Why is circular design important for businesses?

The concept of circular product design has gained significant traction in recent years, with organisations across various industries recognising the importance of adopting sustainable practices. As concerns about resource scarcity, plastic pollution, and the need for a more resilient workforce continue to grow, businesses are increasingly looking for ways to transition from linear production to circular business models that prioritise extended product use, disassembly, reuse, and recycling.

In this article, I will explore the benefits of circular design for businesses, highlighting how it aligns with both environmental sustainability and economic prosperity.

What is circular design?

It is an innovative approach to designing products that seeks to eliminate waste and minimise resource consumption by keeping products in use for as long as possible, ultimately aiming to create a closed-loop system where materials are continually regenerated and reused in a sustainable manner.

At its core, circular design aims to close the loop on material flows, ensuring that resources remain within productive cycles rather than being discarded as waste. This not only reduces the environmental impact of consumption but also creates economic opportunities through the development of new business models, job creation in the repair and remanufacturing sectors, and the emergence of pioneering technologies for resource recovery.

Circular design takes into account the entire lifecycle of a product, from sourcing materials to manufacturing, distribution, use, and end-of-life disposal:

• Material selection: Circular packaging design prioritises materials that are renewable, compostable, or at the very least, recyclable.Image sourceUse: Products should be maintained within the circular economy, being shared, reused, repaired, refurbished, and remanufactured. 
• End-of-life: All materials must be reused, recycled, or composted at scale. It’s not enough for it to work just in theory, it must happen in practice.

Many brands have realised the value of embracing circular principles. Patagonia’s ‘Worn Wear’ recycling strategy, for example, encourages customers to repair and reuse their garments, increasing the life of their products and reducing overall consumption, and Swedish giant Ikea aims to transition fully to renewable or recycled materials by 2030 while incentivising customers to engage in its buy-back scheme.

On the packaging front, companies like Blackmores have embraced sustainable alternatives to polystyrene, while packaging brands like Planet Protector, Uluu, and Hero Packaging provide innovative technologies to Australian brands on a quest to replace plastic.

This progress is for good reason; in addition to its positive environmental impact, it boasts a host of benefits for business.

Resource Efficiency

Circular packaging emphasises the use of recycled or renewable materials, therefore reducing the demand for new resources. By utilising materials that can be replenished (or that have already been extracted), circular packaging works to preserve natural resources and reduce the environmental impact linked to resource extraction.

By adopting circular approaches, businesses can decouple growth from the extraction and use of natural resources. A stark contrast from the single-use nature of most packaging solutions, circular design helps organisations maximise the value extracted from materials throughout their life cycles.

WOOLPACK, Planet Protector’s sustainable alternative to polystyrene, is a perfect example of this. By repurposing waste wool, we reduce the need for virgin resources, decrease the amount of wool that goes to landfill, and generate revenue for Australian and New Zealand farmers. In other words, we keep it in a closed-loop system. At its end of life, WOOLPACK is disassembled; the wool can be home-composted and the carton recycled into a new product. A brilliant circular solution!

Cost Savings

On top of its positive environmental impact, circular packaging presents businesses with unique economic benefits. This became clear to Planet Protector once we began working with the Royal College of Pathologists of Australasia (RCPA). In addition to lowering the company’s carbon footprint by 66%, WOOLPACK reduced incoming freight costs by 66%. Its compact nature means it requires fewer trucks than polystyrene boxes to transport, lowering the RCPA’s costs even further.

Being laser-focused on reducing environmental degradation, designers of circular packaging solutions are committed to ensuring their products have a low impact. Through its flat-packed design, WOOLPACK requires minimal space to store, ultimately driving cost savings for our clients.

Whether through innovative materials, streamlined production processes, or end-of-life considerations, circular packaging designers are dedicated to advancing the principles of sustainability and lowering costs for businesses.

Risk Mitigation

By focusing on local materials, circular packaging helps organisations mitigate risks associated with supply chain disruptions. Planet Protector’s supply chain was initially established in China, as there was no local alternative. This meant our wool was grown in Australia, processed in China and the final products manufactured in Australia and New Zealand.

The COVID-19 pandemic revealed the vulnerabilities of supply chains and the risks associated with overreliance on specific regions. We weren’t immune to this; our reliance on China was the biggest risk in the business, and we made it our mission to bring wool manufacturing back to Australia.

Our new manufacturing facility will be based in Geelong, Victoria! In addition to reducing our carbon footprint by approximately 55 kg of CO2e per tonne of wool, we are proud to be realising a transparent, all-Australian supply chain. By embracing circular packaging models, companies can diversify their supply chains, reduce dependence on specific resources, and create more resilient networks.

In addition to mitigating risks, companies can also contribute to the growth and development of local economies. This is a crucial part of our strategy at Planet Protector, and the benefits extend to our clients too. Since our wool vendors are local, our clients work closely with the farmers to decide what option is best while keeping costs down and reaching ESG targets.

Regulatory Compliance

Having a strong focus on reducing emissions reduction, the circular economy encourages businesses to mitigate their climate risks. This is essential, since materials extraction and handling accounts for 70% of greenhouse gas emissions.

Mandatory climate reporting in Australia, for example, will help businesses make climate a core part of their strategy. Emphasising scope 1, 2, and 3 emissions, the new legislation will require transparent reporting on climate strategy, governance, and risk management.

Companies like the RCPA are already exemplifying their dedication to corporate responsibility. WOOLPACK’s recent Life Cycle Assessment revealed that its carbon footprint is almost half as compared to Expanded Polystyrene (EPS). By embracing WOOLPACK, the RCPA lowered its carbon footprint by 66%.

Furthermore, wool is a short-term store of atmospheric carbon, preventing carbon dioxide from contributing to climate change while it is in use. It is also home-compostable; at its end of life, it is kept within the circular economy by releasing valuable nutrients into the soil. With strong Environmental, Social, and Governance (ESG) targets; namely, to become carbon neutral by 2050, this was a significant step in the right direction for the RCPA.

Consumer Preferences

Circular solutions present an opportunity to cultivate consumer trust while addressing the growing demand for sustainability. It has been shown that 70% of consumers already consider themselves environmentally aware and actively seek brands with sustainability credentials. 

It’s evident that consumers are becoming increasingly conscious of environmental issues and actively seek sustainable alternatives to common packaging. A study found that 68% of consumers chose a product in the last 6 months specifically for its sustainability.

IDEXX, a global leader in animal healthcare innovation, has experienced this first-hand with WOOLPACK. It consistently receives positive client feedback; users celebrate the change and admire the 100% reusable, recyclable, compostable nature of the new packaging. 

By opting for circular packaging, companies not only champion sustainability but also deliver a strong message to their customers – a commitment to providing premium-quality, environmentally responsible products.

Positive Brand Image

Circular design plays a crucial role in building a positive brand image, particularly in the eyes of investors. Adopting circular packaging design not only demonstrates a commitment to environmental stewardship but also signals a forward-thinking and innovative approach to business operations.

Investors increasingly prioritise ESG metrics when evaluating companies, recognising that environmentally responsible practices not only mitigate risks but also unlock long-term value. Additionally, companies that show continuous improvement in ESG (for example, through cost savings related to resource efficiency) are often viewed favourably by stakeholders and may gain a competitive advantage in attracting investment.

By embracing circular packaging, brands showcase their ability to adapt to evolving consumer preferences and regulatory landscapes, positioning themselves as resilient and future-ready investments.

Final words

As businesses navigate an increasingly complex and resource-constrained world, circular design provides a framework for sustainable and resilient growth. 

The time for circular product design is now, as it offers a win-win solution for both businesses and the planet.