How can purchasing support circular economy practices?

1 What is circular purchasing?

Circular purchasing is a way of procuring goods and services that minimizes the environmental impact and maximizes the value of the resources used throughout their life cycle. It involves considering not only the price and quality of the products, but also their design, durability, recyclability, and potential for reuse or remanufacturing. It also involves collaborating with suppliers and other stakeholders to create closed-loop systems that reduce waste and emissions, and foster innovation and social responsibility.

2 Why is circular purchasing important?

Circular purchasing can help businesses achieve supply chain resilience and sustainability in several ways. First, it can reduce the dependency on scarce or volatile raw materials, and lower the risk of disruptions or price fluctuations. Second, it can lower the costs of waste management, disposal, and compliance, and create new revenue streams from selling or leasing surplus or recovered materials. Third, it can enhance the reputation and competitiveness of the business, and meet the expectations and demands of customers, regulators, and investors who value environmental and social performance.

3 How to implement circular purchasing?

Circular purchasing requires a shift in mindset and practice from a linear to a circular approach, which involves rethinking the needs and specifications of the products and services, and looking for alternatives that can reduce resource consumption and extend the life span. Engaging with suppliers and other partners to co-create solutions that can optimize the use and recovery of the materials, and share the benefits and risks of circularity is also necessary. To implement circular purchasing, one should conduct a circularity assessment of the current procurement practices, define the circularity goals and criteria for the products and services, select the suppliers that can offer the best circular solutions, and establish long-term relationships and contracts that incentivize innovation and collaboration. Additionally, it is important to monitor and evaluate the performance and impact of the circular procurement, and collect feedback and data to improve the processes and outcomes.

4 What are some examples of circular purchasing?

Circular purchasing can be applied to various types of products and services, depending on the context and objectives of the business. For instance, businesses can buy or lease refurbished or remanufactured equipment, such as computers, printers, or vehicles, instead of new ones, and return them to the supplier for further reuse or recycling at the end of their useful life. Additionally, businesses can source materials or components that are made from recycled or renewable materials, such as paper, plastic, or metal, and ensure that they can be easily separated and recycled again after use. Furthermore, businesses can contract services that provide maintenance, repair, or upgrade of the products, rather than replacing them, and that take back the products or parts for reuse or recycling when they are no longer needed or functional. Lastly, businesses can purchase products that have a modular or adaptable design, that can be customized or updated according to the changing needs or preferences of the users, and that can be easily disassembled and reassembled.

5 What are the benefits and challenges of circular purchasing?

Circular purchasing can bring many benefits to the business, the suppliers, and the environment, such as reducing the environmental footprint and the greenhouse gas emissions of the supply chain, saving costs and increasing profits, enhancing the innovation and differentiation of the products and services, and improving the collaboration and trust among the supply chain partners. However, circular purchasing also faces some challenges and barriers, such as lack of awareness and knowledge of the circular economy principles and practices, resistance to change, difficulty in finding and evaluating the circular suppliers and solutions, and complexity and uncertainty of the circular business models and contracts.