+ A Primer on Circular Economy – CII Blog

The goal of a circular economy is threefold. Firstly, it aims to reduce wastage at any part of a product or material value chain. Secondly, it aims to preserve the product and material in its in-use phase for as long as possible. And finally, it prioritizes doing these in a manner that reduces externalities on the natural systems, aiding their sustainable use.

Circular economy is often understood narrowly to be a matter of only waste or recycling; actually, it covers the entire “value circle” of products – from product design and production to consumption and the utilization of the material content of the products over and over again.

Increased material consumption world over is causing already high extractive pressure on natural resources to increase and reach unsustainable levels, driven by rising population, urbanization and industrial productivity.

A Circular Economy offers an alternative pathway for development to optimize, economic, environmental and social benefits. The important elements of a circular economy include the following:

  • Design for the future: By incorporating the systems perspective during the design process, to use the optimum materials, to design for appropriate lifetime and to design for ease of remanufacturing/refurbishment/recycling
  • Incorporate digital technology: Track and optimise resource use and strengthen connections between supply chain actors through digital, online platforms and technologies.
  • Preservation and life extension of existing resources: While resources are in-use, maintain, repair and upgrade them to maximise their lifetime and give them a second life through take-back strategies wherever possible.
  • Prioritization of regenerative resources: Ensure renewable, reusable, non-toxic resources are used efficiently.
  • Use of waste as a resource: Use waste streams as a source of secondary resources and recover waste for reuse and recycling.
  • Redesign/rethink business models: Consider opportunities to create greater value and align incentives through business models that build on the interaction between products and services.
  • Increase collaboration across the value chain: Work together throughout the supply chain, internally within organisations and with the public sector to increase transparency and create joint value.

The benefits of a circular economy accrue from efficient use of resources throughout the value chain of a product. There is enough evidence to show that efficient resource flows will not only increase business competitiveness but also reduce pollution of, air, water, soil, conserve biodiversity, better natural resource management, create new business opportunities and new jobs, bring about technological innovation, increase geopolitical security, allow for low-carbon growth, and, overall, help alignment with sustainable development goals.

The Confederation of Indian Industry (CII) works to create and sustain an environment conducive to the development of India, partnering industry, Government, and civil society, through advisory and consultative processes. For 125 years, CII has been working on shaping India’s development journey and, this year, more than ever before, with the onset of the COVID-19 pandemic, it will continue to proactively transform Indian industry’s engagement in national development. CII engages closely with Government on policy issues and interfaces with thought leaders to enhance efficiency, competitiveness and business opportunities for industry through a wide portfolio of specialized services and strategic global linkages.

For India, especially in the current pandemic scenario, adoption of CE principles and practice provide an alternative, sustainable pathway to build resilience.

The Confederation of Indian Industry has the resources and structure to support a trickle-down of elements of a CE to all stakeholders and enhance its uptake across the economy. Through its ten Centres of Excellence, CII has initiated some work on different elements of a circular economy.

The Centre of Excellence (CoE) on Sustainable Development has a dedicated team and set of basic activities focusing on circular economy. A very important part of visualizing a CE is activating the return of products or of packaging for reuse after their useful life is over, instead of allowing them to enter waste streams. For this, reverse logistics, quality assurance, standards and certification of collected material (or secondary resources) needs to be strengthened. The CoE of Logistics, Quality and the Green Business Centre can play important roles in this respect through their existing activities.

CII, through its large membership base in a variety of industrial activities is connected to long and deep supply chains. We are aware that most of these are medium and small-scale enterprises: new business models and innovations that CE advocates, are implementable in these enterprises and hold promise of change by providing jobs for workers of different skill-capability. In this regard the CII-Centre of Excellence for Competitiveness for SMEs and CII Centre of Excellence for Innovation, Entrepreneurship and Start-ups are well-placed to assist and kick-start a change in the direction of a circular economy, also pressing into use the power of digital technologies.

In a circular economy, bio-based material can be recycled back into the manufacturing process and into new applications: products made of paper, for example, can return to nature. A circular economy adopted in agriculture would prevent episodes of air pollution each year in North India. Support for examining such possibilities can be provided by the Food and Agriculture Centre of Excellence across India’s food systems.

The CE model has been taken up by many countries, such as the EU, Finland, China and Japan, with tremendous scope for collaboration and crosslearnings. CII’s relationships with a variety of trade and business agencies across the globe can provide the platform for increased collaboration and innovation required in the CE ecosystem.

CII in its 125th year recognizes social wellbeing as the bedrock of India’s prosperity and developmental agenda. There is much evidence to support improved economic growth, substantial net material cost savings, the creation of employment opportunities, and increased innovation as outcomes of adopting circular economy principles.

Given a conducive policy ecosystem, collaboration between stakeholders and countries that have begun their CE journey, backed by leadership and stewardship by industry, India can redefine its development trajectory and transition to a circular economy. The benefits of a CE will percolate down to the last mile.

This article was first published in the November 2020 issue of CII Economy Matters on November 27, 2020. Click here to read the complete issue.