VivoPower and Tembo e-LV, the global leader in EV conversion kits for utility vehicle fleets, hosted top-class Drive Days in the Al Wadi Desert Nature Reserve, Unit, to demonstrate the performance of our electrified LandCruiser to partners and clients.
Guests were able to inspect and test drive our Electric Utility Vehicle (EUV) in a desert environment. This was a real test for our EUV and, as usual, it passed comfortably.
“Heel erg bedankt” to the team back in Eindhoven for logistics and online support pre-drive day. Many thanks as well to Santiago Tenorio-Garcés, Matthew Nestor, and Daniel Boardman for organising successful drive days and brilliantly representing the Tembo team led by VivoPower’s CEO, Kevin Chin.
Visit the VivoPower website for more News & Insights.
Tembo e-LV, the global leader in EV conversion kits for utility vehicle fleets, and Evolution Group Holdings Limited, the leading traffic, civil, and fleet management company for the road infrastructure sector in Australia and NZ, hosted an exciting Drive Day in Brisbane at the RACQ Mt Cotton Testing Facility to showcase an electrified LandCruiser to Australia-based partners and clients.
After an information session and safety briefing, guests were able to test drive Tembo’s Electric Utility Vehicle (EUV), first on a road circuit, and then on a challenging 4x4 trail circuit! Both Evolution and Tembo teams had many conversations with partners and clients, several of which are already bearing fruit with specific commercial opportunities.
Many thanks to the team at Evolution, especially Andrew Baxter, Nick van Pooss, Grant Reid, Daniel Hopkins, and Rhys Attwood for meticulously coordinating logistics prior to, and during the Drive Day, truly making it a success.
On the Tembo and VivoPower side, thank you to Phil Barker for explaining vehicle performance specs and answering all technical client queries on the day, to the team back at base in Eindhoven for their continuous online support, as well as Michael Hui, Eduardo Nebot, and Tony Culleton for brilliantly representing the company and engaging with attendees.
Visit the VivoPower website for more News & Insights.
Arowana, the leading B Corporation-accredited global investment firm, today announced the launch of its impact-focussed venture studio, Vivarium, as it expands its mission to grow companies that address some of the world’s most pressing challenges, as articulated by the UN Sustainable Development Goals (SDG).
Vivarium partners with talented and resilient founders at an early stage who are ready to scale up solutions that advance societal and environmental welfare globally but require further strategic and operational support.
Led by a team of experienced venture builders, Vivarium focusses on building solutions to global challenges – from bridging the digital divide with universal access to technology and the internet; to addressing environmental crises such as plastic pollution with a waste-to-X approach; to building a more socially inclusive world with better opportunities in education and employment.
Vivarium looks to work alongside entrepreneurs in building ventures that tackle the UN SDGs where technology and innovation can make lasting changes for humanity. Initial SDGs highlighted as focus areas include SDG 9 (Industries, innovation, and infrastructure), SDG 10 (Reduced inequalities), SDG 11 (Sustainable cities and communities), and SDG 13 (Climate action).
At the beginning of the programme and throughout the early stages of venture development, Vivarium also provides seed funding and assists in securing investment from value-add co-investors in follow-on rounds.
Vivarium also offers resources and structured support by bringing together a talented and curious group of individuals with various specialisations, including operations, design, engineering, marketing & brand strategy, law, finance, and enterprise sales. These experts function as extensions of the founding team, providing expertise to navigate the growth journey of scaling global businesses. Teams will also have access to Arowana’s world-class advisory board and experienced team of entrepreneurs who have started, scaled, bought, fixed, operated, and exited businesses or gone public with an IPO, as well as access to a global network of potential customers, partners, and talent.
Santiago Tenorio, Executive Director, Vivarium, said: “We are thrilled to launch Vivarium, our impact-focussed venture-building platform. With an unparalleled pool of talent and an increased focus on sustainability, the potential for impact-driven ventures is greater than ever before. We believe this convergence of talent and focus creates the perfect environment for building innovative global businesses that tackle some of the world’s most pressing challenges. Our platform is dedicated to nurturing and empowering these ventures, helping them to scale their impact and build a better future for all. We are excited to work with entrepreneurs who share our vision and are ready to make a positive difference in the world.”
Kevin Chin, CEO and Founder, Arowana, said: “Vivarium is on a mission to help start-up founders turn their impact-focussed ventures into successful global companies. These founders are driving change in the world, and we are delighted to work closely with them on their journey. We are here to provide the resources, support, and experience needed to overcome the inevitable challenges of scaling up successfully and delivering on their mission of creating lasting impact. This aligns with Arowana’s core purpose of growing people, companies, and value.”
The launch of Vivarium follows the announcement today of the spin-off of Arowana’s growth-stage venture capital secondaries unit, Alicorn Venture Partners, where Arowana will maintain an economic interest going forward. This affords Arowana, through Vivarium, the opportunity to focus on impact-focussed primary investment opportunities that align with its B Corp triple bottom-line mantra of People, Planet, and Profit.
About Arowana
Arowana is a leading B Corp-certified global investment firm with several operating companies and investments in electric vehicles, renewable energy, vocational and professional education, technology and software, venture capital, and impact asset management. Arowana’s purpose is to grow people, companies, and value.
About Vivarium
Backed by Arowana, Vivarium is a venture studio and holding company established to solve the most fundamental problems that affect our society and our planet. We partner at an early stage with start-up founders who are mission-aligned to build scalable businesses that not only disrupt industries and are profitable, but also create meaningful impact in the world.
Arowana, the leading B Corporation-accredited global investment firm, today announced the successful spin-off of its UK based venture capital unit, Alicorn Venture Partners, into an independent entity, after scaling up the business in the secondaries investing space.
Alicorn was established in 2018, initially with internal capital of Arowana’s leadership. The firm focussed on investing into growth-stage frontier technology companies backed by leading VC firms through a combination of secondaries and bespoke primary transactions. Under the Arowana umbrella, Alicorn scaled to more than US$65 million of invested capital through co-investment opportunities, Fund I, and more recently towards the first close of Fund II.
Alexander Assim, Managing Partner, Alicorn, said: “Very few people had heard of secondary VC opportunities in 2018, far less a fund devoted to that activity. Arowana noticed and executed this strategy and supported the growth of the business as Alicorn took its initial steps in that marketplace. Without that early support, in what has now become a non-core area for Arowana, we would not be in the situation where we are today. We are more convinced than ever of the opportunities in the secondary venture space, which is now worth over US$150 billion. Alicorn now has an enormous and timely market opportunity to exploit and the entire Alicorn team is looking forward to executing on this.”
Kevin Chin, Founder & CEO, Arowana, said: “Arowana has been proud to support Alicorn’s development over the years. Our decision to spin off Alicorn is in sync with Arowana’s strategy to sharpen our focus on impact as well as to stay true to our core purpose of growing people, companies, and value. We believe that, as an independent entity, Alicorn will have the flexibility and focus to further grow and expand its operations. We are excited to see them continue to pursue their vision as an independent VC firm, leveraging their expertise in secondaries to invest in and support innovative companies. Arowana will remain a close ally and strategic stakeholder, encouraging them to further success.”
At the same time, Arowana announced the launch of its impact-focussed venture studio, Vivarium.
About Arowana
Arowana is a leading B Corp-certified global investment firm with operating companies and investments in electric vehicles, renewable energy, vocational and professional education, technology and software, venture capital, and impact asset management. Arowana’s purpose is to grow people, companies, and value.
About Alicorn
Alicorn Venture Partners (AVP) is a secondary-dominant venture capital firm focussed on investing across the capital structure in growth-stage companies across a range of technology thematics. It is a European-orientated VC with a strong focus in Israel and the UK, working with leadership teams, existing investors, and other stakeholders since 2018 to solve capital problems in high-growth areas.
EdventureCo is pleased to announce the appointment of Denise Farrell as the new General Manager, Plain English Foundation. EdventureCo is a premium provider of digital, soft, and future skills training, committed to developing lifelong learners for the roles of the future. Denise will be responsible for overseeing the day-to-day operations of the company, continuing to build on the outstanding reputation as Australia’s leading provider of plain English training, consulting, and editing.
Denise’s priority is to support our diverse and inclusive teams to drive innovation and accelerate growth. With a passion for quality customer care, Denise will be supporting our committed teams to deliver exceptional experiences for all our clients. Her aim is to build a strong workplace culture and robust systems so that all employees can excel and reach their potential.
“We are thrilled to welcome Denise to the EdventureCo team,” said Nicola Fowkes, General Manager of the EdventureCo Group. “Her extensive experience, as well as her passion for learning and helping people develop new skills, makes her the perfect fit for our company. We look forward to seeing the positive impact she will have within the group.”
“I am thrilled to join Plain English Foundation. The thought of leading this exceptional team, developing new strategies, and achieving business objectives fills me with excitement and a sense of purpose. I am excited to dive into the challenges of this new role and make a meaningful impact on the company’s success and to create a positive and productive work environment. It is an honour to join a team with such a strong track record, providing hundreds of organisations to improve their writing skills and transform their documents over the last 20 years”.
VivoPower is pleased to announce that the Company and its wholly-owned subsidiary, Tembo e-LV, have entered into a Memorandum of Understanding with leading Indonesian mining solutions provider Petrosea to sell, distribute, and market Tembo electrification conversion for Toyota 4×4 vehicles and/or 4×4 Toyota vehicles which have been fully electrified by Tembo.
Under the proposed agreement, Petrosea would commit to selling 2,000 Tembo e-LV conversion kits through December 2027. The Proposed Agreement must be finalised prior to April 30, 2023, unless the parties agree to an extension, and all purchase commitments would be subject to the terms and conditions set forth in the final agreement.
The Tembo kits transform diesel-powered Toyota Land Cruiser and Hilux vehicles into ruggedised e-LVs for use in hard-to-decarbonise sectors. Alongside solar generation, battery storage, and on-site power distribution, Tembo e-LV products are a key component of VivoPower’s turnkey net-zero solutions for corporate decarbonisation.
Petrosea is a multi-disciplinary contract mining, engineering, procurement & construction, and oil & gas services company that is fully committed to prioritise ESG as a continuation of the company’s sustainability strategy. Petrosea offers complete pit-to-port mining solutions, integrated engineering, procurement, and construction capabilities as well as logistic support, whilst demonstrating absolute commitment to safety, health & environment, quality management, and business integrity.
VivoPower and Petrosea intend to finalise the Proposed Agreement as soon as practicable.
For more News & Insights, stay tuned to the VivoPower website.
VivoPower International PLC is pleased to announce that it has signed a definitive agreement with Ulti-Mech for Ulti-Mech to market, distribute, and service Tembo-powered electric utility vehicles across Western Australia, home to half of Australia’s mines and the leading destination in the world for mining investment.
Ulti-Mech is a 100% Australian-owned and operated automotive service company headquartered in Newman, Western Australia. It has three locations enabling comprehensive coverage of Western Australia from north to south with plans to expand to two additional large mining towns in the Pilbara region, Tom Price and Karratha. The company provides specialised mining and 4WD automotive services through expert on-site advisors and highly qualified mechanics to leading large-cap mining companies and their contractors.
Under the Agreement, Ulti-Mech has committed to sell a minimum of 1,000 Tembo EV conversion kits from execution of this Agreement over the next 5 years across Western Australia. Ulti-Mech will be responsible for acquiring utility vehicles, converting the vehicles to ruggedised Electric Utility Vehicles (EUV) using Tembo conversion kits, selling the units to end-customers, and providing after-sale servicing and maintenance with support from Tembo.
The Tembo EV kits will transform new and second hand diesel-powered 4×4 LandCruiser and Hilux vehicles into ruggedised EUVs for use in the mining industry, as well as other sectors. Tembo EV conversion kits are a key component of VivoPower’s turnkey sustainable energy solutions, designed to help corporate customers accelerate towards their net zero carbon goals and to achieve cost savings.
Kevin Chin, VivoPower’s Executive Chairman and Chief Executive Officer said:
“Western Australia is one of the world’s largest mining markets and we have been seeking to partner with a well-established and highly reputed local leader in mine spec and 4WD automotive services. We are delighted to partner with Ulti-Mech and cater to its blue chip clientele, including some of the world’s pre-eminent mining companies. Ulti-Mech’s coverage across Western Australia is strategically important, given it is Australia’s largest state by land mass with mines located in remote locations from north to south. Importantly, Ulti-Mech is an Authorised Inspection Station service provider for the Department of Transport of Western Australia. We look forward to co-locating Tembo trained engineers across Western Australia, to support Ulti-Mech and its team to help its customers towards achieving their net zero objectives.”
John Adams, Ulti-Mech’s Founder and Managing Director said:
“I am thrilled to enter into a partnership with Tembo. With three locations in the heart of Western Australia’s mining market, we are perfectly placed to successfully supply and service the Tembo electric utility vehicle. With increased pressure for mining companies to start their Net-Zero journey, the Tembo solution is a significant step in that direction.”
About Ulti-Mech
Ulti-Mech is a 100% Australian-owned and operated company, first established in the Pilbara mining town of Newman in Western Australia. The company has over the years built a highly experienced team with specialised knowledge across a range of mining and 4WD automotive services. Ulti-Mech has expanded into the Perth metropolitan and Southern areas of Western Australia with three locations strategically located to provide coverage to its customers throughout Western Australia.
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We are happy to announce that we are Bronze Level winners in The Cleanie Awards 2022 for the Clean Energy Investment Leader of the Year.
The Cleanie Awards is the leading awards program dedicated to celebrating people and brands driving the clean energy economy.
Being acknowledged by The Cleanie Awards is evidence of Arowana's steadfast commitment to making a significant difference through clean energy investments.
Thank you to this year’s judges and the entire industry for recognising this incredible distinction.
We would also like to congratulate the Gold Level winners, Hannan Armstrong and Silver Level winners, SoCalGas RD&D.
To view the full list of winners, visit The Cleanie Awards website.
Stay tuned to Arowana for more News & Insights.
The Extended Producer Responsibility Act of 2022 is the latest and strongest attempt by the Philippines to curb plastic pollution. For years, the country has had to deal with high volumes of plastic waste. In fact, a World Bank report estimated that the Philippines produces approximately 2.7 million tons of plastics each year. About 20 percent of these materials make their way to the ocean.
Through the new law, the government hopes to reduce the number of plastics that end up in the environment. It enlists the help of large enterprises by making them more responsible for their own waste. This addresses the issue of plastic packaging waste directly through the source.
What is the EPR Act and how can it help solve the long-time problem of plastic waste in the Philippines? What responsibilities do businesses need to meet in order to adhere to the new law?
The Extended Producer Responsibility Act is a law that requires large companies to manage their own plastic packaging waste. Also known as Republic Act No. 11898, the legislation lapsed into law on 23 July 2022.
Under the EPRA, enterprises with over P1 billion worth of total assets must recover a specific portion of their waste. Failure to do so would land them a hefty fine from the Philippine government.
The new law is based on Extended Producer Responsibility, a concept first introduced by Swedish academic Thomas Lindhqvist in 1990. Lindhqvist outlined an environmental protection strategy where manufacturers take on the responsibility for the entire life cycle of their products. This includes the take-back, recycling, and final disposal of such products.
Many other countries have already developed EPR schemes that are designed to meet the unique challenges of their economies.
In North America, the United States and Canada have implemented the Product Stewardship Program. The initiative encourages manufacturers to re-design their products, change their marketing methods, and adopt innovative collection and recycling programs.
In Asia, Japan and South Korea were the first countries to adopt Extended Producer Responsibility frameworks. South Korean manufacturers and importers are required to pay an Advance Disposal Fee for products that are difficult to recycle.
The EPR Act framework aims to reduce the number of materials and wastes that end up in landfills. It tasks companies with finding new purposes for their products, whether through reuse or recycling. Those that can no longer be repurposed should be allowed to biodegrade without impacting the environment.
The law eschews the traditional ‘tingi-tingi’ system that is prevalent in the Philippines. It’s a common practice where manufacturers sell their products individually in disposable packaging. The system offers many cash-strapped Filipinos a more affordable and convenient way to buy basic goods. However, it leads to more single-use plastics being produced and ending up in landfills.
In place of the tingi-tingi system, the EPRA promotes the creation of product refilling systems for retailers. It also encourages product makers to add proper disposal labels to their offerings. This would help educate consumers on how to dispose of the product after use. It also allows companies to retrieve the items that they made.
The Philippines' EPR Act identifies plastic waste as a recovery requirement for enterprises. This means that any packaging made from synthetic material should be collected and properly handled by manufacturers.
Some of the most common forms of plastic packaging include:
There are several ways that companies can recover their plastic packaging wastes more responsibly, according to the EPRA. These include:
For large enterprises to adhere to the EPRA, they need to meet specific recovery rates in their waste management programs. These targets should be achieved within the timeframe outlined by the law.
Companies should:
The EPR Act requires companies to come up with their own EPR plan. They can also hire Producer Responsibility Organisations (PROs) to develop programs for them. A PRO is a group or firm that has extensive knowledge and experience in recycling, waste recovery, and reuse initiatives.
All EPR programs should be registered with the Department of Environment and Natural Resources via the National Solid Waste Commission (NSWC). This should be done within six months of the EPRA’s effectivity.
During registration, companies need to include key information such as:
The Philippine government tasks the NSWC with regulating the implementation of the EPR Act. A new sub-group, known as the National Ecology Center (NEC), was created to closely monitor how manufacturers follow the law. The office will be headed by the Environmental Management Bureau assistant director.
The NEC’s mandate includes the following:
To help promote the adoption of sustainable waste management, the EPR Act has outlined a reward system for relevant organisations. Manufacturers can apply for various tax incentives related to their EPR programs. These incentives will be made possible through the National Internal Revenue Code.
According to the law, all costs related to EPR activities will be considered “necessary expenses deductible from gross income”. However, the implementation is still subject to substantiation requirements under the Philippines' tax code.
Meanwhile, large enterprises that fail to meet the necessary recovery rates will face heavy fines from the government. The penalty could be equivalent to twice the amount of recovery and diversion of the plastic footprint or its shortfall. It could also be based on the list of fines set by the EPR Act, whichever is higher.
All cases of violations of the EPR Act will be handled by the DENR’s Pollution Adjudication Board. The body will be responsible for hearing and judging of cases, as well as imposing fines on violators.
While the concept behind the EPR Act is no longer new, not many organisations fully understand its purpose. There is still some misunderstanding as to what the Philippine government expects large enterprises to do. For the new law to work, this confusion needs to be addressed through the right dissemination of information.
At Arowana Impact Capital, we believe in the ideals of the Extended Producer Responsibility Act. The law provides a clear plan for cutting plastic pollution in the country. One important aspect to note is how companies stand to benefit from the EPR Act financially. By offering reasonable tax incentives, businesses will be more inclined to take care of the plastic waste that they produce.
The EPRA also highlights the role that producer responsibility organisations will play in the success of companies’ programs. PROs provide businesses with the knowledge and technical know-how to recover plastic packaging waste. This makes it possible for organisations to meet the law’s strict guidelines.
Green Antz, the cornerstone investment of AIC, is an example of a PRO that helps enterprises collect their plastic waste. The company operates several eco hubs where companies can drop off their plastic packaging. Green Antz transforms the recovered plastics into eco-bricks, which can be used to construct green buildings.
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Market Study for Philippines: Plastics Circularity Opportunities and Barriers
https://www.worldbank.org/en/country/philippines/publication/market-study-for-philippines-plastics-circularity-opportunities-and-barriers-report-landing-page
The circular economy offers organisations a systematic way of solving some of the biggest problems of the world today. The economic model focusses on extending the value of existing raw materials and products to mitigate the impacts of materials extraction. It also prioritises the use of renewable energy over fossil fuels to help curb carbon emissions in many industries.
Far from being a recent invention, the concept of circularity has been around for a very long time. Societies have been experimenting with cycles and feedback loops in production for thousands of years. However, it was not until the advent of global crises, such as climate change and biodiversity loss, that CE solutions became widely accepted.
Now, more governments and businesses have started to adopt the circular economy approach. The future of many industries depends on how they can effectively use the finite resources available in the world.
A circular economy (CE) is an economic system that makes use of restorative or regenerative industrial processes and economic activities. The objective is to preserve the value of raw materials, components, and products as much as possible. This is done through sharing, leasing, reusing, repairing, refurbishing, and recycling existing materials.
In a CE, manufacturers try to reduce waste to a minimum. When a product reaches its end of life, the materials used to make it are kept within the economy wherever possible. Further value is created by using the materials productively again and again.
Many organisations view the circular economy as a potential solution to global challenges. The Ellen McArthur Foundation, for example, believes it can provide society with the means to address biodiversity loss and climate change, while also tackling important social needs.
Researchers often point to three main elements that a circular economy needs to focus on to be effective: closed cycles, renewable energy, and systems thinking.
Circular economies place heavy emphasis on closing material cycles. During the manufacturing process, every residual stream is used to make a new product so that no waste is left. Residual flows are often segregated between biological and technical cycles. Toxic substances are also taken out of production.
In a CE, businesses take back the products from customers after use. This allows them to repair the used items and give them a new useful life. For this system to work, products, components, and raw materials should be kept in high quality.
Another key element of circular economies is their use of renewable energy. Just like with raw materials, CE businesses prioritise extending the value of energy resources as well. This means sustainable power sources like solar, and wind are preferred over fossil fuels.
The concept of circularity can also be used in the production of renewable energy materials and equipment. By using existing materials within the economy, manufacturers can minimise the extraction of new raw materials. This, in turn, can help reduce the negative impacts of such activities on the climate, biodiversity, and society.
Systems thinking also plays a key role in the effectiveness of circular economies. Every person, company, and organism included in the system is connected to each other. This means every action that one stakeholder takes can affect other members of the network.
In a circular economy, every single decision should always consider its short-term and long-term consequences. Stakeholders should also factor in the potential impact of each action on the entirety of the value chain.
The concept of circular economy was developed as a more sustainable alternative to the traditional linear economy model.
In LE, manufacturers follow a “take-make-dispose” strategy where they collect raw materials and turn them into products. These products will be used until they reach their end of life and are discarded as waste. To create value, businesses would have to produce and sell as many products as they possibly can.
On the other hand, CE follows the 3R (reduce-reuse-recycle) strategy. Companies prioritise minimising the use of resources, maximising the reuse of products, and finding new uses for raw materials. Circular economy businesses focus on preserving the value of products instead of producing and selling as many as possible.
Circular and linear economies also have different approaches to sustainability. LE focusses on eco-efficiency, where the economic gain of production is maximised while also minising its environmental impact. By reducing the negative impact per economic profit gained, businesses can manage the potential overload of the system.
Meanwhile, CE focusses on enhancing the eco-effectivity of the system to achieve sustainability. By adopting radical innovations and system change, companies are able to maximise the positive impact of the system.
This difference between eco-efficiency (linear economy) and eco-effectivity (circular economy) can best be observed in the production of beef. One of the biggest challenges to raising cattle is the high levels of greenhouse gas (methane) emissions it produces.
To solve this issue, a linear economy would look at the way the cows are being fed and try to change it. Altering the type or amount of food the animals are given would allow cattle raisers to reduce methane emissions. This would essentially make beef production more eco-efficient.
However, a circular economy would address the GHG emission problem by not making beef from cows at all. Companies would rather develop a plant-based meat alternative that they can offer to consumers. By using plants instead of animal meat, CE businesses would help promote biodiversity, employment, and landscape management. This would make the ‘beef’ production eco-effective.
A circular economy offers several advantages to both companies and consumers, making an appealing production and economic model. These benefits can be divided into environmental, economic, and business.
With its strong focus on sustainability, circular economies prioritise the preservation of ecosystems and natural resources. One example is companies’ heavy emphasis on limiting their greenhouse gas emissions.
By using renewable energy instead of fossil fuels, manufacturers can cut the amount of GHG that they emit. It also improves production since renewables like solar and wind power are much more energy-efficient than petrol.
CE businesses also try to optimise their use of raw materials and agricultural productivity. Through reusing and dematerialising, companies can rely on fewer materials and processes to create products.
Switching to a circular economy model today can help organisations significantly reduce their overall carbon levels. A 2015 report found that CEs have the potential to halve their CO2 emissions by 2030, relative to 2018 levels. It showed a 48% reduction in emissions across mobility, food systems, and the built environment. This number could grow even further to 83% by 2050.
In the agriculture sector, the CE model can help improve the health and resilience of farmlands through composting. Farmers use anaerobic processes to ensure that important nutrients used in food production are returned to the soil. They also lower the number of residues that the farmers need to address to keep the soil viable.
Some circular economies have begun diversifying crops in their farmlands to improve soil health. This allows local insect populations to thrive, which also benefits other species that are part of local food chains.
Regenerative farming techniques such as these provide important habitats for microorganisms at the beginning of the food chain. They help hold more water in the soil, resulting in better fertility and productivity of farmlands.
The CE model’s focus on sustainable food and goods production also leads to better growth for economies overall. By eschewing the take-make-dispose strategy of the linear model, CEs can use and reuse natural capital more efficiently. They also find more value throughout the life cycle of existing products.
Many manufacturers still follow the linear economy model. Many of them assume that there will always be a constant supply of natural resources. However, the take-make-dispose mentality of LE businesses has led to severe natural resource depletion.
Ninety percent of global biodiversity loss and water stress are caused by resource extraction, according to the World Economic Forum. The practice also contributes to more than half of global climate change impacts.
The extraction and processing of metals and non-metallic minerals produce about 20% of greenhouse gas emissions. The production of plastics and other materials also adds to the increase in GHG levels. Current energy technology solutions can only do so much to mitigate these negative effects.
Circular economies develop smarter ways to use natural resources. By fully recycling raw materials used in production, it minimises the need to extract and process new resources. Recycling also cuts the number of materials that go to waste when they reach their end of life.
Transitioning to a circular economy model also creates better employment opportunities for workers. CE businesses are often in need of designers and engineers who can develop new ways of recycling and repairing materials. This focus on innovation also leads to the creation of new business models.
Additionally, a World Economic Forum report suggests that circular economies can bring greater local employment, particularly in entry-level and semi-skilled jobs. These jobs can help solve some of the economic problems that many developing countries face. However, these benefits depend on whether labour markets can be better organised and regulated.
Indeed, several international organisations are optimistic about the potential of CEs for employment generation. According to an International Institute for Sustainable Development (IISD) report, an estimated 3.9 million people found jobs because of the circular economy.
The International Labour Organization (ILO) believes 18 million green jobs can be created through the CE model by 2030. Meanwhile, Global Climate Action Summit projects that more than 65 million new low-carbon jobs by 2030.
A circular economy also leads to new profit opportunities. Businesses can increase their earnings by cutting their waste and energy costs through circularity. They can also improve the continuity of their supply.
Adopting circular methods can also help companies enter new markets that would not have been available had they still been in a linear economy.
For manufacturers, making sure that they receive a steady supply of raw materials is of the utmost importance. Without these, they wouldn’t be able to produce products to meet the demand.
However, several factors make it difficult for many businesses to secure their supplies. The availability of raw materials often drives up prices, making them highly volatile to depend on. Natural calamities and geopolitical crises can also severely affect supply chains.
Instead of relying on the procurement of new raw materials, CE businesses address the supply issue by cutting the number of materials they use overall. They create products made from recycled or reused materials instead. This reduces their dependence on volatile raw material prices.
Ultimately, the circular economy model helps companies become more resilient against disruptions in supplies.
With the CE model opening up new business opportunities, companies will need to create additional services to meet the demand. The Ellen McArthur Foundation outlines three examples of these new services:
The report explained that specialised knowledge involves the collection, disassembly, refurbishment of products, integration into the manufacturing process, and introduction of the products to the market.
In many cases, companies can adopt these new services by creating subsidiaries.
Despite the numerous benefits of a circular economy, many countries have yet to adopt this economic model. Businesses face several challenges that prevent them from switching their production strategy.
According to the World Economic Forum, there are 5 main barriers against the circular approach.
Many businesses still don’t have enough knowledge about available CE solutions or how to apply them. Some may already have the know-how but don’t necessarily have the competencies to implement such strategies.
Another challenge is the absence of a circular mindset in business owners. Many companies still view post-consumer products as mere waste. There are also those that don’t consider the sake of other stakeholders beyond their immediate customer base.
CE adoption is also hampered by the refusal of some businesses to even consider the potential of the model for innovation.
Unfortunately, only a few companies appreciate the financial benefits of switching to a circular economy. There are businesses who flat-out refuse to invest in CE solutions that would cost more than what the organisations could afford.
Some companies also believe that they might lose their competitive edge if they were to switch to a different market.
For bigger companies, adopting a CE model may not be that difficult since they could easily shift to recycled or reused materials. However, this might not be as simple for smaller manufacturers that rely heavily on certain raw materials.
Recycled or reused materials or components are still not yet readily available on the market. This makes it harder for companies to source enough materials for their production. Those that are available might not meet the right quality or are far too expensive for manufacturers.
There are also several other factors that keep companies from adopting circular approaches. Business owners are uncertain about the stability of regulations (such as carbon tax), as well as the viability of CE-related technologies (such as components reuse).
Some companies are also unsure whether customers would be willing to accept a switch to a circular economy. CE solutions cannot always be used as an alternative to non-CE practices since they don’t necessarily have the same quality or price level. This financial uncertainty leads many business owners to be wary of changing from a linear to a circular model.
Switching to a circular economy requires a significant change in consumer behaviour. It will make it difficult for people to buy into the CE model if they would have to put in more effort in doing so.
Also, not all companies can shoulder the high operating cost involved in implementing CE approaches. This can discourage even those who might be convinced of the potential benefits of these solutions.
There is also a need to create market-wide standards in implementing circular economy approaches. Some solutions, such as the reduction of material variation, can only effectively improve circularity if many companies in a given market adopt the measure.
Throughout the years, the circular economy model has been adopted in different industries. Companies have found various innovative ways on how to apply circularity in their businesses.
Some clothing brands have started leasing their products instead of selling them. The approach builds on the concept of ‘sharing economy’, where access and services are prioritised over ownership. This allows the manufacturer to retain ownership of their products and keep the items within their production cycle.
For these companies, they take on the role of the manufacturer and recycler of the products. Not only does it extend their own responsibility for the items, but it also lets them produce more circular clothing.
Circularity in clothing is viewed as a significant step toward reducing waste. The UN Conference on Trade and Development (UNCTAD) identified the fashion industry as the second most polluting in the world.
The consumer tech industry is also adopting the CE model by offering leasing services for mobile devices. Some telecom companies allow customers to lease mobile phones instead of buying them.
The circular service lets the company keep a closed cycle for the recycling and reuse of products. More than 99% of mobile phones are returned. About 95% of these devices are then either repaired and reused or recycled by the telecom company. This allows the industry to cut as much as 50kg of carbon dioxide for each mobile device saved.
Single-use plastics have also been a particular concern in terms of waste management. To address the problem, several restaurants have started using environmentally friendly containers for food items. These include cardboard packaging, cloth bags, and even recycled containers that were once used for another product.
Some food stores have switched to using biodegradable utensils and even tried using edible cups, straws, and plates.
In the construction industry, more businesses around the world are now incorporating reused or recycled items in materials. Some have developed new technologies that use recovered plastics to produce eco-bricks. This helps reduce the number of plastic waste that could end up overcrowding landfills.
One example of this is Green Antz Builders, an environmental solutions company in the Philippines. Green Antz collects used plastics and turns them into eco-friendly construction materials. The company has also tapped local businesses and communities to donate their plastic waste, such as beverage bottles, tarpaulins, and CDs/DVDs.
Despite the potential of the circular economy to solve many of the world’s problems, it still suffers from the same limitations as other economic models. Its solutions can only be fully effective if a large portion of society adopts and implements them.
Every stakeholder in the economy needs to do their part to maximise the value of finite resources and reduce the production of waste. Circularity, in this sense, can only work if every single link is connected.
For more information on the circular economy, visit the Arowana Impact Capital website.
