The following is an article written by Tamara Barker of UPS.
In today’s world, the basic model for the production of goods is
linear: Natural resources are extracted and turned into products
that are used for a limited time.
While some of these products are recycled, most eventually end
up in the world’s landfills.
This model is becoming increasingly unsustainable and expensive
for businesses.
Commodity prices rose more than 150 percent between 2002 and
2010 and an additional three billion middle-class consumers are
expected to enter the global market by 2030.
This unprecedented demand for goods and services, coupled with
increasing resource scarcity and price volatility, is causing
companies to move from a traditional “take-make-dispose” model to a
more circular strategy.
Collaborative change
Beyond the cost, there is increasing awareness of the impact of
the linear model on the well-being of the planet and a growing
sense of urgency as we see the ultimate ramifications on society
and the environment.
I believe this shift will only be possible through collaboration
across multiple industries and business segments.
Companies will need to commit to examine the inner workings of
their manufacturing process and supply chains to identify areas for
improvement. Increasingly, more companies are looking for help in
implementing viable, sustainable solutions across their
operations.
According to a recent study by GreenBiz and UPS, nearly nine out
of 10 sustainability executives believe the circular economy
will be important to their business two years from now. Yet they
believe one of the largest barriers is the logistical costs
associated with implementing real change.
As a global provider of transportation and logistics services,
UPS is acutely aware of how intelligent logistics plays a critical
role in the circular economy.
This is why it is important to invest in creating lasting
solutions that will help revolutionize the global economy and allow
businesses to move toward building more sustainable, circular
supply chains.
Closing the loop with innovative logistic
solutions
In recent years, I’ve seen companies like Dell, Patagonia
and TerraCyclefocus their sustainability efforts on implementing
seamless take-back programs that make use of turnkey packaging,
pickup services and pre-paid return labels.
With approximately 97 percent of business leaders listing
logistics as important to transitioning to a circular economy,
partnering with intelligent logistic providers will be crucial for
companies to implement cost-effective circular strategies.
UPS teamed up with Nespresso to help the company ensure their
single-serve coffee capsules are properly recycled.
Nespresso offers pre-paid recycling bags for consumers to mail
back used capsules, allowing the public to drop off the
recycled products at one of the 88,000 UPS drop-off locations
across the U.S. or give them to any UPS driver.
The aluminum from the capsules is then melted down and used in
new products, and coffee grounds are composted into high-quality
soil amendments that go to landscapers, garden centers,
municipalities and homeowners.
This is one example of many where partnerships are critical to
closing the loop.
While partnerships are key, businesses also need to examine
their own supply chain and operations to identify areas where they
can make improvements.
UPS has a long-standing commitment to investing in innovation
and technological advances to make our fleet designs more
sustainable.
By tapping into renewable natural gas (RNG), UPS is using
biomethane (that would otherwise be released into the atmosphere as
a greenhouse gas) to power our fleets.
Today, UPS operates one of the largest private alternative fuel
and advanced technology fleets in the U.S., with more than 7,200
vehicles.
We achieved our goal of driving 1 billion miles in our
alternative vehicles one year earlier than planned, and we continue
to test different fuels and technologies in our “Rolling
Laboratory” as we seek to meet the growing demand for
deliveries.
The future of the circular economy
I recently had the opportunity to participate on a panel at
GreenBiz VERGE 2016 with Tom Szaky, CEO of TerraCycle, and Kevin
Zweier, VP of Transportation Practice at Chainalytics, to discuss
trends shaping the future of the circular economy.
In addition to the critical role of logistics, major takeaways
from the discussions included:
1. Tailoring the solution
Companies trying to implement circular strategies face a
“first-mile” challenge with re-using products and resources
for future consumption.
Each product in a company’s supply chain must be analyzed based
on its unique characteristics from raw material to end-of-life.
Circular planning must then be used to determine whether
reclaimed products and resources should be transported back to a
central hub facility or dealt with on a local level.
2. Education is key
To build mainstream acceptance and support for a realized
circular economy, governments and businesses alike should
prioritize educating consumers about circular principles, including
which products can be reused, recycled or upgraded.
By helping customers make easy decisions when they are done
using a product, we can ensure valuable materials don’t end up in
landfills.
3. We all have a role to play
While companies are investing in innovative partnerships and
creating more sustainable solutions, there is also a need for
customers and consumers to take advantage of these offerings so
that these investments can be supported by a strong business
case.
One of the most common misconceptions about the circular economy
is that it will be impossible to achieve. I believe that when
companies invest and collaborate to implement “smarter” supply
chains and give others an opportunity to participate, the notion of
a circular economy can certainly be realized.
Tamara Barker is UPS Chief Sustainability Officer and Vice
President of Environmental Affairs.
Reprinted with permission of Longitudes, the UPS
blog devoted to the trends shaping the global economy.
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