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4 Steps to Driving Effective Circular Strategies for Consumer Goods and Retail Businesses – PARTHENON

By Jim Doucette, Dr. Shahid Murtuza, Olivier Gergele and Ray MacSweeney

A thoughtful and comprehensive approach is critical to moving away from the traditional “get, make, waste” ” The economics of circular approaches to prevent possible environmental hazards from products and packaging. There are four imperatives for an organization to achieve a circular economy.

    1. Understand the significant impacts and externalities of the business.

    Organizations across industries are looking to accelerate their sustainability journey, but the key factors driving environmental, social and governance impacts vary by industry.

    Waste, water and packaging all impact the food industry, but organisations also need to consider topsoil degradation. Food companies must move beyond visible issues like recycling and make regenerative agriculture a pillar of their corporate strategy.

    The global fashion industry is responsible for 10% of annual carbon emissions, 20% of global wastewater and 100 million tons of non-renewable resources. Applying circular principles to every stage of the apparel life cycle, you can Revitalize and reimagine the industry and divert large volumes of landfill waste. Several organizations are exploring fiber recycling for natural and synthetic materials. Recommerce—resale of worn or returned consumer goods—offers an approximately $80 billion market opportunity: Its simplicity for consumers and cost-effectiveness as a circular solution has allowed it to grow 16 times faster than the global apparel market.

    2. Design processes to mitigate business externalities and build cradle-to-cradle applications.

    After an organization has conducted a materiality assessment, it can design products and processes to mitigate key externalities. Adopting circular design principles at the front end is important for reducing waste and facilitating logistics at the end of the product life cycle Crucial.

      While many sustainable technologies are still in their early stages, some can now be applied, such as advances in materials or R&D capabilities. Other Design options may not be economically viable for many years. Investing in multiple technologies to determine the viability and cost-effectiveness of leading technologies can help organizations build the focused investments and partnerships they need to expand technology and secure product materials.

      While organizations need to continue designing to eliminate waste during the product creation phase, the reverse Logistics and redistribution of used products are critical to a circular economy. Organizations and markets are at different stages of implementation: some are using reverse logistics as a competitive advantage and investing millions of dollars in downstream advanced robotics, while others are still defining their reverse logistics react to market conditions.

      3. Scale the circular process through an extensive partner ecosystem and advanced technology.

      After the organizational design is complete and shows the cyclic application and associated processes, it must expand them to have a lasting impact. This will require a change in the entire organization’s ecosystem: a shift in thinking from “competitive advantage” to “industry solutions” is critical to how it sees its peers and competitors. The workforce will need relevant expertise and mindset to adapt, and collaboration with peers and across the value chain will require companies to manage risks and costs, especially in procurement, and drive greater demand.

      While scale and cost are critical to justify investment, traceability is another key issue. A growing number of tools are available to companies and their partners to track raw materials, goods and services, including radio frequency identification, QR codes, IoT, watermarking and blockchain. Such technologies enable more transparent supply chains, simplified returns, reverse logistics, better user experience, and more efficient management of redundant materials and products.

      4. Engage consumers in a circular economy.

    1. Strategic rentals such as recycling, reusable packaging and products have one thing in common : They only apply to consumer engagement. Whether it’s renting clothes or using recycling bins correctly, consumers are important players in achieving circular outcomes.

      Consumers are increasingly concerned about sustainability. The EY Future Consumer Index uncovers an emerging commitment to simpler, more balanced lives and sustainable choices. More than half of respondents are more concerned about the environmental (62%) and social (56%) impacts of their purchases: 43% of consumers say they always try to recycle or reuse packaging, 69% say they are Try to repair the product more than replace it. This sustainable consumption trend is growing in all regions, including developed and developing markets.

      Consumer goods and retail companies need to engage and educate consumers and create their experience as seamless as possible. Chemical recycling of flexible plastics requires consumers to sort them, municipalities offer single-stream curbside recycling, and sorting systems that send materials to chemical recyclers. Brands must provide informative labels, encourage good recycling practices, and help provide customer-friendly infrastructure.


      To achieve a good circular strategy, organizations should consider the following four key areas:

        1. Use loops to define your sustainability target background. A holistic, materiality-based view is essential. Reducing greenhouse gases, reducing water use and other sustainable development goals fall within the scope of the cycle, as important as avoiding landfills.
        2. Consider multiple strategies and options to determine how to build a looping application. As technology rapidly evolves, evaluate options and develop a roadmap with key decision points as development progresses to scale .
        3. Take an ecosystem approach. Cooperation across value chains is critical. Organizations must lead the way of thinking from a “competitive advantage” to an “industry solution”. Partnering with a competitor can increase scale and adoption and reduce costs.
        4. attract consumers. Once the solution is defined, communicate the improvements to consumers – labelling, instructions, education clear – for easy engagement.

        5. For more information, visit How can packaging stay fresh and not last a lifetime? To learn more about consumer products and retail strategies, visit ey.com.

          Jim Doucet Yes The global Ernst & Young Parthenon consumer goods and retail leader.

          PhD. Shahid Murtuza is EY-Pa Head of Strategy and Transactions, Ernst & Young LLP, Tenon.

          Olivier Gögler is Ernst & Young’s Asia Pacific Consumer Goods and Retail Leader.

          Ray McSweeney is EY-Parthenon Associate Partner in Consumer Sustainability, Ernst & Young.

            The views expressed in this article are those of the author and not Must reflect the views of the global Ernst & Young organization or its member firms.



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