Is this the key to the circular economy?

Every year massive amounts of valuable resources are deemed “waste” and consigned to landfill. Take the UK – around 540 million tonnes of products and materials enter the country annually, but only 117 million tonnes are recycled.

However if we truly thought that waste equals value, and ensured that resources are kept in the economy for longer and thus reducing the use of raw materials, we could make serious steps towards diverting all this waste from landfill. This is what’s known as the circular economy.

For the circular economy to thrive, we must be serious about reducing waste. And yet we’re still locked into an “iron cage of consumerism” – shifting to a future in which we’re more efficient with materials will require significant changes in the way we consume things and in the way businesses are organised.

To make this shift possible, we must recognise that a lot of customers simply don’t consider sustainability the main selling point of a product. We must be realistic, and businesses have to target what consumers really want.

Recycling has thus far been the main focus of waste production, but this is far from ideal as it takes a great deal of energy to reprocess and remanufacture materials, as well as transport them.

We need to focus on making new stuff last longer. In short, we need to do away with the “consumer culture”. To do this, businesses need to think differently about the ways in which products are provided to consumers.

Tell the truth – stuff lasts

Providing better information to consumers about durability of products would be a good start. Giving accurate lifetime information on product labels could keep them in use for a longer time.

The average consumer expects a washing machine to last six years before it needs to be replaced, and Which? magazine cites quality and reliability as strong buying criteria.

So why don’t people actually keep their washing machines for that long? It’s because they’re confused by the labelling. Consumers tend to assess the expected lifetime of large household appliances through the manufacturer’s warranty. However most just give between one or two years warranty, making it difficult for the consumer to really assess how long it would last.

Rectifying this would mean businesses and their brands become more trusted, enabling them to build better and more prolonged relationships with consumers. When people aren’t switching brands all the time, products will be considered less disposable.

What’s in it for businesses?

Leasing isn’t a new concept, but it could pay dividends for the environment – it’s one of the business models which could reduce the use of materials in the longer term.

Why can’t household appliances like washing machines be rented rather than bought? They could be rented from manufacturers. As manufacturers would be responsible for repair and replacement rather than consumers, this should help to remove any commercial benefit to be gained from making products short-lived.

More leasing would thus significantly cut the use of materials. Appliances could be re-used from one consumer to another while all repairs would be undertaken by the manufacturer, rather than machines being scrapped when they break down. As well as providing added revenues for manufacturers that would spread over time, this would trigger a change in the design of washing machines which would enhance the focus on longevity.

It is true that consumers already have well-established buying habits, and that firms would encounter significant costs when setting up new business models. But the benefits it seems could out-weigh the immediate barriers.

There would be major cost savings on manufacturing materials, something which may become very important in the future. The more scarce materials become, the more expensive they will be – a real pressure point for the industry of tomorrow. Re-use and repair services and leasing models will inevitably start to become more appealing to businesses which are looking at ways to turn a profit in the face of increasing costs.

We need an Airbnb for laundrettes

In the past few years, the sharing economy or collaborative consumption has demonstrated new ways of distributing goods and services to consumers. As goods are shared instead of owned, the sharing economy represents an alternative to our consumerist society. Take for example Bla Bla Car, where people can share a ride, or Airbnb where travellers can rent a spare room in someones home, as an alternative accommodation. This peer-to-peer business models had prove to be successful. However, there still some barriers as they depend on trust between people.

Similar business models could be applied to other products such as large household appliances. A laundrette is the perfect example. In Scandinavian countries, famed for their sustainability, it is very common to find laundrettes in private apartment blocks. However, in the UK and many other countries laundrettes are often perceived as unhygenic and people can be snobby towards them. Such attitudes aren’t helpful. We should reinvent the laundrette as a key part of the shift towards a more sustainable, sharing economy.

This article is published in collaboration with The Conversation. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Mariale Moreno is a Research Fellow in Product Life extension at Nottingham Trent University.

Image: Miele washing machines are seen on a display during the IFA Electronics show in Berlin September 4, 2014. REUTERS/Hannibal Hanschke.