Reducing Environmental Impact Through A Closed-Loop Economy

As more and more businesses are opting into green initiatives, the closed-loop economy model and the many benefits that stem from it has become increasingly popular. Unfortunately, for many business owners and managers unfamiliar with this model, it can be difficult to incorporate into their business operations. For those businesses struggling, this post and the infographic featured alongside it should serve as great information on how the model functions and the ways it can positively impact your business.

Before a complete breakdown of the model, it’s important to understand the way in which it earned its name. A closed-loop economy is the same as a circular economy, which is the same as a closed-loop supply chain. Confusing names aside, they are all meant to indicate the lack of waste that is created throughout the operational processes these models oversee. Meaning that everything used within these processes is reused, recycled, shared or repaired in some way. This is done in order to ensure that nothing is wasted throughout these processes. The inputs and outputs that within other models would be considered waste are fully repurposed as a resource to create once again.

This newfound approach that businesses have taken to creating and consuming materials has been rising in popularity throughout many industries in recent years. As popularity soars, estimates suggest the model will be worth $4.5 trillion dollars globally by the end of year 2030. It’s not just global businesses impacting this value either. Many local organizations have found ways to integrate this model into their operations and have seen a number of benefits. Some of those benefits include an increase in customer loyalty, a well-refined positive public recognition, and a decreased reliance on external suppliers which has led to increased savings. With more businesses transitioning to this strategy, less of an impact is made on the environment and more raw material can be saved.

How The Cycle Works

A closed-loop economy is only fully realized when businesses are able to ensure a closed-loop supply chain. This can be particularly difficult to achieve, as many processes go against these ideals entirely. Which means these processes will have to be rethought and redesigned. One of the most common examples of this comes in the form of companies having to reconsider how their products and the packaging for those products are designed and manufactured. Once these changes are made, businesses will have to consider how their newly designed processes will contribute to the sale, refurbishment, and recyclability of their products. The good news is that as more businesses elect to transitioning to the closed-loop economy, the process of saving and reusing these raw materials appropriately becomes much more simplified.

Many industries continue to lag behind the innovation found in a closed-loop economy model. In fact, as most companies currently follow a linear economy model, most of the raw materials used in their production processes will go on to be wasted. Incapable of being reused or repurposed, these processes will require new raw material to begin again. Thus illustrates the strength of a closed-loop economy. These models do not include an endpoint and thus eliminate all the considered ‘waste’. The cyclical nature of the closed-loop economy is capable of reusing the consumed raw materials by collecting them and reprocessing them in order to begin the process anew. This in turn creates the most sustainable product for any businesses’ customers. For more information on how this model operates, check out the infographic coupled alongside this post. Courtesy of Quincy Recycle.


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