As a part of its Circular Economy Action Plan, the EU has decided to make sustainable products the new norm. Today, the Ecodesign for Sustainable Products Regulation (ESPR) enters into force. The ESPR covers almost all types of products placed on the EU market, and the EU will now introduce specific design requirements for different categories of products, starting with e g garments, footwear, furniture and electronics. Overall, the goal is to ensure products that:
• Last longer
• Use less energy
• Can be easily repaired
• Can be easily disassembled and recycled
• Contain more recycled content
• Contain fewer substances of concern
• Has lower emissions and environmental footprint
The ESPR further includes requirements for digital product passports to ensure relevant information for various stakeholders such as how the products can be repaired, disassembled and recycled as well as information on materials and lifecycle environmental impacts.
As always, companies need to adapt to new market conditions. Several converging megatrends are now driving the transition to a circular economy, including the triple planetary crisis (climate change, biodiversity loss and pollution), resource scarcity, geopolitical risks in global supply chains and digitalization (enabling smarter business models).
Durable products that can be repaired, reused and, as the last resort recycled, is just the first step in the transition to a circular economy. The next step will be about smarter business models. Tomorrow’s companies need to be able to ensure profitable and attractive customer offerings with minimal emissions and resource consumption (and ultimately net-zero and circular value chains). Business models based on planned obsolescence will be phased out. User centric companies with business models where the business logic and profitability are driven by circular principles will become the new winners, enabling e g:
• More attractive customer offerings (e g shifting expensive ownership models to flexible usership models)
• Customer loyalty and higher margin per product over time (e g subscription based instead of one-time sales)
• Access to scarce minerals and materials (reuse old products to produce new ones)
• Significant lower emissions and negative environmental impact (produce less products and keep them in use)
• Growth targets that align with climate targets (huge potential to cut Scope 3 emissions)
Producing companies have two choices. They can adopt a risk-based approach, cling on to linear business model and focus on short term profits – or they can embrace the huge business opportunities in the shift to a net-zero and circular economy using digitalization, smarter business models and partnerships as enablers.
It’s all about design thinking. It's time to rethink business as usual. Just as we can design circular products, we can design circular businesses and circular cities and societies.
Fabienne BOSCHER METCALFE Thanks for Sharing 😁