by qualifying technics with knowledge concerning the implementation of more sustainable strategies in the footwear production”. By its turn, the undergoing project FAMEST (2017-2020), which includes 23 companies of the sector, “has the topic of Circular Economy present through the investigation, development and creation of new materials, components, technologies and designs economically competitive”. Simultaneously, this initiative aims to “contribute to waste reduction of the productive process of the companies within the Portuguese footwear industry”.
Community-wide, the European project LIFE GreenShoes4All (LIFE17 ENV/PT/000337) aims “the implementation and dissemination of the ecological footprint methodology of footwear and the development of an efficient eco-design, recycling and production solutions”.

Beneficiary enterprises
Within Portugal 2020, companies will receive support in the field of Circular Economy. To that end, the companies have to choose “to step away from the linear model, based on extracting, transforming, consuming and disposing, relying on the assumption that resources are abundant, easy to get and throw away”. As an alternative, “they should choose the Circular Economy, in which the planet’s environmental borders are respected by conservation and optimization of resources usage. The Circular Model involves the increase of renewable and recycled resources’ usage, the consumption reduction of raw materials and energy, and, at the same time, the decrease of emissions and material’s loss. The overall goal is to improve the efficiency and sustainability of all resources”.
Overall, it’s important to consider the eco-design, resources’ efficiency, waste prevention, recycling, management and new business models. These assume a fundamental role in the maintenance of the products’ utility and the value of products and materials in the economy, thus contributing to a more efficient resources’ management and sustainable development.

What is Circular Economy?
Circular Economy is a strategic concept that is based on the reduction, reuse, recovery and recycling of materials and energy. By replacing the linear economy through new "loop-flows" of reutilization, restauration and renovation on an integrated process, the Circular Economy is considered a key element to promote the dissociation of the economic growth and increasing resources consumption, which is so far viewed as relentless.
Being inspired directly by the mechanisms of the natural ecosystems, which have a long-term resources’ management through a continuing process of recycling and resorption, the Circular Economy promotes a reorganized economic model by the coordination of the production systems and consumption in closed loops. It establishes itself as a dynamic process that demands technical and economical consistency (productive capacities and activities) but also equally requires social and institutional context (incentives and investments).


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