Report: Embracing the Circular Economy in Retail

Introduction

Consumers want more sustainable products from more sustainable businesses. While only 11% of consumers understand the term “circular economy,” retailers and suppliers are embracing circular thinking and practices to drive profitable, consumer-friendly sustainability solutions.

The Circular Economy

In traditional economic models, raw materials are converted into useful goods that are sold, used, and sent to landfills. In contrast, the circular economy is an economy-wide effort to ensure useful products, materials, and resources are reused and recycled. It is a system, as defined by the Ellen MacArthur Foundation, “where materials never become waste and nature is regenerated.”

Elements of Circular Retail Business Models

Retailers are actively engaged in the creation of a more circular economy. They are developing or improving the elements that define circular retail business models. Some of these elements include:

Exploring Resale and Rental

• Buying used or renting products instead of buying new reduces the materials and resources needed to meet consumer needs.
• Well-known brands like Neiman Marcus, Patagonia, REI, Gap, Levi Strauss & Co., and Coach sell “gently used” or “well-loved” products through a variety of resale business models.
• The global secondhand apparel market is expected to reach $350 billion by 2027, according to ThredUp.
• Rent the Runway, Gwynnie Bee, Armoire, and Nuuly offer rental services for fashion and accessories.
• IKEA buys and sells used IKEA furniture.
• Retailers like Lowe’s and The Home Depot offer rental services for tools and equipment.

Improving Reverse Logistics Operations

• Reverse logistics is the backbone of the circular economy, managing the collecting, sorting, repairing, and refurbishing of products for resale or recycling.
• Optimizing reverse logistics operations helps retailers ensure products are handled in ways that protect their highest environmental, social, and economic value.

Promoting Redesign, Repair, and Refurbishing

• Brands and retailers are working together to improve the durability of products, including making them easier to repair.
• Programs like the Apple trade-in program and Amazon Renewed allow for refurbishing and resale of products.
• Retailers track reasons for product returns to improve products and reduce waste.

Refilling and Reusing

• Retailers are exploring reuse and refill options for personal care, cleaning, pet care, and food products to reduce packaging waste.
• Reusable containers are being integrated into retail operations, such as Walmart’s reusable containers for its home delivery program.
• Reusable pallets are commonly used by retailers to move goods.

Facilitating Recycling

• Retailers offer in-store recycling for specific product types, such as Sephora’s Beauty (Re)Purposed program.
• Best Buy offers free or low-cost recycling options for various products, including electronics and appliances.
• Retailers are also embedding other elements of the circular economy, such as buying renewable energy, investing in electric vehicles, decarbonizing ocean shipping, and setting carbon reduction goals.

Conclusion

Retailers are actively embracing the principles of the circular economy to drive sustainable and profitable business models. By exploring resale and rental options, improving reverse logistics operations, promoting redesign and repair, refilling and reusing, and facilitating recycling, retailers are making significant progress towards achieving the Sustainable Development Goals (SDGs) outlined by the United Nations.

SDGs, Targets, and Indicators

SDG 12: Responsible Consumption and Production

– Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.

– Indicator 12.2.1: Material footprint, material footprint per capita, and material footprint per GDP.

SDG 8: Decent Work and Economic Growth

– Target 8.4: Improve progressively, through 2030, global resource efficiency in consumption and production and endeavor to decouple economic growth from environmental degradation.

– Indicator 8.4.1: Material footprint, material footprint per capita, and material footprint per GDP.

SDG 9: Industry, Innovation, and Infrastructure

– Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.

– Indicator 9.4.1: CO2 emission per unit of value added.

SDG 11: Sustainable Cities and Communities

– Target 11.6: By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management.

– Indicator 11.6.1: Proportion of urban solid waste regularly collected and with adequate final discharge out of total urban solid waste generated, by cities.

SDG 13: Climate Action

– Target 13.3: Improve education, awareness-raising, and human and institutional capacity on climate change mitigation, adaptation, impact reduction, and early warning.

– Indicator 13.3.1: Number of countries that have integrated mitigation, adaptation, impact reduction, and early warning into primary, secondary, and tertiary curricula.

SDG 14: Life Below Water

– Target 14.1: By 2025, prevent and significantly reduce marine pollution of all kinds, in particular from land-based activities, including marine debris and nutrient pollution.

– Indicator 14.1.1: Index of coastal eutrophication and floating plastic debris density.

SDG 15: Life on Land

– Target 15.2: By 2020, promote the implementation of sustainable management of all types of forests, halt deforestation, restore degraded forests, and substantially increase afforestation and reforestation globally.

– Indicator 15.2.1: Progress towards sustainable forest management.

Table: SDGs, Targets, and Indicators

SDGs	Targets	Indicators
SDG 12: Responsible Consumption and Production	Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.	Indicator 12.2.1: Material footprint, material footprint per capita, and material footprint per GDP.
SDG 8: Decent Work and Economic Growth	Target 8.4: Improve progressively, through 2030, global resource efficiency in consumption and production and endeavor to decouple economic growth from environmental degradation.	Indicator 8.4.1: Material footprint, material footprint per capita, and material footprint per GDP.
SDG 9: Industry, Innovation, and Infrastructure	Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.	Indicator 9.4.1: CO2 emission per unit of value added.
SDG 11: Sustainable Cities and Communities	Target 11.6: By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management.	Indicator 11.6.1: Proportion of urban solid waste regularly collected and with adequate final discharge out of total urban solid waste generated, by cities.
SDG 13: Climate Action	Target 13.3: Improve education, awareness-raising, and human and institutional capacity on climate change mitigation, adaptation, impact reduction, and early warning.	Indicator 13.3.1: Number of countries that have integrated mitigation, adaptation, impact reduction, and early warning into primary, secondary, and tertiary curricula.
SDG 14: Life Below Water	Target 14.1: By 2025, prevent and significantly reduce marine pollution of all kinds, in particular from land-based activities, including marine debris and nutrient pollution.	Indicator 14.1.1: Index of coastal eutrophication and floating plastic debris density.
SDG 15: Life on Land	Target 15.2: By 2020, promote the implementation of sustainable management of all types of forests, halt deforestation, restore degraded forests, and substantially increase afforestation and reforestation globally.	Indicator 15.2.1: Progress towards sustainable forest management.

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: nrf.com

 

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