Optimizing the Reverse Supply Chain to Adopt a Circular Economy

Earth Overshoot Day: Moving Towards a Circular Economy

As of August 2, humanity has been using ecological resources beyond what the earth is capable of regenerating for the year. Known as Earth Overshoot Day, this annual mark serves as a reminder that we live on a resource-constrained planet. Our society has been designed to discard waste in a landfill in a very linear supply chain and product life cycle.

To make better use of the limited resources on our planet, recycling, remanufacturing, and reusing materials at the end of their life cycle through a circular economy is vital to reducing raw material consumption. With 37% of CO2 emissions coming from the built environment (UN 2022 GlobalStatus Report for Buildings and Construction), a circular economy is an especially critical evolution for the building industry. We must ask ourselves as consumers, manufacturers, and community members, what can we do to move toward circularity?

The Reverse Supply Chain as a Vital Piece of the Circular Economy

For several hundred years, society has produced and perfected a linear economy — delivering products to an end consumer and eventually to a landfill at the end of their initial life. To create a circular system, we must actively fight against this history and challenge the systems we’re so familiar with. Where we stand now, the global economy is only 7.2% circular, a regression from 9.1% in 2018 (Circularity Gap Report). A vital piece of increasing our circularity, yet to be perfected, is the adoption of reverse supply chains. It falls on all stakeholders to ensure the raw materials that make up the products we use every day are harvested at their highest value to give them a second life in a circular economy.

Going Green: Reducing Waste and Production Costs

With development and large-scale enactment of reverse supply chains, manufacturers should expect to see a reduction in production costs and a reduction of environmental impact over time. Right now, the circular economy is a developing system with many pieces of reverse supply chains unoptimized, meaning initial costs are likely higher. However, this is a temporary issue. By optimizing this system, we can all expect to see lower costs and reduced environmental impact.

In recent years, we’ve seen manufacturers experience major cost volatility associated with supply and demand. The more wide-scale usage of recycled materials will help mitigate this market volatility by enabling manufacturers to be less reliant on virgin raw materials in our resource-constrained world. Additionally, utilizing circular and recycled materials generally helps reduce a manufacturer’s scope three emissions and sometimes even scope one and scope two emissions. For example, CertainTeed’s use of recycled glass in insulation production takes less energy to melt and reuse, reducing both scope one, two, and three emissions.

The Responsibility Falls on All of Us

Product manufacturers hold a lot of responsibility to design and deliver on products that will enable a circular economy. However, it is not the responsibility of one sector or one piece of the puzzle to make reverse supply chain processes work.

The reverse supply chain includes end consumers, raw material suppliers, and everyone in between. Here, leadership means advocating to make sure that everyone in the reverse supply chain is compensated, to make sure everyone is incentivized in the process.

As a manufacturer, we must develop products that can be easily deconstructed in a way that allows reuse or the harvesting of raw material. While we’ve seen an increase in companies offering take-back systems, it is critical to consider that local reuse has the most impact, recognizing and prioritizing existing community value. Reinvesting the inherent wealth of existing materials back into the community can create employment and economic opportunities and contribute to achieving affordable housing goals. An organization like BuildReuse.org is a great resource for local information.

A circular economy also places responsibility on population centers to develop systems and enact favorable legislation within waste management and policy. One example, Circular Philadelphia, has a multi-prong approach focused on education within the built environment and other sectors, bringing together consumers, businesses, institutions, and policy makers to lead the shift to a circular economy in the region.

Looking Ahead to a More Sustainable Future

For more than 200 years, we’ve functioned within a linear economy in which products were manufactured with

SDGs, Targets, and Indicators

1. SDG 12: Responsible Consumption and Production

   • 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.

   The article discusses the need for a circular economy to reduce raw material consumption and make better use of limited resources. This aligns with SDG 12, which aims to promote responsible consumption and production. The targets mentioned in the article focus on sustainable management of resources and waste reduction through recycling and reuse.

2. SDG 13: Climate Action

   • Target 13.2: Integrate climate change measures into national policies, strategies, and planning.
   • Target 13.3: Improve education, awareness-raising, and human and institutional capacity on climate change mitigation, adaptation, impact reduction, and early warning.

   The article mentions that utilizing circular and recycled materials helps reduce emissions. This relates to SDG 13, which aims to take urgent action to combat climate change and its impacts. The targets mentioned in the article focus on integrating climate change measures into policies and improving education and awareness on climate change mitigation.

3. 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.
   • Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.

   The article mentions that the adoption of reverse supply chains can lead to reduced production costs and environmental impact. This aligns with SDG 8, which aims to promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. The targets mentioned in the article focus on improving resource efficiency and achieving full and productive employment.

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: environmentalleader.com

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