Circular supply chains: 9 focus areas to maximize impact | GreenBiz

Sustainable Development Goals (SDGs) and Circular Supply Chains

Introduction

Supply chains are complex and often overlooked in discussions about the circular economy. However, they play a crucial role in achieving the Sustainable Development Goals (SDGs) by ensuring the sourcing, movement, and transformation of materials. Current supply chains are linear, but there is a need to transition to circular supply chains to increase material security, reduce emissions, and improve resilience.

The Need for Circular Supply Chains

Global shocks and the scarcity of finite materials highlight the vulnerabilities of existing supply chains. Linear supply chains are susceptible to disruptions and can result in significant financial losses. Additionally, Scope 3 emissions from supply chains contribute to greenhouse gas emissions. Circular supply chains break the link between resource consumption and revenue generation, offering increased material security, reduced price volatility, and long-term resilience.

Nine Target Areas for Circular Supply Chains

1. People and Structure

   Organizational transformation is necessary to implement circular processes and technologies. Companies like HP are developing new structures and training their supply chain teams on circular economy principles.

2. Network Design

   Setting up regional hubs for reverse logistics can facilitate access to circular inputs, combat cross-border challenges, and reduce emissions. Companies like CHEP are exploring new approaches to network design to reduce GHG emissions.

3. Supplier Engagement

   Engaging, supporting, and incentivizing suppliers is essential for the cost-effective circulation of products and materials. Companies like Danone establish long-term contracts with suppliers to ensure quality and traceability.

4. Data and Quality

   Leveraging technology and data flows is crucial for circulating products and materials. Companies like Niaga use scannable markings and digital product passports to provide ingredient transparency and information on carbon footprint and recyclability.

5. Metrics and Performance Management

   Measuring circular supply chains requires specific performance indicators and employee incentives. Companies like CHEP use Activity Based Costing (ABC) models to track circular flows and link circular economy targets to employee bonuses.

6. Business Models and Product Design

   Collaboration between internal and external departments is necessary for efficient product and material flow. Companies like HP partner with others to create reverse logistics ecosystems and influence design decisions.

7. Customer Engagement

   Engaging customers beyond the point of sale is crucial for closing the loop in a circular economy. Customers need to return products and materials when no longer needed. Companies must leverage customers as partners in the circular supply chain.

8. Financial Resources

   Financing the transition to a circular economy requires a shift in mindset and measurement. New metrics that consider non-financial aspects like biodiversity and carbon emissions are needed. Companies must advocate for common standards and longer timelines for expected returns.

9. Policy and Legislation

   Legislation, such as the EU’s Extended Producer Responsibility, can facilitate circular supply chains. However, common standards, metrics, and definitions are urgently needed. Businesses can engage with policymakers to inform legislation and promote cross-border alignment.

Conclusion

Building circular supply chains is a complex task, but it is essential for achieving the SDGs and ensuring resilience in the face of global challenges. By focusing on these nine target areas, businesses can make significant progress towards circularity and contribute to a more sustainable future.

For more information on driving change in your supply chain, read the Ellen MacArthur Foundation’s white paper, “Building a circular supply chain: Achieving resilient operations with the circular economy.”

SDGs, Targets, and Indicators in the Article

1. SDGs Addressed

• SDG 12: Responsible Consumption and Production
• SDG 13: Climate Action
• SDG 15: Life on Land

2. Targets Identified

• Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
• Target 12.5: By 2030, substantially reduce waste generation through prevention, reduction, recycling, and reuse.
• Target 13.2: Integrate climate change measures into national policies, strategies, and planning.
• Target 15.2: By 2020, promote the implementation of sustainable management of all types of forests.

3. Indicators Mentioned or Implied

• Indicator 12.2.1: Material footprint, material footprint per capita, and material footprint per GDP.
• Indicator 12.5.1: National recycling rate, tons of material recycled.
• Indicator 13.2.1: Number of countries that have communicated the establishment or operationalization of an integrated policy/strategy/plan which increases their ability to adapt to the adverse impacts of climate change.
• Indicator 15.2.1: Progress towards sustainable forest management.

SDGs, Targets, and Indicators Table

Analysis

1. SDGs Addressed

The issues highlighted in the article are connected to SDG 12 (Responsible Consumption and Production), SDG 13 (Climate Action), and SDG 15 (Life on Land). The article discusses the need for circular supply chains to achieve sustainable management of resources, reduce waste generation, integrate climate change measures, and promote sustainable forest management.

2. Specific Targets

Based on the article’s content, the specific targets that can be identified are:
– Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
– Target 12.5: By 2030, substantially reduce waste generation through prevention, reduction, recycling, and reuse.
– Target 13.2: Integrate climate change measures into national policies, strategies, and planning.
– Target 15.2: By 2020, promote the implementation of sustainable management of all types of forests.

3. Indicators

The article mentions or implies the following indicators that can be used to measure progress towards the identified targets:
– Indicator 12.2.1: Material footprint, material footprint per capita, and material footprint per GDP.
– Indicator 12.5.1: National recycling rate, tons of material recycled.
– Indicator 13.2.1: Number of countries that have communicated the establishment or operationalization of an integrated policy/strategy/plan which increases their ability to adapt to the adverse impacts of climate change.
– Indicator 15.2.1: Progress towards sustainable forest management.

The article provides examples of companies and organizations implementing circular supply chain practices that contribute to these targets and indicators. For example, HP is transforming its organizational structure and training supply chain teams on circular economy principles (Target 12.2). CHEP is exploring a “Managed Recovery” approach to network design to reduce GHG emissions (Target 12.5). Danone has established long-term contracts with dairy farmers to support regenerative outcomes (Target 12.5). Niaga has developed a scannable marking to provide ingredient transparency and information on the product’s carbon dioxide footprint (Indicator 12.2.1). CHEP has created an Activity Based Costing (ABC) model to track circular flows and incentivize circular actions through employee bonuses (Indicator 12.5.1). HP has partnered with Sinctronics to create a reverse logistics ecosystem for end-of-use electronic equipment (Target 15.2).

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: greenbiz.com

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