SITA UK’s Gev Eduljee – an ambassador for RWM in Partnership With CIWM – looks at the results of the company’s recent survey asks just how circular UK businesses really are…
CIWM Journal Online Exclusive
Last November, the Minister for Resource Management, Dan Rogerson, announced Defra’s intention to “[withdraw] from some of the areas in which we do proactive policy work … the approach I want is for business to lead the way with government ensuring the right frameworks are in place. I have confidence in the capability of British business to really drive forward the development of the circular economy.”
While one cannot argue with the premise that Government should only act when and where it needs to, just how circular is British business at the moment, and is the Minister’s optimism justified?
SITA UK surveyed senior decision-makers in a statistically representative cross-section of British businesses covering a range of industry sectors and sizes from sole traders to large multi-site companies. Each business was scored on a scale representing basic compliance with legal obligations at one end, to a circular operation at the other, the latter having established an integrated supply chain, operating resource-efficiently and extracting maximum value from unavoidable waste.
The survey indicated that 56 percent of the businesses sampled focused on legal compliance and basic recycling. Ninety percent of these businesses had 10 or less employees. At the next level, 35 percent of businesses (typically employing 11 to 49 people) were engaged in recycling and basic materials management, but were not plugged into wider sustainability-driven supply chain networks. Just one percent of surveyed companies reached the higher levels of circularity, working with their supply chain in a continual effort to achieve best performance, keeping resource use to a minimum, and extracting maximum value from unavoidable waste.
The survey also highlighted some confusion over precisely what a circular economy meant. Many respondents equated circularity solely with recycling, or with legal compliance – “everything is dealt with according to government regulations”.
What does the survey tell us about the general readiness of British business to embrace the circular economy?
Firstly, the assumption that businesses align and adjust their commercial interests to wider environmental concerns is highly questionable. Relative to the environmental pressures of resource scarcity and security, our survey suggests that businesses tend to have a shorter-term focus on their bottom line. Wider environmental considerations are either not recognised (because they are too far removed from day-to-day commercial dealing) or not fully costed into the goods or services on offer. Either way, the environment cannot look after itself – the economic signals are simply not strong or visible enough for the average company to spontaneously change the way it does business. More often than not commercial imperatives clash with and run counter to environmental considerations.
Secondly, figures published by BIS in October 2013 estimate that 99.2 percent of the 4.9 million businesses in the UK were small (0 to 49 employees) with 3.7m sole-trader businesses – 75 percent of the total. These are precisely the survey cohorts that were least connected to wider supply chains and were unclear as to what was expected of a resource-efficient, circular business model.
Thirdly, our survey suggests that relying on company supply chains to deliver Britain’s circular economy has its limitations. To truly scale up the circular economy, we need a comprehensive framework of policies that can be applied at national and supra-national level, addressing the internal and cross-boundary flow of raw materials, the design and use of consumer products, the efficiency of our production and manufacturing processes, and the return to productive use of post-consumer goods and materials, replacing virgin raw materials.
Managing the UK’s resource requires the active intervention of Government. Defra – take note!
Gev Eduljee is director of external affairs at SITA UK. He joined SITA in 2001, with oversight for environmental, EMS and heath & safety functions. He has published widely on waste-related issues, including on incineration and public health risk assessment. He is also a member of Defra’s Advisory Committee on Packaging. And, of course, Gev is a member of the RWM in Partnership With CIWM Ambassadors Programme.