by Maria Chachali, I&F General Manager at Bureau Veritas Hellas M.A.E
Sustainability is at a turning point, as governments and businesses seek ways to combat climate change and the severity of plastic waste in food chains and oceans. For many years, businesses have focused on managing environmental impacts; today, they are looking to meet future regulatory requirements and customer expectations. Modern business leaders and sustainability managers may feel overwhelmed when defining a sustainability strategy for their business. In response to growing evidence of climate change, pollution and poor working conditions in global supply chains, many managers are personally committed to enacting change, future-proofing their business and preserving their company reputation. To succeed in this, managers require sustainability strategies that are workable, tangible and easy to communicate. The most ambitious sustainability strategies are based on a move towards the circular economy – a renewable energy-powered model in which resources are preserved, sub-products are continually reused and wastes recycled to retain their highest value state. The circular economy is disruptive: it requires a rethinking of existing linear business models which generate waste at each stage of production and consumption, and demands new skills for product and process design. The disruptive nature of the circular economy business model can make it challenging to adopt, particularly for large or listed companies in traditional industries.
What is the circular economy?
The circular economy is an economic framework that focuses on carefully managing resources so nothing is wasted. In other words, products and materials are kept in use—reused, remanufactured and recycled continuously— for as long as possible to achieve maximum value. This restorative and regenerative approach aims to create a closed-loop supply chain that “designs out” waste. Because the circular economy maximizes economic, natural and social capital, it is considered a valuable tool for empowering businesses, helping them successfully tackle environmental priorities, drive performance and stimulate economic growth.[i]
The circular economy distinguishes between two cycles of supply chain and production:
• Biological: Food and organic materials are fed back into the system (e.g., composting, anaerobic digestion).This helps regenerate living systems (e.g., soil) that provide renewable resources.
• Industrial: Products and materials are recovered and restored through reuse, repair, remanufacture or recycling.
A circular model encompasses zero energy waste and carbon emissions: it is supported by the use of renewable energies.
Experts agree that reducing the negative impacts of the “take-make-waste” industrial model is not enough to achieve a circular economy. Transitioning necessitates a systemic shift in the way new products are designed, how their input materials are sourced, how they are manufactured and how sub-products are reused and wastes are recycled. Controlling finite resources, recycling components, redesigning products and optimizing resource yield are among the many ways to begin this systemic shift. Transitioning to the circular economy model demands understanding and control of all materials and processes used in production. For example, to produce and sell a T-shirt in a circular economy business model requires responsible sourcing of the cotton and chemicals used, and the working conditions in the factory used to manufacture it; control of the energy used in manufacturing, transportation and distribution; and a process for collecting, breaking down and recycling the T-shirt post-use. In order to be credible, each of these processes must be defined, implemented, audited and verified.
In recent years, the circular economy concept has gained ground. Companies around the world have started incorporating this outlook into their day-to-day operations. Major companies are already adopting a circular economy business model for several products.
The future of business is poised to be circular, and there’s never been a better time to accelerate the transition.
How can standards and auditing support the transition to a circular economy business model?
A range of management systems and other standards support a circular economy business model.
- HOLISTIC SYSTEM STANDARDS such as:
ENVIRONMENTAL MANAGEMENT: ISO 14001
Led by top management, ISO 14001 begins with a business-wide analysis of social and environmental impacts. The recently updated standard encourages a life cycle view of products and services, and provides a framework for addressing impacts, facilitating the move toward a circular economy business model.
ENERGY MANAGEMENT: ISO 50001
Energy Management Systems (EnMS) certification and associated energy use reduction schemes enable you to understand energy use, reduce consumption and close loops.
HEALTH & SAFETY MANAGEMENT: ISO 45001
Occupational Health and Safety Management Systems ensure consistent protection of both employees and staff.
ECO-DESIGN
Although they are not available as certification schemes, certain standards deepen environmental considerations in product development. These include: ISO 14006 ; ISO 14009 Guidelines for incorporating eco-design; Guidelines for incorporating redesign of products and components to improve material circulation; and IEC 62959 Environmental Conscious Design (ECD) – Principles, requirements and guidance.
LIFE CYCLE ASSESSMENT
Carbon foot printing of products (ISO 14067), life cycle impact assessment (ISO 14040 family) and water foot printing (ISO 14046) approaches help organizations to identify environmental impact hotspots in value chains.
GREENHOUSE GAS (GHG) EMISSIONS
A range of verification schemes help you ensure transparency: for example, verification of organizational GHG emissions for the European Union’s Emission Trading Scheme (EU ETS), other regional and national cap and trade schemes, voluntary organizational GHG inventories, or the CDP (e.g., using ISO 14064-1 and the GHG Protocol). Carbon off set project validation and verification is also used for voluntary schemes like the Gold Standard, VCS and green bonds (e.g., Climate Bonds Initiative) for carbon finance.
- SUSTAINABLE USE OF MATERIALS STANDARDS and SCHEMES such as
FOREST AND WOOD PRODUCTS:
Certification schemes such as the Program for the Endorsement of Forest Certification (PEFC), the Forest Stewardship Council (FSC) and auditing regulatory compliance to European Union Timber Regulation (EUTR) offer options to demonstrate greater transparency.
METALS AND MINERALS:
Precious metals (London Bullion Markets Association [LBMA], Responsible Jewelry Council [RJC]) conflict metals (Tungsten, Tantalum, Tin, and Gold [3TG]), more common metal (Aluminium Stewardship Initiative [ASI]) and Responsible Mineral Initiative [RMI]) auditing schemes support independent and credible assurance of sustainability performance throughout these value chains.
BIOFUELS:
Voluntary certification schemes such as 2BSvs, REDcert ensure compliance with the European Union’s Directive on Renewable Energy (RED) and International Sustainability & Carbon Certification (ISCC).
- CORPORATE AND SOCIAL RESPONSIBILITY SCHEMES such as
SUPPLIER AUDITS:
The Supplier Ethical Data Exchange(SEDEX) provides an independent framework for responsible sourcing on labor rights, health & safety, business and environment. Sedex Members EthicalTrade Audits (SMETA) and Social Accountability SA8000® certification enable suppliers to prove their responsible labor practices to their customers and other stakeholders.
RESPONSIBLE BUSINESS PRACTICES AND MATERIALS SOURCING:
The Responsible Business Alliance (RBA) provides requirements for responsible materials sourcing, ethical labor practices and supply chain accountability. RBA’s Validated Assessment Program (VAP) uses a standard for onsite social and environmental verification. Auditing to this standard provides recognition of a company’s ethical supply chain practices and labor conditions.
SOCIAL RESPONSIBILITY GUIDANCE:
Extensive sustainability and social responsibility guidance is offered by ISO 26000.
ASSURANCE OF SUSTAINABILITY REPORTING (ASR):
More Report verification and assurance is offered according to guidelines like the Global Reporting Initiative (GRI), Accountability AA1000 Assurance Standard and the International Federation of Accountants International Standard on Assurance Engagements: ISAE 3000.
To conclude, the journey to Sustainability is not an easy process. This journey, however, is supported by standards and schemes that help companies to better understand and manage all aspects of their processes under the perspective of a circular economy model. Bureau Veritas is a Business to Business to Society company, contributing to transforming the world we live in. Being a world leader in testing, auditing, inspection, verification, and certification, we help clients across all industries address challenges in quality, health & safety, environmental protection and social responsibility. Bureau Veritas offers a wide range of sustainability auditing and certification programs to ensure compliance and continuous improvement across the supply chain.
- [i] Ellen MacArthur Foundation