Businesses increasingly recognize the need to cut waste and carbon. That part’s clear. What’s far less obvious – and far more complex – is how to do it right.
Enter circularity: the concept of keeping materials in play through reuse, repair and recycling. It’s often celebrated as the gold standard for sustainable business. But treating circularity as a catch-all solution can backfire.
“Circularity is not carbon neutral; it takes a lot of work, energy, water and potential emissions to upcycle, recycle or reuse materials,” says Jury Gualandris, Associate Professor of Sustainability and Operations Management and faculty director of the Building Sustainable Value Centre at Ivey Business School.
“In the circular economy, you need to be very careful before putting processes in place because you might end up unintentionally creating more impacts than the one that you are trying to solve.”
When businesses misstep on carbon reduction, the cost isn’t just time or resources – it’s trust. Doubt creeps in, and confidence in climate solutions begins to erode. That’s why setting companies up for sustainability success is so critical, and why a bold new report is stepping in to chart the way forward.
Two key targets to hit your carbon goals
To get circularity right, and help businesses achieve their carbon goals, Gualandris partnered with the Canadian Standards Association (CSA) – a global standards organization that develops standards across varied industries – to create a pioneering report, Climate-Smart Circularity: Guiding Decision-Making Through Data-Informed Standard Protocols.
By digging deep into the agri-food, construction, and textile industries, Gualandris and his team uncovered a simple principle for effective circularity: consider the virgin (new) material that circularity is trying to displace and keep travel shorter and energy use more efficient than linear processes. This principle, along with its two key thresholds – distance and energy – determines the success or failure of circular initiatives, especially when compared to linear production using virgin materials. No matter the material, if the critical thresholds summarized in the report are not respected, circularity effort is likely doing more harm than good.
Spent grain, for example, is a byproduct of beer. It often goes into landfills or, at best, is used in animal feed. If, instead of throwing that spent grain out, a company wants to turn it into baking flour – and it wants that flour to have 20 per cent less carbon than “virgin” flour coming from regular corn and wheat – operational processes would need to stay within 300 kilometers from point of collection to point of entering the market and consume less than 1200 kilowatt hours of a certain type of energy.
That means that if a company respects those two thresholds, it can have confidence that its material is meeting desired carbon reduction goals –without doing complex life cycle assessments.
Not all materials are created equal
Further to the smart formula, Gualandris’s report also found certain materials and processes yielded better results than others.
For instance, mixed materials or those with components that are hard to separate (such as wood that’s been painted or treated to be fire retardant) can decrease the quality and environmental benefit of those materials.
Additionally, clothing made largely of a single fibre type (such as 100 per cent cotton) has higher circularity potential than mixed fabrics (such as cotton-spandex – commonly found in leggings). This insight points to design choices companies can make at the start of the product’s life to increase its chances for a successful second life.
What’s more, discarded materials that have the potential for a second life need to be available in sufficient quantities to make collection and processing economically viable.
Making circularity simple, scalable and standardized
With business leaders under increasing pressure to cut carbon emissions, the report also looked at how governments can give companies high-level direction on circularity – both in terms of the actual goals and how to reach them (such as incentives or rewards).
It also suggests that developing quality standards and certification processes for recovered materials can help foster circularity and increase demand for reused and recycled products. Minimum imposed recycled content legislation, sliding taxes, or public procurement, similar to what has been proposed and endorsed for plastics packaging, are all options governments can explore.
In addition to providing a road map for introducing new circular approaches, the data and information provided in the report can also be used by firms to explain, justify and quantify existing sustainability efforts. According to Gualandris, firms can now point to the estimated carbon savings achieved through circular processes – demonstrating environmental impact while delivering more sustainable products at no added cost to clients.
In fact, Gualandris says, since the report’s publication, several companies have started considering its thresholds to successfully achieve their emissions goals.
“What we are offering here are the thresholds they need to stay within to achieve certain goals that are important for both government and for companies themselves,” Gualandris says.
Companies and governments need to be key partners in the transition from a linear to a circular economy, he adds, but they need clear thresholds and standards to be able to “do better” without added work.
“If we want the circular economy to become diffused, we need some simplification.”
Looking to make circularity work for your bottom line – and the planet? Explore the full insights in Gualandris and CSA’s report: Climate-Smart Circularity: Guiding Decision-Making Through Data-Informed Standard Protocols.
