SHIFT Business Festival’s program featured future visions and use cases of circular economy. Circular economy is, in a nutshell, about using the waste of one industry as raw material for another industry. The goal is to create ecologically sustainable business without sacrificing productivity or profits.
Both consumers and regulations are creating pressure on industry to implement circular economy, making new practical models and learning opportunities much needed. Risto Vapola from Neste said regarding plastics, “leading brand owners will leverage the change towards more sustainable materials and increased recycling of raw material. Recycling of plastic raw materials will be a growing trend in the coming years.”
“Linear business models won’t be cost competitive in the future,” Vapola said. For future business models to fulfil the value-based demands of customers, companies must function within an ecosystem and parties outside the company itself must also benefit from their operations.
According to Maija Pohjakallio from Sulpack, this development is not caused by customer choices alone, as also investors take sustainability into account. “Several studies have already shown that there is a strong link between companies’ sustainability performance and economic performance. Companies will be more and more assessed on their circularity performance by customers and investors.”
Pohjakallio said sustainability should be assessed in terms of whole systems. In other words, producing individual ecological products through a linear process is not enough, and circular economy needs to be implemented throughout. “Over time, linear business models will face market, operational, legal and business risks. Future business success means not only generating profit but also creating value for society and the environment.”
To remain competitive, a circular business model relies on collaboration. “Collaboration through the value chain is the key factor, and finding the right partners,” Vapola said.