Companies moving to circular business models want more government help

According to a new report from the Green Alliance, companies moving from linear to circular business models, aiming to keep products in use much longer, want more help from the government.

Circular Business: What Business Needs to Change Lane calls on the government to establish mandatory reporting requirements for businesses on emissions embedded in their supply chains.

Compiled from 20 anonymous interviews with companies and experts from the fashion, electronics and construction industry, the Green Alliance report reveals that there is still much to be done – and quickly – to accelerate the adoption of business models that keep products in service longer.

Companies said that it was not until they started measuring their entire value chain emissions (“Scope 3 emissions”) that they realized how much their carbon footprint came from materials, goods and services purchased.

By requiring companies to disclose the impact of their material use and find circular business strategies to reduce it, the government can stimulate demand for circular goods and services.

Construction is currently the only UK sector with certain requirements – for planning applications in London – where statements on embodied carbon and the reuse of products and materials are needed to win business.

This is proving to be a driver of progress, with respondents providing examples of new offerings and innovative partnerships deployed to secure contracts. An industry leader said, “You only act on carbon if you start measuring it.”

The detailed conversations point to an opportunity to drive demand for circular goods and services by factoring value chain emissions into decision-making. While strong voluntary initiatives by some large companies are already starting to make a difference, economy-wide incentives are lacking: no country currently has mandatory requirements to report Scope 3 emissions. .

Companies have told Green Alliance of their frustration with the lack of government support. “You want to move the whole industry forward, not just one or two people traveling alone,” said one builder.

Increase resource efficiency

According to the analysis, emissions generated beyond a company’s own operations are on average more than 10 times higher than direct operational emissions. They include the extraction of materials, the production and transport of components and the final disposal of products.

At the COP26 climate summit, former Chancellor Rishi Sunak outlined plans for a mandatory sustainability disclosure (SDR) regime that should cover value chain emissions for large listed companies – but the government has yet to provide a clear timeline.

The recent report by the Committee on Climate Change highlighted that the UK’s path to net zero emissions depends in part on creating a more circular economy. He found that there are not enough plans to boost resource efficiency, undermining broader efforts to reduce emissions.

The report also calls on the government to strengthen reporting requirements for major public contracts. He suggests that under the new public procurement guidelines, suppliers should submit a carbon reduction plan addressing all associated emissions.

We need a plan to move from linear business models, focused on selling short-lived goods, to circular models aimed at keeping products in service much longer.

Susan Evans of Green Alliance said: “We need a plan to move from linear business models, focused on selling short-lived goods, to circular models aimed at keeping products in service for much longer. Companies making this change want more help from the government.

“Asking companies to report on emissions from their value chain, and helping them to do so, will encourage innovation in circular and low-carbon business models – helping the bottom line and the planet.

“To stimulate demand, we need to move from a voluntary system. The future green finance strategy is certainly time to make the UK the first country to set mandatory requirements for embedded emissions.

Sarah Ottaway, Head of Sustainability and Social Value in Suez said: “Keeping products in use creates more value for people, the planet and the economy than recycling, but there remains insufficient political support for it to progress beyond a niche activity.

“As this report highlights, by requiring companies to disclose the impact of their material use and find circular business strategies to reduce it, government can stimulate demand for circular goods and services and thus create more benefits. societal.”