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Supporting Net Zero Through a Circular Economy

July 29, 2021 | News,

What is Net Zero?
Net Zero is achieved when greenhouse gas emissions resulting from human activity equate to the same amount of greenhouse gases removed from the atmosphere. Learn more about the Net Zero Journey


What is Scope 1,2, and 3 emissions?

Scope 1 and 2 emissions include emissions that relate to systems that are within reasonable control of the organisation, such as onsite and purchased energy. Scope 3 emissions relate to external emissions, such as those emitted throughout the supply chain. Find out more about Scope 3 emissions

When it comes to achieving Net Zero greenhouse gas emissions before 2050, much attention rightly focuses on reducing energy-related carbon through energy efficiency and renewable energy. However, this will only get us halfway to reducing the emissions we need.

By changing the way we do business, looking at alternative business models, products, services, supply and distribution chains, much more can be achieved. This is where the circular economy becomes a key component of our journey to a Net Zero future.


Circular Economy and Decarbonisation

Cutting operational carbon and buying carbon offsets alone is not enough to reach Net Zero. We need to take action on material resources – the ‘stuff’ of life: how much we use, how it’s made, what it’s made of, how we use it and dispose of it.

The Food, Construction, Fashion FMCG and Electronics sectors are responsible for a large portion of global scope 3 emissions as a result of their resource use and waste. The circular economy can help organisations in these industries meet scope 3 carbon targets by addressing the “embodied carbon” of goods and services; the in-use impacts; optimizing how we keep resources in use to minimise “end of life.”



The Sustainable Production and Consumption Challenge

Increasingly consumers and business leaders recognise the huge challenge that consumption and production represents. In the World Economic Forum’s Global Risk Report 4/5 of the top risks by likelihood and 3/5 risks by impact were climate-related including biodiversity loss, natural resource crises, climate action failure and environmental damage. On top of that, it’s estimated that we need about 1.75 planets to provide the resources for our consumption and to absorb our waste, including CO2 and other greenhouse gases. By 2030, we will need 2 planets to support us. If everyone lived like western consumers, we would need 5. We face a future scenario of limited resources, and the extraction and processing of natural resources cause half of global emissions and over 90% of biodiversity loss (according to the UN FCCC). It’s clear that humanity is living far beyond its means and we’re at a critical crossroads to take action. Circularity represents a solution to minimise the natural resource risks and draw down carbon emissions enough to achieve the UN’s SDGs or the Paris Agreement goal of limiting temperature rise to 1.5 degrees C.

Annie Leonard, the Executive Director of Greenpeace USA, was featured in the animated film “The Story of Stuff.” She explained, “There is no away.”  It’s essential for organisations to understand this concept in order to build a pathway to a sustainable future. With increasing value chain transparency, consumer awareness of climate and waste issues, and regulatory requirements for Extended Producer Responsibility, there is increasing recognition that “there is no away.” The expectation of Corporate Responsibility extends further to include the waste you make, the carbon you emit, and the pollution you cause. Organisations must find ways to understand their impact and work to minimize it by considering the entire life cycle of a product or service.


How to use Circular Strategies to achieve Net Zero

There are four key ways organisations can use circularity as a tool to address carbon emissions and move toward Net Zero. They include:

  • Closing loops so that you get the most out of materials and reducing embodied carbon
  • Narrowing loops to reduce the amount of resource required or reduce the amount emissions-spewing transport and logistics
  • Slowing loops by making durable products and ensuring they stay in use for as long as possible
  • Cleaning loops to reduce the pollution and negative impacts of production and use

Driving innovation

To make the shift to a Net Zero economy, innovation through circularity will be required. Anthesis has identified 5 key impact areas to embedding circularity into your organisation and driving progress:

  1. Partnership Innovation – developing new partnerships, or innovating practices with existing partners to unlock circularity benefits
  2. Process Innovation – refining or reimagining our existing business and industrial / production processes or creating new circular processes
  3. Product Innovation – developing new or renovating existing products to unlock more circular benefits
  4. Packaging Innovation – innovating or renovating packaging for improved circularity performance
  5. Proposition Innovation – creating a new or evolved consumer & customer propositions that build in circularity by design

For example, Anthesis recently supported Tesco to develop and launch its sustainability-linked supply chain finance programme to reward sustainability performance across its supply chain. Learn more about Tesco’s partnership innovation.

Watch the Webinar
Reaching Net Zero: Enabling a Circular Scope 3

The circular Net Zero economy produces financial benefits

The costs associated with run-away climate change are beyond measure. Insurers Swiss Re has calculated climate change as projected could cost the global economy $23 trillion by 2050. The US could see a 7% reduction in their GDP, with poorer nations faring much worse.

However, limiting temperature rises to 1.5 degrees aligned to a net-zero economy by 2050 would reduce this impact. Transitioning to a circular Net Zero economy by making better use of resources can have substantial economic benefits at the global and national fiscal level, at the business level, and at the household level.

Well beyond helping to make those much-needed reductions in scope 3 emissions, and reducing waste and resource use, if we apply circular economy principles effectively these have real potential to help create a better and fairer society. We can transition towards cleaner jobs in greener industries, more equitable distribution of resources and more prosperity for everyone.

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