Five things we learned from conversations with circular businesses – Inside track

It can feel like you’re stuck between two stalls when talking about supporting circular businesses. On the one hand, you might be challenged: if circular business models already work well, why would the government need to get involved in helping them? And, on the other, if they’re not yet proving they work, are they worth investing time and money into?

Green Alliance has published a report exposing how major businesses are already quietly getting on with it, moving to resource efficient models and benefiting the UK. As one of the authors, I was lucky enough to speak to people in companies across a range of sectors to find out what they’re doing and why. I wanted to understand more about their operations and unravel the conundrum around whether or not more support would be economically beneficial.

What I found is that, while they are demonstrating that going circular is a successful business strategy, it is still far from the norm. These businesses are managing to succeed despite the current policy environment, not because of it. The UK’s tax system isn’t set up to reward the value they bring to the economy. Regulatory standards don’t prevent them being undercut by their resource wasting competitors.

Here are the five takeaways from our research that particularly struck me:

1. Businesses gain from thinking differently about ‘waste’
A big shift happens when something is labelled as waste. A different set of rules and assumptions kicks in. My conversation with the National Industrial Symbiosis Programme brought this home. They made the point that if you see by-products not as waste but as materials with value, new possibilities open up. For example, if you’re a food producer dealing with hundreds of eggshells a week, your instinct might be to treat them as waste. But if you think like a chemist, not a baker, and recognise them as calcium carbonate, you have a usable, desirable material. The cosmetics industry, for one, may be interested. Businesses are saving money and resources through partnerships that are rethinking what counts as valuable.

2. A lot of the skills needed already exist
It’s often assumed that circular economy jobs will need completely new and specialist skills. My conversation with Project PRoGrESS challenged that. They are piloting technology to recycle wind turbine blades and recover high quality fibres. It’s a cutting edge process, but many of the skills involved are highly transferable from sectors like oil, gas and pharmaceuticals. That kind of overlap will be crucial for a successful and fair transition to a more sustainable economy. It doesn’t mean targeted government support or planning around skills isn’t needed, and shortages in some areas are a real issue. But there’s already a really strong base of skills to build on.

3. It’s what consumers want
Across so many of my conversations, the same theme came through, namely that much of the momentum behind the changes introduced is being driven by customers. Businesses are responding to demand, and many are finding that circularity is genuinely popular and they have found ways to build customer trust in the products.

Ocado, which recently concluded a pilot scheme where customers could buy products like pasta in refillable containers, shared some striking results with us. All the customers they surveyed said the reuse scheme was easy to use. All of them trusted the hygiene and cleanliness of the system, 96 per cent said they would use it again and the refillable products were rated more highly than single-use ones.

Screwfix and B&Q shared similar stories about their refurbished product lines. Refurbished products often receive higher customer ratings than new ones. People are often surprised by the quality, especially when something arrives in a clean, pristine box and turns out to be as new but cheaper.

We’ve said it before, but it bears repeating: people are often ahead of where policy makers believe them to be. Yes, there are barriers around behaviour and, yes, the government also has a role in boosting trust. But this is clearly the direction many people want to go in.

4. Circular business is no longer on the fringes
When I asked Advanced Clothing Solutions (ACS), a circular fashion business based in Glasgow, for photos of their factory, I wasn’t quite expecting the pictures they sent. The scale was impressive, and the site was high tech. This isn’t a niche pilot or side project. It’s happening at an industrial level. ACS uses nanotechnologies to sanitise clothes, the warehouse has automated systems for picking, packing and dispatching, and the site can process over six million garments a year. What’s exciting is not just the size of the operation but its ripple effect. Their model helps existing retailers test rental or resale options without taking on the complexity themselves. That opens the door to wider change, bringing circularity into the mainstream.

5. We can’t overlook the social value
One of the most powerful reminders of the wider impact of going circular came from my conversation with SUEZ about the Greater Manchester Renew Hub. I hadn’t expected the extent of social good it delivers. The hub, which is the UK’s largest reuse facility, has refurbished and redistributed over 360,000 items so far. Around 175 tonnes of goods have gone directly to people in need. They provide everything from sofas to sports equipment at affordable prices or through referrals from social workers, helping families to make their budgets go further. This kind of provision can also reduce pressure on local services, whether that’s toys and bikes for schools or furniture for social housing. And, because the approach is joined up, thinking about environmental and social value together, it delivers results on both fronts.

Circular business is the future
England’s forthcoming circular economy strategy is a chance to scale up what’s already working well. The biggest thing I took away from all these conversations is that these businesses are thriving, they’re not marginal operations or ‘nice to haves’. They are practical, proven, replicable business models at a profitable scale that can support a fairer, more resilient economy. Companies, like the ones I spoke to, are leading the way, but they’re not getting support that recognises their contribution to wider goals, so they are left to compete in the market with wasteful business models. If we want more positive, modern enterprise like this everywhere, the strategy is the time to make it happen.