Why digitising supply chains and implementing a circular economy is important to achieving true net zero
Veera Johnson, Co-Founder, Circulor
The cornerstone of decarbonisation and achieving net zero is to gain transparency in our supply chains. But we all know in our hearts that this is only one part of the answer. The true driver for achieving net zero is establishing a fully functioning circular economy, where we move our narrative from making things more sustainably, use and then throw away to how can we extend the life of the product, recover and reuse materials and design waste out of our systems. Whilst there are many amazing innovations in manufacturing and recycling capabilities, they will not drive a sustainable future on their own.
Firstly, lets tackle the need for transparency. In order to build more sustainable supply chains,
it is critical for organisations to better understand the provenance of materials right from material source, through to manufacturing and to the end -product across their entire supply chain. Digitising supply chains through implementing traceability platforms provides this deep understanding and enables organisations to make better informed sourcing and manufacturing decisions, aswell as enabling them to prove responsible sourcing of materials and help to build resilient supply chains. The key principle here is that ‘“if you don’t know about what is truly happening in your supply chain then you can’t make changes that are going to be impactful”.
There is no denying that even getting basic transparency in manufacturing supply chains has been difficult to date. Supply chains are global, complex and have a significant number of diverse actors. The raw materials in these supply chains, by their nature, are also very difficult to reliably tag and the material transforms on its journey from source to end use. We also know that manufacturing supply chains in particular, are one of the biggest contributors to high GHG emissions, environmental damage and human rights issues such as forced or child labour. Implementing traceability in what are effectively linear supply chains will go a long way towards enabling manufactures to take informed action to make these supply chains sustainable and environmentally and socially responsible.
The second and most important part, in tandem with traceability, is the need to build a ‘circular economy’ of products and materials, beyond their first use. In this circular economy the narrative and economic models need to focus on reclaiming, reuse, sharing, repair, remanufacturing and recycling practices across entire value chains. This circular economy must also be primarily aimed at reducing carbon emissions, waste and resource extraction, but clearly this will come with a price premium, with the cost of recycling being priced into the end recycled product.
It is only in the last twelve months that economies have properly started to focus on the need for recycling and building a circular economy, particularly in the battery and other ‘critical’ materials and broader energy transition spaces, where there is an increasing focus on re-use and then extracting the raw materials at end of life through effective re-cycling.
Regulation to date has been focused on safety and reducing emissions, but new legislation of the European Commission is pushing for greater recycling and reuse. For example, the EU has adopted an ambitious circular economy package this year, which includes concrete measures to promote re-use, and economic incentives for producers to put greener products on the market such as electric vehicles. The more recent EU proposals for the introduction of a ‘product passport’ will further drive the focus and need provenance data.
It is this combined need for materials provenance and lifecycle traceability from first use and into second use and beyond that digitising both manufacturing and recycling supply chains is so critical to achieving a circular economy and achieving true net zero.
About Circulor
Circulor is a global climate technology company Its’ technology platform provides transparency of raw materials provenance in both linear and circular economy value chains. This data enables organisations to gain visibility of their supply chains and empowers them to make informed decisions such that they can source effectively, build sustainability and resilience into their manufacturing supply chain and =also, most importantly build genuine circular economy solutions.
