What is green business according to the circular economy?

The circular economy, or circular economy, is a concept of, among others, the European Commission, based on the rational use of resources and minimising the negative impact of manufactured products, thereby reducing waste.

According to this project, the resources used should remain in circulation for as long as possible. So should the raw materials and the materials used in production.

What is driving the circular economy and how does it relate to running a business?

Closed loop economy

Circular economy is primarily intended to benefit the environment. However, it does not only presuppose minimising the consumption of natural renewable resources, but also adopting a policy of using these resources in such a way that their exploitation enables their subsequent regeneration.

The current production-consumption model in most companies is a linear model. This means that it is limited to a production-consumption-disposal path.

What are the characteristics of the circular economy?

Features of a circular economy are clear. They are:

• Dependence of economic development on the consumption of scarce resources
• Enriching the natural capital by separating biological materials from artificial ones and creating opportunities for the regeneration of individual ecosystem elements
• Design rationalisation to keep materials in circulation and optimise resource use
• Development of new technologies and support for innovative solutions to support the circular economy
• Minimise towards the elimination of negative externalities such as pollution by identifying them, in order to increase the efficiency of the system

The circular economy and changes in the production chain

With this in mind, in keeping with the circular economy Not only should consumption take proper recycling into account, but the process of doing so should already begin at the product design and production planning stage.

However, in order to carry out process restructuring, it is necessary to prepare for it properly. The most important thing is to understand the purpose of such an action with knowledge of all its consequences. One of the most noticeable for the company is to design the production processes in such a way that the beginning of the closed loop is already at the stage of selecting suppliers. Thus, the entire supply chain should be planned in terms of the circular economy. In order for the process to be effective, not only must resources be processed appropriately within the company, but also suppliers must be selected that are aware of and oriented towards the circular economy.

Not every company will be able to restructure processes within its own resources. Not only supply chain requires changes, but also the areas of purchasing and, above all business negotiations, which should include the entire cycle in the TCO (Total Cost of Ownership) analysis. When deciding to introduce environmentally friendly processes, it is therefore advisable to draw on the experience of experts in this field and to prepare the team responsible for negotiating contracts accordingly, ensuring specialised business training.