All the remedies to stave off greenwashing
The Circular Economy is not just a trendy buzzword, it's a game-changing business practice that is taking the world by storm. This new business approach to sustainability is gaining momentum across the globe, as more and more businesses recognize the benefits of going green. However, it is not as simple as just optimizing returns and extracting maximum economic value.
Without the feedstock injected the Circular Economy systems, firms simply cannot activate the operations needed to bring the circular economy dreams to life. From reverse logistics to remanufacturing, from closed-loop supply chains to recycling, feedstock is the essential ingredient that makes circular systems work. But firms definitely know that estimating the time, quality, and quantity of feedstock available can be a challenge. With uncertainty lurking at every turn, it is no wonder that circular systems struggle to make accurate predictions.
It is time for firms to take a proactive approach towards connecting with feedstock in order to drive their circular economy initiatives forward. However, this requires a true connection between firms and feedstock, which can only be realized through the support of digital technologies. By harnessing the power of drones, Internet of Things (IoT), big data analytics, blockchain and Artificial Intelligence (AI), firms can effectively connect to traditional systems such as satellites, SAP systems, and public datasets, enabling them to optimize their circular economy activities. For instance, businesses can utilize drones and satellite data to more accurately estimate the quantity of feedstock available in a given area and allocate resources accordingly. With blockchain and AI, firms can leverage inbound and outbound oracles to assess feedstock quality and determine its residual value. Meanwhile, IoT and big data analytics can enable firms to anticipate when feedstock will become available, offering significant benefits in terms of reverse logistics and production planning. Ultimately, these tools can help firms select the most appropriate circular options, including reduce, reuse, remanufacture, or recycle, to achieve their sustainability goals. With a solid understanding of the digital technologies available and a commitment to driving circular economy initiatives, firms can properly evaluate feedstocks and material flows, and better estimate the real impact of economic processes oriented to circularity.
Although digital technology is a powerful tool in driving circular economy initiatives, they alone are not enough to ensure that greenwashing is avoided. One of the major challenges faced by firms is demonstrating that there are tangible economic, social, and environmental impacts of their circular economy actions. To this end, the Life Cycle Assessment (LCA) approach is an effective tool. By analyzing goods and associated feedstocks across all the stages of a products' life, LCAs can help firms identify areas of intervention to design more impactful circular economy systems. In order to achieve the sustainable design of products, firms should focus on principles such as material selection, energy efficiency and waste reduction, as well as supply chain management, geographical dispersion, and involvement of stakeholders. Digital technology plays a crucial role in collecting and analyzing the right pieces of information to calculate the circular economic impact through LCA. In conjunction with circular economy first and digitalization afterwards, LCA assessments enable firms to demonstrate the true impact of their circular economy initiatives and avoid the pitfalls of greenwashing.