- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 23 May 2019
Five things leaders can do to create a truly circular economy
As the world continues to grow, so does our environmental footprint. At the G7 Alliance on Resource Efficiency workshop held in Washington, DC in 2017, it was noted that three quarters of all raw materials used in industrialised countries end up in landfills in just one year — that number is staggering and a cause for significant concern.
The circular economy can dramatically alter that trend and create a more sustainable and profitable future. However, there are significant barriers that keep us from achieving this. Below are five things we, as leaders of the fourth industrial revolution, can do to create a true circular economy:
 1 Realise a circle is not a line
We need a fundamental paradigm shift to leave behind linear thinking and not look at the end-of-life of a product as waste, but rather, a critical source of supply for new products. With a circular economy, a supply chain starts and ends at the same place.
 2 Commit to circular supply chains
To achieve a circular economy, products must be designed with materials that can be economically and responsibly recovered or re-purposed. By thinking about the lifecycle of the raw materials as opposed to the finished product, companies can benefit both financially and socially.
At Johnson Controls, our conventional automotive batteries have been designed so 99% of the materials can be reused. While this may not be possible in all products, this thinking, coupled with a one-for-one product exchange of old product for new, is critical to creating a circular supply chain.
Without standardised materials across sectors, a circular system would be limited to only one company or product line. This happened in the 1990s when another battery company introduced non-standard materials into their vehicle batteries. What provided a marginal product improvement caused the entire recycling system to fail since the new product could not be recovered and reused across the sector.
Fortunately, market forces drove out this marginal product improvement to ensure the greater value enabled by the circle. Today, while our products are highly differentiated, they use a standard set of materials allowing us to recycle a competitor’s product in our system.
While new products are delivered and sold, they should also be exchanged for used ones. In this type of scenario, a marketing campaign can impact raw material supply through increasing returns. In terms of logistics, a new system must be put in place to manage the flow of new and used materials at the same time.
 5 Address regulatory constraints
Government regulations developed in the functional silos of a linear paradigm can hinder the ability to close the loop and create a circular economy. Manufacturing and distribution regulations vary from country to country, which makes it difficult to create a scale-able process for end-of-life and recovery of used products.
For example, while the only difference between a new vehicle battery and a used one is that the latter can no longer hold an effective charge, the two products are treated very differently by regulations. Just as the business community must integrate circular thinking, policymakers must also identify and remove regulatory roadblocks.
Our journey to create a closed-loop supply chain at Johnson Controls began when we recycled our first battery in Germany in 1904. Today in the G7 economies, 99% of all used conventional vehicle batteries are responsibly recycled and recovered to create new ones.
In the early 1900s, Henry Ford pioneered vertical integration to supply the growing demand for the Ford Motor Company. As we prepare for the fourth industrial revolution and the consequences that come with it, now is the time for us to pioneer 'circular integration'. It has been and can be done.
 Related articles on Designing Buildings Wiki
- A social, circular economy.
- Blockchains will change construction.
- Building Revolutions - review.
- Circular economy.
- Circular economy in the built environment.
- Circular economy - transforming the worlds number one consumer of raw materials.
- Faraday Challenge.
- Impact of the sharing economy on construction craft labour and equipment markets.
- Managing packaging waste streams.
- Recyclable construction materials.
- The future of electricity in domestic buildings.
- The use of batteries to store electricity for buildings.
- Waste management plan.
--Future of Construction 14:31, 20 Jun 2017 (BST)
Featured articles and news
Civil engineers can lead the way.
Cutting-edge tech pairs with building management systems.
BSRIA updates its assessment of the industry.
What happens when it all goes wrong?
Input being gathered by CIOB.
Changes proposed for MHCLG consultation on house building statistics.
Full of passion and acerbic wit. 1 min book review.
Reminding us what is possible.
Five signs you are at risk.
Biotechnology as it applies to the built environment.
Stopping sound coming through windows.
Government response to the Building a Safer Future consultation.
Energy savings quickly payback any small additional capital investment.