DELIVERING ON CIRCULARITY
Embracing a circular economy will be key in ensuring that global production and consumption are in line with sustainability targets. By focusing on the principles of a circular economy, the 5 Rs of Reducing, Repairing, Reselling, Refurbishing and Recycling, the circularity model allows manufacturers to increase the life-cycle of a product, reduce waste and optimize water consumption, while simultaneously optimizing supply chains to build a sustainable business model.
This report is an examination of how logistics can enable consumer goods industries, particularly those in textiles, apparel and consumer goods, to tackle the climate crisis and other environmental challenges by helping to close the supply chain loop.
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The Status Quo: The Environmental Impact of Fashion and Consumer Electronics
The Potential of Circularity Is Significant
With 80% of emissions of an average fashion or consumer electronics item accruing during production and manufacturing, extending the product lifetime as much as possible is imperative. Second-life items, for instance, cause 60-75% fewer emissions than new items produced from virgin materials. The potential positive impact that circularity can have in these two industries on promoting sustainability is significant.
The Baseline: The Environmental Impact of Fashion and Consumer Electronics
The combined carbon footprint of the fashion and consumer electronics industries makes up approximately 6% of global emissions. Therefore, adopting practices that support a circular economy could have a significant impact on increasing sustainability in these industries.
The Mission: Circularity Holds Large Potential for Net-zero and the Environment
Up to 80% of emissions of an average fashion or consumer electronics item accrue during production. Hence, extending the product lifetime as much as possible is critical. This can be achieved by focusing on the 5 Rs. Diagrams on circular economy show circular vs. linear product lifecycles and the role of the 5 Rs on the circular product lifecycle.
The Transformation: Building Blocks and Enablers to Go from Supply Chain to Supply Loop
Ensuring the successful transition to circularity depends on the development of materials, products, and packaging, as well as the optimization of the supply chain to allow for smart product return and recycling – among others. This chapter includes diagrams showing the transition from linear to circular supply chain model.
The Outlook: Collective Stakeholder Action Needed
A move towards a circular economy must be a combined effort between four core stakeholders. Brands and manufacturers, consumers, regulators, and logistics players must all adopt practices which support a circular economy. Only if all four groups accept their responsibility and act now can circularity become a reality.
The Transformation to a Circular Economy
In this white paper, we have identified 3 core enablers and 10 building blocks along the value chain of a product that allow for a successful transition from supply chains to supply loops. These range from innovative materials and product design, to on-demand production, smart product return, reusable packaging, new use concepts and asset collection and recycling. Above all, circular consumer practices must be incentivized, supply chains redesigned, and visibility and orchestration enabled to support a circular economy.
Collective Action: We All Have a Part to Play
While brands and manufacturers play a central role in determining the level of circularity that can be achieved, in order to make the transition to a circular economy successful and rewarding for all, a concerted effort from four stakeholders is needed: brands and manufacturers, regulators, consumers and logistics players.