The EU Green deal – how to thrive in a circular economy

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The EU’s Green Deal for 2050 climate neutrality puts demands on all EU manufacturers. But a circular approach can have far-reaching benefits as Madelene Wiil explains.

The drivers of circular
Knightec has been helping manufacturers with sustainable thinking in the circular design and development of products for quite some time. However, in recent years, the interest in the circular economy has significantly increased, as the need to reduce climate impact becomes more acute. What we’re seeing now is a massive drive towards circular within all industries, which is being propelled on multiple fronts:
• Firstly, users are demanding it. People want the footprint of products to be minimal, which is why we see such growth in electric vehicle sales and a reduction of plastic in packaging.
• Secondly, employees want to feel they work at companies that take their responsibilities seriously and are doing what they can for the planet.
• Thirdly, regulatory bodies are now forcing industries to rethink. Most prominently in the finance industry which, here in the EU, has seen the introduction of the taxonomy classification for sustainable activities. Many finance companies must now rank their investments according to sustainability goals and activities.
• Fourthly and finally, getting the circular approach right can deliver new business opportunities, stronger brand and ultimately, a bigger market share.

The circular implementation gap
Of course, deciding to introduce circular and implementing it are two very different things. There are few manufacturers today that don’t want to lower their footprint. What we typically find is that there is a knowledge gap in organizations. And that can take different forms. There may be circular champions at an organization who have difficulty in taking the message to senior management for buy-in, or there may be a general lack of understanding on how to get started and what tools are available to support a circular approach. Some companies have also tried and failed to introduce circular thinking and need a kickstart with a partner who can remove the risks.

The EU Green Deal in a nutshell
Climate change and environmental degradation are existential threats to Europe and the world. To overcome these challenges, the European Green Deal will transform the EU into a modern, resource-efficient and competitive economy, ensuring:
• no net emissions of greenhouse gases by 2050
• economic growth decoupled from resource use
• no person and no place left behind

Why you should act now
The fact of the matter is that if you are a manufacturer, you must start your circular journey regardless of any gaps. As part of the EU Green Deal, we will see more regulations coming into play in the coming five to ten years which will mean if your products are not designed and manufactured sustainably, or if you can’t account for their climatic impact across the product lifecycle, you will not be compliant. And the EU taxonomy classification conducted by banks means that if your company is classified as a poor green performer, it will become harder to raise finances and loans, while those companies with a high classification may get more favourable financing terms.

Closing the gap brings a world of benefits
Fortunately, closing these gaps is achievable and any costs involved in implementing greener designs can be recouped through new business opportunities. At least that’s what we have been able to deliver to our clients. How you proceed will depend on how far you have come on your circular journey. Typically, for those companies at an early stage of the process, we begin with seminars and short workshops to educate teams and give them the necessary foundational support to move further. In an ideal world, a representative from senior management will be involved as circular is a direction that an organization must commit to from an operational and cultural perspective.

For companies that have come further on the journey, we offer a range of services that can help them implement circular into the design, development, sourcing and production of their products. This can range from carrying out an LCA screening during product development to identifying hotspots for improvement identifying greener sourcing partners, to carrying out a full LCA of a product across the lifecycle.

Follow the pilot to a greener organization
Often, we find that a pilot project is a great way for a company to integrate a circular approach into product design, development and production. Focusing on a new product in development, for example, lowers the threshold and will often have a lot of interest from different stakeholders within the organization. When done effectively, with the right analytics tools, the benefits delivered – lower costs, reduced environmental footprint, etc. – provide the ideal stepping stone for a more concerted effort to green development and production.

Don’t fear, Knightec is here
In the coming years, we’re going to see a stepwise roll-out of the Green Deal, which gives manufacturers time to assess their operations and act accordingly. Understanding the implications of this can be difficult but we can help. Taking small steps today can have a big impact on the future of your operations, your business, and the planet.

Meet Madelene Wiil
Madelene joined Knightec as a Senior Consultant in 2014, bringing a decade of mechanical engineering experience and a specialization in developing industry plastics. In 2018 she took a sabbatical to do a Masters in Sustainable Development. Today, she is a Sustainability and Circular Design Advisor at Knightec, supporting clients with circular design, strategy and learning.

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