Money for Old Rope... or Clothes or Watches - Profiting from the Circular Economy.

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At Futuretivity, our passion is for businesses to become more sustainable, delivering benefit and value to the planet, people and their profits.


It’s clear that without rapidly reaching net zero, drastically reducing waste and building greater equity for stakeholders along the supply chain, we will simply burn up our world (pun intended following the mercury-busting temperatures across Europe this week). But by changing our approach to responsible production and consumption not only will we ensure a world for us all to live on, we will reap economic benefits too – and nowhere more than within the Circular Economy.


The Circular Economy is a closed loop model of production and consumption that involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products to maximise their lifecycle and reduce waste. The Circular Economy is underpinned by a move to renewable energy and materials and away from the consumption of finite resources.


A key benefit of operating within the Circular Economy is the ability to reduce costs. By recycling and reusing materials, manufacturers not only eliminate waste and reduce resource dependency, but also tap into the financial benefits of a more efficient approach to production.


Cost savings in materials alone within the Circular Economy can be 20%, a significant contributor to the 30%+ cost savings we see from adopting sustainable practices within a business. For complex products, cost savings represent up to $630m per annum (most significantly in the automotive sector) and up to $700m for FMCG goods.


In addition to reducing costs, reusing materials also mitigates price volatility and supply chain risks, offers opportunity for innovation and new job creation, supporting longer-term economic resilience and contributing towards net zero goals.


Whilst cost saving is a clear and tangible benefit not just to the environment but also to a business’ bottom line, it is by factoring in new revenue streams opening up within the Circular Economy that the case for businesses planning a sustainable future really shines. The Sustainability market as a whole is valued at $12tr per annum, as PWC puts it “the opportunity of the century”. Whilst the Circular Economy is primarily focused on retaining value rather than generating it, this too is a growing market with revenue opportunities across sectors. Currently valued at $4.5tn per annum, the potential is far higher given just 8.6% of the world is currently circular.


Sales of sustainable products have soared, with earth-friendly products growing 5-6 times faster and consumers increasingly paying more for sustainably marketed products – 90% of Gen Z consumers will pay 10% more for sustainable products and 85% of all consumers state they have shifted to more sustainable purchasing choices.


A question we hear, however, is will the economic benefits of sustainability hold up for businesses as consumers and businesses feel the pinch of inflation and increased cost of living? Whilst price sensitivity is undoubtedly an issue, this is exactly where the Circular Economy offers savings, benefits and opportunities for consumers and businesses alike.


Two specific areas thriving during the cost of living crisis are the refurbishment and resale sectors. Both are achieving mainstream appeal, both apply to high street and luxury goods, and both are attracting investment and delivering innovation for start ups and established brands.


The global refurbished electronics market is valued at $80bn per annum, with customers first choice for tech purchases increasing and investment pouring into the sector. Retailer Back Market secured $510m in funding this year and is now valued at $5.7bn, becoming France’s most valuable start up. This reflects increased confidence in reuse as a segment, but for the circular economy as a whole. “The secondhand circular economy is not a concept any more; it’s happening”, as Back Market’s CEO Thibaud Hug de Larauze says.


Similarly, fashion resale is exploding, with the sector set to grow 127% by 2026 to reach $82bn and with every major fashion brand expected to offer a resale option before 2022 is out. Mackinsey values luxury fashion resale at $25bn+ alone, and the watch market expects resale to comprise one third of the total market by 2025.


Depop a London-based marketplace for high street or designer clothing launched in 2011 more than doubled its revenues between 2019 and 2020 from $30m to $70m. It recently sold to Etsy for $1.6bn (its biggest ever purchase).


Interestingly this is driven as much as desire for rare and valuable pieces as it is cost, with resale marketplaces offering access to such specialised products currently holding 25-30% market share with growth forecasts of 20-30% per annum.


One thing is for sure, those businesses willing to make the transition to incorporating 360˚ Sustainability within their organisation are pivoting to becoming a company that will not just survive but will thrive into the future.


We’d love to talk with you about how the Circular Economy could be bring benefits to your business and how to incorporate 360˚ Sustainability into your organisation. Get in touch with us at hello@futuretivity.com to find out more.



Futuretivity https://www.futuretivity.com/ delivers climate positivity with vibrant, socially impactful commercial power. We recognise that the how-to of sustainability can be overwhelming, so we empower businesses with actionable roadmaps, skills for the future and meaningful connections to succeed. Being a conscious business needn’t cost the earth nor cost your business.


For more inspiration and insights on sustainability for business go to futuretivity.com/resources If you are a company that needs help with sustainability in your business book a call with Futuretivity now and get sustainability delivered.



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